Dundee Precious Metals Continues Record of Strong Free Cash Flow Generation; Announces 2024 First Quarter Results
Dundee Precious Metals Continues Record of Strong Free Cash Flow Generation;
Announces 2024 First Quarter Results
Toronto, Ontario, May 7, 2024 – Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or the “Company”)
announced its operating and financial results for the first quarter ended March 31, 2024.
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 62,727 ounces of gold and 6.7 million pounds of copper, in line
with expectations.
• All-in sustaining cost: Reported all-in sustaining cost per ounce of gold sold 1 of $883, in line with
2024 guidance, and cost of sales per ounce of gold sold2 of $1,127.
• Significant free cash flow: Generated $62.3 million of free cash flow 1 from continuing operations and
$35.8 million of cash provided from operating activities from continuing operations.
• Solid adjusted net earnings: Reported adjusted net earnings2 from continuing operations of $32.5
million ( $0.18 per share 1) and net earnings from continuing operations of $39.4 million ( $0.22 per
share).
• Growing financial position: Ended the year with a strong balance sheet, including a total of $625.6
million of cash from continuing and discontinued operations, a $150.0 million undrawn revolving credit
facility, and no debt.
• Čoka Rakita: Results of the preliminary economic assessment (“PEA”) for the Čoka Rakita project in
Serbia highlight a highly-attractive organic growth project with robust economics, meaningful
production and attractive costs. Based on the positive results, DPM is proceeding with a pre-feasibility
study (“PFS”), which is expected to be completed by the first quarter of 2025.
• Loma Larga: At the Loma Larga gold project in Ecuador, progressed activities related to permitting
and stakeholder relations, including environmental consultation, which recommenced during the
quarter.
• Sale of the Tsumeb smelter: Entered into a definitive share purchase agreement (“SPA”) with a
subsidiary of Sinomine Resource Group Co. Ltd. (“Sinomine”) for the sale of DPM's interest in the
Tsumeb smelter in Namibia for consideration of $49.0 million in cash. The transaction is expected to
close in the third quarter of 2024.
• Return of capital to shareholders: Returned $9.1 million, or 15% of free cash flow , to shareholders
during the first quarter of 2024 through dividends paid as well as shares repurchased following the
renewal of the Normal Course Issuer Bid (“NCIB”) in late March. Declared second quarter dividend of
$0.04 per common share payable on July 15, 2024 to shareholders of record on June 30, 2024.
1
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 17 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
“DPM is off to a solid start in 2024, generating approximately $62 million of free cash flow during the first
three months of the year, a result of our strong production, low cost structure and the benefit of higher
metal prices improving our already robust margins,” said David Rae, President and Chief Executive
Officer.
“We have continued to fast-track the Čoka Rakita project in Serbia. The results from the PEA, which we
announced last week, outline a highly attractive project with robust economics and the potential to
contribute meaningful high-margin production growth to DPM's portfolio. We are also continuing our infill
and scout drilling programs, where results have continued to demonstrate the significant exploration
potential of Čoka Rakita and the surrounding licences.
“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.
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 17 of this news release.
2
Key Operating and Financial Highlights
$ millions, except where noted Three Months
2024 2023 Change
Operating Highlights
Ore Processed t 701,198 737,637 (5%)
Metals contained in concentrate produced:
Gold
Chelopech oz 37,495 35,258 6%
Ada Tepe oz 25,232 33,323 (24%)
Total gold in concentrate produced oz 62,727 68,581 (9%)
Copper Klbs 6,692 7,177 (7%)
Payable metals in concentrate sold:
Gold
Chelopech oz 29,568 31,073 (5%)
Ada Tepe oz 25,644 32,426 (21%)
Total payable gold in concentrate sold oz 55,212 63,499 (13%)
Copper Klbs 5,457 6,358 (14%)
Cost of sales per tonne of ore processed(1):
Chelopech $/t 69 65 6%
Ada Tepe $/t 147 139 6%
Cash cost per tonne of ore processed(2):
Chelopech $/t 55 51 8%
Ada Tepe $/t 65 66 (2%)
Cost of sales per ounce of gold sold(3) $/oz 1,127 974 16%
All-in sustaining cost per ounce of gold sold(2) $/oz 883 872 1%
Financial Highlights
Revenue 123.8 126.4 (2%)
Cost of sales 62.2 61.9 1%
Earnings before income taxes(4) 52.6 49.0 7%
From continuing operations 46.3 46.0 1%
