Dundee Precious Metals Continues Record of Strong Free Cash Flow Generation; Announces 2023 Financial Results and Updated Three-Year Outlook
Dundee Precious Metals Continues Record of Strong Free Cash Flow Generation;
Announces 2023 Financial Results and Updated Three-Year Outlook
Toronto, Ontario, February 14, 2024 – Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or the
“Company”) announced its operating and financial results for the quarter and year ended December 31,
2023.
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.)
• Strong metals production: Produced 296,072 ounces of gold and 30.5 million pounds of copper, in
line with 2023 guidance.
• All-in sustaining cost: Reported cost of sales per ounce of gold sold 1 of $919 and an all-in sustaining
cost per ounce of gold sold2 of $849, in line with 2023 guidance.
• Significant free cash flow: Generated $261.6 million of cash provided from operating activities and
free cash flow2 of $227.9 million.
• Solid adjusted net earnings: Reported net earnings of $182.0 million ($0.98 per share) and adjusted
net earnings2 of $180.0 million ($0.97 per share2).
• Growing financial position: Ended the year with a strong balance sheet, including $595.3 million of
cash, a $150.0 million undrawn revolving credit facility, and no debt.
• Return of capital to shareholders: Returned $95.8 million, or 42% of free cash flow, to shareholders
during 2023 through dividends paid and shares repurchased. Declared fourth quarter dividend of $0.04
per common share payable on April 15, 2024 to shareholders of record on March 31, 2024.
• Strong sustainability performance: DPM s cored in the 91st percentile among metals and mining
companies in the 2023 S&P Global Corporate Sustainability Assessment for the third consecutive year,
and was included in the 2024 Sustainability Yearbook.
• Chelopech life of mine ("LOM") plan: Updated Mineral Reserve and Mineral Resource estimate and
LOM plan with improved grades and recoveries support a mine life that now extends to 2032.
• Strong 2024 guidance and updated three-year outlook: 2024 production expected to be between
245,000 and 285,000 ounces of gold at an all-in sustaining cost of between $790 to $930 per ounce of
gold sold.
• Strategic review of the Tsumeb smelter: DPM has decided to undertake a strategic review of the
Tsumeb smelter, including a potential sale, as the smelter is no longer seen as strategic to DPM's asset
portfolio.
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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 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 21 of this news
release for more information, including reconciliations to IFRS measures.
• Acquisition of Osino: On December 18, 2023, DPM announced an agreement to acquire Osino
Resources Corp. ("Osino"), which holds the advanced-stage Twin Hills gold project. Completion of the
acquisition remains subject to certain customary conditions, including approval of Osino
securityholders and regulatory approval under the Namibia Competition Act.
• Čoka Rakita: In December 2023, announced a maiden Mineral Resource estimate ("MRE") of 1.78
million ounces for the Čoka Rakita project in Serbia and continues to advance the preliminary
economic assessment ("PEA"), which is on-track for completion in Q2 2024. DPM is continuing the
drilling program focused on extending the limits of Čoka Rakita, which remains open to the northeast
and southwest, and is also aggressively pursuing additional skarn targets on four licences.
• Loma Larga: At the Loma Larga project in Ecuador, progressed activities related to permitting and
stakeholder relations.
CEO Commentary
"2023 was an exceptional year for DPM. We delivered strong operating results, achieved our gold
production and all-in sustaining cost guidance, generated $228 million of free cash flow, significantly
increased our return of capital to shareholders and further strengthened our balance sheet," said David
Rae, President and Chief Executive Officer. "We also continued to deliver on our ESG priorities and
scored in the 91st percentile among metals and mining companies in the S&P Global Corporate
Sustainability Assessment for the third consecutive year.
"During the year, we significantly transformed our growth pipeline by advancing the Čoka Rakita project in
Serbia from discovery to a 1.8 million ounce gold deposit within 11 months.
"As we enter 2024, DPM is in a unique position in the industry, with a strong base of production, attractive
all-in sustaining costs, significant free cash flow generation and the financial strength to internally fund our
growth pipeline and exploration prospects while continuing to return capital to shareholders through our
quarterly dividend."
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.
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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 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 21 of this news release.
