sculpin

Cline Mining Our focus for Cline remains on improving liquidity through the sale of non-core assets and the reduction of expenses. Following its emergence from the Companies’ Creditors Arrangement Act in mid-2015, Cline has meaningfully reduced legal costs and headcount. Cline management remains focused on asset sales, including surplus land and Cline Gold, both of which are expected to be sold in the first half of 2016. As the mine remains on ‘care and maintenance,’ Cline management continues to sell used equipment into a challenging market. Sales of equipment and the non-core assets are being undertaken with an aim to maximize corporate liquidity until a buyer for the asset can be secured. Cline management is continuing to consider alternative strategies which may include outright liquidation. The market for metallurgical coal remains very challenging due to weakness in the Chinese steel market and the strength in the U.S. dollar. Met coal prices have declined to the lowest levels in a decade, and are well below the break-even costs for most producers. While money-losing production has been shut in, the market remains oversupplied, and further cuts and/or a pickup in end-demand will be required to rebalance the market. The strong U.S. dollar has been a competitive headwind for U.S. producers versus their Canadian and Australian peers, given the weakness in those currencies. One offset to this is that Cline’s debt is denominated in Canadian dollars; Australian and Canadian dollars tend to move in the same direction, so this acts as a partial buffer in Cline’s favou

The 2016 edition is now available: http://robgrayassetmanagement.com/content/uploads/prefGuide2016.pdf Thanks for posting this - very helpful.

Dundee should be buying back their prefs at these prices (>half off sale). Oil & some of their holdings will most likely rebound strongly at some point in the not so distant future.

Canaccord prefs... http://canadianvalueinvesting.com/?p=158 Cannacord Genuity Preferred Shares Posted on February 14, 2016 Canaccord Genuity (TSX:CF) made headlines on Friday, posting a $3.91 per share loss on what was mostly from a goodwill write-off. If you strip out the goodwill and an impairment in an investment in Canadian First Financial, the loss was a more manageable $0.25 per share. Canaccord also whacked the dividend on the common shares, deciding the cash would be better used to shore up the balance sheet. Can’t say I disagree, they’re in need of some cost cutting, especially in the Canadian part of the business. These guys rode the commodity boom up to $12 per share back in 2014, and now that it’s over they really need to punt some of the dead weight. As part of earnings the company announced a reduction of something like 8% of its workforce, a nice step in the right direction. Basically, the company has four divisions — Canada, U.S.A., Europe, and Asia/Australia. With the exception of Canada, which is down 11% YOY over the last nine months, the other parts of the company aren’t doing so bad. I’m not especially excited about the common shares at this point. Much of the book value is still made up of intangible assets, something that doesn’t really excite me. Canaccord is still getting a decent share of new deals, so there’s clearly some sort of moat there. But competition is fierce in the capital markets business, and I don’t think it would be terribly difficult for one or two of the big players to aggressively crowd out Canaccord, especially in a soft market. Although at the same time, the company has a history of crashing hard during bear markets. Shares were this cheap as recently as 2012, eventually increasing some 200% just two years later in 2014. Investors have done well riding the trends of this company before, and there’s no reason to think today would be any different. Where Canaccord does become interesting (at least to me) in when you look at the preferred shares. There are two outstanding, the series A and the series C. The As reset at the GoC five-year bond rate plus 3.21% on September 30th, 2016. They have a current yield of 17.5% (trading at $7.86 each), and have an implied yield of 12.1% for the next five years. You’re looking at a return of about 13% over the next six years, plus potential capital appreciation. The Cs are similar. They yield 14.6%, paying out $0.36 per quarter, currently trading at $9.85 each. They reset on June 30th, 2017 at the GoC five-year rate plus 4.03%. The implied yield at the conversion date would be 11.8%. Add in the 14.6% you’d be getting for a year and a half, and you’re looking at the same sort of return as the As, just stretched out over a little longer time period. There’s only one reason why these things would trade at such high yields, and that’s because investors are worried the company is going to zero. I’m not sure I understand the concern, since there’s $400 million in cash compared to just $15 million in corporate debt on the balance sheet. There are also some lease obligations, but these only total something like $60 million over the next decade. Very manageable. I see very little risk of a 2008-type of event to really rock these investment bankers to their cores either. This is just a cyclical company which is experiencing a temporary downturn that investors think will last forever. Like the last time it happened. And the time before. This looks a lot like my investment in Dundee’s preferred shares. As long as you think the company is strong enough to survive the downturn, these preferred shares are a screaming bargain. Once the company recovers and investors think these preferred shares deserve a 6% dividend again, the upside is easily 100%, and you get paid to wait. I believe Canaccord can get itself to a break-even company with just a few more cuts. If that happens, these preferred shares are safe. And if not, the giant hoard of cash should be enough to ensure the preferred share dividends get paid. Disclosure: No position, but I will likely initiate one this week. Long Dundee common shares and preferred shares.

