Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 138034 times)

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #460 on: December 16, 2018, 01:20:48 PM »
Polar has added an additional 2.6 million shares since their last filing. Now almost up to 15%. One of the best small cap investors in Canada....


The requirement to file this report was triggered on November 13, 2018, when Polar, on behalf of client accounts over which it has discretionary trading authority, acquired 1,990,900 Shares of the Issuer.

Since the last report dated October 10, 2018, there has been a net increase of 2,559,000 Shares over which Polar, on behalf of client accounts over which it has discretionary trading authority, exercised control or direction, representing a net increase of 4.42% in the number of Shares over which Polar, on behalf of client accounts over which it has discretionary trading authority, exercised control or discretion.

As at November 30, 2018, Polar, on behalf of client accounts over which it has discretionary trading authority, exercised control or direction over 8,556,090 Shares of the Issuer, representing approximately 14.76% of the issued and outstanding Shares.

Are you or anyone else aware if they would have to disclose in this filing if they also had a position in the preferred shares?

They would only need to declare an interest in the preferred shares if they were convertible into common.


sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #461 on: December 16, 2018, 01:24:55 PM »
So will pull out about $24 million from capital & sale price in the 4th quarter....


Dundee Corporation Announces the Sale of Dundee Securities Ltd. to Echelon Wealth Partners Inc.

TORONTO, Dec. 14, 2018 (GLOBE NEWSWIRE) -- Dundee Corporation (TSX: DC.A) (the “Corporation” or “Dundee”) today announced the sale of Dundee Securities Ltd. (“Dundee Securities”) to Echelon Wealth Partners Inc. (“Echelon”) for total consideration of $4 million. This transaction is also expected to provide Dundee with additional liquidity from Dundee Securities of up to $5 million and ongoing cost savings. In October 2018, approximately $15 million of regulatory capital supporting Dundee Securities was provided to Dundee Corporation.
As part of this transaction, veteran investment professional Les Sherman and his team will be joining Echelon in their Toronto office.

“The sale of Dundee Securities is consistent with our strategy of streamlining our portfolio of investee companies and focusing our efforts on core businesses that are positioned to deliver long-term shareholder value,” said Jonathan Goodman, Chairman and CEO, Dundee Corporation. “Prior to the closing of this transaction, our capital markets team at Dundee Goodman Merchant Partners, which was operating as part of Dundee Securities, was transitioned to operate as part of Goodman & Company Investment Counsel.”

“We would like to thank Les and his team for their many years of dedication and wish them well as they transition their business to the Echelon platform,” said Robert Sellars, Executive Vice President, and Chief Financial Officer, Dundee Corporation.

All required regulatory approvals have been received and the transaction is due to close at the end of business on December 14, 2018

So they’ve already taken 15m of capital out, they’ll take 5 more, and then they’ll be paid 4? Am I reading that right?

That is correct. Also would like to know how much this has lowered annual op costs..."and ongoing cost savings" 

doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #462 on: December 16, 2018, 04:09:33 PM »
So will pull out about $24 million from capital & sale price in the 4th quarter....


Dundee Corporation Announces the Sale of Dundee Securities Ltd. to Echelon Wealth Partners Inc.

TORONTO, Dec. 14, 2018 (GLOBE NEWSWIRE) -- Dundee Corporation (TSX: DC.A) (the “Corporation” or “Dundee”) today announced the sale of Dundee Securities Ltd. (“Dundee Securities”) to Echelon Wealth Partners Inc. (“Echelon”) for total consideration of $4 million. This transaction is also expected to provide Dundee with additional liquidity from Dundee Securities of up to $5 million and ongoing cost savings. In October 2018, approximately $15 million of regulatory capital supporting Dundee Securities was provided to Dundee Corporation.
As part of this transaction, veteran investment professional Les Sherman and his team will be joining Echelon in their Toronto office.

“The sale of Dundee Securities is consistent with our strategy of streamlining our portfolio of investee companies and focusing our efforts on core businesses that are positioned to deliver long-term shareholder value,” said Jonathan Goodman, Chairman and CEO, Dundee Corporation. “Prior to the closing of this transaction, our capital markets team at Dundee Goodman Merchant Partners, which was operating as part of Dundee Securities, was transitioned to operate as part of Goodman & Company Investment Counsel.”

“We would like to thank Les and his team for their many years of dedication and wish them well as they transition their business to the Echelon platform,” said Robert Sellars, Executive Vice President, and Chief Financial Officer, Dundee Corporation.

All required regulatory approvals have been received and the transaction is due to close at the end of business on December 14, 2018

So they’ve already taken 15m of capital out, they’ll take 5 more, and then they’ll be paid 4? Am I reading that right?

That is correct. Also would like to know how much this has lowered annual op costs..."and ongoing cost savings"

This meshes with the $24M carrying value in the Sept 30 financials.

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #463 on: December 17, 2018, 10:29:48 AM »
New coverage on Dundee Precious Metals (DPM - TSX - $3.44) today with a NAV & target of $6.35. DC.A owns 36.4 million shares worth about $125million. At net asset value DC's 20% stake in DPM would be $230 million or about close to $4 per Dundee common share.

Dundee Precious Metals (DPM-T, Buy) – Analyst Jacob Willoughby is initiating coverage of Dundee Precious Metals with a Buy rating and a 12 month target of C$6.35 

Previously, DPM experienced a period of major capital investment at its three main assets (all 100% owned): its Chelopech and Krumovgrad mines and its Tsumeb smelter. Now, those major capital investments are complete and the company and its shareholders are set to be rewarded with free cash flow levels exponentially higher than in its past. DPM should produce about 190k oz. in 2018, but reach over 235k oz. in 2019 at cash costs well below $700/oz.  Production should average 275k oz. a year from 2020 to 2023. DPM is undervalued relative to its peers. 

