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Good morning. My name is Adam, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Dundee Corporation Fourth Quarter and Year-end 2018 Conference and Webcast. [Operator Instructions] Mr. John Vincic, you may begin your conference.
Thank you, operator. Good morning, everyone, and welcome to Dundee Corporation's 2018 Fourth Quarter and Year-end 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 December 31, 2018, 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.And now I'd like to turn the call over to Jonathan Goodman. Jonathan?
Thank you, John, and thanks to everyone for joining the call this morning. I'll start with some key high-level themes. It's been -- it's a little over year since I returned to Dundee. During that time, we've had our challenges, but we've also made progress across our businesses. We have developed and begun implementing a new strategy, focused on attractive opportunities that we see in the resources sector.Our portfolio of investments, which has -- which numbered more than 100 companies just over a year ago is now down to below 40. Clearly, this is a much more manageable number, but more work needs to be done on this front. As we have streamlined our portfolio, we have also begun to develop a view on those assets which we see as core to the business and perhaps more importantly, we have a better understanding of the investments that no longer fit with our vision for Dundee.In many cases, we have taken steps to exit these businesses or reduce the management time required to oversee them. In other instances, we are actively exploring sale and exit opportunities for those assets not being core to the business. With that, let me take a brief look at some of the holdings that are core to Dundee. As many of you know, Dundee Precious Metals remains our largest investment. In early of 2019, DPM commissioned the Krumovgrad mine in Bulgaria. This milestone, combined with record gold production in 2018, has set DPM on a clear path to a rerating opportunity. We are also pleased with the momentum we see in Dundee Goodman Merchant Partners, our new platform for expanding our business interests in the junior mining sector. I'll speak more about these assets in a few moments. As I have said previously, United Hydrocarbon International provides us with attractive energy exposure and upside in a low cost, low risk manner. And our partner, Delonex, is an experienced operator in countries in Sub-Saharan Africa. Delonex is making progress on a number of fronts.At AgriMarine, we've been focused on operational improvements. We see a turnaround taking hold, but we'll need time and some additional capital to help AgriMarine reach its full potential. In our view, AgriMarine does possess world class technology providing a strong foundation for us as we try to advance this business. And finally, Android Industries is poised to deliver improved financial and operating results beginning in 2019. For now, we see this as a core holding, but as Android begins to achieve its targets, we'll continually evolve our view on this investment.Streamlining the portfolio. When I joined -- rejoined Dundee just over a year ago, one of our top priorities was to rationalize our business model. This included a full review of our overhead. Today, we have significantly reduced our real estate footprint in Toronto. Previously, we occupied nearly 3 floors of a downtown office tower and today, it's 1/2 of 1 floor. We also take took a closer look at our staffing requirements. As we've sold and exited businesses, we have reduced our complement of full-time employees from nearly 68 when I joined to 42 today.As noted earlier, we have also made significant adjustments in the size of our investment portfolio. Today, the portfolio number is less than 40, down from more than 100 just over a year ago. The streamlined investment portfolio has allowed our senior management team to be more focused. These investments requiring more over -- those investments requiring more oversight, most notably Parq Vancouver, are getting the attention they require.Looking ahead, more will be done to further optimize our investment portfolio. Legacy assets we inherited have been evaluated and under the right circumstances, we will look to exit those positions. We will do the same with the entire businesses as well, but in an orderly manner that helps maximize returns on those dispositions for our shareholders.Let me now turn to the announcement we also made last night regarding our Series 5 preferred shares. With the support of advice from independent