DUNDEE PRECIOUS METALS ANNOUNCES 2021 FIRST QUARTER RESULTS (All monetary figures are expressed in U.S. dollars
DUNDEE PRECIOUS METALS ANNOUNCES 2021 FIRST QUARTER RESULTS
(All monetary figures are expressed in U.S. dollars unless otherwise stated)
Toronto, Ontario, May 5, 2021 – Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or the “Company”)
today announced its operating and financial results for the first quarter of 2021.
FIRST QUARTER FINANCIAL AND OPERATING HIGHLIGHTS:
• Solid metals production – Strong operating performance, including record quarterly production at Ada
Tepe, contributed to gold production of 70,258 ounces. Copper production was 7.2 million pounds;
• Smelter maintenance completed during the quarter – Throughput of 23,009 tonnes of complex
concentrate reflects 45-day maintenance shutdown at Tsumeb completed at the end of March;
• Chelopech and Ada Tepe deliver strong cost performance – Reported an all-in sustaining cost per
ounce of gold(1) of $522. Cash cost per tonne of complex concentrate smelted(1) of $967 reflects the impact
of the maintenance shutdown;
• Chelopech Mineral Reserve Update – As previously announced, mine life at Chelopech was extended
to 2029 with the successful addition of 3.9 million tonnes (“Mt”) to Mineral Reserves, which more than
offset 2020 production depletion of 2.2 Mt for a net addition of 1.7 Mt;
• Strong free cash flow generation – Generated $47.6 million in cash flow from operating activities and
$51.0 million of free cash flow(1);
• Earnings – Reported net earnings attributable to common shareholders from continuing operations of
$20.7 million, reflecting the impact of the maintenance shutdown at T sumeb. Reported adjusted net
earnings(1) of $31.0 million or $0.17 per share;
• Dividends – Declared a second quarter dividend of $0.03 per common share payable on July 15, 2021
to shareholders of record on June 30, 2021;
• Growing financial strength – Ended the quarter with $175.7 million in cash, an investment portfolio of
$68.1 million and no debt; and
• 2021 guidance – Ada Tepe and Chelopech on track to meet previously issued 2021 guidance with
complex concentrate smelted updated to reflect the extended shutdown, as previously announced.
“The first quarter was a solid start to the year as we continued to generate significant free cash flow, driven by
record quarterly gold production at Ada Tepe and excellent all-in sustaining cost performance,” said David
Rae, President and Chief Executive Officer. “Based on this performance and our outlook for the balance of
the year, our mining operations are on track to achieve their 2021 guidance . With the completion of the
planned maintenance at Tsumeb during the quarter, we are also expecting stronger smelter performance.”
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KEY FINANCIAL AND OPERATIONAL HIGHLIGHTS
$ millions, except where noted
Ended March 31,
Three Months
2021 2020
Revenue(1) 138.0 147.8
Cost of sales(1) 85.6 86.9
Earnings before income taxes(1) 35.3 51.4
Net earnings attributable to common shareholders from continuing operations 20.7 45.7
Net earnings attributable to common shareholders 20.1 43.2
Basic earnings per share from continuing operations 0.11 0.25
Basic earnings per share 0.11 0.24
Adjusted EBITDA(1),(2) 66.2 80.6
Adjusted net earnings(1),(2) 31.0 48.6
Adjusted basic earnings per share(1),(2) 0.17 0.27
Cash provided from operating activities(1) 47.6 11.0
Free cash flow(1),(2) 51.0 50.4
Metals contained in concentrate produced:
Gold (ounces)
Chelopech 36,879 42,631
Ada Tepe 33,379 30,332
Total gold in concentrate produced 70,258 72,963
Copper (‘000s pounds) 7,174 9,381
Silver (ounces) 46,919 56,459
Payable metals in concentrate sold:
Gold (ounces)
Chelopech 35,534 38,765
Ada Tepe 33,033 29,489
Total payable gold in concentrate sold 68,567 68,254
Copper (‘000s pounds) 7,279 9,520
Silver (ounces) 44,159 54,848
Cash cost per tonne of ore processed(2):
Chelopech 41.64 36.28
Ada Tepe 43.28 40.06
All-in sustaining cost per ounce of gold(2) 522 593
Complex concentrate smelted at Tsumeb (tonnes) 23,009 65,010
Cash cost per tonne of complex concentrate smelted at Tsumeb (2) 967 357
1) Information relates to continuing operations.
2) Adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA’); adjusted net earnings; adjusted basic earnings per share; free cash
flow; cash cost per tonne of ore processed; all-in sustaining cost per ounce of gold; and cash cost per tonne of complex concentrate smelted at Tsumeb
are not defined measures under International Financial Reporting Standards (“IFRS”). Refer to the “Non -GAAP Financial Measures” section of the
Management’s Discussion and Analysis for the three months ended March 31, 2021 (the “MD&A”) for more details, including reconciliations to IFRS
measures.
First Quarter Operating Highlights
In the first quarter of 2021, the Company achieved a new record for quarterly gold production at Ada Tepe,
while production from Chelopech was slightly lower than forecast due to lower copper grades as well as
lower copper and gold recovery performance with certain ore blends . Chelopech and Ada Tepe remain on
track to achieve their 2021 production guidance. The Company completed the planned Ausm elt furnace
maintenance shutdown at Tsumeb and resumed full operations at the end of March. As previously
announced, due to the 15-day extension of the Ausmelt maintenance , which also included additional
furnace and converter maintenance activities, the Co mpany has revised its 2021 production guidance for
Tsumeb to a range of 200,000 tonnes to 220,000 tonnes from the previous range of 220,000 tonnes to
250,000 tonnes.
Net Earnings and Adjusted Net Earnings
Net earnings attributable to common shareholders were $20.1 million ($0.11 per share) in the first quarter of
2021 compared to $43.2 million ($0.24 per share) in the corresponding period in 2020.
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Net earnings attributable to common shareholders from continuing operations in the first quarter of 2021 were
$20.7 million ($0.11 per share) compared to $45.7 million ($0.25 per share) in the corresponding period in
2020.
Net earnings attributable to common shareholders in the first quarter of 2021 and 2020 were impacted by
unrealized losses on Sabina Gold and Silver Corp. (“Sabina”) special warrants and a deferred income tax
adjustment not related to current period earnings, both of which are not reflective of the Company’s underlying
operating performance and are excluded from adjusted net earnings from continuing operations.
Adjusted net earnings from continuing operations in the first quarter of 2021 were $31.0 million ($0.17 per
share) compared to $48.6 million ($0.27 per share) in the corresponding period in 2020. This decrease was
due primarily to the planned Ausmelt furnace maintenance shutdown at Tsumeb, partially offset by higher
realized gold and copper prices.
Adjusted EBITDA from Continuing Operations
Adjusted EBITDA (1) in the first quarter of 202 1 was $ 66.2 million compared to $ 80.6 million in the
corresponding period in 20 20 due primarily to the planned Ausmelt furnace maintenance shutdown at
Tsumeb, partially offset by higher realized gold and copper prices.
Production, Delivery and Cost Measures
In the first quarter of 2021, gold contained in concentrate produced decreased by 4% to 70,258 ounces due
primarily to lower gold grades and recoveries at Chelopech, partially offset by higher gold grades at Ada
Tepe, and copper production decreased by 24% to 7.2 million pounds due primarily to lower copper grades,
in each case, relative to the corresponding period in 2020.
Payable gold in concentrate sold in the first quarter of 2021 of 68,567 ounces was comparable to the
corresponding period in 2020. Payable copper in concentrate sold in the first quarter of 2021 of 7.3 million
pounds was 24% lower than th e corresponding period in 2020 consistent with the decrease in copper
production as a result of lower copper grades.
Complex concentrate smelted at Tsumeb during the first quarter of 2021 of 23,009 tonnes was 65% lower
than the corresponding period in 2020 due primarily to the planned Ausmelt furnace maintenance
shutdown, which was completed during the first quarter of 2021. Originally planned for 30 days, the
maintenance shutdown was extended to 45 days. This was primarily a result of COVID -19 related safety
protocols, travel restrictions and the use of remote commissioning support, as well as an increase in the
scope of the maintenance work around the Ausme lt lining replacement and additional converter
maintenance.
