DUNDEE PRECIOUS METALS ANNOUNCES RECORD Q2 2020 OPERATING AND FINANCIAL RESULTS (All monetary figures are expressed in U.S. dollars
1
DUNDEE PRECIOUS METALS ANNOUNCES RECORD Q2 2020 OPERATING AND FINANCIAL RESULTS
(All monetary figures are expressed in U.S. dollars unless otherwise stated)
Toronto, Ontario, July 30 , 2020 – Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or the
“Company”) today announced its operating and financial results for the second quarter of 2020.
SECOND QUARTER FINANCIAL AND OPERATING HIGHLIGHTS:
• Record gold production – Produced 81,365 ounces of gold in concentrate, as Ada Tepe delivered its
highest quarterly production to date, and Chelopech continued its track record of consistent performance.
Copper production was 9.4 million pounds;
• Solid smelter performance – Achieved throughput of 58,516 tonnes at Tsumeb despite a 30 -day
reduction in throughput in April related to the management of staffing levels as a result of COVID-19;
• Record quarterly free cash flow generation – Generated $75.5 million in cash flow from operating
activities and a record $58.4 million of free cash flow(1);
• Growing earnings – Reported record net earnings attributable to common shareholders of $48.8 million,
reflecting strong gold production and excellent cost performance from Chelopech and Ada Tepe
combined with higher gold prices. Reported adjusted net earnings(1) were $45.8 million or $0.25 per share;
• Strong cost performance at all operations – Reported an all-in sustaining cost per ounce of gold(1) of
$729 and a cash cost per tonne of complex concentrate smelted(1) of $345. Cash cost guidance for Ada
Tepe has been reduced to $44 to $50 per tonne to reflect strong operating performance;
• Strengthened financial position – Ended the quarter with approximately $226 million of cash resources,
comprised of $76 million in cash and an undrawn $150 million long-term revolving credit facility (“RCF”),
as well as an investment portfolio of $65 million; and
• Well-positioned to deliver 2020 guidance – With strong performance in the first half of the year, DPM
is tracking towards the higher end of guidance for gold production and remains on track to meet previously
issued guidance metrics.
“We continued to deliver exceptional performance in the second quarter, achieving record gold production
and strong cost performance at all of our operations. Our strong operational results, combined with higher
gold prices, generated record net earnings and free cash flow, demonstrating the significant potential of our
operating assets. Based on our strong results and our expectations for the second half of the year, we remain
on track for another milestone year in 2020,” said David Rae, President and CEO.
“Our achievements in the first half of the year are a reflection of the outstanding efforts at all our sites to
proactively respond to the challenges of the COVID-19 pandemic as we continue to prioritize the health and
safety of our workforce and provide support in our local communities.”
2
KEY FINANCIAL AND OPERATIONAL HIGHLIGHTS
$ millions, except where noted
Ended June 30,
Three Months Six Months
2020 2019 2020 2019
Revenue 157.0 99.2 308.7 184.5
Cost of sales 84.5 71.7 175.1 136.4
Earnings before income taxes 53.7 17.7 101.8 16.7
Net earnings attributable to common shareholders 48.8 16.0 92.0 14.5
Basic earnings per share 0.27 0.09 0.51 0.08
Adjusted EBITDA(1) 78.7 34.0 156.2 50.7
Adjusted net earnings(1) 45.8 15.8 91.9 14.2
Adjusted basic earnings per share(1) 0.25 0.09 0.51 0.08
Cash provided from operating activities 75.5 9.3 84.9 23.8
Free cash flow(1) 58.4 24.4 107.6 34.4
Metals contained in concentrate produced:
Gold (ounces)
Chelopech 49,088 47,074 91,719 90,108
Ada Tepe 32,277 5,351 62,609 5,351
Total gold in concentrate produced 81,365 52,425 154,328 95,459
Copper (‘000s pounds) 9,378 9,056 18,759 17,077
Silver (ounces) 51,593 36,010 108,052 66,745
Payable metals in concentrate sold:
Gold (ounces)
Chelopech 36,723 41,424 75,488 80,983
Ada Tepe 34,115 - 63,604 -
Total payable gold in concentrate sold 70,838 41,424 139,092 80,983
Copper (‘000s pounds) 8,543 10,152 18,063 16,467
Silver (ounces) 45,070 37,765 99,918 62,826
Cash cost per tonne of ore processed(1):
Chelopech 37.65 35.35 36.98 35.03
Ada Tepe 44.00 47.78 41.99 47.78
All-in sustaining cost per ounce of gold(1) 729 709 662 763
Complex concentrate smelted at Tsumeb (tonnes) 58,516 61,667 123,526 124,489
Cash cost per tonne of complex concentrate smelted at
Tsumeb(1) 345 373 352 372
1) Adjusted 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, net of by-product credits, are not defined measures under IFRS.