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Key Operating and Financial Highlights
$ millions, except where noted Fourth Quarter Full Year
2023 2022 Change 2023 2022 Change
Operating Highlights
Ore Processed t 735,524 759,241 (3%) 2,952,711 2,991,782 (1%)
Metals contained in concentrate produced:
Gold
Chelopech oz 41,871 45,339 (8%) 161,872 179,135 (10%)
Ada Tepe oz 35,212 28,081 25% 134,200 93,974 43%
Total gold in concentrate produced oz 77,083 73,420 5% 296,072 273,109 8%
Copper Klbs 8,229 7,436 11% 30,547 30,835 (1%)
Payable metals in concentrate sold:
Gold
Chelopech oz 36,276 39,203 (7%) 135,862 151,580 (10%)
Ada Tepe oz 33,288 26,628 25% 129,881 91,117 43%
Total payable gold in concentrate sold oz 69,564 65,831 6% 265,743 242,697 9%
Copper Klbs 7,009 6,726 4% 26,651 27,224 (2%)
Cost of sales per tonne of ore processed(1):
Chelopech $/t 64 71 (10%) 63 63 0%
Ada Tepe $/t 146 125 17% 140 120 17%
Cash cost per tonne of ore processed(2):
Chelopech $/t 51 51 0% 50 50 0%
Ada Tepe $/t 72 58 24% 67 55 22%
Cost of sales per ounce of gold sold(3) $/oz 877 990 (11%) 919 975 (6%)
All-in sustaining cost per ounce of gold sold(2) $/oz 876 1,008 (13%) 849 885 (4%)
Financial Highlights
Revenue 139.3 113.0 23% 520.1 433.5 20%
Cost of sales 61.0 65.1 (6%) 244.2 236.7 3%
Earnings (loss) before income taxes(4) 63.9 37.6 70% 216.7 58.7 269%
From continuing operations 58.5 26.4 122% 205.7 139.4 48%
From discontinued operations 5.4 11.2 (52%) 11.0 (80.7) 114%
Net earnings (loss)(4) 57.5 33.3 72% 192.9 35.9 437%
From continuing operations 52.1 22.1 136% 182.0 116.6 56%
From discontinued operations 5.4 11.2 (52%) 10.9 (80.7) 114%
Basic earnings (loss) per share(4) 0.32 0.18 78% 1.04 0.19 447%
From continuing operations 0.29 0.12 142% 0.98 0.61 61%
From discontinued operations 0.03 0.06 (50%) 0.06 (0.42) 114%
Adjusted EBITDA(2),(4) 79.6 58.3 37% 287.2 252.9 14%
From continuing operations 72.0 45.5 58% 268.4 222.9 20%
From discontinued operations 7.6 12.8 (41%) 18.8 30.0 (37%)
Adjusted net earnings(2),(4) 55.5 33.3 66% 190.9 129.0 48%
From continuing operations 50.1 22.1 127% 180.0 118.9 51%
From discontinued operations 5.4 11.2 (52%) 10.9 10.1 8%
Adjusted net earnings per share(2),(4) 0.31 0.18 72% 1.03 0.68 51%
From continuing operations 0.28 0.12 133% 0.97 0.62 56%
From discontinued operations 0.03 0.06 (50%) 0.06 0.06 (1%)
Cash provided from operating activities(4) 78.2 49.3 59% 275.7 232.1 19%
From continuing operations 71.3 48.5 47% 261.6 209.6 25%
From discontinued operations 6.9 0.8 807% 14.1 22.5 (37%)
Free cash flow(2),(4) 51.8 33.3 56% 231.9 166.4 39%
From continuing operations 49.3 30.0 64% 227.9 150.5 51%
From discontinued operations 2.5 3.3 (24%) 4.0 15.9 (75%)
Capital expenditures incurred(5):
Sustaining(6) 8.0 12.9 (38%) 31.2 39.4 (21%)
Growth(7) 10.0 11.2 (11%) 29.3 31.4 (7%)
Total capital expenditures 18.0 24.1 (25%) 60.5 70.8 (15%)
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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 21 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) These measures include discontinued operations.
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.
Performance Highlights
A table comparing production, sales and cash cost meas ures by asset for the quarter and year ended Dec ember 31, 2023 against
2023 guidance is located on page 17 of this news release.
In the fourth q uarter of 202 3, the Company’s mining operations continued to p erform well and delivered
another quarter of strong production. Ada Tepe achieved record quarterly gold production, and production
from Chelopech was in-line with expectations.
For the full year, DPM achieved its annual guidance for the gold and copper production as well as al l-in
sustaining cost per ounce of gold sold.
Highlights include the following:
Chelopech, Bulgaria: Gold contained in concentrate produced in the fourth quarter and full y ear of 2023
of 41 ,871 oun ces and 1 61,872 oun ces, r espectively, was 8% a nd 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 fourth quarter of 2023 of 8.2 million pounds was 11%
higher than the corresponding period in 2022 due primarily to higher copper grades. Copper production in
2023 of 30.5 million pounds was comparable to 2022 due primarily to lower copper grades largely offset
by higher volumes of ore processed.
