Dundee Precious Metals Announces 2023 Third Quarter Results; Strong Operating Performance Drives Robust Free Cash Flow Generation
Dundee Precious Metals Announces 2023 Third Quarter Results;
Strong Operating Performance Drives Robust Free Cash Flow Generation
Toronto, Ontario, November 7, 2023 – Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or the
“Company”) announced its operating and financial results for the third quarter and first nine months ended
September 30, 2023.
Highlights
(Unless otherwise stated, all monetary figures in this news release are expressed in U.S. dollars.)
• Strong metals production: Produced 74,102 ounces of gold and 7.2 million pounds of copper.
• All-in sustaining cost: Reported cost of sales per ounce of gold sold 1 of $901 and an all-in sustaining
cost per ounce of gold sold2 of $911.
• On track to achieve 2023 guidance: Both mining operations are on track to achieve their 2023
production and cost guidance, while Tsumeb is forecast to be below its 2023 production guidance
range and at the high end of its cash cost per tonne guidance range.
• Significant free cash flow: Generated $67.4 million of cash provided from operating activities and
quarterly free cash flow 2 of $44.6 million, bringing year-to-date cash provided from operating activities
to $197.5 million and year-to-date free cash flow to $180.1 million.
• Solid adjusted net earnings: Reported net earnings of $27.1 million ($0.15 per share) and adjusted
net earnings2 of $27.1 million ($0.15 per share2).
• Growing financial position: Ended the quarter with a strong balance sheet, including $562.7 million
of cash, a $150.0 million undrawn revolving credit facility, and no debt.
• Increasing return of capital to shareholders: Returned $76.1 million, or 42% of free cash flow, to
shareholders during the first nine months of 2023 through dividends paid and payments for shares
repurchased. Declared fourth quarter dividend of $0.04 per common share payable on January 15,
2024 to shareholders of record on December 31, 2023.
• Development projects: Completed an investment protection agreement ("IPA") for the Loma Larga
gold project and advanced permitting for the 69 kV power line. DPM will continue to progress the
updated feasibility study (“FS”) beyond the previously stated timeline ending in 2023 to pursue
additional optimization opportunities and potentially incorporate the results of drilling once these
activities are able to resume.
• Strong results from exploration activities: Results from ongoing drilling activities at the Čoka Rakita
exploration prospect in Serbia locally extended the deposit to the west and continue to confirm the
continuity of the mineralization. DPM expects to complete a maiden Mineral Resource estimate by the
end of 2023 and is progressing activities to accelerate the advancement of the project.
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1 Cost of sales per ounce of gold sold represents total cost of sales for Chelopech and Ada Tepe, divided by total payable gold in concentrate sold,
while all-in sustaining cost per ounce of gold sold includes treatment and freight charges, net of by-product credits, all of which are reflected in
revenue.
2 All-in sustaining cost per ounce of gold sold, free cash flow, adjusted net earnings and adjusted basic earnings per share are non-GAAP financial
measures or ratios. These measures have no standardized meanings under International Financial Reporting Standards (“IFRS”) and may not be
comparable to similar measures presented by other companies. Refer to the “Non-GAAP Financial Measures” section commencing on page 16 of
this news release for more information, including reconciliations to IFRS measures.
CEO Commentary
"With strong gold production, including record quarterly performance from Ada Tepe, we generated over
$180 million of free cash flow year-to-date, demonstrating the quality of our assets and strength of our
operating teams," said David Rae, President and Chief Executive Officer. "Our mining operations are on
track to achieve their 2023 guidance for production and all-in sustaining cost, and we continue to be well-
positioned as one of the lowest-cost gold producers.
"During the quarter, we continued to return a significant portion of our free cash flow to our shareholders,
approximately 42% year-to-date, through our enhanced share buyback program and our sustainable
quarterly dividend.
"Our infill and extensional drilling programs at the Čoka Rakita project are advancing well, and we are on
track to deliver the maiden Mineral Resource estimate for the project before the end of 2023. We continue
to be excited by Čoka Rakita's potential and we are progressing activities to accelerate the development
of this high-quality organic growth prospect."
