TORONTO, March 27, 2024 (GLOBE NEWSWIRE) -- Dundee Corporation (TSX: DC.A) (the "Corporation" or "Dundee") today announced its financial results for the three months and year ended December 31, 2023. All currency amounts in this press release are in Canadian dollars, except as otherwise indicated.
FOURTH QUARTER AND YEAR-END 2023 RESULTS
- Reported a net loss from portfolio investments for the fourth quarter of 2023 of $0.8 million (2022 - income of $39.9 million). For the year ended December 31, 2023, the Corporation reported a net loss from portfolio investments of $23.0 million (2022 - income of $53.6 million). The key driver of performance during the year was the market depreciation in holdings of Centaurus Metals Limited, Ausgold Limited, warrants of Magna Mining Inc. and Reunion Gold Corporation of $11.6 million, $4.1 million, $3.2 million and $1.9 million, respectively.
- Reported consolidated general and administrative expenses for the current quarter of $2.5 million (2022 - $7.1 million), representing a 65% year-over-year decline as Dundee sustains momentum with cost-cutting initiatives. For the year ended December 31, 2023, the Corporation reported consolidated general and administrative expenses of $16.1 million (2022 - $25.3 million), representing a 37% decline from the prior year.
- Purchased for cancellation 914,040 of the Corporation's outstanding Cumulative Floating Rate First Preference Shares, Series 3 ("Series 3 Shares"), under a substantial issuer bid for aggregate proceeds of C$18.7 million. The quantity purchased represented 55.8% of the Series 3 Shares issued and outstanding before giving effect to the substantial issuer bid. The Corporation secured loan proceeds of C$14.0 million to partially fund the purchase and provide more flexibility around long-term commitments.
- Reported a net loss attributable to owners of the Corporation for the fourth quarter of 2023 of $2.8 million (2022 - earnings of $26.0 million).
- For the year ended December 31, 2023, the Corporation reported a net loss attributable to owners of the Corporation of $38.8 million (2022 - earnings of $17.1 million), or a loss of $0.43 per share (2022 - earnings of $0.15 per share).
Jonathan Goodman, President and Chief Executive Officer of Dundee Corporation, commented:
"Dundee navigated a challenging market landscape for junior mining in 2023 despite a generally robust environment for commodity prices. Persistent inflationary pressures, poor investor sentiment, and lack of capital availability to the junior mining industry contributed to a notable decrease in risk appetite in the sector and posed a significant headwind for our investment portfolio during 2023. Encouragingly, portfolio investment losses decelerated in the fourth quarter. With the price of gold now hovering near its all-time high of over $2,100 per ounce, we remain steadfast in our conviction that the market is underestimating the value of companies engaged in the discovery and development of high-quality precious metals, as well as base metals, and strategic resources. We see substantial opportunities in the sector given the disconnect between gold prices and the stocks. We remain focused on investing in top quality projects for the long-term while working with our investee companies as advisors and partners to maximize asset value and realize their full potential."
"Meanwhile, Dundee continued to make progress on the factors within its control, namely around cost reduction. We are happy to report a material reduction in our cash general and administrative expenses during 2023. Further, by retiring more than half the issued and outstanding Series 3 Shares at the end of the year, we took a big step towards rightsizing our balance sheet and reducing long-term cash commitments."
"In 2023, we continued to move forward with our strategic plan. Dundee elected to terminate its joint venture arrangement in Borborema, Inc. in exchange for a net smelter royalty on the sale of any product from Borborema, up to 2 million ounces of gold. The royalty gives Dundee a direct line of sight on anticipated future cash flows from the Borborema project without any additional capital investment."
Mr. Goodman concluded: "The entire team at Dundee continues to work diligently to implement and execute our strategy across all fronts. I am encouraged by our ability to sustain and grow our momentum into 2024 as we look forward to the opportunities ahead of us. Our team remains committed to growing the core business, streamlining operations, divesting our remaining non-core businesses and investments, and positioning Dundee to deliver long-term, sustainable value for our stakeholders, shareholders and partners. I would like to thank the entire team for their hard work in navigating a time of continued evolution."
SEGMENTED FINANCIAL RESULTS
Mining Investments
In the fourth quarter of 2023, the Corporation reported a net loss from the mining investments segment of $1.6 million (2022 - earnings of $12.0 million). Performance from the mining investments portfolio incurred a $1.3 million loss (2022 - income of $12.3 million), which is included in the net loss from this segment. The share of losses from equity accounted mining investments during the current quarter of 2023 and 2022 was $0.3 million.
During 2023, the Corporation reported a net loss from the mining investments segment of $24.0 million (2022 - earnings of $23.0 million). Performance from the mining investment portfolio contributed $24.0 million to the net loss in this segment (2022 - income of $23.5 million). The share of loss from equity accounted mining investments during 2023 was $2.2 million (2022 - $0.5 million). Offsetting the loss in this segment, the Corporation recognized a $2.3 million gain during 2023 relating to the termination of the Corporation's 20% equity interest in the Borborema gold project joint venture in exchange for a net smelter royalty as non-monetary consideration.
Mining Services
During the three months ended December 31, 2023, the mining services segment, comprised of the Corporation's 78%-owned subsidiary, Dundee Sustainable Technologies Inc. ("DST" or "Dundee Technologies"), reported a pre-tax loss of $1.2 million (2023 - $1.0 million).
