2016 - Dundee Corporationdundeecorp.com/pdf/DUNDEE_Corp_2017_Annual_Report_FINAL.pdf · the existing Edgewater Casino as well as two Marriott branded hotels, five restaurants, various

OVERVIEW AND LEADERSHIP VIEWS

2016

The forward-looking information contained in this presentation is presented for the purpose of assisting shareholders in understanding business and strategic priorities and objectives as at the periods indicated and may not be appropriate for other purposes. Forward-looking statements may include, but are not limited to, statements about anticipated future events or results including comments with respect to the Company’s objectives and priorities for 2017 and beyond, and strategies or further actions with respect to the Company and its subsidiaries, its products and services, business operations, and financial performance and condition. Forward-looking statements are statements that are predictive in nature, depend upon or refer to future events or conditions or include words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “estimates” or similar expressions concerning matters that are not historical facts. Such statements are based on current expectations of the Company’s management and inherently involve numerous risks and uncertainties, known and unknown, including economic factors and those affecting the financial services, energy, resources, agriculture and real estate industries generally. All such statements constitute forward-looking information within the meaning of securities law and are made pursuant to the “safe harbour” provisions of applicable securities laws.

A number of risks, uncertainties and other factors may cause actual results to differ materially from the forward-looking statements contained in this presentation, including, among other factors, those referenced in the section entitled “Risk Factors” in the Company’s annual information form for the year ended December 31, 2016, which include, but are not limited to, general economic and market conditions; the Company’s ability to execute strategic plans including the ability to complete acquisitions and dispositions effectively; the Company’s ability to meet financial obligations; the performance of the Company’s principal subsidiaries; the Company’s ability and the ability of its investee companies to raise additional capital; the availability of equity and debt financing and/or refinancing on acceptable terms; risks relating to trading activities and investments;

competition faced by the Company; regulation of the Company’s businesses; successful integration of the Company with acquired businesses and the realization of any anticipated synergies; risks associated with the Company’s operating businesses and the Company’s investment holdings in general, including risks associated with oil and gas and mining exploration; risks of operating in foreign jurisdictions; development and production activities, environmental risks, inflation, changes in interest rates, commodity prices and other financial exposures; the availability and adequacy of insurance coverage for the Company and its subsidiaries; maintenance of minimum regulatory capital requirements for certain of the Company’s subsidiaries; potential liability of the Company and its subsidiaries under securities laws and for violations of investor suitability requirements; and the ability of the Company and its subsidiaries to attract and retain key personnel. The preceding list is not exhaustive of all possible risk factors that may influence actual results, and is compiled based upon information available as of June 5, 2017.

Forward-looking statements contained in this presentation are based upon assumptions about the future performance of the Canadian, European and United States economies, which were material factors considered by management when setting Dundee’s strategic priorities and objectives. In determining expectations for economic growth in the financial services, energy, resource, agriculture and real estate sectors, the Company considered historical economic data provided by the Canadian government and its agencies, and market and general economic conditions, which factors are unpredictable and may impact the Company’s performance.

Dundee Corporation®, Dundee 360 Real Estate Corporation™, Dundee Agriculture™, Dundee Sustainable Technologies™ and Dundee Capital Markets™ are trademarks owned by Dundee Corporation, used under license. ©Copyright 2017, Dundee Corporation. All rights reserved.

FORWARD LOOKING STATEMENTS AND OTHER IMPORTANT DISCLOSURES

MESSAGE FROM THE CHAIRMANAs you read this year’s CEO message two dominant themes will emerge: execution and transition. In 2016, the focus for David Goodman, our CEO, and his executive management team was squarely on execution. Much of what they set out to accomplish, they achieved. And for that, they deserve to be commended.

The work David and his team are focused on is critical to repositioning Dundee for longer term success. Many of the businesses within our portfolio required capital. And yet others were underperforming and considered non-core for the future. The Board of Directors was fully supportive of decisions to sell certain companies in order to generate capital for redeployment in support of businesses with promising growth prospects. This approach makes strategic sense and the impact of these decisions is already being reflected in improved financial performance.

The Board also supports efforts by management to nurture key businesses, which are on the verge of generating improved financial results. Actively managing our portfolio of investments is a cornerstone of our philosophy at Dundee. We see this work as critical in helping the Company navigate this period of transition.