Use of non-GAAP Financial Measures
Certain financial measures referred to in this news release are not measures recognized under IFRS and
are referred to as non-GAAP financial measures or ratios. These measures have no standardized
meanings under IFRS and may not be comparable to similar measures presented by other companies.
The definitions established and calculations performed by DPM are based on management’s reasonable
judgment and are consistently applied. These measures are intended to provide additional information
and should not be considered in isolation or as a substitute for measures prepared in accordance with
IFRS. Non-GAAP financial measures and ratios, together with other financial measures calculated in
accordance with IFRS, are considered to be important factors that assist investors in assessing the
Company’s performance.
The Company uses the following non-GAAP financial measures and ratios in this news release:
• mine cash cost
• cash cost per tonne of ore processed
• mine cash cost of sales
• cash cost per ounce of gold sold
• all-in sustaining cost
• all-in sustaining cost per ounce of gold sold
• smelter cash cost
• cash cost per tonne of complex concentrate smelted
• adjusted earnings (loss) before interest, taxes, depreciation and amortization (“EBITDA”)
• adjusted net earnings
• adjusted basic earnings per share
• cash provided from operating activities, before changes in working capital
• free cash flow
• average realized metal prices
For a detailed description of each of the non-GAAP financial measures and ratios used in this news
release and a detailed reconciliation to the most directly comparable measure under IFRS, please refer to
the “Non-GAAP Financial Measures” section commencing on page 16 of this news release.
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Key Operating and Financial Highlights
$ millions, except where noted
Ended September 30,
Three Months Nine Months
2023 2022 Change 2023 2022 Change
Operating Highlights
Ore Processed t 738,614 731,880 1% 2,217,187 2,232,542 (1%)
Metals contained in concentrate produced:
Gold
Chelopech oz 40,280 43,051 (6%) 120,001 133,796 (10%)
Ada Tepe oz 33,822 20,819 62% 98,988 65,893 50%
Total gold in concentrate produced oz 74,102 63,870 16% 218,989 199,689 10%
Copper Klbs 7,228 6,897 5% 22,318 23,399 (5%)
Payable metals in concentrate sold:
Gold
Chelopech oz 34,660 36,383 (5%) 99,586 112,377 (11%)
Ada Tepe oz 32,955 20,393 62% 96,593 64,489 50%
Total payable gold in concentrate sold oz 67,615 56,776 19% 196,179 176,866 11%
Copper Klbs 6,699 6,715 (0%) 19,642 20,498 (4%)
Cost of sales per tonne of ore processed(1):
Chelopech $/t 63 63 0% 63 60 5%
Ada Tepe $/t 138 122 13% 138 119 16%
Cash cost per tonne of ore processed(2):
Chelopech $/t 50 51 (2%) 50 49 2%
Ada Tepe $/t 65 55 18% 66 54 22%
Cost of sales per ounce of gold sold(3) $/oz 901 1,039 (13%) 934 970 (4%)
All-in sustaining cost per ounce of gold
sold(2) $/oz 911 991 (8%) 840 839 0%
Complex concentrate smelted t 21,782 63,990 (66%) 120,912 132,287 (9%)
Cost of sales per tonne of complex
concentrate smelted(4) $/t 1,061 481 121% 589 717 (18%)
Cash cost per tonne of complex concentrate
smelted(2) $/t 921 297 210% 467 470 (1%)
Financial Highlights
Revenue 135.0 128.6 5% 458.4 416.9 10%
Cost of sales 84.0 89.8 (6%) 254.4 266.3 (4%)
Earnings before income taxes 34.5 (53.7) 164% 152.8 21.1 624%
Net earnings 27.1 (57.7) 147% 135.5 2.6 5,104%
Per share 0.15 (0.30) 150% 0.72 0.01 7,100%
Adjusted EBITDA(2) 52.5 56.4 (7%) 207.5 194.5 7%
Adjusted net earnings(2) 27.1 25.3 7% 135.5 95.6 42%
Per share(2) 0.15 0.13 15% 0.72 0.50 44%
Cash provided from operating activities 67.4 31.5 114% 197.5 182.8 8%
Free cash flow(2) 44.6 43.2 3% 180.1 133.2 35%
Capital expenditures incurred(5):
Sustaining(6) 16.8 11.6 45% 33.4 41.5 (20%)
Growth(7) 6.4 7.5 (14%) 19.7 21.2 (7%)
Total capital expenditures 23.2 19.1 22% 53.1 62.8 (15%)
1) Cost of sales per tonne of ore processed represents cost of sales for Chelopech and Ada Tepe, respectively, divided by tonnes of ore processed.