financial advisers at GMP Securities and external legal counsel, Dundee management and its Board of Directors have made the decision to proceed with the conversion of the Series 5 shares with the issuance of Class A subordinate voting shares.To facilitate this conversion, approximately 42 million Class A shares will be issued by the corporation. Many alternatives were considered before we decided to proceed down this path. We considered the composition of our current portfolio, our balance sheet, our capital needs and our ability to sell assets at good prices related to the Series 5 shares and the dilution that they brought.And as noted previously, we did engage with some of the larger holdings -- holders of Series 5 preferred shares in good faith negotiations to consider other alternatives. We also had an open dialogue with some investors who are large shareholders of our company. Ultimately, the decision was made by management and the Board of Directors that this choice was in the best interest of Dundee and its stakeholders in the long-term. This decision provides Dundee with the balance sheet strength and stability and the financial flexibility necessary to pursue our longer-term strategic objectives.As part of this process, management and the Board of Directors will also consider the possibility of a share buyback program either through a normal course issuer bid or a substantial issuer bid. Should we choose one of these share buyback options, it would not be implemented until after the closing of the conversion, which is anticipated on or about May 15 of 2019, and would be still be subject to regulatory approval.Now let me take a moment to look at some of our larger holdings. Dundee Precious Metals. In 2019, Dundee Precious Metals achieved record gold production with more than 201,000 ounces of gold produced, surpassing guidance for the year. DPM also produced 36.7 million pounds of copper, which was in line with guidance. The strong operating results are reflected in DPM's financial results as well with $98.3 million (sic) [ $98.1 million ] generated in cash flow from operating activities and over $53.9 million in free cash flow in 2018. Subsequent to year-end, DPM achieved first gold pour at Krumovgrad in Q1 2019.Krumovgrad is DPM's second gold mine in Bulgaria and will help underpin the rerating that is already underway at the company. Krumovgrad will become DPM's second low cost gold mine in Bulgaria with an average production of 100,000 ounces of gold per year at an all-in sustaining cost of $400 per ounce over the first 5 years of mine life.DPM's Tsumeb smelter in Namibia achieved record throughput of 232,000 tonnes in 2018, which was in line with guidance and it generated positive free cash flow. DPM remains our single largest investment and we are very happy with the progress made by its management team over the last year and today, the stock trade near a 52-week high and we believe the market is just continuing to take notice and the rerating still has a ways to go.Dundee Goodman Merchant Partners. Since establishing Dundee Goodman Merchant Partners last year, we have been able to make progress as we advance our strategic shift towards investing in the mining sector. Our capital markets team in Vancouver has been active in the deal stream and has begun generating fee revenue. We've also begun to successfully deploy our own capital through investments into a number of junior mining companies, including Maritime Resources and Havilah Mining. These investments are consistent with our longer-term strategy of deploying capital into the sector and we have concluded -- conducted deep due diligence into these assets.The skills across our team allow us to thoroughly vet opportunities in this sector with a focus on leveraging our technical expertise. Once the decision is made to deploy capital, then we have the added benefit of actively working with the management teams at these investee companies to provide them with the technical support as they advance their respective projects. We think this know-how uniquely positions us to evaluate and invest in undervalued and overlooked equity stories in the junior mining sector.And as noted previously, we have a business model in place that allows us to exploit multiple revenue streams through capital raising, M&A, consulting services and ultimately, capital gains. Throughout our history, we have done this and look forward to continuing to evaluate numerous opportunities we see in today's very dislocated market.And now I'd like to turn the call over to Bob Sellars for a review of our financial performance. Bob?