Underpinning their efforts last year was management’s continued work in stabilizing the Company’s financial position. The Company is now free of bank debt and remains focused on lowering expenses further as it solidifies its balance sheet. Clearly, improving our financial position is critical in ensuring the flexibility and wherewithal required to support future growth.

As we continue through 2017 we hope for more positive results and improved performance across our portfolio.

I would also like to thank those Board members who did not stand for re-election this year for their contributions over the years. Messrs Daniel Goodman, Mark Goodman, Ned Goodman and Harold P. (Sonny) Gordon have determined that they will

not stand for re-election this year. Effective June 5, 2017, Ned Goodman becomes the Chairman Emeritus of the Company and Mr. Gordon will become the Vice-Chairman Emeritus of the Company.

Ned Goodman founded Dundee nearly three decades ago and under his leadership the Company has enjoyed much success. Mr. Gordon has been a Board member since 2000. We wish both of them continued success in their new roles and thank them for their many contributions over the years.

Let me conclude by thanking our shareholders for their continued support. We believe our strategy is sound and that we have the right team in place to deliver against our longer-term objectives. And ultimately we believe this will deliver long-term value for all shareholders.

Actively managing our portfolio of investments is a cornerstone of our philosophy at Dundee

ROBERT McLEISHChairman of the Board

1

“”

DUNDEE CORPORATION • 2016 Overview and Leadership Views2

DUNDEE CORPORATION IS A CANADIAN HOLDING COMPANY WITH INVESTMENTS IN FOUR CORE BUSINESS AREAS:

WEALTH MANAGEMENT

AGRICULTURE

REAL ESTATE

NATURAL RESOURCES (MINING AND ENERGY)

3DUNDEE CORPORATION • 2016 Overview and Leadership Views

CEO’S MESSAGE We emerged from 2016 a leaner, more focused company. Much was accomplished in a year that is best characterized as one of transition for Dundee Corporation.

After a difficult 2015, we took action to right size our portfolio. Last year, we made a commitment to exit non-core businesses and restructure others which were underperforming. We were successful on a number of fronts and in the process we lowered our overhead costs and reduced debt. Still, more work remains before we can fully pivot to an offensive posture. As much as we want to pursue growth options, our first priority is fortifying our balance sheet.

We believe the building blocks are in place to get back to being a growth company but first, we must continue to focus on the hard work and heavy lifting that needs to be done to stabilize our financial position. This also means more focus on nurturing businesses towards profitability to ensure a secure foundation for growth is in place.

In 2016 we laid out clear objectives for our business. And throughout the year and into early 2017, we pursued these objectives with vigor.

Throughout 2016 we managed our portfolio in a careful and measured manner. Capital was allocated with an eye towards efficiency and effectiveness. And expenses, at both our corporate office and our investee companies, were managed prudently. The end result was a slow and steady progress against our long-term objectives as outlined below.

Dundee Goodman Private Wealth – The sale of our retail brokerage business was announced in early 2016 and closed in April of last year. This transaction with Echelon Partners saw the majority of our retail brokers find a new home with a company intent on growing this platform. For Dundee, the sale resulted in an upfront cash payment of $9 million. More importantly, this sale helped us achieve two important goals: first, it helped us lower our overall cost profile and reduce overall G&A costs. And second, it freed up nearly $40 million of regulatory capital for redeployment to other businesses.

Dundee Capital Partners – In December 2016 we announced the sale of the assets of Dundee Capital Markets. Going forward, Dundee Corporation will maintain an economic interest in this business via a subordinated loan which will generate $1.5 million annually, and an ongoing revenue royalty agreement. Similar to the sale of Dundee Goodman Private Wealth, this transaction liberated regulatory capital which we redeployed.

Blue Goose Capital Corp. – In October of last year, Blue Goose secured a third-party investment from Serruya Private Equity Inc.

This infusion of capital was instrumental in helping finance its Tender Choice acquisition in the fourth quarter of last year and it continues its progress towards becoming a significant cash flow

contributor.

United Hydrocarbon International Corp. – In October 2016, United Hydrocarbon International initiated a process to seek third-party investors and potential partners to invest in its world-class oil assets in Chad. This ultimately evolved into a full strategic review process, which was concluded in May of this year. United chose Delonex Energy as its preferred partner. Delonex is a company focused on oil and gas assets in Sub-Saharan Africa, with a long track record and successful operating history.

