sculpin

At today's $3.65 price on Dundee Precious Metals, DC's investment is valued at $133 million.

Paradigm on Dundee Precious Metals....  We think that DPM is positioned for a rerating among the Junior producers. It is now finally able to offer more predictable performance and free cash flow from its existing operations, the smelter in particular, followed by strong growth starting in Q4 from the new Krumovgrad mine.  DPM is trading at 0.48x NAV@5% at US$1,196/oz gold with zero value for the smelter. Our Junior and Intermediate averages are 0.50x and 0.91x, respectively. We mention both tiers because with 2019–2021e production of 263– 305Koz/year, plus copper, DPM will be on the 250–300Koz/year threshold of our Intermediate category. Don MacLean

Dundee Corporation (1.7%) The most instructive investment I made over the last years. Dundee looked always cheap. Therefore, I added three times to my position. I ignored the continuing adverse news flow. The very definition of a value trap. Finally, the new management in charge seems to have a plan. The underlying assets have vast potential to surprise on the upside. http://wertartcapital.com/2018/09/28/a-recap-of-my-existing-investments/

If they issue 40m shares, the stock will definitely go a lot lower so that negotiating leverage still exists. Yes, that is a good point. It's interesting to try to put yourself inside the head of an E holder. It currently trades at $18.85. Given the uncertainty around this stock, for someone to hold rather than sell they would have to believe something positive is going to happen. What could that be? Being able to cash out at $25 next year would be a big positive, but it seems very unlikely to be allowed by Dundee. Getting the face value cut to say $20 with an extension would not help because the stock would likely trade at a sizeable discount to that afterwards which would place it below the current value of $18.85. The only thing that I can think of is a conversion to common shares. At $18.85 the conversion value is about $1.50, which is a better deal than buying the common in the market. The E is currently pricing in a conversion benefit, but as you say that may be ephemeral given the probability of a large decline in the common if a conversion is announced. An option for the E holder is to short the common to take out the risk of a drop, but that is hardly an option for many people. So the question remains--who is holding the E and why aren't they selling now? For myself, I would be inclined to own it as a cheaper proxy for the common that also pays a dividend. Probably I'm overthinking it and the likely answer is that the E owners are income oriented investors that are afraid to sell at a loss and are just hoping to get their money back somehow and aren't yet sure how that will happen. Or they could use the proceeds of a sale of ICC & a few other investments to make an offer of $20 cash per pref share to all the E preferred share holders in the next few months. Would cost around $66mm. No dilution and the E prefs get all cash above the current trading price.

I also wonder how exactly they are going to refinance when the project is badly losing money on operations. Would you lend them money? I think the project needs to demonstrate it can earn money before a lender would be willing to lend. Otherwise the rate would probably be no better than what they are already paying on the construction loan. I think that the next step is likely a sale of the hotels. That could bring in enough cash to at least pay down a chunk of the debt and buy them time. But then, as you say, it may just give them more time to throw more money down the drain. Or they could attempt to sell the entire Parq entertainment complex to someone large enough (global entertainment group/hotel conglomerate) with a cost of debt in the lower single digits.

Isn't the CSE's recent success largely tied to cannabis? I believe the CSE has come to prominence in this area because the major exchanges in the US and Canada (including the TSX-V) do not allow companies that do cannabis-related business in the US. The ban is due to somewhat murky legal position, where state and federal laws differ. For instance, MedMen is listed on the CSE, which makes no sense aside from the legal angle. My point is that one has to think that, sooner than later, the major exchanges are going to either accept the murky legal standing or the murkiness will be cleared up, and you can bet that any substantial company on the CSE is going to move swiftly to a bigger exchange. Hopefully Dumbdee can monetize both ICC and their investment in the CSE in the next few months while the cannabis market is still on fire. An extra $50mm to $60mm coming from these 2 investments could offset a good portion of the E pref liability.