Copy/paste from few slides from Broadview presentation at Toronto CFA 2016 Investment Symposium. http://www.broadviewcapital.ca/contact-us/ Our base case assumption is that Dundee will deploy an additional $116m into cash-burning investments and we capitalize corporate expenses at $100m Net of these assumptions we derive ~$478m of asset value to cover $237m par value of preference shares Goodman Family, backed by any of their well-heeled partners or friends, decide they’re done with the public market  If anyone has a contrarian, super-bullish view on commodities or other “hard assets” Dundee Corp would be as good a play as any  Prefs face value of $25 comes into play.  More than 100% upside on Series 2 and 3 Prefs Conclusion  Huge dislocation in small cap stocks and rate reset preferred share market are causing investors to overlook the risk/reward proposition  Current dividend yields between 8% and 13%  Worst case implied IRRs of 10% to 13% plus warrant potential  Base Case asset coverage 2.0x  Potential to see upwards of 100% capital appreciation should Dundee clean up its asset base and prefs trade to 8% yield (Series 2 and 3)

Garth Turner on Prefs - page 7 & 8 - charts not posted here are in below pdf.... http://www.turnerinvestments.ca/pdfs/Turner-Investments-2015-In-Review.pdf Tough Year for Canadian Preferred Shares If there’s one thing that Canadian preferred shares don’t like it’s falling interest rates. The two Bank of Canada interest rate cuts in 2015 sealed the fate of Canadian preferred share prices and led to one of the weakest performances for preferred shares since the credit crisis. Companies, particularly banks, creating abundant supply through new issuance, retail-investor selling, which tends to be undisciplined and reactionary, and finally downward pressure at year-end from tax-loss selling put the finishing touches on a year to forget for Canadian preferred shares. Preferred share prices fell a remarkable 19% in 2015. The attractive dividends limited the downside somewhat, but even after dividends, the sector still declined almost 15%. Our Take for 2016 While 2015 was a dark year for Canadian preferreds, it wasn’t without hope. At year-end, we finally saw the US Federal Reserve raise its overnight rate and we believe this could mark an extended period of steadily higher North American interest rates. The correlation between the US benchmark overnight rate and our own benchmark rate has been close to 90% over the past 30 years and we believe the Bank of Canada will not be able to adopt an interest rate policy that’s in opposition to the US’s for long. More importantly, the correlation between the US 5-year Treasury yield and the Government of Canada (GoC) 5-year bond yield has been greater than 95% over the past 30 years. Inevitably, where US bond yields go, Canadian bonds follow. Because most Canadian preferred shares are structured as ‘rate resets’ their dividends are indirectly pegged to the GoC 5-year bond yield. Therefore rising interest rates and bond yields are positive for prices. Given our interest rate outlook, we believe preferred shares are an important asset class for our clients to have exposure to over the next several years. Preferred share yields are now also compelling (roughly 5%) due to the 2015 sell-off and we believe this yield has become very attractive vs. other fixed income vehicles, such as corporate bonds, which could create additional buying interest for preferreds in 2016.