Parq Casino – Located in downtown Vancouver, the Parq Casino is a unique urban resort project poised to become a flagship asset in Dundee’s portfolio. Set to open in the fall of 2017, it will house the existing Edgewater Casino as well as two Marriott branded hotels, five restaurants, various lounges, a spa and a parking garage. Located adjacent to B.C. Place Stadium, the project has the potential to generate significant EBITDA for Dundee. In 2016 we and our partners invested new capital to help fund ongoing construction work. Once operational, we will explore opportunities to refinance the project debt in an effort to further enhance Parq’s ability to generate free cash flow.

Dundee 360 – Last year we successfully repositioned this business under the leadership of Brad Henderson, who is also the president of Sotheby’s International Realty Canada. This team is focused on restoring profitability to a much leaner business, while considering an array of options to help it monetize legacy assets within its portfolio.

These are some of the examples of the progress we are making against numerous key strategic objectives. And these efforts are being reflected through improved operating results at various investee companies and in the financial results of the company.

David Goodman, LLB, CFAChief Executive Officer

As much as we want to pursue growth options, our first priority is fortifying our balance sheet.

“”

4 DUNDEE CORPORATION • 2016 Overview and Leadership Views

MERCHANT CAPITAL GROUP

The momentum we enjoyed in 2016 carried over into our merchant capital group as well. They built on earlier success and their focal point in 2016 remained the active management of its portfolio.

Creative thinking combined with a laser-like focus on execution is the hallmark of success within this group. Led by Mark Goodman, this group has the ability to turn vision into reality by nurturing ideas which ultimately manifest themselves in the form of new and exciting businesses. Below are some examples of their value creation success stories:

ICC International Cannabis Corporation – Working with Union Group, our South American subsidiary partners, the merchant capital group was instrumental in the creation of this Uruguay-based company. Today, ICC is ramping up production in anticipation of legalization in Uruguay and also marketing other products internationally. Following its successful public listing on the TSX Venture Exchange in late 2016, it currently has a market capitalization in excess of $120 million.

Osisko Mining – Through a plan of arrangement, the group was instrumental in facilitating a three-way merger to create the new Osisko Mining, which is now led by a team of seasoned executives with whom Dundee has had a long and successful track record. In the process, our team has taken an investment worth a combined $8 million and turned it into a much more liquid holding in a larger company which values our stake today at about $35 million.

These are just some of the highlights for the merchant capital group for the last year. In a portfolio heavily skewed towards resource companies, there were other winners to celebrate.

We did encounter some setbacks last year. Dundee was one of the pioneers in Canada when we launched the first SPAC, or special purpose acquisition corporations, in 2015. And in the summer of 2016 we were one of the first SPAC’s to announce a qualifying transaction. This transaction with CHC Student Housing Corp. was valued at nearly $420 million and offered the opportunity to gain a toehold in the purpose-built student housing market in Canada. Unfortunately, we were unable to close the transaction and ultimately in April of this year, capital was returned to shareholders. There remains a possibility to complete an alternate transaction but we have made the strategic decision to not re-enter the SPAC market at this time.

WEALTH MANAGEMENT

The build out of our wealth management platform remains a priority. However, the pace of growth within this unit is proving to be more challenging than we anticipated. Our strategy underpinning our re-entry into wealth management is focused around serving high-net worth and ultra-high-net

worth individuals in Canada. This cohort is made up of business owners, entrepreneurs, executives and other successful people with complex financial needs. As a group, these individuals have amassed significant amounts of wealth and they generally seek bespoke solutions that take a holistic approach to serving their needs.

We believe our strategy is sound and the team we have built to date is capable of execution. However, to accelerate the growth of this business we feel a cornerstone acquisition is required. By building critical mass through an acquisition, we feel we can enhance our platform. And in theory, this seems easy but the reality of completing a compelling acquisition has proven harder than expected.

Staying disciplined and not overpaying for an acquisition are keys to making our strategy a success. And while we have kicked the tires on many established businesses with promising growth outlooks, we have yet to find the right match. So rather than rush into a commitment, we have decided to act cautiously as we continue evaluating potential acquisitions.

COST REDUCTION

A top priority for 2017 is continuing to make progress towards cost containment targets. It is imperative for us to streamline our cost base. Lowering interest payments, reducing rent expenses, eliminating overheads and lowering our SG&A on a permanent basis are key elements. We are still transitioning towards this goal but I am pleased with the progress made to date. As we continue through 2017 it is our belief we will be able to further consolidate our real estate footprint in Toronto, leading to permanent cost reductions in our business.

