DUNDEE CORPORATION 2014 THIRD QUARTER REPORT › dc › - › media › DGC › DC › 2014Q3D... · SEPTEMBER 2014 – DUNDEE CORPORATION 1 DUNDEE CORPORATION Management’s Discussion

DUNDEE CORPORATION

2014 THIRD QUARTER REPORT

SEPTEMBER 2014 – DUNDEE CORPORATION 1

DUNDEE CORPORATION

Management’s Discussion and Analysis

Dundee Corporation (the “Corporation” or “Dundee Corporation”) is a public Canadian independent holding company, listed

on the Toronto Stock Exchange (“TSX”) under the symbol “DC.A”. Through its operating subsidiaries, the Corporation is

engaged in diverse business activities in the areas of its core competencies including investment advisory and corporate finance,

energy, resources, agriculture, real estate and infrastructure. The Corporation also holds, directly and indirectly, a portfolio of

investments mostly in these core focus areas, as well as other select investments in both publicly listed and private enterprises.

This Management’s Discussion and Analysis (“MD&A”) has been prepared with an effective date of November 14, 2014

and provides an update on matters discussed in, and should be read in conjunction with the Corporation’s audited

consolidated financial statements, including the notes thereto, as at and for the year ended December 31, 2013 (the “2013

Audited Consolidated Financial Statements”), together with the accompanying MD&A for the year then ended, and with

the unaudited condensed interim consolidated financial statements of the Corporation as at and for the three and nine

months ended September 30, 2014 (the “September 2014 Interim Consolidated Financial Statements”), all of which have

been prepared using International Financial Reporting Standards (“IFRS”). All amounts in this MD&A are in Canadian

dollars unless otherwise specified. Tabular dollar amounts, unless otherwise specified, are in thousands of dollars, except

for per share or per unit amounts.

ACCOUNTING FOR INVESTMENTS – BASIS OF PRESENTATION

(i) Includes “Dundee Securities Europe LLP”, “Dundee Securities Inc.”, and “Dundee Goodman Insurance Agency Ltd.”, all of which are sister companies to

Dundee Securities Ltd. “Dundee Capital Markets” and “Dundee Goodman Private Wealth” are divisions of Dundee Securities Ltd.

(ii) Formerly Nichromet Extraction Inc.

(iii) Formerly 360 VOX Corporation

As at September 30, 2014

Business Business Percentage Market Value

Entity Activity Ownership ($000's)

Subsidiaries

Goodman & Company, Investment Counsel Inc. Asset management 100% Private

Dundee Securities Ltd.(i) Full service securities brokerage 100% Private

Dundee Energy Limited Oil and gas exploration, development and production 58% 23,979

United Hydrocarbon International Corp. Oil and gas exploration 35% Private

Dundee Sustainable Technologies Inc.(ii) Patented metallurgical processing 64% 36,504

Eurogas International Inc. Oil and gas exploration 53% 499

Blue Goose Capital Corp. Agriculture 86% Private

AgriMarine Holdings Inc. Aquaculture 95% 11,408

Dundee 360 Real Estate Corporation(iii) Residential, commercial and hospitality based real estate 100% Private

Equity Accounted

Dundee Precious Metals Inc. International mining company 25% 157,136

Union Group International Holdings Limited Latin American private equity asset manager 40% Private

Paragon Holdings (Smithe Street) ULC Real estate resort development 50% Private

Edgewater Casino ULC Vancouver casino 50% Private

Android Industries, LLC Technology-enabled assembler and sequencer 20% Private

Cambridge Medical Funding Group II, LLC Receivables financing company 50% Private

Others n/a n/a 9,470

Other Investments

Direct investment in diverse industry sectors including:

Brokerage securities owned and sold short n/a n/a 23,115

Publicly traded securities n/a n/a 441,179

Private investments n/a n/a 232,627

Mutual funds and short-term investments n/a n/a 68

Debt securities n/a n/a 121,945

Warrants and options n/a n/a 1,007


The ownership structure of the Corporation’s various investments is diverse, resulting in different methods of accounting for such

investments. Generally, the Corporation accounts for its investments as either (i) subsidiaries; (ii) equity accounted investments;

or (iii) direct investments. The previous chart illustrates significant investments included in the Corporation’s existing portfolio

at September 30, 2014, and details the method of accounting that has been applied in order to account for each investment.

Subsidiaries include those investment structures for which the Corporation is exposed, or has rights, to variable returns

from its involvement with the investee and has the ability to affect those returns through its power over the investee.

Subsidiaries are not recorded as individual investments in the Corporation’s consolidated financial statements. Instead,

subsidiaries are consolidated, with 100% of the subsidiaries’ underlying accounts recorded on a line-by-line basis within the

Corporation’s consolidated financial statements. The share of assets, liabilities, net earnings or loss and other

comprehensive income or loss (“OCI”) of the subsidiary belonging to other investors and not attributable to the Corporation

are reported in the Corporation’s consolidated financial statements as “Non-controlling interest”.

Equity accounted investments are those investment structures over which the Corporation may exert significant influence,

or over which it has joint control relating to financial and operating policy decisions. The carrying values of equity

accounted investments are initially recorded at cost and are subsequently adjusted by the Corporation’s share of net earnings

or loss, less any dividends or distributions received, and the Corporation’s share of OCI generated by the investee company.

The carrying value of an equity accounted investment is subsequently adjusted to reflect any dilution in the Corporation’s

ownership interest. The share of net earnings and OCI from equity accounted investments, as well as any gain or loss

resulting from a dilution in ownership interest, are reported in the Corporation’s consolidated statements of operations as

“Share of earnings (or OCI) from equity accounted investments”. Dividends or distributions received from equity

accounted investments are not reported as revenues. Rather, any amounts received are reported in the Corporation’s

financial statements as a reduction in the carrying value of the equity accounted investment.

Investments – All other investments have been designated as investments at fair value through profit or loss (“FVTPL”).

These investments are carried in the Corporation’s consolidated financial statements at their fair value, with changes in

period-over-period fair values recorded in net earnings. Investments at FVTPL include investments associated with the

Corporation’s brokerage business and which have been separately designated as “Brokerage securities owned” or

“Brokerage securities sold short” in the Corporation’s consolidated statements of financial position.

PERFORMANCE MEASURES

The Corporation believes that important measures of its operating performance, including the operating performance of its

subsidiaries, include certain performance measures that are not defined under IFRS and as such, may not be comparable to

similar performance measures used by other companies. Throughout this MD&A and the Corporation’s MD&A as at and for the

year ended December 31, 2013, there will be references to certain performance measures which management believes are

relevant in assessing the economics of its business. While these performance measures are not formally recognized by IFRS, the

Corporation believes that they are informative and provide further insight as supplementary measures to net earnings and cash

flows.

“AUA” or “Assets under Administration” represent the approximate period-end value of client assets administered by the

Corporation’s brokerage subsidiaries and in respect of which these subsidiaries earn commission revenue and other similar

fees from clients. AUA are not included in the Corporation’s consolidated statements of financial position. “AUM” or “Assets under Management” represent the period-end value of client assets managed by the Corporation’s

capital markets, wealth management and asset management subsidiaries on a discretionary basis and in respect of which

these subsidiaries earn management fee revenue and, in certain cases, performance fee revenue. AUM are not included in

the Corporation’s consolidated statements of financial position. “Barrel of Oil Equivalent” or “boe” is calculated at a barrel of oil conversion ratio of six thousand cubic feet (“Mcf”) of

natural gas to one barrel (“bbl”) of oil (6 Mcf to 1 bbl), based on an energy equivalency conversion method which is

primarily applicable at the burner tip and does not always represent a value equivalency at the wellhead.


“Contribution Margin” or “Margin” is an important measure of earnings in each business segment and generally

represents core revenues less cost of sales, and excludes related general and administrative expenses, depreciation and

depletion, interest expense, and income taxes. “Market Value” of an investment is generally determined using quoted market prices on prescribed stock exchanges. “Field Level Cash Flows” are calculated as revenue from oil and natural gas sales, less royalties and cost of sales. Field

level cash flows contribute to working capital, including debt management, as well as to the funding of capital expenditure

requirements for the Corporation’s resource-based business activities. “Field Netbacks” refer to field level cash flows expressed on a measurement unit or barrel of oil equivalent basis. “Per Day Amount” or (“/d”) is used throughout this MD&A to reflect oil and gas production volumes on an average per

day basis. “Probable Reserves” are those additional reserves that are less certain to be recovered than proved reserves. It is equally

likely that the actual remaining reserves quantities recovered will be greater or less than the sum of the estimated proved

plus probable reserves. “Proved Reserves” are those reserves that can be estimated with a high degree of certainty to be recoverable. It is likely

that the actual remaining reserves quantities recovered will exceed the estimated proved reserves.

RESULTS OF OPERATIONS

Nine months ended September 30, 2014 compared with the nine months ended September 30, 2013

Consolidated Net Earnings

During the nine months ended September 30, 2014, the Corporation incurred a net loss attributable to owners of Dundee

Corporation of $140.2 million or a loss of $2.68 per share. This compares with earnings of $513.4 million or $9.37 per share

generated during the same period of the prior year, including an after-tax gain of $599.4 million relating to the completion of the

distribution of the Corporation’s 70% interest in Dundee Realty Corporation (“Dundee Realty”) pursuant to a tax efficient plan of

arrangement that resulted in the establishment of DREAM Unlimited Corp. (“DREAM”). The Corporation retained a 29%

interest in DREAM, whose business activities include residential land development, housing and condominium development and

asset management activities for certain infrastructure investment vehicles.

Continuing Operations Discontinued Operations TOTAL

For the nine months ended September 30, 2014 2013 2014 2013 2014 2013

Net (loss) earnings before income taxes from:

Corporate and other portfolio holdings (108,126)$ (124,417)$ -$ -$ (108,126)$ (124,417)$

Goodman & Company, Investment Counsel Inc. (1,101) (3,402) - - (1,101) (3,402)

Dundee Securities Ltd. (5,825) (25,511) - - (5,825) (25,511)

Dundee Energy Limited 3,764 (3,028) - - 3,764 (3,028)

United Hydrocarbon International Corp. (24,486) (2,470) - - (24,486) (2,470)

Dundee Sustainable Technologies Inc. (7,064) (2,729) - - (7,064) (2,729)

Eurogas International Inc. (800) (626) - - (800) (626)

Blue Goose Capital Corp. (21,263) (8,493) - - (21,263) (8,493)

AgriMarine Holdings Inc. (2,671) - - - (2,671) -

Dundee 360 Real Estate Corporation (3,023) - - - (3,023) -

Dundee Realty Corporation - - - 51,807 - 51,807

Gain on distribution of assets - - - 625,651 - 625,651

(170,595) (170,676) - 677,458 (170,595) 506,782

Income tax recovery (expense) 16,329 49,900 - (40,689) 16,329 9,211

Net (loss) earnings for the period (154,266)$ (120,776)$ -$ 636,769$ (154,266)$ 515,993$

Net (loss) earnings attributable to:

Owners of the parent (140,196)$ (113,292)$ -$ 626,709$ (140,196)$ 513,417$

Non-controlling interest (14,070) (7,484) - 10,060 (14,070) 2,576

(154,266)$ (120,776)$ -$ 636,769$ (154,266)$ 515,993$


The operations of Dundee Realty, prior to completion of the transaction as outlined above, have been included in the comparative

information to the September 2014 Interim Consolidated Financial Statements as “Discontinued operations”. Excluding the

effect of discontinued operations, the Corporation’s net loss from continuing operations attributable to owners of Dundee

Corporation decreased by a further $26.9 million in the first nine months of 2014, when compared with the net loss from

continuing operations attributable to owners of Dundee Corporation incurred during the first nine months of the prior year. The

previous table summarizes the Corporation’s net earnings or loss on a per segment basis.

Significant contributions to changes in period-over-period results include the following:

Included in the “Corporate and other portfolio holdings” segment are gains or losses representing changes in the market

values of the Corporation’s investment portfolio designated as investments at FVTPL. Changes in the fair value of

investments are determined by equity and credit markets and are expected to result in significant quarterly fluctuations in net

earnings. Declines in the fair value of the Corporation’s portfolio of investments during the nine months ended September

30, 2014 were $108.4 million. This compares with declines of $147.1 million incurred during the same period of the prior

year. The Corporation believes that equity and credit markets do not necessarily correctly reflect the underlying value of

certain assets and therefore, the Corporation’s operating results do not necessarily provide predictive value to readers of the

Corporation’s financial statements.

Also included in the “Corporate and other portfolio holdings” segment during the nine months ended September 30, 2014

are losses of $27.2 million relating to the Corporation’s share of losses of its underlying equity accounted investees. In the

same period of 2013, the Corporation recognized earnings of $27.9 million as its share of earnings from these equity

accounted investees. Included in the current year equity accounted losses is $22.3 million relating to the Corporation’s share

of impairment amounts recognized by Dundee Precious Metals Inc. (“Dundee Precious”) in respect of certain of its

investment properties in Armenia.

Included in operating results during the nine months ended September 30, 2014 are expenses of $24.5 million relating to

United Hydrocarbon International Corp. (“UHI”). The Corporation began to consolidate the operating results of UHI on

June 30, 2013.

Also included in operating results for the nine months ended September 30, 2014 are losses of $2.7 million and $3.0 million

relating to the operations of AgriMarine Holdings Inc. and Dundee 360 Real Estate Corporation, respectively. The

Corporation began to account for these investments on a consolidated basis during the third quarter of 2014.

In the early part of 2014, the Corporation restructured the operations of its agricultural operating subsidiary, Blue Goose

Capital Corp. (“Blue Goose“). As a result of these initiatives, Blue Goose incurred an operating loss of $21.3 million during

the nine months ended September 30, 2014, including $11.5 million relating directly to these initiatives. This compares with

an operating loss of $8.5 million in the same period of the prior year.

The net loss from the Corporation’s brokerage subsidiary was $5.8 million in the nine months ended September 30, 2014,

compared with a net loss of $25.5 million incurred in the same period of the prior year. Brokerage operations benefited

from increased corporate finance activities and improved portfolio trading gains.

The Corporation’s oil and gas operating subsidiary also generated improved earnings, primarily as a result of improved

commodity prices, most notably during the earlier months of the year and in response to severe winter weather conditions.


Segmented Results of Operations

The following discussion provides a more detailed analysis of the results of operations of each of the Corporation’s business

segments, including the results of the Corporation’s investment portfolio.

CORPORATE AND OTHER PORTFOLIO INVESTMENTS

Equity Accounted Investments

(i) On July 2, 2014, the Corporation acquired all of the outstanding common shares of Dundee 360 Real Estate Corporation (“Dundee 360”) that it did not

already own. See “Dundee 360 Real Estate Corporation” segment.

(ii) Dundee Energy Limited’s 74% owned subsidiary, Castor UGS Limited Partnership, holds a 33% interest in Escal UGS S.L. giving Dundee Energy Limited an

effective 25% interest and Dundee Corporation an effective 14% interest.

The following table provides a summary of the continuity of the Corporation’s portfolio of equity accounted investments during

the nine months ended September 30, 2014:

Significant New Equity Accounted Investments

Union Group International Holdings Limited (“Union Group”)

Union Group (www.uniongrp.com), is a holding company specializing in the natural resources, power generation and real

estate sectors throughout high growth Latin American economies such as Uruguay, Peru, Columbia and Paraguay.

Overseeing in excess of $1 billion in assets at September 30, 2014, Union Group operates out of offices in Lima, Peru;

Montevideo, Uruguay; London, England; and Toronto, Ontario. Through a series of transactions, the Corporation holds a

40% interest in Union Group.

As at September 30, 2014 December 31, 2013

Trade Carrying Market Carrying Market

Symbol Investment Ownership Value Value Ownership Value Value

DPM Dundee Precious Metals Inc. 25% 178,239$ 157,136$ 25% 183,408$ 106,246$

n/a Union Group International Holdings Limited 40% 51,539 private 25% 19,898 private

n/a Paragon Holdings (Smithe Street) ULC 50% 20,985 private n/a n/a n/a

n/a Android Industries, LLC 20% 20,076 private n/a n/a n/a

n/a Edgewater Casino ULC 50% 14,508 private n/a n/a n/a

n/a Cambridge Medical Funding Group II, LLC 50% 10,600 private n/a n/a n/a

EAG Eagle Hill Exploration Corporation 29% 8,630 4,215 30% 7,798 7,798

RYG Ryan Gold Corp. 20% 4,467 2,574 20% 4,341 3,159

n/a Dundee 360 Real Estate Corporation (i) n/a n/a n/a 18% 4,160 4,658

CRG Corona Gold Corporation 24% 3,455 2,170 23% 3,423 2,138

ODX Odyssey Resources Limited 31% 245 511 31% 298 398

n/a Escal UGS S.L. (ii) 14% - private 14% - private

312,744$ 223,326$

For the nine months ended September 30, 2014

Carrying value of equity accounted investments, beginning of period 223,326$

Transactions during the nine months ended September 30, 2014

Share of loss from equity accounted investments (27,188)

Share of other comprehensive income from equity accounted investments 14,535

Cash invested in equity accounted investments 100,775

Transfer of net carrying value from portfolio investments 49,904

Transfer to consolidated investments (55,347)

Other 6,739

Carrying value of equity accounted investments, end of period 312,744$

http://www.uniongrp.com/


Union Group is developing a diversified portfolio of mineral assets, including iron ore, gold, nickel and diamonds. Union

Group’s mineral properties are located predominantly in Uruguay and are currently in the exploration phase. In addition,

Union Group has been granted the necessary approvals to complete an environmental impact assessment, which is required

in order to undertake exploration activities on its 50% farm-in interest in the Z34 Block, a prospective oil and gas asset in

Peru. Union Group has also invested in power generation projects and is currently constructing two run-of-river

hydropower projects of 27 MW combined capacity, and it is developing a portfolio of other greenfield renewable energy

projects representing an additional 900 MW. Power generation projects are located primarily in Peru. Prime real estate

properties are located in Uruguay and include income generating properties, residential development projects and other

landholdings. Union Group’s portfolio also includes a minority interest in Union Agriculture Group, (www.uag.com.uy), the

largest corporate agricultural landholder and operator in Uruguay and a leading producer of agricultural products for global

export.

During the nine months ended September 30, 2014, Union Group generated losses of approximately US$1.4 million,

primarily as a result of a US$2.2 million increase in pre-operative expenses associated with launching the power generation

project and a US$0.6 million increase in expenses related to mineral and oil and gas exploration; partially offset by a US$1.6

million increase in revenues due to asset management activities. The Corporation’s share of these losses was $0.7 million.

Paragon Holdings (Smithe Street) ULC (“Paragon Holdings”), Edgewater Casino ULC and Edgewater Casino LP

On April 1, 2014, the Corporation received the necessary British Columbia gaming regulatory approvals to complete a series

of transactions which resulted in the Corporation converting its $37.5 million participating loan to Edgewater Casino Resort

Development for (i) 50% of the shares of Paragon Holdings; (ii) 50% of the shares of Edgewater Casino ULC, the general

partner of Edgewater Casino LP and the holder of an 86% interest in Edgewater Casino LP; and (iii) a 7% direct interest in

Edgewater Casino LP, the operator of the Edgewater Casino, a boutique casino located in downtown Vancouver, British

Columbia (which, on a combined basis, provides the Corporation, directly and indirectly, with a 50% interest in the

operations of the Edgewater Casino).

The developer, Paragon Holdings, which is now jointly owned by the Corporation and affiliates of Paragon Gaming Inc.

(“Paragon Gaming”), a Las Vegas based casino resort developer and operator, has the rights to design, develop and operate a

mixed-use comprehensive development project adjacent to B.C. Place stadium. The new development will feature two

luxury resort hotels, a conference centre, restaurants, parking, retail space and a new location for the existing Edgewater

Casino. The Corporation and Paragon Gaming have entered into certain contracts pursuant to which entities jointly

controlled by Dundee 360 and Paragon Gaming will assume responsibility for the development, construction and

management of the new complex. The Corporation and Paragon Gaming are currently in the process of raising project

financing for the development.

The Corporation assessed its ability to exert significant influence over the operations and financial results of Paragon

Holdings, given its current interest shareholdings, its representation on the board of directors and joint approval voting

power. Accordingly, on April 1, 2014, the Corporation began to account for its investment in Paragon Holdings and the

Edgewater Casino using the equity method. From April 1, 2014 to September 30, 2014, the Corporation recognized equity

losses from its investment in Paragon Holdings of $4.0 million, representing its share of significant legal and consulting

costs as Paragon Holdings continues to make significant advancements in the new development, and equity earnings from its

investment in Edgewater Casino of $2.0 million.

Android Industries, LLC (“Android”)

In early 2014, the Corporation acquired, both directly and indirectly, a 20% interest in Android (www.android-ind.com), a

private leading high technology-enabled assembler and sequencer of complex assemblies for the automotive industry.

Android currently operates 11 production facilities in North America and Europe, each strategically located in close

proximity to its customers. Android’s business model enables original equipment manufacturers to outsource complex

module assembly operations. Android uses this differentiated foundation to assemble a diverse range of automotive

modules, including power trains, chassis, tires and wheels, instrument panels, and door trim and hardware, utilizing complex

systems and equipment designed and built by Android. During the nine months ended September 30, 2014, the

Corporation’s share of equity losses from its investment in Android was $0.7 million.

http://www.uag.com.uy/

http://www.android-ind.com/


Cambridge Medical Funding Group II, LLC (“Cambridge Medical”)

In April 2014, the Corporation invested US$10 million to acquire a 50% interest in Cambridge Medical Funding Group II,

LLC, a New Jersey based receivables finance company with a proprietary system that facilitates the collection of American

no-fault and workers’ compensation receivables for medical facilities including hospitals, surgical centers, and single

medical providers resident in certain states. For the period from April 1, 2014 to September 30, 2014, the Corporation’s

share of equity losses from its investment in Cambridge Medical was $0.5 million.

Earnings and Losses from Equity Accounted Investments

The Corporation realized losses of $27.1 million (nine months ended September 30, 2013 – earnings of $27.9 million) from

equity accounted investments, including dilution gains of $0.3 million (nine months ended September 30, 2013 – $7.4 million).

(i) During 2013, the Corporation determined that it no longer had significant influence over the operations and financial results of these investees. Accordingly,

these investments were reclassified to the Corporation's investment portfolio as investments at FVTPL.

(ii) Real estate joint venture investments were acquired as part of the plan of arrangement with Dundee 360. See “Dundee 360 Real Estate Corporation”.

Dundee Precious Metals Inc.

Dundee Precious (www.dundeeprecious.com) is a Canadian based international mining company engaged in the acquisition,

exploration, development, mining and processing of precious and base metals in Bulgaria, Namibia, Armenia and Serbia.

During the nine months ended September 30, 2014, revenue from sales generated by Dundee Precious was US$234.7 million, a

decrease of US$25.5 million from revenue of US$260.2 million generated in the same period of the prior year. The decrease was

mainly attributable to lower volumes of payable metals in concentrate sold as a result of lower metals production, and lower

metal prices, partially offset by higher volumes of concentrate smelted and toll rates reflecting improved contract terms and lower

third party treatment charges. Revenue less cost of sales (“gross profit”) from mining operations was US$39.9 million for the

nine months ended September 30, 2014, compared with US$69.8 million in the same period of the prior year. The decrease in

gross profit is consistent with Dundee Precious’ decrease in net revenue, reflecting lower volumes of payable metals in

concentrate sold partially offset by higher volumes and toll rates, higher depreciation and a higher cost per tonne of concentrate

sold, partially offset by the favourable impact of a stronger U.S. dollar.

The net loss attributable to its common shareholders of Dundee Precious was US$80.4 million during the nine months ended

September 30, 2014, compared with net earnings of US$3.3 million in the same period of the prior year. The net loss was due

primarily to an impairment provision of US$70.0 million on certain property in Armenia. The Corporation’s share of the loss

from its investment in Dundee Precious was $22.3 million during the nine months ended September 30, 2014 (nine months ended

September 30, 2013 – $1.5 million earnings).

For the nine months ended September 30, 2014 September 30, 2013

Dundee Precious Metals Inc. (22,300)$ 1,506$

Union Group International Holdings Limited (650) -

Paragon Holdings (Smithe Street) ULC (4,015) -

Android Industries, LLC (688) -

Edgewater Casino ULC 2,008 -

Cambridge Medical Funding Group II, LLC (507) -

Eagle Hill Exploration Corporation (714) -

Ryan Gold Corp. 157 (1,243)

Dundee 360 Real Estate Corporation (1,138) (1,254)

Corona Gold Corporation 712 (762)

Odyssey Resources Limited (53) (94)

DREAM Office REIT(i) - 16,463

DREAM Global REIT(i) - 6,871

DREAM Unlimited Corp.(i) - 6,373

(27,188) 27,860

Real estate joint venture investments (ii) 87 -

(27,101)$ 27,860$

http://www.dundeeprecious.com/


In April 2014, the Corporation acquired 750,000 common shares of Dundee Precious in the open market at a cost of $3.1 million.

At September 30, 2014, the Corporation held an aggregate of 35.5 million common shares of Dundee Precious with a market

value of $157.1 million, representing a 25% equity interest.

Eagle Hill Exploration Corporation (“Eagle Hill”)

Eagle Hill (www.eaglehillexploration.com) is a Canadian mineral exploration company focused on the exploration and

development of the high-grade Windfall Lake Gold Deposit, located between Val-d’Or and Chibougamau in Quebec. This area

is known for its gold and copper production and excellent infrastructure for exploration and mining. During the nine months

ended September 30, 2014, the Corporation recognized losses of $0.7 million relating to its investment in Eagle Hill. At

September 30, 2014, the Corporation held an aggregate of 140.5 million common shares, or a 29% interest in Eagle Hill,

including 29.1 million shares acquired earlier in the current year. The market value of the Corporation’s investment in Eagle Hill

at September 30, 2014 was $4.2 million.

Escal UGS S.L. (“Escal”)

The carrying value of the Corporation’s investment in Escal at September 30, 2014 is $nil. In July 2014, Escal filed an

application for the relinquishment of the exploitation concession related to the Castor underground natural gas storage project in

Spain, which was acknowledged by the Spanish authorities by royal decree subsequent to September 30, 2014. Under the terms

of the royal decree: (i) Escal will receive €1.35 billion within 35 days of the date of the royal decree, and (ii) Escal will receive

certain other remuneration rights, including financial remuneration for the period from the provisional commissioning date of the

Castor project on July 5, 2012 through to October 4, 2014, being the date the royal decree went into force, as well as the

reimbursement of operating and maintenance costs incurred during this period. The final determination and timing of these

additional remuneration rights have not yet been finalized. It is anticipated that the amounts received by Escal will be applied

towards the repayment of €1.38 billion of outstanding bonds issued by Watercraft Capital S.A., Escal’s financing vehicle. The

royal decree further stipulates that the Castor project will remain mothballed until the Spanish government is satisfied with

technical studies and reports on the commissioning of such facilities. Enagás Transporte, S.A.U., the technical manager of the

Spanish gas system, has been tasked with completing these studies and it will be entrusted with ongoing care and maintenance of

the facilities as soon as practicable. However, in accordance with the terms of the decree, Escal and its shareholders remain

responsible for any possible flaws or defects in the facilities associated with the Castor project that become apparent during the

ten years following the issuance of the royal decree.

Portfolio Investments

At September 30, 2014, the Corporation’s portfolio of investments included several public and private investments, as well as

certain debt securities across a variety of industry sectors.

Real Estate - $371.946%

Mining - $193.624%

Energy - $101.713%

Finance - $48.86%

Agriculture - $10.61%

Pharmaceuticals - $35.74% Other - $37.5

5%

Investments by Industry Sector at Market Value ($ Millions)as at September 30, 2014

Real Estate - $371.9

Mining - $193.6

Energy - $101.7

Finance - $48.8

Agriculture - $10.6

Pharmaceuticals - $35.7

Other - $37.5

http://www.eaglehillexploration.com/


Top Ten Investment Holdings

During the nine months ended September 30, 2014, the Corporation invested a total of $66.7 million in new portfolio investments

or in increasing its interest in existing portfolio investments. New investments completed during the nine months ended

September 30, 2014 were predominantly in the energy, finance and resource sectors.

Proceeds from sales of investments were $262.4 million during the nine months ended September 30, 2014 and included $199.7

million of proceeds from the sale of 4,469,000 units of DREAM Office Real Estate Investment Trust (“DREAM Office REIT”)

and 8,600,000 units of DREAM Global Real Estate Investment Trust (“DREAM Global REIT”) pursuant to a secondary offering

completed in July 2014. The Corporation retains sufficient units of DREAM Office REIT to meet its obligations pursuant to its

outstanding 5.85% exchangeable unsecured subordinated debentures and to meet other contractual obligations.

Trade Market

As at September 30, 2014 Symbol Value

DREAM Unlimited Corp. DRM.CN 283,868$

Real estate investment, development and management company

Pan African Minerals Ltd. Private 45,000

Minerals development company focused on project in West Africa

DREAM Global REIT - Sub-participating loan Debt 38,481

Real estate investment trust focused on commercial real estate outside Canada

TauRx Pharmaceuticals Ltd. Private 34,433

Pharmaceutical, research and development company

Minexco Petroleum Inc. Private 24,172

Oil and gas exploration company focused in Africa

Minexco Petroleum Inc.- Convertible subordinate debenture Debt 22,416

Oil and gas exploration company focused in Africa

Newfoundland Capital Corporation Ltd. NCC.A 23,924

Radio broadcaster with radio stations across Canada

Catalyst Fund Limited Partnership iii Private 21,826

Investment fund focused on distressed and undervalued Canadian assets

Oxane Materials Inc. Private 18,845

Marketer and manufacturer of advanced ceramic proppant for oil and gas industry

Dream Industrial REIT (formerly Dundee Industrial REIT) DIR-U.CN 14,028

Real estate investment trust focused on high-quality industrial assets

526,993$


Market value of investments, beginning of period 1,191,651$


New investments 66,653

Proceeds from sales of investments (262,399)

Changes in market values (108,389)

Transfer to equity accounted investments (49,904)


Other transactions (7)

Market value of investments, end of period 799,826$

Represented by:

Publicly traded securities 444,179$

Private investments 232,627

Mutual funds and other short-term investments 68

Debt securities 121,945

Warrants and options 1,007

799,826$


Income from Corporate Investments

The Corporation recognizes changes in the fair values of its investments in its net earnings or loss. During the nine months ended

September 30, 2014, the fair value of the Corporation’s portfolio of investments declined by $108.4 million (nine months ended

September 30, 2013 – decline of $147.1 million).