I believe all of the below Canadian preferred shares are quite attractive given the risk profile of the issuer trading at current yields in excess of 10% on both the 5yr and floaters. For the 5 year reset I have chosen those with resets not going to take place until at least 2019. Preferred Share Positions Issuer Dividend Reset Rate Atlantic Power Series 2 (AZP.PR.B) $1.39 31 Dec 19 5Yr + 4.18% Atlantic Power Series 1 (AZP.PR.A) $1.2125 Fixed Aimia Preferred A Series 1 (AIM.PR.A) $1.125 31 Mar 20 5Yr + 3.75 Aimia Preferred B Series 2 (AIM.PR.B) $1.04 Floating 90Day +3.75% Dundee Securities Series 2 (DC.PR.B) $1.422 30 Sep 19 5YR + 4.1% Dundee Securities Series 3 (DC.PR.D) $1.14 Floating 90Day + 4.1% Transalta Series G (TA.PR.J) $1.325 30 Sep 19 5Yr + 3.8%

Can you buy these debentures via a TD, Interactive Broker or do you need an actual bond broker to buy these securities? These are exchange traded on the TSX. Just need a regular broker to buy or sell these.

Zargon debentures at $24. ZAR.DB Not for the faint of heart... http://zargon.ca/wp-content/uploads/2015/11/Zargon-November-11-presentation-r7.pdf

A favourable mention for the Dundee pref's in Broadview's annual shareholder letter.... http://www.broadviewcapital.ca/wp-content/uploads/December-2015.pdf Positioning and New Ideas for 2016: It is not for lack of trying that we have not materially increased our net exposure of late. We have growing stacks of new files on both our desks. Most definitely there will be wonderful opportunities to make money from recovering stock prices from amongst these piles. In a previous letter we mentioned Dundee Corp (DC-A), as an example of the sort of things we were looking at as a way to wade into the stock market wreckage and pull out some treasure. So far we have not bought any stock in Dundee as we have been unable to gain confidence that the value of its book is meaningfully higher than the stock price. Admittedly, we are running it through the wringer using brutally conservative assumptions. Our work on the company led us to its balance sheet. The majority of the company’s capital structure, apart from the equity, is preferred shares (or “prefs” as they’re commonly known). This is an asset class of which we have never fully understood the appeal. At the issue price, prefs are inferior to senior debt given the lack of covenants or defined maturity and inferior to equity as you get no real upside. For your trouble you get around 5% or 6% annual return. No thank you. Now with Dundee’s preferred shares being cut in half, we completely understand the appeal. These things are great! We are now owners of all three series of Dundee preferred shares (DC.PR.B, DC.PR.C and DC.PR.D) with yields in the double-digits. While our draconian assumptions have left us undecided as to whether or not the equity of Dundee is a bargain, there is no objective scenario under which the prefs are impaired. The management of Dundee (or more accurately the previous management) has destroyed a great deal of value through poor investments. We are confident that under its new CEO this era has come to an end and the company will cease pouring capital into far-flung resource ventures. In order for the value of the prefs to be called into question, Dundee would have to re-double its previous efforts at chasing a failed dream across the globe. It is our firm belief that this will not happen. We mention this investment(s) to illustrate that a) we are actually doing something even while hidden under a pile of coats and b) investing can follow an unusual path. We started with Dundee’s equity and ended up with the preferred shares as that is where our research took us. Being objective, open- minded and free of investment constraints led us to what we believe will generate a very solid return for our investors. This is not dissimilar to our investments in the distressed convertible debenture space which continues to yield some very compelling opportunities. We think the flexibility we have, both by mandate and by mentality, is a major advantage particularly in more challenging markets.

