U.S. Markets open in 2 hrs 27 mins

Edited Transcript of DC.A.TO earnings conference call or presentation 15-Aug-19 2:00pm GMT

Q2 2019 Dundee Corp Earnings Call

Toronto Sep 6, 2019 (Thomson StreetEvents) -- Edited Transcript of Dundee Corp earnings conference call or presentation Thursday, August 15, 2019 at 2:00:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* John Vincic

Dundee Corporation - Head of Investor & Media Relations

* Jonathan Carter Goodman

Dundee Corporation - Chairman & CEO

* Robert Mark Sellars

Dundee Corporation - Executive VP & CFO

================================================================================

Conference Call Participants

================================================================================

* Andrew Hood

M Partners Inc., Research Division - Research Analyst

* Brett Reiss

Janney Montgomery Scott LLC - SVP of Private Client Group & Financial Advisor

* James Christopher Roumell

Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good morning. My name is Shelley, and I will be your conference operator today. At this time, I would like to welcome everyone to the Dundee Corporation Q2 2019 Conference Call and Webcast. (Operator Instructions) Thank you.

Mr. John Vincic, you may begin your conference.

--------------------------------------------------------------------------------

John Vincic, Dundee Corporation - Head of Investor & Media Relations [2]

--------------------------------------------------------------------------------

Thank you, operator. Good morning, everyone, and welcome to Dundee Corporation's 2019 Second Quarter Results Conference Call and Webcast. The company's financial results were issued last night and are available on our website at dundeecorporation.com.

Before we get started, please be advised that the information discussed today is current as of June 30, 2019, unless otherwise indicated, and the comments made on today's call may contain forward-looking information. This information by its nature is subject to risks and uncertainties, and as such, actual results may differ materially from the views and expectations expressed today. For further information on these forward-looking statements, please consult the company's relevant filings on SEDAR.

Also please be reminded that all currency amounts discussed on today's call are in Canadian dollars unless otherwise stated.

Our presenters today are Jonathan Goodman, Dundee's Chairman and Chief Executive Officer; and Robert Sellars, Executive Vice President and Chief Financial Officer. And now I'd like to turn the call over to Jonathan Goodman. Jonathan?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [3]

--------------------------------------------------------------------------------

Thank you, John, and thanks, everyone, for joining the call this morning.

It has been over 18 months since I returned to Dundee. In that time period, much has changed, and we have made progress on a number of fronts. On previous quarterly calls, we have dedicated significant time to discuss our legacy asset. Today, I'd like to shift the focus to something that perhaps has been overlooked. And that is the success that we've enjoyed as we implement our strategic pivot to refocus Dundee on its roots in the resource sector.

To begin with, our merchant banking team, which is based in Vancouver, Toronto and overseas, is operating -- and operating under the banner of the Dundee Goodman Merchant Partners is permanently established in the marketplace. They've been actively engaged on a number of mandates in the junior mining sector. More importantly, this team has worked tirelessly and have established themselves in the ecosystem of the junior mining world as a credible player.

Let me take a moment to talk about some of our success stories in our resources portfolio. Last quarter, we touched upon our support for the business combination between eCobalt and Jervois Mining. We are happy to report this merger closed in late July, formally creating a much larger, more liquid cobalt vehicle with greater access to capital markets. And just last week, Jervois announced that it's commenced the 2,000-meter drill program at the Idaho cobalt operations, targeting the main lines of the ram deposits from metallurgical samples and testing in the footwall at depth.

Planning for further infill drilling is also underway to focus on improving the existing resource model with drilling expected to be completed this year. Results from the drilling program will feed into the feasibility study for the Idaho cobalt operations, which Jervois have planned to publish early next year. We are excited about the progress Jervois is making and look forward to the update next quarter.

Subsequent to quarter end, we reported the sale of some of our shares in Reunion Gold. Our decision to sell shares in Reunion is consistent with our strategy of prudent capital allocation across our resources portfolio. Simply put, our investment in Reunion has been profitable, and we thought it was wise to crystalize a small portion of our gain. In doing so we were able to reallocate that capital to other parts of our business and portfolio where we see promise and potential. We remain very bullish on the prospects for Reunion Gold, and this is reinforced by the fact that we continue to be their second-largest shareholder.

Now let me take a minute to look -- moment to look at our largest portfolio holding, Dundee Precious Metals. During the second quarter of 2019, DPM produced gold on an all-in sustaining cost basis of USD 707 per ounce. Gold contained in concentrate produced increased by 9% compared to the same period last year to 52,425 ounces, including 5,351 ounces from Ada Tepe, which is a new mine that is just starting to ramp up and will be in full design capacity during the third quarter of 2019. Copper production increased by 6% to 9.1 million pounds relative to the corresponding period in 2018. The Tsumeb smelter achieved total complex concentrate smelted of 61,667 tonnes during the second quarter, which was 33% higher than the corresponding period in 2018 and remains on track to meet its 2019 production guidance.

Overall, we are very pleased with the results from DPM. The company continues to be in what we still think is the early stages of a rerating as it ramps up production at Ada Tepe. We're also excited by the aspiration prospects for DP, not just in Bulgaria, but also for its Timok Gold Project in Serbia. In today's rising gold price environment, the strong performance is being reflected in DPM's share price, which closed yesterday at $4.98 a share. As our flagship holding, it goes without saying we are extremely pleased with this investment.

