Dundee Corporation (OTCPK:DDEJF) Q1 2019 Earnings Conference Call May 13, 2019 10:00 AM ET

Company Participants

John Vincic – Investor Relations

Jonathan Goodman – Chairman & Chief Executive Officer

Robert Sellars – Executive Vice President & Chief Financial Officer.

Conference Call Participants

Brett Reiss – Janney Montgomery Scott

Andrew Hood – M Partners

Operator

Good morning. My name is Kim, and I will be your conference operator today. At this time, I would like to welcome everyone to the Dundee Corporation Q1 2019 Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. [Operator Instructions] Thank you.

Mr. John Vincic, you may begin your conference.

John Vincic

Thank you, Operator. Good morning, everyone, and welcome to the Dundee Corporation’s 2018 first quarter results conference call and webcast. The company’s financial results were issued this past Friday evening and are available on our website at dundeecorp.com.

Before we get started, please be advised that the information discussed today is current as of March 31, 2019, unless otherwise indicated, and that 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. Joining them for the question-and-answer session following the conclusion of the formal remarks will be Richard McIntyre, Executive Vice President and Chief Operating Officer.

And now I’d like to turn the call over to Jonathan Goodman. Jonathan?

Jonathan Goodman

Thank you, John, and thanks to everyone for joining the call this morning. We had another busy quarter and I will discuss that today. So let me start by taking some — talking about some events that happened just last week, subsequent to quarter end. These achievements are notable because they are aligned with our strategy of streamlining our portfolios of investments.

We are doing this in two ways: one, through the exit of non-core businesses and then, by working to provide management oversight and expertise to support investee companies. Last Friday, we announced the successful refinancing of the capital structure of Parq Holdings Limited Partnership, which is the owner of Parq Vancouver.

As part of this transaction PBC Group and Dundee welcomed a new equity partner who has acquired estate in Parq Holdings. Our new partner is a privately held Canadian company with hospitality holdings in several markets. This group brings significant expertise and knowledge to our partnership and will be able to assist the team of Parq Vancouver with the ongoing ramp up and optimization of operations.

More importantly, we believe this financing provides Parq Vancouver with the stability and flexibility needed to continue to deliver world-class services to its customers. I’d like to thank the executives at Dundee and our partners at PBC Group and management at Parq Vancouver for working hard for many months to complete this important transaction. This was a critical step in stabilizing operations at Parq Vancouver and allowing us to move forward with this optimization.

Also, last week, we announced the sale of Sotheby’s International Realty Canada to Peerage Realty Partners. We originally acquired the Sotheby’s platform and envisaged it would become part of our broader wealth management offering into high net worth and also high net worth investors.

However, our strategy has changed since Sotheby’s no longer fits within the — with the new direction at Dundee, which is shifting to focus on resources. As a result, we exited this business and are happy we found a partner such as Peerage, which is capable of integrating Sotheby’s into its existing business. We wish the agents and the team at Peerage all the best.

In early April, we supported the business combination between eCobalt Solution and Jervois Mining of Australia. Dundee was an early investor in eCobalt and we believe strongly in the thesis for battery metals growth over the short to medium-term as the world transitions to electric cars. This transaction brings together two companies with greater scale, liquidity and diversification with a rerating opportunity.

The combined entity will have cobalt exposure in Australia, East Africa and the United States that includes the Idaho cobalt project, which has the highest combination of cobalt grade and scale in the U.S. We also believe that the newly combined entity will benefit from increased capital markets exposure through listings in Canada and Australia and a greater institutional investor following an equity analyst research coverage.

And finally, we made some progress during the quarter reducing our ongoing expense run rate. We did this by lowering our full time employee head count to 36 as of May 2019, down from 42 at the end of March 2019. This was due in part to the successful exit of non-core businesses so far this year.

Let me now take a moment to provide an update on the conversion of our Series 5 preferred shares. As previously announced, we expect this conversion to occur this week on May 15. As a result, Dundee will issue approximately 42 million Class A subordinate voting shares. Following the conversion, we expect there will be approximately 100 million Class A subordinate voting shares outstanding.