Not a great return in 2015. Only 1.4% - too much energy holdings. Perhaps 2016 will be better with an eventual turnaround in oil and natural gas prices looking to happen sometime this year. I have no set % size allocations. I tend to accumulate positions as they drop and reduce them as they begin to get expensive - the opposite of what most traders will tell you. I see the Series 4 preferred holders persistence has paid off..... The Financial Post reports in its Friday, Jan. 8, edition that holders of Dundee's Series 4 preferred shares, who responded negatively to an initial proposal, have emerged victorious. The Post's Barry Critchley writes that the pref holders won because Dundee listened and changed a plan that seemed destined to be shot down at a meeting originally scheduled for Jan. 7. Put it down as a victory for shareholders and common sense, a victory reflected by the market's reaction: the prefs shares rose by 15 per cent Thursday on the news. Chief executive officer David Goodman says, "We have consulted and we responded with what we think is a win-win solution." However, the outcome -- offering better terms to the holders of the outstanding $107.04 million prefs -- raises an obvious question. How out of touch were those involved with the original proposal that seemed, through consent payments, to consider the interests of the investment advisers more than the interests of the owners of the securities. Originally, Dundee said it had received "substantial support" from representatives of "significant" holders of the prefs. Dundee's new proposal will be voted on at a Jan. 28 meeting. http://business.financialpost.com/news/fp-street/dundee-corp-listened-and-responded-with-better-proposal-on-amending-its-preferred-shares

Excellent YTD return on both of these preferreds with the DC.PR.B up 14.8% and the DC.PR.D up 16.6%. This is especially impressive given that the BMO LADDERED PREF SHARE IDX ETF is down 7.3% since the beginning of the year. Both these preferreds have further to run given how badly they fell due to tax loss & grudge selling in 2015. Any return to some positive sentiment in the overall Canadian preferred share market would definitely help as well.

I find there is too much senior debt ahead of the TBE debentures for my comfort - especially with oil down at $33. The Fortress 2019's are a good bet. Don't know Argent or Toscana enough to comment. I like the Zargon debentures and the Pengrowth ones are beginning to get interesting. Two others that may be attractive that I own are the Discovery Air debentures and Western One debentures - both series.

If they can monetize this sometime in the next year than this will solve any of their liquidity problems. The owners of TauRx Pharmaceuticals Ltd., which counts Singapore state investment company Temasek and Southeast Asia’s largest casino operator, Genting, as investors, are looking at listing on the Nasdaq Stock Market as early as 2017 in a deal that could value the company at about $15 billion, according to people familiar with the matter. An IPO would provide an avenue for shareholders to exit their investment in TauRx. The firm has raised $350 million to date from the likes of Temasek, the Development Bank of Singapore and the Dundee Corp. of Canada, according to its official website. Genting, a Malaysian casino-to-plantations conglomerate, is the largest shareholder with a total exposure of $120 million.

Dundee has put in $30 million US?