The loss in the value of investments during the nine months ended September 30, 2014 included a loss of $81.8 million relating

to the Corporation’s investment in 21,636,288 Class A subordinate voting shares of DREAM, reflecting a decline in the trading

value of these shares from $16.90 per share at December 31, 2013 to $13.12 per share at September 30, 2014. A further $18.0

million loss was recognized in respect of the Corporation’s investment of 5,698,500 shares of African Minerals Ltd., a minerals

exploration, development and mining company with significant interests in Sierra Leone, with the underlying per share value

falling from £1.97 per share on December 31, 2013 to £0.17 per share on September 30, 2014.

DEVELOPMENTS IN ASSET MANAGEMENT

In July 2014, the Corporation announced that it was reorganizing its business activities into two separate divisions; wealth

management and merchant banking.

As currently envisioned, the wealth management division will encompass the activities of the Corporation’s subsidiaries,

Goodman & Company, Investment Counsel Inc. (“GCIC”), a registered portfolio manager and exempt market dealer across

Canada and an investment fund manager in the provinces of Ontario, Quebec and Newfoundland; and Dundee Securities Ltd., a

full service securities broker and member of the Investment Industry Regulatory Organization of Canada. The Corporation’s

strategy for its wealth management division is to build an independent, integrated and diversified financial services firm by

recreating the environment that led to the past success of the Corporation’s previously owned subsidiary DundeeWealth Inc.,

which the Corporation sold in February 2011, while allowing it to capture new opportunities in investment management,

including exchange traded funds (ETFs) and alternative investments.

GOODMAN & COMPANY, INVESTMENT COUNSEL INC.

At September 30, 2014, GCIC reported total AUM of $206.5 million, compared with AUM of $497.1 million at December 31,

2013. In order to streamline the core focus of its investment management activities, GCIC terminated its sub-advisory activities

in respect of certain mutual funds and concurrently, it assumed full management for the “CMP”, “CDR” and “Canadian

Dominion Resources” limited partnership investment products, including the management of the oil and gas components of these

portfolios which had previously been sub-advised by third parties.

For the nine months ended September 30, 2014 2013

Realized Unrealized Realized Unrealized

Publicly traded securities (45,082)$ (72,606)$ 4,964$ (103,818)$

Private investments (276) 7,047 (312) (35,404)

Mutual funds and other short-term investments - (21) 861 (1,242)

Debt securities 1,191 1,304 2,523 (2,763)

Warrants and options (46) 100 (9,507) (2,353)

(44,213)$ (64,176)$ (1,471)$ (145,580)$


The termination of sub-advisory activities decreased levels of AUM by $249.3 million during the nine months ended September

30, 2014 as outlined below.

Corresponding to reduced levels of AUM as outlined above, revenues earned by GCIC during the nine months ended September

30, 2014 decreased to $2.4 million, compared with $3.4 million earned in the same period of the prior year.

Management fee revenue earned by GCIC is largely based on the fair value of AUM as calculated on the last business day of

each month. Average AUM decreased by 54% to $307.8 million during the nine months ended September 30, 2014 compared

with $666.7 million during the nine months ended September 30, 2013. During this period, the average management fee rate

increased to 1.2% in the first nine months of 2014 as compared with 0.7% for the same period of 2013. Despite the decrease in

AUM, the average management fee rate increased, predominantly as a result of GCIC assuming full management of previously

sub-advised assets in the current year as described above.

During the nine months ended September 30, 2014, GCIC incurred a net loss before income taxes of $1.1 million (nine months

ended September 30, 2013 – loss of $3.4 million). Prior year losses include a compensatory amount of $2.3 million that had been

accrued in anticipation of growth in AUM in excess of amounts subsequently realized. These compensatory amounts were

subsequently reversed in the fourth quarter of the prior year.

Consistent with year-to-date returns, management fee revenue earned by GCIC during the third quarter of 2014 was $0.8 million,

a decrease compared with management fee revenue of $1.0 million earned during the same period of the prior year. During the

third quarter of 2014, GCIC incurred a net loss of $0.2 million, compared with a net loss in the third quarter of 2013 of $2.0

million, reflecting the effect of the compensatory accrual as outlined above.

DUNDEE SECURITIES LTD.

Business activities at Dundee Securities Ltd. are carried out directly, and through sister companies, including: Dundee Securities

Europe LLP, a company authorized by the Financial Services Authority in the United Kingdom for the purposes of security

brokering and asset management, Dundee Securities Inc., a member of the Financial Industry Regulatory Authorities and

registered as a broker dealer with the U.S. Securities Exchange Commission, and Dundee Goodman Insurance Agency Ltd.,

licensed by the Financial Services Commission of Ontario to carry on business as a life insurance agency (collectively “Dundee

Securities”).

Total AUM at September 30, 2014 (in '000's) 206,460$

AUM activity during the nine months ended September 30, 2014

AUM at beginning of period 497,129$

Additions 30,116

Rollover of limited partnership units to mutual funds (66,611)

Redemptions (4)

Distributions (5,111)

Change in market values 3,567

Net change in managed assets (38,043)

Change in value of sub-advisory asset pool

Change in market values (3,340)

Termination of sub-advisory agreement (249,286)

AUM at end of period 206,460$

AUM Breakdown

Tax sheltered investment products 77,415$

Closed end funds 34,999

Alternative investment products 11,346

Third party sub-advisory assets 82,700

206,460$



Assets Under Management and Assets Under Administration

In March 2014, Dundee Securities completed a transaction pursuant to which it acquired 55 new retail advisors, and added

approximately $2 billion to its existing base of AUM and AUA. The purchase consideration for the transaction was

approximately $16.0 million. The transaction added retail advisors to Dundee Securities’ existing offices in Toronto, Montreal,

Calgary and Vancouver, and it also resulted in the establishment of new offices in Ottawa and Victoria.

Partially stemming from assets acquired in the transaction, AUA increased to $4.8 billion at September 30, 2014, compared with

AUA levels of $3.0 billion at the end of December 2013 and $2.9 billion at September 30, 2013.

AUM also increased during the same period, with AUM levels at September 30, 2014 exceeding $1.1 billion, a 33% increase

over AUM of $0.9 billion at December 31, 2013 and a 38% increase over AUM levels of $0.8 billion a year earlier.

Correspondingly, management fee revenue earned during the nine months ended September 30, 2014 increased to $9.9 million,

compared with $4.9 million of management fees earned in the same period of the prior year.

Financial Services Revenue

Investment banking revenue, including revenue from new issues and advisory services fees, was $40.1 million during the nine

months ended September 30, 2014, a 103% increase over the $19.7 million of revenue earned in the same period of the prior

year. During the nine months ended September 30, 2014, Dundee Securities participated in 106 (nine months ended September

30, 2013 – 84) public and private new issue transactions, with the mining and oil and gas sectors representing 43% of new issue

activity. These new issue financings generated revenue of $30.5 million during the nine months ended September 30, 2014, a

significant increase compared with the $13.8 million of revenue earned in the same period of the prior year. During the nine

months ended September 30, 2014, Dundee Securities earned advisory services fees of $9.6 million, compared with $5.9 million

in the same period of the prior year. Advisory mandates are generally long term in nature, and fees are earned only on the

successful completion of a transaction.


Revenues

Management fees 9,906$ 4,946$

Financial services

Investment banking 40,084 19,717

Commissions 36,704 27,022

Principal trading (884) (13,931)

Foreign exchange trading 584 587

Interest, dividends and other 6,970 7,791

93,364 46,132

Cost of sales

Variable compensation (46,361) (24,003)

Other items in net loss before taxes

Depreciation (1,234) (2,106)

General and administrative (51,525) (44,833)

Interest expense (125) (415)

Foreign exchange gain (loss) 56 (286)

Net loss before taxes, Dundee Securities Ltd. (5,825)$ (25,511)$

Net loss before taxes, Dundee Securities Ltd. attributable to:

Owners of Dundee Corporation (5,825)$ (25,511)$

Non-controlling interest - -


(in millions of dollars)

As at September 30, 2014 December 31, 2013 September 30, 2013

AUA 4,785$ 3,002$ 2,870$

AUM 1,133 855 823


Commission revenue increased by 36% during the nine months ended September 30, 2014 to $36.7 million, compared with $27.0

million earned in the same period of the prior year. This increase reflects improvements in both the institutional and retail

divisions and includes increases resulting from the previously discussed acquisition of new retail advisors in March 2014.

Principal trading activities generated trading losses of $0.9 million during the nine months ended September 30, 2014, compared

with losses of $13.9 million in the same period of the prior year, reflecting market appreciation of proprietary investment banking

positions and decreased facilitation trading losses, partially offset by decreased revenues from Dundee Securities’ portfolio of

trading securities.

Variable Compensation Expense

During the nine months ended September 30, 2014, variable compensation expense paid to capital markets professionals was

$46.4 million (nine months ended September 30, 2013 – $24.0 million), representing approximately 54% (nine months ended

September 30, 2013 – 63%) of related financial services and management fee revenue, resulting in contribution margins of 46%

(nine months ended September 30, 2013 – 37%). The current year’s variable compensation reflects the higher compensation

levels that are inherent in the acquisition of the new retail advisors. The prior year’s contribution margin included amounts

accrued in excess of the normal payout model due to unusual losses on proprietary inventory positions. Capital markets

professionals and financial advisors are compensated on a variable scale, based on revenues generated. Certain capital markets

professionals may also be compensated based on the profitability of their respective division.

Dundee Securities incurred general and administrative expenses of $51.5 million during the nine months ended September 30,

2014, compared with general and administrative expenses of $44.8 million incurred in the same period of the prior year. The

increase is primarily attributable to infrastructure costs associated with the previously discussed acquisition of new retail

advisors.

FINANCIAL CONDITION

Balances Directly Related to Dundee Securities

Client account balances represent funds owing from or belonging to clients, and amounts due to or from brokers and dealers that

are pending settlement.

Securities owned and securities sold short represent trading positions of Dundee Securities and are recorded at their fair value

based on quoted prices where available, with changes in fair values included in principal trading revenue. Client account

balances and trading positions will vary significantly on a day-to-day basis and are dependent on business activities and trading

strategies in response to market conditions and in anticipation of price movements. These variances do not necessarily reflect

any meaningful changes to Dundee Securities’ financial position.

Call Loan Facilities

From time to time, Dundee Securities may utilize call loan arrangements to facilitate the securities settlement process for both

client and principal securities transactions, or to fund margin lending. At September 30, 2014, Dundee Securities had established

an uncommitted call loan facility for up to $100 million (December 31, 2013 – $125 million). There were no amounts drawn

pursuant to this facility at September 30, 2014.


Client accounts receivable 641,567$ 655,376$

Client deposits and related liabilities (630,912) (667,196)

Securities owned 59,347 54,491

Securities sold short (38,600) (25,815)


DUNDEE 360 REAL ESTATE CORPORATION

Dundee 360 (formerly 360 VOX Corporation) is a global real estate company that offers comprehensive service in the

investment, development, sales, marketing, operations and management of real estate assets. Prior to July 2, 2014, the

Corporation held 49.0 million shares of Dundee 360, representing an 18% interest. The Corporation’s investment in Dundee 360

was accounted for as an equity accounted investment.

On July 2, 2014, the Corporation acquired all of the issued and outstanding common shares of Dundee 360 that it did not already

own. Under the terms of the arrangement, other former shareholders of Dundee 360 exchanged their shares in Dundee 360 for

2,779,983 Class A subordinate voting shares of the Corporation, with an approximate value at the date of completion of the

arrangement of $45.5 million. Following completion of the arrangement, Dundee 360 became a wholly-owned subsidiary of the

Corporation. Accordingly, the Corporation began consolidating the operating results, cash flow and net assets of Dundee 360

from the date of the completion of the arrangement.

The aggregate purchase consideration for Dundee 360 was $55.3 million, including the $45.5 million fair value of the 2,779,983

Class A Subordinate voting shares of the Corporation that were issued on the date of the completion of the arrangement, as well

as $9.8 million in value attributed to the shares of Dundee 360, which the Corporation owned prior to the arrangement. A

summary of the allocation of the aggregate consideration transferred to the fair value of the net assets acquired is summarized

below. The determination of the fair value of assets and liabilities acquired are preliminary and may be revised when estimates

and assumptions and the valuations of assets and liabilities are finalized within 12 months of the respective acquisition date.

The goodwill recorded as part of the acquisition primarily reflects the estimated value of identified future real estate development

projects which are anticipated to result in the formalization of asset management and development contracts in the foreseeable

future, including a project in the Gangwon Province of the Republic of Korea to develop a leisure, tourism and commercial hub

within the East Coast Free Economic Zone.

A detailed description of the various other intangible assets acquired as part of the arrangement is provided in note 2 to the

September 2014 Interim Consolidated Financial Statements.

Net assets acquired:

Cash 2,002$

Accounts receivable 8,822

Client accounts receivable 21,707

Real estate joint venture investments 7,093

Real estate assets 13,871

Capital and other assets

Intangible assets 47,207

Tangible and other capital assets 1,397

Goodwill 17,290

Accounts payable and other liabilities (21,975)

Client deposits and related liabilities (21,707)

Corporate debt (7,912)

Deferred income tax liability (10,620)

Allocated to non-controlling interest (1,828)

55,347$

Aggregate consideration transferred:

Transfer of fair value of Dundee 360 common shares previously included in "Equity Accounted Investments" 9,806$

Issuance of 2,779,983 Class A subordinate voting shares at fair value on the date of completion of the plan of arrangment 45,541

55,347$



During the period from the date of acquisition on July 2, 2014 to September 30, 2014, Dundee 360 generated a net loss

attributable to the owners of Dundee Corporation of $3.0 million, including $2.9 million of depreciation, a large part of which

reflects the amortization of intangible assets acquired as outlined above.

Real Estate Brokerage and Sales and Marketing Activities

Dundee 360 is involved in listing, marketing and selling of real estate, including the sales and marketing of condominiums,

attached and detached homes, condominium developments and resort properties, both in the residential resale market and for

stand-alone real estate projects. As part of these initiatives, Dundee 360 is party to a franchise agreement, which grants Dundee

360 the exclusive right to the use of the “Sotheby’s International Realty” name and related trademarks across Canada for a

period of 25 years ending in 2029, with a unilateral right to extend these rights for an additional 25-year term. Franchise fees

pursuant to this arrangement are 6% of gross commission revenues with minimum annual payments of US$960,000.

During the three months ended September 30, 2014, Dundee 360 earned gross commission revenues for the listing, marketing

and selling of real estate assets of $20.9 million. Commission expense payouts to associated brokers and agents in respect of this

revenue stream were $19.2 million during this period, providing Dundee 360 with a contribution margin of $1.7 million or 8%.

In addition, Dundee 360 earned $2.1 million of other revenue, consisting primarily of fees paid by its network of brokers and

agents for the provision of marketing, administrative and support services.

In addition, and through a wholly-owned subsidiary, Blueprint Global Marketing Ltd. (“Blueprint”), Dundee 360 markets real

estate internationally, working with the Sotheby’s International Realty network of franchised offices throughout the world to

assist in the listing and selling of international developments. From time to time, Dundee 360 and Blueprint may be awarded the

exclusive right to the sales and marketing of large condominium projects. Dundee 360 earned revenues of $0.6 million in respect

of these activities during the three months ended September 30, 2014. Revenues earned from these projects are recognized on a

percentage of completion basis.


Revenues

Gross commission income 20,910$

Consulting and management fees 3,096

Sales and marketing fees 632

Other revenue 2,126

Interest, dividends and other (79)

26,685

Cost of sales (19,228)


Depreciation and depletion (2,880)

General and administrative (7,687)

Share of earnings from real estate joint ventures 87

Net loss before taxes, Dundee 360 Real Estate Corporation (3,023)$

Net loss before taxes, Dundee 360 Real Estate Corporation attributable to:

Owners of Dundee Corporation (3,000)$

Non-controlling interest (23)

Net loss before taxes, Dundee 360 Real Estate Corporation (3,023)$


Hospitality and Asset Management Activities

Hospitality and asset management activities encompass the management and development of international hotel, resort,

residential and commercial properties.

Dundee 360 has entered into an asset management agreement with Ivanhoé Cambridge, a subsidiary of the Caisse de dèpôt et

placement du Québec pension fund. Pursuant to the terms of the agreement, Dundee 360 will provide hotel management services

for a portfolio of Canadian hotels that operate under the “Fairmont” banner in exchange for a fee calculated on the portfolio

value of the hotels under management, subject to an annual minimum fee. The asset management agreement expires in January

2017.

In addition to these hospitality and asset management arrangements, Dundee 360 has entered into several project management

and procurement agreements with the Fairmont hotels to oversee several refurbishments and infrastructure capital projects.

Dundee 360 has also entered into a series of agreements with members of Enchantment Group, a resort company based in the

United States with equity interests in various hotels, resorts and destination spas. Under the terms of these agreements, which

expire in May 2025, Dundee 360 will manage the “Enchantment Resort” in Sedona, Arizona including the “Mii Amo”

destination spa and the “Tides Inn”, a Chesapeake Bay waterfront resort in Virginia, in exchange for a fee calculated on gross

revenues earned by these select properties. In connection with these arrangements, Dundee 360 has entered into a pre-

development agreement to prepare a plan to redevelop the Tides Inn. The pre-development agreement includes an option to

acquire an interest in the Tides Resort and Tides Inn. The option carries a penalty of $1.0 million if such option is not exercised.

Under the terms of these arrangements, Dundee 360 is also committed to assume 50% of any operating losses incurred by the

Tides Inn for a period of up to three years commencing November 13, 2015. Dundee 360 has not recorded a liability in respect

of these amounts as such liability cannot be reasonably estimated.

Pursuant to an agreement with Northlight Asset Management II LLC, a United States based manager of private equity, debt and

real estate assets, Dundee 360 will manage the Seven Canyons Golf Course, an 18-hole, Tom Weiskopf designed golf course in

Sedona, Arizona, for an initial term of 30 years ending in May 2043. Dundee 360 will provide management services in exchange

for a fee calculated on gross revenues generated by the golf club.

During the three months ended September 30, 2014, Dundee 360 generated revenues of $1.8 million from hospitality and asset

management activities.

Real Estate Development Activities

Edenarc 1800

Edenarc 1800 is a ski-in and ski-out resort project development in the French Alps. Sotarbat 360, a French entity domiciled

in Savoie, France is the builder of the project.

Dundee 360 has signed an agreement with Sotarbat 360 to provide ongoing development services in respect of the Edenarc

1800 project, for which Dundee 360 will earn a fee calculated as a percentage of project costs. The Edenarc 1800 project

has an estimated full build-out cost of approximately $120 million, all of which is being financed directly by the builder or

with other traditional bank financing. In addition to providing development services, Dundee 360 has also invested directly

in Sotarbat 360, and retains a 45% equity interest. Dundee 360 accounts for its investment in Sotarbat 360 as a real estate

joint venture investment, with a book value at September 30, 2014 of $2.0 million.

Clearpoint Resort

Dundee 360 has an approximate 78% interest in Clearpoint Resort Limited, a Maltese corporation (“CRLM”), through

which Dundee 360 intends to develop the Clearpoint Resort project. CRLM’s operating results are consolidated in the

September 2014 Interim Consolidated Financial Statements.


Located in Cavtat, Croatia, and in close proximity to Dubrovnik, Clearpoint Resort will be a master planned hotel, marina

and recreational accommodations project developed on a terraced hillside reaching down to the Cavtat harbour. The

Clearpoint Resort project has an estimated full build-out cost of $185 million. The development of the Clearpoint Resort is

in its early stages of sourcing both debt and equity financing. Capitalized costs associated with the Clearpoint Resort project

amount to $13.5 million and have been included in the September 2014 Interim Consolidated Financial Statements as “Real

estate assets”.

CRLM is subject to a loan arrangement with the Erste & Steiemarkische Bank. Amounts owing on September 30, 2014

pursuant to this loan arrangement were €3.1 million and the loan bears interest at Euribor plus 6.75%. Subsequent to

September 30, 2014, Dundee 360 facilitated the repayment of a further €0.5 million in respect of this loan, in exchange for

an additional 3% equity interest in CRLM, which increases its interest in CRLM to approximately 80%.

Parq Resort & Casino

Dundee 360 has entered into development and asset management agreements with affiliates of Paragon Gaming Inc. to

jointly develop and operate the resort site in Vancouver that will host the relocated Edgewater Casino and other recreational

and tourist facilities. The Parq Resort & Casino project has an estimated full build-out cost of approximately $630 million.

Dundee Corporation has invested $37.5 million for an initial 50% interest in this project (see “Corporate and Other Portfolio

Investments – Equity Accounted Investments”). Project financing for the project is in the final stages of negotiation.

First Bay Resorts Limited

Dundee 360 has loaned approximately $2.9 million to First Bay Resorts Limited to finance the development of a second

project in Primosten, Croatia. It is anticipated that Dundee 360 will subsequently convert the loan to an equity investment in

the underlying development project.

Development in the Gangwon Province

In September 2014, the Corporation and Dundee 360 announced the signing of a framework agreement with the Gangwon

Province of the Republic of Korea to develop a leisure, tourism and commercial hub within the East Coast Free Economic

Zone in the Gangwon Province. This framework agreement is based on the desire of the Gangwon Province to engage the

Corporation and Dundee 360 to advise with respect to the planning and development of a world class, year-round

recreational and mixed-use real estate development, directly south of and in close proximity to the 2018 Winter Olympic site

of Gangneung, and encompasses approximately 600 hectares of land with 2.5 kilometres of prime beachfront on the East

Sea.

During the three months ended September 30, 2014, Dundee 360 earned revenues of $1.3 million from real estate development

activities.

Opportunities in Cuba

Dundee 360 has entered into a joint venture agreement with an agency of the Government of Cuba to develop a number of

specific hotel properties in Cuba (the “Cuban Development Agreement”). The Cuban Development Agreement provides for the

construction of 11 hotels and real estate developments at four different sites and, at two of the proposed sites, the construction or

acquisition and operation of other major tourist and recreational facilities.

Pursuant to the Cuban Development Agreement, Dundee 360 currently owns approximately 61% of Vancuba Holdings S.A.

(“Vancuba”), the ultimate joint venture company that is undertaking the activities contemplated by the Cuban Development

Agreement. The activities of Vancuba are accounted for on an equity basis and have been included in the September 2014

Interim Consolidated Financial Statements as a real estate joint venture investment with a carrying value of $0.3 million.

Dundee 360 and Vancuba hold a 30% equity interest in Bellavista Resorts S.A. (“Bellavista”). Bellavista has acquired land rights

for one of the proposed sites subject to the Cuban Development Agreement, pursuant to a long-term lease agreement with the

government of Cuba. The Bellavista venture has been included in the September 2014 Consolidated Interim Financial

Statements as a real estate joint venture with a carrying value of $5.1 million.


FINANCIAL CONDITION

Real Estate Debt

Dundee 360, through its investment in CRLM, assumed a long term obligation with Erste & Steiemarkische Bank in Croatia that

is secured by land held in Croatia. At September 30, 2014, amounts borrowed pursuant to this facility were €3.1 million.

Amounts borrowed are subject to interest at a rate of Euribor plus 6.75%. Subsequent to September 30, 2014, Dundee 360 repaid

€0.5 million plus accrued interest against amounts borrowed. A further €0.5 million is payable on January 1, 2015, with the

balance outstanding due on April 1, 2015. All other amounts borrowed by Dundee 360 are short term in nature and are due

within the next 12 months.

DUNDEE ENERGY LIMITED

Dundee Energy (www.dundee-energy.com) is a Canadian-based company focused on creating long-term value through the

development and acquisition of high-impact energy projects. Dundee Energy’s common shares trade on the TSX under the

symbol “DEN”.

During the nine months ended September 30, 2014, Dundee Energy generated net earnings of $2.7 million attributable to owners

of Dundee Corporation. This compares to a net loss attributable to owners of Dundee Corporation of $1.7 million incurred

during the same period of the prior year.


Sales and Production Volumes

Dundee Energy holds interests, both directly and indirectly, in the largest accumulation of producing oil and natural gas assets in

southern Ontario. During the nine months ended September 30, 2014, sales of oil and natural gas, net of royalty interests, were

$30.7 million, an increase of $5.8 million over revenues earned during the same period of the prior year. The effect of improved

commodity prices increased revenues by approximately $7.4 million, although these results were partially offset by reduced

production volumes, which decreased revenues by $1.6 million. From time-to-time, Dundee Energy may mitigate its exposure to

price volatility, including currency risk associated with commodity pricing, by entering into fixed price commodity contracts in

Canadian dollars.


Revenues

Oil and gas sales 30,716$ 24,944$

Interest and dividends 267 850

30,983 25,794

Cost of sales

Production expenditures (10,969) (11,031)

Other items in net earnings (loss) before taxes

Depreciation and depletion (7,698) (9,523)


Loss on derivative financial instruments (116) (661)

Interest expense (3,309) (3,358)

Foreign exchange gain 111 156

Net earnings (loss) before taxes, Dundee Energy Limited 3,764$ (3,028)$

Net earnings (loss) before taxes, Dundee Energy Limited attributable to:

Owners of Dundee Corporation 2,664$ (1,693)$

Non-controlling interest 1,100 (1,335)

Net earnings (loss) before taxes, Dundee Energy Limited 3,764$ (3,028)$

Average daily volume during the nine months ended September 30, 2014 2013

Natural gas (Mcf/d) 9,784 9,972

Oil (bbls/d) 571 626

Liquids (bbls/d) 12 20

Total (boe/d) 2,214 2,308

http://www.dundee-energy.com/


Field Level Cash Flows and Field Netbacks

Field level cash flows from natural gas, before realized amounts related to risk management contracts, increased to $10.4 million

or $3.88/Mcf during the nine months ended September 30, 2014, compared with $4.3 million or $1.57/Mcf in the same period of

the prior year. Dundee Energy realized an average price on sales of natural gas of $7.29/Mcf during the nine months ended

September 30, 2014, 64% higher than the average price of $4.45/Mcf realized in the same period of the prior year. The increase is

reflective of severe weather conditions experienced in Ontario from January to April 2014 and the high volatility in natural gas

commodity prices during the winter months at the Dawn Hub, a leading provider of natural gas supply to the greater Toronto

market area.

Field level cash flows from oil and liquids, before realized amounts related to risk management contracts, decreased to $9.4

million during the nine months ended September 30, 2014, compared with $9.6 million generated during the same period of the

prior year. Despite the decline in field level cash flows, field netbacks, before realized amounts related to risk management

contracts, increased to $58.76/bbl during the first nine months of 2014 compared with $54.56/bbl in the same period of the prior

year, reflecting higher commodity prices, offset by lower production volumes. Risk management contracts reduced field level

cash flows in the nine months ended September 30, 2014 by $0.3 million or $2.12/bbl. As a result, field netbacks from oil

production and sales were $56.64/bbl during the nine months ended September 30, 2014, compared with $54.61/bbl earned in the

same period of the prior year.

CHANGES IN FINANCIAL CONDITION

Capital Expenditures

During the nine months ended September 30, 2014, Dundee Energy expended $5.6 million on capital projects, compared with

$8.8 million in the same period of the prior year.

Approximately $0.8 million of capital expenditures were incurred offshore, including $0.7 million on four exploratory new

horizon tests and $0.1 million in upgrading offshore facilities. Initial results from two of the four exploratory tests were positive

and may lead to additional testing and a subsequent horizontal drilling program.

Capital expenditures on onshore properties were $1.6 million during the nine months ended September 30, 2014, including $1.2

million in drilling costs. To date, Dundee Energy has drilled one vertical development well and one re-entry horizontal sidetrack

well. While initial results are encouraging, the re-entry horizontal well came back into production late in the quarter at 42 bbl/d

and has subsequently settled in at 18 bbl/d. Dundee Energy is still testing the vertical development well to evaluate its economic

viability. In addition to these drilling activities, Dundee Energy expended $0.1 million in final costs associated with two

workovers commenced in late 2013 and $0.3 million on efficiency and equipment upgrades to onshore facilities.


Natural Gas Oil and Liquids Total Natural Gas Oil and Liquids Total

Total sales 19,482$ 16,660$ 36,142$ 12,114$ 17,295$ 29,409$

Royalties (2,873) (2,553) (5,426) (1,820) (2,645) (4,465)

Production expenditures (6,212) (4,757) (10,969) (6,006) (5,025) (11,031)

10,397 9,350 19,747 4,288 9,625 13,913

Realized risk management (loss) gain - (337) (337) (185) 9 (176)

Field level cash flows 10,397$ 9,013$ 19,410$ 4,103$ 9,634$ 13,737$



$/Mcf $/bbl $/boe $/Mcf $/bbl $/boe

Total sales 7.29$ 104.69$ 59.81$ 4.45$ 98.05$ 46.67$

Royalties (1.08) (16.04) (8.98) (0.67) (15.00) (7.09)

Production expenditures (2.33) (29.89) (18.15) (2.21) (28.49) (17.51)

3.88 58.76 32.68 1.57 54.56 22.07

Realized risk management (loss) gain - (2.12) (0.56) (0.07) 0.05 (0.28)

Field netbacks 3.88$ 56.64$ 32.12$ 1.50$ 54.61$ 21.79$


During the nine months ended September 30, 2014, Dundee Energy incurred costs of $0.7 million on completing 2-D and 3-D

seismic work, which had been started in late 2013, and $2.1 million on two exploration wells on certain undeveloped land. The

vertical exploration well requires further testing and analyses to determine flow rates and its economic viability. The second

exploration well, in which Dundee Energy is a non-operating 50% working interest partner, has shown good test results to date.

Dundee Energy and the operator of this well are currently working on a plan to tie-in this well, in order to bring it into production

in the fourth quarter of 2014.

Demand Revolving Credit Facility

A subsidiary of Dundee Energy has established a $70.0 million credit facility with a Canadian Schedule I Chartered Bank. The

credit facility is structured as a demand revolving loan, and is subject to a tiered interest rate structure that varies based on the net

debt to cash flow ratio generated by the subsidiary. Based on current ratios, draws on the credit facility bear interest at prime

plus 3.5% for loans and letters of credit or, for bankers’ acceptances, at the bankers’ acceptance rate plus 4.5%. At September

30, 2014, an aggregate of $64.0 million had been drawn against the facility.

UNITED HYDROCARBON INTERNATIONAL CORP.