From discontinued operations 6.3 3.0 109%
Net earnings(4) 45.7 46.6 (2%)
From continuing operations 39.4 43.6 (10%)
From discontinued operations 6.3 3.0 109%
Basic earnings per share(4) $/sh 0.25 0.25 0%
From continuing operations $/sh 0.22 0.23 (4%)
From discontinued operations $/sh 0.03 0.02 50%
Adjusted EBITDA(2),(4) 65.9 68.4 (4%)
From continuing operations 54.5 63.7 (14%)
From discontinued operations 11.4 4.7 142%
Adjusted net earnings(2),(4) 41.4 46.1 (10%)
From continuing operations 32.5 43.1 (25%)
From discontinued operations 8.9 3.0 194%
Adjusted net earnings per share(2),(4) $/sh 0.23 0.24 (4%)
From continuing operations $/sh 0.18 0.22 (18%)
From discontinued operations $/sh 0.05 0.02 150%
Cash provided from operating activities(4) 53.5 70.9 (25%)
From continuing operations 35.8 65.7 (46%)
From discontinued operations 17.7 5.2 240%
Free cash flow(2),(4) 68.2 65.0 5%
From continuing operations 62.3 66.1 (6%)
From discontinued operations 5.9 (1.1) 651%
Capital expenditures incurred(5):
Sustaining(6) 5.7 7.3 (22%)
Growth and other(7) 8.3 6.5 28%
Total capital expenditures 14.0 13.8 2%
3
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 17 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 measures by asset for the three months ended March 31, 2024 against 2024
guidance is located on page 12 of this news release.
In the first quarter of 2024, the Company’s mining operations continued to deliver strong results. Gold
production at Chelopech and Ada Tepe was in line with expectations, with higher grades and recoveries
expected at both operations over the balance of the year . Both mines are on track to achieve 2024
production and all-in sustaining cost guidance.
Highlights include the following:
Chelopech, Bulgaria: Gold contained in concentrate produced in the first quarter of 2024 of 37,495
ounces was 6% higher than the corresponding period in 2023 due primarily to higher gold recoveries,
largely offset by lower volumes of ore processed and lower gold grades. Copper production in 2024 of 6.7
million pounds was 7% lower than the corresponding period in 2023 due primarily to lower than expected
copper grades and lower volumes of ore processed, partially offset by higher copper recoveries.
All-in sustaining cost per ounce of gold sold in the first quarter of 2024 was $849 compared to $932 in the
corresponding period in 2023 due primarily to lower treatment charges and lower prices for power and
direct materials, partially offset by lower by-product credits as a result of lower volumes and realized
prices of copper sold, lower volumes of gold sold, higher freight charges and higher labour costs , as well
as lower cash outlays for sustaining capital expenditures.
Ada Tepe, Bulgaria: Gold contained in concentrate produced in the first quarter of 2024 of 25,232
ounces was 24% lower than the corresponding period in 2023, due primarily to mining lower grade zones,
in line with the mine plan, and lower volumes of ore processed.
All-in sustaining cost per ounce of gold sold in the first quarter 2024 was $583 compared to $486 in the
corresponding period in 2023 due primarily to lower volumes of gold sold and the timing of maintenance
activities, partially offset by lower prices for power and direct materials, and lower royalties.
Consolidated Operating Highlights
Production: Gold contained in concentrate produced in the first quarter of 2024 of 62,727 ounces was
9% lower than the corresponding period in 2023 due primarily to lower gold grades at Ada Tepe and lower
volumes of ore processed, partially offset by higher gold recoveries at Chelopech, in line with the mine
plans for both operations.
4
Copper production in the first quarter of 2024 of 6.7 million pounds was 7% lower than the corresponding
period in 2023 due primarily to lower than expected copper grades and lower volumes of ore processed,
partially offset by higher copper recoveries.
Deliveries: Payable gold in concentrate sold in the first quarter of 2024 of 55,212 ounces was 13% lower
than the corresponding period in 2023 primarily reflecting lower gold production and the timing of
shipments. Payable copper in concentrate sold in the first quarter of 2024 of 5.5 million pounds was 14%
lower than the corresponding period in 2023 due primarily to lower copper production and the timing of
shipments.
Cost measures: Cost of sales in the first quarter of 2024 of $62.2 million was comparable to the
corresponding period in 2023 due primarily to higher labour costs and the timing of maintenance activities
at Ada Tepe, largely offset by lower local currency mine operating costs reflecting lower prices for power
and direct materials, and lower royalties at Ada Tepe reflecting lower contained ounces mined.