Maxim Power (MXG -TSX) $2.85 Canadian Maxim Power (MXG – TSX) currently $2.85/share is one that we have been holding onto for several years waiting for the value in its various assets to be realized. Following discussions with management and other holders it appears that value realization should begin to take place in 2016. Catalysts Upcoming Sale of Comax – our 100% owned independent utility in France is expected by early Q1. Settlement of FERC (Federal Energy Regulatory Commission) lawsuit should be close. This is what led to the cancellation of the previous sale of Maxim’s US assets (MUSA). Expected settlement is small compared to the value of this asset. Once this is resolved Maxim US can be sold. Settlement of Alberta Line Loss lawsuit should bring in substantial cash (see below in NAV) by Q2 2016. Once MUSA & Comax are sold Maxim will hold significant cash and its Alberta assets which can then be sold. Valuation To properly value Maxim, it is necessary to do a SOTP valuation. Currently the Company has 54MM shares out for a market cap of $150 million. Debt only resides in its French & US subsidiaries and will be extinguished upon their divestiture. Book value is currently $5.09 or close to double the current share price. Management has consistently stated that investors will see at least book value upon sale of the Company. Comax assets – Potentially $45MM after debt repayment. Line Loss Settlement – gross loss to be repaid to Maxim is $35MM - 40MM – with penalties, interest and legal fees going back 10 years the final amount Maxim may recoup is up to $70MM. Maxim USA – the value of this asset has appreciated strongly with EBITDA expected to hit over $40MM in 2018 as electricity capacity payments triple and NE US coal & other power plants are retired. Management now believes the value of this asset is close to $200MM after debt ($3.70 per share alone). This is confirmed by a recent analysis by Industrial Alliance: “Recent gas asset transactions indicate substantial potential value for MXG’s US fleet relative to the current stock price. In Q3 we witnessed a trio of transactions for merchant natural gas-fired capacity in the US Northeast, with implied multiples in the 7-10x EV/EBITDA range. Although no two assets (or two transactions) are directly identical, if we apply the multiples from the recent transactions to MXG’s US fleet, we arrive at a valuation range of US$140-200M (US$115-175M, net of ~US$25M in associated debt). After currency conversion, the valuation range implies $2.75-4.20/share (compared with MXG’s $2.58 share price). In other words, MXG is trading below the market value of its US assets alone (assuming nothing for France or Alberta). ” Totaling the expected proceeds from above nets approximately $280 to $315MM in cash to the Canadian holding company which has substantial tax loss carry forwards in place. Per share this amounts to $5.15 to $5.80 per share prior to the value of the Canadian power and development assets. The Canadian assets include: Summit Metallurgical coal with 18.9 million tons of high quality met coal with a book value of $25MM Emission credits recently sold for cash of $5MM with an additional $15MM at the same pricing Milner coal/NG generating plant with approval for a new 520MW NG fired plant in the same location with all electrical connections, water license, fuel delivery infrastructure and ops team. Milner can currently run as a peaker plant on either coal or NG until 2019 generating up to $20MM Ebitda/annum Construction ready 190 MW NG fired peaking station approved in Bruderheim Alberta Approved 200 MW wind generation project in SW Alberta waiting on improved Alberta pricing and NDP driven wind power purchase agreements to allow for economic operation. Maxim should hold in excess of $5 per share in cash along with the above listed Alberta assets at some point in the next year. The entire Company could then be sold (hopefully into an improving Alberta power market) by sometime in 2017 at the cash level plus the value resident in the Alberta assets. This value could be substantial given the Alberta NDP & federal governments’ desire to see faster retirement of coal gen capacity (50% of current Alberta generation) and replacement with cleaner NG and wind generation. MXG put out estimate of compensation & ongoing cost savings from line loss at Milner MAXIM estimates the compensation that it will be afforded to be approximately $38 million for the period January 1, 2006 to December 31, 2015 based on information currently available on the public record. This amount excludes compensation for Milner’s cost of capital and legal costs, which will also be determined in Module C. On a go forward basis, the new Rule is expected to reduce Milner’s ongoing operating costs by approximately $3 to $5 million annually, based on current forward pool prices. http://www.financialbuzz.com/maxim-power-corp-provides-guidance-on-alberta-utilities-commission-s-loss-factor-decision-378844

Thanks for this list, Norm R!

The opportunity in certain Dumbdee rate reset preferred shares seems highly compelling. The distasteful goings on with the Pref C shares along with the drop in the market price of the common has people liquidating their positions in 2 classes of DC preferreds either in fear or to take advantage of tax losses by the 24th of December in Canada. Dundee Preferred Series 2 - DC.PR.B - this is a 5 year rate reset at 4.1% above the Canada 5 year bond. Next rate reset is 30 Sep 2019 so a little under 4 years. Current dividend is $1.422 and the prefs are now trading at $11. So the current dividend yield until September 2019 is 13% and the par value of the shares is $25. Dundee Preferred Series 3 - DC.PR.D - this is a floating rate pref based on the 90 day Tbill plus 4.1%. Current dividend is $1.14 and with the shares now trading at $8.00 the yield on the floater is currently 14.25%. This series gives nice participation for those who believe interest rates will rise one day. As with the previous pref, the par value on these shares is $25. At $8 on the DC.PR.D, a potential $17 per share capital gain is a possibility given the potential for: 1. increase in confidence in the business operations and value in Dundee's portfolio 2. change in sentiment towards increased short term interest rates in Canada 3. a potential takeover or privatization of Dundee with these preferreds being redeemed at $25 par.