Now let me move on to discuss the company's capital structure. As many of you know, on May 15, we completed the successful conversion of our Series 5 preferred shares into Class A subordinate voting shares of the corporation. This was an important step, which permanently lowers our ongoing interest payments and G&A costs.

Along these lines, we are consolidating -- considering other ways to streamline our capital structure. Previously, we considered a normal course issuer bid and substantial issuer bid for our Class A subordinate voting shares. After careful analysis, we have come to -- between management and the Board of Directors, we have determined that this is not the best use of our capital at this time. To that end, we are in the process of implementing a normal course issuer bid for our Series 2 and Series 3 preferred shares. We believe this would be a more effective use of capital that will result in lower interest payments and G&A costs. And relative to potential use of capital, we see this as delivering the best possible return for our shareholders at this time.

Work is underway, and we hope to update the market on our intentions and ability to carry out the NCIB beginning later this quarter.

In June, Bob Sellars and I went to London to meet with members of the senior executive team from Delonex Energy, our partner that is advancing the United Hydrocarbon assets in Chad. In addition to meeting with the CEO and other executives, we had an in-depth meeting with members of their technical team. This included a fulsome update on Delonex exploration drilling to date and its work interpreting 2D and 3D seismic service -- surveys.

As noted in our news release, Delonex completed the first phase in Block H as planned with the completion of 6 exploration wells. The exploration drilling established the presence of hydrocarbons in multiple wells and zones. Based on the success of the initial exploration program, Delonex has commenced the next phase of exploration, starting with the acquisition of additional seismic surveys comprising of 1,530 square kilometers of 3D seismic and 800 line kilometers of 2D seismic. The acquisition of the 3D data is underway with the acquisition of the 2D data following completion of the 3D. The next phase of drilling will be based on the new seismic data and is currently in the planning stages scheduled to begin in early 2020. A comprehensive assessment of the resource potential of Block H is expected to follow the completion of Phase 2.

Based on this update and the meeting with the Delonex team, we are very encouraged by the prospects for UHIC's assets in Chad. The quality of the work being done and the high-caliber technical team gives us added confidence in Delonex and in its ability to advance these assets in a timely manner.

And now I'd like to turn the call over to Bob Sellars who will review the financial performance during the quarter. Bob?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [4]

--------------------------------------------------------------------------------

Thanks, Jonathan. I will first talk about the second quarter results.

For the second quarter, we are reporting a pretax loss of $4.4 million compared to a $74 million loss in Q2 2018. The net loss for the quarter after discontinued operations and taxes was $8.5 million compared to a loss of $79.1 million in 2018. During the quarter, there was a $5.4 million net gain on investments, of which $16 million was the portfolio gain from Dundee Precious Metals with other losses offsetting this gain. Investment losses for the prior year were $12.4 million.

We also had a $3 million gain on UHIC -- in UHIC to revalue the royalty and the consideration to our net total of $158.6 million after adjusting to the contingent consideration. There was also a $3.7 million gain on the conversion of the Series 5 preferred shares into common shares in the quarter.

At Blue Goose, we incurred a loss of $3.8 million in the quarter, which was an improvement over the loss from the second quarter of 2018, which was $8.1 million. The fair value of livestock decreased by $584,000 in the quarter compared to a decrease of $3.5 million in the prior year.

Goodman, Investment Counsel, or GCIC, loss in the quarter was $288,000 compared to $1.9 million loss in the prior year, reflecting the benefit of the downsizing and the expense reduction that we implemented. Equity accounted losses were $2.8 million compared to a $38.6 million loss in the same period in the prior year, which was primarily related to Parq Vancouver in 2018.

Consolidated G&A for the quarter was $9.5 million compared to $18.5 million in Q2 2018, reflecting continued reductions of head count and operating cost across most entities.

We treated Sotheby's as discontinued operations as the business was sold and the transaction closed in late May, generating proceeds of $5 million. As previously disclosed, we successfully refinanced the capital structure of Parq Vancouver on May 9 with the first -- a new first and second lien loan as well as a new equity investor. These steps are expected to help generate significant improvement in Parq Vancouver's cash flow.

Let me now provide a year-to-date summary of our results. Year-to-date, we are reporting a pretax gain of $19.1 million compared to $102 million loss in the prior year. Year-to-date net gain after discontinued operations and taxes was $7.7 million compared to a $99.7 million loss in 2018. The net gain on investments was $33.5 million, of which $46.2 million was DPM related with other losses offsetting this gain.

Year-to-date gain on the UHIC royalty was $9 million compared to a $6.7 million gain in the corresponding 2018 period. The year-to-date gain on the conversion of the Series 5 preference shares into Class A subordinate voting shares was $9.1 million.

At Blue Goose, Blue Goose incurred a year-to-date loss of $7.9 million compared to $14.5 million in 2018 period, again reflecting continued downsizing and expense reductions. Year-to-date fair value increased, and livestock was $1 million compared to $2 million loss in 2018.

At GCIC, the year-to-date loss was $751,000, which compares to a loss of $3.8 million in the prior year due to the wind down of the private client division in 2018.

Year-to-date equity accounted losses were $3.3 million compared to $48.8 million in the prior year, which was primarily related to Parq Vancouver in 2018. Again, consolidated G&A was down, and we are at $18.3 million year-to-date, which is down significantly compared to $32.1 million in the same period of '18.