Thank you, Jonathan. For the fourth quarter, we reported a pretax loss of approximately $51 million compared to a $63 million loss in Q4 2017. The net loss for the quarter after discontinued operations was $50 million in Q4 '18 compared to a $75 million loss in 2017.One of the major drivers for the quarter was a further impairment of $31 million at Parq Vancouver. Also, UHIC had a downward reevaluation of the royalty of $34 million leading to a fourth quarter loss of $34 million at UHIC compared to a $3 million gain a year ago. We also booked impairments at Dundee Sarea of $5 million and in Dundee 360 of $8 million to reduce the carrying value of those assets to a more realizable value.Offsetting those losses were $22 million of -- in trading gain and a $30 million gain on a financial derivative calculation relating to the Series 5 preference shares conversion. At Union Group, we recognized a loss in the quarter of $5 million as we wrote down our position to $14.5 million, which was the amount that we sold Union Group for in January.At Blue Goose, we incurred a loss of $1.3 million in the quarter, which was better than the Q4 loss of $3.7 million. Fair value cattle increase of $2.3 million in the quarter reduced the loss, which was -- there was a small fair value increase last year of less than $1 million. Consolidated G&A for the quarter was $17 million compared with $25 million in Q4 2017, reflecting continued reductions in headcount and operating cost at head office and the subsidiaries.On a year-to-date basis, we reported a pretax loss of $205 million compared to a small gain of $180,000 in the prior year. After taxes and discontinued operations, the loss was $209 million compared to a loss of $70 million in 2017. Again, the major drivers for these results were a write-down of approximately $124 million in Parq. Also a $22 million write-down in the UHIC royalty in the year, leading us to a carrying value of approximately $158 million at year-end. A $15 million impairment trading losses in Dundee Sarea and $13 million in losses in impairment as we revalued the assets in Dundee 360. Offsetting these was the $30 million financial derivative I previously mentioned on the Series 5 preference share conversion. Blue Goose lost $40 million in the year, including a $5 million impairment in Q3 compared to a $13 million loss in 2017. The business is still feeling the effects of BC wildfires in the prior year with increased cost in operations.At GCIC, we downsized the business in the year and the year-to-date loss was $3 million compared to $7 million in the prior year. Consolidated G&A was $74 million for the year compared to $100 million in the prior year with reductions in many entities.A couple of comments on the investment portfolio. The investment portfolio at year-end stood at $270 million compared to $385 million a year ago. Proceeds from disposition were $80 million in the year and the marketable securities was $167 million at year-end with Dundee Precious Metals accounting for $130 million of that number.Dundee Precious Metals has continued to improve post year-end and is up approximately $42 million in Q1. We continue to monitor our liquidity and had approximately $37 million of unrestricted cash at year-end at head office. We have approximately the same amount now and after we have incurred paying the first -- first of the year dividends on all the preferreds.Also, we are continuing to work at increasing our overall liquidity by continuing to reduce costs and disposing of non-core assets. Our annual dividends for 2019 are forecasted to be about $9 million and additional dividend tax of $3.6 million. The head office expenses were higher in 2018 as a result of severances, space rationalization, increased amortization and addition of one-time compensation costs.Looking ahead, we expect our normalized run rate to continue to decrease with a target between $14 million and $15 million in '19, subject to ongoing downsizing costs. We have ongoing discussions with CRA and we have disclosed a contingency note of $11 million in tax and $2 million in interest, which was disclosed in the third quarter and continue to be disclosed at fourth quarter. It should be noted, however, that the eventual tax amount could be materially higher and would affect our cash flow. This concludes our financial review for the quarter and year. And I will turn it back to Jonathan.
Thank you, Bob, for your update. Looking ahead, we continue to focus on the strategic priorities that we believe will help drive long-term value for all shareholders. In some areas, we've made good progress to date and others, more work needs to be done. That said, in little over a year since returning to Dundee, I do believe we have a clear vision for the path forward. Let me discuss some of those priorities briefly.Dundee Goodman Merchant Partners is a platform that is taking shape and beginning to gain traction in the market. We believe we have the right team in place to evaluate and execute on opportunities in the marketplace. Our capital markets teams based in Vancouver is actively in the deal flow and our technical team is conducting due diligence on many projects.Together, these teams gives us a unique platform of identifying and sourcing opportunities in the junior mining sector. Our resources portfolio is anchored by investments in Dundee Precious Metals. Additional investments have been made in other mining companies and today, this portfolio is valued at more than $240 million. We see this portfolio as a core investment at Dundee and we'll continue to actively manage and grow it. Other core holdings in our portfolio include our investments in the United Hydrocarbon International, AgriMarine Holdings and Android Industries. We think these investments provide us with significant optimality and upside in the medium to longer term.As noted earlier, our investment portfolio today has just over 40 names. This is a marked improvement from the portfolio that was inherited just over a year ago. That said, we see more opportunities for rationalization and will continue working towards that goal.And finally, it seems we always end with this theme, but it's important. Optimizing the capital structure of the corporation is critically important and we think we took a big step towards this goal with our decision to convert the Series 5 shares to Class A shares. This was not a decision we took lightly, but we believe it was the best option available and we think it's in the best interest of the corporation and the stakeholders. This decision, combined with our ongoing focus on cost management, are important elements to underpinning the sustainability of our business going forward.In closing, I'd like to thank our employees and management team for their continued support and hard work and, I would also like to thank our shareholders for their continued support. It's been a year with many challenges, but we also see many opportunities emerging and feel we are now in a better position to move Dundee forward.Now we'd be happy to answer your questions. Operator?
