DUNDEE PRECIOUS METALS DELIVERS RECORD 2020 RESULTS; ANNOUNCES 2020 FOURTH QUARTER AND YEAR-END RESULTS AND PROVIDES THREE-YEAR OUTLOOK (All monetary figures are expressed in U.S. dollars
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DUNDEE PRECIOUS METALS DELIVERS RECORD 2020 RESULTS;
ANNOUNCES 2020 FOURTH QUARTER AND YEAR-END RESULTS
AND PROVIDES THREE-YEAR OUTLOOK
(All monetary figures are expressed in U.S. dollars unless otherwise stated)
Toronto, Ontario, February 11, 202 1 – Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or the
“Company”) today announced its operating and financial results for the fourth quarter and twelve
months ending December 31, 2020.
ANNUAL FINANCIAL AND OPERATING HIGHLIGHTS:
• Record gold production – Strong operating performance continued in the fourth quarter and contributed
to record gold annual production of 298,289 ounces, at the top end of 2020 guidance. Copper production
of 35.6 million pounds was in line with 2020 guidance;
• Solid smelter performance – Achieved throughput of 231,890 tonnes at Tsumeb, in line with 2020
guidance;
• Strong cost performance at all operations – Cost of sales of $330.9 million, up $36.4 million from 2019
reflecting a full year of operation at Ada Tepe. Reported an all-in sustaining cost per ounce of gold(1) of
$654, below the original 2020 guidance, and a cash cost per tonne of complex concentrate smelted(1) of
$377, at the lower end of 2020 guidance;
• Strong cash flow generation – Generated $197.0 million in cash flow from operating activities and a
record $211.4 million of free cash flow(1);
• Growing earnings – Reported record net earnings attributable to common shareholders from continuing
operations of $199.1 million, reflecting strong gold production combined with higher gold prices. Reported
record adjusted net earnings(1) of $193.4 million or $1.07 per share;
• Increased dividend by 50% – Quarterly dividend was increased to $0.03 per share in December 2020,
reflecting strong free cash flow generation. 2020 declared dividends totalled $0.09 per share;
• Strengthened financial position – Ended the year with $149.5 million in cash, an investment portfolio
of $106.6 million and no debt; and
• Optimized 2021 guidance and three-year outlook – Detailed 2021 guidance and updated three-year
outlook highlight the Company’s strong gold production profile, attractive all-in sustaining costs, and
sustaining capital expenditures that are trending lower.
“In 2020, DPM’s continued strong operational performance delivered record gold production and generated
$211 million of free cash flow. I am particularly prou d of our accomplishments this year as we delivered
exceptional results while adapting to the challenges of the COVID-19 pandemic and prioritizing the health and
safety of our workforce and local communities,” said David Rae, President and Chief Executive Officer.
“Tragically, as previously reported, there was a fatality at Tsumeb in November, which overshadows what was
otherwise an exceptional year. The safety and well -being of our people is our highest priority, and we are
focused on applying what we have learned from this incident across the organization to ensure every employee
arrives home safely each day.
“Our solid three-year outlook for gold production and attractive all-in sustaining costs , combined with our
financial strength and significant free cash flow generation , position us well to continue delivering strong
returns for our shareholders . Free cash flow in 2021 is expected to be positively impacted following the
2020 delivery of all remaining ounces under our prepaid forward gold sales arrangement.”
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KEY FINANCIAL AND OPERATIONAL HIGHLIGHTS
$ millions, except where noted
Ended December 31,
Three Months Twelve Months
2020 2019 2020 2019
Revenue(1) 151.8 135.4 609.6 404.4
Cost of sales(1) 81.1 95.2 330.9 294.5
Earnings (loss) before income taxes(1) 52.6 (85.6) 217.9 (53.6)
Net earnings (loss) attributable to common shareholders
from continuing operations 50.2 (90.4) 199.1 (66.6)
Net earnings (loss) attributable to common shareholders 50.3 (92.7) 196.0 (70.9)
Basic earnings (loss) per share from continuing operations 0.28 (0.51) 1.10 (0.38)
Basic earnings (loss) per share 0.28 (0.52) 1.08 (0.40)
Adjusted EBITDA(1),(2) 74.8 54.5 319.3 140.4
Adjusted net earnings(1),(2) 47.0 16.2 193.4 36.5
Adjusted basic earnings per share(1),(2) 0.26 0.09 1.07 0.20
Cash provided from operating activities(1) 70.5 50.7 197.0 96.9
Free cash flow(1),(2) 39.3 11.7 211.4 69.6
Metals contained in concentrate produced:
Gold (ounces)
Chelopech 38,020 42,963 179,562 173,399
Ada Tepe 26,097 26,528 118,727 57,193
Total gold in concentrate produced 64,117 69,491 298,289 230,592
Copper (‘000s pounds) 7,659 10,031 35,642 37,250
Silver (ounces) 48,098 57,783 204,657 180,370
Payable metals in concentrate sold:
Gold (ounces)
Chelopech 37,399 40,168 150,764 149,205
Ada Tepe 25,169 38,941 120,070 49,035
Total payable gold in concentrate sold 62,568 79,109 270,834 198,240
Copper (‘000s pounds) 7,766 11,060 33,389 34,131
Silver (ounces) 45,542 64,212 186,056 156,159
Cash cost per tonne of ore processed(2):
Chelopech 41.78 39.88 38.42 36.30
Ada Tepe 42.17 49.04 40.07 49.29
All-in sustaining cost per ounce of gold(2) 651 679 654 725
Complex concentrate smelted at Tsumeb (tonnes) 52,484 48,614 231,890 215,289
Cash cost per tonne of complex concentrate smelted at
Tsumeb(2) 406 465 377 421
1) Information relates to continuing operations.