Let me now move to a review of the investment portfolio, which was valued at $310 million at the end of June 2019 compared to $270 million at year-end. Proceeds of disposition were $7.9 million in the quarter and $15.2 million year-to-date, with the Canadian Securities Exchange contributing $9.7 million. Dundee's marketable securities portfolio was $217 million at quarter end with DPM accounting for $176 million of that total.

Now let me make a comment on liquidity, which we continue to monitor closely. At the end of the second quarter, we had approximately $36 million of corporate cash on hand. We continue to work at increasing overall liquidity by reducing costs and disposing of noncore assets.

Year-to-date, we have funded subsidiaries for a total of $11.3 million. Our annual dividend for 2019 should be $9 million with the additional dividend tax of $3.6 million.

Our year-to-date head office expense for; 2019 was $10 million, including $1.9 million in consulting fees and related to the Series 5 preference shares conversions and legal work related to Parq. We also incurred some significant severance accruals.

Q2 head office expense was $4.9 million compared to the prior year of $10.8 million, and this compares to Q4 2018 head office G&A of $6 million. We expect to see a continued reduction in our normalized G&A run rate with a target of $14 million to $15 million in 2019 subject to ongoing downsizing costs.

As we have previously disclosed, our tax discussions with Canadian revenue agency are ongoing, and we have disclosed in the contingency note an amount of $11 million in tax and $2 million in interest that we expect to get reassessed in the near future. However, the eventual tax amount could be higher and may adversely affect our cash flow.

This concludes our financial review for the quarter, and I will now turn the call back to Jonathan. Jonathan?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [5]

--------------------------------------------------------------------------------

Thank you, Bob, for your comprehensive update.

Let me take a moment to provide a brief update on some of the other assets in our portfolio. Beginning with Blue Goose, we are continuing a process to explore a sale of this business. We are engaged in advanced discussions with the group and hope to have an update on this matter later in the third quarter or early in the fourth quarter.

At Parq Vancouver, we are encouraged by the improved operational performance since announcing our partnership with an established industry player. We are in the midst of the peak tourist season in Vancouver and seeing stronger occupancy rates and performance at Parq relative to previous years.

We continue to explore opportunities with potential buyers to sell all or a portion of our investment in TauRx at an acceptable price. TauRx is a pharmaceutical company involved in the research and development of a drug to treat Alzheimer's and is currently involved in a Phase III clinical trial for one of its drugs.

And finally, we're also engaged in discussions with Eight Capital about the possibility of them finding a buyer for repaying the $13.7 million subordinated loan, which Dundee currently holds.

Now let me briefly touch upon our ongoing cost-cutting efforts. We are squarely focused on lowering our G&A, and we'll leave no stone unturned in our efforts to reduce expenses. We have continued to reduce costs and head count at both corporate and subsidiary levels. Letting good and dedicated people go is never easy, but it's critical that we remain disciplined as we align our head count and the realities of our business model. More importantly, we are seeing a step-change reduction in G&A that will help underpin the future successes of our business.

And finally, I want to talk about some of the things that we're doing at Dundee to further align our interest with those of our shareholders. In the second quarter, we restarted our employee share purchase plan. As part of this plan, employees can put up to 10% of their pretax salary towards the purchase of Class A subordinate voting shares. The company, in turn, provides a matching program, incentivizing employees to participate in this plan.

I am happy to report that both Bob Sellars and I and along with a number of head office employees are taking full participation in this program. So we started this plan and our participation is a strong sign of confidence in our business and our efforts to implement a strategic shift. Our goal is to have all employees to take part in this plan, and we are encouraging them to get involved. In addition to the share -- employee share purchase plan, we are also in the process of reinstating a stock option plan for senior employees. On that note, I would also -- I would like to thank all our employees and shareholders for their continued support.

And now we'd be happy to answer your questions. Operator?

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Your first question comes from the line of Brent -- Brett Reiss from Janney.

--------------------------------------------------------------------------------

Brett Reiss, Janney Montgomery Scott LLC - SVP of Private Client Group & Financial Advisor [2]

--------------------------------------------------------------------------------

If you're able to achieve your objectives on the preference 2 and 3 shares, could you just walk us through the arithmetic? I mean the dividends are costing you $9 million plus $3.6 million in dividend tax. What do you hope on a base case to be able to reduce that down to?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [3]

--------------------------------------------------------------------------------

Well, the dividends of $9 million included first quarter of -- we paid some on the Series 5. But -- so the ongoing 2 and 3 dividends should be about $7.3 million or $7.4 million, and then there's $0.40 tax on that. So a smaller number than the $9 million.

The issuer -- normal course issuer bid is either 5% of the outstanding or 10% of the public float on an annual basis. And so there's 3.7 million shares outstanding, I think, of the Series 2 and 1.7 million of the Series 3. I don't have the exact number in front of me, but -- and so we're going to be -- hope to be steadily in the market (technical difficulty) be buying some.

--------------------------------------------------------------------------------

Brett Reiss, Janney Montgomery Scott LLC - SVP of Private Client Group & Financial Advisor [4]

--------------------------------------------------------------------------------

Right, right. And going that route instead of doing it for the subordinated A shares, can you walk me through why you're opting for that versus the other?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [5]

--------------------------------------------------------------------------------

.