On our most recent quarterly conference call, we explained that our management and our Board is considering the possibility of a share buyback program, either through a normal-course issuer bid or a substantial issuer bid. A final decision has not yet been reached, and management and Board will take a short period of time following the conversion on May 15 to make a decision. I should remind everyone that we should — that should we choose one of these share buyback options, it would still be subject to regulatory approval.

As I’ve said before, this decision to convert the Series 5 preferred shares provides Dundee with balancing strength and stability and the financial flexibility to pursue our longer-term strategic objectives.

Now let me take a moment to look at our largest portfolio holding, Dundee Precious Metals. In the first quarter of 2019, DPM produced 43,343 ounces of gold and 8 million pounds of copper, which was right in line with their guidance. At Krumovgrad which is the new mine that’s starting up in Bulgaria, the first gold pour was achieved during the quarter, and operations remain on track to achieve commercial production in the second quarter of 2019.

Krumovgrad is DPMs second gold mine in Bulgaria and is helping to underpin the ongoing rerating of the company. Krumovgrad will become DPM’s second low cost gold mine in Bulgaria with average production of 100,000 of gold — ounces of gold per year at an all-in sustaining cost of around $400 per ounce over the first five years of mine life.

DPM’s Tsumeb smelter in Namibia achieved throughput of 62,800 tonnes during the first quarter, a 16% increase compared to the same period of 2018 due primarily to strong performance and a steady state of operations. DPM remains our single largest investment, and Dundee currently holds about 36.4 million shares. It’s also one of our best performing investments, and we continue to remain really bullish on this outlook for Dundee Precious Metals.

And now I’d like to turn the call over to Bob Sellars for a review of our financial performance during the quarter. Bob?

Robert Sellars

Thank you, Jonathan. In the first quarter, we are reporting a pre-tax gain of $23.4 million compared to a $27.9 million loss in Q1 2019. The net gains for the quarter after discontinued operations and taxes was $14.9 million compared to a loss of $25 million in 2018. The major drivers for the quarter are $28 million net gain on investment, of which $13.1 million was a portfolio gain primarily from Dundee Precious Metals. We also had a $6.3 million gain in the valuation of the UHIC royalty, and total consideration is now at $159.4 million. We also had a $5.4 million gain on the fair value of the embedded derivative, which is now carried at $35.4 million.

If you recall, we sold Union Group in January, so first part of the quarter for $14.5 million. At Blue Goose, we incurred a loss of $14.1 million in the quarter, which was an improvement over the loss in the first quarter of 2018, which was $6.4 million. Included in those numbers was a fair value cattle increase of $1.6 million in Q1 similar to the $1.5 million in the prior year.

Consolidated G&A for the quarter was $8.9 million compared to $17.4 million in Q4 2018 and $13.6 million in Q1 2018, reflecting continued reductions in headcount and operating cost across the portfolio of all our REIT companies.

You will recall we sold Dundee Securities late in the fourth quarter of 2018, so it’s no longer part of our reporting. We treated Sotheby’s as discontinued operations as we announced the transaction to sell the business last week and we expect it will close in late May entering proceeds of approximately $5 million.

And as Jonathan discussed earlier on the call, we successfully refinanced the capital structure of Parq on May 9, with the new first and second lien loan as well as a new equity invested. These steps are expected to help generate significant improvement in Parq Vancouver’s cash flow.

Let me now move to a review of the investment portfolio, which was valued at $299 million at the end of March compared to $270 million at the end of year-end. We had proceeds of disposition of $7.3 million, which is primarily the result of sales of positions in our fiscal mining of $2.6 million in Canadian Securities Exchange for $3.3 million. Dundee’s marketable security portfolio was $200 million at quarter end with DPM accounting for $116 million of that total.