UHI (www.unitedhydrocarbon.com), is a private Canadian company engaged in oil and gas exploration, development and

production activities in the Republic of Chad. At September 30, 2014, the Corporation held 49.9 million shares of UHI

representing a 35% equity interest. In addition to its equity investment, at September 30, 2014, the Corporation had advanced

$241.7 million to UHI, including $201.7 million advanced pursuant to the terms of senior secured convertible debentures issued

by UHI and carrying an interest rate of 12% per annum, and $40.0 million advanced pursuant to promissory notes bearing interest

at prime plus 2%. The Corporation also holds certain common share purchase warrants. The Corporation’s equity interest,

combined with advances to UHI, and the granting to the Corporation of share purchase warrants, provides the Corporation with

the ability to control the business activities of UHI and accordingly, the Corporation accounts for its investment in UHI on a

consolidated basis.

UHI has entered into a Production Sharing Contract (“PSC”) with the government of the Republic of Chad through its wholly-

owned subsidiary, United Hydrocarbon Chad Ltd. Specific details outlining the terms of the PSC are provided on pages 18 and

19 of the management’s discussion and analysis accompanying the Corporation’s 2013 Audited Consolidated Financial

Statements. The PSC provides UHI with the exclusive right to explore and develop oil and gas reserves in four distinct

contractual zones: the DOC Block and the DOD Block (together the “Doba Basin”); the Lake Chad Block; and the Largeau

Block. UHI is currently focusing its efforts on the DOC, DOD and Lake Chad Blocks, and will evaluate the Largeau Block as

part of its long-term strategy as the Largeau Block is more remote and relatively unexplored.


Capital Expenditures

During the nine months ended September 30, 2014, UHI invested $158.7 million on exploration activities, including

capitalization of general and administrative costs and foreign currency translation.

PSC Acquisition Doba Basin Lake Chad TOTAL

Opening, January 1, 2014 91,922$ 71,737$ 709$ 164,368$


Inventory, net of usage - 7,449 - 7,449

Camps and civil works - 16,290 174 16,464

Drilling and completion costs - 59,772 - 59,772

Seismic, geology and geophysical - 14,737 - 14,737

Pipelines and facilities - 1,246 - 1,246

Other (land access and health and safety) - 2,256 418 2,674

Decomissioning liability additions - 1,823 - 1,823

Capitalized stock based compensation - 420 - 420

Capitalized general and administrative costs - 42,754 89 42,843

Foreign currency translation 377 10,895 (15) 11,257

Closing, September 30, 2014 92,299$ 229,379$ 1,375$ 323,053$

http://www.unitedhydrocarbon.com/


Doba Basin Exploration and Development Program

The Doba Basin is located in southern Chad and includes both the DOC and DOD Blocks. Two oil discoveries from previous

operators in the Doba Basin, at Belanga and M’Biku, are situated in close proximity to producing fields currently operated by

Exxon. In 2013, United Hydrocarbon Chad Ltd. procured a rig contract and a rig service contract in anticipation of beginning

exploration work initially focused on these existing discoveries. The rig was mobilized late in 2013 and drilling began in January

2014. To date, UHI has drilled nine wells in the Doba Basin, including three wells drilled at a combined cost of $19.7 million

during the third quarter of 2014.

Drilling activities resulted in four successful oil appraisal wells at Belanga, one new oil discovery close by at an area named Lara,

three cased oil wells and one dry hole. In the first half of 2014, UHI completed a 146 km2 3-D seismic program over the Belanga

oil discovery and a 57 km2 3-D seismic program over the M’Biku oil discovery. The processing and interpretation of the Belanga

3-D seismic data was recently completed and will be used to define future drilling locations. The data from the M’Biku 3-D

program was recently processed and the interpretation is in progress. UHI also acquired an additional 174 kilometres of 2-D

seismic on other areas of the DOC and DOD Blocks to refine existing exploration prospects.

With completion of the recent technical work, UHI is proceeding with development of the Belanga and Lara discoveries, which

will include the filing of an application with the government of the Republic of Chad for an exploitation development area

encompassing both discoveries. Planning is underway to order long lead-time items required to produce up to 15,000 bbl/d from

the Doba Basin area by the beginning of 2016. With the expectation of near-term production, UHI has initiated discussions with

third parties to gain access to the export pipeline system in order to carry any production to market.

Lake Chad Block

Two oil discoveries from previous operators within the 1.8 million acres Lake Chad Block are included in the PSC, namely the

Kumia and Kanem discoveries. In addition, and with 7,400 kilometres of 2-D seismic data, previous operators identified

approximately 200 other exploration leads or prospects on the block. During the nine months ended September 30, 2014, UHI

prepared an environmental impact study and conducted reconnaissance visits to Lake Chad to prepare for the commencement of

its exploration program, which is expected to begin by the middle of 2015.

Cash Resources

UHI does not generate revenue from operations and it currently relies on its ability to raise funds through capital markets or

through debt from the Corporation. There can be no assurance that UHI will be successful in raising alternative funds to support

future operations. During September 2014, the Corporation and UHI announced that they had engaged Wells Fargo Securities,

LLC and Goodman Merchant Capital Inc. as financial advisors in conjunction with the raising of up to US$250 million pursuant

to a private placement, the proceeds of which will be deployed by UHI in connection with its ongoing oil-focused exploration

and development programs.


UHI currently capitalizes costs that are directly related to its exploration work, including all costs incurred in Chad, as well as

certain costs incurred at head office that relate specifically to the project in Chad.

During the nine months ended September 30, 2014, and in recognition of the contribution made by the Corporation towards an oil

discovery as outlined previously, UHI awarded 20,000,000 treasury shares to the Corporation, with a value of $10.0 million.

Concurrently, the board of directors of UHI amended the terms of certain outstanding warrants for the issuance of common

shares of UHI, accelerating the vesting criteria and resulting in the recognition of compensation expense of $9.0 million. These

transactions resulted in the recognition of expenses aggregating $19.0 million, significantly contributing to losses of $2.0 million

and $24.5 million incurred during the three and nine months ended September 30, 2014, respectively (three months ended

September 30, 2013 – $2.5 million). For consolidation purposes, and in accordance with accounting requirements, the $10.0

million expense related to the discovery bonus paid by UHI to the Corporation has been eliminated against revenues earned

directly by the Corporation.


DUNDEE SUSTAINABLE TECHNOLOGIES INC.

Dundee Sustainable Technologies Inc. (formerly Nichromet Extraction Inc.) (“Dundee Technologies”)

(www.dundeetechnologies.com) is engaged in the development of new technologies for treatment of refractory ores. Dundee

Technologies has developed proprietary hydrometallurgical processes for the extraction of base and precious metals from ores,

concentrates and tailings, which cannot be exploited with conventional processes because of internal refractoriness or

environmental considerations.

Cyanidation, a commonly used way of processing gold, produces a large amount of highly contaminated tailings. Dundee

Technologies uses a patented innovative approach, chlorination, to extract precious metals. In addition to environmental benefits,

the cyanide-free process allows the exploitation of gold deposits that are not extractable using conventional methods. The

primary benefits of this new technology are shorter processing times, reduced emissions due to lower energy consumption, and

increased mining productivity by reclaiming process waste and remediating tailings.

The process developed by Dundee Technologies has been recognized as a “green technology”, for which it has been awarded a

$5.7 million grant for the construction of a demonstration plant, including $0.7 million from the Government of Quebec and $5.0

million from the Government of Canada through its Sustainable Development Technology Fund. Construction of the

demonstration plant, which commenced in June 2013, is budgeted at $27.0 million. The design has been completed and the

commissioning of the demonstration facilities is scheduled for completion by the end of March 2015. The demonstration plant

will have a capacity of 15 tonnes per day in order to assess, on an industrial scale, the chlorination extraction technology under

continuous operating conditions. This pre-commercialization demonstration plant will serve as a reference for the establishment

of full-scale plants operating with the same technology. At September 30, 2014, Dundee Technologies had expended $9.5

million towards completion of the demonstration plant.

In the short term, the Dundee Technologies business model encompasses the licensing of its chlorination extraction technology to

third parties in exchange for a royalty interest. Cyanide has been banned for usage by many countries and there are a significant

number of gold ore bodies that are dormant for lack of a process that can extract gold without cyanide. As the technology is of

particular interest to gold mining companies, the price of gold will be a significant factor in Dundee Technologies’ future

business development.

Reflective of its current stage of development, Dundee Technologies does not report any revenue. During the nine months ended

September 30, 2014, it incurred a net loss of $7.1 million (nine months ended September 30, 2013 – $2.7 million) including $2.5

million incurred during the third quarter of 2014 (three months ended September 30, 2013 – $0.9 million). Year-to-date costs

include $6.5 million relating to the cost of the demonstration plant, of which $2.1 million was incurred during the third quarter of

2014.

Acquisition of Resources Properties

On April 1, 2014, Dundee Technologies completed a three cornered amalgamation with Creso Exploration Inc. (“Creso”), a

mineral resource company with its principal mining exploration holdings located at the Shining Tree mining camp in northern

Ontario, following which Dundee Technologies indirectly acquired all of the issued and outstanding common shares of Creso that

it did not already own. On April 8, 2014, the subordinate voting shares of the newly amalgamated Dundee Technologies began

trading on the Canadian Securities Exchange (CSE: DST). The Corporation retains multiple voting shares of Dundee

Technologies, which are convertible, at the option of the Corporation, into subordinate voting shares of Dundee Technologies, for

no additional consideration. The multiple voting shares of Dundee Technologies are not listed on a stock exchange. At

September 30, 2014, and following completion of the amalgamation as outlined above, the Corporation owned 128.1 million

subordinate voting shares and 50.0 million multiple voting shares of Dundee Technologies, giving the Corporation a 64% equity

interest and an 86% voting interest in Dundee Technologies.


In connection with the amalgamation of Creso as outlined above, Dundee Technologies acquired land interests previously held by

Creso, including a land package which Creso had acquired through staking or optioning large areas of ground adjacent to its

100% interests in the Tyranite, Minto, Duggan and Mann properties in the Shining Tree camp of northern Ontario. At the time of

completion of the amalgamation, Dundee Technologies determined that the fair value of these acquired resource properties was

$22.1 million. The acquisition of Creso may provide Dundee Technologies with an opportunity to develop the underlying gold

deposits located on these lands, using Dundee Technologies’ technological processes.

EUROGAS INTERNATIONAL INC.

Eurogas International Inc. (“Eurogas International”) (www.eurogasinternational.com), is a publicly traded (CSE: EI) oil and

natural gas exploration company. In June 2003, Eurogas International entered into a joint operating agreement with Atlas

Petroleum Exploration Worldwide Ltd. (“APEX”), pursuant to which Eurogas International and APEX (jointly, the “Original

Contractors”) agreed to undertake exploration, appraisal and extraction activities on the Sfax permit (“Sfax Permit”), which

currently covers approximately 800,000 acres in the shallow Mediterranean waters in the Gulf of Gabes, offshore Tunisia and

southeast of the city of Sfax. Eurogas International held a 45% working interest in the arrangement. APEX held the remaining

55% working interest, and was the operator of the project.

In January 2014, Eurogas International completed a farmout agreement with DNO Tunisia AS (“DNO” and the “DNO

Agreement”) with respect to the Sfax Permit and the associated Ras El Besh development concession. The DNO Agreement

provides for DNO acquiring an 87.5% working interest in the Sfax Permit in exchange for an upfront, non-refundable cash

payment of US$6 million to the Original Contractors, and the carrying of 100% of all future costs associated with the Sfax

Permit. Under the terms of the DNO Agreement, and with the approval of the Tunisian authorities, DNO has also contractually

assumed full responsibility for all drilling obligations associated with the Sfax Permit, including any compensatory payments that

may arise as a result of non-compliance. In that regard, DNO has provided a full guarantee to the Tunisian governmental

authorities. During the nine months ended September 30, 2014, Eurogas International received cash of $2.9 million (US$2.7

million), representing its proportionate share of the cash received at closing. Amounts received by Eurogas International were

deducted from the carrying value of Eurogas International’s exploration and evaluation properties, which at September 30, 2014

was $9.1 million (December 31, 2013 – $11.9 million).

Under the terms of the DNO Agreement, the Original Contractors will be entitled to 12.5% of the profit oil or profit gas

component of production from the Sfax Permit, to a maximum of US$125 million (or 12.5% of the profit oil or profit gas from

the production of 75 million barrel of oil equivalents, whichever comes first). Thereafter, the Original Contractors are entitled to

6.25% of the profit oil or profit gas component of production from the Sfax Permit to a maximum of an additional US$75 million

(or 6.25% of the profit oil or profit gas component from the production of an additional 45 million barrel of oil equivalents,

whichever comes first). Eurogas International is entitled to 45% of any payments made to the Original Contractors under these

arrangements.

The Original Contractors have conceded a temporary deferral of 50% of their entitlement to a share of the profit oil or profit gas

component of production from the Sfax Permit, as outlined above, until such time as DNO recovers $150 million of total incurred

costs, including costs to be incurred by DNO subsequent to completion of the DNO Agreement, from the cost oil or cost gas

component of production on the Sfax Permit. In addition to their entitlement to a share of the profit oil or profit gas, the DNO

Agreement also provides the Original Contractors with entitlement to receive 20% of the cost oil or cost gas component of

production from the Sfax Permit, to a maximum of the lesser of 18% of the costs incurred by the Original Contractors prior to

completion of the DNO Agreement, or US$20 million.

Subsequent to September 30, 2014, DNO began the drilling of the Jawhara-3 well, the first of several exploration and appraisal

wells planned by DNO on the Sfax Permit. The Jawhara-3 well will be drilled four kilometres north of the Jawhara-1 discovery

well, which flowed 1,500 barrels of oil per day, and will test the Douleb and Bireno reservoirs in the up dip Jawhara structure. A

second exploration well is anticipated in the first half of 2015.


In prior years, the Original Contractors had entered into a farmout option agreement with a third party in respect of the Sfax

Permit. The third party subsequently exited the farmout option agreement and under a settlement agreement, the third party

forfeited its entitlement under the farmout option agreement in exchange for a portion of certain payments, if and when received

by the Original Contractors, to a maximum of $20 million.

During the nine months ended September 30, 2014, Eurogas International incurred a loss before income taxes of $0.8 million

(nine months ended September 30, 2013 – $0.6 million).

BLUE GOOSE CAPITAL CORP.

Blue Goose (www.bluegoosepurefoods.com) is a Canadian private company focused on the production, distribution and sale of

organic and natural beef, chicken and fish. At September 30, 2014, the Corporation held an 86% interest in Blue Goose.


During the nine months ended September 30, 2014, Blue Goose incurred a net loss attributable to the owners of Dundee

Corporation of $17.9 million. This compares with a net loss attributable to the owners of Dundee Corporation of $7.1 million in

the same period of the prior year.

During the nine months ended September 30, 2014, Blue Goose has been executing a restructuring of its operations following a

two-year period of intense growth and expansion, including the completion of a substantial number of acquisitions. Under new

leadership, Blue Goose has been re-engineering certain processes to lower operating costs, it has initiated a shift in the

company’s marketing strategy (away from selling only to national retailers to selling to national retailers and higher-margin

restaurant, specialty store, and export customers), and it began selling non-core assets and surplus inventory. Included in the net

loss during the nine months ended September 30, 2014 were costs of $11.5 million relating to these initiatives, of which $6.0

million have been included in the September 2014 Interim Consolidated Financial Statements as “Cost of sales” as they relate to

the usability of previously stockpiled inventory and $5.5 million as “Depreciation and depletion”, reflecting changes in the

estimated useful lives and ultimate recoverability of property, plant and equipment.

Unit Sales


Revenues

Sales 61,403$ 28,251$

Interest and dividends 665 -

62,068 28,251

Cost of sales (78,460) (34,091)




Fair value changes in livestock 11,000 6,807

Interest expense (1,510) (626)

Foreign exchange (loss) gain (2) 3

Net loss before taxes, Blue Goose Capital Corp. (21,263)$ (8,493)$

Net loss before taxes, Blue Goose Capital Corp. attributable to:


Non-controlling interest (3,326) (1,403)


Unit sales for the nine months ended September 30, 2014 2013

Beef (kgs) 1,700,132 1,184,609

Chicken (kgs) 2,096,768 653,977

Consumer packaged goods (cases) 21,811 -

Fish (lbs) 678,306 632,129

http://www.bluegoosepurefoods.com/


Contribution Margins

During the nine months ended September 30, 2014, Blue Goose incurred negative contribution margins of $6.1 million on sales

of $61.4 million, compared with a positive contribution margin of $1.0 million on sales of $28.3 million in the same period of the

prior year.

Contribution margins during the nine months ended September 30, 2014 were adversely affected by a $6.0 million reduction in

the estimated recoverable amount of stockpiled inventory, including associated compost and fertilizer inventory, and feed

inventory. These losses were offset by the recognition of an $11.0 million gain in the estimated fair value of livestock recorded

during the nine months ended September 30, 2014, primarily attributable to growth of the cattle herd. This compares to an

estimated fair value gain of $6.8 million recognized in the same period of the prior year.

Blue Goose’s abattoir, located in British Columbia, received full federal certification in August 2013, allowing it to sell its

products across the country. Accordingly, during the nine months ended September 30, 2014, Blue Goose opted to sell its entire

northern Ontario 1,300 cattle herd, weighing roughly 554,000 kilograms, for revenue of $1.7 million, in order to concentrate its

beef operations out of the province of British Columbia and in proximity to the abattoir. Excluding the impact of the sale of the

northern Ontario cattle herd, beef unit sales decreased marginally to 1.1 million kilograms during the nine months ended

September 30, 2014, compared with beef unit sales of 1.2 million kilograms in the same period of the prior year. Despite the

marginal decrease in volumes, revenues from beef sales were $11.7 million during the nine months ended September 30, 2014

(excluding the sale of the northern Ontario cattle herd), compared with $7.5 million in the same period of the prior year,

reflecting the sale of higher quality cuts of beef in the current period for which Blue Goose was able to demand higher prices.

Beef contribution margins, before the effect of fair value changes, were negative $6.6 million during the nine months ended

September 30, 2014, compared with negative contribution margins of $5.9 million incurred during the same period of the prior

year.

Blue Goose has grown its sales of organic and natural chicken in Ontario, Quebec and the Atlantic provinces, through expanded

sales capabilities and by cross-selling to its existing client base within existing channels. Blue Goose continues taking the

necessary steps to improve margins in the chicken division by finding cost efficiencies through strategic relationships and by

eliminating duplicate chicken processing and distribution costs as much as possible.

The cultivation and subsequent sales of natural and organic fish product in Blue Goose’s aquaculture business is cyclical in

nature. During the spring and summer months, significant costs are incurred to promote growth of fish stock, with sales

anticipated in the remaining months of the year and early into the following year. Having experienced significant physical

growth during the spring and summer of 2014, fish stocks are essentially ready for market, and shipments are expected to be

robust during the remainder of the year.


Changes in the Carrying Value of Land and Other Capital Assets

Blue Goose has acquired high quality, productive land acreage that is fully irrigated, and which provides quality hay for winter

cattle feeding. Blue Goose landholdings are comprised of over 1.1 million acres, including both freehold (deeded) acres and

leasehold acreage in British Columbia, Ontario and Colorado.


Cost of Fair Value Cost of Fair Value

Components of Agriculture Products Revenue Sales Changes Margin % Margin Revenue Sales Changes Margin % Margin

Beef 13,410$ 19,961$ 8,026$ 1,475$ 11.0% 7,517$ 13,401$ 4,625$ (1,259)$ (16.7%)

Chicken 17,674 25,404 - (7,730) (43.7%) 3,885 3,586 - 299 7.7%

Fish 2,220 6,795 2,974 (1,601) (72.1%) 1,941 3,589 2,182 534 27.5%

Feed 24,279 23,748 - 531 2.2% 12,674 12,053 - 621 4.9%

Other 3,820 2,552 - 1,268 33.2% 2,234 1,462 - 772 34.6%

61,403$ 78,460$ 11,000$ (6,057)$ (9.9%) 28,251$ 34,091$ 6,807$ 967$ 3.4%


During the nine months ended September 30, 2014, Blue Goose reassessed the usefulness of, and recoverable amount of land

assets attributed to its beef operations in northern Ontario. As a consequence, land carrying values were reduced by $3.8 million

early in 2014 and Blue Goose took measures to divest itself of non-strategic landholdings. During the third quarter of 2014, Blue

Goose successfully sold approximately 2,000 acres of land for $3.2 million. While Blue Goose intends to sell its remaining

landholdings in northern Ontario, the upcoming winter season could delay the completion of this initiative.

Blue Goose previously developed a fertilizer plant through which it had intended to package and distribute fertilizer by-products

of its organic and natural protein production. At December 31, 2013, the fertilizer plant asset had a net book value of $2.1

million. During the early part of 2014, Blue Goose reassessed the production capacity of the plant in light of market distribution

initiatives and determined that its carrying amount should be reduced by $1.7 million. Blue Goose intends to sell this plant when

a suitable buyer is found.

Changes in Livestock Carrying Values

Blue Goose has increased its herd count to 12,603 as at September 30, 2014, up from 12,122 at December 31, 2013. In addition

to its organic cattle herds in British Columbia, Blue Goose had expanded its herd of Wagyu cattle (more commonly known as

“Kobe beef”) which it produces through Emma Farms Cattle Company (“Emma Farms”) in Colorado and Oklahoma. At

September 30, 2014, Emma Farms had a herd size of 874 purebred Wagyu. The Wagyu beef product is in high demand by

upscale restaurants throughout the United States.

Corporate Debt

Blue Goose and its subsidiaries have entered into several loan arrangements including a $14.8 million fixed term facility

maturing July 1, 2027 and bearing interest at 5.2% annually. This term loan is secured by a first charge mortgage against various

real estate assets held by Blue Goose and by certain wholly-owned subsidiaries of Blue Goose. In addition, Blue Goose has

established a $10.0 million fixed term facility secured by ranch property in western Canada. The fixed term facility bears interest

at 3.05% per annum.

Number of Acres Deeded or Leased as at

(in thousands) September 30, 2014

British Columbia 1,119

Ontario 9

Colorado 18

1,146

Inventory and

Cattle Fish Supplies TOTAL

Carrying value, beginning of period 21,468$ 2,019$ 12,151$ 35,638$


Net additions 1,609 285 9,017 10,911

Herd growth 8,026 2,974 - 11,000

Net of product processed (6,889) (1,738) (8,005) (16,632)

Changes in estimated recoverable amounts - - (6,004) (6,004)

Carrying value, end of period 24,214$ 3,540$ 7,159$ 34,913$

Cattle herd as at

(number of animals) September 30, 2014 December 31, 2013

Breeding cattle and bulls 6,316 4,974

Immature livestock and feeder cattle 6,287 7,148

12,603 12,122


Certain wholly-owned subsidiaries of Blue Goose have entered into various credit facilities for up to $23.5 million with certain

Canadian Schedule I Chartered Banks. Borrowings under these arrangements bear interest at a rate per annum ranging from the

bank’s prime lending rate plus 0.50% to 1.30%. The facilities are secured by general security agreements against the assets of

each respective subsidiary and are guaranteed by Blue Goose. Certain of these loan arrangements require that Blue Goose and its

subsidiaries meet financial debt covenants customary to such loan arrangements, including the maintenance of certain interest

coverage ratios in excess of specified amounts and covenants that limit the amount of liabilities that may be assumed by Blue

Goose and its subsidiaries. These loan arrangements also oblige Blue Goose to comply with certain reporting requirements,

including the delivery of financial information and debt covenant certification as provided for in the loan agreements. During the

second quarter of 2014, Blue Goose experienced an increase in leverage and as such, at June 30, 2014 and September 30, 2014,

Blue Goose exceeded its maximum leverage threshold, and it did not comply with the associated compliance requirements. Blue

Goose is currently in negotiations with the lender and is endeavouring to comply with the delivery of financial information as

required by such arrangements.

On October 1, 2013, Blue Goose’s U.S. subsidiary secured a 4.70% US$6.0 million real estate loan secured against land in

Colorado and a US$1.0 million variable interest rate operating line secured against the assets of the U.S. subsidiary. Both

facilities are guaranteed by Blue Goose.

In aggregate, at September 30, 2014, Blue Goose and its subsidiaries had drawn $52.4 million (December 31, 2013 – $50.0

million) pursuant to these various loan arrangements.

AGRIMARINE HOLDINGS INC.

AgriMarine Holdings Inc. (www.agrimarine.com) (“AgriMarine”) is a CSE listed company (CSE:FSH), specializing in

conventional and innovative fish farming, and in developing sustainable aquaculture technologies.

On July 3, 2014, the Corporation completed the conversion of three convertible notes to acquire 102,490,753 common shares of

AgriMarine. The convertible notes, which had an aggregate principal value of $18.5 million and aggregate accrued and unpaid

interest of $2.2 million, were issued to the Corporation in connection with a series of loans advanced to AgriMarine in 2013.

When aggregated with the Corporation’s existing position, the Corporation now owns or controls 103,709,086 shares of

AgriMarine, representing an approximate 94.5% interest. The Corporation has determined that the exercise of the convertible

notes is a transaction that represents a business combination, with the Corporation as the acquirer of AgriMarine. Accordingly,

the Corporation began consolidating the operating results, cash flow and net assets of AgriMarine from the date of the exercise of

the conversion right.

The aggregate purchase consideration for AgriMarine was $20.9 million. A summary of the allocation of the aggregate

consideration transferred to the fair value of the various identifiable assets and liabilities acquired is provided below. The

determination of the fair value of assets and liabilities acquired are preliminary and may be revised when estimates and

assumptions and the valuations of assets and liabilities are finalized within 12 months of the respective acquisition date.


Cash 903$

Livestock 6,179


Intangibles 14,711

Other 13,797


Accounts payable and other net liabilities (8,810)


20,879$


Transfer of fair value of AgriMarine common shares previously included in "Investments" 116$

Fair value of convertible notes and associated interest 20,763

20,879$

http://www.agrimarine.com/


The Corporation has attributed a value of $14.7 million to intangible assets acquired. Included in intangible assets are certain

patents and trademarks developed and registered by AgriMarine and associated with its semi-closed floating rearing container

technology developed to improve fish farming practices. This intangible asset will be amortized over its expected useful life. The

remaining $1.1 million intangible asset relates to a farming license. The farming license is not amortized as it is considered to

have an indefinite life based on AgriMarine’s intent and ability to renew the license without substantial cost or material

modification to the existing terms and conditions.

In December of 2013, AgriMarine acquired West Coast Fishculture (Lois Lake) Ltd. (“WCFC”), the premier producer and

supplier of steelhead salmon in British Columbia. WCFC has built up a brand name that is recognized for its quality and

sustainability. WCFC conforms to United Nations Food and Agriculture Organization’s Code of Conduct for Responsible

Fisheries, while its Lois Lake steelhead brand is “Ocean Wise™ recommended” by the Vancouver Aquarium as an ocean-

friendly seafood choice. AgriMarine has installed four semi-closed containment tanks at WCFC’s farm at Lois Lake, BC, which

have been fully commissioned subsequent to September 30, 2014. Lois Lake offers an optimal sheltered site with excellent water

quality that can support the installation of the rearing tanks, where AgriMarine will focus on accelerated crop turnover and

demonstrate the anticipated performance benefits of its semi-closed containment technology. AgriMarine will continue to

assemble and install tanks as WCFC expands operations. AgriMarine also has a production facility located in Benxi County,

Liaoning Province, China (“Benxi AgriMarine”). Benxi AgriMarine is in active production of salmon and trout for the local

market and continues to modernize and upgrade its production facilities and processes.


During the three months ended September 30, 2014, AgriMarine incurred a net loss attributable to the owners of Dundee

Corporation of $2.5 million. Included in the third quarter loss is a $1.2 million writedown of its biological assets and inventory,

largely due to extraordinary mortalities of salmon at its net pen fish farming sites, resulting from unusually high surface water

temperatures over the summer months. With the installation of the technologically advanced containment tanks to replace the net

pens, these adverse environmental effects should be largely mitigated in the future as the containment tanks provide better

temperature control and a more favourable environment for growth.

For the three months ended September 30, 2014

Revenues

Sales of livestock 1,626$

1,626



General and administrative (1,287)

Fair value changes in livestock (427)

Interest expense (2)

Foreign exchange gain 167

Net loss before taxes, AgriMarine Holdings Inc. (2,671)$

Net loss before taxes, AgriMarine Holdings Inc. attributable to:

Owners of Dundee Corporation (2,537)$

Non-controlling interest (134)

Net loss before taxes, AgriMarine Holdings Inc. (2,671)$


Contribution Margins

During the three months ended September 30, 2014, AgriMarine incurred negative contribution margins of $1.5 million on sales

of $1.6 million.

During the three months ended September 30, 2014, AgriMarine generated revenue of $1.6 million and contribution margins

before fair value changes and writedowns of approximately 7% or $0.1 million. The volume of fish sold during the three months

ended September 30, 2014 was 238,000 kilograms, representing an average selling price of $6.83 per kilogram. The cost of sales

for the three months ended September 30, 2014 was $1.5 million or $6.35 per kilogram sold.


During the three months ended September 30, 2014, AgriMarine had a reduction in fair value for its biological assets of $0.4

million, of which $0.3 million was due to the increased estimated cost of harvest, given the higher mortality rate presented in the

current fish stocks as a result of higher surface water temperatures during the summer, as previously outlined. Along with the

new tanks being commissioned at Lois Lake, AgriMarine is also working to rapidly regrow the biomass at its farm sites.

OTHER CONSOLIDATED BALANCES AND CAPITAL STRUCTURE

General and Administrative Expenses

Generally, head office costs, including costs associated with corporate governance and related public company costs, are

accumulated and reported as head office costs and are not allocated to other operating segments. During the nine months ended

September 30, 2014, the Corporation incurred general and administrative expenses of $4.7 million, compared with general and

administrative expenses of $23.7 million incurred in the same period of the prior year.

As part of the distribution of Dundee Realty completed in May 2013, the Corporation adjusted the settlement terms of its stock

based compensation arrangements to provide holders of such incentive arrangements with an equivalent distribution entitlement

provided to other shareholders as part of the distribution. These adjustments to stock based compensation arrangements are

recognized as liabilities at fair value, with changes in fair value reported in net earnings. During the nine months ended

September 30, 2014, the fair value of these liabilities decreased by $9.7 million, with a corresponding reduction in stock based

compensation expense.

In addition to the effect of stock based compensation, and following an assessment of ongoing operational results, the

Corporation also adjusted its estimate of incentive compensation. This assessment further reduced liabilities previously accrued

by $6.0 million, with a corresponding reduction in general and administrative expenses.


Revenue 1,626$


Contribution margin before fair value changes and writedowns 7.0% 114

Fair value changes (427)

Writedowns (1,236)

(1,549)$

Biological Inventory and

Assets Supplies TOTAL

Carrying value, beginning of period -$ -$ -$

Transactions during the three months ended September 30, 2014

Acquisitions 5,500 679 6,179

Net additions (339) 138 (201)

Biomass growth (427) - (427)

Carrying value, end of period 4,734$ 817$ 5,551$


Corporate Interest Expense

Corporate interest expense, before intersegment eliminations, was $6.5 million during the nine months ended September 30,

2014, a $4.9 million decrease from the $11.4 million of interest expense incurred in the same period of the prior year, reflecting a

decrease in average borrowings over the respective periods.