Cost of sales in the first quarter of 2021 of $85.6 million was comparable to the corresponding period in
2020 due primarily to lower volumes of complex concentrate smelted at Tsumeb , which was offset by the
impact of a stronger Euro relative to the U.S. dollar and higher cost per tonne gold-copper concentrate sold.
All-in sustaining cost per ounce of gold in the first quarter of 2021 of $ 522 was 12% lower than the
corresponding period in 2020 due primarily to lower treatment charges for Chelopech as a result of
increased deliveries to third party smelters and higher by-product credits, partially offset by the impact of a
stronger Euro relative to th e U.S. dollar, higher allocated general and administrative expenses and higher
cash outlays for sustaining capital expenditures.
Cash cost per tonne of complex concentrate smelted at Tsumeb in the first quarter of 2021 of $967 was
$610 higher than the cor responding period in 2020 reflecting the fixed cost nature of the facility and the
impact of lower volumes of complex concentrate smelted resulting from the maintenance shutdown, which
was completed during the first quarter of 2021.
A table comparing production, delivery and cash cost measures for the first quarter of 2021 against 2021
guidance can be found on page 7 of this news release.
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Cash Provided from Operating Activities of Continuing Operations
Cash provided from operating activities in the first quarter of 2021 of $47.6 million was $36.6 million higher
than the corresponding period in 2020 due primarily to a favourable period over period change related to
working capital, the fulfillment of the prepaid forward gold sales agreement at Ada Tepe in December 2020
and higher realized gold and copper prices, partially offset by lower volumes of complex concentrate
smelted as a result of the maintenance shutdown at Tsumeb.
During the first quarter of 2020, Ada Tepe delivered 13,110 ounces of gold pursuant to the prepaid forward
gold sales arrangement which resulted in $17.9 million of deferred revenue recognized in revenue, with no
corresponding impact on cash as these deliveries were in partial satisfaction of the $50.0 million of upfront
proceeds received in 2016. In December 2020, the Company completed its final delivery of gold under this
arrangement.
For a detailed discussion on the factors affecting cash provided from operating activities, refer to the
“Liquidity and Capital Resources” section contained in the MD&A.
Free Cash Flow from Continuing Operations
In the first quarter of 2021, f ree cash flow of $51.0 million was comparable to the corresponding period in
2020 due primarily to the fulfillment of the prepaid forward gold sales agreement at Ada Tepe in December
2020 and higher realized gold and copper prices, which were offset by lower volumes of complex
concentrate smelted as a result of the maintenance shutdown at Tsumeb and higher cash outlays for
sustaining capital expenditures.
Capital expenditures from Continuing Operations
Capital expenditures incurred during the first quarter of 2021 were $19.0 million compared to $9.6 million in
the corresponding period in 2020.
Sustaining capital expenditures (1) incurred during the first quarter of 2021 were $17.4 million compared to
$6.8 million in the corresponding period in 2020. This increase was due primarily to the planned
maintenance shutdown at Tsumeb and accelerat ed grade contr ol drilling at Ada Tepe . Growth capital
expenditures(1) incurred during the first quarter of 2021 were $1.6 million compared to $2.8 million in the
corresponding period in 2020.
Chelopech Mineral Reserve and Mineral Resource Update
As previously announced on March 30, 2021 , 3.9 Mt were successfully added to Chelopech’s Mineral
Reserves, which more than offset 2020 production depletion of 2.2 Mt for a net addition of 1.7 Mt. Relative
to the previous Mineral Reserve estimate, this represents an increase of 10% in tonnage and an increase
in metal content of 5% for gold, 13% for silver and 3% for copper, extending the life of mine to 2029.
Measured and Indicated Mineral Resources, exclusive of Mineral Reserves, increased 22%, representing
a 3.2 Mt net increase in tonnage and an increase in metal content of 12% for g old and 6% for copper,
further adding to the potential to extend the mine life, if such Mineral Resources are converted to Mineral
Reserves.