All-in sustaining cost per ounce of gold sold in the fourth quarter of 2023 was $985 compared to $1,127 in
the corresponding period in 2022 due primarily to lower cash outlays for sustaining capital expenditures,
higher by-product credits reflecting higher volumes and prices of copper sold and lower prices for power,
partially offset by 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 2023 was $955 compared to $858 in 2022 due primarily to
lower volumes of gold sold, lower by-product credits reflecting lower volumes and prices of copper sold,
higher prices for labour and direct materials and a stronger Euro relative to the U.S. dollar, partially offset
by lower treatment and freight charges as a result of increased deliveries to third-party smelters and lower
prices for power, as well as lower cash outlays for sustaining capital expenditures.
Ada Tepe, Bulgaria: Gold contained in concentrate produced in the fourth quarter and full year of 2023
of 35,212 ounces and 134,200 ounces, respectively, was 25% and 43% 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 year.
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All-in sustaining cost per ounce of gold sold in the fourth quarter and full year of 2023 of $475 and $500,
respectively, was 14% and 26% lower than the corresponding periods in 2022 due primarily to higher
volumes of gold sold, as well as the timing of cash outlays for sustaining capital expenditures.
Consolidated Operating Highlights
Production: Gold contained in concentrate produced in the fourth quarter and full year of 2023 of 77,083
ounces and 296,072 ounces, respectively, was 5% and 8% 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.
Copper production in the fourth quarter of 2024 of 8.2 million pounds was 11% higher than the
corresponding period in 2022 due primarily to higher copper grades. Copper production in 2023 of 30.5
million pounds was comparable to 2022 due primarily to lower copper grades largely offset by higher
volumes of ore processed.
Deliveries: Payable gold in concentrate sold in the fourth quarter and full year of 2023 of 69,564 ounces
and 265,743 ounces, respectively, was 6% and 9% higher than the corresponding periods in 2022
primarily reflecting higher gold production.
Payable copper in concentrate sold in the fourth quarter of 2023 of 7.0 million pounds was 4% higher than
the corresponding period in 2022 due primarily to higher copper production, partially offset by the timing
of deliveries. Payable copper in 2023 of 26.7 million pounds was comparable to 2022, consistent with
copper production.
Cost measures: Cost of sales in the fourth quarter of 2023 of $61.0 million decreased compared to $65.1
million in the corresponding period in 2022 due primarily to lower prices for power and lower depreciation
expenses. Cost of sales in 2023 of $244.2 million increased compared to $236.7 million in 2022 due
primarily to higher local currency mine operating costs reflecting higher costs for labour and direct
materials, partially offset by lower prices for power.
All-in sustaining cost per ounce of gold sold in the fourth quarter of 2023 of $876 was 13% lower than the
corresponding period in 2022 due primarily to higher volumes of gold sold, lower cash outlays for
sustaining capital expenditures, lower prices for power, and higher by-product credits as a result of higher
volumes and realized prices of copper sold, partially offset by a stronger Euro relative to the U.S. dollar.
All-in sustaining cost per ounce of gold sold in 2023 of $849 was 4% lower than 2022 due primarily to
higher volumes of gold sold, lower treatment and freight charges at Chelopech and lower prices for
power, partially offset by 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 expenses reflecting DPM’s strong share price performance.
Capital expenditures: Capital expenditures incurred in the fourth quarter and full year of 2023 of $18.0
million and $60.5 million, respectively, were 25% and 15% lower than the corresponding periods in 2022
of $24.1 million and $70.8 million.
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Sustaining capital expenditures incurred the fourth quarter of 2023 of $8.0 million were 38% lower than
the corresponding period in 2022 of $12.9 million due primarily to the planned upgrade of the tailings
management facility at Chelopech, which occurred throughout 2022 and was completed in the second
quarter of 2023. Sustaining capital expenditures in 2023 of $31.2 million were 21% lower than 2022 of
$39.4 million due primarily to the completion of the tailings management facility upgrade at Chelopech, as
well as the inclusion of the capitalized lease and leasehold improvements related to the new head office
in 2022.
Growth capital expenditures incurred during the fourth quarter and full year of 2023, primarily related to
the Loma Larga gold project, were $10.0 million and $29.3 million, respectively, compared to $11.2 million
and $31.4 million in the corresponding periods in 2022.
Consolidated Financial Highlights
Financial results in 2023 reflected higher volumes and realized prices of gold sold, partially offset by
higher planned exploration and evaluation expenses.