How about I take it? The truth of it is when you buy -- the press are trading at a big discount, so when you buy them back, you actually reduce -- they're trading at $13 -- if you bought some at $13, there's $12 of what's the equivalent of debt reduction for every share you buy back, and the benefit of that is all shareholders. And as Bob said, over time, bringing those numbers lower reduces your interest cost, reduces the tax payable. It has numerous benefits to their benefits for our shareholders. And we feel that notwithstanding the fact that we've started the process of cleaning up our balance sheet, we feel we're not done yet. And to buy back the shares before, you feel like you finished the balance sheet cleanup seems -- feels a bit premature.

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [6]

--------------------------------------------------------------------------------

There's actually 3.5 million shares outstanding on the Series 2, not 3.7 million, so...

--------------------------------------------------------------------------------

Brett Reiss, Janney Montgomery Scott LLC - SVP of Private Client Group & Financial Advisor [7]

--------------------------------------------------------------------------------

Okay. Other than Dundee Precious Metals and the remaining Reunion Gold shares, what other gold investments do we still have at Dundee?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [8]

--------------------------------------------------------------------------------

Unfortunately, I don't have my portfolio in front of me. We have a very nice position in a company called Maritime Resources. We own 19.9% of that company, which is a gold project in Newfoundland. And as I struggle to pull my portfolio up on my phone -- and boy, technology is great. So let's see. We own some shares in Cabral, which is precious metals. It really is Dundee and Maritime -- Dundee Precious and Maritime are the lion's share of it.

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [9]

--------------------------------------------------------------------------------

And Reunion.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [10]

--------------------------------------------------------------------------------

And Reunion, of course. And I don't want to -- I mean I want to -- I mean I met with Reunion's management yesterday. We're very excited about what's going on in Reunion. Our view was just we wanted to take a little bit off the table, but we are very excited with what they're doing in French Guiana right now.

--------------------------------------------------------------------------------

Brett Reiss, Janney Montgomery Scott LLC - SVP of Private Client Group & Financial Advisor [11]

--------------------------------------------------------------------------------

Great. Great. Are you disappointed that something hasn't been done on Blue Goose? And can you give any more color on that?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [12]

--------------------------------------------------------------------------------

Disappointed and frustrated is probably -- it's moving forward, but the process is slow. We've had discussions with many different groups. And a number of them have, for one reason or another, wanted to bid and didn't. We've got a couple of groups that we're still talking to, one more serious than the other. And obviously, as I said, it's a slow process, but we hope to get something done certainly by the end of this year.

--------------------------------------------------------------------------------

Brett Reiss, Janney Montgomery Scott LLC - SVP of Private Client Group & Financial Advisor [13]

--------------------------------------------------------------------------------

Do you think that as the balance sheet and things get better at Dundee that your relative negotiation position with potential buyers will strengthen over time?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [14]

--------------------------------------------------------------------------------

I think it already has. I mean I think people that come in and think that they're going to bid $0.10 on a dollar for something, I think there was a lot of concern because the Series 5 actually had a due date on it that put a lot of pressure. I mean the reality of it is, we own close to $200 million in Dundee Precious Metals shares. So I mean it'd be hard to argue that we're without any wherewithal. We certainly are not, and we have a decent cash position. And I think we're in a much better financial state than we were a year ago or even 2 years ago.

--------------------------------------------------------------------------------

Brett Reiss, Janney Montgomery Scott LLC - SVP of Private Client Group & Financial Advisor [15]

--------------------------------------------------------------------------------

Right, right. Now other than something finally happening with Blue Goose, what kind of corporate dispositions can we look for the second half of the year?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [16]

--------------------------------------------------------------------------------

Predicting when things happen is very, very, very hard. On the private asset side, things don't necessarily happen with the same tension as the public market side. So -- but I think the reality of it is that it's very clear that we're retransitioning the company back towards the resources sector, and you're going to see more of that.

--------------------------------------------------------------------------------

Operator [17]

--------------------------------------------------------------------------------

Your next question comes from the line of Jim Roumell from Roumell Asset.

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [18]

--------------------------------------------------------------------------------

Couple specific questions. I just want to make sure I understand the United announcement. So Delonex is committing $65 million directly into the assets that United holds its royalty on?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [19]

--------------------------------------------------------------------------------

;

I believe Delonex has already spent...

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [20]

--------------------------------------------------------------------------------

That's spent.

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [21]

--------------------------------------------------------------------------------

Yes. That's right.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [22]

--------------------------------------------------------------------------------

And they're spending more. I believe so. I don't have the -- they did not give us exact numbers of how much they spent, but we believe they're going to be well in excess of what they've committed to spend.

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [23]

--------------------------------------------------------------------------------

Got it. Okay. And on that point, we understand that there are a number of private equity firms that actively buy royalties like the one United owns on Block H. Have you considered or have you thought about possibly monetizing the royalty, given that there's now so much more clarity on the resource value there?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [24]

--------------------------------------------------------------------------------

The answer is yes, we have considered it. It's probably still too early. I mean the reality of it is they've gone in there. They've shut a lot of 3D seismic. They've drilled a bunch of holes. They've had some very nice success. They're going back. They're doing a bunch more of 3D, and they're going to come back and drill a bunch more holes. And I think -- you think -- there's still -- until you actually have real clarity on what it's going to cost about, what type of production rates they're going to talk about, it's going to be very hard to sell it, except to someone who will see some success, or say there's a bit of a worst-case scenario and think with us. But we think these assets have tremendous potential, and anything that we would try and monetize today would be way lower than it should be. And we're very comfortable with the Delonex team, and they're going to go out there and do what needs to be done. They're doing a proper assessment.