[Operator Instructions] And your first question comes from Brett Reiss from Janney Montgomery Scott.
Jonathan, the stock is down $0.26. I assume the market's making a judgment that the preference 5 holders are going to take delivery of the stock and then look to sell it. Is that what -- your thinking on that?
If that's the case -- that's why we said we're considering putting in an issuer bid is that we recognize that there may be some liquidity constraints here and our plan is this is the continued way the stock is going, that we would like to put together a bid that would provide for some liquidity for some of those that do want to exit.
Okay. You have $37 million in cash. Your guided run rate on G&A at the corporate level is $14 million to $15 million. Your dividends on the other preferreds, I think I heard Bob say, $9 million. You may have some obligations on this tax business that's going on. I don't think you have in place a bank line of credit at the present time. Where is the cash going to come from to buy in the stock on the issuer bid?
Thank you for asking that question, Brett. If you didn't ask it, it would have gone unasked, but the reality of it is we've commented on numerous calls that we've been in the processes of liquidating a big chunk of our portfolio, and a lot of these things are in very late stage advanced discussions. We've had a number of deals that we thought we had done and then it turned out they couldn't get financing towards, but these things -- a lot of these deals will get to fruition and will close this year. And I think that, that's where we're going to be raising it. We have over -- I think, if you look at the portfolio that we have, I said depending on valuation, somewhere between $100 million and $200 million worth of assets for sale. That's probably now between $100 million and $150 million of assets for sale. But that's the type of stuff that we're working towards and clearly, we're not going to spend money we don't have, but as we can liquidate some of these and get some of these deals over the finish line, that's where we're going to get the cash flow.
Could you share with us the 3 or 4 assets that are in late stage negotiations?
I'm not sure how much I can say. I think we've talked about we're working towards selling Blue Goose. I think we've been openly talking about 360 box.
Dundee 360's assets.
The Canadian Securities Exchange, we sold some of it last year and we're in the process of closing the balance right now. I wish I could talk more because, obviously, some of these negotiations are confidential and we have to respect confidentiality agreements that we signed and agreed to, but I just want to give you assurances that we are working towards the finish line.
Right.
And these things take a long time.
With respect to Blue Goose, included in that is the land that in past years has had a pretty large appraised value. Is that on the block?
The answer is yes, it is. And I'd say that clearly, values are down from where the appraised value was, but there still is very significant value there and certainly value well in excess of its debt.
Right. Now in the MD&A, where you list the portfolio of investments, there's debt securities of $25.3 million. Is that an investment-grade debt security? It is a high yield? What's the -- as an outsider, if I wanted to handicap, if it's really worth $25.3 million, can you give me any color on that?
Okay, well, $15 million of it is the subordinated loan to Eight Capital when we spun out capital markets. It pays a 10% interest rate, they've paid their interest monthly, they paid an annual royalty on that of $2.2 million and they reduced the principal at year-end -- after year-end at $1.3 million. So that's a very strong performing asset. The other is the $10 million continued note that we have in Parq and we look -- continue to evaluate that every quarter. So that's most -- that's most all of it.
Right. I am going to ask you some questions on Parq, but just before we go there, the TauRx Pharmaceuticals, where you carried at $42.3 million, is that a kind of binomial valuation? If they get favorable data on their Alzheimer drug that they're trying to develop, it could be worth multiples of that? But if they don't get favorable data, your downside is -- could be zero? Or do they have other assets so that's a hard number?
No, your conclusion's correct. It's either worth that or way more or zero depending on their ultimate results, and it is -- it's USD 30 million, so it went up a little bit of the quarter because the U.S. dollar strengthened, but we continue to have an optimistic view on TauRx.
Right.
As well as there are -- there do appear some secondary markets and we are exploring those as well.
Right, right. Do you know when the next trial results are going to be released? Is there a time line on that?