2) Cash cost per ounce of gold sold, cash cost per tonne of ore processed, all-in sustaining cost per ounce of gold sold, cash cost per tonne of
complex concentrate smelted, adjusted EBITDA, adjusted net earnings, adjusted basic earnings per share and free cash flow are non-GAAP
financial measures or ratios. Refer to the “Non-GAAP Financial Measures” section commencing on page 16 of this news release for more
information, including reconciliations to IFRS measures.
3) Cost of sales per ounce of gold sold represents total cost of sales for Chelopech and Ada Tepe, divided by total payable gold in concentrate sold.
4) Cost of sales per tonne of complex concentrate smelted represents cost of sales for Tsumeb, divided by tonnes of complex concentrate smelted.
5) Capital expenditures incurred were reported on an accrual basis and do not represent the cash outlays for the capital expenditures.
6) Sustaining capital expenditures are generally defined as expenditures that support the ongoing operation of the asset or business without any
associated increase in capacity, life of assets or future earnings. This measure is used by management and investors to assess the extent of non-
discretionary capital spending being incurred by the Company each period.
7) Growth capital expenditures are generally defined as capital expenditures that expand existing capacity, increase life of assets and/or increase
future earnings. This measure is used by management and investors to assess the extent of discretionary capital spending being undertaken by the
Company each period.
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Performance Highlights
A table comparing production, sales and cash cost measures by asset for the third quarter and nine months ended September 30,
2023 against 2023 guidance is located on page 12 of this news release.
In the third quarter of 2023, the Company’s mining operations continued to perform well and delivered
another quarter of strong production. Ada Tepe achieved record quarterly gold production, reflecting
higher grades in-line with the mine plan, and production from Chelopech was in-line with expectations. At
Tsumeb, the planned Ausmelt furnace maintenance was completed during the quarter and the smelter
resumed operations and ramped up to full production towards the end of September. Both mining
operations are on track to achieve their 2023 production and cost guidance, while Tsumeb is forecast to
be below its 2023 production guidance range and towards the high end of its cash cost per tonne
guidance range.
Highlights include the following:
Chelopech, Bulgaria: Gold contained in concentrate produced in the third quarter and first nine months
of 2023 of 40,280 ounces and 120,001 ounces, respectively, was 6% and 10% lower than the
corresponding periods in 2022 due primarily to lower gold grades, partially offset by higher volumes of ore
processed, in-line with the mine plan. Copper production in the third quarter of 2023 of 7.2 million pounds
was 5% higher than the corresponding period in 2022 due primarily to higher volumes of ore processed.
Copper production in the first nine months of 2023 of 22.3 million pounds was 5% lower than the
corresponding period in 2022 due primarily to lower copper grades, partially offset by higher volumes of
ore processed.
All-in sustaining cost per ounce of gold sold in the third quarter of 2023 of $1,120 increased compared to
$1,046 in the corresponding period in 2022 due primarily to lower volumes of gold sold and a stronger
Euro relative to the U.S. dollar.
All-in sustaining cost per ounce of gold sold in the first nine months of 2023 of $944 increased compared
to $765 in the corresponding period in 2022 due primarily to lower by-product credits, lower volumes of
gold sold, higher costs for labour and direct materials, and higher cash outlays for sustaining capital
expenditures, partially offset by lower treatment and freight charges.
Ada Tepe, Bulgaria: Gold contained in concentrate produced in the third quarter and first nine months of
2023 of 33,822 ounces and 98,988 ounces, respectively, was 62% and 50% higher than the
corresponding periods in 2022 due primarily to mining higher grade zones, partially offset by lower
volumes of ore processed, in-line with the mine plan. The Ada Tepe mine achieved record production for
both the quarter and the first nine months of the year.
