Dundee Precious Metals Announces 2024 Third Quarter Results; Continuing Track Record of Strong Free Cash Flow Generation
Dundee Precious Metals Announces 2024 Third Quarter Results; Continuing
Track Record of Strong Free Cash Flow Generation
Toronto, Ontario, November 5, 2024 – Dundee Precious Metals Inc. (TSX: DPM) ( “DPM” or the
“Company”) announced its operating and financial results for the third quarter and nine months ended
September 30, 2024.
Third Quarter Highlights
(Unless otherwise stated, all monetary figures in this news release are expressed in U.S. dollars, and all operational
and financial information contained in this news release is related to continuing operations.)
• On track to meet 2024 guidance: With production of 60,145 ounces of gold and 7.3 million pounds of
copper in the third quarter, and 190,516 ounces of gold and 21.9 million pounds of copper in the first
nine months of 2024, DPM is well-positioned to achieve its annual production guidance.
• Generating robust margins: Reported all-in sustaining cost per ounce of gold sold 1 of $1,005, and
cost of sales per ounce of gold sold 2 of $1,265. All-in sustaining cost per ounce of gold sold in the first
nine months of 2024 was $859, and is expected to be within the annual guidance range for the year.
• Advancing growth pipeline: The Čoka Rakita project pre-feasibility study ("PFS") is progressing well,
with infill drilling completed and an updated Mineral Resource Estimate in progress. The PFS is on
track for completion in the first quarter of 2025.
• Free cash flow: Generated $70.9 million of free cash flow 1 and $52.5 million of cash provided from
operating activities from continuing operations.
• Adjusted net earnings: Reported adjusted net earnings1 of $46.2 million ($0.26 per share 1) and net
earnings from continuing operations of $46.2 million ($0.26 per share).
• Continued capital discipline: Returned $49.5 million, or 23% of free cash flow, to shareholders year-
to-date through dividends paid and shares repurchased.
• Substantial liquidity for growth: Ended the quarter with a strong balance sheet, including a total of
$658.2 million of cash, a $150.0 million undrawn revolving credit facility, and no debt.
• High-grade copper-gold discoveries: Announced high-grade copper-gold Dumitru Potok and Frasen
discoveries, which are located within one kilometre of the Čoka Rakita project.
• Sale of Tsumeb smelter completed: DPM closed the sale of the Tsumeb smelter for a net cash
consideration of $15.9 million, subject to normal post-closing adjustments (“Tsumeb Disposition”).
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1 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 IFRS Accounting 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 13 of this news release for more information, including reconciliations to IFRS measures.
2 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.
CEO Commentary
“We generated $213 million of free cash flow year-to-date, demonstrating the quality of our assets, our
low cost structure and the benefit of higher metal prices,” said David Rae, President and Chief Executive
Officer. “We are well-positioned to continue our ten-year track record of achieving our gold production and
all-in sustaining cost guidance.
“We continue to advance Čoka Rakita, our high-grade, low-cost growth project in Serbia, with the PFS on
track for completion in Q1 2025. Our scout drilling programs continue to return strong results confirming
the large-scale potential for further high-grade copper-gold mineralization, as demonstrated by the
Dumitru Potok and Frasen discoveries we announced in September.
“DPM is in a unique position in the industry, with a strong base of high-margin production driving
significant free cash flow generation, and the balance sheet strength to internally fund our growth pipeline
and exploration prospects while continuing to return capital to shareholders.”
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
• adjusted earnings before interest, taxes, depreciation and amortization (“adjusted 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 13 of this news release.