MXG put out estimate of compensation & ongoing cost savings from line loss at Milner today…. MAXIM estimates the compensation that it will be afforded to be approximately $38 million for the period January 1, 2006 to December 31, 2015 based on information currently available on the public record. This amount excludes compensation for Milner’s cost of capital and legal costs, which will also be determined in Module C. On a go forward basis, the new Rule is expected to reduce Milner’s ongoing operating costs by approximately $3 to $5 million annually, based on current forward pool prices. http://www.financialbuzz.com/maxim-power-corp-provides-guidance-on-alberta-utilities-commission-s-loss-factor-decision-378844

In my opinion, Dundee should be the poster child for the abolition of dual class share structures. Take a look at the latest management information circular & note carefully the substantial amounts paid to directors & management to put together such a complicated & poorly performing menagerie of assets. No way would this be trading at 25% of a already much reduced net asset value if there were no multi voting shares.... http://dundeecorp.com/pdf/2015-DC-Circular-FINAL.pdf

Maxim Power (MXG -TSX) $2.85 Canadian Maxim Power (MXG – TSX) currently $2.85/share is one that we have been holding onto for several years waiting for the value in its various assets to be realized. Following discussions with management and other holders it appears that value realization should begin to take place in 2016. Catalysts Upcoming Sale of Comax – our 100% owned independent utility in France is expected by early Q1. Settlement of FERC (Federal Energy Regulatory Commission) lawsuit should be close. This is what led to the cancellation of the previous sale of Maxim’s US assets (MUSA). Expected settlement is small compared to the value of this asset. Once this is resolved Maxim US can be sold. Settlement of Alberta Line Loss lawsuit should bring in substantial cash (see below in NAV) by Q2 2016. Once MUSA & Comax are sold Maxim will hold significant cash and its Alberta assets which can then be sold. Valuation To properly value Maxim, it is necessary to do a SOTP valuation. Currently the Company has 54MM shares out for a market cap of $150 million. Debt only resides in its French & US subsidiaries and will be extinguished upon their divestiture. Book value is currently $5.09 or close to double the current share price. Management has consistently stated that investors will see at least book value upon sale of the Company. Comax assets – Potentially $45MM after debt repayment. Line Loss Settlement – gross loss to be repaid to Maxim is $35MM - 40MM – with penalties, interest and legal fees going back 10 years the final amount Maxim may recoup is up to $70MM. Maxim USA – the value of this asset has appreciated strongly with EBITDA expected to hit over $40MM in 2018 as electricity capacity payments triple and NE US coal & other power plants are retired. Management now believes the value of this asset is close to $200MM after debt ($3.70 per share alone). This is confirmed by a recent analysis by Industrial Alliance: “Recent gas asset transactions indicate substantial potential value for MXG’s US fleet relative to the current stock price. In Q3 we witnessed a trio of transactions for merchant natural gas-fired capacity in the US Northeast, with implied multiples in the 7-10x EV/EBITDA range. Although no two assets (or two transactions) are directly identical, if we apply the multiples from the recent transactions to MXG’s US fleet, we arrive at a valuation range of US$140-200M (US$115-175M, net of ~US$25M in associated debt). After currency conversion, the valuation range implies $2.75-4.20/share (compared with MXG’s $2.58 share price). In other words, MXG is trading below the market value of its US assets alone (assuming nothing for France or Alberta). ” Totaling the expected proceeds from above nets approximately $280 to $315MM in cash to the Canadian holding company which has substantial tax loss carry forwards in place. Per share this amounts to $5.15 to $5.80 per share prior to the value of the Canadian power and development assets. The Canadian assets include: Summit Metallurgical coal with 18.9 million tons of high quality met coal with a book value of $25MM Emission credits recently sold for cash of $5MM with an additional $15MM at the same pricing Milner coal/NG generating plant with approval for a new 520MW NG fired plant in the same location with all electrical connections, water license, fuel delivery infrastructure and ops team. Milner can currently run as a peaker plant on either coal or NG until 2019 generating up to $20MM Ebitda/annum Construction ready 190 MW NG fired peaking station approved in Bruderheim Alberta Approved 200 MW wind generation project in SW Alberta waiting on improved Alberta pricing and NDP driven wind power purchase agreements to allow for economic operation. Maxim should hold in excess of $5 per share in cash along with the above listed Alberta assets at some point in the next year. The entire Company could then be sold (hopefully into an improving Alberta power market) by sometime in 2017 at the cash level plus the value resident in the Alberta assets. This value could be substantial given the Alberta NDP & federal governments’ desire to see faster retirement of coal gen capacity (50% of current Alberta generation) and replacement with cleaner NG and wind generation.