Timok gold project, Serbia
On February 23, 2021, DPM released the positive results of a pre -feasibility study (“P FS”) on the Timok
gold project and announced that it was proceeding with a feasibility study (“FS”). Based on the results of
the PFS, the project is expected to produce approximately 547,000 gold ounces over an eight-year mine
life, with an average annual gold production of 80,000 ounces for the first six years, at an all-in sustaining
cost of $693 per ounce of gold (life of mine average). Initial capital is expected to be $211 million, with
several initiatives to reduce the initial capital estimate and optimize overall economics to be evaluated as
part of the FS. The PFS focused on the oxide and transitional portion of the project’s Mineral Resource,
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with additional upside potential from the sulphides to be considered in parallel with the FS following further
metallurgical test work. The FS is expected to be completed in the first quarter of 2022.
For additional details, including key assumptions, risks and parameters relating to the FS refer to the news
release entitled “Dundee Precious Metals Announces Positive Pre-Feasibility Study and Encouraging New
Exploration Results for the Timok Gold Project in Serbia” dated February 23, 2021 and the Technical Report
entitled “NI 43 -101 Technical Report, Timok Project, Pre -Feasibility Study, Zagubica, Serbi a” effective
March 30, 2021, which have been posted on the Company’s website at www.dundeeprecious.com and
have been filed on SEDAR at www.sedar.com.
Exploration
At Chelopech, target delineation drilling at the Wedge and West Shaft prospects was completed in the first
quarter of 2021. In January 2021, a Geologic Discovery Certificate was issued by the Bulgarian Ministry of
Energy. This certificate allows for one additional year of exploration for the assessment of, and application
for, a Commercial Discovery. Plans for the second quarter of 2021 include a shift of drilling activities towards
testing more conceptual targets within the surrounding Brevene exploration license (e.g. Kazana and
Bridge) as well the start of significant drilling campaigns at Vozdol and Sharlo Dere.
Drilling activities continued at the Surnak, Synap and Kuklitsa prospects, in the Khan Krum mining
concession around Ada Tepe, as part of sustained efforts to support an extension of the Ada Tepe mine
life. At Surnak, drilling has been completed and re-modeling, followed by internal scoping, is planned in the
second quarter of 2021 . A dditional drilling is also planned at Synap and Kuklitsa, as well as target
generation and scout drilling commencing on other licenses.
At Timok, drilling continued at the Chocolate, Chocolate South, Frasen and Čoka Rakita targets located
south-east of the Bigar Hill deposit and has generated encouraging results both extending shallow oxide
resources and identifying high grade sulphide mineralization. During the second quarte r of 2021, drilling
will continue more aggressively to support the completion of critical target delineation , infill drilling and the
application for the mining concession.
Financial Position and Liquidity
As at March 31, 2021, the Company had no debt and a cash position of $175.7 million, investments valued
at $68.1 million primarily related to its 8.9% interest in Sabina, 23.5% interest in INV Metals Inc. and 8.5%
interest in Velocity Minerals Ltd., a s well as $150.0 million of available capital under its revolving credit
facility.
Capital Allocation and Declaration of Dividend
As part of its strategy, the Company adheres to a disciplined capital allocation framework that is based on
three fundamental considerations – balance sheet strength, reinvestment in the business, and the return of
capital to shareholders.
On February 11, 2021, the Company declared a quarterly dividend of $0.03 (2020 – $0.02) per common
share payable on April 15, 2021 to shareholders of record on March 31, 2021 resulti ng in dividend
distributions of $5.5 million (2020 – $3.6 million) recognized against its retained earnings in the condensed
interim consolidated statements of changes in shareholders’ equity for the three months ended March 31,
2021. As at March 31, 2021, the Company recognized a dividend payable of $5.5 million (December 31,
2020 – $5.4 million) in accounts payable and accrued liabilities in the condensed interim consolidated
statements of financial position. For the three months ended March 31, 2021, the Company also paid $5.4
million (2020 – $nil) of dividends which was included in cash used in financing activities in the condensed
interim consolidated statements of cash flows.
On May 5, 2021, the Company declared a dividend of $0.03 per common share p ayable on July 15, 2021
to shareholders of record on June 30, 2021.