Now, let me turn to a review of our liquidity in which we continue to monitor closely. At the end of the quarter, we had approximately $39 million of corporate cash on hand. We continue to work at increasing our overall liquidity by reducing costs and disposing of non-core assets.

Our annual dividend for 2019 are projected to be $9.1 million, which includes the first quarter Series 5 a dividend of $1.6 million, with the additional tax – dividend tax of $3.6 million. Head office expenses in the first quarter were $4.9 million, which including a $1.5 million in consulting and legal fees related to the Series 5 preferred share conversion and legal work related to the refinancing of the capital structure at Parq Vancouver.

Head office G&A was $6 million in Q4 of last year and in Q1 2018 it was $6.2 million. We would expect our normalized G&A to run rate to continue to decrease with a target of $14 million to $15 million in 2019, subject to ongoing downsizing costs.

We continue to have tax discussions with the CRA, and we have disclosed in the contingency note an amount of $11 million in tax and $2 million in interest. However, the eventual tax amount could be materially higher and may adversely affect our cash flow.

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

Jonathan Goodman

Thank you, Bob, for your comprehensive review. Before we move into the Q&A session, let me provide a brief summary. The conclusion of the Parq Vancouver refinancing is a success story for Dundee and its partners. We believe Parq is now well positioned to continue its ramp up and ultimately reach its full potential. The sale of Sotheby’s is another example of our focuses on exiting businesses, which are no longer core to Dundee.

Reducing our G&A and our head count is consistent with my goal of streamlining our overhead to better align with the future of the company. And as noted before, we believe our future lies in the pursuit of opportunities in the junior mining sector.

Our team at Dundee Goodman Merchant Partners is active in the deal flow evaluating numerous potential transaction and financing opportunities. And our resources portfolio provides us with access to a cross-section investment candidate in the junior mining sector where our technical expertise provides us with a competitive advantage. Overall, we are pleased with how our strategic shift is taking hold.

In closing, I’d like to thank our shareholders for their continued support. I’d also like to thank our employees and management team for their continued hard work and dedication. We are addressing our challenges head on and slowly, but surely making progress against our strategic objectives.

Now we’d be happy to answer your questions. Operator?

Question-and-Answer Session

Operator

[Operator Instructions] Your first question comes from Brett Reiss from Janney Morgan, sorry. Go ahead your line is open.

Brett Reiss

Hi, John, Bob, Richard. I have a couple of questions on Parq, but I just want to make sure, I’ve got my arithmetic right. From the MD&A, the first-lien term loan was $371 plus million and the second-lien term loan $198 million. So both those amounts, that’s what’s been restructured in the refinancing in that amount?

Jonathan Goodman

The amounts are moving targets because both of those are U.S. dollar loans and the new financing was put in place in Canadian dollars. So subject to small variations in currency, both of those loans are no longer existing and have been settled out and there’s a new Canadian dollar package that’s been put in place.

Brett Reiss

Okay. And from the MD&A, when I see the interest expense for the first quarter was CAD 31.4 million. That was on the total project, not just our one-third.

Jonathan Goodman

Yes.

Brett Reiss

Okay. Okay. The interest bond, the first lien term loan was 10%, the second lien term loan was 15%, what have they been reduced down to?

Jonathan Goodman

I don’t think we’re — I think the new package is a complicated package, as you can imagine. I think — I’m trying to think of what the best way of summarizing it, because I’m not allowed to give you the individual terms of each thing. But it’s a combination of cash pay, and there’s some PIK, performance in kind, pieces in it. And so what we have is the cash part of it is significantly lower than the old one. What I’m certain is I don’t think the $31 million was an interest payment. That sounds very high for 1 quarter.

Robert Sellars

Yeah.

Jonathan Goodman

While I talk, Bob’s going to check that.

Robert Sellars

30 — $65 million for the year, so…

Jonathan Goodman

The $65 million was about the yearly interest payment. So $31 million sounds high. So while Bob researches that, I think that overall the new package on a gross basis drops the combined rate by about 300 basis points, but a big chunk of the new combined rate is PIK. So the cash paid is significantly lower, which will give this thing the chance to ramp up.