Positive as Dundee holds a position in this exchange - back in 2013 they owned 33%... about $25 million total now?? Maverick businessman Ned Goodman has bought a minority stake in CNSX Markets and wants to transform it into a true competitor to the Toronto Stock Exchange. Goodman, CEO of the Toronto-based holding company Dundee Corp., has reportedly teamed up with CNSX chairman Thomas Caldwell and his Urbana Corporation and purchased a 33 per cent interest in the rival exchange. He will also join the board as deputy chairman. Increase in Valuation of CNSX Markets Inc. Shares NOT FOR DISTRIBUTION TO U.S. WIRE SERVICES OR FOR DISSEMINATION IN THE U.S. TORONTO, Sept. 17, 2018 (GLOBE NEWSWIRE) -- Urbana Corporation (“Urbana”) (TSX & CSE: URB & URB.A) announces today an increase in the valuation of its CNSX Markets Inc. (“CNSX”) shares. The CNSX operates the Canadian Securities Exchange (“CSE” or “Exchange”). Based on the positive performance of the CSE over the recent quarters, Urbana’s management has increased the valuation of the CNSX shares that Urbana holds from $1.29 to $2.00 per share. This represents an increase of approximately $9.4 million (or 4.2%) in Urbana’s net assets. For 2018 to-date, the results for the CSE’s trade volume and value, as well as the amount of capital raised from equity financings, are all on-pace to far exceed the Exchange’s 2017 record setting results. The total number of listed securities on the CSE recently surpassed the 400 milestone. In total, over $2 billion of capital has been raised through the CSE in 2018 to-date. The CSE’s CEO, Richard Carleton, commented: “Our company’s performance in 2018 is a clear indicator of the CSE’s growing impact on capital formation in the Canadian capital markets. Continuing to achieve trading and corporate finance milestones comes in no small part from the support and advocacy we receive from our listed companies, shareholders and Board.” Urbana’s President, Thomas S. Caldwell, C.M., noted: “We are very pleased with this investment and the results reflect the great leadership and team at the CSE.”

Thanks for noticing that and letting us know A Uruguayan news source has reported that Aurora is in talks to acquire the ICC business. Haven't seen anything from a Canadian source yet. https://www.busqueda.com.uy/nota/una-empresa-productora-de-la-marihuana-oficial-negocia-su-venta-la-principal-compania-de No idea of the legitimacy of the article or report, only thought it might be interesting for Dundee followers. ICC sold to Aurora for $1.95 per share... https://www.newswire.ca/news-releases/aurora-cannabis-to-acquire-south-american-market-leader-icc-labs-692843161.html

Thanks for noticing that and letting us know A Uruguayan news source has reported that Aurora is in talks to acquire the ICC business. Haven't seen anything from a Canadian source yet. https://www.busqueda.com.uy/nota/una-empresa-productora-de-la-marihuana-oficial-negocia-su-venta-la-principal-compania-de No idea of the legitimacy of the article or report, only thought it might be interesting for Dundee followers. Thanks the ICC shares are up 17% today on heavy volume...press release from ICC Labs... ICC Labs notes media report on potential transaction 2018-08-23 15:34 ET - News Release Shares issued 137,600,910 ICC Close 2018-08-22 C$ 1.49 Mr. Alejandro Antalich reports ICC RESPONDS TO MEDIA REPORTS ICC Labs Inc. is aware of a recent Spanish language media report speculating as to a potential transaction involving the acquisition of the company. The policy of the company is not to comment on rumors or speculation in the marketplace or any potential transaction unless, and until, a binding legal agreement to effect that transaction has been signed. However, in response to a request from the Investment Industry Regulatory Organization of Canada, the company confirms that it engages from time to time in discussions with other industry players regarding various alternatives. There can be no assurance that the company will enter into any transaction or take any other corporate action as a result of any such discussions. ICC does not intend to make any further comment on this matter except as may be required by applicable securities laws. About ICC Labs Inc. ICC Labs is a fully licensed producer and distributor of medicinal cannabinoid extracts, recreational cannabis and industrial hemp products in Uruguay as well as a fully licensed producer of medicinal cannabis in Colombia. The company has active operations in Uruguay and is focused on becoming the worldwide leading producer of cannabinoid extracts, giving support and promoting responsible use for medicinal purposes, backed by scientific research and innovation, while following strict compliance with standards for quality and safety.