They was supposed to be something soon, but I believe they've recently expanded their study for good reasons, and I think that we won't see anything till the end of the year. But I'm not -- I don't have all my dates on top of them, but I know it's been deferred out for a good reason, because they expanded their study.
Okay. Let's talk about Parq. I mean, it just hasn't -- this was supposed to be an asset that would be cash flow positive for us. It just hasn't happened. And we've had to put more money in, not take any money out. At what point do we just say, I know it's very hard to admit things are not working out, but at what point do you just say enough is enough and walk away? Or do you continue to have it -- be a money pit that it's been?
I hear you, but recognize, we haven't put any money in, in June, in September or December into Parq. So we've already recognized that we're reluctant to throw money in. It was supposed to -- we were hoping to see it ramp up sooner than it has and we have been working on a transaction with a third party, who unfortunately still has to remain confidential. And I don't disagree with you. If -- we're going to work very hard to get this transaction to the finish line, and I think we will. And if we can do that, I think it will restructure this thing into something that will have a much more sustainable outcome. The problem with Parq is: one, the ramp up is taking longer than expected, but I also think perhaps our expectations were that we're probably overly optimistic given that it's an integrated resort and needs time to get to fruition, but the other problem is it was financed with some very high-priced pieces of paper and we need to get those pieces of paper restructured so the thing can have more runway and a better chance and we believe that the deal we're working towards will get that.
When do you think we'll see a possible deal?
I'm hoping we can have a deal announced before the end of April.
Well, that would be wonderful. Now another thing I think you have on the sales block are $11.6 million net of biological assets. Is that like the cattle herd and some of the fish assets? Did I read that correctly?
Yes, we have the Blue Goose fish, which is in Northern Ontario up for sale. I didn't think it was $11 million. It's a couple million dollars that we expect to sell for Blue Goose fish. And then the cattle, which are in -- cattle operations in British Columbia, we're trying to sell the whole entity. We do have those biological assets and the -- it's a normal process of processing them and selling them, but they would be bundled in as part of an overall sale of Blue Goose cattle.
Right, right, and there's 2 or 3 pages of explanation of the debt of Blue Goose. And then at the end, you say that Blue Goose's debt is non-recourse to the corporate parent. And then I think I see something listed. The credit facility of Blue Goose is listed as a liability of $17.5 million. Can you definitively tell me, is Blue Goose's debt non-recourse or not? Can you...
It's nonrecourse to Dundee Corporation. There's a holding company above Blue Goose called Blue Goose Capital. It has some debt in it, but it is subject to the assets of Blue Goose and then there's some debt directly in the cattle operations.
Right. If you're able to sell Blue Goose, will there be -- are you optimistic that there'll be proceeds over and above the debt so that some remuneration will flow to the corporate parent?
Yes.
[Operator Instructions] And your next question comes from Andrew Hood of M Partners.
So I just wanted to focus on Parq Vancouver first. Just a quick question first that I was wondering. You said you lost roughly $31 million on that investment. And my understanding was that it was already being carried at zero value. So where is that flowing?
Okay, so what you're mixing up -- in the investment in Parq had Class As, which were the first common and that was originally $53 million-or-so and we had wrote that down by taking up our equity losses in the first 2 quarters and then we took an additional impairment of $22 million in the second quarter. And so that's what got written down to zero. But if you look at the capital stack information in the financials and the MD&A, there are a whole bunch of different -- they were called, like, preferred units but they were actually units in the entity and those are the ones that every quarter, we have done additional impairments. And so the $31 million in the quarter -- fourth quarter was continued write-down of those classes of shares and we wrote the -- we had a $15.5 million note, which we wrote down to $10 million.
Okay. So again, on Parq Vancouver still then, could you guys give us kind of an update on how the operations are going there now? Because I understand you're still not fully ramped up, but from what I see in the quarter, you had a roughly 21%, 22% operating margin versus 10.9% for the year. So could you explain there maybe if there's improvement on expenses there or what's going on?
I think in the MD&A, in the Parq -- there's a Parq set of financials, which shows their operating results. I'm just going to find the page here, sorry, which was before amortization and interest. So when they -- when you add in the amortization and interest -- sorry, Page 28 of the MD&A. So let me just go there.