Brett Reiss

Right, right. And when will we find out what the exact terms — new terms are and who the new participant is? And what equity interest we have retained after this restructuring?

Jonathan Goodman

That’s a very fair question. I can tell you that the new equity participant is a — as I said, it’s a private Canadian group that wants to remain private. But I can tell you, they’re not that private. They have been approved by the regulators of BC. They’re going to be very active in the day-to-day business, but I think we’ve agreed that we are going to respect their wishes of — on a disclosure basis. But that said, they’re a very active, and we’re very happy to have them as partners

Bob, do you want to address when we’re going to be able to disclose? I mean, the equity interest is very easy because I think right now, how much have they earned in?

Robert Sellars

34.9%.

Jonathan Goodman

That’s what they own right now?

Robert Sellars

Yeah.

Jonathan Goodman

So right now, they’ve earned a 34.9% interest, and so we own approximately half of the difference, and I believe they have the rights over a certain period of time to take that eventually to a larger stake, over 50%.

Robert Sellars

Brett, the question on that — the interest in the MD&A of 31.4, that’s not just on the debt. That includes all the dividends on all of the preferred share classes, which the stack is being collapsed. So — but that’s.…

Brett Reiss

Okay.

Jonathan Goodman

Yeah, much of that is in cash.

Brett Reiss

But even with the restructuring, right now, I mean, revenues in the first quarter were $38.2 million and expenses, $36.7 million. So there was a gross operating margin of $1.5 million. Is the project, even with the reduction in interest expense, still operating at a negative cash flow?

Jonathan Goodman

Well, I mean, the answer is the first quarter historically is the worst quarter of the year because of the seasonality of the industry and a few other factors that affect it. We are now just ramping into the busy time of the season, and obviously, the first quarter was still a negative cash flow and our hope is as we start implementing some of these changes and start seeing the other thing, there was a lot of press around the fact that we pushed this financing right against the wall time wise and we believe a lot of — we lost a lot of potential revenue because of that uncertainty.

So, our hope is that — we’re not wasting our time, but I want to — keep in mind, I’m not pretending that we derisk the financing component of this. We need to now get this asset operating a lot better for it to have significant value and that’s what the focus is on.

Brett Reiss

Okay. When we are talking to one another like in the first quarter or so of 2020 and all the smoke clears with all these moving parts, what do you think our percentage ownership in Parq will be? And when do you think this thing will operate cash flow positive so that we see money coming in on our investment and not flowing out?

Jonathan Carter

Okay. Well, the first portion is I mean eventually this group is going to convert over to 50% and whatever. So, if you assume they convert over to 50%, our ultimate interest is going to be half of the difference, so it’s 20% to 25% is what our ultimate interest is. Assuming it’s all successful, the thing is if unsuccessful, our ultimate interest will eventually be zero. So, what was the other part of the question?

Robert Sellars

Cash flow part?

Brett Reiss

Yes, when are we going to start to see money coming in corporate — flowing out?

Jonathan Carter

They say with a brand-new hotel-type complex, it takes two to four years to get it really running properly and this is not just a brand-new, this is a very integrated resource. We’re just kind of really starting our second year and so I guess in the next 12 to 24 months, we should see the results of the work that’s being done today that will hopefully make it cash flow positive, but there’s still a lot of work — there’s a lot of heavy lifting to do.

Brett, we bring this thing down to about $10 million on our balance sheet. That’s not for naught. This is a very tough asset and there’s a lot of work left to do to make it worth something.

Brett Reiss

Okay. Just one or two others and then I’ll drop back into queue out of respect for other people on the call. Starting in 2020 what — between the G&A that you hope to get it reduced down to and what you think the obligations will be on the preference two and three preferreds, just those two items what is the knot the company will have to cover starting in 2020 when it’s more of a clean slate?

