Dundee Precious Metals Announces Sale of Tsumeb Smelter for US$49 Million
Dundee Precious Metals Announces Sale of Tsumeb Smelter for US$49 Million
Toronto, Ontario, March 7, 2024 – Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or “the Company”)
today announced that it has entered into a definitive share purchase agreement (the “SPA”) with a
subsidiary of Sinomine Resource Group Co. Ltd. , (“Sinomine”) for the sale of its interest in the Tsumeb
smelter located in Namibia , including all associated assets and liabilities, through the disposition of all of
the issued and outstanding shares it indirectly holds in Dundee Precious Metals Tsumeb Holding (Pty) Ltd.
(“DPMTH”) (“the Transaction”) for consideration of US$49 million in cash.
“We are pleased to announce the sale of the Tsumeb smelter, which is consistent with our strategic
objective of focusing on our gold mining assets and simplifying our portfolio going forward. We are
extremely proud of the investment s that we have made to transform Tsumeb’s operation al and
environmental performance into a specialized custom smelter with a highly skilled workforce,” said David
Rae, President and Chief Executive Officer.
“We would like to thank the government of Namibia, the community of Tsumeb and our employees for their
support over the past 13 years. We will work closely with Sinomine to ensure a smooth transition to support
a successful future for the operation and all of its stakeholders.”
DPM acquired the smelter in 2010 to secure a processing outlet for the complex concentrate produced by
the Company’s Chelopech mine in Bulgaria. With developments in the global smelting market and changes
in the quality of the Chelopech concentrate , DPM is able to place its Chelopech concentrate at several
other third-party facilities, providing secure and reliable processing alternatives at favourable terms.
Key terms of the transaction
Under the terms of the SPA, DPM, through the sale of the shares of DPMTH, will transfer, on a debt-free
and cash-free basis, all assets and liabilities associated with the Tsumeb smelter to Sinomine for
consideration of US$49 million in cash, subject to normal working capital adjustments following closing (“the
purchase price”) . The Company has made limited representations and warranties and provided certain
indemnities to Sinomine customary with transactions of this nature , subject to a liability cap equal to 50%
of the purchase price. The cash received by DPM on closing will be less a US$5 million holdback to be held
in escrow for a period of six months to secure the Company’s indemnity obligations under the SPA.
In addition, pursuant to the SPA, DPM is entitled to be paid all cash collected from IXM S.A. with respect
to a positive balance in metals exposure outstanding at Tsumeb, currently estimated to be approximately
US$17.2 million, which will constitute an increase in the purchase price.
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The Transaction is subject to customary closing conditions, including approval under the Namibia
Competition Act and approvals required from Chinese regulatory authorities for overseas investments, and
is expected to close in Q3 2024 . DPM expects to use the proceeds from the Transaction to further
strengthen its balance sheet and to support its core mining business in line with its disciplined capital
allocation framework.
Cutfield Freeman & Co. Ltd. acted as financial adviser to DPM in the Transaction.
About Dundee Precious Metals Inc.
Dundee Precious Metals Inc. is a Canadian -based international gold mining company with operations and
projects located in Bulgaria, Namibia, Serbia and Ecuador. The Company’s purpose is to unlock resources
and generate value to thrive and grow 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.
For further information please contact:
David Rae
President and Chief Executive Officer
Tel: (416) 365-5191
Jennifer Cameron
Director, Investor Relations
Tel: (416) 219-6177
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 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 expressions. Forward looking
statements in this news release incl ude, without limitation, statements with respect to the potential timing
of the closing of the Transaction; expected benefits to the Company from the Transaction; expected
additional payments for cash collected from IXM S.A. with respect to a positive balance in metals exposure
outstanding at Tsumeb; the Company’s expectation regarding Namibian competition approval and other
regulatory approvals for the Transaction; the Company’s expectations with respect to its ability to place its
Chelopech concentrate at several other third -party facilities without the need to own and operate the
Tsumeb smelter; the Company’s expected use of proceeds; and the impact on its balance sheet. Forward
Looking Statements are based on certain key assumptions and the opinions and estimates as of the date
such statements are made, and they involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company to be materially different
from any other future results, performance or achievements expressed or implied by the Forward Looking
Statements. In addition to factors already discussed in this news release, such factors include, among
others, there being no assurance that the Transaction will close, the Transaction being subject to regulatory
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risks and uncertainties, including with out limitation, uncertainties with respect to obtaining all required
Namibian and other regulatory approvals, discretion of the Company with respect to the use of proceeds
from the sale, uncertainties with respect to realizing the benefits of the Transaction and/or collect additional
payments in full as estimated , risks relating to the Company’s business generally, as well as those risk
factors discussed or referred to in any other documents (including without limitation the Company’s most
recent Annual Information Form and its most recent Management’s Discussion & Analysis) filed from time
to time with the securities regulatory authorities in all provinces and territories of Canada and available on
SEDAR+ at www.sedarplus.com. The reader has been cautioned that the foregoing list is not exhaustive
of all factors which may have been used. Although the Company has attempted to identify important factors
that could cause results to differ materially from those described in Forward Looking Statements, there may
be other factors that cause actions, events or results not to be anticipated, estimated or intended. There
can be no assurance that Forward Looking Statements will prove to be accurate, as actual results and
future events co uld differ materially from those anticipated in such statements. The Company’s Forward
Looking Statements reflect current expectations regarding future events and speak only as of the date
hereof. Unless required by securities laws, the Company undertakes no obligation to update Forward
Looking Statements if circumstances or management’s estimates or opinions should change. Accordingly,
readers are cautioned not to place undue reliance on Forward Looking Statements.