Yes, that's the page I was basing my calculation on. On my calculation, you're looking -- oh, I guess I wasn't including the amortization. That's what you're saying?
Yes, so amortization's down below and that's -- so you include that in your analysis. So you'll see that in the quarter. Their operating gain is $9 million. $18 million for the year. So that's either EBITDA, then -- but their amortization under assets is $34 million for the year and then a pretty big interest expense.
Yes, okay. So on that ramp-up then, in past calls, you guys kind of said you were 2 or 3 years away from full ramp up. Is that still what you're thinking? Or 1.5 years, 2 years?
Well, I think -- what we understand -- as we -- a resort like this probably takes 2 to 3 years to get it properly ramped up. A big chunk of the revenues will come from conferences, which are always booked well in advance, and I'd say with -- and we really -- while we open the doors technically in September, the doors really opened last January, where we had all of the pieces finally working. So yes, our expectation is that it's still going to be 1 to 2 more years until we get all the kinks out of it, get the cost reductions in and get this thing operating right.
Okay. On the additional financing, I saw that you got $20 million in the quarter from the industry investor and also on the 31st of December, you announced another $15 million. So would you be able to say if that's the same investor and is that also still in the works? Or is that what you were discussing in the last line of questioning?
What I would say is we're working with a group that are looking to make a major investment into it, that would refinance the existing structure of 2 levels of debt in a more friendly, a lower interest rate basis. They would also come in and have a big chunk of their stuff convertible. So our interest would drop and they've got a lot more experience in these types of assets than we have. And that's the group that's putting up the capital as we get this thing over the finish line.
Okay, so could you say then, if that's the same group as the $20 million or no?
I think I just did. Yes, it's the same group.
Oh, okay, okay. Would you be able to comment or maybe provide some insight onto why Paragon Gaming sold its position in February?
I'd prefer not to. Obviously, it was a 3-way partnership and when you have 3 partners, you don't always see eye-to-eye on things and I think that you'd had to ask Paragon as to why they sold their interest.
And now just a couple of more questions not related to Parq Vancouver. For the Series 5 redemptions, I was kind of confused by the language. Do they have to convert or is it an optional thing?
No, they have to.
They have to. Okay. And my final question is in relation to the United Hydrocarbon Chad-Delonex relationship. Is there any update there on Delonex' exploration activity in the area? If they've done anything since the end of the year?
We understand that they have done some things and they've drilled some wells. We don't have any of the results of the wells, but they continue to spend and be active there and we've had some chats with Delonex and Delonex is doing a very professional integrated exploration approach and our plan is to sit down with them in the summer and have a wholesome review of the project.
And your next question comes from Jim Roumell of Roumell Asset Management.
Jonathan, Bob, hey, question on the thinking through of a buyback and raising cash to do that. Would you consider borrowing against DPM?
Jim, I think that I would tell you that there's nothing that we wouldn't consider. Everything really depends on stock price, our view -- obviously, our view of asset values at the time and if buying back the stock is going to add significant value to our shareholder base, then, of course, we'd consider it.
Okay. And then just 2 quick questions. I just want to make sure I understand an earlier comment you made, Jonathan, regarding Tau. There have been some third-party transactions, secondary market transactions in Tau private stock at a price equal to your carrying value?
We believe so. And we're exploring this market. These are not people we know well and we're having conversations and dialogue and when we know for sure is when we'll tell you, but we do believe that there -- we believe that things are going well at Tau and we believe that there is -- I don't want to say an active secondary, but there is a secondary potential.
Is there any roadmap that you can provide in terms of where investors might be able to access information on the trading of Tau private stock? Or is it -- I guess, in other words, is there a site in which one can kind of -- that tracks this or are these just kind of inside trades that you have been made aware of, but there's no place to confirm them?
It's just things we've been told. We're neither validating it or verifying it.
Okay, okay. And then lastly, as the flow comes in from United Hydrocarbon on the drilling, have you determined whether you would be able to sell your royalty to a third party? Or does Delonex -- I assume Delonex has a first right of refusal, but can you -- is it allowable in the agreement to sell it to a third-party?