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Key Operating and Financial Highlights from Continuing Operations
$ millions, except where noted Three Months Nine Months
2024 2023 Change 2024 2023 Change
Operating Highlights
Ore Processed t 711,090 738,614 (4%) 2,167,831 2,217,187 (2%)
Metals contained in concentrate produced:
Gold
Chelopech oz 43,899 40,280 9% 125,128 120,001 4%
Ada Tepe oz 16,246 33,822 (52%) 65,388 98,988 (34%)
Total gold in concentrate produced oz 60,145 74,102 (19%) 190,516 218,989 (13%)
Copper Klbs 7,318 7,228 1% 21,890 22,318 (2%)
Payable metals in concentrate sold:
Gold
Chelopech oz 37,725 34,660 9% 105,142 99,586 6%
Ada Tepe oz 15,503 32,955 (53%) 64,121 96,593 (34%)
Total payable gold in concentrate sold oz 53,228 67,615 (21%) 169,263 196,179 (14%)
Copper Klbs 6,484 6,699 (3%) 18,410 19,642 (6%)
Cost of sales per tonne of ore processed(1):
Chelopech $/t 79 63 25% 72 63 14%
Ada Tepe $/t 136 138 (1%) 140 138 1%
Cash cost per tonne of ore processed(2):
Chelopech $/t 61 50 22% 57 50 14%
Ada Tepe $/t 71 65 9% 69 66 5%
Cost of sales per ounce of gold sold(3) $/oz 1,265 901 40% 1,151 934 23%
All-in sustaining cost per ounce of gold sold(2) $/oz 1,005 911 10% 859 840 2%
Financial Highlights
Average realized prices(2):
Gold $/oz 2,548 1,921 33% 2,347 1,933 21%
Copper $/lb 4.24 3.72 14% 4.25 3.85 10%
Revenue 147.3 121.9 21% 427.9 380.8 12%
Cost of sales 67.3 60.9 10% 194.8 183.2 6%
Earnings before income taxes 55.3 44.1 25% 181.8 147.2 23%
Net earnings 46.2 36.7 26% 156.5 129.9 20%
Basic earnings per share $/sh 0.26 0.20 30% 0.87 0.69 26%
Adjusted EBITDA(2) 68.5 59.6 15% 216.1 196.3 10%
Adjusted net earnings(2) 46.2 36.7 26% 149.6 129.9 15%
Adjusted basic earnings per share(2) $/sh 0.26 0.20 30% 0.83 0.69 20%
Cash provided from operating activities 52.5 70.1 (25%) 214.1 190.4 12%
Free cash flow(2) 70.9 46.1 54% 213.4 178.6 20%
Capital expenditures incurred(4):
Sustaining(5) 10.8 9.7 11% 24.4 23.1 5%
Growth and other(6) 3.2 6.1 (48%) 15.1 19.4 (22%)
Total capital expenditures 14.0 15.8 (11%) 39.5 42.5 (7%)
(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, average realized metal
prices, 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 13 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) Capital expenditures incurred were reported on an accrual basis and do not represent the cash outlays for the capital expenditures.
(5) 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.
(6) 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 first nine months ended September
30, 2024 against 2024 guidance is located on page 9 of this news release.
In the third quarter of 2024, Chelopech continued to deliver strong operating results. Gold production at
Ada Tepe was impacted by temporary operational challenges during the quarter, which have been
resolved. With strong year-to-date results and production expected to increase in the fourth quarter, b oth
mines remain on track to achieve their respective 2024 production and cost guidance.
Highlights include the following:
Chelopech, Bulgaria: Gold contained in gold-copper and pyrite concentrates produced in the third
quarter of 2024 was 9% higher than 2023 due primarily to higher gold recoveries and ore grades. Gold
contained in gold-copper and pyrite concentrates produced in the first nine months of 2024 was 4%
higher than 2023 due primarily to higher gold recoveries. Copper production in the third quarter and first
nine months of 2024 was comparable to 2023.
All-in sustaining cost per ounce of gold sold in the third quarter and first nine months of 2024 was 43%
and 30% lower than 2023, respectively, due primarily to lower treatment charges as a result of DPM
having secured more favourable commercial terms for the year under the current tight market for copper
concentrates, higher volumes of gold sold, and higher by-product credits reflecting higher realized copper
prices, partially offset by higher labour cost , as well as lower cash outlays for sustaining capital
expenditures.
The Company is assessing the potential impact of a proposed change by China’s tax authority to the
applicability of value-added taxes (“VAT”) and import duties on gold-copper concentrates. While this
change is not yet confirmed, and Chelopech’s sales contracts currently provide that taxes and duties in
China are for the buyer’s account, the Company will continue to monitor the situation and to assess any
potential impact on the future demand and commercial terms, including alternative buyers, for
Chelopech's gold-copper concentrates.
Ada Tepe, Bulgaria: Gold contained in concentrate produced in the third quarter and first nine months of
2024 was 52% and 34% lower than 2023, respectively, due primarily to mining in lower grade zones in the
first six months of the year, in line with mine plan, and lower than expected grades, recoveries and fleet
availability in the third quarter. The Company expects increased production in the fourth quarter as mining
has transitioned to an area of the pit with higher grades and recoveries, and fleet availability has
improved. Ada Tepe remains on track to achieve its guidance for gold production.
All-in sustaining cost per ounce of gold sold in the third quarter and first nine months of 2024 was 130%
and 51% higher than 2023, respectively, due primarily to lower volumes of gold sold.
Consolidated Operating Highlights
Production: Gold contained in concentrate produced in the third quarter and first nine months of 2024
was 19% and 13% lower than 2023, due primarily to lower gold production at Ada Tepe, partially offset by
higher gold recoveries at Chelopech.