All-in sustaining per ounce of gold sold in the first quarter of 2024 of $883 was comparable to the
corresponding period in 2023, due primarily to lower volumes of gold sold, lower by-product credits as a
result of lower volumes and realized prices of copper sold, and higher freight charges as a result of the
disruptions in key sea routes due to the Middle East conflicts, largely offset by lower treatment charges at
Chelopech as DPM was able to secure more favourable commercial terms for the year as a result of the
current shortfall of concentrates supply in the copper industry, lower prices for power and direct materials
as the market came off the peak inflationary environment, and lower mark-to-market adjustments on
share-based compensation expenses reflecting changes in DPM’s share prices.
Capital expenditures: Capital expenditures incurred in the first quarter of 2024 were $14.0 million ,
compared to $13.8 million in the corresponding period in 2023.
Sustaining capital expenditures incurred in the first quarter of 2024 were $5.7 million compared to $7.3
million in the corresponding period in 2023, due primarily to the completion of the planned upgrade of
Chelopech’s tailings management facility in the second quarter of 2023.
Growth and other capital expenditures incurred in the first quarter of 2024 were $8.3 million compared to
$6.5 million in the corresponding period in 2023, due primarily to a $4.0 million expenditure for the electric
mobile equipment received in the first quarter of 2024, partially offset by lower expenditures related to the
Loma Larga gold project as expected.
Consolidated Financial Highlights
Financial results in the first quarter of 2024 reflected lower volumes of metals sold, lower realized copper
prices and higher planned exploration and evaluation expenses, partially offset by higher realized gold
prices.
Revenue: Revenue in the first quarter of 2024 of $123.8 million was 2% lower than the corresponding
period in 2023 due primarily to lower volumes of metal sold and lower realized copper prices, partially
offset by lower treatment charges at Chelopech and higher realized gold prices.
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Net earnings: Net earnings from continuing operations in the first quarter of 2024 of $39.4 million ($0.22
per share) decreased compared to $43.6 million ($0.23 per share) in the corresponding period in 2023
due primarily to lower volumes of metals sold and higher planned exploration and evaluation expenses
mainly related to the Čoka Rakita project, partially offset by higher realized gold prices and lower
treatment charges at Chelopech. Net earnings in the first quarter of 2024 was $45.7 million ($0.25 per
share) compared to $46.6 million ($0.25 per share) in the corresponding period in 2023, due primarily to
lower net earnings from continuing operations, partially offset by higher volumes of complex concentrate
smelted and higher estimated metal recoveries at Tsumeb.
Adjusted net earnings: Adjusted net earnings from continuing operations in the first quarter of 2024 was
$32.5 million ($0.18 per share) compared to $43.1 million ($0.22 per share) in the corresponding period in
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.
Earnings before income taxes: Earnings before income taxes from continuing operations in the first
quarter of 2024 was $46.3 million compared to $46.0 million in the corresponding period in 2023 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 first quarter of 2024 was $54.5
million, compared to $63.7 million in the corresponding period in 2023, reflecting the same factors that
affected adjusted net earnings from continuing operations, except for interest, income taxes, depreciation
and amortization, which are excluded from adjusted EBITDA.
Cash provided from operating activities: Cash provided from operating activities of continuing
operations in the first quarter of 2024 of $35.8 million was 46% lower than the corresponding period in
2023, due primarily to the timing of deliveries and subsequent receipt of cash under various commercial
terms, partially offset by the timing of payments to suppliers.
For a detailed discussion on the factors affecting cash provided from operating activities, refer to the
“Liquidity and Capital Resources” section contained in the Management’s Discussion and Analysis for the
three months ended March 31, 2024 (the “MD&A”).
Free cash flow: Free cash flow from continuing operations in the first quarter of 2024 of $62.3 million
was $3.8 million lower than the corresponding period in 2023, due primarily to the same factors impacting
earnings before income taxes from continuing operations, partially offset by the timing of cash outlays for
sustaining capital expenditures. Free cash flow is calculated before changes in working capital.
Sale of the Tsumeb Smelter
On March 7, 2024, DPM announced that it had entered into a definitive SPA with a subsidiary of Sinomine
for the sale of its 98% interest in the Tsumeb smelter for a cash consideration of $49.0 million, on a debt-
free and cash-free basis, subject to normal working capital adjustments following closing (the “Tsumeb
Disposition”). In addition, pursuant to the SPA, DPM is entitled to be paid all cash collected from IXM S.A.