Refer to the “Non-GAAP Financial Measures” section of the MD&A for more details, including reconciliations to IFRS measures.
Response to Coronavirus (“COVID-19”)
To date, as a result of the proactive actions being taken within the regions in which we operate and by
personnel at each of our sites, DPM has not experienced any material disruptions to its operations as a
result of the worldwide COVID-19 pandemic. The Company’s Chelopech and Ada Tepe mines in Bulgaria
continue to operate at full capacity and have not experienced any disruptions to their operations.
As previously reported, the Tsumeb smelter in Namibia curtailed its operations by shutting down ancillary
plants for 30 days during the month of April in response to a government directive to the natural resources
sector aimed at limiting staffing levels. As a result, complex concentrate smelted for the second quarter
was reduced by approximately 10%. Full op erations resumed in May with ongoing management of the
number of employees and contractors working at site and continued observance of the COVID-19 controls
that have been established across all sites. With throughput back to full capacity, the smelter remains on
track to achieve 2020 annual guidance.
To date, MineRP continues to operate with minimal impact on its ability to service existing customers
remotely, although it is experiencing some delays starting up new projects and converting a growing
customer pipeline as customers satisfy themselves that implementation can be effectively executed
remotely.
3
Net Earnings and Adjusted Net Earnings
Net earnings attributable to common shareholders were $48.8 million ($0.27 per share) and $92.0 million
($0.51 per share) for the second quarter and first six months of 2020, respectively, compared to $16.0 million
($0.09 per share) and $14.5 million ($0.08 per share) for the same periods in 2019.
Adjusted net earnings in the second quarter and first six months of 2020 were $45.8 million ($0.25 per share)
and $91.9 million ($0.51 per share), respectively, compared to $15.8 million ($0.09 per share) and $14.2 million
($0.08 per share) for the corresponding periods in 2019.
The increases in both net earnings attributable to common shareholders and adjusted net earnings were
due primarily to higher volumes of gold sold, higher realized gold prices and the favourable impact of a
stronger U.S. dollar relative to the ZAR , partially offset by higher depreciation and lower realized copper
prices. In addition, the results in the second quarter of 2020 were also impact ed by higher share -based
compensation as a result of the increase in DPM’s share price. Adjusted net earnings in the second quarter
and first six months of 2020 and 2019 excluded net gains on Sabina Gold and Silver Corp. (“Sabina”) special
warrants, which are not reflective of the Company’s underlying performance and are excluded from adjusted
net earnings(1).
Adjusted EBITDA
Adjusted EBITDA (1) in the second quarter and first six months of 2020 was $ 78.7 and $ 156.2 million,
respectively, compared to $34.0 million and $50.7 million in the corresponding period s in 2019, reflecting
the same factors that affected adjusted net earnings, except for depreciation, interest and income taxes,
which are excluded from adjusted EBITDA.
Production, Delivery and Cost Measures
Gold contained in concentrate produced in the second quarter of 2020 increased by 55% to 81,365 ounces
relative to the corresponding period in 2019 due primarily to production from Ada Tepe, which achieved
commercial production in June 2019. Copper production in the second quarter of 2020 increased by 4% to
9.4 million pounds relative to the corresponding period in 2019 due primarily to higher copper grades,
partially offset by lower copper recoveries.
Gold contained in concentrate produced in the first six months of 2020 increased by 62% to 154,328 ounces
relative to the corresponding period in 2019 due primarily to production from Ada Tepe. Copper production
in the first six months of 2020 increased by 10% to 18.8 million pounds relative to the corresponding period
in 2019 due primarily to higher copper grades, partially offset by lower copper recoveries.