Copper production in the third quarter and first nine months of 2024 was comparable to 2023.
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Deliveries: Payable gold in concentrate sold in the third quarter and first nine months of 2024 was 21%
and 14% lower than 2023, consistent with lower gold production.
Payable copper in concentrate sold in the third quarter of 2024 was comparable to 2023. Payable copper
in the first nine months of 2024 was 6% lower than 2023, due primarily to the timing of deliveries.
Cost measures: Cost of sales in the third quarter and first nine months of 2024 increased 10% and 6%,
respectively, compared to 2023, due primarily to higher labour costs.
All-in sustaining cost per ounce of gold sold in third quarter and first nine months of 2024 was 10% and
2% higher than 2023, respectively, due primarily to lower volumes of gold sold, higher share-based
compensation expenses reflecting DPM’s strong share price performance, and higher labour costs,
partially offset by lower treatment charges at Chelopech and higher by-product credits as a result of
higher realized copper prices.
Capital expenditures: Sustaining capital expenditures incurred in the third quarter and first nine months
of 2024 were comparable to 2023.
Growth and other capital expenditures incurred during the third quarter and first nine months of 2024
decreased 48% and 22%, respectively, compared to 2023, due primarily to lower expenditures related to
the Loma Larga gold project, as expected.
Consolidated Financial Highlights
Financial results in the third quarter and first nine months of 2024 reflected higher realized metal prices
and lower treatment charges at Chelopech, partially offset by lower volumes of gold sold at Ada Tepe and
higher planned exploration and evaluation expenses.
Revenue: Revenue in the third quarter and first nine months of 2024 was 21% and 12% higher than
2023, respectively, due primarily to higher realized metal prices and lower treatment charges at
Chelopech, partially offset by lower volumes of gold sold at Ada Tepe.
Net earnings: Net earnings from continuing operations in the third quarter and first nine months of 2024
increased 26% and 20%, respectively, compared to 2023 due primarily to higher revenue and interest
income, partially offset by higher planned exploration and evaluation expenses, higher labour costs
including higher share-based compensation expenses reflecting DPM’s strong share performance, and
higher income taxes.
Adjusted net earnings: Adjusted net earnings from continuing operations in the third quarter and first
nine months of 2024 increased 26% and 15%, respectively, compared to 2023 due primarily to the same
factors affecting net earnings from continuing operations, with the exception of adjusting items primarily
related to the net termination fee received from Osino Resources Corp. (“Osino”).
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Cash provided from operating activities: Cash provided from operating activities of continuing
operations in the third quarter of 2024 was 25% lower than 2023 due primarily to the timing of deliveries
and subsequent receipt of cash, partially offset by higher earnings generated from continuing operations
in the quarter. Cash provided from operating activities of continuing operations in the first nine months of
2024 was 12% higher than 2023 due primarily to higher earnings generated from continuing operations in
the period and the timing of payments to suppliers, partially offset by the timing of deliveries and
subsequent receipt of cash.
Free cash flow: Free cash flow from continuing operations in the third quarter and first nine months of
2024 was 54% and 20% higher than 2023, respectively, due primarily to higher earnings generated in the
periods. Free cash flow is calculated before changes in working capital.
Balance Sheet Strength and Financial Flexibility
The Company continues to maintain a strong financial position, with a growing cash position, no debt and
an undrawn $150 million revolving credit facility.
Cash and cash equivalents increased from $595.3 million as at December 31, 2023 to $658.2 million as
at September 30, 2024 due primarily to earnings generated in the period, and cash proceeds from the
disposition of Osino shares and the Tsumeb smelter, partially offset by a net cash outflow of $ 94.8 million
related to the DPM Tolling Agreement, cash outlays for capital expenditures, payments for shares
repurchased under the Normal Course Issuer Bid (“NCIB”) and dividends paid.
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 the NCIB.
During the first nine months of 2024, the Company returned a total of $49.5 million to shareholders
through dividends paid of $21.7 million , as well as payments for shares repurchased of $27.8 million
following the renewal of the NCIB in late March.
Share Repurchases
During the nine months ended September 30, 2024, the Company purchased a total of 3,399,511 shares
with a total cost of $28.3 million at an average price per share of $8.32 (Cdn$11.36).
The actual timing and number of common shares that may be purchased under 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 5, 2024 , the Company declared a dividend of $0.04 per common share payable on
January 15, 2025 to shareholders of record on December 31, 2024.
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Development Projects Update
Čoka Rakita, Serbia
DPM continues to focus on advancing the high-quality Čoka Rakita project, which has rapidly progressed
since the announcement of the initial discovery in January 2023.
