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Dundee Corporation Announces Intention to Commence a Substantial Issuer Bid for Up to C$20,000,005 in Value of its Series 3 Preferred Shares
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Dundee Corporation Announces Intention to Commence a Substantial Issuer Bid for Up to C$20,000,005 in Value of its Series 3 Preferred Shares

TORONTO, Nov. 20, 2023 (GLOBE NEWSWIRE) — Dundee Corporation (TSX: DC.A, DC.PR.B and DC.PR.D) (“Dundee” or the “Corporation”) announced today that it intends to commence a substantial issuer bid (the “Offer”) to purchase for cancellation from the holders thereof who choose to participate up to 975,610 of its Cumulative Floating Rate First Preference Shares, Series 3 in the capital of the Corporation (the “Series 3 Shares”) at a purchase price of C$20.50 (the “Purchase Price”) per Series 3 Share, for a maximum aggregate purchase price of C$20,000,005.

In connection with the Offer, the Corporation has entered into lock-up agreements (the “Lock-up Agreements”) with each of Stornoway Recovery Fund LP and Ravensource Fund (the “Locked-up Shareholders”) pursuant to which, among other things, and subject to the terms and conditions set out therein, the Locked-up Shareholders have agreed to tender to the Offer all of the Series 3 Shares held by them as at the date of the Lock-up Agreements. As at the date of the Lock-up Agreements, the Locked-up Shareholders hold an aggregate of 499,650 Series 3 Shares representing approximately 30.48% of the issued and outstanding Series 3 Shares as at November 20, 2023.

The Offer is expected to commence on November 22, 2023 and will expire at 11:59 p.m. (Toronto time) on December 27, 2023 or such later time and date to which the Offer may be extended by Dundee, unless varied or withdrawn by Dundee.

“This Offer is another important step towards the ongoing streamlining of our capital structure to support the successful execution of our strategic business plan with a focus on capital allocation in the junior mining industry. Reducing the call on our capital from the preferred share dividends preserves our capital base to pursue our core strategy,” said Jonathan Goodman, President and Chief Executive Officer.

“We believe this is an effective way to simplify our balance sheet, lower our overall cost of capital, and reduce our run-rate cash outflows which benefits all classes of shareholders,” said Lila Murphy, Executive Vice President and Chief Financial Officer.

The Board of Directors will continue to review various options for the allocation of capital, including any portion of the C$20,000,005 under the Offer remaining in excess of the aggregate purchase price payable pursuant to the Offer, with such options including, but not limited to, further repurchases of the Corporation’s securities, including without limitation, its Class A Subordinate Voting Shares and Series 2 Shares (as defined below). Beginning in early 2018, the Corporation has focused on the implementation of its strategy of rationalizing its portfolio of investments and monetizing non-core assets as it exists business lines which are no longer deemed to be aligned with its longer-term mining-focused strategy. As part of this process, the Corporation has taken significant steps to streamline its capital structure and strengthen its balance sheet. In line with the Corporation’s longer-term strategy and commitment to creating value for the Corporation, the Board of Directors believes that the purchase of Series 3 Shares under the Offer represents an attractive investment opportunity for Dundee and will be welcomed by certain holders of Series 3 Shares who may wish to reduce their share ownership positions.