Payable gold in concentrate sold in the second quarter of 2020 increased by 71% to 70,838 ounces relative
to the corresponding period in 2019 due primarily to deliveries from Ada Tepe, which achieved commercial
production in June 2019. Payable copper in concentrate sold in the second quarter of 2020 of 8.6 million
pounds was 16% lower than the corresponding period in 2019 due primarily to the timing of gold -copper
concentrate deliveries by Chelopech.
Payable gold in concentrate sold in the first six months of 2020 increased by 72% to 139,092 ounces relative
to the corresponding period in 2019 due primarily to deliveries from Ada Tepe . Payable copper in
concentrate sold in the first six months of 2020 of 18.1 million pounds was 10% higher than the
corresponding period in 2019 due primarily to higher copper grades, partially offset by lower copper
recoveries.
Complex concentrate smelted during the second quarter of 2020 of 58,516 tonnes was 5% lower than the
corresponding period in 2019 due primarily to a 30-day reduction in throughput during the month of April in
response to a government request to the natural resources sector to limit staffing levels as a result of
COVID-19. Complex concentrate smelted in the first six months of 2020 of 123,526 tonnes was slightly
lower than the corresponding period in 2019 due primarily to a reduction in throughput as a result of COVID-
19, partially offset by a steadier state of operations in 2020.
4
A table comparing production, delivery and cash cost measures for the second quarter and first six months
of 2020 to 2020 guidance can be found on page 7 of this news release.
Cost Measures
Cost of sales in the second quarter and first six months of 2020 of $ 84.5 million and $175.1 million,
respectively, was $ 12.8 million and $38.7 million higher than the corresponding period s in 2019 due
primarily to increased deliveries as a result of Ada Tepe commencing commercial operation in June 2019,
partially offset by the favourable impact of a stronger U.S. dollar relative to the ZAR and lower depreciation
at Tsumeb as a result of an impairment charge taken in the fourth quarter of 2019.
All-in sustaining cost per ounce of gold in the second quarter of 2020 of $729 was 3% higher than the
corresponding period in 2019 due primarily to lower by -product credits and higher general and
administrative expenses as a result of higher share-based compensation, reflecting the increase in DPM’s
share price, partially offset by low-cost gold production from Ada Tepe. All -in sustaining cost per ounce of
gold in the first six months of 2020 of $66 2 was 13% lower than the corresponding period in 2019 due
primarily to low-cost gold production from Ada Tepe.
Cash cost per tonne of complex concentrate smelted in the second quarter of 2020 of $345 was 8% lower
than the corresponding period in 2019 due primarily to the favourable impact of a weaker ZAR relative to
the U.S. dollar, partially offset by lower volumes of complex concentrate smelted and lower acid prices.
Cash cost per tonne of complex concentrate smelted in the first six months of 2020 of $352 was 5% lower
than the corresponding period in 2019 due primarily to the favourable impact of a weaker ZAR r elative to
the U.S. dollar, partially offset by lower acid prices.
Cash provided from operating activities
Cash provided from operating activities in the second quarter of 2020 was $75.5 million compared with $9.3
million in the corresponding period in 2 019 due primarily to the significant increase in earnings during the
period and a favourable period over period change in no n-cash working capital. Cash provided from
operating activities in the first six months of 2020 was $84.9 million compared with $23.8 million in the
corresponding period in 2019 due primarily to the significant increase in earnings during the period, partially
offset by an unfavourable period over period change in non-cash working capital due primarily to the timing
of customer receipts and higher gold prices and deliveries.
In addition, during the second quarter and first six months of 2020, Ada Tepe delivered 6,992 ounces and
20,102 ounces of gold, respectively, pursuant to the prepaid forward gold sales arrangement resulting in
$9.6 million and $27.5 million of deferred revenue being recognized in revenue during the second quarter
and first six months of 2020, respectively, with no corresponding impact on cash as these deliveries were
in partial satisfaction of the $50.0 million of upfront proceeds received in 2016 .