The Parq complex would be very attractive to various Asian hotel & gaming groups looking to expand their gaming empire from Macau or Hong Kong to North America. Companies such as Galaxy Entertainment, Sands China or Melco Resorts have multi billion market caps and access to financing at much lower costs than the high yield debt that is hobbling Parq at the current time. With regard to Canada’s hotel sector, it’s experiencing its own boom. Case in point: in early March, Vancouver’s Rosewood Hotel Georgia set a new record in Canada when Hong-Kong-based Able Shine Enterprises and Magnificent Hotel Investments Ltd. purchased the property from Delta Land Development Ltd. for $145 million. It surpassed the Four Seasons Hotel Toronto deal by nabbing the country’s highest recorded price per key at $929,000 per room. Another significant off-shore deal took place late last fall as APA Group of Japan finalized plans to buy Vancouver-based Coast Hotels for $210 million through a share purchase agreement with Okabe Co. Ltd. of Tokyo, bringing the brand’s 36 properties into its stable. In January, Leadon Investment Inc., a private investor group with ties to Hong Kong, inked a deal to buy British Columbia Investment Management Corporation (bcIMC)’s hospitality arm for more than $1 billion, becoming the new owner of Silver Birch Hotels & Resorts. “Last year was our peak of interest, because there were a few transactions where foreign groups wanted to buy bulk and have a platform for further expansion in North America, so they’re buying one-off portfolios,” explains McLuskie. They also don’t want to waste time on smaller assets. “The challenge is they don’t want to come here for a $10-million deal. It’s not worth it for such a small transaction, so they’re looking for larger deals where it makes sense to save money and they are looking for key markets and larger site sizes.” https://www.hoteliermagazine.com/canadas-hotel-market-good-value-foreign-investors/

Canaccord has moved 2.2 million shares over last 2 days at $1.12... 33 Canaccord 2,156,290 2,415,044 1.12 2,201,548 2,466,186 1.12 -45,258 51,142 Capitulation by a long term holder, while the new investor believes they might be getting a bargain. At this point hinges on the outcome of the advanced discussions on Parq as sellers are betting it has negative future worth to DC.

Am I right in thinking that these have been written off as assets but could come back if profits/gains are made? And do they disclose how much of these are at the holdco vs, say, Blue Goose? I believe all of these are at the corporate level but could be mistaken. Obviously if/when Dundee rights the ship & gets back to operating profitably and with potential investments that could have capital gains, then these tax loss carry forwards become very valuable allowing them to pay little or no tax on profitability & realized capital gains. The size of these losses could truly become an asset & opens the door in the future where profitable operations/assets could be bought by Dundee & their profits shielded by these TLCF's. Unused business tax losses may be carried back up to three years or carried forward up to 20 years to offset future tax liabilities of the taxpayer.16 Capital losses may be carried back three years and carried forward indefinitely. https://www.policyschool.ca/wp-content/uploads/2016/03/corporate-group-taxation.pdf A tax loss carryforward is a "negative profit" for tax purposes. It usually occurs when a company's expenses exceed revenues, making the company unprofitable. HOW IT WORKS (EXAMPLE): Tax loss carryfowards reduce future tax payments. For example, let's assume Company XYZ has income of $1,000,000 but expenses of $1,300,000. Its net operating loss is $1,000,000 - $1,300,000 = -$300,000. Company XYZ will probably not have to pay taxes that year, because it has negative taxable income. But let's assume that next year, Company XYZ makes a lot more money and records $500,000 of taxable income. Company XYZ pays a corporate tax rate of 30%. Normally, the company would need to pay $500,000 x 30% = $150,000 in taxes. But because it had a tax loss carryforward from last year, it can apply last year's loss to this year's tax bill, reducing it significantly (or even to $0, depending on the jurisdiction Company XYZ is in). Let's assume that Company XYZ can apply the entire -$300,000 tax loss carryforward to this year's tax bill. Instead of owing $500,000 x 30% = $150,000 in taxes, Company XYZ now owes only ($500,000 - $300,000) x 30% = $60,000 in taxes. Similarly, investors can carry forward losses from selling investments and thereby reduce their taxes on future capital gains. WHY IT MATTERS: Tax loss carryforwards create future tax relief for companies and are therefore very valuable. The laws on how tax loss carryforwards apply vary by state, but usually a carryforward from the last two or three years can apply up to the next seven years. After that, the carryforwards expire. There are rules and exceptions for almost any circumstance, so it's best to check with the IRS or a qualified tax accountant when calculating and applying tax loss carryforwards. As mentioned above, tax loss carryforwards are valuable assets in and of themselves. In fact, sometimes companies purchase other companies solely for their tax loss carryforwards.