Income Tax Recovery

The Corporation’s effective income tax recovery rate was 9.6% for the nine months ended September 30, 2014 (nine months

ended September 30, 2013 – 29.2%). This effective income tax recovery rate is significantly different than the statutory

combined federal and provincial tax rate of 26.5% and can be attributed primarily to losses incurred by certain subsidiaries, the

benefit of which was not recognized in the September 2014 Interim Consolidated Financial Statements, as well as to the non-

taxable portion of losses realized on the disposition of certain of the Corporation’s investments.

Net Deferred Income Tax Liabilities

The Corporation’s net deferred income tax liabilities at September 30, 2014 were $69.9 million, and represent deferred income

tax liabilities of $110.6 million, offset by deferred income tax assets of $40.7 million. This compares to net deferred income tax

liabilities of $75.2 million at December 31, 2013. Components of the Corporation’s net deferred income tax liabilities are

detailed in note 28 to the September 2014 Interim Consolidated Financial Statements. Deferred income tax liabilities decreased

as a result of declines in the market value of the Corporation’s investments, as well as the divestiture of certain of the

Corporation’s investments. These declines were partially offset by the recognition of deferred income tax liabilities associated

with the acquisitions of Dundee 360 and AgriMarine.

The Corporation’s aggregate income tax loss carry forwards at September 30, 2014 were $225.1 million (December 31, 2013 –

$80.6 million). Included in the Corporation’s deferred income tax balances is a deferred tax asset of $16.1 million (December 31,

2013 – $8.9 million) in respect of these tax losses.

Corporate Debt

On January 23, 2014, as amended on June 9, 2014 and June 27, 2014, the Corporation established a credit facility for up to $205

million. At September 30, 2014, the Corporation had drawn $32.6 million against these arrangements.

On November 13, 2014, the Corporation established a $300 million, three-year revolving term credit facility with a syndicate of

Canadian Schedule I Chartered Banks. Concurrently, the Corporation repaid amounts outstanding pursuant to its previously

established credit arrangements, and borrowing availabilities under previous arrangements were terminated. Borrowings under

the $300 million credit facility bear interest at a rate per annum equal to the prime lending rate for loans plus 0.45% or, at the

Corporation’s option, at the prevailing bankers’ acceptance rate or London Interbank Offered Rate plus 1.45%.

Draws against the $300 million credit facility are contingent on, among other things, the maintenance of certain financial ratios

relating to the fair value of certain of the Corporation’s investments, and are subject to other customary restrictions, including

restrictions on the existence of other secured indebtedness. The Corporation has granted a first ranking security over all of its

assets as security against amounts borrowed under these arrangements.

$6.5 million $70 million Blue Dundee

Exchangeable $205 million Dundee Goose 360

Debentures Corporate Energy Debt Debt TOTAL

Balance, December 31, 2013 6,438$ -$ 65,709$ 49,995$ -$ 122,142$

Acquisitions of debt - - - - 7,912 7,912

Draws (Repayments) - 32,566 (2,025) 1,990 (2,688) 29,843

Unrealized revaluation adjustment - - - 367 (42) 325

Other 26 - - - - 26

Balance, September 30, 2014 6,464$ 32,566$ 63,684$ 52,352$ 5,182$ 160,248$

Revolving Term Credit Facilities


5.85% Exchangeable Unsecured Subordinated Debentures

The terms of the Corporation’s exchangeable debentures provide for the exchange, at the option of the holder, of one $1,000

exchangeable debenture for 33.6134 units of DREAM Office REIT, subject to certain conditions. The Corporation has retained

and placed into escrow sufficient units of DREAM Office REIT to satisfy its potential obligation pursuant to the terms of the

exchangeable debentures. There were no debentures tendered under these exchange provisions during the nine months ended

September 30, 2014. The Corporation’s exchangeable debentures mature on June 30, 2015.

Debt of Subsidiaries

A more detailed discussion of corporate debt in each of the Corporation’s business segments is presented under “Segmented

Results of Operations”.

Share Capital

Preference Shares

In accordance with the terms of the Corporation’s Preference Shares, series 2, on August 26, 2014, the Corporation announced

that it did not intend to exercise its right to redeem the Preference Shares, series 2 and accordingly, holders had the right, at their

option, to convert all or part of their Preference Shares, series 2 on a one-for-one basis into Preference Shares, series 3.

Shareholders who did not exercise their right to convert retained their Preference Shares, series 2, subject to the 5.688% dividend

rate applicable to the Preference Shares, series 2 for the 5-year period commencing on September 30, 2014 to, but excluding

September 30, 2019. Of the 5,200,000 Preference Shares, series 2 outstanding prior to the exercise of the conversion right,

1,720,615 shares with a face value of $43.0 million were converted on September 30, 2014 to Preference Shares, series 3. At

September 30, 2014, an aggregate 3,479,385 Preference Shares, series 2 remained outstanding.

The 1,720,615 Preference Shares, series 3 issued upon conversion of the Preference Shares, series 2 have an initial 5.04%

dividend rate, and, in accordance with their terms, are subject to a quarterly floating rate of interest based on the three-month

Government of Canada Treasury bill yield plus 4.10%.

At September 30, 2014, the Corporation’s outstanding preference share arrangements were as follows:

Common Shares

As at September 30, 2014, there were 53,184,868 Class A subordinate voting shares and 3,115,235 Class B common shares

outstanding. At November 14, 2014, the number of outstanding shares had increased to 53,194,991 Class A subordinate voting

shares and 3,115,235 Class B common shares.

In July 2014, the Corporation issued 2,779,983 Class A subordinate voting shares in connection with the previously discussed

acquisition of Dundee 360. The Class A subordinate voting shares were issued with a fair value of $16.38 per share, determined

using the 20-day volume weighted average trading price of the Class A subordinate voting shares of the Corporation for the

period ended on the trading day preceding the entering into of the plan of arrangement pursuant to which the acquisition of

Dundee 360 was completed.

On April 7, 2014, the Corporation announced that it had received regulatory approval for the renewal of its normal course issuer

bid from April 8, 2014 to April 7, 2015. The normal course issuer bid allows the Corporation to purchase up to a maximum of

2,550,098 Class A subordinate voting shares for subsequent cancellation, representing approximately 5% of the public float at the

time approval for the normal course issuer bid was granted. In May 2014, the Corporation purchased 615,000 Class A

subordinate voting shares pursuant to the terms of its normal course issuer bid at a cost of $10 million.

Trade # of Shares Face Value Total

Symbol Series Outstanding per Share Face Value Coupon Rate Carrying Value

DC.PR.B Series 2 3,479,385 $25.00 $86,985 5.688% - 5-year fixed rate $84,053 equity instrument

DC.PR.D Series 3 1,720,615 $25.00 $43,015 5.04% - quarterly floating rate $43,015 equity instrument

DC.PR.C Series 4 6,000,000 $17.84 $107,040 5.00% fixed rate $106,602 debt instrument


As at September 30, 2014, the Corporation had granted 1,237,500 options with a weighted average exercise price of $9.40, all of

which were exercisable as holders had met the vesting requirements. Outstanding stock option arrangements expire in February

2015. Each option entitles the holder thereof, upon payment of the associated exercise price, to one Class A subordinate voting

share of the Corporation and to the value of one Class A subordinate voting share of DREAM Unlimited Corp. which value may

be settled, at the option of the Corporation, in cash or in additional Class A subordinate voting shares of the Corporation with a

value, at the time of the exercise of the option, equal to the value of the Class A subordinate voting share of DREAM Unlimited

Corp.

In addition to outstanding options, at September 30, 2014, there were 1,252,452 deferred share units outstanding under the

Corporation’s deferred share unit plan, each deferred share unit of which tracks the value of the Corporation’s Class A

subordinate voting shares. In addition, the Corporation had awarded 1,332,430 deferred share units that track the value of a Class

A subordinate voting share of DREAM Unlimited Corp.

The terms of the Corporation’s share based compensation arrangements are summarized in note 24 to the Corporation’s 2013

Audited Consolidated Financial Statements.

CONSOLIDATED LIQUIDITY AND CAPITAL RESOURCES

As at September 30, 2014, the Corporation had cash of $156.0 million, compared with cash of $183.8 million at December 31,

2013. Included in the Corporation’s consolidated cash balance is $103.9 million of cash used in the operating business of the

Corporation’s asset management and brokerage subsidiaries. These subsidiaries function in regulated environments and are

therefore required to maintain levels of capital in liquid assets, in accordance with regulatory requirements. The amount of

capital that exists within these regulated entities may dictate the level of business operations, including margin lending, securities

trading and corporate finance commitments. Furthermore, the ability to transfer cash resources out of these regulated subsidiaries

may be limited by their requirement to comply with regulatory capital requirements. At September 30, 2014 and December 31,

2013, the Corporation’s regulated subsidiaries exceeded their minimum regulatory capital requirements.

As previously discussed, Blue Goose experienced an increase in leverage and as such, at June 30, 2014 and September 30, 2014,

Blue Goose exceeded its maximum leverage threshold, and it did not comply with the associated compliance requirements. Blue

Goose is currently in negotiations with lenders and is endeavouring to comply with the delivery of financial information as

required by such arrangements.

Significant Sources and Uses of Cash

Significant transactions affecting cash flows during the nine months ended September 30, 2014 and September 30, 2013,

excluding cash flows associated with discontinued operations, are discussed below.

Significant Cash Flows – Operating Activities

* Adjusted net earnings are equal to net earnings or loss adjusted for net earnings from discontinued operations, gain on distribution of assets, dividends received

from discontinued operations and items not affecting cash and other adjustments.


Operating activities:

Adjusted net earnings* (29,238)$ (33,915)$

Changes in balances relating to investment dealer activities (5,110) 32,762

Changes in agricultural inventory 14,247 2,901

Changes in other working capital amounts (10,290) (7,716)

Changes in income taxes 30,500 (29,357)

Cash provided from (used in) operating activities 109$ (35,325)$


During the nine months ended September 30, 2014, balances related to investment dealer activities, including client account

balances and brokerage securities owned and sold short resulted in net cash outflow of $5.1 million (nine months ended

September 30, 2013 – $32.8 million of net cash inflow). The effect of changes in balances related to investment dealer

activities will vary significantly on a day-to-day basis to reflect the underlying business activities undertaken in that period.

Cash flows from period to period resulting from these types of transactions may not necessarily reflect any meaningful

change in the Corporation’s financial position, or that of its subsidiaries.

Changes in agricultural inventory balances resulted in cash inflow of $14.2 million (nine months ended September 30, 2013

– $2.9 million).

Changes in other working capital amounts and changes in cash relating to the Corporation’s income tax positions reflect

changes in the underlying level of business activities.

Significant Cash Flows – Investing Activities

Cash required or derived from trading in the Corporation’s investment portfolio, including equity accounted investments,

will vary from period to period and is dependent on trading activity and strategies that may evolve in response to global

market conditions or otherwise. During the nine months ended September 30, 2014, the Corporation generated net cash of

$140.5 million from trading in its investment portfolio (nine months ended September 30, 2013 – $308.5 million). Included

in these cash flows is $199.7 million from the sale of units of DREAM Office REIT and DREAM Global REIT, which was

completed in July 2014.

During the nine months ended September 30, 2014, the Corporation invested $143.5 million into its resource properties,

compared with $33.5 million in the same period of the prior year. Current year investments in resource properties include

$145.2 million (nine months ended September 30, 2013 – $15.6 million) invested by UHI in the Republic of Chad.

The net investment in livestock and agricultural assets during the nine months ended September 30, 2014 was $12.0 million,

compared with $76.0 million in the same period of the prior year. Amounts expended during the nine months of the prior

year included startup amounts associated with the Corporation’s initial investment into the agriculture sector.

Cash acquired in business combinations was $2.8 million, including $0.9 million from the Corporation’s acquisition of

AgriMarine, and $2.0 million from its acquisition of Dundee 360, partially offset by the payment of certain cash amounts

related to the acquisition of Creso by Dundee Technologies.

Included in cash flows relating to other investment activities is $16.0 million of consideration paid by Dundee Securities to

complete the acquisition of certain retail brokers (see “Dundee Securities Ltd. – Results of Operations”).

Significant Cash Flows – Financing Activities

Net amounts drawn against credit facilities available to the Corporation and to its subsidiaries during the nine months ended

September 30, 2014 were $29.8 million (nine months ended September 30, 2013 – $40.9 million).


Investing activities:

Net proceeds from disposition of portfolio investments 140,483$ 308,486$

Net investment in resource properties (143,543) (33,489)

Net investment in livestock and other agricultural assets (12,034) (76,044)

Net investment in real estate (195) -

Acquisition of cash in business combinations 2,780 9,351

Other investment activities (23,002) (11,987)

Cash (used in) provided from investing activities (35,511)$ 196,317$


Financing activities:

Change in corporate debt 29,843$ 40,878$

Acquisition of Class A subordinate voting shares, net of costs (10,000) -

Dividends paid on Preference Shares, series 2 (6,581) (6,581)

Net cash from transactions with non-controlling interests (5,857) 9,068

Issuance of Class A subordinate voting shares, net of issue costs 170 382

Cash provided from financing activities 7,575$ 43,747$


During the nine months ended September 30, 2014, the Corporation paid $10.0 million to purchase Class A subordinate

voting shares for cancellation under its normal course issuer bid.

During the nine months ended September 30, 2014, the Corporation paid dividends of $6.6 million (nine months ended

September 30, 2013 – $6.6 million) on outstanding Preference Shares, series 2. The Corporation has not paid dividends on

its Class A subordinate voting shares or on its common shares.

On a consolidated basis, the Corporation incurred cash outflows of $5.9 million during the nine months ended September

30, 2014 relating to transactions conducted with non-controlling interests. Included in these cash outflows is $4.9 million

paid by the Corporation to acquire all of the outstanding units of Ravensden Alternative Group that it did not already own.

Ravensden Alternative Group is a private investment vehicle. In addition, the Corporation paid $1.0 million to purchase

common shares of Blue Goose from former employees. In the same period of the prior year, cash raised pursuant to the

issuance of shares by subsidiaries included $2.7 million raised from non-controlling interests pursuant to the rights offering

by Dundee Energy in April 2013, and $6.7 million raised by Blue Goose pursuant to private placements, before associated

costs of issue.

Cash Requirements

The Corporation’s capital management and funding objectives include ensuring that the Corporation is compliant with all of its

ongoing obligations, including compliance with all applicable debt covenants, and ensuring that the Corporation is able to meet

its financial obligations as they become due. In determining its capital allocation, the Corporation considers relevant regulatory

capital requirements in order to effectively manage its capital markets business, and resources required for the development of

resource, agricultural and real estate opportunities. The Corporation’s capital management objectives also include ensuring that it

has sufficient capital available to benefit from acquisitions and other opportunities, should they arise, and ensuring adequate

returns for shareholders. The Corporation regularly assesses the allocation of its capital resources in response to changing

economic conditions.

The Corporation’s intention is to meet short-term liquidity requirements through funds from operations, working capital reserves

and operating debt facilities. In addition, the Corporation anticipates that its operations will continue to provide the cash

necessary to fund expenses and debt service requirements. Capital may also be generated through dispositions of investments as

the Corporation repositions its investment portfolio in a manner consistent with its stated strategy to maintain a conservative level

of debt, while ensuring that sufficient capital is available to execute the Corporation’s business plan at all times.

On a consolidated basis, the Corporation believes that operating cash flow, combined with available lines of credit and its

portfolio of investments, provide sufficient cash resources for the Corporation to conduct its operations for the foreseeable future,

including supporting the capital requirements of its regulated subsidiaries, funding the payment of dividends and interest

payments on preference shares and debt obligations, and supporting subsidiaries in order to remedy excess leverage situations, if

the need arises. On an ongoing basis, the Corporation may also require cash to develop its energy, resource, agricultural and real

estate initiatives or to invest in other opportunities, including growth opportunities related to its portfolio of investments. If

required, the Corporation may consider alternative financing options for certain investment initiatives, including possible debt or

equity issuances.



Three months ended September 30, 2014 compared with the three months ended September 30, 2013

Consolidated Net Earnings

During the third quarter of 2014, the Corporation incurred a net loss attributable to owners of Dundee Corporation of $78.7

million or a loss of $1.48 per share. This compares with earnings of $2.6 million or $0.01 per share in the same period of the

prior year.

Segmented Results of Operations

CORPORATE AND OTHER PORTFOLIO INVESTMENTS

Equity Earnings

Changes in the carrying value of the Corporation’s equity accounted investments during the third quarter of 2014 are illustrated

in the table below. Results in the third quarter of 2014 include the transfer of the net carrying value of the Corporation’s

investment in Dundee 360 from an equity accounted investment to a consolidated investment as discussed previously.

Continuing Operations Discontinued Operations TOTAL

For the three months ended September 30, 2014 2013 2014 2013 2014 2013

Net loss before income taxes from:

Corporate and other portfolio holdings (78,311)$ 23,535$ -$ -$ (78,311)$ 23,535$

Goodman & Company, Investment Counsel Inc. (166) (2,025) - - (166) (2,025)

Dundee Securities Ltd. (7,218) (15,193) - - (7,218) (15,193)

Dundee Energy Limited (359) (1,374) - - (359) (1,374)

United Hydrocarbon International Corp. (2,024) (2,470) - - (2,024) (2,470)

Dundee Sustainable Technologies Inc. (2,498) (949) - - (2,498) (949)

Eurogas International Inc. (221) (196) - - (221) (196)

Blue Goose Capital Corp. (1,708) (2,241) - - (1,708) (2,241)

AgriMarine Holdings Inc. (2,671) - - - (2,671) -

Dundee 360 Real Estate Corporation (3,023) - - - (3,023) -

Dundee Realty Corporation - - - - - -

Gain on distribution of assets - - - - - -

(98,199) (913) - - (98,199) (913)

Income tax recovery 16,637 360 - - 16,637 360

Net loss for the period (81,562)$ (553)$ -$ -$ (81,562)$ (553)$

Net (loss) earnings attributable to:

Owners of the parent (78,655)$ 2,598$ -$ -$ (78,655)$ 2,598$

Non-controlling interest (2,907) (3,151) - - (2,907) (3,151)

(81,562)$ (553)$ -$ -$ (81,562)$ (553)$


Carrying value of equity accounted investments, beginning of period 307,523$


Share of loss from equity accounted investments (4,868)

Share of other comprehensive income from equity accounted investments 13,177


Other 6,682

Carrying value of equity accounted investments, end of period 312,744$


During the third quarter of 2014, the Corporation realized losses of $4.9 million from its equity accounted investments, compared

with earnings of $1.2 million in the third quarter of the prior year. Results from the third quarter of the prior year included $5.2

million of equity earnings from the Corporation’s investments in DREAM Office REIT and DREAM Global REIT, which were

subsequently reclassified as investments at FVTPL.

Other Investments

Changes in the carrying value of the Corporation’s portfolio of other investments during the third quarter of 2014 are illustrated

in the table below.

The Corporation received proceeds from the sale of investments of $207.8 million during the third quarter of 2014, including

amounts that it received pursuant to the sale of DREAM Office REIT and DREAM Global REIT units.

During the third quarter of 2014, the value of the Corporation’s investment portfolio declined by approximately $81.2 million

(third quarter of 2013 – increase of $29.7 million).

For the three months ended September 30, 2014 September 30, 2013

Dundee Precious Metals Inc. (2,648)$ (3,212)$

Union Group International Holdings Limited 158 -

Paragon Holdings (Smithe Street) ULC (3,920) -

Android Industries, LLC 1,063 -

Edgewater Casino ULC 2,008 -

Cambridge Medical Funding Group II, LLC (202) -

Eagle Hill Exploration Corporation (358) -

Ryan Gold Corp. (72) (79)

Dundee 360 Real Estate Corporation (891) (192)

Corona Gold Corporation 17 (532)

Odyssey Resources Limited (23) (34)

DREAM Office REIT - 3,610

DREAM Global REIT - 1,617

DREAM Unlimited Corp. - -

(4,868) 1,178

Real estate joint venture investments 87 -

(4,781)$ 1,178$


Market value of investments, beginning of period 1,101,169$


New investments 22,587

Proceeds from sales of investments (207,778)

Changes in market values (81,246)

Transfer to equity accounted investments -


Other transactions 2,873

Market value of investments, end of period 799,826$

For the three months ended September 30, 2014 2013


Publicly traded securities (42,551)$ (40,676)$ 8,918$ 24,686$

Private investments 21 6,792 (307) (1,399)

Mutual funds and other short-term investments - (11) - 10

Debt securities (258) 702 3,916 1,846

Warrants and options 103 (5,368) (9,508) 1,565

(42,685)$ (38,561)$ 3,019$ 26,708$


Consistent with year-to-date results, approximately $42.9 million of the decline in value of the portfolio reflects a decline in the

trading value of Class A subordinate voting shares of DREAM, while $5.4 million of the quarterly decline relates to the

Corporation’s investment in African Minerals Ltd. Quarterly results were also impacted by $16.5 million of depreciation in the

Corporation’s investments in DREAM Office REIT and DREAM Global REIT, prior to their sale in early July 2014.

DUNDEE SECURITIES LTD.

During the third quarter of 2014, Dundee Securities generated a net loss attributable to the owners of Dundee Corporation of $7.2

million, compared with $15.2 million incurred during the third quarter of the prior year.

Revenues increased to $23.1 million in the third quarter of 2014, compared with revenues of $9.0 million generated in the same

period of the prior year.

Management fee revenue earned during the third quarter of 2014 was $3.9 million, compared with management fee revenue of

$1.7 million earned during the same period of the prior year. Consistent with year-to-date results, the increase reflects both the

growth in AUM levels, as well as an increase in the number of advisors following completion of the acquisition of retail advisors

in March 2014.

Investment banking revenue more than doubled in the current quarter to $9.5 million, compared with revenue of $4.3 million in

the third quarter of the prior year, primarily as a result of an increase in new issue transactions. During the three months ended

September 30, 2014, Dundee Securities participated in 37 (three months ended September 30, 2013 – 24) public and private new

issue transactions with the mining and oil and gas sectors, representing 38% of new issue activity. These new issue financings

generated revenue of $4.5 million in the third quarter of 2014, an increase over the $3.6 million generated in the same period of

the prior year. Advisory services fees earned in the third quarter of 2014 were $5.0 million, which is also significantly more than

the $0.7 million earned in the third quarter of the prior year.

Commission revenue increased to $11.8 million in the current quarter, compared with $7.9 million earned in the same period of

the prior year. This 50% increase reflects the impact of the new retail advisors added in March 2014.


Revenues

Management fees 3,883$ 1,673$

Financial services

Investment banking 9,524 4,304

Commissions 11,765 7,871

Principal trading (3,624) (6,885)

Foreign exchange trading 195 202

Interest, dividends and other 1,336 1,853

23,079 9,018

Cost of sales

Variable compensation (12,246) (9,005)


Depreciation (483) (710)



Foreign exchange loss (25) 214


Net loss before taxes, Dundee Securities Ltd. attributable to:


Non-controlling interest - -



Variable compensation expense was $12.2 million in the third quarter of 2014, compared with $9.0 million in the third quarter of

2013, reflective of the higher revenue in the current quarter. The increase is primarily the result of the higher compensation

levels that are inherent in the acquisition of the new retail advisors and also reflects amounts accrued in the third quarter of the

prior year in excess of the normal payout model due to unusual losses on proprietary inventory positions during that period.

Consistent with year-to-date results, general and administrative expenses increased to $17.5 million in the third quarter of 2014,

compared with $14.7 million incurred in the third quarter of the prior year, reflecting the costs associated with assuming the

business activities of the new retail advisors in March 2014.

DUNDEE ENERGY LIMITED

Dundee Energy’s net loss attributable to the owners of the parent for the three months ended September 30, 2014 was $0.2

million, compared with $0.7 million in the third quarter of the prior year.

Field Level Cash Flows and Field Netbacks


Revenues

Oil and gas sales 8,574$ 9,340$

Interest and dividends 148 739

8,722 10,079

Cost of sales

Production expenditures (4,443) (4,636)




Gain (loss) on derivative financial instruments 376 (509)

Interest expense (889) (1,257)

Foreign exchange gain (loss) 51 (29)

Net loss before taxes, Dundee Energy Limited (359)$ (1,374)$

Net loss before taxes, Dundee Energy Limited attributable to:

Owners of Dundee Corporation (204)$ (715)$

Non-controlling interest (155) (659)

Net loss before taxes, Dundee Energy Limited (359)$ (1,374)$



Total sales 5,102$ 5,012$ 10,114$ 4,875$ 6,140$ 11,015$

Royalties (773) (767) (1,540) (736) (939) (1,675)

Production expenditures (2,669) (1,774) (4,443) (2,672) (1,964) (4,636)

1,660 2,471 4,131 1,467 3,237 4,704

Realized risk management (loss) gain - (126) (126) 196 (371) (175)

Field level cash flows 1,660$ 2,345$ 4,005$ 1,663$ 2,866$ 4,529$



$/Mcf $/bbl $/boe $/Mcf $/bbl $/boe

Total sales 4.72$ 101.83$ 44.10$ 4.41$ 109.90$ 45.86$

Royalties (0.72) (15.58) (6.71) (0.67) (16.81) (6.97)

Production expenditures (2.47) (36.03) (19.37) (2.42) (35.15) (19.30)

1.53 50.22 18.02 1.32 57.94 19.59

Realized risk management (loss) gain - (2.56) (0.55) 0.18 (6.64) (0.73)

Field netbacks 1.53$ 47.66$ 17.47$ 1.50$ 51.30$ 18.86$


Field level cash flows in the third quarter of 2014, before realized risk management contract gains or losses, were $4.1 million, a

12% decrease over field level cash flows of $4.7 million generated in the third quarter of the prior year, primarily reflecting

reduced production volumes and commodity prices for oil and liquids.

Field netbacks in the third quarter of 2014, before realized risk management contracts gain or losses, were $18.02/boe, an 8%

decrease over field netbacks of $19.59/boe generated in the third quarter of the prior year. The decrease was mainly as a result of

lower overall commodity prices. Realized losses resulting from Dundee Energy’s risk management contracts reduced field

netbacks in the third quarter of 2014 by $0.55/boe. In the comparable period of 2013, these contracts reduced field level cash

flows by $0.73/boe.

BLUE GOOSE CAPITAL CORP.

During the third quarter of 2014, Blue Goose incurred a net loss attributable to the owners of the parent of $1.5 million,

compared with a net loss attributable to owners of the parent of $1.8 million incurred in the same quarter of the prior year.

During the third quarter of 2014, Blue Goose generated contribution margins of $1.1 million on revenues of $19.8 million. This

compares with a contribution margin of $2.4 million on revenues of $14.8 million incurred in the same quarter of 2013.

Contribution margins during the third quarter of 2014 were enhanced by the recognition of a $4.0 million gain in the estimated

fair value of livestock, primarily attributable to growth of the fish stock. This compares to an estimated fair value gain of $2.9

million recognized in the same period of the prior year.


Revenues

Sales 19,785$ 14,770$

Interest and dividends 649 -

20,434 14,770

Cost of sales (22,781) (15,212)


Depreciation and depletion (696) (674)


Fair value changes in livestock 4,046 2,866


Foreign exchange loss (2) (5)


Net loss before taxes, Blue Goose Capital Corp. attributable to:


Non-controlling interest (234) (405)



Cost of Fair Value Cost of Fair Value

Components of Agriculture Products Revenue Sales Changes Margin % Margin Revenue Sales Changes Margin % Margin

Beef 3,924$ 5,305$ 1,575$ 194$ 4.9% 1,955$ 2,565$ 1,800$ 1,190$ 60.9%

Chicken 5,328 6,454 - (1,126) (21.1%) 2,890 2,441 - 449 15.5%

Fish 805 2,231 2,471 1,045 129.8% 1,069 2,056 1,066 79 7.4%

Feed 7,766 7,521 - 245 3.2% 7,538 7,296 - 242 3.2%

Other 1,962 1,270 - 692 35.3% 1,318 854 - 464 35.2%

19,785$ 22,781$ 4,046$ 1,050$ 5.3% 14,770$ 15,212$ 2,866$ 2,424$ 16.4%


Units of livestock sold during the third quarter of 2014 are illustrated in the table below.

CONSOLIDATED QUARTERLY BUSINESS TRENDS

In the second quarter of 2013, the Corporation realized a gain from discontinued operations of $599.4 million relating to the

distribution of Dundee Realty. Included in net earnings or losses are amounts reflecting changes in the fair value of the Corporation’s direct investments in

public and private securities. As previously noted, changes in the fair value of investments are determined by equity and

credit markets and are expected to result in significant quarterly fluctuations in net earnings. The Corporation believes that

equity and credit markets do not necessarily correctly reflect the underlying value of certain assets. As a consequence,

management of the Corporation believes that the amount of unrealized gains or losses that will be included in net earnings or

loss in any given period typically provides little analytical or predictive value to the readers of the Corporation’s financial

information. The Corporation’s share of earnings or losses from equity accounted investments is included in net earnings or loss for each

quarter. Earnings or losses from each equity accounted investee and dilution gains and losses from these investments will

fluctuate from period to period and may depend on market forces or other operating conditions that are not necessarily under

the Corporation’s direct control.

OFF-BALANCE SHEET ARRANGEMENTS, COMMITMENTS AND CONTINGENCIES

Other than as disclosed elsewhere in this MD&A or in note 33 to the September 2014 Interim Consolidated Financial Statements,

there have been no significant changes in the nature of off-balance sheet arrangements, commitments and contingencies from

those described in note 31 to the 2013 Audited Consolidated Financial Statements and under “Off-Balance Sheet Arrangements”

and “Commitments and Contingencies” on pages 36 through 38 in the Corporation’s MD&A as at and for the year ended

December 31, 2013.

