Author Topic: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?  (Read 138032 times)

Sportgamma

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #480 on: January 29, 2019, 06:00:10 AM »
https://finfeed.com/small-caps/mining/mine-development-focus-zinc-ireland-secures-cornerstone-investor/

"After emerging from a trading halt this morning, Zinc of Ireland NL (ASX: ZMI) reported that Dundee Resources Limited, a subsidiary of Canadian based Dundee Corporation (TSX:DC.A), has become its cornerstone shareholder with 19.9% shareholding.

ZMI has successfully completed a placement to Dundee, raising A$2.425 million at $0.005 per share — an encouraging 25% premium to the market price."

[...]

“We also welcome the in-house knowledge and expertise that the Dundee Goodman Merchant Partners (DGMP) team bring to the table. DGMP is a division of Goodman & Company, Investment Counsel Inc. (GCIC), a wholly-owned subsidiary of Dundee. DGMP finances and provides M&A advice to mining companies through all phases of their development cycle. The DGMP team has a respected corporate finance team with deep technical backgrounds in engineering and geology.


bizaro86

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #481 on: January 29, 2019, 01:25:23 PM »
Oh good. I know when I look at Dundee I always think, man this would be perfect if they just had a bit more of their NAV in illiquid microcap speculations.

Sportgamma

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #482 on: January 29, 2019, 01:58:23 PM »
Oh good. I know when I look at Dundee I always think, man this would be perfect if they just had a bit more of their NAV in illiquid microcap speculations.

Haha.

Well, they have been very clear about building up the merchant banking unit, so it should not come as that much of a surprise. Nonetheless, it is disappointing that there aren't actual clients participating in the placement with them.

doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #483 on: January 29, 2019, 06:25:45 PM »
Oh good. I know when I look at Dundee I always think, man this would be perfect if they just had a bit more of their NAV in illiquid microcap speculations.

Nicely said.  Yes, that's always been the missing link for them. ;)

EDIT: Just noticed Dundee's aftermarket release regarding the sale of the Union Group holding for $14.5M Canadian, approx $4M lower than the carrying value at Sept 30.
« Last Edit: January 29, 2019, 06:31:49 PM by doc75 »

petec

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #484 on: January 29, 2019, 09:26:25 PM »
EDIT: Just noticed Dundee's aftermarket release regarding the sale of the Union Group holding for $14.5M Canadian, approx $4M lower than the carrying value at Sept 30.

Ugh. That’s about the only holding (bar DPM) that’s been having good news (the ICC sale to Aurora and the Peru sale to Polaris). IIRC the last balance sheet value was at a liquidity discount to the value of the ICC stake only, with nothing for any other assets, so this sale is at a big discount. Ouch.

Still, more cash in the bank and a harder NAV.
« Last Edit: January 29, 2019, 10:13:00 PM by petec »

Lakesider

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #485 on: January 29, 2019, 10:41:59 PM »
Still, more cash in the bank and a harder NAV.

Agreed, I don't think the market was giving it much value anyway.

Cardboard

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #486 on: January 30, 2019, 04:40:39 AM »
Less than half the value of highly liquid Aurora shares alone. Yeah morons.

Cardboard
« Last Edit: January 30, 2019, 05:19:24 AM by Cardboard »

doc75

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #487 on: January 30, 2019, 05:19:53 AM »
Less than half the value of highly liquid Aurora shares alone. Yeah f. bunch of morons.

Cardboard

The press release refers to this as an "acceptable outcome". You know it's not a great deal when that's the best spin the company can muster.

Must come down to them recognizing there was no path to extracting full value, but I'd like to know why.  Based on commentary on the Q3 call I was expecting the private asset sales to be roughly at book.

petec

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #488 on: January 30, 2019, 05:35:32 AM »
More worryingly, if this is the discount they have to accept for holdings with a visible (albeit lookthrough) market value, what on earth are they going to have to accept for junk like TauRx and Android? All the stuff where the value is really questionable is still on the balance sheet.

As a common shareholder I'm now praying that:
1) they use some of their recent $40m cash inflow to tender for lots of prefs at a silly discount.
2) they convert the S5 pref at $2. Conversion is highly accretive to my bear case (so removes a lot of risk), somewhat accretive to my base case, and still leaves a lot of upside to my bull.
3) They find a Spindletop in Chad!

petec

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Re: Dumbdee - The Goodmans, The Bad & The Ugly - 30% of NAV bargain?
« Reply #489 on: January 30, 2019, 05:37:14 AM »
Must come down to them recognizing there was no path to extracting full value, but I'd like to know why.  Based on commentary on the Q3 call I was expecting the private asset sales to be roughly at book.

In fairness this isn't massively away from book in absolute terms. It's just disappointing they couldn't have got a better deal. They must have had almost no exit rights, which suggests a badly written deal.