Jonathan's comments on the CC suggest to me that cash redemption of the Es is the least likely outcome. The very poor Parq results put them in a much more serious liquidity crunch than I previously believed. DPM won't be sold. Parq looks like it will require substantial ongoing capital infusions. If the Delonex drilling doesn't go well, then I think they'll turn off the dividends on the prefs. I missed what he said about the CRA tax issue. I looked at the financials and it appears there could be a material charge there, but not quantifiable at this time? Anyone have further insight? Many negatives in the quarter & on the call but there were some things that give me a glimmer of hope. At least the events at Parq are really forcing them to move on getting this cleaned up. Some of the positives on the CC were the acknowledgement of potential buyers for Blue Goose, "advanced stages" in negotiating with outside parties for solutions to Parq, moving portfolio down to 30 positions from 70 and "potential proceeds of $100mm to $200mm" from these sales, DPM doubling EBITDA over next year & Jonathan saying "at right price anything is for sale". While the BC gaming industry is having a tough year, it seems as though Parq Casino is outperforming the others... And the casino part – there is no question that the casino industry if you look at the other participants in the BC industry they’re down on the table drop close to 20% year-to-date. We’re actually up on the edge water because - with the same number of tables and the same slots but we’re up because it's in a much nicer building. But certainly we’re up in a really tough market. Need to look further into the CRA filing - could it be a disallowance of the deduction amount on a large capital gain?? DC currently has the following tax loss carry forwards which could be very valuable assuming they begin to make money again... At June 30, 2018, the Corporation had operating loss carry forwards of $527,656,000 (December 31, 2017 – $505,195,000) and capital loss carry forwards of $234,396,000 (December 31, 2017 – $231,918,000).

Conference call transcript.... https://seekingalpha.com/article/4199547-dundee-corp-ddejf-ceo-jonathan-goodman-q2-2018-results-earnings-call-transcript

Based on these reviews, the Douglas & JW Marriott are doing most things right & guests seems impressed. Pricing seems to be very solid this Summer... https://www.tripadvisor.ca/Hotel_Review-g154943-d12619583-Reviews-or10-The_DOUGLAS_Autograph_Collection-Vancouver_British_Columbia.html https://www.tripadvisor.ca/Hotel_Review-g154943-d12619570-Reviews-JW_Marriott_Parq_Vancouver-Vancouver_British_Columbia.html#REVIEWS

Cline Mining Update The Q2 Coking Coal Benchmark price was just over $195 tonne USD on June 30, 2018. Major financial analysts are estimating prices to stay in this range for 2018. There are many reasons for the price support including increased Chinese demand, supply disruptions in Australia, greater producer supply discipline and environmental group pressure limiting new supplies. Cline continues to be engaged with multiple parties in exploring sources of fresh capital and potentially new ownership for Cline. Overall, the prospects for a liquidity event have improved, yet continue to be far from certain.