Yes the DC.PR.D is a floater yielding 90 day Tbill plus 4.1% trading at $9.60 and currently paying out $1.14 so yield is about 12%. With the amount of assets backing the Company and relatively low level of debt this should be an excellent current yield play and spectacular if you ever believe that short term interest rates will ever rise again. The DC.PR.B is a rate reset preferred which resets at the 5 year bond plus 4.1% on 30 Sep 2019 so there is about 4 years at the current dividend level of $1.42 yielding about 11 % at the current trading price of $13. Another great opportunity if you ask me.

Canaccord also has a rate reset preferred share that is currently trading at $13.00 (with a par value of $25). It is currently yielding over 11% based on its current dividend of $1.44. However this preferred resets on June 30th 2017 at the Canada 5yr bond rate plus 4.03% which given the current 5yr rate would mean a drop in the dividend to around the $1.20/annum area. Still a pretty good dividend amount if you believe in Canaccord. As well, if CF is taken over by a larger entity these prefs could rerate to a lower dividend yield or be paid off at $25. The symbol on them is CF.PR.C on TSX. Series C preferred shares: YIELD: Canaccord Genuity Group (formerly Canaccord Financial) Series C preferred shares pay fixed, cumulative, preferential cash dividends payable quarterly, yielding 5.75% annually for the initial period ending June 30, 2017 ("Initial Fixed Rate Period")* RATING: DBRS has assigned the Series C preferred shares a rating of PFD-3 (low with a negative trend). CONVERSION DATE: After the initial period ending June 30, 2017, the dividend rate will be reset every five years at the rate equal to the 5-year Government of Canada bond yield plus 4.03%. CONVERSION OPTION: On September 30, 2017 and on every September 30th every five years after, holders of Series C preferred shares will have the right, at their option, to convert any or all of their shares into an equal number of Cumulative Floating Rate First Preferred Series D shares.

Anyone want to admit to owning any heavily discounted resource focused conglomerates? Well Dundee Capital (TSX - DC.A) is certainly one as is the once highly regarded Sprott Resource Corp (latest NAV $1.41, SCP mkt price $0.45) which traded at $5.75 back in 2011 when Eric Sprott's rantings on gold & financial cataclysm were more in vogue. For those who believe there is upside in oil, ag and gold these 2 publicly traded vehicles could offer a highly leveraged vehicle to this rebound yet with a substantial margin of safety built in due to their massive discounts to recent net asset values. According to GMP (see below) Dundee Capital has a net asset value of $16.02 as of last quarter yet trades on the TSX currently for a meager $4.90 heavily discounted Canuck bucks. This is about 30% of its calculated NAV. As Broadview Capital writes in their latest November portfolio update... A brutal year for smaller-cap Canadian stocks appears to be culminating in one last horrific tire-fire of a sell-off. The confluence of tax loss selling, commodities hitting new lows and the disappearance of liquidity has created a “no bid” environment for huge swaths of the market. It is at this point that one must consider the trade-off between volatility and absolute return. In plain English, this consideration is expressed as “are you willing to watch as your portfolio falls, perhaps significantly, if you are confident it will ultimately regain those losses, and more?” As such an example, we have been watching the equity of Dundee Corporation (DC.a:TSX)2 over the past few months. We have seen it plummet from the mid-teens a year ago to under $8 two months ago. At that point, it looked interesting given the potential value of the underlying assets. It’s now under $5. It may ultimately prove to have been a great deal at $8, but certainly not a better deal than at $5 (or maybe at $3). Follows is the GMP note on Dundee following the Q3 release.... Dundee Corporation BUY DC.A-TSX November 16, 2015 Q3/15 - UHIC impairment lowers NAV Undiscounted NAV of $16.02 As of Q3/15, our undiscounted NAV is $16.02 (previously $19.55). The decline was due predominantly to an asset impairment at United Hydrocarbon International Corp. (“UHIC”) that reduced the carrying value of the investment. The carrying value of the investment in Pan African Minerals also declined materially. Despite our reduced NAV, the discount remains wide, at ~54%. In addition to ongoing uncertainty around UHIC and Pan African, we also believe the market continues to be cautious on a few of the other material holding including Blue Goose Capital, Union Group International and Dundee Securities. UHIC remains the largest individual investment in the portfolio at $227 million or $3.87/share (previously $5.79/share). During the quarter, UHIC recorded an impairment on its resource properties of $215 million, to reflect the recoverable amount. As a reminder, UHIC temporarily suspended operation in Q1/15 in response to pressure on global oil prices. We continue to believe that some recovery on the investment is likely, although timing remain uncertain. Maintain BUY – Outlook still positive, optional upside remains The UHIC impairment does not change our positive outlook for DC.A overall. We believe this had been priced into the stock. In our view, the current share price may still allow investors to participate in the upside of certain private investments. We believe the investment portfolio remains diversified and strategic and we continue to see potential for value through real estate investments and new product initiatives such as the SPAC. We continue to use DC.A’s carrying values of investments for our undiscounted NAV. However, we have quantified downside risk for the NAV by applying various discounts to the portfolio depending on the risk profile of the investments. Our most conservative calculation, which excludes all private resource sector investments, still results in shares trading at a ~10% discount to NAV. Our undiscounted NAV is $16.02 (previously $19.55). We apply a 20% discount to yield our price target of $13.00 (previously $16.00). Shares continue to trade below our most conservative NAV estimates. We maintain our BUY recommendation.