We feel the market is assigning ZERO value to its Tsumeb smelter while also overstating the sovereign risk associated with operating in Bulgaria, making this an excellent buy at current levels.

The company also has a great balance sheet, with $35.5m in working capital, $25.8m in investments and only $39m in long term debt.

Our calculated NAV for DPM is C$6.34.  A multi asset company with its own smelter should trade at up to 1.0 its NAV.  Applying that 1.0x multiple to our NAV gives our share price target of C$6.35.

colinwalt

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #464 on: December 17, 2018, 11:00:31 AM »
@sculpin - Thanks!

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #465 on: December 17, 2018, 03:28:22 PM »
New coverage on Dundee Precious Metals (DPM - TSX - $3.44) today with a NAV & target of $6.35. DC.A owns 36.4 million shares worth about $125million. At net asset value DC's 20% stake in DPM would be $230 million or about close to $4 per Dundee common share.

Dundee Precious Metals (DPM-T, Buy) – Analyst Jacob Willoughby is initiating coverage of Dundee Precious Metals with a Buy rating and a 12 month target of C$6.35 

Previously, DPM experienced a period of major capital investment at its three main assets (all 100% owned): its Chelopech and Krumovgrad mines and its Tsumeb smelter. Now, those major capital investments are complete and the company and its shareholders are set to be rewarded with free cash flow levels exponentially higher than in its past. DPM should produce about 190k oz. in 2018, but reach over 235k oz. in 2019 at cash costs well below $700/oz.  Production should average 275k oz. a year from 2020 to 2023. DPM is undervalued relative to its peers. 

We feel the market is assigning ZERO value to its Tsumeb smelter while also overstating the sovereign risk associated with operating in Bulgaria, making this an excellent buy at current levels.

The company also has a great balance sheet, with $35.5m in working capital, $25.8m in investments and only $39m in long term debt.

Our calculated NAV for DPM is C$6.34.  A multi asset company with its own smelter should trade at up to 1.0 its NAV.  Applying that 1.0x multiple to our NAV gives our share price target of C$6.35.


Given that Jonathan Goodman is the Chairman of DPM and DPM has little net debt, perhaps they could pay out a substantial amount of operating cash flow as a special dividend in 2019....20% of $138mm US $ would be $36 million Cdn $.

We would also note that we expect DPM to generate $203m in EBITDA
and $138m in operating cash flow in 2019
and with a current EV of
approximately $465m, the shares are trading at an EV/EBITDA multiple of
2.3x and an EV/CF multiple of 3.4x. Thus we feel DPM has tremendous
upside We are initiating coverage of Dundee Precious Metals Resources
with a BUY recommendation.


In our model we are using $1,300/oz. for gold, $17/oz. for silver and
$2.75/lb. for copper. Our total NAV for DPM is C$896.6m or C$6.34 per
share and we are using a 1x NAV multiple to derive our target price of
C$6.35.
« Last Edit: December 17, 2018, 03:36:18 PM by sculpin »

petec

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #466 on: December 18, 2018, 08:04:28 AM »
Quite a bit going on here under the bonnet.

Dundee Securities sale is a nice monetiser and hardens up some BV.

Also I see the ICC/Aurora deal has closed and Union has also sold Peru power assets to PIF for shares. Those two stakes (assuming 1.2m shares of PIF, not the 2.5m potentially payable under some circumstances) are worth $40m at market today, but presumably deserve some discount as they are held through Union.

Does anyone have a sense of what else is in Union and whether there's any progress on Dundee actually being able to monetise it?

Cardboard

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #467 on: December 21, 2018, 07:47:32 AM »
Thanks Sculpin for posting the DPM report. It made me take a deeper look at this and I would encourage others to do so as well.

This company is really cheap and I figure a FCF figure of $100 - $150 million U.S. in 2019. It has essentially no net debt if you take cash and Sabina shares into account.

This means a FCF yield of 20-30% on a company with no net debt, assuming zero bullishness on the gold price.

The company is one of the very few in the gold space which considers return of capital (dividends or other) as an option or see their latest presentation. There are other cheap gold companies but, none think about that or all too busy to reinvest in the next project (GCM is an exception but, they are repaying debt instead).

So I bought some. I think that precious metals could have a good year in 2019 but, even if nothing happens, this thing is too cheap.

Cardboard

sculpin

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #468 on: January 02, 2019, 02:43:18 PM »
Great - keep cutting the superfluous overhead...

Dundee Corporation Announces Executive Departure

TORONTO, Jan. 02, 2019 (GLOBE NEWSWIRE) -- Dundee Corporation (TSX: DC.A) (the “Company”) today announced that Mark Goodman, President, has departed the Company.

“On behalf of the board of directors and fellow members of the executive management team, I would like to thank Mark for his dedication and contributions to Dundee Corporation,” said Jonathan Goodman, Chairman and Chief Executive Officer. “We would also like to wish Mark the best in his future endeavors.”

Mark Goodman’s responsibilities related to the resources portfolio and merchant capital activities at Dundee Corporation will be split amongst various executives at the Company.

petec

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #469 on: January 03, 2019, 03:01:23 AM »
Yesterday they announced another 15m unsecured loan into Parq from an (I think the same) industry investor. Effectively it looks like Parq operating cost is now externally funded but its debt keeps growing. That may be the best equity/pref holders like Dundee can hope for at this point.