Roumell’s Q2 update… http://roumellasset.com/pdf/update_2Q2018.pdf Recent travels underscore our conviction that scuttlebutt (investigative journalism) provides real value to our investors. Dundee Corporation, a small (roughly $70 million capitalization) Canadian company discussed later in this letter, is now one of RAM’s top holdings. Dundee has no active sell-side coverage, is deeply out of favor, once boasted a $1 billion plus market cap, is difficult to understand and consequently uniquely situated to be a source of investment value creation, in our opinion. In early June, I traveled to Toronto to attend the company’s annual shareholder meeting. I was one of two investors from outside of Toronto who attended the meeting. Afterwards, I joined management and the company’s board for a wonderful salmon dinner sourced from the company’s AgriMarine Holdings, Inc. subsidiary. In addition to spending quality time with Jonathan Goodman, CEO, and Robert Sellars, CFO, I met key management team members overseeing some of the company’s most important investments. Richard McIntyre, COO, is heading up the company’s Vancouver Parq Casino investment. Richard seems exceptionally well-suited, both professionally and temperamentally, to renegotiate Parq’s debt and also to oversee the monetization of Dundee’s Blue Goose investment. He is joined by seasoned veteran L. Geoffrey Morphy, Vice President, Corporate Development. Dundee is described in greater detail below. What I can attest to is that there are some very competent management members, led by a new, albeit legacy controlling family member, CEO in Jonathan Goodman. Spending three days in Vancouver this month visiting the Dundee’s Parq Casino and Hotel was one of the nicer company visits in memory. Vancouver, rated by Mercer as being the number one North American city to live in, and fifth in the world, is a wonderful city. The Parq property is a Class A asset with first rate amenities. It strategically sits next to the Rogers Arena, home of the Vancouver Canucks as well as a venue for some of the biggest concerts in the city. Parq is now the largest convention venue in Western Canada. Joe Burnini, Parq’s President and on-site operator, provided me a detailed walk-through of the property. I spoke with many of Parq’s line workers which gave me a good sense of their view of the property, what’s working and what needs further attention. Top Three Purchases Dundee Corp., DCA-T/DDEJF. We wrote extensively about Dundee in our 1Q18 letter. After establishing our initial position, the stock price continued to decline in the 2nd quarter. As is typical, we decided to add to our position and average down. We believe Dundee is trading at a significant discount to a conservative estimate of Net Asset Value. Dundee is a public Canadian independent holding company, listed on the Toronto Stock Exchange under the symbol DCA and also trades in the US under the symbol DDEJF. Through its operating subsidiaries, Dundee is engaged in diverse business activities in the areas of investment advisory, corporate finance, energy, resources/commodities, agriculture, and real estate. The Corporation also holds, directly and indirectly, a portfolio of investments mostly in these key areas, as well as other select investments in both publicly listed and private enterprises. I had a face-to-face meeting with the company’s top management, including CEO Jonathan Goodman, last month and came away feeling confident in our investment. Further, as mentioned earlier, I visited one of Dundee’s significant assets, Parq Vancouver, a few weeks ago and believe that this property is extremely attractive and would garner significant interest from other investors in the event Dundee decided it no longer wanted to own it and would rather exit. To be clear, the company’s Parq asset is weighed down by costly debt that needs to be restructured. This debt is non-recourse to Dundee and sits at the property level only. Dundee is a prime example of an instance where RAM is acting contrary, in a major way, to the investment community. The company is certainly “overlooked, misunderstood and out of favor.” Dundee is a complex holding company that has destroyed massive amounts of capital in the past several years. The company’s founder, Ned Goodman, who previously created a tremendous amount of value over many decades, bet way too heavily on commodity-based investments during the latter period of the financial crisis based on the belief that paper money would be destroyed by central bank actions. His son, Jonathan, left the company in protest four years ago over deep disagreements with the company’s capital allocation decisions. To us, Dundee is a “reverse” prodigal son story— the son has returned to clean up the mess of the father. We believe Jonathan has inherited a plethora of assets that sum to a significant premium to Dundee’s share price. He has the vision, and team in place, to execute on a monetization plan resulting in a streamlined business with core assets. Moreover, investors have time on their side. Dundee effectively has permanent capital given a combination of perpetual preferred securities and one preferred series that can be paid off in common stock. We like the investment odds on Dundee very much, particularly at its recent price, which, from what appears to us, is the result of shareholder fatigue and capitulation.

The upside in this thing if either Parq or Chad work out is immense. Recent reviews of Parq seems to be improving... https://www.tripadvisor.ca/Attraction_Review-g154943-d12945737-Reviews-Parq_Vancouver-Vancouver_British_Columbia.html

Dundee to release Q2 2018 results Aug. 14 2018-08-07 17:36 ET - News Release Mr. John Vincic reports DUNDEE CORPORATION TO HOST CONFERENCE CALL FOR SECOND QUARTER 2018 RESULTS Dundee Corp. senior management will host a conference call on Wednesday, Aug. 15, 2018, at 10 a.m. ET to discuss the company's second-quarter 2018 results. Second-quarter 2018 results conference call and webcast: Date: Wednesday, Aug. 15, 2018 Time: 10 a.m. ET Webcast: see company's website Live Call: 1-855-859-2056 or 1-416-849-0833 Replay passcode: 3482877 Dundee plans to issue a news release containing the second-quarter 2018 results after market close on Tuesday, Aug. 14, 2018, and will also post it to the company's website. The conference call will be archived for replay until Wednesday, Aug. 22, 2018, at midnight. An archive of the audio webcast will also be available at Dundee's website.