All-in sustaining cost per ounce of gold sold in the third quarter and first nine months of 2023 of $509 and
$508, respectively, was 32% and 30% lower than the corresponding periods in 2022 due primarily to
higher volumes of gold sold.
Consolidated Operating Highlights
Production: Gold contained in concentrate produced in the third quarter and first nine months of 2023 of
74,102 ounces and 218,989 ounces, respectively, was 16% and 10% higher than the corresponding
periods in 2022 due primarily to mining in higher grade zones at Ada Tepe, partially offset by lower gold
grades at Chelopech, in-line with the mine plans for both operations.
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Copper production in the third quarter of 2023 of 7.2 million pounds was 5% higher than the
corresponding period in 2022 due primarily to higher volumes of ore processed. Copper production in the
first nine months of 2023 of 22.3 million pounds was 5% lower than the corresponding period in 2022 due
primarily to lower copper grades, partially offset by higher volumes of ore processed.
Deliveries: Payable gold in concentrate sold in the third quarter and first nine months of 2023 of 67,615
ounces and 196,179 ounces, respectively, was 19% and 11% higher than the corresponding periods in
2022 primarily reflecting higher gold production.
Payable copper in concentrate sold in the third quarter of 2023 was comparable to the corresponding
period in 2022. Payable copper in the first nine months of 2023 of 19.6 million pounds was 4% lower than
the corresponding period in 2022 primarily reflecting lower copper production.
Complex concentrate: Complex concentrate smelted in the third quarter of 2023 of 21,782 tonnes was
42,208 tonnes lower than the corresponding period in 2022 due primarily to the timing of the Ausmelt
furnace maintenance shutdown, which was completed during the third quarter of 2023 compared to the
second quarter of 2022. Complex concentrate smelted in the first nine months of 2023 of 120,912 tonnes
was 11,375 tonnes lower than the corresponding period in 2022 due primarily to unplanned downtime
earlier in 2023, which was related to water leaks in the off-gas system. Following the completion of the
maintenance work in the third quarter of 2023, Tsumeb resumed operations and ramped up to full
production towards the end of September. While complex concentrate smelted is expected to increase in
the fourth quarter, reflecting improved operating performance as a result of the maintenance work, it is
forecast to be below the guidance range for the year.
Cost measures: Cost of sales in the third quarter of 2023 of $84.0 million decreased compared to $89.8
million in the corresponding period in 2022 due primarily to lower depreciation expense as a result of the
impairment charge in respect of Tsumeb taken in the third quarter of 2022 and lower operating costs at
the smelter as a result of the maintenance shutdown in the third quarter of 2023. Cost of sales in first nine
months of 2023 of $254.4 million decreased compared to $266.3 million in the corresponding period in
2022 due primarily to lower depreciation expense and lower operating costs at the smelter as a result of
unplanned downtime at Tsumeb, partially offset by higher local currency mine operating costs reflecting
higher costs for labour and direct materials.
All-in sustaining cost per ounce of gold sold in the third quarter of 2023 of $911 was 8% lower than the
corresponding period in 2022 due primarily to higher volumes of gold sold, partially offset by a stronger
Euro relative to the U.S. dollar.
All-in sustaining cost per ounce of gold sold in the third quarter of 2023 was $178 higher compared to the
second quarter of 2023 due primarily to higher treatment charges as all of the gold-copper concentrate
was delivered to Tsumeb this quarter, while all deliveries were to third-party smelters in the second
quarter. Going forward, DPM expects all gold-copper concentrate to be delivered to third-party smelters.
All-in sustaining cost per ounce of gold sold in the first nine months of 2023 of $840 was comparable to
the corresponding period of 2022 due primarily to higher local currency mine operating costs reflecting
higher costs for labour and direct materials, lower by-product credits as a result of lower volumes and
realized prices of copper sold, and higher share-based compensation reflecting DPM’s strong share price
performance, largely offset by higher volumes of gold sold and lower treatment and freight charges at
Chelopech.