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [25]

--------------------------------------------------------------------------------

Do you think that given Delonex knows the intrinsic value of these assets more than anyone else, that they are a potential bidder on United's royalty?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [26]

--------------------------------------------------------------------------------

They would be. But I think even they would concur it's too early. It's not that there isn't significant value there. And it's not that they're finding oil and -- they're finding oil, that's quite -- that's really exciting. And now they're going to take another step back, do a lot more work. And they're doing a very professional first-rate technical job of defining -- of getting this to an economic decision. Once that's there, it's going to be a different story, and then there'll be a lot more options. And yes, of course, there would be a potential buyer.

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [27]

--------------------------------------------------------------------------------

Okay. Moving on to Android. I'm just curious, Android was marked down slightly from the previous quarter, and I'm aware that it appears that their business is actually growing nicely, and they've expanded their relationship with General Motors. Is the reason for the markdown because of a model you're using that forces the markdown, but, in fact, the business itself has possibly grown in value? In other words, could there be a mismatch there between what's going on organically at Android and how you're marketing because of the methodology you're valuing it because I'm aware that their business is growing nicely, and in particular, expanded their relationship with General Motors?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [28]

--------------------------------------------------------------------------------

Yes. It's not -- Android had some potential onetime expenses that are going to occur in the -- potentially in the third quarter, some into the fourth, and I sort of anticipated them coming. So I did a markdown on our carrying value. It had nothing to do with our -- any view that we felt that the business had any weaknesses in it. We think that we're still very bullish on Android. And if you did a model on ongoing growth and assumptions, the carrying value would be likely higher, but I was being conservative in my carrying value, and I did an adjustment for some pending expenses.

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [29]

--------------------------------------------------------------------------------

Got it. Okay. And then just 2 other quick questions. On TauRx, we're hearing rumors that they're actually engaged in a capital raise right now, and that capital raise is at a pre-money valuation north of the -- your carrying value. Are you hearing that as well? And is there a possibility that you could participate in that capital raise in terms of selling your shares to the investor who is looking to put in capital?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [30]

--------------------------------------------------------------------------------

We're not involved in the capital raise per se. And I think the transaction that we think they're working on is probably more complicated than just the straight share raise. I believe there's going to be some potential marketing rights as well. I don't know the -- I don't know any of the details, but I don't think it's just the straight raise. And hopefully, it will happen. So...

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [31]

--------------------------------------------------------------------------------

Or does it, Jonathan, give you -- is it a window for you to potentially monetize our interest?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [32]

--------------------------------------------------------------------------------

The answer to that is -- the answer is a strong maybe.

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [33]

--------------------------------------------------------------------------------

Got it. And then my last question is just on AgriMarine. Is -- I know you've made some investments there in the past year to try to really make that more profitable, and I'm just curious of how those investments have turned out and whether, in fact, AgriMarine is getting close to being EBITDA breakeven?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [34]

--------------------------------------------------------------------------------

Well, I think it is getting close to being EBITDA breakeven because I think certainly on an operational level, we've seen it start -- our goal is that it should be EBITDA positive by the first quarter of next year. That's -- you know we've made a bunch of improvements there. We've put in some better technology to automate a whole bunch of the things that are traditionally automated on fish farms, and the expectation is that first quarter next year, and they seem to be a little ahead of that. So we're optimistic that they're going to achieve that.

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [35]

--------------------------------------------------------------------------------

Okay. And my final question is regarding reinitiating the employee stock buyback program or stock purchase plan. You mentioned that you and Bob are participating, so can you just give some clarity? What are employees being entitled to do to take a certain percentage of their salary and receive it in stock? And when you say you and Bob have -- are participating, on what basis?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [36]

--------------------------------------------------------------------------------

Everyone is entitled to go up from 0 up to 10% of their salary. We'll be...

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [37]

--------------------------------------------------------------------------------

Base salary, not bonus.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [38]

--------------------------------------------------------------------------------

Base salary. No bonus, yes. Can be used to buy shares in the marketplace, and the company will match that.

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [39]

--------------------------------------------------------------------------------

Okay. And you're -- that's something you're actively encouraging employees to participate in?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [40]

--------------------------------------------------------------------------------

To the extent that they can afford to because the matching is a taxable event as well. It's a big hit in your cash take-home pay. So there's some people that clearly can't afford it. But to the extent that they can afford, we encourage people to participate to the extent they can.

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [41]

--------------------------------------------------------------------------------

Got it. And how many employees are you down to now?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [42]

--------------------------------------------------------------------------------

I don't know the...

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [43]

--------------------------------------------------------------------------------

Well, what do you expect to be at year-end?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [44]

--------------------------------------------------------------------------------

By year-end, we expect to be below 30, but we're at about 33 now at head office, and then we've had reductions -- significant reductions in Blue Goose. We've had reductions in AgriMarine, we wound down Dundee 360 group out of Montréal and had reductions there. We took out our -- some of the management of Sotheby's and reductions there. And some of those things we've brought that extra operational and accounting burden into Toronto and added it on to what we're doing here, but we continue to look at how we're going to reduce cost to all entities, including our own.