(“IXM”) with respect to the estimated metal recoverable at Tsumeb, estimated to be $17.9 million as at
March 31, 2024. The Tsumeb Disposition 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 the third quarter of 2024.
6
As a result, the assets and liabilities of Tsumeb have been presented as held for sale in the condensed
interim consolidated statement of financial position as at March 31, 2024 and December 31, 2023 and the
operating results and cash flows of Tsumeb have been presented as discontinued operations in the
condensed interim consolidated statements of earnings (loss) and cash flows for the three months ended
March 31, 2024 and 2023. As a consequence, certain comparative figures in the condensed interim
consolidated statements of earnings (loss) and cash flows have been reclassified to conform with current
year presentation.
Complex concentrate smelted in the first quarter of 2024 of 54,773 tonnes was 10% higher than the
corresponding period in 2023, 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 first quarter of 2024 of $329 was 16% lower
than the corresponding period in 2023 due primarily to higher volumes of complex concentrate smelted,
higher sulphuric acid by-product credits and a weaker South African Rand (“ZAR”) relative to the U.S.
dollar.
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 of continuing operations increased by $12.7 million to $608.0 million in the
first quarter of 2024 due primarily to earnings generated during the quarter. Cash and cash equivalents of
discontinued operations increased by $15.8 million to $17.6 million in the first quarter of 2024 due
primarily to earnings generated during the quarter and subsequent receipt of cash related to year-end
accounts receivables.
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 NCIB.
During the first quarter of 2024, the Company returned a total of $9.1 million to shareholders through
dividends paid of $7.2 million, as well as payments for shares repurchased of $1.9 million following the
renewal of the NCIB in late March.
Share Repurchases
The Company renewed its NCIB effective March 18, 2024 , pursuant to which the Company is able to
purchase up to 15,500,000 common shares representing approximately 9.8% of the public float as at
March 6, 2024 , over a period of twelve months commencing March 18, 2024 and terminating on
March 17, 2025.
During the three months ended March 31, 2024, the Company purchased a total of 252,811 shares with a
total cost of $1.9 million at an average price per share of $7.37 (Cdn$9.94).
7
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. The Company continually reviews its capital allocation strategy of
balancing between the capital required for its growth projects and return of capital to shareholders.
Quarterly Dividend
On May 7, 2024, the Company declared a dividend of $0.04 per common share payable on July 15, 2024
to shareholders of record on June 30, 2024.
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.
On May 1, 2024, DPM announced the results of the PEA for the Čoka Rakita project, which was based on
the Inferred Mineral Resource, published in December 2023, of 9.79 Mt at a grade of 5.67 g/t for 1.78
million ounces of gold at Čoka Rakita. The PEA outlined a highly-attractive organic growth project with
robust economics, meaningful production and attractive costs.
Highlights of the PEA include:
• After-tax NPV5% of $588 million and an internal rate of return of 33% based on a $1,700 per ounce
gold price assumption;
• Initial capital of $381 million;
• Approximately 1.3 million ounces recovered over a 10 year mine life, with gold production expected
to average 164,000 ounces per year for the first 5 full years and approximately 129,000 ounces per
year over the life of mine; and
• An average all-in sustaining cost of $715 per ounce over the life of mine.3
The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too
speculative geologically to have the economic considerations applied to them that would enable them to
be categorized as Mineral Reserves, and there is no certainty that the PEA will be realized. Mineral
Resources that are not Mineral Reserves do not have demonstrated economic viability.
Based on the positive results, DPM will continue to accelerate the project. A PFS was initiated in April,
and is expected to be completed by the first quarter of 2025. As a result, the Company’s guidance for
2024 evaluation expenses has increased to between $30 million and $35 million, up from the previous
range of $10 million to $13 million.
8
3 All-in sustaining cost per ounce of gold sold is a non-GAAP financial ratio and has no standardized meaning under IFRS and may not be comparable
to similar measures used by other issuers. As the Čoka Rakita project is not in production, the Company does not have historical non-GAAP financial
measures nor historical comparable measures under IFRS, and therefore this prospective non-GAAP ratio may not be reconciled to the nearest
comparable measure under IFRS. Refer to the “Non-GAAP Financial Measures” section on page 17 for more information, including a detailed
description of this measure.