Bob, do you know...
Yes, thanks, Jim. I'm not 100% certain, but I do think that you're right that they have right of first refusal and that we could probably market it to another party. It is one of the things that we've discussed because there are royalty -- energy royalty companies out there and so it is something we're going to pick up and have a look at.
But until we actually have -- here's what we know, Jim. We know that -- I believe there were 6 -- before Delonex came in, within the Block H, which is really the exciting part of the story, there were 6 historical wells drilled and I think 4 or 5 of them hit oil. We also know from the seismic that we shot -- as we haven't seen Delonex' seismic, but we had our own, there's a lot of seismic closure, that's where you can actually see structures, the structures that allegedly contain -- the structure that contains the oil, you can see a lot of areas of seismic closure where there can be trapped oil. So -- and so we see the potential that if all of those structures had oil in it, this would be an immense discovery. And of course, the assumption is that all of them won't have oil as only 4 of the 6 that were drilled historically had oil. But if a good chunk of them have oil, this could be -- this is one of those funny assets that's on your books and you look at the valuation and you kind of scratch your head and say, everything about this valuation has been done right, but the only one thing we know for sure is that the number's wrong, in the sense that this is either going to be worth multiples of that number or 0. So until Delonex finishes its full review and I think they're doing a very professional approach, they're going to drill a whole bunch of wells and test a bunch of different structures and if they can come to the conclusion that they can put together enough critical mass to make a significant play and afford to bring in the transportation, then they will have a very significant oil and gas field. So that's kind of where the story is and we're very happy with things. But it's not one where we get management reports every week. We're going to be getting an opportunity to review it on a timely basis, and we're hopeful that it's going to turn into something significant.
Your next question comes from [ Luis Hernandez ].
All right. My first one is kind of like a simple question on Parq, and it's, obviously, pretty subjective, but do you guys expect to eventually cover the invested capital in Parq eventually in the future?
I mean, clearly, by the fact that we've written a lot of it down, the answer would probably be no, but we do expect that there's a real opportunity to recover significantly more than we're carrying it at. And that's provided that we get things right from here on in.
All right, okay, okay. Then on Union Group, just wanted to clarify. On the $14 million you've got, did you keep the ICC Labs shares or that includes them.
That was included.
We just got cash.
We never owned the ICC shares directly. It was always indirectly down in Union Group. So we were subject to the 60% shareholder selling those ICC shares or getting value for them to pay us for our 40% carry of Union Group.
Right. So they kept them, and you just got the cash? All right.
We got cash, yes.
Right, okay. Then on Android, you carry $21 million and you put it as your -- one of your core companies. Just wanted to -- what's the upside there? Where do you see it in the future?
Well, Android is...
Sorry, before you answer, Jon, did you say we carry it at 0?
No, he said $21 million.
No, $21 million.
Yes, yes, okay, that's correct. We do carry it. We believe it's a good asset.
And Android is very interesting company that's in the automotive assembly business. They actually assemble the automobiles for many of the large companies. And as a company, they have a very significant contract that they've landed from General Motors and they've been spending the last few years expanding and building plants to handle, I think, the minivan and pickup truck business assembly for GM. And that has -- just ramping -- starting to ramp up in 2019 and will continue to ramp up right through 2022. And we think that this is a very exciting company. They've been doing it for many years. They do a very good job at it. Right now, their balance sheet is probably a little more levered than it is historically because they've been building plants and those plants are just now coming on stream and we'll see the cash flow and the EBITDA ramp up and a lot of that debt will start to come down, but -- and we're also excited that given that there's -- the pickup truck and minivan business is probably the least cyclical component of the automotive sector. So we feel very comfortable that they're going to be able to achieve their objective. And we changed it to core because we're quite excited about the prospects.
Okay. Also, AgriMarine, you mentioned it as a core company. You commented a little bit about it. And just also wanted to have your feel on the upside on that business.