Dundee Precious continuing to do well - DC's position worth about $120 million. GMP research... Dundee Precious Metals BUY DPM-TSX Last: C$3.09 Target: C$4.90 FLASH: 2Q18 results – Chelopech’s solid results lead to improved FY production and cost guidance Last night, DPM reported Q2 results after pre-releasing production earlier this month (refer to our Flash note of July 11). Adj. EPS of $0.08 beat our estimate (and consensus) of $0.05. The variance largely driven by lower G&A. CFPS before changes in working capital, including interest paid was $27mm or $0.15 vs our forecast of $28mm or $0.15 (consensus at $0.16). Operating costs were below our estimates at Chelopech, but offset partly by higher cash cost per tonne smelted at Tsumeb. As pre-reported, Chelopech had another solid quarter producing 48k oz gold and 8.5mm lbs copper in concentrates (with 55k oz and 10.4mm lbs payable in concentrates sold due to unsold inventory from Q1). Cash cost of $472/oz gold sold in copper concentrates (inclusive of pyrite oz) was lower than our forecast of $579/oz (1Q18 was $574/oz). The lower cash cost is partly due to benefiting from higher grades and recoveries as well as lower unit cost ($35.62/t processed vs $37.23/t in Q1). At Tsumeb, 46.6kt of concentrate smelted in Q2 had a cash cost of $548/tonne smelted vs. our estimate of $494/t. Cash cost was negatively impacted by lower volumes of concentrate smelted along with lower acid by-product credits (due to the 24-day annual maintenance shutdown in May), higher electricity and labour cost, a stronger ZAR relative to the U.S. dollar. Despite the higher costs at Tsumeb in Q2, we expect cash costs to improve in the coming quarters driven stronger operational performance following the maintenance shutdown. Furthermore, DPM has put in place additional currency hedges and it has favourably revised 2018 cash cost per tonne smelted guidance to $430-480/t (from $440-500/t). The smelter has performed well following the annual maintenance shutdown and concentrate smelted in July achieved a new record. At the end of Q2, Tsumeb is sitting at 43% of annual guidance of 220-250kt smelted. We currently model 240kt of concentrate smelted in 2018. Strong YTD performance at Chelopech results guidance revision: 2018 gold production guidance has been increased by almost 6% or 10k oz (at mid-point of range) relative to original guidance. Chelopech is now expected to produce 180-200k oz gold (previously 165-195k oz) with payable gold in the range of 155-172k oz (previously 140-170k oz). Copper production and sales volumes are unchanged. AISC was also improved by $50/oz to $640–755/oz (from $640–855/oz previously) based on modestly lower unit cost and deferred sustaining capex (reflecting timing of expenditures). Refer to Figure 1 for details on updated guidance. We currently model 2018 full-year production of 188k oz gold and 36.4mm lbs copper which is within revised guidance and AISC of $759/oz. Krumovgrad’s construction progressing well but slightly behind schedule – first gold still expected in late 2018: The project was ~71% complete at the end of June (compared to project schedule of 78%). Capex remains unchanged ($164mm-$168mm budget - with $111.6mm spent at the end of June) and first concentrate production is still expected in late Q4. Impact: Positive on improved guidance Operationally, Chelopech had another solid quarter with cash cost coming below our expectations. The strong operational performance in H1 led to a positive guidance revision. We believe Chelopech is well positioned to meet the updated gold production guidance having produced ~55% of (mid-range) annual gold production in H1. With the annual maintenance at Tsumeb complete, the smelter should see stronger operational performance in the coming quarters. Recommendation: Maintain BUY rating and C$4.90 target