During the year, DST reported a pre-tax loss of $4.3 million (2022 - $3.5 million), including $3.1 million (2022 - $3.9 million) revenue generated from technical services to customers in the mining industry to evaluate processing alternatives using its proprietary technologies and for general mineral processing services. In addition, DST recognized a $0.9 million gain on the sale of a non-strategic operation and assets located at its Thetford Mines technical facilities.
In 2023, Dundee Technologies completed the detailed engineering of a GlassLock Process project with a top-tier gold producer in Ghana. They also invested $75,000 cash and a $1.6 million in-kind contribution into Enim Technologies Inc., a Québec-based company focused on the treatment of electronic waste material. In addition, Dundee Technologies extended the maturity date of its convertible debenture to May 15, 2025.
Corporate and others
The Corporation reported a pre-tax loss from the corporate and others segment, including non-core subsidiaries, of $0.3 million (2022 - earnings of $22.8 million) during the three months ended December 31, 2023. During this period, the Corporation reported head office general and administrative expenses of $2.8 million (2022 - $2.1 million). During the year, the corporate and others segment reported a pre-tax loss of $12.0 million (2022 - earnings of $15.1 million). Corporate head office general and administrative expenses declined to $11.1 million (2022 - $12.9 million) in 2023.
The fair value of portfolio investments in the corporate and others segment increased by $0.5 million during the fourth quarter (2022 - $27.6 million). The fair value of portfolio investments in the corporate and others segment increased by $1.1 million during 2023 (2022 - $30.0 million).
Other subsidiaries and equity accounted investments reported a loss of $0.1 million and income of $0.3 million, respectively, to this segment's total pre-tax loss during the fourth quarter of 2023 (2022 - loss of $4.7 million and income of $1.3 million, respectively). During the year, other subsidiaries and equity accounted investments contributed $3.2 million and $1.9 million, respectively, to this segment's total pre-tax loss (2022 - loss of $9.2 million and income of $4.8 million, respectively).
SHAREHOLDERS' EQUITY ON A PER SHARE BASIS*
| Carrying value as at December 31, | 2023 | 2022 | ||||||
| Mining Investments | ||||||||
| Portfolio investments | $ | 126,671 | $ | 168,598 | ||||
| Equity accounted investments | 15,731 | 26,506 | ||||||
| Royalty | 18,921 | - | ||||||
| 161,323 | 195,104 | |||||||
| Mining Services | ||||||||
| Subsidiaries | 2,439 | 3,081 | ||||||
| Equity accounted investment | 98 | - | ||||||
| 2,537 | 3,081 | |||||||
| Corporate and Others | ||||||||
| Corporate | 18,342 | 36,333 | ||||||
| Portfolio investments ? other | 68,482 | 67,455 | ||||||
| Equity accounted investments ? other | 28,874 | 28,557 | ||||||
| Real estate joint ventures | 2,852 | 6,796 | ||||||
| Subsidiaries | 7,738 | 16,814 | ||||||
| 126,288 | 155,955 | |||||||
| SHAREHOLDERS' EQUITY | $ | 290,148 | $ | 354,140 | ||||
| Less: Shareholders' equity attributable to holders of: | ||||||||
| Preference Shares, series 2 | (27,667 | ) | (27,667 | ) | ||||
| Preference Shares, series 3 | (18,125 | ) | (50,423 | ) | ||||
| SHAREHOLDERS' EQUITY ATTRIBUTABLE TO CLASS A SUBORDINATE SHARES | ||||||||
| AND CLASS B SHARES OF THE CORPORATION | $ | 244,356 | $ | 276,050 | ||||
| Number of shares of the Corporation issued and outstanding: | ||||||||
| Class A Subordinate Shares | 85,832,805 | 84,968,090 | ||||||
| Class B Shares | 3,114,491 | 3,114,491 | ||||||
| Total number of shares issued and outstanding | 88,947,296 | 88,082,581 | ||||||
| SHAREHOLDERS' EQUITY ON A PER SHARE BASIS | $ | 2.75 | $ | 3.13 | ||||
*Shareholders' Equity on a per share basis is calculated as total shareholders' equity per the financial statements, less the carrying amount of preference shares series 2 and series 3 and divided by the total number of Class A and Class B shares issued and outstanding.
The Corporation's audited consolidated financial statements as at and for years ended December 31, 2023 and 2022, along with the accompanying management's discussion and analysis, as well as the Annual Information Form, have been filed on the System for Electronic Document Analysis and Retrieval ("SEDAR") and may be viewed by interested parties under the Corporation's profile at www.sedarplus.ca or the Corporation's website at www.dundeecorporation.com.
ABOUT DUNDEE CORPORATION:
Dundee Corporation is a public Canadian independent holding company, listed on the Toronto Stock Exchange under the symbol "DC.A". Through its operating subsidiaries, Dundee Corporation is an active investor focused on delivering long-term, sustainable value as a trusted partner in the mining sector with more than 30 years of experience making accretive mining investments.
FORWARD-LOOKING STATEMENTS:
This press release may contain forward-looking information within the meaning of applicable securities legislation, which reflects Dundee Corporation's current expectations regarding future events. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond Dundee Corporation's control, which could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. Such risks and uncertainties include, but are not limited to, the factors discussed under "Risk Factors" in the Annual Information Form of Dundee Corporation and subsequent filings made with securities commissions in Canada. Dundee Corporation does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.
FOR FURTHER INFORMATION PLEASE CONTACT:
Investor and Media Relations
T: (416) 864-3584
E: ir@dundeecorporation.com