Jonathan Carter

Bob?

Robert Sellars

Well, G&A we continue to reduce and we hope to get our G&A down to somewhere between $10 million and $12 million in 2020. The dividend’s on the twos and threes are $7.5 million a year approximately plus a $0.40 on that of another $3 million of dividend tax and that’s what we would be expecting in 2020.

Brett Reiss

That $3 million in dividend tax does that ever cease some time out there or does that add in tonight I mean to the future?

Robert Sellars

It’s — every time you pay a dividend there’s a tax, but there’s — the amount that you pay into those taxes are applicable against your normal income tax, so if we were taxable from an income tax perspective, we’d be able to use that as an installment.

Jonathan Carter

And also if we receive any dividends, it will get credit against that.

Robert Sellars

…through tax free, yes.

Brett Reiss

Okay. So, $10 million to $12 million on G&A, $7.5 million on the Series 2 and 3, $3 million on the tax. So, the bottom-line expense you’ll have to cover starting in 2020 is between $20 million and $22 million?

Robert Sellars

Correct.

Brett Reiss

Okay. I’m going to drop back into queue. I have other questions. But I’ll let other people in. But thank you so far.

Operator

Your next question comes from Andrew Hood from M Partners. Your line is open.

Andrew Hood

Good morning. So, most of my questions are about Parq as well. They’ve already been asked now, but I just have one question remaining on Parq. Could you guys give me some insight into how the operations are going to be split up between the partners? You guys working on everything together or is this new partner kind of focusing on the hotel elements and you guys are looking at the casino or what’s happening there?

Jonathan Carter

Well, first I’d like to say Parq Vancouver has its own management team, so we are really all just shareholders. Certainly the new investor is going to be very involved in the hospitality, food and beverage, the hotel side, and the parking side of it and the management team that there is very capable on the casino side and as shareholders we’ve got Board responsibility. So, we’re not sitting here in Toronto trying to manage this business. There are people very capable, people who were — we trust strongly, who are going to run this from Vancouver.

Andrew Hood

Okay. Good. Just on the overall portfolio, could you speak to how many positions you’ve exited since year-end and how many you’re at now in total?

Jonathan Carter

I don’t have everything in front of me, but I counted up the other day. Right now we’re down to I think about 31 major positions, so we’ve done a lot of cleaning.

Andrew Hood

Okay. So, my understanding with you were somewhere around 40 at year end, is that correct?

Jonathan Carter

Yes. I mean some of it we — Bob just handed me the report that I don’t have in front of me right now. What we’ve done is we’ve taken a lot of the small stuff we hold and we put that together into one portfolio that we’re actively managing and dealing with. And we liquidated and got out of many different names.

Andrew Hood

Okay. And now I saw that value in mining investments is around 70% now. Is this kind of where you expected to be or you going to maybe increase your positions more there since that was your focus?

Jonathan Carter

The only investments we’ve really made other than putting some cash into existing businesses that desperately need cash has been in the resource side. So, I expect that to continue to go up.

Andrew Hood

Okay. And I notice a lot of your investments have been increasing your positions in existing investments. Is that more so your focus moving forward or also getting into good more nuance?

Jonathan Carter

Well, I think that when you invest in the junior resource company, I think you really — to put it into casino terms, you have to look at that first investment in kind of the same way as you looked at an ante and poker.

The reality of it is these things don’t produce cash. They’re going to need more capital down the road and you really have to be prepared to — when you make that first commitment to make a longer-term commitment to get more involved as the process gets derisked.

Andrew Hood

Yes. Okay. Now, just jumping to the Series 5 conversion. I know you guys said you’re still discussing the NCIB or the SIB. But do you have any sort of range you’re looking at about how many shares you would maybe buyback?