What is to be expected from the Parq operations? Initially management gave guidance to GMP that Parq could do the following financially after a 12 month ramp period - should be the end of the ramp late this Fall... Management has provided their financial expectations for Parq, which are subject to an estimated 12-month ramp up period. Parq is on track to open in the fall of 2017.  $75-$100 million EBITDA  60-70% from casino activities  10-15% from hotel activities  15-30% from other services (food/beverage, parking etc.) At the end of the first quarter they stated 2018 would look like this... Parq guidance Management has given guidance for 2018 and expects to generate EBITDA of $50 to $75 million and in excess when operations are fully ramped up. As a result of expected increases in customer traffic and slot utilization rates, 50% to 60% of EBITDA is expected to be generated through casino operations while the remainder is from hotel operations and beverage services. So the contribution from the casino seems to be about 10% below in the overall results of the facility. It will be interesting to see if this is further adjusted in the Aug/Sep after experiencing the height of the tourist season in Vancouver (June - Aug). Potential value of Parq to Dundee using a simplistic valuation model of expected 2018 results is as follows ( On a fully converted basis, the Corporation holds a 45.9% interest in Parq Vancouver, while Paragon Gaming Inc. owns a 21.9% fully converted interest, and PBC owns a 32.2% fully converted interest).... EBITDA high EBITDA low $75mm $50mm 10X 10X EV $750mm $500mm Debt $550mm $550mm Equity $200mm ($50mm) 46% DC $92mm $0 At the upper end of the range value comes in at $90 million to Dundee using $75mm in EBITDA while Parq is owned by the debt holders at the lower end. Hopefully, upon full ramp in 2019, Parq can achieve the initial expected results resulting in a floor valuation to Dundee of $90mm & upside to a $200mm valuation with $100mm in EBITDA & possibly a much better financing arrangement. As well, perhaps higher value & substantial financial breathing room could be extracted by selling the hotel operations in what is a strong Vancouver market - an example per room valuation multiple for the hotels would be $425,000 per room average over both the Douglas & Marriot's 517 guest rooms gives a valuation of $220mm just to the hotels & their expected approximate 15% - 25% contribution to Parq EBITDA. https://www.statista.com/statistics/496256/vancouver-downtown-value-per-hotel-room/ http://dailyhive.com/vancouver/interim-hotel-rooms-development-policy-vancouver-shortage Vancouver’s tourism sector growth has been experiencing year-over-year records with overnight visitation, but this is not reflected in the city’s hotel accommodations capacity. A new report by the City of Vancouver states the municipality saw a net loss of 1,105 hotel rooms between 2008 and 2018, with the gains in the years leading to the 2010 Winter Olympics now lost.

Right now value of their holdings in Dundee Precious Metals = $109 million while Series 5 prefs liability = $90mm. Kind of premature to be discussing default but then again with DC's luck & general competence there is always need to worry about mine catastrophes, nationalization or anything else that can sink a junior gold miner. Latest article I can find on TaurX of which I believe Dumbdee has a 4% stake (hopefully they have not put any more in on subsequent financings).... Casino-Backed Startup Eyes Alzheimer's Cure Worth $2.5 Billion By Joyce Koh and Livia Yap March 1, 2018, 8:24 PM EST *TauRx will look at options including IPO if trial successful *Big pharmaceutical companies have exited or failed in field It hasn’t found a cure for Alzheimer’s disease and doesn’t have any drugs on the market. Yet, TauRx Pharmaceuticals Ltd. says the company’s worth about $2.5 billion as it embarks on its latest trial funded by shareholders including casino operator Genting Bhd. If the trial proves successful, the Singapore-based company plans to apply to European and U.S. regulators for conditional or accelerated approval of its drug, TauRx Deputy Chairman Tay Siew Choon said in an interview in the city-state last month. It will also need to raise about $150 million to conduct a more comprehensive phase III trial, though at that point, it would evaluate options including an initial public offering or sale. TauRx is pressing ahead in a field that has seen many of the largest pharmaceutical players from Pfizer Inc. to Axovant Sciences Ltd. exit or fail. Just last month, Merck & Co. said it will end a trial of its most advanced Alzheimer’s drug while Biogen Inc.’s shares tumbled after saying it was making changes to its trial. TauRx disappointed investors in 2016 when it said its LMTX drug failed to meet a primary goal of slowing the rate of disease progression when taken in combination with other Alzheimer’s drugs. “We have consistently seen that our theory works, and there’s no reason to give it up,” said Tay. “Shareholders’ support and faith in us has not weakened.” On top of a $71 million rights issue in October to fund the current trial, TauRx had already raised more than $500 million since 2002, according to Tay. The last financing round in 2016 valued the company at about $2.5 billion, he said. Billionaire Lim Kok Thay’s Genting invested $112 million in TauRx in 2012, becoming its biggest shareholder with about a 20 percent stake. TauRx has been recruiting patients since November for the current trial, where it plans to test its drug on 200 patients with mild Alzheimer’s disease who aren’t taking any other medication. The results are expected in early 2019. https://www.bloomberg.com/news/articles/2018-03-02/casino-backed-startup-eyeing-alzheimer-s-cure-worth-2-5-billion