The Company’s dividend has been set at a level that is considered to be sustainable based on the
Company’s free cash flow outlook and is expected to allow the Company to build additional balance sheet
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strength to support further growth, a key element of DPM’s strategy. The declaration, amount and timing of
any future dividend are at the sole discretion of the Board of Directors and will be assessed based on the
Company’s capital allocation framework, having regard for the Company’s financial position, overall market
conditions, and its outlook for sustainable free cash flow, capital requirements, and other factors considered
relevant by the Board of Directors.
2021 Guidance
With higher quarterly production expected over the balance of the year, DPM is on track to meet its
previously issued guidance for 2021 for Ada Tepe and Chelopech , including expected gold production of
271,000 ounces to 317,000 ounces and 34 million pounds to 39 million pounds of copper. DPM’s 2021 all-
in sustaining cost per ounce of gold is expected to be at the lower end of its $625 to $695 guidance.
As previously announced on April 9, 2021, the Company revised its 2021 production guidance for Tsumeb
to a range of 200,000 tonnes to 220,000 tonnes from the previous range of 220,000 tonnes to 250,000
tonnes, as a result of a 15 -day extension of the Ausmelt furnace maintenance shutdown , which included
additional furnace and converter maintenance activities. In 2021, cash cost per tonne of complex
concentrate smelted is expected to range between $450 and $520 per tonne , unchanged from the
previously issued guidance for 2021.
For additional information regarding the Company’s detailed guidance for 2021, please refer to the “Three-
Year Outlook” section of the MD&A.
COVID-19
To date, with the proactive measures taken by each of the Company’s operations, the COVID-19 pandemic
has had minimal impact on DPM’s production. DPM is closely monitoring the COVID -19 situation and has
put measures in place to safeguard the health of its workforce and support the continuity of its operations.
Given the highly uncertain and evolving nature of this situation, the Company is not able to reliably estimate
the likelihood, timing, duration, severity and scope of this pandemic and the potential i mpact it could have
on the Company’s future operating and financial results. As a result, the 2021 guidance is predicated on
the COVID-19 pandemic continuing to be effectively managed with minimal impact on DPM’s operations.
For additional details on COVID-19, including the related risks faced by the Company, refer to the “Overview
– Operational and Financial Highlights” and “Risk and Uncertainties” sections contained in th e MD&A.
(1) Adjusted net earnings, adjusted basic earnings per share, adjusted EBITDA, all-in sustaining cost per ounce of gold, cash cost per
tonne of complex concentrate smelted at Tsumeb, free cash flow, and growth and sustaining capital expenditures are Non-GAAP
measures and have no standardized meaning under IFRS. Presenting these measures from period to period helps management and
investors evaluate earnings and cash flow trends more readily in comparison with results from prior periods. Refer to the “Non-GAAP
Financial Measures” section of the MD&A for further discussion of these items, including reconciliations to IFRS measures.
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Selected Production, Delivery and Cost Performance Versus Guidance
Q1 2021 2021
Consolidated
Guidance Chelopech Ada Tepe Tsumeb Consolidated
Ore processed (‘000s tonnes) 543.6 218.7 - 762.3 2,925 – 3,125
Metals contained in concentrate
produced
Gold (‘000s ounces) 36.9 33.4 - 70.3 271 – 317
Copper (million pounds) 7.2 - - 7.2 34 – 39
Payable metals in concentrate
sold
Gold (‘000s ounces) 35.5 33.0 - 68.5 243 – 285
Copper (million pounds) 7.3 - - 7.3 31 – 36
All-in sustaining cost per ounce
of gold(1),(3) 589 450 - 522 625 – 695
Complex concentrate smelted
(‘000s tonnes)(2) - - 23.0 23.0 200 – 220
Cash cost per tonne of complex
concentrate smelted(1) - - 967 967 450 – 520
1) All-in sustaining cost per ounce of gold and cash cost per tonne of complex concentrate smelted are Non -GAAP measures and have no standardized meaning
under IFRS. Refer to the “Non-GAAP Financial Measures” section of the MD&A for reconciliations to IFRS measures.
2) Previous guidance in respect of complex concentrate smelted was a range of 220,000 tonnes to 250,000 tonnes.
3) Chelopech’s all-in sustaining cost per ounce of gold is expected to range between $685 and $755. Ada Tepe’s all-in sustaining cost per ounce of gold is expected
to range between $560 and $630.