RELATED PARTY TRANSACTIONS

There have been no significant changes in the nature and scope of related party transactions to those described in note 32 to the

2013 Audited Consolidated Financial Statements and the accompanying MD&A.

Unit sales for the three months ended September 30, 2014 2013

Beef (kgs) 691,744 615,065

Chicken (kgs) 831,950 515,479

Consumer packaged goods (cases) 6,102 -

Fish (lbs) 235,645 351,278

2014 2013 2012

For the three months ended, 30-Sept 30-Jun 31-Mar 31-Dec 30-Sept 30-Jun 31-Mar 31-Dec

Net earnings (loss) for the period

Continuing operations (78,655)$ (29,698)$ (31,843)$ 20,667$ 2,598$ (69,285)$ (46,605)$ 10,595$

Discontinued operations - - - - - 610,897 15,812 24,913

Net earnings (loss) attributable to owners of the parent (78,655)$ (29,698)$ (31,843)$ 20,667$ 2,598$ 541,612$ (30,793)$ 35,508$

Earnings (loss) per share

Basic

Continuing operations (1.48)$ (0.59)$ (0.63)$ 0.34$ 0.01$ (1.32)$ (0.90)$ 0.15$

Discontinued operations - - - - - 11.29 0.29 0.46

(1.48)$ (0.59)$ (0.63)$ 0.34$ 0.01$ 9.97$ (0.61)$ 0.61$

Diluted

Continuing operations (1.48)$ (0.59)$ (0.63)$ 0.33$ 0.01$ (1.32)$ (0.90)$ 0.15$

Discontinued operations - - - - - 11.29 0.29 0.44

(1.48)$ (0.59)$ (0.63)$ 0.33$ 0.01$ 9.97$ (0.61)$ 0.59$


ACCOUNTING POLICIES AND CRITICAL ACCOUNTING ESTIMATES

The preparation of the Corporation’s consolidated financial statements in conformity with IFRS requires management to make

estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and other items in net earnings and the

related disclosure of contingent assets and liabilities. Critical accounting estimates represent estimates made by management that

are, by their very nature, uncertain.

The Corporation evaluates its estimates on an ongoing basis. Such estimates are based on historical experience and on various

other assumptions that the Corporation believes are reasonable under the circumstances, and these estimates form the basis for

making judgments about the carrying value of assets and liabilities and the reported amount of revenues and other items in net

earnings that are not readily apparent from other sources. Actual results may differ from these estimates under different

assumptions or conditions. A summary of the more significant judgments and estimates made by management in the preparation

of its financial information is provided in note 4 to the 2013 Audited Consolidated Financial Statements, and is updated in note 4

to the September 2014 Interim Consolidated Financial Statements. Other than as disclosed in note 3 to the September 2014

Interim Consolidated Financial Statements, there have been no changes in the accounting policies adopted in the preparation of

the Corporation’s September 2014 Interim Consolidated Financial Statements from those detailed in note 3 to the Corporation’s

2013 Audited Consolidated Financial Statements. The changes in accounting policies adopted during the first nine months of

2014 did not have a material impact to the September 2014 Interim Consolidated Financial Statements.

CONTROLS AND PROCEDURES

In accordance with the Canadian Securities Administrators’ National Instrument 52-109, and subject to the limitation on scope of

design as outlined below, the Corporation has filed certificates signed by its Chief Executive Officer and the Chief Financial

Officer certifying that, among other things, the design of disclosure controls and procedures and the design of internal control

over financial reporting are adequate as at September 30, 2014.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by the Corporation in the

reports it files or submits under securities legislation is recorded, processed, summarized and reported on a timely basis and that

such information is accumulated and reported to management, including the Corporation’s Chief Executive Officer and Chief

Financial Officer, as appropriate, to allow required disclosures to be made in a timely fashion. Based on their evaluation, and

subject to the limitation on scope as outlined below, the Chief Executive Officer and Chief Financial Officer concluded that as of

September 30, 2014, the Corporation’s disclosure controls and procedures were effective.

The Chief Executive Officer and the Chief Financial Officer of the Corporation have also assessed whether there were any

changes to the Corporation’s internal control over financial reporting during the nine months ended September 30, 2014 that have

materially affected, or are reasonably likely to materially affect the Corporation’s internal control over financial reporting.

Subject to the limitation on scope as outlined below, there were no changes identified during their assessment.

Limitation on Scope of Design

The Chief Executive Officer and Chief Financial Officer have limited the scope of the design of disclosure controls and

procedures and the design of internal control over financial reporting to exclude controls, policies and procedures of Dundee 360

and AgriMarine, the results of which have been included in the September 2014 Interim Consolidated Financial Statements. The

scope of limitation is in accordance with Section 3.3 of National Instrument 52-109, which permits an issuer to limit its design of

disclosure controls and procedures, and the design of internal control over financial reporting to exclude the controls, policies and

procedures of a company acquired not more than 365 days before the end of the financial period to which the certificate relates.

A summary of the financial information for each of Dundee 360 and AgriMarine is provided under the sections entitled

“Segmented Results of Operations – Dundee 360 Real Estate Corporation” and “Segmented Results of Operations – AgriMarine

Holdings Inc.” respectively.


MANAGING RISK

Except as noted below, there have been no significant changes to the nature and scope of the risks faced by the Corporation as

described in the Corporation’s 2013 Annual Information Form under “Risk Factors” which is available on SEDAR at

www.sedar.com. These business risks should be considered by interested parties when evaluating the Corporation’s performance

and its outlook.

Realization of Real Estate Development Projects including Developments through Real Estate Joint Ventures

The ultimate realization of real estate investments, including Dundee 360’s investments in real estate joint ventures (notes 12 and

13 to the September 2014 Interim Consolidated Financial Statements) is dependent upon Dundee 360’s ability to retain the

associated development rights, to successfully arrange for the necessary financing to complete the developments, and to the

successful development and use of the tourism assets, or alternatively, sale of the asset. In addition, the success of these real

estate development projects is dependent upon the cooperation of joint venture partners in approving the development plans and

course of action, in obtaining the necessary government approvals and in managing other regulatory and governmental matters.

FORWARD LOOKING STATEMENTS

Dundee Corporation’s public communications may include written or oral forward looking statements. Statements of this type

are included in this MD&A, and may be included in other filings with the Canadian regulators, stock exchanges or in other

communications. 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. Forward looking statements may include, but are not

limited to, statements about anticipated future events or results including comments with respect to the Corporation’s objectives

and priorities for 2014 and beyond, and strategies or further actions with respect to the Corporation, its products and services,

business operations, 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 Corporation’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. The forward looking information contained in this MD&A 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.

A number of risks, uncertainties and other factors may cause actual results to differ materially from the forward looking

statements contained in this MD&A, including, among other factors, those referenced in the section entitled “Risk Factors” in the

Corporation’s Annual Information Form, which include, but are not limited to, general economic and market conditions; the

Corporation’s ability to execute strategic plans and meet financial obligations; the performance of the Corporation’s principal

subsidiaries; the Corporation’s ability to raise additional capital; the Corporation’s ability to create, attract and retain AUM and

AUA; risks relating to trading activities and investments; competition faced by the Corporation; regulation of the Corporation’s

businesses; successful integration of the Corporation with acquired businesses and the realization of any anticipated synergies;

risks associated with the Corporation’s operating businesses and the Corporation’s investment holdings in general, including risks

associated with oil and gas and mining exploration, 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 Corporation and its subsidiaries; maintenance of minimum regulatory capital requirements for certain of the Corporation’s

subsidiaries; potential liability of the Corporation and its subsidiaries under securities laws and for violations of investor

suitability requirements; and the ability of the Corporation 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 November 14, 2014.

http://www.sedar.com/


Forward looking statements contained in this MD&A 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

Corporation’s strategic priorities and objectives. In determining expectations for economic growth in the financial services,

energy, resource, agriculture and real estate sectors, the Corporation 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 Corporation’s performance.

Forward looking statements contained in this MD&A are not guarantees of future performance and, while forward looking

statements are based on certain assumptions that the Corporation considers reasonable, actual events and results could differ

materially from those expressed or implied by forward looking statements made by the Corporation. Prospective investors are

cautioned to consider these and other factors carefully when making decisions with respect to the Corporation and not place

undue reliance on forward looking statements. Circumstances affecting the Corporation may change rapidly. Except as may be

required by applicable law, the Corporation does not undertake any obligation to update publicly or revise any such forward

looking statements, whether as a result of new information, future events or otherwise.

INFORMATION CONCERNING DUNDEE CORPORATION

Additional information relating to Dundee Corporation, including a copy of the Corporation’s Annual Information Form, may be

found on SEDAR at www.sedar.com and the Corporation’s website at www.dundeecorp.com.

Toronto, Ontario

November 14, 2014

http://www.sedar.com/

http://www.dundeecorp.com/


DUNDEE CORPORATION

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF

FINANCIAL POSITION

(unaudited)

(expressed in thousands of Canadian dollars)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Commitments, contingencies and off-balance sheet arrangements (note 33)

As at

Note September 30, 2014 December 31, 2013

ASSETS

Cash 155,998$ 183,825$

Accounts receivable 123,611 119,198

Client accounts receivable 7 657,076 655,376

Derivative financial instruments 8 1,749 1,828

Brokerage securities owned 9 61,715 58,969

Investments 10 799,826 1,191,651

Equity accounted investments 11 312,744 223,326

Real estate joint venture investments 12 7,393 -

Real estate assets 13 13,523 -

Resource properties 14 538,193 349,920

Livestock 15 40,464 35,638

Capital and other assets 16 251,411 162,628

Goodwill 17 17,290 -

TOTAL ASSETS 2,980,993$ 2,982,359$

LIABILITIES

Accounts payable and accrued liabilities 131,500$ 132,408$

Client deposits and related liabilities 18 662,823 673,358

Brokerage securities sold short 9 38,600 25,815

Income taxes payable 6,991 (23,537)

Corporate debt 19 160,248 122,142

Decommissioning liabilities 20 52,995 42,734

Preference Shares, series 4 21 106,602 106,415

Deferred income tax liabilities 28 69,927 75,199

1,229,686 1,154,534

SHAREHOLDERS' EQUITY

Share capital

Common shares 22 251,958 208,435

Preference Shares, series 2 21 84,053 127,068

Preference Shares, series 3 21 43,015 -

Contributed surplus 23,286 2,985

Retained earnings 1,230,144 1,384,456

Accumulated other comprehensive income (loss) 12,533 (1,872)

1,644,989 1,721,072

NON-CONTROLLING INTEREST 23 106,318 106,753

1,751,307 1,827,825

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 2,980,993$ 2,982,359$

SEPTEM BER 2014 – DUNDEE CORPORAT I ON 45

DUNDEE CORPORATION

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(expressed in thousands of Canadian dollars, except for per share amounts)


For the three months ended For the nine months ended

Note September 30, 2014 September 30, 2013 September 30, 2014 September 30, 2013

REVENUES 24 85,897$ 41,217$ 240,542$ 131,073$

OTHER ITEMS IN NET (LOSS) EARNINGS

Cost of sales 25 (61,446) (28,853) (157,766) (69,125)

Depreciation and depletion 14, 16 (7,574) (5,583) (22,036) (15,864)

General and administrative 27 (36,744) (37,303) (101,588) (92,120)

Net (loss) gain from investments 10 (81,246) 29,727 (108,389) (147,051)

Share of (loss) earnings from equity accounted investments 11, 12 (4,781) 1,178 (27,101) 27,860

Gain (loss) on sale of equity accounted investments 11 6,714 - 6,714 (35)

Fair value changes in livestock 15 3,619 2,866 10,573 6,807

(Loss) gain on derivative financial instruments 8 376 (689) (416) (4,141)

Interest expense 19, 20 (3,432) (3,713) (11,665) (11,445)

Foreign exchange gain 418 240 537 3,365

NET LOSS BEFORE INCOME TAXES (98,199) (913) (170,595) (170,676)

Income tax recovery 28 16,637 360 16,329 49,900

NET LOSS FROM CONTINUING OPERATIONS (81,562) (553) (154,266) (120,776)

DISCONTINUED OPERATIONS 5

Earnings, net of taxes - - - 37,323

Gain on distribution of assets, net of taxes - - - 599,446

- - - 636,769

NET (LOSS) EARNINGS FOR THE PERIOD (81,562)$ (553)$ (154,266)$ 515,993$

NET (LOSS) EARNINGS ATTRIBUTABLE TO:

Owners of the parent

Continuing operations (78,655)$ 2,598$ (140,196)$ (113,292)$

Discontinued operations - - - 626,709

(78,655) 2,598 (140,196) 513,417

Non-controlling interest

Continuing operations (2,907) (3,151) (14,070) (7,484)


(2,907) (3,151) (14,070) 2,576

(81,562)$ (553)$ (154,266)$ 515,993$

NET (LOSS) EARNINGS PER SHARE 29

Basic and diluted

Continuing operations (1.48)$ 0.01$ (2.68)$ (2.22)$

Discontinued operations - - - 11.59

(1.48)$ 0.01$ (2.68)$ 9.37$


DUNDEE CORPORATION


COMPREHENSIVE (LOSS) INCOME

(unaudited)




Note September 30, 2014 September 30, 2013 September 30, 2014 September 30, 2013

NET (LOSS) EARNINGS FOR THE PERIOD (81,562)$ (553)$ (154,266)$ 515,993$

Other comprehensive income (loss):

Items that may be reclassified to net (loss) earnings

Unrealized gain (loss) from foreign currency translation 13,897 (281) 12,057 255

Share of other comprehensive income (loss) from equity accounted investments, 13,177 (3,032) 14,535 3,339

net of associated taxes (3,491) 787 (3,866) (939)

Transfer of unrealized other comprehensive (income) loss from equity

accounted investments to net earnings, (32) 542 (32) 542

net of associated taxes 8 (72) 8 (72)

Other comprehensive income (loss) from continuing operations 23,559 (2,056) 22,702 3,125

Other comprehensive income from discontinued operations, 5 - - - 1,533

net of associated taxes - - - (171)

Total other comprehensive income (loss) for the period 23,559 (2,056) 22,702 4,487

COMPREHENSIVE (LOSS) INCOME FOR THE PERIOD (58,003)$ (2,609)$ (131,564)$ 520,480$

COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO:

Owners of the parent

Continuing operations (63,540)$ 592$ (125,791)$ (110,199)$


(63,540) 592 (125,791) 517,605

Non-controlling interest

Continuing operations 5,537 (3,201) (5,773) (7,452)


5,537 (3,201) (5,773) 2,875

(58,003)$ (2,609)$ (131,564)$ 520,480$


DUNDEE CORPORATION


CHANGES IN SHAREHOLDERS’ EQUITY

(unaudited)



Accumulated

Number of Preference Preference Other

Common Common Shares, Shares, Contributed Retained Comprehensive Non-controlling

Note Shares Shares Series 2 Series 3 Surplus Earnings Income (Loss) Interest Total

Balance, December 31, 2012 54,062,811 207,768$ 127,068$ -$ 11,720$ 1,529,378$ (7,949)$ 147,164$ 2,015,149$


Net loss, continuing operations - - - - - (113,292) - (7,484) (120,776)

Net earnings, discontinued operations 5 - - - - - 626,709 - 10,060 636,769

Other comprehensive income, continuing operations - - - - - - 3,093 32 3,125

Other comprehensive income, discontinued operations 5 - - - - - - 1,095 267 1,362

Issuance of Class A subordinate shares for non-cash consideration 22 1,999 53 - - - - - - 53

Issuance of Class A subordinate shares for cash 22 1,998 52 - - - - - - 52

Dividends on Preference Shares, series 2 - - - - - (6,581) - - (6,581)

Stock based compensation - - - - 1,344 - - - 1,344

Exercise of options 22 37,842 527 - - (136) - - - 391

Distribution of assets 5 (74) - - - (7,938) (670,231) (408) (115,864) (794,441)

Changes of ownership interest in subsidiaries 6 - - - - (725) - - 75,548 74,823

Balance, September 30, 2013 54,104,576 208,400 127,068 - 4,265 1,365,983 (4,169) 109,723 1,811,270

From October 1, 2013 to December 31, 2013

Net earnings, continuing operations - - - - - 20,667 - (3,669) 16,998

Other comprehensive income, continuing operations - - - - - - 2,297 44 2,341

Issuance of Class A subordinate shares for non-cash consideration 912 17 - - - - - - 17

Issuance of Class A subordinate shares for cash 913 18 - - - - - - 18


Stock based compensation - - - - 444 - - - 444

Share incentive arrangements - - - - (557) - - - (557)

Changes of ownership interest in subsidiaries - - - - (1,167) - - 655 (512)

Balance, December 31, 2013 54,106,401 208,435 127,068 - 2,985 1,384,456 (1,872) 106,753 1,827,825


Net loss, continuing operations - - - - - (140,196) - (14,070) (154,266)

Other comprehensive income, continuing operations - - - - - - 14,405 8,297 22,702

Shares issued in a business combination 2 2,779,983 45,541 - - - - - - 45,541

Acquisition of Class A subordinate shares for cancellation 22 (615,000) (2,465) - - - (7,535) - - (10,000)

Issuance of Class A subordinate shares for non-cash consideration 22 3,003 53 - - - - - - 53

Issuance of Class A subordinate shares for cash 22 3,002 52 - - - - - - 52

Conversion of Preference Shares, series 2 to series 3 - - (43,015) 43,015 - - - - -


Stock based compensation - - - - 1,331 - - - 1,331

Exercise of options 22 22,714 342 - - (33) - - - 309

Changes of ownership interest in subsidiaries 6 - - - - 19,003 - - 5,338 24,341

Balance, September 30, 2014 56,300,103 251,958$ 84,053$ 43,015$ 23,286$ 1,230,144$ 12,533$ 106,318$ 1,751,307$

Attributable to Owners of the Parent


DUNDEE CORPORATION

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOW

(unaudited)



For the nine months ended

Note September 30, 2014 September 30, 2013

OPERATING ACTIVITIES:

Net (loss) earnings for the period (154,266)$ 515,993$

Adjusted for:

Net earnings from discontinued operations 5 - (37,323)

Gain on distribution of assets 5 - (599,446)

Dividends received from discontinued operations - 7,000

Items not affecting cash and other adjustments 30 125,028 79,861

Changes in non-cash working capital items 30 29,347 (1,410)

Cash provided from (used in) operating activities – continuing operations 109 (35,325)

Cash used in operating activities – discontinued operations - (15,496)

CASH PROVIDED FROM (USED IN) OPERATING ACTIVITIES 109 (50,821)

INVESTING ACTIVITIES:

Net investment in resource properties (143,543) (33,489)

Net investment in livestock and other agricultural assets (12,034) (76,044)

Net investment in real estate (195) -

Acquisition of cash in business combinations 2 2,780 9,351

Acquisitions of portfolio investments (121,916) (303,412)

Proceeds from dispositions of portfolio investments 262,399 611,898

Net investment in capital and other assets (23,002) (11,987)

Cash (used in) provided from investing activities – continuing operations (35,511) 196,317

Cash used in investing activities – discontinued operations - (983)

CASH (USED IN) PROVIDED FROM INVESTING ACTIVITIES (35,511) 195,334

FINANCING ACTIVITIES:

Change in corporate debt 29,843 40,878

Issuance of Class A subordinate shares, net of issue costs 170 382

Acquisition of Class A subordinate shares, net of costs 22 (10,000) -

Net cash from transactions with non-controlling interests (5,857) 9,068

Dividends paid on Preference Shares, series 2 (6,581) (6,581)

Cash provided from financing activities – continuing operations 7,575 43,747

Cash provided from financing activities – discontinued operations - 24,285

CASH PROVIDED FROM FINANCING ACTIVITIES 7,575 68,032

NET (DECREASE) INCREASE IN CASH DURING THE PERIOD (27,827) 212,545

Cash, continuing operations, beginning of period 183,825 33,337

Cash, discontinued operations, beginning of period - 8,487

CASH BEFORE DISPOSITION OF DISCONTINUED OPERATIONS 155,998 254,369

Less: cash disposed of on distribution of assets 5 - (16,293)

CASH, CONTINUING OPERATIONS, END OF PERIOD 155,998$ 238,076$

Cash flows include the following amounts:

Interest paid 10,802$ 10,743$

Taxes paid 22,115$ 45,135$


DUNDEE CORPORATION

NOTES TO THE CONDENSED INTERIM CONSOLIDATED

FINANCIAL STATEMENTS

(unaudited)

For the three and nine months ended September 30, 2014 and September 30, 2013

Tabular dollar amounts in thousands of Canadian dollars, except per share amounts

1 . N A T U R E O F O P E R A T I O N S

Dundee Corporation (the “Corporation” or “Dundee Corporation”) is a public Canadian independent holding company listed

on the Toronto Stock Exchange (“TSX”) under the symbol “DC.A”. Through its operating subsidiaries, the Corporation is

engaged in diverse business activities in the areas of its core competencies including investment advisory and corporate

finance, energy, resources, agriculture, real estate and infrastructure. The Corporation also holds, directly and indirectly, a

portfolio of investments mostly in these core focus areas, as well as other select investments in both publicly listed and

private companies.

The Corporation is incorporated under the Business Corporations Act (Ontario) and is domiciled in Canada. The

Corporation’s head office is located at 1 Adelaide Street East, 21st Floor, Toronto, Ontario, Canada, M5C 2V9.

At September 30, 2014 and December 31, 2013, the Corporation’s major operating subsidiaries included:

* Formerly “360 VOX Corporation”

** Formerly “Nichromet Extraction Inc.”

2 . S I G N I F I C A N T A C Q U I S I T I O N S

Acquisition of AgriMarine Holdings Inc. – July 2014

On July 2, 2014, a subsidiary of the Corporation acquired 102,490,753 common shares of AgriMarine Holdings Inc.

(“AgriMarine”) pursuant to the conversion of certain convertible notes with an aggregate principal value of $18,529,000

and associated interest of $2,234,000. When aggregated with the Corporation’s previously existing equity interest in

AgriMarine, the Corporation controls approximately 95% of the common shares of AgriMarine. AgriMarine is a Canadian-

based producer of sustainable fin fish, utilizing a proprietary aquaculture technology. The common shares of AgriMarine

currently trade on the Canadian Securities Exchange under the symbol “FSH”.

As at and for the nine months ended As at and for the year ended

September 30, 2014 December 31, 2013

Opening Ending Opening Ending

(in alphabetical order) Ownership Ownership Ownership Ownership

AgriMarine Holdings Inc. (note 2) n/a 95% n/a n/a

Blue Goose Capital Corp. 84% 86% 83% 84%

Dundee 360 Real Estate Corporation* (note 2) n/a 100% n/a n/a

Dundee Energy Limited 58% 58% 57% 58%

Dundee Securities Ltd. 100% 100% 100% 100%

Dundee Sustainable Technologies Inc.** 83% 64% 75% 83%

Goodman & Company, Investment Counsel Inc. 100% 100% 100% 100%

United Hydrocarbon International Corp. (note 6) 29% 35% n/a 29%


The Corporation has accounted for its acquisition of AgriMarine as a business combination. The aggregate purchase

consideration for AgriMarine was $20,879,000 and included (i) the fair value of certain converted notes, including

outstanding interest thereon, of $20,763,000, and (ii) an aggregate of $116,000, being the fair value of 1,218,333 common

shares of AgriMarine previously held by the Corporation. A summary of the allocation of the aggregate consideration

transferred to the fair value of the various identifiable assets and liabilities acquired is summarized below. The

determination of the fair value of assets and liabilities acquired are preliminary and may be revised when estimates and

assumptions and the valuations of assets and liabilities are finalized within 12 months of the respective acquisition date.

The Corporation has attributed a value of $14,711,000 to intangible assets acquired. Included in intangible assets are certain

patents and trademarks developed and registered by AgriMarine and associated with its semi-closed floating rearing

container technology developed to improve fish farming practices. This intangible asset will be amortized over its expected

useful life. The remaining $1,100,000 intangible asset relates to a farming license. The farming license is not amortized as

it is considered to have an indefinite life based on AgriMarine’s intent and ability to renew the license without substantial

cost or material modification to the existing terms and conditions.

The following proforma summary presents the Corporation’s consolidated results of operations as if AgriMarine had been

acquired on January 1, 2014. The proforma summary is presented for illustrative purposes only and is not necessarily

indicative of the results of operations that would have been achieved had the acquisition of AgriMarine been consummated

at the dates or for the periods presented, nor are they necessarily indicative of future results.

(a) Interest expense owed to the Corporation which is eliminated in consolidation.


Cash 903$

Livestock 6,179


Intangibles 14,711

Other 13,797


Accounts payable and other net liabilities (8,810)


20,879$


Transfer of fair value of AgriMarine common shares previously included in "Investments" 116$

Fair value of convertible notes and associated interest 20,763

20,879$

Dundee

Dundee Proforma Corporation

For the nine months ended September 30, 2014 Corporation AgriMarine Adjustments Ref (Proforma)

Revenues 238,916$ 4,871$ -$ 243,787$

Other items in net loss before income taxes (406,840) (12,059) 1,473 (a) (417,426)

Income taxes 15,880 437 - 16,317

Net loss for the period (152,044)$ (6,751)$ 1,473$ (157,322)$


Acquisition of Dundee 360 Real Estate Corporation (formerly 360 VOX Corporation) – July 2014

On July 2, 2014, the Corporation completed a plan of arrangement that resulted in the acquisition by the Corporation of all

of the issued and outstanding common shares of Dundee 360 Real Estate Corporation (“Dundee 360”) that it did not already

own. Through its wholly-owned subsidiaries, Dundee 360 is engaged in the business of developing and managing

international hotel, resort, residential and commercial real estate projects.

Prior to completion of the plan of arrangement, the Corporation held 49,028,138 common shares of Dundee 360,

representing an 18% equity interest. Under the terms of the plan of arrangement, other former shareholders of Dundee 360

exchanged their shares in Dundee 360 for 2,779,983 Class A subordinate voting shares (“Subordinate Shares”) (note 22) of

the Corporation and, upon completion of the plan of arrangement, Dundee 360 became a private, wholly-owned subsidiary

of the Corporation. Prior to completion of the plan of arrangement, the common shares of Dundee 360 traded on the TSX

Venture Exchange under the symbol “VOX”.

The aggregate purchase consideration for Dundee 360 was $55,347,000, including (i) the fair value of the Corporation’s

original 18% interest in Dundee 360 at the date of completion of the plan of arrangement, being $9,806,000, and (ii) the fair

value of the 2,779,983 Subordinate Shares of the Corporation on the date of the completion of the plan of arrangement,

being $45,541,000. A summary of the allocation of the aggregate consideration transferred to the fair value of the net assets

acquired in the above transaction is summarized below. The determination of the fair value of assets and liabilities acquired

are preliminary and may be revised when estimates and assumptions and the valuations of assets and liabilities are finalized

within 12 months of the respective acquisition date.

Goodwill

Goodwill was calculated as the excess of the purchase price over the fair value of the net assets acquired. The goodwill

recorded as part of the acquisition primarily reflects the estimated value of identified future real estate development projects

which are anticipated to result in the formalization of asset management and development contracts in the foreseeable future,

including a project in the Gangwon Province of the Republic of Korea to develop a leisure, tourism and commercial hub

within the East Coast Free Economic Zone. Goodwill has been allocated to the Dundee 360 operating segment.


Cash 2,002$

Accounts receivable 8,822

Client accounts receivable 21,707

Real estate joint venture investments 7,093

Real estate assets 13,871


Intangible assets 47,207

Tangible and other capital assets 1,397

Goodwill 17,290

Accounts payable and other liabilities (21,975)

Client deposits and related liabilities (21,707)

Corporate debt (7,912)



55,347$


Transfer of fair value of Dundee 360 common shares previously included in "Equity Accounted Investments" 9,806$

Issuance of 2,779,983 Subordinate Shares at fair value on the date of completion of the plan of arrangment (note 22) 45,541

55,347$


Intangible Assets Acquired

The following proforma summary presents the Corporation’s consolidated results of operations as if Dundee 360 had been

acquired on January 1, 2014. The proforma summary is presented for illustrative purposes only and is not necessarily

indicative of the results of operations that would have been achieved had the acquisition of Dundee 360 been consummated

at the dates or for the periods presented, nor are they necessarily indicative of future results.

(a) To record an increase in amortization expense of $4,651,000 to reflect fair value adjustments assigned to intangible assets at the time of completion of

the plan of arrangement.

Fair value Remaining

at Amortization

Acquisition Life (Years)

Brand, franchise, trademark rights and

customer lists

In November 2012, Dundee 360 acquired a master franchise

agreement for the right to use the “Sotheby’s International

Realty ” name and related trademarks in Canada.

14,977$ 41 ~ 49

In May 2013, Dundee 360 acquired the exclusive license to use

the trademarks “Enchantment ” and “Mii Amo ” and the related

marks in connection with the operation, marketing and promotion

of certain destination spa resorts.

Resort development contract In September 2013, Dundee 360 entered into a joint venture to

provide development services for the construction of an urban

resort in Vancouver (note 12).

11,814 2.5

Construction management contract In October 2011, Dundee 360 acquired a construction

management contract relating to the development of a ski-in and

ski-out resort in France, from which the Corporation earns

consulting and management fees.

5,317 2.5 ~ 10

On December 17, 2013, Dundee 360 acquired an additional

construction management contract relating to the development of

a resort in Croatia.

Hospitality management agreements In May 2013, Dundee 360 acquired management contracts for the

management, operation and promotion of certain destination

hotel and spa resorts.

4,915 11

Hotel renovation contracts Dundee 360 has entered into several project management and

procurement agreements pursuant to which Dundee 360 will

oversee the refurbishment and infrastructure capital projects for

certain hotels under the “Fairmont ” banner.

4,118 2.5

Asset management agreements Dundee 360 has entered into asset management contracts for a

portfolio of hotels.

2,684 2.5

Agency relationships In November 2012, Dundee 360 acquired contractual agreements

with a network of real estate brokerage agents.

1,971 4.0

Others Other intangibles, consisting of the fair value of website and

other proprietary items.

1,411 n/a

Total 47,207$

Dundee

Dundee Dundee Proforma Corporation

For the nine months ended September 30, 2014 Corporation 360 Adjustments Ref (Proforma)

Revenues 213,857$ 64,505$ -$ 278,362$

Other items in net loss before income taxes (381,429) (68,886) (4,651) (a) (454,966)

Income taxes 16,753 (655) - 16,098

Net loss for the period (150,819)$ (5,036)$ (4,651)$ (160,506)$


Acquisition of Creso Exploration Inc. – April 2014

On April 1, 2014, Dundee Sustainable Technologies Inc. (“DSTI”) completed the acquisition of Creso Exploration Inc.

(“Creso”), a company engaged in the exploration of mineral properties. The transaction was accounted for as a purchase of

Creso’s net identifiable assets and accordingly, the assets and liabilities acquired were recorded at their estimated fair value

as at the transaction date. The excess of the purchase price over the fair value of the net monetary assets acquired was

allocated to resource properties. The following table presents the total consideration paid by DSTI and its allocation of the

consideration paid to the acquired net assets of Creso:

Expansion of Wealth Management Services – January 2014

In January 2014, Dundee Goodman Private Wealth, a division of Dundee Securities Ltd. (“Dundee Securities”) completed

the acquisition of certain investment advisors and their related businesses from a third party. The following table presents

the aggregate consideration transferred and the Corporation’s allocation of the consideration transferred to the net assets

acquired.