BALANCE SHEET MANAGEMENT

As noted earlier, we remain focused on strengthening our balance sheet. To realistically evaluate and pursue the growth opportunities we envision for Dundee we must first be standing on sound financial ground. To that end, we have worked diligently in concert with our lenders. In early 2017 we announced a new $80 million revolving credit facility with a Canadian bank. Not long afterwards, we announced the sale our remaining shares in DREAM for proceeds of over $106 million. Proceeds from this share sale were used to retire outstanding debt against the revolving credit facility. The remainder of the cash will be used for general corporate purposes and to help support the working capital needs of some of our investee companies.

Ultimately, we foresee a time when Dundee is in a position to harvest dividends from some of the business it has seeded and nurtured. While we remain confident that day will come, it is not quite upon us.

DUNDEE CORPORATION PORTFOLIO

Industrials – $26.5 Other – $9.0

Pharmaceuticals – $41.4

Agriculture – $88.2Real Estate – $243.9

Mining – $236.3 Capital Allocation by Industry Sector ($

Millions)*

*As at March 31, 2017

Financial – $150.5Energy – $220.8

2% 1%

4%

9%24%

23%

15%22%

5DUNDEE CORPORATION • 2016 Overview and Leadership ViewsDUNDEE CORPORATION • 2016 Overview and Leadership Views

DUNDEE’S KEY STRATEGIC OBJECTIVES FOR 2017Looking ahead, the remainder of 2017 holds much promise for Dundee. A number of catalysts are within view on the horizon and each has the potential to be a significant value enhancing event for Dundee.

SOME OF OUR KEY INITIATIVES FOR 2017 INCLUDE THE FOLLOWING:

Construction completion at Parq Casino and the beginning of operations in the fall of 2017. We believe Parq Casino can generate meaningful EBITDA over a 12 month ramp up period, ranging between $75 and $100 million annually.

Continued integration of the Tender Choice acquisition by Blue Goose in support of its ongoing transformation of its poultry business. With early integration hiccups behind them, Blue Goose has plans in place to grow both its organic and conventional poultry businesses. Tender Choice provides an expanded platform for conventional poultry products such as turkey and chicken, while Blue Goose management has been working actively to secure quota needed to help meet demand for its organic chicken products.

Completion of the United Hydrocarbon International transaction with Delonex Energy. This transaction is compelling for Dundee on many levels. It provides a cash payment of US$35 million upon closing, and an additional combined payment totaling US$50 million if first oil is achieved at Doba and Block H. Additionally, royalties of 10 per cent on Doba production and 5 per cent on Block H production ensure we will continue to share in the economic success of these projects for many years to come.

However and perhaps most importantly, Delonex is ready to invest US$65 million in funding within two years of the transaction closing. We see this as critical to overall success as this money will be spent on a comprehensive exploration program with another US$35 million earmarked for development in Doba, subject to commerciality being achieved. This is a win-win-win proposition for UHIC, Delonex and the people and government of Chad. Our focus now is supporting the process to secure required approvals from the government of Chad in order to close this transaction later in 2017.

6 DUNDEE CORPORATION • 2016 Overview and Leadership Views

DUNDEE CORPORATION • 2016 Overview and Leadership Views 7

Our efforts to reposition our business continue and are advancing, but clearly we remain in a period of transition. We are pleased with progress to date and the improvements made across our portfolio. However, more needs to be done to achieve our goal of stabilizing our financial position in order to support more pronounced growth in the future. That day has not arrived yet, but we feel it is getting closer very quickly. Until then, we will remain diligent, and disciplined as we pursue the task at hand. As stewards of your capital, we take our responsibilities seriously. And as fellow shareholders, our interests are aligned and we look forward to ongoing improvements in our business that we believe will lead to greater success in the not too distant future.

In closing, I would like to thank all of our shareholders for their continued support. To our employees, a heartfelt thank you for their ongoing dedication and commitment to the greater cause. And finally, to our board, we say thank you for your ongoing stewardship and wise counsel.

IN CONCLUSION

David Goodman, LLB, CFAChief Executive Officer

Our efforts to reposition the business continue and are advancing, but clearly we remain in a period of transition. “ ”

DUNDEE CORPORATION • 2016 Overview and Leadership Views8

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dundeecorporation.com

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DUNDEECORP.COM

A YEAR OF TRANSITION