Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 23878 times)


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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #80 on: May 15, 2017, 08:12:26 AM »
GMP on.....

Dundee Corporation1 BUY


May 15, 2017 ▼ Target: C$8.00

UHIC sale provides cash, royalty potential

Dundee Corp. (DC.A-TSX) reported Q1/17 results on May 11
th after the
market close.

Prior to the quarter, DC.A also announced the sale of UHIC
assets to Delonex Energy Ltd. in exchange for US$35 million cash on closing,
US$50 million cash on first oil, and a royalty stream. DC.A owns 85% of UHICís
equity. Delonex is a Sub-Saharan oil and gas company focused on exploration,
development and production and is currently active in Ethiopia, Kenya and
Mozambique. The deal is subject to a number of conditions including
approval from the government of Chad. DC.A management believes the
timeline for this approval is uncertain.

In our view, this announcement is positive for DC.A. Although our NAV is
reduced, we believe the market may have been assigning near nil value to the
UHIC investment. We believe the cash payable on closing would help ease
any liquidity concerns for DC.A. Our UHIC NAV contribution (previously based
on managementís carrying value) is reduced by ~$2.60. We assume the deal
will close, but conservatively include only the initial US$35 million payment in
our NAV. Payment on achievement of first oil (US$50 million) would add
~$1.00 to our NAV, plus an ongoing royalty.

Liquidity remains tight

We believe DC.A continues to manage a tight liquidity situation. The existing
$80 million credit facility has been replaced by a 365-day revolving term
credit facility with a Canadian Schedule I Chartered Bank for up to $80 million,
which offers some near term certainty on the corporate debt. Corporate debt
ended Q1/17 at $61 million and currently stands at $49 million after certain
asset sales post quarter. We believe further asset sales of the liquid public
investments remain possible for annual corporate level cash needs (interest,
dividends, op. expenses) of ~$36 million.

Maintain BUY Ė Parq casino remains on track

Exiting the quarter, our NAV is now $9.77 (previously $12.49). There were no
material changes in our NAV other than UHIC. The Parq Casino Resort project
in Vancouver (Paragon Holdings) remains on track to be completed and
operational by the fall of 2017. Despite the decline, the discount to NAV
remains wide at ~61%. We apply a 20% discount to yield our price target of
$8.00 (previously $10.00). We maintain our BUY rating. Please see Figure 1
for our NAV sensitivity analysis.


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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #81 on: May 19, 2017, 11:21:58 AM »


Dundee Corp. has sold 15,536,288 Class A subordinate voting shares of Dream Unlimited Corp. at a price of $6.85 per share for aggregate proceeds, net of associated costs, of approximately $106.1-million.