Agricultural Investments – Completed During 2013

During the year ended December 31, 2013, the Corporation completed several agricultural-based acquisitions, including

business combinations and asset acquisitions. The following table presents the aggregate consideration transferred and the

Corporation’s allocation of the consideration transferred to the net assets acquired.


Cash 88$

Accounts receivable 52

Resource properties 22,085

Capital and other assets 102

Accounts payable and accrued liabilities (1,196)

21,131$


Issuance of shares, warrants and options of DSTI 17,939$

Transfer of market value of Creso shares and warrants owned by DSTI and

previously included in "Brokerage securities owned" 2,914

Transaction costs 278

21,131$


Accounts receivable 343$

Capital and other assets:

Customer contracts and related customer relationships 15,254

Property, plant and equipment 427

Other 148

Deferred income tax liabilities (148)

16,024$


Cash 16,024$


Capital assets 61,123$

Livestock 4,587

Resource properties 11,208

Deferred income tax liabilities (4,893)

Other liabilities assumed (175)

71,850$


Cash 70,350$

Consideration held back/earnout 1,500

71,850$


3 . B A S I S O F P R E P A R A T I O N

These unaudited condensed interim consolidated financial statements of the Corporation as at and for the three and nine

months ended September 30, 2014 (“September 2014 Interim Consolidated Financial Statements”) have been prepared in

accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards

Board (“IASB”), and with interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”)

which the Canadian Accounting Standards Board has approved for incorporation into Part 1 of the CPA Canada Handbook –

Accounting, as applicable to the preparation of interim financial statements, including International Accounting Standard

(“IAS”) 34, “Interim Financial Reporting”. The September 2014 Interim Consolidated Financial Statements should be read

in conjunction with the Corporation’s audited consolidated financial statements as at and for the year ended December 31,

2013 (“2013 Audited Consolidated Financial Statements”) which were prepared in accordance with IFRS as applicable for

annual financial statements. The September 2014 Interim Consolidated Financial Statements were authorized for issuance

by the Board of Directors on November 14, 2014.

The September 2014 Interim Consolidated Financial Statements follow the same accounting principles and methods of

application as those disclosed in note 3 to the 2013 Audited Consolidated Financial Statements, except as described below.

Policies Adopted Pursuant to Acquisitions Completed During the Nine Months Ended September 30, 2014

Goodwill

Goodwill is recorded as the excess of consideration transferred over the fair value of the identifiable net assets acquired in a

business combination, less accumulated impairment charges, and is allocated to the cash-generating unit (“CGU”) expected

to benefit from the acquisition for the purpose of impairment testing. On an annual basis or more frequently if there are

potential indicators of impairment, the carrying value of a CGU, including its allocated goodwill, is compared to its

recoverable amount, which is the higher of its fair value less costs to sell and its value in use. Goodwill impairment, if any,

is measured as the excess of the carrying amount over the recoverable amount of a CGU, and is charged to net earnings.

Goodwill impairment charges cannot be reversed for subsequent increases in a CGU’s recoverable amount. Goodwill is

derecognized on disposal of a CGU to which goodwill was previously allocated, with the difference between the proceeds

and carrying value of the CGU (inclusive of goodwill and unrealized balances recorded in accumulated other comprehensive

income) recorded in the consolidated statement of operations.

Intangible Assets

Intangible assets are comprised primarily of brand, franchise, trademark rights and customer lists, resort development

contracts, construction management contracts, hospitality management agreements, hotel renovation contracts, asset

management agreements, agency relationships and other acquired identifiable non-monetary assets without physical form.

Intangible assets are initially recognized at cost or at fair value when acquired through a business combination, and are

subsequently measured at cost less accumulated amortization and impairment, where amortization is calculated using the

straight-line method based on the estimated useful life of those intangible assets with a finite life. The intended use, expected

life and economic benefit to be derived from intangible assets with a finite life are re-evaluated by the Corporation when

there are potential indicators of impairment. Indefinite-life intangible assets are not subject to amortization but are assessed

for impairment on an annual basis or more frequently if there are potential indicators of impairment. If events or changes in

circumstances indicate that a previously recognized impairment loss has decreased or no longer exists, a reversal is

recognized in net earnings to the extent that the carrying amount of the intangible asset after reversal does not exceed the

carrying amount that would have resulted had no impairment taken place.


Real Estate Assets

Real estate assets include land and direct costs relating to the underlying development opportunities which are capitalized as

incurred. Direct costs include architectural services, design and engineering services, market studies, feasibility studies, legal

costs, and overhead directly attributable to the development projects. The carrying value of real estate assets are not

amortized and are carried at cost less accumulated impairment losses, if any.

Revenue Recognition in Dundee 360

Real estate revenue is comprised of (i) commission revenues from brokerage sales of real estate which are recorded on a

gross basis and which are recognized when the parties are bound by the terms of the underlying contracts, all consideration

has been exchanged, all conditions precedent to closing have been performed and transfer of significant risk and rewards of

ownership have occurred; (ii) consulting and management fee revenue which is recognized when earned and realized or

realizable under the terms of the underlying agreement; and (iii) sales and marketing fees and revenue from the sales of

condominium units which are recognized when persuasive evidence of an arrangement exists, usually in the form of any

executed sales agreement, recovery of the consideration is probable, the associated costs and possible return of units can be

estimated reliably, there is no continuing management involvement with the units, and the amount of revenue can be

measured reliably. Revenue from condominium unit sales is recognized in net earnings in proportion to the stage of

completion of the units.

Changes in Accounting Policies Implemented During the Nine Months Ended September 30, 2014

The Corporation has adopted the following new and revised accounting standards, including any consequential amendments

thereto, effective January 1, 2014. Changes in accounting policies adopted by the Corporation were made in accordance

with the applicable transitional provisions as provided in those standards and amendments.

IAS 32, “Financial Instruments: Presentation” (“IAS 32”)

On January 1, 2014, the Corporation implemented certain amendments to IAS 32 which require the Corporation to provide

clarification on the requirements for offsetting financial assets and financial liabilities on the statement of financial position.

The implementation of amendments to IAS 32 had no impact to the Corporation’s September 2014 Interim Consolidated

Financial Statements.

IAS 36, “Impairment of Assets” (“IAS 36”)

On January 1, 2014, the Corporation implemented certain amendments to IAS 36 which require that the Corporation

disclose, if appropriate, the recoverable amount of an asset or cash generating unit, and the basis for the determination of fair

value less costs of disposal or value-in-use of the asset, when an impairment loss is recognized or when an impairment loss

is subsequently reversed. The implementation of amendments to IAS 36 had no impact to the Corporation’s September

2014 Interim Consolidated Financial Statements.

IFRIC 21, “Levies” (“IFRIC 21”)

On January 1, 2014, the Corporation implemented IFRIC 21 which provides an interpretation on IAS 37, “Provisions,

Contingent Liabilities and Contingent Assets” (“IAS 37”), with respect to the accounting for levies imposed by

governments. IAS 37 sets out criteria for the recognition of a liability, one of which is the requirement for the entity to have

a present obligation as a result of a past event. The interpretation clarifies that the obligating event is the activity described

in the relevant legislation that triggers the payment of the levy. The implementation of IFRIC 21 had no material impact to

the Corporation’s September 2014 Interim Consolidated Financial Statements.

IFRS 10, “Consolidated Financial Statements” (“IFRS 10”)

On January 1, 2014, the Corporation adopted certain amendments to IFRS 10 relating to the exception to the consolidation

requirements as outlined in IFRS 10 as they apply to investment entities. The implementation of these amendments had no

impact to the Corporation’s September 2014 Interim Consolidated Financial Statements.


Accounting Standards, Interpretations and Amendments to Existing Standards not yet Effective

IFRS 9, “Financial Instruments” (“IFRS 9”)

In July 2014, the IASB issued final amendments to IFRS 9, replacing earlier versions of IFRS 9 already adopted by the

Corporation. These amendments to IFRS 9 introduce a single, forward-looking ‘expected loss’ impairment model for

financial assets which will require more timely recognition of expected credit losses, and a fair value through other

comprehensive income category for financial assets that are debt instruments. Other previously issued amendments to IFRS

9 that have not yet been adopted by the Corporation include a substantially reformed approach to hedge accounting and

requirements to recognize gains or losses that relate to the effect of a Corporation’s own credit risk in measuring liabilities

elected to be measured at fair value outside of profit or loss. The amendments to IFRS 9 that are not yet adopted by the

Corporation are effective for annual periods beginning on or after January 1, 2018 and are available for earlier adoption.

The Corporation has yet to assess the full impact of the amendment to IFRS 9 to its consolidated financial statements, and it

has not yet determined whether the new amendments will be adopted earlier than at the required date of implementation.

IFRS 11, “Joint Arrangements” (“IFRS 11”)

In May 2014, the IASB issued amendments to IFRS 11 to address the accounting for acquisitions of interests in joint

operations. The amendments address how a joint operator should account for the acquisition of an interest in a joint

operation in which the activity of the joint operation constitutes a business. IFRS 11, as amended, now requires that such

transactions shall be accounted for using the principles related to business combinations accounting as outlined in IFRS 3,

“Business Combinations”. The amendments are to be applied prospectively and are effective for annual periods beginning

on or after January 1, 2016, with earlier application permitted. The Corporation is in the process of evaluating the impact of

adopting this amendment to its consolidated financial statements.

IFRS 15, “Revenue from Contracts with Customers” (“IFRS 15”)

In May 2014, the IASB issued IFRS 15, which supersedes IAS 18, “Revenue”, IAS 11 “Construction Contracts” and other

interpretive guidance associated with revenue recognition. IFRS 15 provides a single model to determine how and when an

entity should recognize revenue, as well as requiring entities to provide more informative, relevant disclosures in respect of

its revenue recognition criteria. IFRS 15 is to be applied prospectively and is effective for annual periods beginning on or

after January 1, 2017, with earlier application permitted. The Corporation is in the process of evaluating the impact that

IFRS 15 may have on the Corporation’s consolidated financial statements.

IAS 16, “Property, Plant and Equipment” (“IAS 16”) and IAS 38, “Intangible Assets” (“IAS 38”)

In May 2014, the IASB issued amendments to IAS 16 and IAS 38 to clarify acceptable methods of depreciation and

amortization. The amended IAS 16 eliminates the use of a revenue-based depreciation method for items of property, plant

and equipment. Similarly, amendments to IAS 38 eliminate the use of a revenue-based amortization model for intangible

assets except in certain specific circumstances. The amendments are to be applied prospectively and are effective for annual

periods beginning on or after January 1, 2016, with earlier application permitted. The Corporation is in the process of

evaluating the impact of adopting these amendments to its consolidated financial statements.

IAS 16 and IAS 41, “Agriculture” (“IAS 41”)

In June 2014, the IASB issued amendments to IAS 16 and IAS 41 which require biological assets that meet the definition of

a bearer plant to be accounted for as property, plant and equipment in accordance with IAS 16. The amendments are to be

applied prospectively and are effective for annual periods beginning on or after January 1, 2016, with earlier application

permitted. The Corporation is in the process of evaluating the impact of adopting this amendment to its consolidated

financial statements.


4 . C R I T I C A L A C C O U N T I N G J U D G M E N T S , E S T I M A T E S A N D A S S U M P T I O N S

The preparation of the September 2014 Interim Consolidated Financial Statements requires the Corporation to make

judgments in applying its accounting policies and estimates and assumptions about the future. These judgments, estimates

and assumptions affect the Corporation’s reported amounts of assets, liabilities, revenues and other items in net earnings, and

the related disclosure of contingent assets and liabilities, if any. The Corporation evaluates its estimates on an ongoing basis.

Such estimates are based on historical experience and on various other assumptions that the Corporation believes are

reasonable under the circumstances, and these estimates form the basis for making judgments about the carrying value of

assets and liabilities and the reported amount of revenues and other items in net earnings that are not readily apparent from

other sources. Actual results may differ from these estimates under different assumptions or conditions. Other than as

outlined below, there have been no significant changes in accounting judgments, estimates and assumptions made by the

Corporation in the preparation of the September 2014 Interim Consolidated Financial Statements from those judgments,

estimates and assumptions disclosed in note 4 to the 2013 Audited Consolidated Financial Statements.

Assessment of Goodwill for Potential Impairment

Goodwill is assessed annually for impairment or more frequently if there are potential indicators of impairment. In

assessing for possible impairment of goodwill, the Corporation estimates the recoverable amount of each of its CGUs to

which goodwill has been assigned using one or more generally accepted valuation techniques, which requires the making of

a number of assumptions, including assumptions about future revenue, net earnings, corporate overhead costs, capital

expenditures, cost of capital, and the growth rate of operations. The recoverable amount of each CGU is compared to its

carrying value, inclusive of assigned goodwill. If the recoverable amount of a CGU is determined to be less than its

carrying value, the excess is recognized as a goodwill impairment loss. The estimated recoverable amounts are sensitive to

the assumptions used in the valuations. Given the variability of future-oriented financial information, goodwill impairment

tests are subjected to significant sensitivity analysis.

Real Estate Assets

Real estate assets, including real estate assets in the pre-development phase are stated at the lower of cost and net realizable

value. In calculating net realizable value, management must estimate the selling price of the assets based on prevailing

market prices at the dates of the consolidated statements of financial position, discounted for the time value of money, if

material, less estimated costs of completion and estimated selling costs. If estimates are significantly different from actual

results, the carrying value of such real estate assets may be overstated or understated on the consolidated statements of

financial position and accordingly, net earnings in a particular period may be overstated or understated.

Accounting for Commission Revenue – Principal versus Agency

Dundee 360 has entered into a master franchise agreement for the right to the “Sotheby’s International Realty” name and

related trademarks in Canada. Through these arrangements, Dundee 360 earns commission revenues from the listing,

marketing and selling of real estate. Significant judgment has been applied in determining whether Dundee 360 acts as an

agent in these transactions, rather than as principal. The assessment of whether Dundee 360 acts as agent or principal

impacts whether accounting for commission revenue should be on a gross or net basis. Dundee 360 has determined that it

acts as principal, as it is directly responsible for providing the underlying service and accordingly, it accounts for commission

revenues on a gross basis.

Recognition of Contingent Payments in Development Projects

Provisions may be recorded by Dundee 360 when it has determined that it has a present obligation, whether legal or

constructive and that it is probable that an outflow of resources will be required to settle the obligation, provided that a

reliable estimate can be made of the amount of the obligation. Management uses judgment in assessing the magnitude and

timing of the potential economic exposure and the likelihood of a future event occurring. Actual results may differ

significantly from these estimates.


5 . D I S T R I B U T I O N O F D U N D E E R E A L T Y C O R P O R A T I O N

Distribution of Dundee Realty Corporation to Shareholders – May 2013

On May 16, 2013, the Corporation’s shareholders approved a corporate restructuring, through a tax efficient plan of

arrangement (the “Arrangement”), that resulted in the Corporation exchanging its 70% interest in Dundee Realty

Corporation (“Dundee Realty”), a real estate subsidiary, for certain shares of DREAM Unlimited Corp. (“DREAM”), a

holding company established for the purpose of completing the Arrangement. The transaction was completed on May 30,

2013. In accordance with the terms of the Arrangement, the shares of DREAM received by the Corporation were effectively

distributed to shareholders of the Corporation such that holders of the Corporation’s Subordinate Shares received one Class

A subordinate voting share of DREAM for each Subordinate Share held, and holders of the Corporation’s Class B common

shares (“Class B Shares”) received one Class B common share of DREAM for each such Class B Share held. At completion

of the Arrangement, the Corporation retained a 28.57% interest in DREAM, providing it with a 20% indirect interest in

Dundee Realty.

The assets and liabilities of Dundee Realty derecognized on May 30, 2013, and the resulting gain on the distribution of such

net assets to the Corporation’s shareholders is illustrated in the following table.

The operating performance of Dundee Realty prior to completion of the Arrangement has been included in the comparative

information to the Corporation’s September 2014 Interim Consolidated Financial Statements as “Discontinued operations”

and was comprised of the following amounts:

Fair value of assets distributed 714,019$

Carrying amount of net assets distributed (328,554)

Other comprehensive income reclassified to the statement of operations 408

Transaction costs deducted from gain on distribution of assets (4,000)

Effect of distribution of assets on stock based compensation (24,295)

Retained interest in DREAM 268,073

Gain on distribution of assets before income taxes 625,651

Deferred income taxes on retained assets (26,205)

Gain on distribution of assets, net of taxes 599,446$

For the period from

January 1, 2013

to May 30, 2013

Revenues 198,385$

Other items in net earnings (146,578)

Net earnings before income taxes 51,807

Income taxes (14,484)

Net earnings for the period 37,323$

Net earnings attributable to:

Owners of the parent 27,263$

Non-controlling interest 10,060

37,323$

Net earnings for the period 37,323$

Other comprehensive income for the period, net of associated taxes 1,362

Comprehensive income for the period 38,685$

Comprehensive income attributable to:

Owners of the parent 28,358$

Non-controlling interest 10,327

38,685$


As part of the Arrangement, a subsidiary of the Corporation retained a preference share interest in Dundee Realty (the

“Class F Preference Shares”). The Class F Preference Shares are retractable by the subsidiary at its option at a price of

$10.00 per share or $180,613,000, plus accrued and unpaid dividends and Dundee Realty may, at its discretion, call the

Class F Preference Shares for redemption. Correspondingly, Dundee Realty retained a preference share interest in the

Corporation’s subsidiary, with offsetting terms and conditions to the Class F Preference Shares of Dundee Realty. At

September 30, 2014 and December 31, 2013, the subsidiary’s investment in the Class F Preference Shares was recognized as

a financial instrument with a net carrying value of $nil as the subsidiary and Dundee Realty each retain the right to set off

retraction amounts receivable in respect of these shareholdings against the redemption amounts payable.

6 . A C Q U I S I T I O N S A N D D I L U T I O N S O F I N T E R E S T S I N S U B S I D I A R I E S

Change of Ownership Interests in Subsidiaries

Dundee Sustainable Technologies Inc.

In consideration for the acquisition of Creso (note 2) in April 2014, DSTI issued 63,615,477 subordinate voting shares from

its treasury and it issued 2,545,000 options and 12,456,566 warrants. During the nine months ended September 30, 2014,

DSTI also issued subordinate voting shares from its treasury upon exercise of outstanding warrants and options. As a result

of these transactions, the Corporation’s interest in DSTI was diluted from 83% at December 31, 2013 to 64% at September

30, 2014 resulting in the Corporation recognizing an increase to contributed surplus of $9,849,000. During the first nine

months of the prior year, the Corporation acquired 67,744,510 common shares of DSTI for $7,487,000, including shares

pursuant to the exercise of warrants, shares acquired in private transactions from other third-party shareholders and other

non-monetary transactions. The acquisitions caused the Corporation’s interest in DSTI to increase from 75% at December

31, 2012 to 83% at September 30, 2013, and resulted in a decrease in contributed surplus of $1,177,000.

United Hydrocarbon International Corp. (“UHI”)

On June 30, 2013, and through a series of transactions, the Corporation had acquired 27,400,000 shares or 28% of UHI, a

private oil and gas exploration, development and production company with activities in the Republic of Chad. In addition to

its investment in shares of UHI, the Corporation had advanced $46,827,000 in senior secured convertible debentures

carrying an interest rate of up to 12% per annum, and it had received certain common share purchase warrants. The

Corporation’s investment in the senior secured convertible debentures, and the granting to the Corporation of share purchase

warrants, provided the Corporation with the ability to control the business activities of UHI. The Corporation determined

that these transactions represented a business combination, with the Corporation as the acquirer. Accordingly, the

Corporation began consolidating the operating results, cash flow and net assets of UHI effective June 30, 2013.

The following table illustrates the total consideration transferred for the acquisition of UHI at September 30, 2013 and the

Corporation’s allocation of the consideration transferred to the acquired net assets of UHI.

Effect on Contributed Surplus

Interest Owned as at During the nine months ended

30-Sept-14 31-Dec-13 30-Sept-13 31-Dec-12 30-Sept-14 30-Sept-13

Blue Goose Capital Corp. 86% 84% 82% 83% (337)$ 174$

Dundee Energy Limited 58% 58% 58% 57% 111 (747)

Dundee Sustainable Technologies Inc. 64% 83% 83% 75% 9,849 (1,177)

Ravensden Alternative Group 100% 93% 92% 92% (159) (3)

United Hydrocarbon International Corp. 35% 29% 29% n/a 9,539 1,028

Total 19,003$ (725)$


* Eliminated on consolidation.

Subsequent to June 30, 2013 and prior to September 30, 2013, the Corporation acquired $19,900,000 senior secured

convertible debentures of UHI and it received an additional 2,500,000 common shares of UHI pursuant to warrants granted

as part of its lending arrangements with UHI. These transactions resulted in the Corporation recognizing an increase to

contributed surplus of $1,028,000. A further $29,700,000 of senior secured convertible debentures of UHI were acquired

after September 30, 2013 and prior to December 31, 2013 and, during the nine months ended September 30, 2014, the

Corporation advanced a further $145,279,000 to UHI. At September 30, 2014, the Corporation had advanced an aggregate

of $241,706,000 to UHI.

During the first nine months of 2014, and in recognition of the contribution made by the Corporation towards an oil

discovery, UHI awarded 20,000,000 treasury shares to the Corporation, with a value of $10,000,000 (the “Discovery

Bonus”). Concurrently, the board of directors of UHI amended the terms of certain outstanding warrants, accelerating their

vesting criteria and resulting in the recognition of compensation expense of $8,980,000. Along with other issues of common

shares of UHI from treasury pursuant to share incentive arrangements, these transactions increased the Corporation’s interest

in UHI from 29% at December 31, 2013 to 35% at September 30, 2014. The difference between the aggregate of the fair

value of the common shares of UHI issued from treasury together with the compensation amount resulting from the

modification of the vesting criteria of the warrant and the corresponding dilutive effect to non-controlling interest was

$9,539,000, and has been recognized in the Corporation’s consolidated financial statements as an increase in contributed

surplus.

Blue Goose Capital Corp. (“Blue Goose”)

During the nine months ended September 30, 2014, the Corporation acquired 100,000 common shares of Blue Goose for

$1,000,000 (nine months ended September 30, 2013 – 2,760,000 common shares of Blue Goose for $27,600,000).

Concurrent with these investments, Blue Goose also issued shares to its non-controlling shareholders for cash or under share

incentive arrangements and/or in consideration for acquisitions. On a net basis, the Corporation’s investment in Blue Goose

increased from 84% at December 31, 2013 to 86% at September 30, 2014 (September 30, 2013 – 82%; December 31, 2012

– 83%), resulting in a decrease in contributed surplus of $337,000 (nine months ended September 30, 2013 – increase of

$174,000).

Dundee Energy Limited (“Dundee Energy”)

Changes in the net equity of Dundee Energy during the nine months ended September 30, 2014 resulted in the Corporation

recognizing an increase in contributed surplus of $111,000. In April 2013, the Corporation had purchased 15,771,991 flow-

through common shares of Dundee Energy pursuant to a rights offering to its shareholders at a cost of $6,151,000. The

purchase increased the Corporation’s interest in Dundee Energy to 58% at September 30, 2013, compared with 57% at the

end of the prior year, and resulted in a decrease of $747,000 in contributed surplus.


Resource properties 126,554$

Cash 9,351

Other assets 1,907

Assumed liabilities (2,306)

Debt due to Dundee Corporation* (46,827)

88,679


27,004$


Cash paid for shares 27,004$

27,004$


Ravensden Alternative Group

During the first nine months of 2014, the Corporation paid $4,984,000 to acquire all of the outstanding units of Ravensden

Alternative Group that it did not already own. The difference between the cash paid and the carrying value of the non-

controlling interest acquired, amounting to $159,000, was recorded as a decrease in contributed surplus.

7 . C L I E N T A C C O U N T S R E C E I V A B L E

“Funds deposited into trust” include client funds deposited and held by the Corporation’s full service brokerage subsidiary,

Dundee Securities, in registered accounts. These funds have been deposited with a Canadian trust company. “Funds

deposited into trust” also include funds placed in escrow by an acquirer in a real estate property transaction from which

applicable fees are distributed to the relevant parties associated with the real estate transaction. Included in “Client deposits

and related liabilities” (note 18) is a corresponding liability related to these deposits.

On January 1, 2012, Dundee Securities entered into an introducing and carrying broker arrangement with Fidelity Clearing

Canada. “Amounts receivable from carrying broker” represent non-registered client balances and other corporate funds held

by the carrying broker pursuant to this arrangement.

8 . D E R I V A T I V E F I N A N C I A L I N S T R U M E N T S

Risk Management Contracts

At September 30, 2014, Dundee Energy had entered into a risk management contract in respect of its oil production, the

terms of which are illustrated in the following table. These derivative instruments are not designated in a qualifying hedge

relationship and accordingly, they are classified as financial instruments at fair value through profit or loss (“FVTPL”) and

are measured at their estimated fair value with changes recorded in net earnings in the period in which they occur.

Dundee Energy has determined that its risk management contract at September 30, 2014 resulted in an asset balance of

$129,000. The risk management contract outstanding on December 31, 2013 had a fair value liability balance of $92,000

and was settled in early 2014.

During the three and nine months ended September 30, 2014, Dundee Energy recognized a gain of $376,000 and a loss of

$116,000 respectively (three and nine months ended September 30, 2013 – loss of $509,000 and $661,000 respectively)

from changes in the fair value of these risk management contracts.

The commodity prices used to determine the market value of risk management contracts reflect management’s best estimate

of future market prices for the underlying commodity as at the measurement date, and considers various other factors.

However, future commodity market prices will vary from those used in such determination and it is possible that such

variations could be material, causing volatility in the Corporation’s financial results.


Client accounts 339,603$ 422,289$

Brokers' and dealers' balances 11,777 937

Funds deposited into trust 228,275 173,494

Amounts receivable from carrying broker 77,421 58,656

657,076$ 655,376$

Contract Pricing Strike Price Remaining Fair Value

Fixed Price Swap Volume Point (Cdn$/unit) Term September 30, 2014

Crude oil 300 bbl/d NYMEX $105.00 Oct 01/14 to Dec 31/14 129$


Embedded Derivatives

The Corporation has determined that the redemption option feature of the Corporation’s preference shares, series 4

(“Preference Shares, series 4”) meets the definition of an embedded derivative, as the economic risks and characteristics of

the redemption option are not closely related to that of the Preference Shares, series 4. Accordingly, the embedded

redemption option has been bifurcated from the Preference Shares, series 4 and has been recognized in the consolidated

financial statements as a derivative financial instrument. The Corporation has determined that the estimated fair value of the

embedded derivative option was $1,620,000 at September 30, 2014 (December 31, 2013 – $1,920,000). The fair value of

the embedded redemption option was measured using an interest rate option pricing method.

During the three and nine months ended September 30, 2014, the Corporation recognized a loss on these embedded

derivatives of $nil and $300,000 respectively.

During the three and nine months ended September 30, 2013, the Corporation recognized a loss on derivative financial

instruments of $180,000 and $3,480,000 respectively, relating to the embedded derivative feature associated with its

preference shares, series 1. The Corporation’s preference shares, series 1 were cancelled in accordance with the terms of the

Arrangement with Dundee Realty (note 5).

Warrants and Options Associated with Investments

Included in the Corporation’s portfolio of investments are warrants and/or options, which were acquired directly by the

Corporation, or which were received by the Corporation as consideration for the Corporation’s investment in the underlying

investee. These warrants and/or options are derivative financial assets and are carried in the Corporation’s consolidated

statements of financial position at their estimated fair value, determined using a modified Black Scholes option pricing

model.

9 . B R O K E R A G E S E C U R I T I E S O W N E D A N D B R O K E R A G E S E C U R I T I E S S O L D S H O R T

Bonds have maturities ranging from 2014 to 2045 (December 31, 2013 – from 2014 to 2045) and have annual interest yields

ranging from 1.00% to 12.00% (December 31, 2013 – 0.75% to 12.00%).

From time to time, Dundee Securities may sell securities that it does not own and will therefore be obligated to purchase

such securities at a future date to settle its obligation. These securities have been designated as “Brokerage securities sold

short” in these consolidated financial statements. Dundee Securities may incur a loss if the market value of these securities

subsequently increases.


Securities Securities Securities Securities

Owned Sold Short Owned Sold Short

Bonds 22,004$ 19,331$ 16,689$ 25,130$

Equities 37,343 19,269 37,802 685

Other 2,368 - 4,478 -

61,715$ 38,600$ 58,969$ 25,815$


1 0 . I N V E S T M E N T S

Fair Value of Investments

Net (Loss) Gain from Investments

On July 24, 2014, the Corporation sold 4,469,000 units of DREAM Real Estate Investment Trust (“DREAM Office REIT”)

and 8,600,000 units of DREAM Global Real Estate Investment Trust (“DREAM Global REIT”) for net proceeds of

$199,707,000. Proceeds from the sale of these publicly traded securities were used to repay amounts borrowed pursuant to

the Corporation’s revolving term credit facility (note 19), with the balance added to the Corporation’s working capital.

The Corporation recognizes changes in the fair values of its investments in its net earnings or loss. During the nine months

ended September 30, 2014, the Corporation recognized a loss in the value of its investments of $108,389,000 (nine months

ended September 30, 2013 – $147,051,000), including a loss of $81,246,000 incurred during the third quarter of the current

year (third quarter of 2013 – gain of $29,727,000).

The loss in the value of investments during the nine months ended September 30, 2014 included a loss of $81,785,000

relating to the Corporation’s investment in 21,636,288 Class A subordinate voting shares of DREAM (note 5), reflecting a

decline in the trading value of these shares from $16.90 at December 31, 2013 to $13.12 at September 30, 2014. A further

$18,001,000 loss was recognized in respect of the Corporation’s investment of 5,698,500 shares of African Minerals Ltd., a

minerals exploration, development and mining company with significant interests in Sierra Leone, with the underlying per

share value falling from £1.97 per share on December 31, 2013 to £0.17 per share on September 30, 2014.


