Dundee Corporation

Dundee Corporation incurred pretax profit of $10.2 million in Q3 2022, versus a pretax loss of $47.8 million in Q3 2021. Consolidated revenues were $2.6 million, down from $4.8 million in the prior-year quarter. Net income from portfolio investments, excluding GCIC, was $19.4 million compared with a loss of $40.5 million a year ago, driven primarily by a $23.8 million gain in Reunion Gold. The market value of publicly traded securities rose to $126.7 million at September 30, 2022 from $118.6 million at June 30, 2022, a 7% quarter-over-quarter increase. Dundee reported $45.6 million in consolidated cash at quarter end. Big River Gold was moved into Borborema Inc., including a $3.4 million top-up payment to reach a 20% interest and an initial carrying value of $17 million. On guidance, management did not provide formal next-quarter or full-year financial guidance; instead, it said it will continue reducing costs and expects to have more to report in the new year.

Jonathan Goodman framed the quarter around portfolio value creation and strategic ownership changes. He emphasized the conversion of Big River Gold into a 20% JV stake in Borborema as a way to gain direct access to project cash flows, and he said Dundee is excited about the project moving toward construction in the new year. He was highly enthusiastic about TauRx, Reunion Gold, and Magna Mining, and he said the company is bracing for higher interest rates by pushing expenses down further.

Lila Manassa Murphy said Q3 pretax profit was $10.2 million, helped by a $19.8 million gain on the consolidated investment portfolio, while consolidated revenues were $2.6 million. She noted the market value of publicly traded securities increased 7% quarter over quarter to $126.7 million and that Dundee added $7.5 million to new and existing corporate portfolio positions, excluding its $5 million participation in Magna’s private placement. She also highlighted consolidated G&A of $6.7 million, including a $1.7 million one-time Montreal lease termination payment; excluding stock-based compensation and that one-time item, consolidated G&A would have been $4.6 million, down about 9% year over year. Head office G&A excluding stock-based compensation was $4.0 million, or $2.3 million excluding the lease item, unchanged from a year ago, and consolidated cash ended at $45.6 million.

Analyst Daniel Baldini focused on TauRx, asking about the path to approval, the reported placebo issue, and Dundee’s mark on the investment. Goodman argued the trial was not failed because the company could not create a proper placebo, saying TauRx used a low dose comparator and still saw an effect, and he cited FDA pathways that can allow approval without a placebo. On timing, he said Dundee does not really know and compared the process to environmental approvals, where timing depends on convincing regulators. On valuation, Goodman said Dundee marked TauRx down to the rights issue, and Murphy said the balance-sheet value was CAD38 million, not yet written up to the warrant-exercise value because the news was only learned that morning.