Well, AgriMarine has developed a very interesting technology where they actually have closed containment vessels for fish farming. And if you look at the fish farming industry, they're plagued with sea lice, algae problems, all kinds of really tough environmental issues. And because these are semi-closed contained vessels and the technologies that they've developed and patented is very interesting. Several years ago, we put the technology in at a place called Lois Lake in British Columbia. And in the last year, we've started to reinvest into that by putting auto feeders and really automating the process. And we're now starting to see better growth rates, we produce an excellent product, which -- and we're looking to expand it and we can see visibility towards getting this thing to be cash flow positive next year. And that will give us the ability to then start ramping it up to its permanent capacity, which we think can make it significantly cash flow positive. But we also look at the fish world and the world is -- it's very well documented that the world is in need of a lot more protein. Fish farming with nets is a very controversial industry. Our process does not use nets, it doesn't add any plastic to the lake. Our process is a semi-closed containment, meaning that none of the -- all of the environmental problems that come with fish farming don't come with this process. So we see it as a very sustainable, environmentally friendly process and we've been slowly kind of making it work in Lois Lake, British Columbia and we're starting to get very excited because it's working.
Okay, great. And finally, on UHIC, do you expect the first oil, the $50 million checks this year? Or how do you see that?
At 2022.
That's our own estimate is that the best case scenario will be 2022. This year, they did a lot of test work. Then they're going to do a lot of work and figure out what reservoirs they have then they'll probably do some infill drilling and put the whole story together and then they'll be a lot of construction along with pipeline.
Okay, great. And eventually, I mean, you talked about it a little bit previously. But let's say you keep it and I don't know, down the road, after, obviously, 2022, on a good year, what's your updated earning power or cash flow potential to Dundee Corp. from UHIC?
Hard to gauge -- hard to say, it all depends on how much oil they -- because the royalty's based on volumes, but...
The comment's been made to me, and this is not me quoting Delonex, this is me quoting other industry executives that have looked at this, is that you really wouldn't build the infrastructure unless you had 200 million barrels. And if you had 200 million barrels, you'd probably want to produce at 15 million barrels a year. And if you produce at 15 million barrels a year and you took our 5% royalty, that would be 750,000 barrels of oil at $60, would produce net to us about USD 45 million a year. So the -- I guess what I'm trying to say is that if this thing works, it could be a very significant number to us.
Right. Right. All right.
We own about 82% of it.
Okay. 82% of -- right. Of the…
Of UHIC.
And next question comes from Brett Reiss from Janney Montgomery Scott.
And I'll keep it short because you've been on a while and I appreciate that. The $27 million in the portfolio of investments listed as Others, can you give us some color on that? Is it 10 positions? How liquid are they? So I get a sense of -- could you realize $27 million if you were aggressive in selling that over the next 6 months to a year?
Uncertain that we could realize the whole amount because there are a handful of small items in there, Brett, but...
I think we look at it as opportunistic and we picked our spot. Some of these are very illiquid. We've amalgamated a whole bunch of them into one portfolio, where whenever some liquidity emerges, we jump on it, but...
Okay. And then just one final one on Parq. In the negotiations that are going on with this independent party, what leverage do we have in coming out of the ultimate conclusion of the negotiations with a material part of the ultimate pie?
Well, I think, we're going end up with somewhere around 22% of -- 22% to 25% of the ongoing Parq after all the conversions of the party coming in and the capital they put in and debt they put in. And we feel that we could have 25% of something that could be viable.
I think, the point is, it's not about the leverage that we have. It's about the fact that with whatever restructuring happens, unless we get this thing, really operating properly, we're not going to have significant -- so the key is getting the right partnership together where everybody's interests are properly aligned so that we can get the asset performing. And I think one of the things that hopefully we'll be able to -- that we're very happy with the potential partner we're talking to because we think they can bring a lot of value to the table.
Do they just bring money or operational expertise?
Both.
They bring both, but that's as much as I'm comfortable saying.
And there are no more questions at this time. So I will turn the call back over to Mr. Jon Goodman for closing remarks.
In closing, I'd like to thank our employees and management team for their continued support and hard work. I'd also like to thank our shareholders for their continued support and it's been a year with many challenges, but we also see many opportunities emerging and we feel we are now in a better position to move Dundee forward. Thank you.
And this does conclude today's conference call. You may now disconnect.