--------------------------------------------------------------------------------

James Christopher Roumell, Roumell Asset Management, LLC - President, Partner and Lead Portfolio Manager [45]

--------------------------------------------------------------------------------

I just want to congratulate you on a hard year of a lot of work and a lot of cleanup. And it's rewarding to see a lot of it come to fruition.

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [46]

--------------------------------------------------------------------------------

Thanks, Jim.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [47]

--------------------------------------------------------------------------------

Thanks.

--------------------------------------------------------------------------------

Operator [48]

--------------------------------------------------------------------------------

Your next question comes from the line of [Jim Ballon] From [Aldebaran] Asset Management.

--------------------------------------------------------------------------------

Unidentified Analyst, [49]

--------------------------------------------------------------------------------

I have a question about the preference shares. They don't really trade that many shares every day. So if you -- would you consider -- I think in September of 2019, you have an opportunity to actually call back or buy back the entire class of shares. If you find over the next 2 or 3 weeks that you're not able to buy many shares of those in the open market, would you consider something like that in September?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [50]

--------------------------------------------------------------------------------

I think in September, there's a right for these shares to interconvert.

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [51]

--------------------------------------------------------------------------------

I'm not certain if it's a complete buyback. But even if -- we would have to have a significant amount of proceeds even if we could do a significant buyback. If we have success on our continued liquidation of the portfolio, we would change -- we would look at other alternatives on to buying bigger allotments.

--------------------------------------------------------------------------------

Unidentified Analyst, [52]

--------------------------------------------------------------------------------

Well, if you're not able to buy that many shares of the preferred in the open market, then would you consider shifting over to buying back the common?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [53]

--------------------------------------------------------------------------------

We don't -- as Jonathan mentioned, we didn't -- I know these things are thinly traded, but we will be working on it on a daily basis. And with 10% of the outstanding over the year, I think we have time to buy them. I'm not certain we'd switch to the common because we get so much bigger bang for our buck doing these preferreds.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [54]

--------------------------------------------------------------------------------

Keep in mind, they're certainly traded, but they're trading at like 55% of...

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [55]

--------------------------------------------------------------------------------

Par.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [56]

--------------------------------------------------------------------------------

At par. So I mean there is a price out there at which they'll become more liquidity.

--------------------------------------------------------------------------------

Operator [57]

--------------------------------------------------------------------------------

Your next question comes from the line of Andrew Hood from M Partners.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [58]

--------------------------------------------------------------------------------

The first thing I'm wondering about, I think last quarter, you were sitting at 31 positions. Do you know how many positions you have now?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [59]

--------------------------------------------------------------------------------

I don't off the top of my head.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [60]

--------------------------------------------------------------------------------

But it's around 30, let's say, 29, 30?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [61]

--------------------------------------------------------------------------------

It's not materially different, but we're focusing on making sure that -- we want the positions to be just positions, not investments that are relying on us to make their payroll next quarter.

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [62]

--------------------------------------------------------------------------------

In the quarter, we got off of the last of the Canadian Securities Exchange, and that was our biggest remaining transaction in the quarter. And yes -- and as Jonathan mentioned, we did sell some Reunion Gold. But since we didn't sell it all, it's still a position, significant position.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [63]

--------------------------------------------------------------------------------

And Sotheby's too as well?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [64]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [65]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [66]

--------------------------------------------------------------------------------

So I know you guys are unsure of the timing of some of these divestitures like Blue Goose. But if you were to sell everything that you're looking at selling at the moment, what kind of dollar value would that be do you think, or what range?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [67]

--------------------------------------------------------------------------------

If selling everything that we're looking at selling versus a lot of things that we want to sell something like longer term, we need some restructuring before you can sell them. So it's really hard to put a dollar value on that. I mean our view is some of these things need to be fixed before they can be sold and...

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [68]

--------------------------------------------------------------------------------

Sorry. Let's say something that -- anything that you can foresee selling within the next, say, 6 to 9 months without significant restructuring, what kind of -- do you know what kind of dollar value that would be?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [69]

--------------------------------------------------------------------------------

I don't because price discovery doesn't always happen early on. What type of dollar value I hope it would be versus what type of dollar value the buyer is going to try and buy that. So let's just say anywhere between, say, $50 million and $150 million over the next, I would say, a year, 1.5 years.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [70]

--------------------------------------------------------------------------------

Okay. And if you were to sell Blue Goose and all the debt associated with that is naturally wiped out as well, right, so the $52 million?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [71]

--------------------------------------------------------------------------------

Right. The Blue Goose debt has no recourse to Dundee Corp.

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [72]

--------------------------------------------------------------------------------

But you're right, that would be wiped out or refinanced by the purchaser.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [73]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [74]

--------------------------------------------------------------------------------

Okay. So I'd just like to talk about Dundee Precious Metals briefly. Obviously, it's your biggest position. It's done really well since last quarter, but there was some issues at first with startup at Ada Tepe. So I'm just wondering if your expectations have changed at all. Last quarter, you were saying you expected over $200 million on EBITDA this year. Have those expectations changed?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [75]

--------------------------------------------------------------------------------

I think some of them have been slightly deferred, but not changed. I mean the reality of it is the startup problems that happened at Ada Tepe have to do with very technical issue of too much -- not too much, but more clays and fines in the tailings that have been previously anticipated.