Cost Fair Value Cost Fair Value

Publicly traded securities 543,904$ 444,179$ 785,570$ 758,355$

Private investments 207,810 232,627 194,468 212,298

Mutual funds and other short-term investments 85 68 66 70

Debt securities 122,837 121,945 221,843 219,646

Warrants and options 880 1,007 1,282 1,282

875,516$ 799,826$ 1,203,229$ 1,191,651$



Publicly traded securities (45,082)$ (72,606)$ 4,964$ (103,818)$

Private investments (276) 7,047 (312) (35,404)

Mutual funds and other short-term investments - (21) 861 (1,242)

Debt securities 1,191 1,304 2,523 (2,763)

Warrants and options (46) 100 (9,507) (2,353)

(44,213)$ (64,176)$ (1,471)$ (145,580)$



Publicly traded securities (42,551)$ (40,676)$ 8,918$ 24,686$

Private investments 21 6,792 (307) (1,399)

Mutual funds and other short-term investments - (11) - 10

Debt securities (258) 702 3,916 1,846

Warrants and options 103 (5,368) (9,508) 1,565

(42,685)$ (38,561)$ 3,019$ 26,708$


1 1 . E Q U I T Y A C C O U N T E D I N V E S T M E N T S

Significant Transactions Affecting the Carrying Value of Equity Accounted Investments During the Nine Months

Ended September 30, 2014

Dundee Precious Metals Inc. (“Dundee Precious”)

In April 2014, the Corporation acquired a further 750,000 common shares of Dundee Precious in the open market at a cost

of $3,127,000, increasing its interest in Dundee Precious to marginally above 25%. During the nine months ended

September 30, 2014, Dundee Precious recognized an impairment provision of US$70,000,000 against its Kapan property in

Armenia. Included in the Corporation’s operating performance during the nine months ended September 30, 2014 are losses

of $22,300,000 relating to the Corporation’s investment in Dundee Precious, including the Corporation’s proportionate share

of the impairment provision against the Kapan property.

Union Group International Holdings Limited (“Union Group”)

At December 31, 2013, the Corporation held a 25% interest in Union Group, a holding company with Latin-American

investments in various sectors such as agriculture, mining, oil and gas, power generation, real estate and infrastructure,

which it had acquired for $19,898,000. During the nine months ended September 30, 2014, the Corporation increased its

interest in Union Group through an additional subscription for treasury shares with a value of $31,908,000. The

subscription increased the Corporation’s interest in Union Group to 40%.

Paragon Holdings (Smithe Street) ULC, Edgewater Casino ULC and Edgewater Casino LP

On April 1, 2014, a subsidiary of the Corporation received the necessary British Columbia gaming regulatory approvals to

complete a series of transactions which resulted in the Corporation converting its $37,500,000 participating loan to

Edgewater Casino Resort Development for: (i) a 50% interest in Paragon Holdings (Smithe Street) ULC, the developer of

the Edgewater Casino Resort Development project; (ii) a 50% interest in Edgewater Casino ULC, the general partner of

Edgewater Casino LP and the holder of an 86% interest in Edgewater Casino LP; and (iii) a 7% direct interest in Edgewater

Casino LP, the operator of the Edgewater Casino in Vancouver, British Columbia (which, on a combined basis, provides the

Corporation, directly and indirectly, with a 50% interest in the operations of the Edgewater Casino). The Corporation

subsequently assessed its ability to exert significant influence over the operations and financial results of the underlying

investees, given its current ownership interest, its representation on the board of directors, and joint approval voting power.

Accordingly, on April 1, 2014, the Corporation began to account for these investments using the equity method.


Trade Carrying Fair Carrying Fair

Symbol Investment Ownership Value Value Ownership Value Value

DPM Dundee Precious Metals Inc. 25% 178,239$ 157,136$ 25% 183,408$ 106,246$

n/a Union Group International Holdings Limited 40% 51,539 private 25% 19,898 private

n/a Paragon Holdings (Smithe Street) ULC 50% 20,985 private n/a n/a n/a

n/a Android Industries, LLC 20% 20,076 private n/a n/a n/a

n/a Edgewater Casino ULC 50% 14,508 private n/a n/a n/a

n/a Cambridge Medical Funding Group II, LLC 50% 10,600 private n/a n/a n/a

EAG Eagle Hill Exploration Corporation 29% 8,630 4,215 30% 7,798 7,798

RYG Ryan Gold Corp. 20% 4,467 2,574 20% 4,341 3,159

n/a Dundee 360 Real Estate Corporation (note 2) n/a n/a n/a 18% 4,160 4,658

CRG Corona Gold Corporation 24% 3,455 2,170 23% 3,423 2,138

ODX Odyssey Resources Limited 31% 245 511 31% 298 398

n/a Escal UGS S.L. 14% - private 14% - private

312,744$ 223,326$


Android Industries, LLC (“Android”)

During the nine months ended September 30, 2014, the Corporation invested $18,617,000 to acquire, both directly and

indirectly, a 20% interest in Android, a privately owned, technology-enabled assembler and sequencer of complex

assemblies for automotive original equipment manufacturers. Concurrent with its investment in Android, the Corporation

entered into a shareholders’ agreement in respect of its Android investment pursuant to which the shareholders agreed that

all major decisions in respect of Android, other than day-to-day operating decisions which have been delegated to

management of Android, require the consent of all shareholders. The Corporation has determined that, for accounting

purposes, the shareholders’ agreement constitutes a joint venture as the shareholders share joint control. Accordingly, the

Corporation is accounting for its investment in Android using the equity method.

Cambridge Medical Funding Group II, LLC

In April 2014, the Corporation invested US$10,000,000 to acquire a 50% interest in Cambridge Medical Funding Group II,

LLC, a New Jersey based receivables finance company with a proprietary system that facilitates the collection of no-fault

and workers' compensation receivables for medical facilities including hospitals, surgical centers, and single providers

located in the United States.

Eagle Hill Exploration Corporation (“Eagle Hill”)

In the early part of 2014, and through a series of transactions, the Corporation acquired 29,090,910 shares of Eagle Hill, a

Canadian mining exploration company focused on precious metal properties, for aggregate consideration of $1,545,000.

Together with shares of Eagle Hill that the Corporation had acquired previously, the Corporation held a 34% interest in

Eagle Hill. During the third quarter of 2014, Eagle Hill completed certain private placements that diluted the Corporation’s

interest to 29% at September 30, 2014.

Dundee 360 Real Estate Corporation

Subsequent to completion of the plan of arrangement that facilitated the acquisition of the common shares of Dundee 360

that the Corporation did not already own (note 2), the Corporation began to account for its investment in Dundee 360 on a

consolidated basis. Prior to this transaction, the Corporation’s investment in Dundee 360 was accounted for using the equity

method. Included in the interim consolidated statement of operations for the nine months ended September 30, 2014 as a

“Gain on sale of equity accounted investments” is an amount of $6,714,000, representing the difference between the

carrying value of the Corporation’s initial 18% interest in Dundee 360, determined on an equity basis and the associated fair

value of its 18% interest on the date of completion of the plan of arrangement.

Escal UGS S.L. (“Escal”)

The carrying value of the Corporation’s investment in Escal at September 30, 2014 is $nil. In July 2014, Escal filed an

application for the relinquishment of the exploitation concession related to the Castor underground natural gas storage

project in Spain, which was acknowledged by the Spanish authorities by royal decree subsequent to September 30, 2014.

Under the terms of the royal decree: (i) Escal will receive €1.35 billion within 35 days of the date of the royal decree, and

(ii) Escal will receive certain other remuneration rights, including financial remuneration for the period from the provisional

commissioning date of the Castor project on July 5, 2012 through to October 4, 2014, being the date the royal decree went

into force, as well as the reimbursement of operating and maintenance costs incurred during this period. The final

determination and timing of these additional remuneration rights have not yet been finalized. It is anticipated that the

amounts received by Escal will be applied towards the repayment of €1.38 billion of outstanding bonds issued by Watercraft

Capital S.A., Escal’s financing vehicle. The royal decree further stipulates that the Castor project will remain mothballed

until the Spanish government is satisfied with technical studies and reports on the commissioning of such facilities. Enagás

Transporte, S.A.U., the technical manager of the Spanish gas system, has been tasked with completing these studies and it

will be entrusted with ongoing care and maintenance of the facilities as soon as practicable. However, in accordance with

the terms of the decree, Escal and its shareholders remain responsible for any possible flaws or defects in the facilities

associated with the Castor project that become apparent during the ten years following the issuance of the royal decree.


Significant Transactions Affecting the Carrying Value of Equity Accounted Investments During the Nine Months

Ended September 30, 2013

DREAM Office Real Estate Investment Trust (formerly “Dundee REIT”)

and DREAM Global Real Estate Investment Trust (formerly “Dundee International REIT”)

During the year ended December 31, 2013, the Corporation accounted for its investments in DREAM Office REIT and

DREAM Global REIT on an equity basis as it was able to exert significant influence over the operations and financial

results of these investees through its representation on the board of trustees and through senior management representation.

Following completion of the Arrangement with Dundee Realty (note 5), the management structure associated with Dundee

Realty was immediately decentralized. Furthermore, in early 2014, the Corporation’s representative to the board of trustees

of each of DREAM Office REIT and DREAM Global REIT resigned his position on the board of trustees. As a result of

these changes, the Corporation’s investment in each of these entities has been reclassified as an investment at FVTPL (note

10).

DREAM Unlimited Corp.

In connection with the distribution of assets to shareholders pursuant to the Arrangement with Dundee Realty (note 5), the

Corporation retained 21,636,222 Class A subordinate voting shares of DREAM, which represented a 29% interest in

DREAM and a 20% indirect interest in Dundee Realty. Initially, the Corporation determined that it had the ability to exert

significant influence over the strategic operating, investing and financing policies of DREAM. Accordingly, the

Corporation accounted for its investment in DREAM using the equity method. During the third quarter of 2013, the

Corporation reconsidered the facts and circumstances around its power to participate in the financial and operating policy

decisions of DREAM and concluded that accounting for its investment in DREAM under the equity method was no longer

appropriate. As such, during the third quarter of 2013, the Corporation began to account for its investment in DREAM as an

equity security at FVTPL (note 10).

Dundee Precious Metals Inc.

On May 9, 2013, the Corporation exercised warrants to acquire 3,561,000 common shares of Dundee Precious for cash

consideration of $10,149,000. In addition, during the nine months ended September 30, 2013, the Corporation acquired

2,424,152 common shares of Dundee Precious in the open market for cash consideration of $17,234,000, increasing its

ownership interest in Dundee Precious from 23% at December 31, 2012 to 25% at September 30, 2013.


Share of (Loss) Earnings from Equity Accounted Investments

There were no dividends or distributions received by the Corporation from its equity accounted investments during the three

and nine months ended September 30, 2014.

Equity earnings during the three and nine months ended September 30, 2013 from DREAM Office REIT were net of

distributions received of $2,737,000 and $8,169,000 respectively. During the same periods, equity earnings in DREAM

Global REIT were net of distributions received of $2,002,000 and $6,935,000 respectively.

1 2 . R E A L E S T A T E J O I N T V E N T U R E I N V E S T M E N T S

Dundee 360 owns a 45% interest in Sotarbat 360, a French entity established for the development of the “Edenarc 1800”

ski-in and ski-out resort located in proximity to Savoie, France.

In addition, Dundee 360 has entered into a joint venture development agreement with an agency of the government of Cuba

to develop certain hotel properties in Cuba. The terms of the joint venture agreement provides for the construction of 11

hotels at four different sites, with two of the sites providing opportunity for the construction or acquisition and operation of

other major tourist and recreational facilities. Pursuant to these arrangements, Dundee 360 owns 61% of Vancuba Holdings

S.A., the ultimate joint venture company undertaking the operational activities covered by the joint venture development

agreement. Dundee 360 and Vancuba Holdings S.A., through their 30% interest in Bellavista Resorts S.A., have acquired

land rights for one of the proposed sites, pursuant to a long-term lease agreement with the government of Cuba. The initial


September 30, 2014 September 30, 2013 September 30, 2014 September 30, 2013

Dundee Precious Metals Inc. (2,648)$ (3,212)$ (22,300)$ 1,506$

Union Group International Holdings Limited 158 - (650) -

Paragon Holdings (Smithe Street) ULC (3,920) - (4,015) -

Android Industries, LLC 1,063 - (688) -

Edgewater Casino ULC 2,008 - 2,008 -

Cambridge Medical Funding Group II, LLC (202) - (507) -

Eagle Hill Exploration Corporation (358) - (714) -

Ryan Gold Corp. (72) (79) 157 (1,243)

Dundee 360 Real Estate Corporation (891) (192) (1,138) (1,254)

Corona Gold Corporation 17 (532) 712 (762)

Odyssey Resources Limited (23) (34) (53) (94)

DREAM Office REIT - 3,610 - 16,463

DREAM Global REIT - 1,617 - 6,871

DREAM Unlimited Corp. - - - 6,373

(4,868) 1,178 (27,188) 27,860

Real estate joint venture investments 87 - 87 -

(4,781)$ 1,178$ (27,101)$ 27,860$

Carrying

As at September 30, 2014 Value

Bellavista 5,064$

Vancuba 253

Sotarbat 360 1,954

Receivable from jointly controlled entities and associate 122

7,393$


lease term is for 50 years commencing on the initial date of exploitation of the associated project, with a renewal option for

a further 25 years.

The ultimate realization of these joint venture investments are dependent upon Dundee 360’s ability to retain its

development rights, to obtain the necessary financing to complete developments, and the successful development and use of

the tourism assets, or alternatively, the sale of these assets.

During the three months ended September 30, 2014, Dundee 360 recognized earnings of $87,000 from its investments in

real estate joint ventures.

1 3 . R E A L E S T A T E A S S E T S

Dundee 360 holds a 78% interest in Clearpoint Resort Limited (Malta) (“CRLM”). CRLM owns property under

development (the “Clearpoint Project”) consisting of land held in Cavtat, Croatia, near Dubrovnik which was valued at

$13,871,000 at the date of completion of the plan of arrangement with Dundee 360 (note 2). The Clearpoint Project consists

of a master-planned hotel, marina and recreational residential development encompassing a mix of private apartments,

townhomes and luxury villas. The Erste & Steiemarkische Bank, as lender to the Clearpoint Project, has registered a lien

over the land (note 19).

During the three months ended September 30, 2014, CRLM invested $195,000 in further development costs associated with

this project. At September 30, 2014, the carrying value of the investment was $13,523,000, with the decrease in value

representing the foreign currency translation effect related to the translation of the Euro relative to the Canadian dollar.

Subsequent to September 30, 2014, Dundee 360 paid a further €511,000 plus accrued interest on behalf of CRLM to reduce

debt outstanding to the Erste & Steiemarkische Bank. In exchange, CRLM issued additional equity to Dundee 360 from its

treasury, increasing Dundee 360’s ownership in CRLM to 80%.


1 4 . R E S O U R C E P R O P E R T I E S

1 5 . L I V E S T O C K

Exploration

and Evaluation

Oil and Gas Machinery Land

Development Pipeline and and Undeveloped

Costs Infrastructure Equipment Buildings Other Properties TOTAL

At December 31, 2012

Cost 134,567$ 25,603$ 28,640$ 4,580$ 3,670$ 25,998$ 223,058$

Accumulated depreciation and depletion (44,414) (4,696) (3,186) (63) (938) - (53,297)

Net carrying value, December 31, 2012 90,153 20,907 25,454 4,517 2,732 25,998 169,761

Nine months ended September 30, 2013

Carrying value December 31, 2012 90,153 20,907 25,454 4,517 2,732 25,998 169,761

Acquisitions (notes 2 and 6) 10,379 734 535 8,277 - 127,208 147,133

Net additions 1,645 706 (273) 12 (96) 25,812 27,806

Remeasure decommissioning liability (6,885) - - - - - (6,885)

Depreciation and depletion (7,139) (1,076) (1,174) (144) (112) - (9,645)

Net carrying value, September 30, 2013 88,153 21,271 24,542 12,662 2,524 179,018 328,170

At September 30, 2013

Cost 138,713 27,043 28,796 12,867 3,571 179,018 390,008

Accumulated depreciation and depletion (50,560) (5,772) (4,254) (205) (1,047) - (61,838)


Transactions from October 1, 2013 to December 31, 2013

Carrying value September 30, 2013 88,153 21,271 24,542 12,662 2,524 179,018 328,170

Acquisitions - - - 3,034 - - 3,034

Net additions 2,591 210 59 28 (169) 24,023 26,742

Remeasure decommissioning liability (537) - - - - - (537)

Depreciation and depletion (5,783) (345) (361) (957) (43) - (7,489)



Cost 140,767 27,253 28,855 15,929 3,402 203,041 419,247

Accumulated depreciation and depletion (56,343) (6,117) (4,615) (1,162) (1,090) - (69,327)




Acquisitions (note 2) 7,246 498 362 70 - 22,093 30,269

Net additions 2,012 - 322 179 330 156,932 159,775

Remeasure decommissioning liability 4,144 - - - - 1,854 5,998

Depreciation and depletion (5,842) (818) (918) (91) (100) - (7,769)



Cost 154,169 27,751 29,539 16,178 3,732 383,920 615,289

Accumulated depreciation and depletion (62,185) (6,935) (5,533) (1,253) (1,190) - (77,096)

Net carrying value, September 30, 2014 91,984$ 20,816$ 24,006$ 14,925$ 2,542$ 383,920$ 538,193$

Property, Plant and Equipment

For the nine months ended September 30, 2014 For the year ended December 31, 2013

Biological Biological

Inventory Assets TOTAL Inventory Assets TOTAL

Balance, beginning of period 12,151$ 23,487$ 35,638$ 3,942$ 13,709$ 17,651$

Acquisitions (note 2) 679 5,500 6,179 2,566 2,021 4,587

Net additions (dispositions) (4,854) (7,072) (11,926) 5,643 (4,568) 1,075

Fair value changes - 10,573 10,573 - 12,325 12,325

Balance, end of period 7,976$ 32,488$ 40,464$ 12,151$ 23,487$ 35,638$


1 6 . C A P I T A L A N D O T H E R A S S E T S

1 7 . G O O D W I L L

1 8 . C L I E N T D E P O S I T S A N D R E L A T E D L I A B I L I T I E S

Computer and Land Other

Furniture and Network and Intangible

Fixtures Equipment Buildings Other Trademarks Assets TOTAL


Cost 6,159$ 9,059$ 32,240$ 30,095$ 14,505$ 35,395$ 127,453$

Accumulated depreciation (5,078) (6,363) (132) (9,982) (5,435) (2,483) (29,473)




Net acquisitions and additions (notes 2 and 6) 591 324 54,693 12,986 862 826 70,282

Depreciation (328) (1,696) (235) (2,150) (746) (1,948) (7,103)



Cost 6,750 9,383 86,933 43,081 15,367 36,221 197,735



From October 1, 2013 to December 31, 2013

Carrying value September 30, 2013 1,344 1,324 86,566 30,949 9,186 31,790 161,159

Net acquisitions and additions 80 191 3,025 455 210 434 4,395

Depreciation (209) (632) (501) (896) (258) (430) (2,926)

Net carrying value, December 31, 2013 1,215 883 89,090 30,508 9,138 31,794 162,628


Cost 6,203 7,635 89,958 36,172 15,577 35,245 190,790


Net carrying value, December 31, 2013 1,215 883 89,090 30,508 9,138 31,794 162,628


Carrying value December 31, 2013 1,215 883 89,090 30,508 9,138 31,794 162,628

Net acquisitions and additions (note 2) 1,483 2,875 (3,827) 20,467 414 75,588 97,000

Depreciation (458) (710) (639) (2,672) (790) (2,948) (8,217)



Cost 7,686 10,510 86,131 56,639 15,991 110,833 287,790

Accumulated depreciation (5,446) (7,462) (1,507) (8,336) (7,229) (6,399) (36,379)

Net carrying value, September 30, 2014 2,240$ 3,048$ 84,624$ 48,303$ 8,762$ 104,434$ 251,411$

Capital Assets Intangible Assets

Carrying

As at September 30, 2014 Value

Dundee 360 17,290$


Client accounts 586,277$ 663,358$

Brokers' and dealers' balances 44,635 3,838

Funds in escrow 15,509 -

International banking client accounts 16,402 6,162

662,823$ 673,358$


“Funds in escrow” represent funds deposited in escrow by an acquirer in a real estate property transaction from which

applicable fees are distributed to the relevant parties associated with the real estate transaction. Funds received pursuant to

these arrangements are included in “Client accounts receivable” (note 7).

1 9 . C O R P O R A T E D E B T

At September 30, 2014 and December 31, 2013, the estimated fair value of corporate debt approximated its carrying value.

$205,000,000 – Revolving Term Credit Facility, Corporate

On January 23, 2014, as amended on June 9, 2014 and June 27, 2014, the Corporation established a $205 million revolving

term credit facility. At September 30, 2014, the Corporation had drawn $32,566,000 against this facility. During the three

and nine months ended September 30, 2014, interest expense relating to the Corporation’s revolving term credit facility,

including standby fees and other similar costs, was $539,000 and $2,086,000 respectively. During the three and nine

months ended September 30, 2013, the Corporation incurred interest charges of $1,179,000 and $3,600,000 respectively,

associated with a revolving term credit facility that was subsequently repaid and extinguished.

Establishment of a $300 million Corporate Credit Facility

On November 13, 2014, the Corporation established a $300 million, three-year revolving term credit facility with a

syndicate of Canadian Schedule I Chartered Banks. Concurrently, the Corporation repaid amounts outstanding pursuant to

its previously established credit facility as outlined above, and borrowing availabilities under previous arrangements were

terminated. Borrowings under the $300 million credit facility bear interest at a rate per annum equal to the prime lending

rate for loans plus 0.45% or, at the Corporation’s option, at the prevailing bankers’ acceptance rate or London Interbank

Offered Rate plus 1.45%. Unused amounts available under the $300 million credit facility are subject to an annual standby

fee of 0.29%.

Draws against the $300 million credit facility are contingent on, among other things, the maintenance of certain financial

ratios relating to the fair value of certain of the Corporation’s investments, and are subject to other customary restrictions,

including restrictions on the existence of other secured indebtedness.

The Corporation has granted a first ranking security over all of its assets as security against amounts borrowed under these

arrangements.

$6,490,000, 5.85% Exchangeable Unsecured Subordinated Debentures

At September 30, 2014, the Corporation had 6,490 (December 31, 2013 – 6,490) outstanding exchangeable unsecured

subordinated debentures with a par value per debenture of $1,000. The exchangeable debentures mature on June 30, 2015

and bear interest at 5.85% per annum, payable semi-annually on June 30 and December 31 of each year. Each exchangeable

debenture may be exchanged, at the option of the holder for 33.6134 units of DREAM Office REIT, representing a

conversion price of $29.75 per DREAM Office REIT unit.


Corporate

$205 million revolving term credit facility due January 22, 2015 32,566$ -$

$6.5 million, 5.85% exchangeable unsecured subordinated debentures due June 30, 2015 6,464 6,438

Subsidiaries

$70 million demand revolving credit facility, Dundee Energy Limited 63,684 65,709

Loan facilities, Blue Goose Capital Corp. 52,352 49,995

Loan facilities, Dundee 360 Real Estate Corporation 5,182 -

160,248$ 122,142$


The Corporation has placed sufficient units of DREAM Office REIT into escrow to satisfy the exchange feature of the

exchangeable debentures. While these securities are held in escrow, the Corporation retains all voting rights and related

privileges and is entitled to all distributions and rights of reinvestment of all distributions. There were no exchangeable

debentures surrendered for exchange of DREAM Office REIT units during the nine months ended September 30, 2014.

The carrying value of the exchangeable debentures is adjusted in the Corporation’s consolidated financial statements to

reflect the estimated fair value of the embedded exchange feature, provided that such adjustment does not result in a

carrying value that is below the principal value of the exchangeable debentures outstanding. The estimated fair value of the

exchange feature is determined using a valuation model that recognizes both the debt and exchange feature of the debentures

and is based on the premise that each of these components have different default risks. Changes in the estimated fair value

of the exchange feature are recorded in net earnings. Based on this valuation model, the Corporation determined that the

value of the exchangeable debentures at September 30, 2014 was $6,490,000 (December 31, 2013 – $6,490,000).

$70,000,000 Demand Revolving Credit Facility, Dundee Energy Limited

Dundee Energy Limited Partnership (“DELP”), a subsidiary of Dundee Energy, has established a $70 million credit facility

with a Canadian Schedule I Chartered Bank. The credit facility provides the subsidiary with a revolving demand loan,

subject to a tiered interest rate structure based on its net debt to cash flow ratio, as defined in the credit facility. Based on

current ratios, draws on the credit facility bear interest, at DELP’s option, at either the bank’s prime lending rate plus 3.5%

for loans or letters of credit, or, for bankers’ acceptances, at the bank’s then prevailing bankers’ acceptance rate plus 4.5%.

During the three and nine months ended September 30, 2014, interest expense relating to this credit facility, including

standby fees and other similar costs, was $613,000 and $2,468,000 respectively (three and nine months ended September 30,

2013 – $1,007,000 and $2,655,000 respectively). At September 30, 2014, the subsidiary had drawn $64,000,000 (December

31, 2013 – $66,200,000) pursuant to the credit facility.

The credit facility is secured against all of the oil and natural gas properties owned by DELP. In addition, Dundee Energy

has assigned a limited recourse guarantee of its units in the subsidiary as further security pursuant to the credit facility. The

credit facility is subject to certain covenants, including the maintenance of minimum levels of working capital.

Loan Facilities, Blue Goose Capital Corp.

Blue Goose and its subsidiaries have entered into several loan agreements, including a $14,750,000 facility maturing on July

1, 2027. During the first nine months of 2014, the facility, which was originally structured as a revolving loan facility, was

converted to a fixed term loan, bearing interest at 5.2% per annum. In addition, Blue Goose has established a real estate

loan for $10,000,000 secured by ranch property in western Canada. The real estate loan is subject to a fixed interest rate of

3.05% per annum. At September 30, 2014, Blue Goose had drawn $14,353,000 (December 31, 2013 – $14,747,000) against

the fixed term facility and $9,524,000 (December 31, 2013 – $9,805,000) against the real estate loan.

Certain wholly owned subsidiaries of Blue Goose have entered into various credit facilities for up to $23,500,000 with

certain Canadian Schedule I Chartered Banks. Borrowings under these arrangements bear interest at a rate per annum

ranging from the bank’s prime lending rate plus 0.50% to 1.30%. The facilities are secured by general security agreements

against the assets of each respective subsidiary and are guaranteed by Blue Goose. At September 30, 2014, the subsidiaries

of Blue Goose had drawn $20,935,000 (December 31, 2013 – $18,617,000) against these facilities. Certain of these loan

arrangements require that Blue Goose and its subsidiaries meet financial debt covenants customary to such loan

arrangements, including the maintenance of certain interest coverage ratios in excess of specified amounts and covenants

that limit the amount of liabilities that may be assumed by Blue Goose and its subsidiaries. These loan arrangements also

oblige Blue Goose to comply with certain reporting requirements, including the delivery of financial information and debt

covenant certification as provided for in the loan agreements. During the second quarter of 2014, Blue Goose experienced

an increase in leverage and as such, at June 30, 2014 and September 30, 2014, Blue Goose exceeded its maximum leverage

threshold, and it did not comply with the associated compliance requirements. Blue Goose is currently in negotiations with

the lender and is endeavouring to comply with the delivery of financial information as required by such arrangements.


Blue Goose’s U.S. subsidiary has also secured a 4.70% US$6,000,000 real estate loan secured against land in Colorado and

a US$1,000,000 variable interest rate operating line secured against the assets of the U.S. subsidiary. Both of these facilities

are guaranteed by Blue Goose. At September 30, 2014, amounts outstanding against the real estate loan were $6,535,000

(December 31, 2013 – $6,349,000) and $1,005,000 (December 31, 2013 – $477,000) was drawn against the operating line.

During the three and nine months ended September 30, 2014, interest expense incurred in respect of these facilities was

$537,000 and $1,510,000 respectively (three and nine months ended September 30, 2013 – $454,000 and $661,000

respectively).

Loan Facilities, Dundee 360 Real Estate Corporation

At September 30, 2014, CRLM, a subsidiary of Dundee 360, borrowed €3,064,000, which was secured against its land

holdings in Croatia, from Erste & Steiemarkische Bank. Amounts borrowed are subject to interest at a rate of Euribor plus

6.75%. Subsequent to September 30, 2014, Dundee 360 repaid €511,000 plus accrued interest against amounts borrowed.

A further €510,657 is payable on January 1, 2015, with the balance outstanding due on April 1, 2015. All other amounts

borrowed by Dundee 360 are short term in nature and are due within the next 12 months.

Call Loan Arrangements

From time to time, Dundee Securities may utilize call loan arrangements to facilitate the securities settlement process for

both client and principal securities transactions, or to fund margin lending. In connection with the establishment of an

introducing and carrying broker arrangement with a third-party service provider, Dundee Securities has arranged for an

uncommitted call loan facility for up to $100 million at September 30, 2014 (December 31, 2013 – $125 million). At

September 30, 2014 and December 31, 2013, there were no amounts outstanding pursuant to these arrangements. Interest

rates on amounts drawn during the nine months ended September 30, 2014 were 1.5% (December 31, 2013 – 1.5%) on

Canadian dollar denominated borrowings and 1.0% (December 31, 2013 – 1.0%) on borrowings denominated in U.S.

dollars.

2 0 . D E C O M M I S S I O N I N G L I A B I L I T I E S

As at and for the nine months ended As at and for the year ended

September 30, 2014 December 31, 2013

Discount rates applied to future obligations 1.13% - 2.61% 1.10% - 3.09%

Inflation rate 1.70% - 2.00% 2.00%

Discounted future obligations, beginning of period 42,734$ 44,739$

Effect of acquisitions 4,870 5,790

Effect of changes in estimates and

remeasurement of discount and foreign exchange rates 5,998 (7,422)

Liabilities settled (reclamation expenditures) (1,470) (1,320)

Accretion (interest expense) 863 947

Discounted future obligations, end of period 52,995$ 42,734$


2 1 . P R E F E R E N C E S H A R E S

Subject to amendments as outlined below, the terms of the Corporation’s preference shares are summarized in note 18 to the

Corporation’s 2013 Audited Consolidated Financial Statements.

Issued and Outstanding First Preference Shares, Series 2 (“Preference Shares, series 2”)

Issued and Outstanding First Preference Shares, Series 3 (“Preference Shares, series 3”)

In accordance with the terms of the Corporation’s Preference Shares, series 2, on August 26, 2014, the Corporation

announced that it did not intend to exercise its right to redeem the Preference Shares, series 2 and accordingly, holders had

the right, at their option, to convert all or part of their Preference Shares, series 2 on a one-for-one basis into Preference

Shares, series 3. Shareholders who did not exercise their right to convert retained their Preference Shares, series 2, subject

to the 5.688% dividend rate applicable to the Preference Shares, series 2 for the 5-year period commencing on September

30, 2014 to, but excluding September 30, 2019. Of the 5,200,000 Preference Shares, series 2 outstanding prior to the

exercise of the conversion right, 1,720,615 shares with a face value of $43,015,000 were converted on September 30, 2014

to Preference Shares, series 3. At September 30, 2014, an aggregate 3,479,385 Preference Shares, series 2 remained

outstanding.