Free Cash Flow
Free cash flow in the second quarter and first six months of 2020 was $58.4 million and $107.6 million,
respectively, compared to $ 24.4 million and $34.4 million in the corresponding periods in 2019. These
increases were due primarily to higher volumes of gold sold, higher realized gold prices and the favourable
impact of a stronger U.S. dollar relative to the ZAR, partially offset by lower realized copper prices. In
addition, as was the case for cash provided from operating activities, free cash flow was similarly impacted
by the prepaid forward gold sales arrangement.
Capital Expenditures
Capital expenditures incurred during the second quarter and first six months of 2020 were $12.7 million and
$22.3 million, respectively, compared to $20.2 million and $40.4 million in the corresponding periods in 2019.
Growth capital expenditures (1) incurred during the second quarter and first six months of 2020 were $1.4
million and $4.2 million, respectively, compared to $15.0 million and $32.7 million in the corresponding
5
periods in 2019. These decreases were related principally to the construction of the Ada Tepe gold mine,
which was completed in 2019. Sustaining capital expenditures(1) incurred during the second quarter and
first six months of 2020 were $11.3 million and $18.1 million, respectively, in line with guidance, compared to
$5.2 million and $7.7 million in the corresponding periods in 2019. These increases were due primarily to
spending at Ada Tepe, which commenced commercial production in June 2019, and the work on the tailings
management facility at Chelopech.
Timok Gold Project, Serbia
As previously announced, the Company initiated a prefeasibility study, which is expected to be completed by
the end of 2020.
Exploration
At Chelopech, diamond drilling from surface continued through the second quarter of 2020 at the Wedge South
target and at the Krasta prospect . A new target , the West Shaft target, was identified approximatively one
kilometre west of the Chelopech mine and drilling to test this zone commenced in late June. At Ada Tepe, field
activities and drilling continued at the near mine prospects with minimal disruption from COVID -19
precautionary measures. In Serbia, all exploration related work w as temporarily ceased, and offices were
closed due to the COVID-19 pandemic and the state of emergency declared by the Serbian government. During
the second half of May , exploration activities resumed gradually. Drilling activities restarted in late June at
Timok, targeting shallow oxide mineralization.
Financial Position and Liquidity
As at June 30 , 2020 , DPM ended the quarter with a cash position of $75.8 million, $64.7 million of
investments, comprised primarily of its 9.4% interest in Sabina and 19.4% equity interest in INV Metals Inc.
(“INV”), and $150.0 million of undrawn capacity under its RCF.
Capital Allocation and Declaration of Dividend
Consistent with the Company’s disciplined capital allocation framework, on February 13, 2020, the
Company declared an inaugural quarterly dividend of $0.02 per common share to shareholders of record
on March 31, 2020, resulting in a total dividend payment of $3.6 million on April 15, 2020.
On May 6, 2020, the Company declared a second quarter dividend of $0.02 per common share to
shareholders of record on June 30, 2020, resulting in a total dividend payment of $3.6 million on July 15,
2020. On July 30, 2020, the Company declared a third quarter dividend of $0.02 per common share payable
on October 15, 2020 to shareholders of record on September 30, 2020.
The level of the Company’s dividend is based on establishing a sustainable level having regard for the
Company’s free cash flow outlook and is expected to allow the Company to build additional balance sheet
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.
On-Track to Meet 2020 Guidance
DPM’s 2020 production guidance remains unchanged from the guidance issued in February 2020, including
expected gold production of 257,000 to 299,000 ounces and 35 to 40 million pounds of copper. Based on
the strong operating performance achieved in the first six months of 2020, Chelopech and Ada Tepe are
on track to achieve the high er end of thei r 2020 production and delivery guidance. Tsumeb remains on
track to achieve its 2020 production guidance.
6
DPM’s 2020 all-in sustaining cost guidance of $700 to $780 per ounce and cash cost per tonne of complex
concentrate smelted guidance of $370 to $450 remain unchanged. Cash cost guidance for Ada Tepe has
been reduced to $44 to $50 per tonne from $50 to $60 per tonne reflecting strong operating performance
in the first half of 2020 and lower consumable costs.
If the US$/ZAR exchange rate and copper prices remain unchanged from current spot levels over the
balance of the year, all-in sustaining cost and cash cost per tonne of complex concentrate smelted for 2020
are expected to be at or below the lower end of guidance.