This news release and DPM’s unaudited condensed interim consolidated financial statements and MD&A
for the three months ended March 31, 202 1 are posted on the Company’s website at
www.dundeeprecious.com and have been filed on SEDAR at www.sedar.com.
Qualified Person
The technical and scientific information in this news release, with respect to the Company’s material mineral
projects, has been prepared in accordance with Canadian regulatory requirements set out in National
Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) of the Canadian Securities
Administrators and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for
Mineral Resources and Mineral Reserves, and has been reviewed and approved by Ross Overall, B.Sc.
(Applied Geology), Corporate Mineral Resource Manager of DPM , who is a Qualified Person as defined
under NI 43-101, and who is not independent of the Company.
First Quarter 2021 Results
On Thursday, May 6, 2021 at 9:00 AM EDT, DPM will host a conference call and audio webcast to discuss
the results, followed by a question-and-answer session. Participants are encouraged to dial into the call 15
minutes before its scheduled start time or to join via the audio webc ast to reduce hold time in advance of
the call.
The call-in numbers and webcast details are as follows:
Date: Thursday, May 6, 2021
Time: 9:00 AM EDT
Webcast: https://produceredition.webcasts.com/starthere.jsp?ei=1461227&tp_key=94bb2f728d
North America Toll Free: 1-888-390-0605
International: 1-416-764-8609
Toll Free Replay: 1-888-390-0541
International Replay: 1-416-764-8677
Passcode: 711635#
Replay Available Until: May 20, 2021 (14 days following the call)
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Virtual Annual Meeting of Shareholders
DPM’s Annual Meeting of Shareholders will be held on Thursday, May 6, 2021 at 4 :00 PM EDT. DPM has
once again elected to hold the meeting via live audio webcast, in light of the ongoing COVID-19 pandemic.
Materials for the meeting, including a user guide for accessing the virtual meeting, are available on our
website at:
https://www.dundeeprecious.com/English/Investors/Disclosure-and-Reporting/default.aspx#quarterly-
section
The details for the meeting, including the link to the audio webcast, are as follows:
Date: Thursday, May 6, 2021
Time: 4:00 PM EDT
Webcast: https://web.lumiagm.com/?fromUrl=230058628
For further information, please contact:
DUNDEE PRECIOUS METALS INC.
David Rae
President and Chief Executive Officer
Tel: (416) 365-5092
Hume Kyle
Executive Vice President and Chief Financial Officer
Tel: (416) 365-5091
Jennifer Cameron
Director, Investor Relations
Tel: (416) 219-6177
About Dundee Precious Metals
Dundee Precious Metals Inc. is a Canadian -based international gold mining company with operation s and
projects located in Bulgaria, Namibia and Serbia. The Company’s purpose is to unlock resources and
generate value to thrive and growth together. This overall purpose is supported by a foundation of core
values, which guides how the Company conducts its business and informs a set of complementary strategic
pillars and objectives related to ESG, innovation, optimizing our existing portfolio, and growth. The
Company’s resources are allocated in -line with its strategy to ensure that DPM delivers value for all of its
stakeholders. DPM’s shares are traded on the Toronto Stock Exchange (symbol: DPM).
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This news release contains “forward looking statements” or “forward looking information” (collectively,
“Forward Looking Statements”) that involve a number of risks and uncertainties. Forward Looking
Statements are statements that are not historical facts and are g enerally, but not always, identified by the
use of forward looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”,
“estimates”, “forecasts”, “outlook”, “intends”, “anticipates”, “believes”, or variations of such words and
phrases or that state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken,
occur or be achieved, or the negative of any of these terms or similar expressions. The Forward Looking
Statements in this news release relate to , among other things: measures the Company is undertaking in
response to the COVID-19 outbreak, including its impacts on the Company’s global supply chains, the level
of and duration of reductions or curtailments in operating levels at any of the Company’s operations and
exploration and development activities; 2021 financial and operating performance at each of the Company’s
operations, including production, o perating costs, capital costs and other financial metrics set out in the
2021 updated guidance and three year outlook; expected cash flow; the realization of Mineral Reserve and