Jonathan Goodman

Well, I mean, the first thing is we’re going to — they get their shares in two days and we’re going to see where the stock settles out at. That’s number one. At the same time, we’re looking at — Bob mentioned that we’re going through discussions with CRA, and at some point, they’re going to assess us. And the reality of it is we’ve given the estimate to what we think that’s going to be, but until we get further along the lines of discussions with them, we don’t know exactly where that’s going to end up. And we are at the same time trying to bring a little more liquidity in from our portfolios.

As we finalize all three of those — and we’re also trying to build the financial plan — a financing plan around it and as we put all those together, we’ll have a much better and more concrete answer to that question.

Andrew Hood

Okay. I noticed that the fair value change at United Hydrocarbon and I think from your MD&A, it said it was just passage of time and maybe some FX changes. Could you guys maybe provide some commentary on that, if there’s been any progress there in the past quarter?

Jonathan Goodman

The answer is we have no new information on the — from what’s happened on the past quarter other than we believe that Delonex is still actively drilling the project and moving it forward and quite excited about it.

We have a financial model that we have built, which includes, I think, some Monte Carlo simulations and oil price estimates and all that and that’s where — as each — those are the currency rates. All those things change from quarter-to-quarter and that’s why the valuation changes.

Andrew Hood

Okay. All right, that’s for me. Thanks guys.

Jonathan Goodman

Thank you.

Operator

[Operator Instructions] Your next question comes from Brett Reiss from Janney. Your line is open.

Brett Reiss

Hi, thanks for the opportunity to come back into queue. Jonathan, leaving Blue Goose on the side, how much money over the next three to six months from other corporate sales of non-core positions do you think can realistically come in?

Jonathan Goodman

No. None. Really wishing I had my liquidity portfolio in front of me. It’s really — that’s really a moving target. I mean, there’s a number of — you’re talking three to six months in the short-term.

I don’t really know the answer to that. It could be up to $30 million or $40 million, but it could be as low as $5 million or $10 million because you really don’t have the control as to how quickly things will get to the finish line or if they get to the finish line at all.

I think we have over the next month probably $7 million or $8 million coming in from some asset sales that I know are happening and some of the balance may or may not be, and Bob has just turned me a number saying, yes, about $3.8 million coming in from one sale that he knows about — that one was actually already in my head.

Brett Reiss

Okay. So it’s the $5 million from Sotheby plus the $3.8 million of this other sale, so that’s the $7 million to $8 million.

Jonathan Goodman

Yeah.

Brett Reiss

Okay. What do you think — you had been making small investments here and there. Dundee is sustainable. What do you think flows out? What are you budgeting the balance of 2019 calendar year?

Jonathan Goodman

Okay. Well, I mean, I’m really going to sit here on a conference call and go through every line item of our budget. But Bob, you can…

Brett Reiss

I can do it offline.

Jonathan Goodman

I think it was probably better to do offline.

Brett Reiss

Right, right, right. Can you give us an update on Blue Goose? Because that’s probably the largest albatross that remains to be dealt with. Is that a fair statement?

Jonathan Goodman

You chose the word albatross. Sure, I’m happy to. Look, Blue Goose is a very significant asset. At this stage, it’s primarily — you know all the employees in the firm are listening, so I was just handed the one of the portfolios that I keep on my desk.

But I think the reality of it is that we’ve been in very serious discussions with a number of parties on the sale of the Blue Goose. We continue to be in discussions with a few, and we are looking at all of the alternatives and how do we take one of these and get them to the finish line.

Brett Reiss

Okay.

Jonathan Goodman

And that’s why I can’t predict. That’s not in my numbers for the next three to six months. But I mean, it could literally happen in a week, like you really don’t know

Brett Reiss

Right. Right. Now in Paris this weekend, Frank Holmes was quoted thinking that copper prices are really suppressed, and he thinks they can move up. As I recall, Dundee Precious Metals mines a fair amount of copper. Is — do I remember that correctly?

Jonathan Goodman

You remember that correctly.

Brett Reiss

Okay. If from your days with Dundee Precious Metals, copper prices go up $0.10 a pound, what does that do to the EBITDA of Dundee Precious Metals?

