Dundee Corporation

Dundee Corporation reported pretax profit of $10.2 million in Q3 2022 versus a pretax loss of $47.8 million in Q3 2021. Consolidated revenue was $2.6 million versus $4.8 million a year ago. Net income from portfolio investments, excluding GCIC, was $19.4 million compared with a loss of $40.5 million in Q3 2021, with a $23.8 million gain from Reunion Gold called out as the main contributor. The market value of publicly traded securities was $126.7 million at September 30, 2022, up from $118.6 million at June 30, 2022. Head office and consolidated G&A were impacted by a $1.7 million Montreal lease termination payment; consolidated G&A including stock-based compensation was $6.7 million, and excluding that one-time item consolidated G&A excluding stock-based compensation would have been $4.6 million, down about 9% year over year. Dundee ended the quarter with $45.6 million in consolidated cash. Forward-looking, management said Borborema is being advanced with partner Aura Minerals, with an updated 43-101 and a revised feasibility study underway and construction hoped for at some point in the new year. Reunion Gold is expected to deliver a maiden resource in the first half of 2023. No formal company-wide revenue or earnings guidance was given on the call.

Jonathan Goodman emphasized portfolio monetization and optionality, saying the Borborema conversion gives Dundee direct access to future cash flows and that the project could become an emerging gold producer. He spent significant time on TauRx, arguing its Phase 3 data were stronger than the market appreciated and saying the investment could be very significant for Dundee. He also pointed to Reunion Gold and Magna Mining as high-potential assets and said the company is continuing to reduce operating costs in response to higher interest rates.

Lila Manassa Murphy focused on the quarter’s financial turnaround and the portfolio’s contribution. She cited pretax profit of $10.2 million, consolidated revenue of $2.6 million, and a $19.8 million gain on the consolidated investment portfolio, led by Reunion Gold; she also noted consolidated cash of $45.6 million at quarter end. She walked through several operating units, including DST’s $900,000 pretax loss on $1 million of revenue, AgriMarine’s $6 million pretax loss on $1 million of sales due mainly to a $5.3 million impairment, and G&A of $6.7 million including a $1.7 million lease termination payment.

The main analyst question focused on TauRx, specifically the regulatory path, the lack of a conventional placebo, and whether the trial could still support approval. Jonathan Goodman argued the criticism was misleading, saying TauRx used a very low dose and that the trial still showed an effect; he also said there are FDA provisions that can allow approval without a placebo, though he did not recall all three. When asked about timing, he said they do not really know and compared the process to environmental approval, saying it may take about a year to a year and a half but is not fully under their control. On valuation, he said Dundee marked TauRx down to the rights issue level and later clarified the September 30 value was CAD38 million, not the post-warrant-exercise value.