What happens is, is it means that for the tailings to settle, they need to settle and dewater. And the more fines and clays that are in there, the longer that takes. And when you start the tailings disposal, you think of yourself as starting at the bottom of a valley, and for ease think of it as a V-shaped valley. When you just deposit the initial tailings, you only have 1 spot to put them in. But as you move up the valley and that V opens up, you have many spots to put them in.

And so the fact that it takes longer for them to settle, one, very often, clays, which are an oxidized material, tend to be more at the surface and tend to decrease as you go deeper. So parts of this problem could go away. But even -- and even if it doesn't go away, it doesn't matter because as they move up, which is like right about now, they actually have a lot more optionality where they have 2 or 3 different spots to put tailings so the actual increase settlement times won't affect the production. So they really only affect the production at the very beginning of the mine life.

So that's why I say it's really a deferral. It's not a long-term issue in any scenario. So yes, I mean we're -- the first half will produce. But starting at some time really at the end of August, really September, the mine should go to full production.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [76]

--------------------------------------------------------------------------------

Okay. Good. I won't focus on this too much, but I do have a couple of questions about Parq Vancouver. I saw there was a nice decreases in the expenses year-over-year, about $4 million of decrease. So is that mostly just less expenses due to ramp-up and additional marketing? Or can we see those kinds of decreases moving forward as well?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [77]

--------------------------------------------------------------------------------

Well, I think we can see significant decreases in their run rate with the new partner, and they're who has hotel experience and expertise as well as they're looking at food and beverage and taking out operating costs at casinos, and they have some pretty ambitious targets on reducing costs that will come into play in late 2019 and 2020. They also hope to improve on the number of people coming through into their property.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [78]

--------------------------------------------------------------------------------

But I think it's safe to say that they're spending a lot of time trying to do a lot of work on how they can offer a first-class experience at the hotel and the gaming sites without compromising the experience but operate at a lower cost environment, and that's where the work is being...

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [79]

--------------------------------------------------------------------------------

Okay. And did you -- in this quarter, did you benefit from the refinancing? Or had you already paid that interest in this quarter and we'll see next quarter an improvement?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [80]

--------------------------------------------------------------------------------

We'll see for June 30, whether -- I mean the refinancing took up a significant amount of their interest expense out going forward. We had a very small contribution to Parq so far post the refinancing. And we'll wait and see what the September 30 numbers look like. We're not anticipating a big request.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [81]

--------------------------------------------------------------------------------

Okay. Because interest expense was about the same as it was in the same quarter last year. So that's just...

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [82]

--------------------------------------------------------------------------------

Yes. But the new lease didn't come in until May.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [83]

--------------------------------------------------------------------------------

Okay. So you had already paid the interest is essentially what I'm wondering for the quarter.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [84]

--------------------------------------------------------------------------------

Well, it had been dealt with the refinancing. We had dispensed a small amount and we were still involved in.

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [85]

--------------------------------------------------------------------------------

Correct.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [86]

--------------------------------------------------------------------------------

Okay. Okay. A quick question. For your eCobalt position, which I guess is Jervois now, what's the Canadian dollar value of your position as of today, let's say?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [87]

--------------------------------------------------------------------------------

I'm just looking it up. It's about a little over $5 million at the end of June. I don't know what's today's market price is.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [88]

--------------------------------------------------------------------------------

Okay. That's with the conversion to Jervois shares?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [89]

--------------------------------------------------------------------------------

Yes. I mean it wasn't a premium conversion.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [90]

--------------------------------------------------------------------------------

It was small.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [91]

--------------------------------------------------------------------------------

Okay. Just a couple more quick questions. So it looks like you're showing a preference for NCIB on the Series 2 and 3 rather than an SIB. I'm just wondering if -- to do an SIB, do you have to finish the CRA discussions as you've done in the past for a potential SIB on the Class A?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [92]

--------------------------------------------------------------------------------

I think the CRA discussions are part of it. I think as we see where we're going to get to on some of the things we're trying to divest our part of it and looking at a few other alternatives. And until we know what pool of capital we have to deal with, they wouldn't be in a position to do a substantial issuer bid. For those on the call, an SIB is a substantial issuer bid whereas an NCIB is a normal course issuer bid.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [93]

--------------------------------------------------------------------------------

My last question for now, on the G&A run rate, where you think you can be by the end of the year?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [94]

--------------------------------------------------------------------------------

Like I said, I thought $13 million, $14 million for '19, including I've got to still do some further -- we're still looking at downsizing head count, which obviously always cost the severance amounts. We continue to ratchet it down. So that's the number I said in my discussion.

--------------------------------------------------------------------------------

Andrew Hood, M Partners Inc., Research Division - Research Analyst [95]

--------------------------------------------------------------------------------

Okay. Got it. I think it was $14 million. $15 million was your estimate last quarter. So looks like that's...

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [96]

--------------------------------------------------------------------------------

Yes. But we expect to get -- keep getting lower. It's just that there's a lag. When you take action on June 30, you don't start seeing the benefit for a little while.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [97]

--------------------------------------------------------------------------------

Yes. The short term is you pay severances, and your G&A goes up. The longer term is it comes back down once that's done.

--------------------------------------------------------------------------------

Operator [98]

--------------------------------------------------------------------------------

(Operator Instructions) And your next question comes from the line of Luis Hernandez, a private investor.