Jonathan Goodman

I think that Dundee Precious Metals — I think you should know, Brett, we don’t rely on prices going up to make the investment decisions in DPM. Dundee Precious Metals had an EBITDA of around US$00 million last year. And with the new Krumovgrad mine coming on and with the fact that the smelter that they own has been turned around, they’re going to be taking their EBITDA at today’s metal prices, close to the $200 million rating.

The stock has about a CAD730 million market cap. If you adjust that down to U.S., Dundee Precious Metals on an enterprise value to EBITDA basis is trading at about 3.5 times future EBITDA, which includes the ramp-up of Krumovgrad, the fixing of the smelter. And I’m not making this number up. This was actually a slide in their presentation at their Board meeting last week. Most mining production companies have Dundee Precious Metals trade at significant premiums to this. The average amongst the group is closer to between — it’s really between 6 and 10 and historically — and right now the sector is very depressed, but historically that is between 8 and 12. So we see a lot of potential for Dundee Precious Metals as a business to have a better valuation reflected.

In addition, DPM is finally getting a lot of the recognition that it well deserves as an innovator and it’s one of the most efficient mining companies in the space. The Chelopech mine in Bulgaria is one of the lowest-cost underground mines in the world and that’s because it has embraced and in many cases created a lot of the new technology in the mining space and one of the things they had at their annual meeting last night was working with the company that helped commercialize the technology in drone technology.

And that is, when you mine a new open space they actually fly a drone through that open space and you get to map it very, very accurately. And in the past you just would use some GPS tools and you’d get a crude mapping of it but by mapping it accurately you can see if you’ve over blasted or under blasted and use that to very — to get your blasting right, which actually reduces your dilution.

More importantly, it also reduces your costs. So, I think, there’s a lot of things going at DPM right now that make it really poise for a rerating over the next couple of years. And I’m glad you asked the question, because part of my frustration is, we have a $9 million or $10 million investment in the casino in Vancouver and $140 million market value in Dundee Precious and we get on a conference call and we spent 40 minutes answering questions about the $10 million one and the elephant in the room is the one that we think has real potential and much more important for outlook.

Brett Reiss

Good, good. And it’s good to hear that on Dundee Precious. Any updates on TauRx? When test results are going to come? And, I think, we were trying to monetize a portion of our investment there?

Jonathan Goodman

We have been and we continue to be in dialogue. We think over the next month, we’re going to hear some new news from them on some test results and the potential for some of their drugs to be able to hit market. Obviously, we don’t know what the news is, because we haven’t been told yet, but we think we’re getting to a point where they’ll have something to tell us.

Brett Reiss

Right, right. You have right now $39 million in cash, plus the $5 million that comes in on Sotheby’s. So you’ve got $43 million. You’ve got enough if you want to be aggressive on the share buyback and/or tender in the next month or so, to do what you want to accomplish or do you have to be creative in getting money from other sources?

Jonathan Goodman

I think there’s enough there right now, but I think we want to wrap around that and what we’re doing is a financing plan. So the — and with that financing plan, I think, you are always owe yourself a duty of downside testing and see if certain things go bad for us, you want to make sure that you still have the liquidity corporately to continue to run the day-to-day business. So that’s kind of the exercise we’re going through right now, and we’re kind of anticipating – your plans for bad news and then you work like hell to make it never happened, but I think that’s kind some of the – some of the scenario testing that we’re doing right now and that’s why it’s going to take a little longer to get us to the finish line here, but it’s not the amount of cash on hand that’s the problem is we want to make sure that we’re properly allocating in case something happens.

Brett Reiss

Right. Thank you for being patients and answering my many questions.

Jonathan Goodman

No worries.

Operator

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

John Vincic

I see. Thanks again to everyone for joining today’s call. We look forward to seeing many of you at our Annual General Meeting on Toronto on June 6th, at the Toronto Board of Trade. Goodbye, and have a wonderful day. Thank you.

Operator

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