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Cash cost per tonne of complex concentrate smelted in the third quarter of 2023 of $921 was $624 higher
than the corresponding period in 2022 due primarily to lower volumes of complex concentrate smelted as
a result of the timing of the Ausmelt furnace maintenance shutdown. Cash cost per tonne of complex
concentrate smelted in the first nine months of 2023 of $467 was comparable to the corresponding period
in 2022 due primarily to lower volumes of complex concentrate smelted, largely offset by a weaker South
African Rand ("ZAR") relative to the U.S. dollar. Tsumeb is tracking towards the high end of its 2023 cash
cost guidance range.
Capital expenditures: Capital expenditures incurred in the third quarter and first nine months of 2023 of
$23.2 million and $53.1 million , respectively, were 22% higher and 15% lower than the corresponding
periods in 2022 of $19.1 million and $62.8 million.
Sustaining capital expenditures incurred in the third quarter of 2023 of $16.8 million were 45% higher than
the corresponding period in 2022 of $11.6 million due primarily to the timing of the Ausmelt furnace
maintenance shutdown. Sustaining capital expenditures in the first nine months of 2023 of $33.4 million
were 20% lower than the corresponding period in 2022 of $41.5 million benefited primarily from the cost
optimizations of the Ausmelt furnace maintenance shutdown in 2023. Sustaining capital expenditures
incurred in the first nine months of 2022 also included the capitalized lease and leasehold improvements
related to the new head office lease.
Growth capital expenditures incurred during the third quarter and first nine months of 2023, primarily
related to the Loma Larga gold project, were $6.4 million and $19.7 million , respectively, compared to
$7.5 million and $21.2 million in the corresponding periods in 2022.
Consolidated Financial Highlights
Financial results from operations in the third quarter of 2023 reflected higher volumes of gold sold and
higher realized gold and copper prices, partially offset by lower volumes of complex concentrate smelted
and higher planned exploration and evaluation expenses.
Revenue: Revenue in the third quarter of 2023 of $135.0 million was 5% higher than the corresponding
period in 2022 due primarily to higher volumes of gold sold, higher realized gold and copper prices,
partially offset by lower volumes of complex concentrate smelted reflecting timing of the Ausmelt furnace
maintenance shutdown.
Revenue in the first nine months of 2023 of $458.4 million was 10% higher than the corresponding period
in 2022 due primarily to higher volumes and realized prices of gold sold, and lower treatment and freight
charges at Chelopech as a result of increased deliveries to third-party smelters, partially offset by lower
volumes of complex concentrate smelted at Tsumeb and lower volumes and realized prices of copper
sold.
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Net earnings (loss): Net earnings in the third quarter of 2023 of $27.1 million ( $0.15 per share)
increased compared to a net loss of $57.7 million ($0.30 per share) in the corresponding period in 2022
due primarily to the Tsumeb impairment charge of $85.0 million taken in the third quarter of 2022, together
with higher volumes of gold sold and higher realized gold and copper prices, partially offset by lower
volumes of complex concentrate smelted and higher planned exploration and evaluation expenses. Net
earnings in the first nine months of 2023 of $135.5 million ($0.72 per share) increased compared to $2.6
million ( $0.01 per share) in the corresponding period in 2022 due primarily to the Tsumeb impairment
charge of $85.0 million, higher volumes and realized prices of gold sold, lower treatment and freight
charges at Chelopech and higher interest income, partially offset by higher planned exploration and
evaluation expenses, higher local currency mine operating expenses, lower volumes and realized prices
of copper sold, higher share-based compensation expenses reflecting DPM’s strong share performance,
as well as restructuring costs related to a cost optimization initiative at Tsumeb taken in 2022.
Adjusted net earnings: Adjusted net earnings in the third quarter and first nine months of 2023 of $27.1
million ($0.15 per share) and $135.5 million ($0.72 per share), respectively, increased compared to $25.3
million ($0.13 per share) and $95.6 million ($0.50 per share) in the corresponding periods in 2022 due
primarily to the same factors affecting net earnings, except for adjusting items primarily related to the
Tsumeb impairment charge and restructuring costs in 2022. Adjusted net earnings in the third quarter of
2023 was $35.1 million lower compared to the second quarter of 2023 due primarily to lower volumes of
complex concentrate smelted at Tsumeb reflecting timing of the Ausmelt furnace maintenance shutdown,
combined with higher treatment charges at Chelopech as all of the gold-copper concentrate was delivered
to Tsumeb this quarter.