The PFS remains on track for completion in the first quarter of 2025. At the end of the third quarter, the
PFS design and engineering was approximately 80% complete. Market and vendor engagement for
pricing and cost estimates has commenced and will continue into the fourth quarter. During the third
quarter of 2024, the PFS infill drilling program was completed, whereby results continued to confirm the
continuity of the high-grade mineralization, and an updated Mineral Resource estimate is underway. In
addition, the geotechnical and hydrogeological drilling program, which will support the PFS design and
cost estimates, is nearing completion.
In parallel, permitting activities have continued to advance. Environmental and other baseline studies,
which form part of the environmental and social impact assessment, are ongoing and expected to be
submitted in early 2026. Permitting preparation activities are underway, with a detailed timeline focused
on supporting commencement of construction in mid-2026.
The Company has had a local presence in Serbia since 2004, has developed strong relationships in the
region, and will continue its proactive engagement with all stakeholders as the project advances.
The Company has planned to spend a total of $ 30 million to $ 35 million for the Čoka Rakita project in
2024, with $17.3 million incurred in the first nine months of the year as a result of the timing of
expenditures.
Loma Larga, Ecuador
At the Loma Larga gold project in Ecuador, the Company continued to progress activities related to
permitting and stakeholder relations. The Company continues to support the government in fulfilling the
requirements of the August 2023 ruling by the Provincial Court of Azuay in connection with the
Constitutional Protective Action that was filed in 2022 . In October 2024, the baseline ecosystem and
water studies, as required by the ruling, were submitted to the court by the Ministry of Environment, Water
and Ecological Transition. On October 31, 2024, the environmental consultation process was completed,
with local communities voting overall in favour of the development of the project. Issuance of the
environmental licence is expected once the prior informed indigenous consultation is concluded.
The Company maintains a constructive relationship with government institutions and other stakeholders
involved with the development of the project.
The Company has budgeted between $10 million and $11 million for the project in 2024, with $8.4 million
incurred in the first nine months of the year.
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Exploration
Čoka Rakita, Serbia
Exploration activities in Serbia continued to focus on an accelerated drilling program at the Čoka Rakita
licence, as well as scout drilling at the Dumitru Potok and Frasen targets, with 28,775 metres completed
during the third quarter of 2024.
In September 2024, DPM reported results from drilling at the high-grade copper-gold Dumitru Potok and
Frasen discoveries, which are located approximately one kilometre north of the Čoka Rakita project.
Results at Dumitru Potok confirm the presence of high-grade copper-gold-silver stratabound skarn
mineralization, with drilling demonstrating a continuous zone of strong mineralization along a 250-metre
corridor open to the north, south and east. At Frasen, drilling returned manto-like carbonate-hosted
replacement and skarn copper-gold mineralization at the conglomerate-marble contact over an area of
700 metres by 500 metres at Frasen West, with the potential to extend this zone southeast towards to the
stratabound skarn copper-gold mineralization intersected by deep drilling at Čoka Rakita North.
Additionally, drilling has commenced at the Valja Saka and Dumitru West prospects, targeting the
stratigraphy in the area known for porphyry and skarn mineralization.
The Company has budgeted between $20 million and $22 million for Serbian exploration activities, with
$15.6 million spent in the first nine months of the year.
Chelopech, Bulgaria
DPM remains committed to extending the life of the Chelopech mine through its focused in-mine
exploration program which targets resource development. During the third quarter of 2024, the Company
completed 8,195 metres of exploration drilling, which included infill and extensional drilling aimed at
discovering new mineralization along identified geological trends as well as testing potential exploration
targets.
The Company successfully completed the defence of the Geological Report for the Brevene exploration
licence at the end of June 2024. DPM expects to obtain the Geological Discovery certificate in the fourth
quarter of 2024, which provides a one-year extension of the exploration rights for the Brevene licence to
complete additional work targeting a Commercial Discovery.
Ada Tepe, Bulgaria
During the third quarter of 2024, exploration activities at the Ada Tepe camp were focused on target
delineation at the Krumovitsa exploration licence, including systematic geological mapping, geophysical
surveys, stream sediments, soil and rock sampling, scout drilling and 3D modelling and interpretation.
A scout drilling campaign is ongoing at the Krumovitsa licence with a total of 5,169 meters of drilling
completed during the quarter. At the Kupel prospect, additional drilling is ongoing to delineate the
extension of a conceptually modelled vein structure.
Permitting at the Kara Tepe prospect, which is located on the Chiriite exploration licence, is ongoing and
drilling is planned to start in November 2024, focused on skarn/carbonate replacement gold targets.
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