Dundee Precious Metals Details: Second quarter metals in concentrate produced was 48Koz Au and 8.5Mlbs Cu versus Q1/18 of 57.3Koz Au and 9.3Mlbs Cu and Q2/17 of 53.5Koz Au and 8.7Mlbs Cu. While the quarter’s gold production was weaker than Q1/18, this was expected as Q1 saw ore grades significantly higher than planned. The company noted in the release that Chelopech’s gold production was still higher than expected in Q2 as a result of higher gold grades in the zones mined. Gold production YTD looks to be trending towards the high end of guidance(165-195Koz) and copper production appears to be in line with guidance (33.7-40.4Mlbs). At the smelter, concentrate smelted of 46.4Kt was below Q1/18 of 54.1KT and Q2/17 of 60.6Kt due to the 24 day annual shutdown. At Krumovgrad, the forecasted CAPEX remains at $164 to $168M, compared with the original estimate of $178M. Implications: Mildly Positive Despite lower gold production q/q and y/y, YTD production of 106Koz appears to be trending towards the upper end of full year guidance. While the smelter’s performance was light due to the annual shutdown, the company notes that full year concentrate throughput is expected to be within guidance of 220-250Kt, therefore it should have a strong H2/18 with YTD concentrate smelted totally 102.2Kt. Krumovgrad remains on track for a late Q4/18 startup. DPM remains the best-value name in our Junior Producer universe and is a top pick for the quarter.

I looked at his numbers and it is somewhat wonky but close to the per share figure. Before taking out corp costs & pref dividends over next 18 months and adding the $37mm cash he left out I get to $251mm net asset value per common or $4.25 per share. Taking out the costs & dividends gives me about $3.50 per share. Total value of assets above = $434mm + Cash $37mm - Total pref of $218 = $251mm

Here is Jim Roumel's valuation of Dundee post AGM. Values Parq at 50% of carry, expects Blue Goose sale & places conservative assumptions on other assets while subtracting $41 million for corp costs & pref dividends over next 18 months. Still comes out with $4.25 per common valuation. I attended Dundee's shareholder meeting two weeks ago and walked away with increased confidence that the board has a plan, senior executives are up to the task and Jonathan knows what he's doing and is passionate about righting this ship. I view it as a "reverse prodigal son" story, i.e. the brother has come back to fix the sins of the father. Our conservative NAV assumption gives us a large margin of safety, in my opinion:Primary Investments: 1. Untied Hydro $65 million (40% of carrying value) 2. Blue Goose $35 million (Current mark, we believe gets sold this year) 3. Dundee Securities $13 million (50% of carrying value) 4. Dundee 360 $12 million (50% of carrying value) 5. Android $24 million (100% of carrying value) 6. Dundee Sarea $7 million (50% of carrying value) 7. Parq $50 million (50% of carrying value) 8. DPM $124 million (Current market value) 9. eCobalt $19 million (20% discount to market) 10. Other Public Equities $40 million (20% discount to market) 11. TauRx $20 million (50% of carrying value) 12. Debt Investments $25 million (25% discount) Sum: $291 million discounted NAV vs Dundee's NAV of $588 million Less 18 months corporate overhead of $24 million and 18 months Preferred Div of $17 million = $4.25/share