--------------------------------------------------------------------------------

Unidentified Participant, [99]

--------------------------------------------------------------------------------

Basically, my question is regarding the merchant partners, which you mentioned at the beginning of the remarks. And I just wanted to -- an update on -- walk us a little bit through the capital requirements of it, when do you expect it to be breaking even or producing any cash flow, what's the upside? Could you give us more financial sort of update on it?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [100]

--------------------------------------------------------------------------------

Okay. Well, I mean the merchant partners is our merchant banking operations where we have a very strong team of people focused on the mining industry. And what we've built there is we've built the ability to do a very deep dive, technical due diligence. And so right now in the short term, we're doing some advisory work, we're doing some M&A advisory work, some asset sales, some strategic advisory work. But where we're taking that is through the investment fold, and that is we can do a very, very deep dive due diligence. And due diligence is one of those things that a word that's bandied about. I've never want anyone that claims not to do due diligence. But obviously, there's very different levels of due diligence.

And our experience in the junior mining sector is if you listen to anybody tell their story in the junior mining sector, you would run out and call your stockbroker every time and buy the stock if you believe the story was true. And the reason the junior mining sector has done so poorly is very few of the stories are actually true. And we have a fundamental belief that the real outlying problem with the junior mining sector is that the quality of the information that you get is horrible. And so our investment model involves more often than not signing a confidentiality agreement, doing the deep dive work, and from there, making proposals to make investments. And the opportunity there is these junior stocks are trading at such low valuations that when you do find something where the story is true, the opportunity of making a lot of money is very real. So we're quite excited about the group.

Longer term, we're thinking we'd like to wrap either a fund around it or some type of a fund or a coinvesting structure where we can bring on some partners that can cover some of the fees and the costs of running this group. But we think we've built a green team as far as being able to take any junior mining company, break it down into its components and really determine what the opportunity is and a strategy for that moving forward.

--------------------------------------------------------------------------------

Unidentified Participant, [101]

--------------------------------------------------------------------------------

Okay. And regarding the capital investment, how much has Dundee invested in that strategy on those companies?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [102]

--------------------------------------------------------------------------------

We haven't invested a lot right now. We've done a bunch of little small deals. We've looked at less than $10 million, and most of those deals have been financed by the sales of other resource -- not most -- all of them have been financed by the sales of other resource holdings. So I think that we're very excited moving forward, and we're working on the business of how do we do -- use this to bring in a bunch of revenues.

--------------------------------------------------------------------------------

Unidentified Participant, [103]

--------------------------------------------------------------------------------

And the overhead related to that operation, is it breaking even with the fees that you charge?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [104]

--------------------------------------------------------------------------------

It's not breaking even yet, but it's very close.

--------------------------------------------------------------------------------

Unidentified Participant, [105]

--------------------------------------------------------------------------------

All right. Okay. Then next question would be what's the expected or estimate G&A for 2020 or maybe 2021? You said right now, it's $14 million for this year, what's your expectation?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [106]

--------------------------------------------------------------------------------

Well, my expectation is to be lower. I'm not going to maybe step out and make a predictive absolute number. But we -- if you look at our trend and how much we've cut G&A across the board, at the head office level and at the -- at all subsidiary levels, I can -- expect that trend to continue. It's not going to be half of what it is run rate now because we've taken a lot of the stuff out, but we're going to continue to cut. So...

--------------------------------------------------------------------------------

Unidentified Participant, [107]

--------------------------------------------------------------------------------

Okay. All right. And then on the employee share purchase plan, is that -- are those shares bought on the market or are they issued like new shares? Are they dilutive?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [108]

--------------------------------------------------------------------------------

Historically, the firm has always gone into the market to buy them as opposed to issuing them from treasury, and we're going to continue to do that. That's not -- when you take the absolute dollar amount going into it because we've got so few employees, even if everybody was into the max, it's not that big a number to buy into the market.

--------------------------------------------------------------------------------

Unidentified Participant, [109]

--------------------------------------------------------------------------------

Okay. All right. And then finally, just on the preferreds, you said you will be allowed a 5% of the outstanding preferreds or 10%?

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [110]

--------------------------------------------------------------------------------

No. The rule is 5% of number of shares currently issued and outstanding or 10% of the public float. And that 10% of the public float is a bigger number because we don't have many insiders holding it, so we're effectively eligible to buy 10% of the public float over a year.

--------------------------------------------------------------------------------

Unidentified Participant, [111]

--------------------------------------------------------------------------------

Right. So if you were to do that, you could potentially deploy around $14 million or something, right?

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [112]

--------------------------------------------------------------------------------

Say 5.2 million shares at $13 and then 10% of that. So...

--------------------------------------------------------------------------------

Operator [113]

--------------------------------------------------------------------------------

There are no further questions at this time. I turn the call back over to the presenters.

--------------------------------------------------------------------------------

Robert Mark Sellars, Dundee Corporation - Executive VP & CFO [114]

--------------------------------------------------------------------------------

Thank you.

--------------------------------------------------------------------------------

Jonathan Carter Goodman, Dundee Corporation - Chairman & CEO [115]

--------------------------------------------------------------------------------

Thank you. Thanks again to everyone for joining today's call. I hope everyone has a wonderful day. Thank you.

--------------------------------------------------------------------------------

Operator [116]

--------------------------------------------------------------------------------

This concludes today's conference call. You may now disconnect.