DPM has also increased the guidance for evaluation expenditures from $2 .0 million to $8.0 million to $7.0
million to $10.0 million to reflect the advancement of the prefeasibility study and related drilling for Timok.
For additional information regarding the Company’s detailed guidance for 2020, please refer to the “Three-
Year Outlook” section of the MD&A.
(1) Adjusted net earnings, adjusted basic earnings per share, adjusted earnings before interest, taxes, depreciation and amortization
(“EBITDA”), all-in sustaining cost per ounce of gold, cash cost per tonne of complex concentrate smelted at Tsumeb, net of by-product
credits, free cash flow, and growth and sustaining capital expenditures have no standardized meaning under International Financial
Reporting Standards ("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 Management’s Discussion and Analysis for the three and six months ended June 30, 2020 (the “MD&A”) for further discussion
of these items, including reconciliations to IFRS measures.
7
Review of Production, Delivery and Cost Measures
Q2 2020 YTD June 2020 2020
guidance(1) Chelopech Ada Tepe Tsumeb Consolidated Chelopech Ada Tepe Tsumeb Consolidated
Ore processed
(‘000s tonnes) 556.0 224.5 - 780.5 1,101.8 458.0 - 1,559.8 2,855 – 3,092
Metals contained in
concentrate produced
Gold (‘000s ounces) 49.1 32.3 - 81.4 91.7 62.6 - 154.3 257 – 299
Copper (million pounds) 9.4 - - 9.4 18.8 - - 18.8 35 – 40
Payable metals in
concentrate sold
Gold (‘000s ounces) 36.7 34.1 - 70.8 75.5 63.6 - 139.1 229 – 267
Copper (million pounds) 8.6 - - 8.6 18.1 - - 18.1 33 – 38
All-in sustaining cost
per ounce of gold(2) - - - 729 - - - 662 700 - 780
Complex concentrate
smelted
(‘000s tonnes)
- - 58.5 58.5 - - 123.5 123.5 230 – 265
Cash cost per tonne of
complex concentrate
smelted(2)
- - 345 345 - - 352 352 370 – 450
1) As disclosed in the MD&A for the period ended December 31, 2019, issued on February 13, 2020, and available at www.sedar.com and www.dundeeprecious. com.
2) All-in sustaining cost per ounce of gold and cash cost per tonne of complex concentrate smelted are not defined measures under IFRS. Refer to the “Non-GAAP Financial Measures” section of the MD&A for reconciliations
to IFRS measures.
8
This news release and DPM’s unaudited condensed interim consolidated financial statements and MD&A
for the three and six months ended June 30 , 2020 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 information in this press release, with respect to the Company’s material mineral projects,
has been prepared in accordance with Canadian regulatory requirements set out in NI 43-101 Standards
of Disclosure for Mineral Projects 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 appr oved 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.
Second Quarter 2020 Results
On Friday, July 31, 2020 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 audi o webcast to reduce hold time in
advance of the call.
The call-in numbers and webcast details are as follows:
Date: Friday, July 31, 2020
Time: 9:00 AM EDT
Webcast: https://edge.media-server.com/mmc/p/ddaygmb3
Canada and USA Toll Free: 1-844-402-0878
International: +1-478-219-0512
Passcode: 9089809
Replay: 1-855-859-2056
Outside Canada or USA: 1-404-537-3406
Replay Passcode: 9089809
Replay Available Until: 7 days following the call
About Dundee Precious Metals
Dundee Precious Metals Inc. is a Canadian based, international gold mining company engaged in the
acquisition of mineral properties, exploration, development, mining and processing of precious metals. The
Company's operating assets include the Chelopech operation, which produces a gold-copper concentrate
containing gold, copper and silver and a pyrite concentrate containing gold, located east of Sofia, Bulgaria;
the Ada Tepe operations, which produces a gold concentrate containing gold and silver, located in southern
Bulgaria; and the Tsumeb smelter, a complex copper concentrate processing facility located in Namibia.
DPM also holds interests in a number of developing gold and exploration properties located in Canada,
Serbia and Ecuador, including its 9.4% interest in Sabina and 19.4% interest in INV.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This press 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 generally, 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 e xpressions. The Forward Looking
Statements in this press 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 Tsumeb or any of the Company’s mining