Earnings before income taxes: Earnings before income taxes in the third quarter and first nine months
of 2023 of $34.5 million and $152.8 million, respectively, increased compared to a loss before income
taxes of $53.7 million and earnings before income taxes of $21.1 million in the corresponding periods in
2022, reflecting the same factors that affected net earnings, except for income taxes, which are excluded.
Adjusted EBITDA: Adjusted EBITDA in the third quarter and first nine months of 2023 was $52.5 million
and $207.5 million , respectively, compared to $56.4 million and $194.5 million in the corresponding
periods in 2022, reflecting the same factors that affected adjusted net earnings, except for interest,
income taxes, depreciation and amortization, which are excluded from adjusted EBITDA.
Cash provided from operating activities: Cash provided from operating activities in the third quarter of
2023 of $67.4 million was 114% higher than the corresponding period in 2022 due primarily to the timing
of deliveries and subsequent receipt of cash and the timing of payments to suppliers. Cash provided from
operating activities in the first nine months of 2023 of $197.5 million was 8% higher than the
corresponding period in 2022 due primarily to higher adjusted EBITDA generated in the period, partially
offset by the timing of deliveries and subsequent receipt of cash.
Free cash flow: Free cash flow in the third quarter of 2023 of $44.6 million was comparable to the
corresponding period in 2022. Free cash flow in the first nine months of 2023 of $180.1 million was $46.9
million higher than the corresponding period in 2022 due primarily to higher adjusted EBITDA generated
and lower cash outlays for sustaining capital expenditures. Free cash flow is calculated before changes in
working capital.
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Balance Sheet Strength and Financial Flexibility
The Company continues to maintain a strong financial position, with a growing cash position, no debt and
a $150 million revolving credit facility which remains undrawn.
Cash and cash equivalents increased by $129.5 million to $562.7 million in the first nine months of 2023
due primarily to earnings generated in the period, plus the cash proceeds from the disposition of B2Gold
Corp (“B2Gold”) shares following its acquisition of Sabina Gold and Silver Corp (“Sabina”), partially offset
by cash outlays for capital expenditures, dividends paid and payments for shares repurchased, as well as
changes in working capital.
Return of Capital to Shareholders
In line with its disciplined capital allocation framework, DPM continues to return excess capital to
shareholders, which currently includes a sustainable quarterly dividend and periodic share repurchases
under its normal course issuer bid (“NCIB”).
During first nine months of 2023, the Company returned a total of $76.1 million to shareholders through
payments for shares repurchased of $53.3 million and dividends paid of $22.8 million, representing
approximately 42% of its free cash flow generated during this period.
During the nine months ended September 30, 2023, the Company purchased a total of 8,431,871 shares
with a total cost of $57.5 million at an average price per share of $6.82 (Cdn$9.18). As at September 30,
2023, the Company had an active automatic share repurchase plan in place under the NCIB with its
designated broker which terminated on November 2, 2023, pursuant to which the Company repurchased
an additional 1,306,192 shares, all of which were cancelled as at November 7, 2023.
Enhanced NCIB
The Company renewed its NCIB in February 2023 and is able to purchase up to 16,500,000 common
shares, representing approximately 10% of the public float as at February 16, 2023 , over a period of
twelve months which commenced on March 1, 2023, and terminates on February 28, 2024.
The Company’s Board of Directors has authorized management to repurchase up to $100 million of the
Company’s shares through the NCIB. As at November 7, 2023 , the amount of shares repurchased
totalled $65.5 million. The actual timing and number of common shares that may be purchased pursuant
to the NCIB will be undertaken in accordance with DPM’s capital allocation framework, having regard for
such things as DPM’s financial position, business outlook and ongoing capital requirements, as well as its
share price and overall market conditions.
Quarterly Dividend
On November 7, 2023 , the Company declared a dividend of $0.04 per common share payable on
January 15, 2024 to shareholders of record on December 31, 2023.
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