Gutsy move by this fund manager..... "I refuse to let other people do our thinking for us. Also, the decline curve never sleeps." Investor Letter on Oil The Contrarian’s Burden Posted on November 26, 2015 by Cale Smith https://www.islainvest.com/2015/11/26/the-contrarians-burden/ It’s exclusively on the oil market and the Tarpon Folio. The Short Version of The Entire Letter The popular consensus is that the oil market is grossly oversupplied, due to Saudi Arabia’s determination to retain market share at the expense of U.S. “tight oil” producers – a relatively new breed of oil companies drilling in shale, sandstone, and carbonate rock. In this consensus view, the market will remain oversupplied until significant amounts of current production are reduced – a potentially long, painful process. My view is different. I believe there are fundamental industry trends being ignored that, unless oil prices rise fairly soon, mean the oil market is at risk of sleepwalking into a supply shortage in 2016. In the meantime, the price of oil is unsustainably low and should self-correct fairly soon. This collapse in oil prices has created egregious mispricings in securities across the capital structures of numerous energy companies. The common stock prices of U.S. exploration and production companies in particular appear the most untethered from conservative appraisals of true value. A number of these firms represent exploitable, once-in-a-decade opportunities for patient investors to compound capital at high rates of return with significantly less risk than extreme levels of volatility might otherwise imply. I believe a significant and sustained rise in oil prices is inevitable much sooner than consensus. Massive cutbacks to drilling programs plus natural decline rates across the world’s oilfields may render the industry temporarily unable to increase production enough to control the pace of an increase in oil prices as demand begins to exceed supply. Oh, and also: Is it just me, or does the Middle East right now look like a Tom Clancy novel that ends in massive sectarian war? Because, um, nobody has told the oil market. The shares of the companies we now own in Tarpon have been extremely volatile. But that same volatility appears to have driven out the vast majority of institutional investors, who because of clients far less patient than you all, are doing their best to avoid the sector entirely. This has temporarily left us with a large, exploitable advantage over some of the biggest investors in the world. I believe the odds we have on our side right now are the most favorable we have seen in any area of the stock market since late 2008. As a result, Tarpon is now entirely focused on this opportunity. I have deliberately chosen to concentrate our efforts and capital here. We are, effectively, all-in on U.S. energy companies, and this is somewhat of an unexpected and dramatic shift in our holdings. I’m hoping the rest of this letter will help explain why.