Treatment of Declared Dividend

The Corporation previously announced on November 8, 2023, that the Board of Directors approved the payment of a quarterly cash dividend for the quarter ended December 31, 2023 of C$0.58351 per Series 3 Share, which is payable on January 2, 2024 to shareholders of record on December 19, 2023 (the “Series 3 Dividend Record Date”). Shareholders of record on the Series 3 Dividend Record Date will be entitled to receive the quarterly cash dividend declared by the Board of Directors for each Series 3 Share held on the Series 3 Dividend Record Date, whether or not such shareholders decide to deposit their Series 3 Shares under the Offer and whether or not all or any portion of their Series 3 Shares are taken up and paid for by the Corporation pursuant to the Offer, and whether or not such shareholders continue to hold some or all of such Series 3 Shares following the Series 3 Dividend Record Date. Such quarterly cash dividend will be paid by the Corporation on January 2, 2024 to shareholders of record on the Series 3 Dividend Record Date (less any tax required to be deducted or withheld by the Corporation) in accordance with the restated articles of the Corporation. Any shareholder who acquires Series 3 Shares after the Series 3 Dividend Record Date will not, in respect of such Series 3 Shares acquired by them after the Series 3 Dividend Record Date, under any circumstances be entitled to receive from the Corporation the quarterly cash dividend declared by the Board of Directors for the quarter ended December 31, 2023, nor will such shareholder be entitled to receive any pro-rata portion of such quarterly cash dividend, irrespective of whether or not such shareholder decides to deposit such Series 3 Shares under the Offer and whether or not all or any portion of such Series 3 Shares are taken up and paid for by the Corporation pursuant to the Offer. The terms of the Offer reflect and take into account that the quarterly cash dividend for the quarter ended December 31, 2023 of C$0.58351 per Series 3 Share will be paid by the Corporation to shareholders of record on the Series 3 Dividend Record Date on January 2, 2024 (less any tax required to be deducted or withheld by the Corporation) in accordance with the restated articles of the Corporation. Holders of record of Cumulative 5-Year Rate Reset First Preference Shares, Series 2 (the “Series 2 Shares”) on the dividend record date for the quarterly cash dividend declared by the Board of Directors on such Series 2 Shares for the quarter ended December 31, 2023 will be entitled to receive such quarterly cash dividend, with such quarterly cash dividend to be paid by the Corporation on January 2, 2024 (less any tax required to be deducted or withheld by the Corporation) in accordance with the restated articles of the Corporation. In accordance with the restated articles of the Corporation, the Corporation has set aside for payment out of cash on hand sufficient funds to satisfy all declared and unpaid dividends on outstanding Series 3 Shares and outstanding Series 2 Shares.

Additional Details of the Offer

The Corporation expects to fund any purchases of Series 3 Shares under the Offer using first the funds advanced under the Loan (as defined below) and then as necessary using the Corporation’s available cash on hand, and expects to fund any fees and expenses related to the Offer using the Corporation’s available cash on hand. All Series 3 Shares purchased by the Corporation under the Offer will be cancelled in due course.

If 975,610 or fewer Series 3 Shares are validly deposited on or before the expiry time of the Offer (and not properly withdrawn), then Dundee will, upon the terms and subject to the conditions of the Offer, purchase at the Purchase Price all such Series 3 Shares deposited. If more than 975,610 Series 3 Shares are validly deposited on or before the expiry time of the Offer (and not properly withdrawn), then upon the terms and subject to the conditions of the Offer, the Corporation will purchase the Series 3 Shares on a pro rata basis after giving effect to “odd lot” tenders (of holders beneficially owning fewer than 100 Series 3 Shares), which will not be subject to pro-ration. Series 3 Shares that are not purchased will be returned to shareholders.

The Offer and all deposits of Series 3 Shares are subject to the terms and conditions set forth in the offer to purchase, the accompanying issuer bid circular and the related letter of transmittal and notice of guaranteed delivery (all such documents, as amended or supplemented from time to time, collectively constitute and are herein referred to as, the “Offer Documents”). Further details of the Offer, including the terms and conditions thereof and instructions for tendering Series 3 Shares, will be included in the Offer Documents. The Offer Documents will be mailed to holders of Series 3 Shares, filed with the applicable Canadian securities regulatory authorities and made available without charge on SEDAR+ at www.sedarplus.ca in accordance with applicable securities laws, as well as being posted on the Corporation’s website at www.dundeecorporation.com, on November 22, 2023.

As of November 20, 2023, the Corporation had 1,639,022 Series 3 Shares issued and outstanding. The Series 3 Shares are listed and posted for trading on the Toronto Stock Exchange (the “TSX”) under the symbol “DC.PR.D”. On November 17, 2023, the last full trading day prior to the day the terms of the Offer were publicly announced, the closing price of the Series 3 Shares on the TSX was C$20.20.

The Offer will not be conditional upon any minimum number of Series 3 Shares being deposited. However, the Offer will be subject to certain conditions that are customary for transactions of this nature and as will be set out in more detail in the Offer Documents.

Dundee previously received approval from the TSX for normal course issuer bids (“NCIBs”) for its Series 2 Shares and Series 3 Shares through the facilities of the TSX from April 12, 2023 to April 11, 2024. The Corporation has suspended share repurchases under its NCIBs and the NCIBs will remain suspended until at least the day following the expiration of the Offer or the termination of the Offer.

Dundee has appointed Computershare Investor Services Inc. (the “Depositary”) to act as depositary for the Offer. Any questions or requests for information or assistance regarding the Offer may be directed to the Depositary at the contact details set out in the Offer Documents.