Revenue: Revenue in the fourth quarter of 2023 of $139.3 million was 23% higher than the
corresponding period in 2022 due primarily to higher volumes and realized prices of gold sold.
Revenue in 2023 of $520.1 million was 20% higher than 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 and realized prices of copper
sold.
Net earnings: Net earnings from continuing operations in the fourth quarter of 2023 of $52.1 million
($0.29 per share) increased compared to $22.1 million ($0.12 per share) in the corresponding period in
2022 due primarily to higher volumes and realized prices of gold and copper sold, partially offset by
higher planned exploration and evaluation expenses. Net earnings from continuing operations in 2023 of
$182.0 million ( $0.98 per share) increased compared to $116.6 million ( $0.61 per share) in 2022 due
primarily to 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, and higher share-based compensation expenses reflecting DPM’s strong share performance.
Adjusted net earnings: Adjusted net earnings from continuing operations in the fourth quarter and full
year of 2023 of $50.1 million ( $0.28 per share) and $180.0 million ( $0.97 per share), respectively,
increased compared to $22.1 million ( $0.12 per share) and $118.9 million ( $0.62 per share) in the
corresponding periods in 2022 due primarily to the same factors affecting net earnings, except for
adjusting items mainly related to gains or losses on derivatives.
Earnings before income taxes: Earnings before income taxes from continuing operations in the fourth
quarter and full year of 2023 of $58.5 million and $205.7 million , respectively, increased compared to
$26.4 million and $139.4 million in the corresponding periods in 2022, reflecting the same factors that
affected net earnings from continuing operations, except for income taxes, which are excluded.
Adjusted EBITDA: Adjusted EBITDA from continuing operations in the fourth quarter and full year of
2023 was $72.0 million and $268.4 million, respectively, compared to $45.5 million and $222.9 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.
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Cash provided from operating activities: Cash provided from operating activities of continuing
operations in the fourth quarter of 2023 of $71.3 million was 47% higher than the corresponding period in
2022 due primarily to higher adjusted EBITDA from continuing operations generated in the quarter, as
well as the timing of deliveries and subsequent receipt of cash partially offset by the timing of payments to
suppliers. Cash provided from operating activities of continuing operations in 2023 of $261.6 million was
25% higher than 2022 due primarily to higher adjusted EBITDA from continuing operations generated in
the year, partially offset by the timing of deliveries and subsequent receipt of cash and the timing of
payments to suppliers.
Free cash flow: Free cash flow from continuing operations in the fourth quarter and full year of 2023 of
$49.3 million and $227.9 million , respectively, was $19.3 million and $77.4 million higher than the
corresponding periods in 2022 due primarily to higher adjusted EBITDA from continuing operations
generated in the periods and lower cash outlays for sustaining capital expenditures. Free cash flow is
calculated before changes in working capital.
Discontinued Operations
In 2023, the Company decided to undertake a strategic review of its Tsumeb operation, including a
potential sale, given that the smelter is no longer expected to process any Chelopech concentrate
commencing in 2024 and as a result, it is no longer seen as strategic to DPM's asset portfolio. As a result,
the assets and liabilities of Tsumeb have been presented as held for sale in the consolidated statement of
financial position as at December 31, 2023 and the operating results and cash flows of Tsumeb have
been presented as discontinued operations in the consolidated statements of earnings (loss) and cash
flows for the years ended December 31, 2023 and 2022. As a consequence, certain comparative figures
in the consolidated statements of earnings (loss) and cash flows have been reclassified to conform with
current year presentation.
Complex concentrate smelted in the fourth quarter of 2023 of 67,891 tonnes was 26,056 tonnes higher
than the corresponding period in 2022 reflecting improved operating performance as a result of the
maintenance work which occurred in the third quarter of 2023, compared to a 17-day shutdown to repair a
water leak in the off-gas system and instability in the power grid as a result of abnormally heavy rainfall in
December 2022. Complex concentrate smelted in 2023 of 188,803 tonnes was 14,681 tonnes higher than
the corresponding period in 2022 due primarily to increased plant availability following the completion of
the maintenance work in the third quarter of 2023.
Cash cost per tonne of complex concentrate smelted in the fourth quarter of 2023 of $320 was $123 lower
than the corresponding period in 2022 due primarily to higher volumes of complex concentrate smelted
reflecting improved operating performance following the Ausmelt furnace maintenance shutdown, partially
offset by lower sulphuric acid by-product credits . Cash cost per tonne of complex concentrate smelted in
2023 of $414 was $49 lower than 2022 due primarily to higher volumes of complex concentrate smelted
and a weaker ZAR relative to the U.S. dollar, partially offset by lower sulphuric acid by-product credits.
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