The 1,720,615 Preference Shares, series 3 issued upon conversion of the Preference Shares, series 2 have an initial 5.04%

dividend rate, and, in accordance with their terms, are subject to a quarterly floating rate of interest based on the three-month

Government of Canada Treasury bill yield plus 4.10%.

Issued and Outstanding First Preference Shares, series 4

Number Par Issue Carrying

of Shares Value Costs Value

Balance as at September 30, 2013 and December 31, 2013 5,200,000 130,000$ (2,932)$ 127,068$


Conversion to Preference Shares, series 3 (1,720,615) (43,015) - (43,015)

Balance as at September 30, 2014 3,479,385 86,985$ (2,932)$ 84,053$

Number Par Carrying

of Shares Value Value

Balance as at December 31, 2013 - -$ -$


Conversion from Preference Shares, series 2 1,720,615 43,015 43,015

Balance as at September 30, 2014 1,720,615 43,015$ 43,015$

Number Par Issue Carrying

of Shares Value Costs Premium Value

Issued pursuant to Arrangement (note 4) 6,000,000 107,040$ (1,043)$ 272$ 106,269$

Amortization for the nine months

ended September 30, 2013 - - 113 (30) 83

Balance as at September 30, 2013 6,000,000 107,040 (930) 242 106,352

Amortization for the period from

October 1, 2013 to December 31, 2013 - - 84 (21) 63

Balance as at December 31, 2013 6,000,000 107,040 (846) 221 106,415

Amortization for the nine months

ended September 30, 2014 - - 254 (67) 187

Balance as at September 30, 2014 6,000,000 107,040$ (592)$ 154$ 106,602$


2 2 . S H A R E C A P I T A L

The terms of the Corporation’s Subordinate Shares and Class B Shares, and significant transactions in respect thereof during

the year ended December 31, 2013, are summarized in note 19 to the Corporation’s 2013 Audited Consolidated Financial

Statements.

Issued and Outstanding

Shares Issued in a Business Combination

In July 2014, the Corporation issued 2,779,983 Subordinate Shares in connection with a business combination pursuant to

which the Corporation acquired all of the outstanding shares of Dundee 360 that it did not already own (note 2). The

Subordinate Shares were issued with a fair value of $16.38 per share.

Normal Course Issuer Bid

On April 7, 2014, the Corporation announced that it had received regulatory approval for the renewal of its normal course

issuer bid from April 8, 2014 to April 7, 2015. Subject to certain conditions, the Corporation may purchase up to a

maximum of 2,550,098 Subordinate Shares pursuant to these arrangements, representing approximately 5% of its public

float at the time approval for the normal course issuer bid was granted.

During the nine months ended September 30, 2014, the Corporation purchased 615,000 Subordinate Shares, having an

aggregate stated capital value of $2,465,000, for cancellation pursuant to these arrangements. The Corporation paid

$10,000,000 to retire these shares. The excess of the purchase price over the value of stated capital, which totalled

$7,535,000, was recorded as a reduction in retained earnings.

Number Amount Number Amount Number Amount

Outstanding December 31, 2012 50,946,478 199,610$ 3,116,333 8,158$ 54,062,811 207,768$

Transactions during the nine months

ended September 30, 2013

Issuance of shares under the

share incentive plan 3,997 105 - - 3,997 105

Options exercised 37,842 527 - - 37,842 527

Shares cancelled pursuant to

dissenting rights (74) - - - (74) -

Conversion from Class B Shares

to Subordinate Shares 498 2 (498) (2) - -

Outstanding September 30, 2013 50,988,741 200,244 3,115,835 8,156 54,104,576 208,400

Transactions during the period from

October 1, 2013 to December 31, 2013



Outstanding December 31, 2013 50,990,566 200,279 3,115,835 8,156 54,106,401 208,435

Transactions during the nine months

ended September 30, 2014

Shares issued in a business combination

(note 2) 2,779,983 45,541 - - 2,779,983 45,541

Redeemed pursuant to

normal course issuer bid (615,000) (2,465) - - (615,000) (2,465)



Options exercised 22,714 342 - - 22,714 342

Conversion from Class B Shares

to Subordinate Shares 600 1 (600) (1) - -

Outstanding September 30, 2014 53,184,868 243,803$ 3,115,235 8,155$ 56,300,103 251,958$

SUBORDINATE SHARES CLASS B SHARES TOTAL


Share Purchase Plan

As part of its share incentive arrangements, the Corporation established a share purchase plan pursuant to which eligible

participants may contribute up to a specified maximum amount of their basic annual salary towards the purchase of

Subordinate Shares of the Corporation, either from treasury or in the open market, at the discretion of the Corporation.

Compensation expense associated with the share purchase plan during the three and nine months ended September 30, 2014,

was $215,000 and $616,000 respectively (three and nine months ended September 30, 2013 – $214,000 and $591,000

respectively).

During the nine months ended September 30, 2014, the Corporation issued 6,005 (nine months ended September 30, 2013 –

3,997) Subordinate Shares at a value of $105,000 (nine months ended September 30, 2013 – $105,000) from treasury

pursuant to the share purchase plan, with the balance of the amounts contributed to the share purchase plan being used to

purchase shares in the open market.

2 3 . N O N - C O N T R O L L I N G I N T E R E S T

2 4 . R E V E N U E S

2 5 . C O S T O F S A L E S


Non-controlling interest in:

Blue Goose Capital Corp. 9,782$ 14,753$

Dundee Energy Limited 26,065 24,883

Dundee Sustainable Technologies Inc. 7,535 1,701

United Hydrocarbon International Corp. 58,256 58,330

Other 4,680 7,086

106,318$ 106,753$



Management fees 5,161$ 3,408$ 14,056$ 10,627$

Financial services 17,875 5,154 76,444 30,026

Oil and gas, net of royalties 8,574 9,340 30,716 24,944

Agriculture 21,411 14,770 63,029 28,251

Real estate 26,764 - 26,764 -

Interest, dividends and other 6,112 8,545 29,533 37,225

85,897$ 41,217$ 240,542$ 131,073$



Variable compensation 12,246$ 9,005$ 46,361$ 24,003$

Oil and gas expenses 4,443 4,636 10,969 11,031

Agriculture expenses 25,529 15,212 81,208 34,091

Real estate expenses 19,228 - 19,228 -

61,446$ 28,853$ 157,766$ 69,125$


2 6 . S H A R E I N C E N T I V E P L A N A R R A N G E M E N T S

The terms of the Corporation’s share based compensation plans are summarized in note 24 to the Corporation’s 2013

Audited Consolidated Financial Statements.

Share Option Plan

There were no share option awards granted in the first nine months of 2014 and the year ended December 31, 2013. A

summary of the status of the Corporation’s share option plan as at September 30, 2014 and December 31, 2013, and the

changes during the periods then ended, are as follows:

Deferred Share Unit Plan

During the first nine months of 2014, the Corporation issued 29,864 deferred share units (“DSUs”). At September 30, 2014,

there were 1,252,452 (December 31, 2013 – 1,222,588) DSUs outstanding that track the value of the Corporation’s

Subordinate Shares and 1,332,430 (December 31, 2013 – 1,332,430) DSUs that track the value of a Class A subordinate

voting share of DREAM (note 5).

Stock Based Compensation

During the three and nine months ended September 30, 2014, the Corporation recognized a stock based compensation

recovery amount of $4,766,000 and $8,404,000 respectively (three and nine months ended September 30, 2013 – expense of

$5,311,000 and $2,758,000 respectively) related to share incentive arrangements, before similar arrangements of its

subsidiaries.

For the nine months ended September 30, 2014 For the year ended December 31, 2013

Weighted Weighted

Number of Average Number of Average

Options Exercise Price Options Exercise Price

Outstanding, beginning of period 1,250,000 $9.40 1,285,000 $9.40

Exercised (12,500) $9.40 (35,000) $9.48

Outstanding, end of period 1,237,500 $9.40 1,250,000 $9.40

Exercisable options 1,237,500 $9.40 987,000 $9.40

Weighted

Average

Remaining

Options Contractual Options

Exercise Price Outstanding Life (Years) Exercisable

Options issued with an exercise price of $9.40 1,227,500 0.37 1,227,500

Options issued with an exercise price of $9.67 10,000 0.37 10,000



Share option plan 108$ 252$ 602$ 794$

Deferred share unit plan 222 177 729 550

DREAM tracking share incentive arrangements:

Stock options (2,457) 2,330 (4,698) 673

Deferred share units (2,639) 2,552 (5,037) 741

(4,766)$ 5,311$ (8,404)$ 2,758$


Stock Based Compensation of Other Subsidiaries

From time to time, other subsidiaries of the Corporation may incur stock based compensation expense pursuant to their

respective share incentive plan arrangements. During the three and nine months ended September 30, 2014, these

subsidiaries incurred stock based compensation expense of $248,000 and $525,000 respectively (three and nine months

ended September 30, 2013 – $443,000 and $614,000 respectively) and a further $131,000 and $420,000 respectively (three

and nine months ended September 30, 2013 – $nil) was capitalized to the cost of resource properties.

2 7 . G E N E R A L A N D A D M I N I S T R A T I V E E X P E N S E S B Y N A T U R E

* Includes compensation expense of $8,980,000 associated with acceleration of vesting criteria on outstanding warrants of UHI (note 6).

2 8 . I N C O M E T A X E S

During the three and nine months ended September 30, 2014, the Corporation recognized an income tax recovery amount on

the pre-tax loss from continuing operations of $16,637,000 and $16,329,000 respectively (three and nine months ended

September 30, 2013 – $360,000 and $49,900,000 respectively), the major components of which include the following items:

The income tax recovery amount on the pre-tax loss from continuing operations differs from the income tax recovery

amount that would arise using the combined Canadian federal and provincial statutory tax rate of 26% (September 30, 2013

– 26%), as a result of the following items:



Salary and salary-related 10,194$ 20,907$ 25,492$ 44,758$

Corporate and professional fees 8,549 6,589 24,084 19,223

General office 13,615 9,366 34,537 27,646

Capitalized expenditures (882) (1,290) (1,996) (3,103)

Other 5,268 1,731 19,471 * 3,596

36,744$ 37,303$ 101,588$ 92,120$



Current income tax expense (10,609)$ (29,490)$ (8,385)$ (15,490)$

Deferred income tax recovery 27,246 29,850 24,714 65,390

Total income tax recovery 16,637$ 360$ 16,329$ 49,900$



Loss before tax at statutory rate of 26%

(2013 – 26%) 26,021$ 241$ 45,207$ 45,229$

Effect on taxes of:

Non-deductible expenses (7,505) (1,706) (14,474) (8,186)

Non-taxable revenue 1,504 3,377 3,774 8,882

Remeasurement of deferred income taxes - - - 92

Net income tax not previously recognized 233 - (1,578) (230)

Net Part IV tax (8) - (15) 8,841

Change in unrecognized temporary differences (2,543) (1,627) (14,582) (3,967)

Other differences (1,065) 75 (2,003) (761)

Income tax recovery 16,637$ 360$ 16,329$ 49,900$


Significant components of the Corporation’s deferred income tax assets and liabilities are as follows:

A deferred income tax asset is only recognized when management believes it is more likely than not that the benefit will be

recognized.

At September 30, 2014, the Corporation had operating loss carry forwards of $225,072,000 (December 31, 2013 –

$80,578,000). Operating loss carry forwards by year of expiry are summarized below:

2 9 . N E T ( L O S S ) E A R N I N G S P E R S H A R E


Deferred income tax assets

Loss carry forwards 16,075$ 8,859$

Capital and other assets 1,783 1,525

Non-deductible reserves 1,773 1,446

Accrued liabilities 4,247 2,848

Other 16,832 17,761

Total deferred income tax assets 40,710 32,439

Deferred income tax liabilities

Investments including equity accounted investments (76,315) (87,877)

Other (34,322) (19,761)

Total deferred income tax liabilities (110,637) (107,638)

Net deferred income tax liabilities (69,927)$ (75,199)$

Year of Expiry: Recognized Unrecognized Total

2014 -$ 287$ 287$

2015 - 357 357

Thereafter 60,667 152,224 212,891

Non-Canadian - 11,537 11,537

60,667$ 164,405$ 225,072$



Net (loss) earnings attributable to owners of the parent (78,655)$ 2,598$ (140,196)$ 513,417$

Less: dividends on Preference Shares, series 2 (2,193) (2,193) (6,581) (6,581)

(80,848)$ 405$ (146,777)$ 506,836$

Represented by:

Continuing operations (80,848)$ 405$ (146,777)$ (119,873)$

Discontinued operations - - - 626,709 -$ -$

Weighted average number of shares outstanding during the period 54,701,407 54,099,399 54,712,455 54,083,502

Basic (loss) earnings per share



(1.48)$ 0.01$ (2.68)$ 9.37$

Effect of dilutive securities on weighted average number of shares

outstanding during the period n/a 1,921,154 n/a n/a

Diluted (loss) earnings per share



(1.48)$ 0.01$ (2.68)$ 9.37$


3 0 . S U P P L E M E N T A L C A S H F L O W I N F O R M A T I O N

Items not affecting Cash and Other Adjustments

Changes in Non-Cash Working Capital Items

3 1 . F I N A N C I A L I N S T R U M E N T S

The following table summarizes those assets and liabilities that are included at their fair values in the Corporation’s

consolidated statements of financial position, or those assets and liabilities for which fair value is otherwise disclosed in the

accompanying notes to the consolidated financial statements. These assets and liabilities have been categorized into

hierarchal levels, according to the significance of the inputs used in determining fair value measurements.


Depreciation and depletion 22,262$ 15,864$

Net loss from investments 108,389 147,051

Share of loss (earnings) from equity accounted investments 27,101 (27,860)

(Gain) loss on sale of equity accounted investments (6,714) 35

Distributions from equity accounted investments - 14,171

Fair value changes in livestock (10,573) (6,807)

Deferred income taxes (24,714) (65,390)

Stock based compensation (7,879) 3,372

Accelerated vesting, warrants (note 6) 8,980 -

Other 8,176 (575)

125,028$ 79,861$


Accounts receivable 7,483$ 16,756$

Accounts payable and accrued liabilities (17,773) (24,472)

Current income tax amounts 30,500 (29,357)

Brokerage securities owned and sold short, net 7,125 14,931

Client accounts receivable, net of client deposits and related liabilities (12,235) 17,831

Agricultural inventory 14,247 2,901

29,347$ (1,410)$


A detailed description of the Corporation’s financial assets and financial liabilities and its associated risk management in

respect thereof are provided in note 29 to the 2013 Audited Consolidated Financial Statements. There have been no

significant changes in the business and economic circumstances and the related financial risks that affect the Corporation’s

financial assets and financial liabilities since December 31, 2013.

3 2 . C A P I T A L M A N A G E M E N T

The Corporation defines the capital that it manages as the aggregate of its shareholders’ equity and interest bearing debt,

including outstanding preference shares. The following table summarizes the carrying value of the Corporation’s capital as

at September 30, 2014 and December 31, 2013.

The Corporation’s objectives when managing capital include (i) ensuring that the Corporation and all of its regulated entities

meet relevant regulatory capital requirements; (ii) ensuring that the Corporation is able to meet its financial obligations as

they become due, whilst ensuring compliance with all applicable debt covenants; (iii) ensuring that the Corporation has

sufficient capital to manage business activities in each of its operating segments; (iv) ensuring that the Corporation has

sufficient capital available to benefit from acquisition opportunities, should they arise; and (v) ensuring adequate returns for

shareholders. The Corporation regularly assesses its capital management practices in response to changing economic

conditions.

Fair Value as at September 30, 2014

Quoted prices in Significant

active markets other Significant

Carrying Value for identical observable unobservable

as at assets inputs inputs

September 30, 2014 (Level 1) (Level 2) (Level 3)

Recurring Measurements

Financial Assets

Investments

Publicly traded securities 444,179$ 444,179$ -$ -$

Private investments 232,627 - 232,627 -

Mutual funds and other short-term investments 68 68 - -

Debt securities 121,945 12,012 109,933 -

Warrants and options 1,007 - 1,007 -

Brokerage securities owned -

Bonds 22,004 - 22,004 -

Equities 37,343 34,920 2,423 -

Other 2,368 - 2,368 -

Derivative financial assets

Risk management contracts 129 - 129 -

Preference Shares, series 4 redemption option 1,620 - 1,620 -

Financial Liabilities

Brokerage securities sold short (38,600) (19,270) (19,330) -

Livestock 32,488 - 32,488 -

Disclosure of Fair Value

Publicly traded equity accounted investments 195,036 166,606 - -

5.85% Exchangeable unsecured subordinated debentures 6,464 - 6,490 -

Preference Shares, series 4 106,602 106,440 - -


Shareholders' equity 1,644,989$ 1,721,072$

Corporate debt 160,248 122,142

Preference Shares, series 4 106,602 106,415

1,911,839$ 1,949,629$


Certain of the Corporation’s subsidiaries are subject to regulatory capital requirements. Compliance with these requirements

requires that the subsidiaries maintain sufficient cash and other liquid assets on hand to maintain regulatory capital

requirements, rather than using these liquid assets in connection with its business or otherwise. As at September 30, 2014

and December 31, 2013, the Corporation and its subsidiaries complied with all regulatory capital requirements.

3 3 . C O M M I T M E N T S , C O N T I N G E N C I E S A N D O F F - B A L A N C E S H E E T A R R A N G E M E N T S

A description of the Corporation’s commitments, contingencies and off-balance sheet arrangements is provided in note 31 to

the Corporation’s 2013 Audited Consolidated Financial Statements. The following provides a summary of material changes

to these items as at September 30, 2014.

Master Franchise Payments

Dundee 360, under its master franchise agreement relating to the use of the “Sotheby’s International Realty” name, pays the

franchisor a franchise fee of 6% of gross commission income earned by its agents, with a minimum annual requirement of

US$960,000. The franchise fee may be reduced by a luxury premium award based on a percentage of gross commission

revenue if certain targets are met. Payments under these arrangements are guaranteed by the Corporation.

Obligations for Tides Inn

As part of the acquisition of a license to use the trademarks “Enchantment” and “Mii Amo” and the related marks in

connection with the operation, marketing and promotion of certain destination spa resorts, Dundee 360 entered into a pre-

development agreement to prepare a plan to redevelop the Tides Inn located in the Chesapeake Bay, Virginia. The

agreement includes an option to acquire an interest in the Tides Resort and Tides Inn. The option carries a penalty of

$1,000,000 if such option is not exercised. Under the terms of these arrangements, Dundee 360 is also committed to assume

50% of any operating losses incurred by the Tides Inn for a period of up to three years commencing November 13, 2015.

Dundee 360 has not recorded a liability in respect of these amounts as such liability cannot reasonably be estimated.

Legal Contingencies

As part of a business reorganization completed in 2011, Dundee Capital Markets Inc., the parent company of Dundee

Securities, agreed to provide an indemnity with respect to certain claims. In 2011, Sino-Forest Corporation (“Sino-Forest”)

was delisted from the TSX, following allegations of securities violations. One of the parties indemnified by Dundee Capital

Markets Inc. participated in underwriting syndicates in respect of several public equity offerings by Sino-Forest. The

indemnified party is a defendant in at least one lawsuit brought by shareholders of Sino-Forest, alleging securities law and

other violations. Sino-Forest received an order for creditor protection in March 2012 and its Companies' Creditors

Arrangement Act (“CCAA”) plan was implemented in January 2013 and was recognized by the U.S. Bankruptcy Court

under Chapter 11 of the U.S. Bankruptcy Code in March 2013. In May 2012, the Ontario Securities Commission

commenced formal proceedings against Sino-Forest and certain of its current and former executives alleging fraud and

securities law violations; hearings started in September 2014 and are scheduled to continue through to June 2015. In

December 2012, the Ontario Securities Commission commenced formal proceedings against Ernst & Young, Sino-Forest’s

former auditor, alleging certain audit deficiencies that allegedly amount to breaches of the Securities Act (Ontario); those

proceedings were settled in September 2014, pursuant to which Ernst & Young paid a fine. The aforementioned shareholder

lawsuit is a proposed class proceeding, which has not been certified as such. The certification and other motions are

scheduled to be heard during the weeks of January 12 and 19, 2015. At this time Dundee Capital Markets Inc. cannot

reliably estimate the timing and quantification of any exposure it may have as a result of the Sino-Forest underwritings.

The Corporation is also a defendant in various other legal actions. The defenses to these claims and the quantification of

damages are yet to be determined and the amount of the loss, if any, cannot be determined at this time. The Corporation

intends to vigorously defend itself against all legal claims. Although the ultimate outcome of these matters cannot be

ascertained at this time and the results of legal proceedings cannot be predicted with certainty, it is the opinion of

management, based on information currently available, that these are not material liabilities, adequate provisions have been


made for any liabilities and the resolution of these matters will not have a material adverse effect on the consolidated

financial position of the Corporation.

3 4 . R E L A T E D P A R T Y T R A N S A C T I O N S

There have been no significant changes in the nature and scope of related party transactions to those described in note 32 to

the Corporation’s 2013 Audited Consolidated Financial Statements.

3 5 . S E G M E N T E D I N F O R M A T I O N

The Corporation’s reportable business segments are organized in a manner that reflects how management views those

business activities. The tabular information that follows shows data of reportable segments reconciled to amounts reflected

in these consolidated financial statements.

Business Entity Business Activity

Corporate and Other Portfolio Holdings Investments in public and private equity and debt securities

in diversified industry segments

Goodman & Company, Investment Counsel Inc. 100%-owned private subsidiary registered as a portfolio

manager and exempt market dealer across Canada and an

investment fund manager in Ontario, Quebec and

Newfoundland

Dundee Securities Ltd. 100%-owned private subsidiary and a full-service Canadian

investment dealer registered with the Investment Industry

Regulatory Organization of Canada

Dundee Energy Limited 58%-owned publicly listed subsidiary in the oil and gas

industry with operations in southern Ontario and Spain

United Hydrocarbon International Corp. 35%-owned private subsidiary engaged in oil and gas

exploration, development and production activities in the

Republic of Chad

Dundee Sustainable Technologies Inc. 64%-owned publicly listed subsidiary developing patented

sustainable precious and base metals extraction processes

Eurogas International Inc. 53%-owned publicly listed subsidiary engaged in oil and gas

exploration in Tunisia

Blue Goose Capital Corp. 86%-owned private subsidiary operating in organic and

natural protein production markets for beef, chicken and fish

AgriMarine Holdings Inc. 95%-owned publicly listed subsidiary operating in fishing

business

Dundee 360 Real Estate Corporation 100%-owned private subsidiary engaged in development

and management of international hotel, resort, residential

and commercial real estate projects


Segmented Operations for the Nine Months Ended September 30, 2014

Segmented Operations for the Nine Months Ended September 30, 2013

Other Amounts Loss from Earnings from

Revenue Cost of Sales in Loss Continuing Discontinued Net Loss

Corporate and other portfolio holdings 33,619$ -$ (141,745)$ (108,126)$ -$ (108,126)$

Asset management and capital markets

Goodman & Company, Investment Counsel Inc. 2,441 - (3,542) (1,101) - (1,101)

Dundee Securities Ltd. 93,364 (46,361) (52,828) (5,825) - (5,825)

Resource industry

Dundee Energy Limited 30,983 (10,969) (16,250) 3,764 - 3,764

United Hydrocarbon International Corp. - - (24,486) (24,486) - (24,486)

Dundee Sustainable Technologies Inc. 167 - (7,231) (7,064) - (7,064)

Eurogas International Inc. - - (800) (800) - (800)

Agriculture industry

Blue Goose Capital Corp. 62,068 (78,460) (4,871) (21,263) - (21,263)

AgriMarine Holdings Inc. 1,626 (2,748) (1,549) (2,671) - (2,671)

Real Estate industry

Dundee 360 Real Estate Corporation 26,685 (19,228) (10,480) (3,023) - (3,023)

Intersegment (10,411) - 10,411 - - -

240,542$ (157,766)$ (253,371)$ (170,595) - (170,595)

Income taxes 16,329 - 16,329

Non-controlling interest 14,070 - 14,070

NET LOSS ATTRIBUTABLE TO OWNERS OF DUNDEE CORPORATION (140,196)$ -$ (140,196)$


Revenue Cost of Sales in Loss Continuing Discontinued Net Earnings





Resource industry

Dundee Energy Limited 25,794 (11,031) (17,791) (3,028) - (3,028)

United Hydrocarbon International Corp. (620) - (1,850) (2,470) - (2,470)

Dundee Sustainable Technologies Inc. 372 - (3,101) (2,729) - (2,729)




Intersegment (4,465) - 4,465 - - -

131,073$ (69,125)$ (232,624)$ (170,676) - (170,676)

Income taxes 49,900 - 49,900

Earnings from discontinued operations, net of taxes - 37,323 37,323

Gain on distribution of assets, net of taxes - 599,446 599,446

Non-controlling interest 7,484 (10,060) (2,576)

NET EARNINGS (LOSS) ATTRIBUTABLE TO OWNERS OF DUNDEE CORPORATION (113,292)$ 626,709$ 513,417$


Segmented Operations for the Three Months Ended September 30, 2014

Segmented Operations for the Three Months Ended September 30, 2013


Revenue Cost of Sales in Loss Continuing Discontinued Net Loss



Goodman & Company, Investment Counsel Inc. 785 - (951) (166) - (166)


Resource industry

Dundee Energy Limited 8,722 (4,443) (4,638) (359) - (359)

United Hydrocarbon International Corp. - - (2,024) (2,024) - (2,024)

Dundee Sustainable Technologies Inc. - - (2,498) (2,498) - (2,498)



Blue Goose Capital Corp. 20,434 (22,781) 639 (1,708) - (1,708)

AgriMarine Holdings Inc. 1,626 (2,748) (1,549) (2,671) - (2,671)


Dundee 360 Real Estate Corporation 26,685 (19,228) (10,480) (3,023) - (3,023) - - - - -

Intersegment (237) - 237 - - -

85,897$ (61,446)$ (122,650)$ (98,199) - (98,199)

Income taxes 16,637 - 16,637


NET LOSS ATTRIBUTABLE TO OWNERS OF DUNDEE CORPORATION (78,655)$ -$ (78,655)$

Other Amounts Earnings from Earnings from

Revenue Cost of Sales in Earnings Continuing Discontinued Net Earnings

Corporate and other portfolio holdings 7,101$ -$ 16,434$ 23,535$ -$ 23,535$




Resource industry

Dundee Energy Limited 10,079 (4,636) (6,817) (1,374) - (1,374)

United Hydrocarbon International Corp. (620) - (1,850) (2,470) - (2,470)

Dundee Sustainable Technologies Inc. 370 - (1,319) (949) - (949)




Intersegment (532) - 532 - - -

41,217$ (28,853)$ (13,277)$ (913) - (913)

Income taxes 360 - 360


NET EARNINGS ATTRIBUTABLE TO OWNERS OF DUNDEE CORPORATION 2,598$ -$ 2,598$


Segmented Net Assets as at September 30, 2014

Segmented Net Assets as at December 31, 2013

ASSETS LIABILITIES

Other Corporate Deferred Other

Cash Investments Assets TOTAL Debt Income Taxes Liabilities TOTAL

Corporate and other portfolio holdings 22,905$ 1,112,570$ 111,540$ 1,247,015$ (39,030)$ (71,741)$ (174,154)$ (284,925)$


Goodman & Company, Investment Counsel Inc. 148 - 811 959 - 3,613 (2,558) 1,055

Dundee Securities Ltd. 103,759 - 747,278 851,037 - 9,117 (696,934) (687,817)

Resource industry

Dundee Energy Limited 676 - 174,000 174,676 (63,684) 8,200 (54,952) (110,436)

United Hydrocarbon International Corp. 20,379 - 335,456 355,835 - - (21,761) (21,761)

Dundee Sustainable Technologies Inc. 339 - 29,992 30,331 - - (1,910) (1,910)

Eurogas International Inc. 535 - 9,078 9,613 - - (187) (187)


Blue Goose Capital Corp. 3,454 - 156,244 159,698 (52,352) (4,557) (15,887) (72,796)

AgriMarine Holdings Inc. 991 - 37,160 38,151 - (4,265) (3,184) (7,449)


Dundee 360 Real Estate Corporation 2,812 - 110,866 113,678 (5,182) (10,294) (27,984) (43,460)

TOTAL 155,998$ 1,112,570$ 1,712,425$ 2,980,993$ (160,248)$ (69,927)$ (999,511)$ (1,229,686)$

ASSETS LIABILITIES

Other Corporate Deferred Other

Cash Investments Assets TOTAL Debt Income Taxes Liabilities TOTAL

Corporate and other portfolio holdings 10,477$ 1,414,977$ 122,651$ 1,548,105$ (6,438)$ (89,863)$ (154,816)$ (251,117)$


Goodman & Company, Investment Counsel Inc. 1,062 - 644 1,706 - 2,238 (2,607) (369)

Dundee Securities Ltd. 151,643 - 735,152 886,795 - 7,639 (723,933) (716,294)

Resource industry

Dundee Energy Limited 111 - 163,065 163,176 (65,709) 9,255 (46,885) (103,339)

United Hydrocarbon International Corp. 19,167 - 173,085 192,252 - - (10,759) (10,759)

Dundee Sustainable Technologies Inc. 1,275 - 11,507 12,782 - - (535) (535)

Eurogas International Inc. 5 - 11,900 11,905 - - (320) (320)


Blue Goose Capital Corp. 85 - 165,553 165,638 (49,995) (4,468) (17,338) (71,801)

TOTAL 183,825$ 1,414,977$ 1,383,557$ 2,982,359$ (122,142)$ (75,199)$ (957,193)$ (1,154,534)$

Head Office Registrar and Transfer Agent Stock Exchange

Dundee Corporation Computershare Investor Services Inc. Toronto Stock Exchange

1 Adelaide Street East 100 University Avenue, 8th Floor

Toronto, Ontario Toronto, Ontario M5J 2Y1 Stock Symbol

M5C 2V9 Toll Free: 1.800.564.6253 DC.A

Canada Email: [email protected] www.dundeecorporation.com

mailto:[email protected]

http://www.dundeecorporation.com/

Documents

DUNDEE CORPORATION 2014 THIRD QUARTER REPORT › dc › - › media › DGC › DC › 2014Q3D... · SEPTEMBER 2014 – DUNDEE CORPORATION 1 DUNDEE CORPORATION Management’s Discussion