Additional Details of the Loan

In connection with the Offer, the Corporation has entered into a loan agreement dated November 17, 2023 (the “Loan Agreement”) among the Corporation, as borrower, Dundee Resources Limited, as guarantor, and Earlston Investments Corp., as lender. The loan, to be advanced by the lender, will be in a principal amount of up to C$20,000,000 and will be available to the Corporation upon satisfaction of certain customary conditions precedent (the “Loan”). The Loan will be guaranteed by Dundee Resources Limited and secured by a security interest over all present and after-acquired personal property of the Corporation and Dundee Resources Limited, including a pledge of the shares of Reunion Gold Corporation held by Dundee Resources Limited (such shares of Reunion Gold Corporation, the “Collateral”). The Loan Agreement provides that the Corporation shall use the proceeds of the Loan to repurchase all or any portion of the Series 3 Shares pursuant to the Offer, and for no other purpose, except with the prior written consent of the lender. Interest on the Loan will accrue: (i) at a rate equal to the greater of (a) The Toronto-Dominion Bank prime rate plus 1.95% per annum, and (b) 9.15% per annum, during the first 24 months of the Loan; and (ii) thereafter, at a rate equal to The Toronto-Dominion Bank prime rate plus 6.50% per annum. The Loan will be repayable on February 27, 2026. At any time after June 28, 2024, the Corporation may voluntarily prepay all or any portion of the Loan together with all interest accrued thereon without premium or penalty. The Corporation must repay (i) any portion of the Loan not used to fund the purchase of Series 3 Shares under the Offer, (ii) periodically, if the value of the Collateral is not at least 250% of the outstanding principal amount of the Loan plus overdue interest (if any), such amount as required to ensure the value of the Collateral is at least 250% of the outstanding principal amount of the Loan plus overdue interest (if any), and (iii) if Dundee Resources Limited sells any of the Collateral in certain circumstances as set out in the Loan Agreement, an amount equal to the net proceeds of such sale.

This news release is for informational purposes only and does not constitute an offer to buy or the solicitation of an offer to sell any Series 3 Shares. The solicitation and the offer to buy Series 3 Shares will only be made pursuant to the Offer Documents filed with the Canadian securities regulatory authorities. The Offer will not be made to, nor will deposits be accepted from or on behalf of, shareholders in any jurisdiction in which the making or acceptance of the Offer would not be in compliance with the laws of any such jurisdiction. However, Dundee may, in its sole discretion, take such action as it may deem necessary to make the Offer in any such jurisdiction and to extend the Offer to shareholders in any such jurisdiction.

The Board of Directors has authorized and approved the Offer. However, none of Dundee, the Board of Directors or the Depositary makes any recommendation to any shareholder as to whether to deposit or refrain from depositing any or all of such shareholder’s Series 3 Shares pursuant to the Offer. Shareholders are strongly urged to carefully review and evaluate all information provided in the Offer Documents, to consult with their own financial, legal, investment, tax and other professional advisors and to make their own decisions as to whether to deposit Series 3 Shares under the Offer and, if so, how many Series 3 Shares to deposit.

ABOUT DUNDEE CORPORATION

Dundee Corporation is a public Canadian independent holding company, listed on the Toronto Stock Exchange under the symbol “DC.A”. Through its operating subsidiaries, Dundee Corporation is an active investor focused on delivering long-term, sustainable value as a trusted partner in the mining sector with more than 30 years of experience making accretive mining investments.

FOR FURTHER INFORMATION PLEASE CONTACT:

Investor and Media Relations
T: (416) 864-3584
E: ir@dundeecorporation.com

Forward-Looking Statements

Forward-looking statements are included in this news release. These forward-looking statements are identified by the use of terms such as “anticipate”, “believe”, “could”, “estimate”, “expect”, “intend”, “may”, “plan”, “predict”, “project”, “will”, “would”, and “should” and similar terms and phrases, including references to assumptions. Such statements may involve but are not limited to, Dundee’s plans, objectives, expectations and intentions, including Dundee’s objectives and expectations regarding the Offer and the size, timing and terms and conditions of the Offer, the Lock-up Agreements, the effect the Offer will have on the Corporation on a go-forward basis, the potential future allocation of the Corporation’s capital, the Loan and the availability of funds under the Loan to satisfy the payment obligations under the Offer, and other comments with respect to strategies, expectations, planned operations or future actions. Forward-looking statements, by their nature, are based on assumptions and are subject to important risks and uncertainties. Any forecasts, predictions or forward-looking statements cannot be relied upon due to, among other things, changing external events and general uncertainties of the business and its corporate structure. Results indicated in forward-looking statements may differ materially from actual results for a number of reasons. The forward-looking statements contained herein are subject to change. However, Dundee disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required under applicable securities regulations.

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