2) 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 are not defined measures under International Financial Reporting
Standards (“IFRS”). Refer to the “Non-GAAP Financial Measures” section of the Management’s Discussion and Analysis for the three and twelve months
ended December 31, 2020 (the “MD&A”) for more details, including reconciliations to IFRS measures.
Fourth Quarter and Annual Operating Highlights
In the fourth quarter of 2020, Ada Tepe delivered impressive performance, while Chelopech continued its
consistent track record, with both operations producing in -line with plan. Tsumeb’s performance reflects a
4-day interruption due to a fatality in the fourth quarter of 2020 as well as maintenance activities in the
converter area of the facility.
For the full year, DPM met or exceeded production guidance at each of its operations, with total gold
production for the year being at the high end of the Company’s 2020 guidance r ange. DPM also achieved
record earnings and cash flow in 2020, reflecting strong operating performance at all operations combined
with higher gold prices.
Net Earnings and Adjusted Net Earnings
Net earnings attributable to common shareholders were $50.3 million ($0.28 per share) and $196.0 million
($1.08 per share) for the fourth quarter and twelve months of 2020, respectively, compared to a net loss
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attributable to common shareholders of $92.7 million ($0.52 per share) and $70.9 million ($0.40 per share) for
the same periods in 2019, which were impacted by a $107.0 million impairment charge at Tsumeb taken in the
fourth quarter of 2019.
Net earnings attributable to common shareholders from continuing operations in the fourth quarter and twelve
months of 2020 were $50.2 million ($0.28 per share) and $19 9.1 million ($1.10 per share), respectively,
compared to a net loss attributable to common shareholders from continuing operations of $90.4 million ($0.51
per share) and $66.6 million ($0.38 per share) in the corresponding periods in 2019.
Net earnings (loss) attributable to common shareholders in the fourth quarter and twelve months of 2020 and
2019 were impacted by several items not reflective of the Company’s underlying operating performance, most
notably an impairment charge of $107.0 million in respect of Tsumeb, which was taken in the fourth quarter of
2019, and net gains on Sabina Gold and Silver Corp. (“Sabina”) special warrants in 2020 and 2019, which are
excluded from adjusted net earnings from continuing operations.
Adjusted net earnings from continuing operations in the fourth quarter of 2020 were $47.0 million ($0.26 per
share) compared to $16.2 million ($0.09 per share) for the corresponding period in 2019. This increase was
due primarily to higher realized gold and co pper prices, higher estimated metal recoveries and volumes of
complex concentrate smelted at Tsumeb, and lower treatment charges for Chelopech, partially offset by the
timing of concentrate deliveries at Ada Tepe and Chelopech in the fourth quarter of 2019.
Adjusted net earnings from continuing operations in 2020 were $193.4 million ($1.07 per share) compared to
$36.5 million ($0.20 per share) in 2019. This increase was due primarily to higher volumes of gold sold as a
result of a full year of production at Ada Tepe, higher realized gold prices , higher volumes of complex
concentrate smelted at Tsumeb and the impact of a stronger U.S. dollar relative to the South African Rand
(“ZAR”).
Adjusted EBITDA from Continuing Operations
Adjusted EBITDA(1) in the fourth quarter of 2020 was $74.8 compared to $54.5 million in the corresponding
period in 201 9, reflecting higher realized gold and co pper prices, higher estimated metal recoveries and
volumes of complex concentrate smelted at Tsumeb, and lower treatment charges for Chelopech, partially
offset by the timing of concentrate deliveries at Ada Tepe and Chelopech in the fourth quarter of 2019.
Adjusted EBITDA in 2020 was $319.3 million compared to $140.4 million in 2019 due primarily to higher
volumes of gold sold reflecting a full year of production at Ada Tepe , higher realized gold prices , higher
volumes of complex concentrate smelted at Tsumeb and the impact of a stronger U.S. dollar relative to the
ZAR.
Production, Delivery and Cost Measures
Gold contained in concentrate produced in the fourth quarter of 2020 decreased by 8% to 64,117 ounces,
relative to the corresponding period in 2019, due primarily to lower gold production at Chelopech as a result
of lower gold grades and recoveries. Copper production in the fourth quarter of 2020 decreased by 24% to
7.6 million pounds, relative to the corresponding period in 2019, due primarily to lower copper grades , in
line with the mine plan, and lower recoveries.
Gold contained in concentrate produced in 2020 increased by 29% to 298,289 ounces, relative to the
corresponding period in 2019, due primarily to additional production from Ada Tepe following the
achievement of commercial production in June 2019 and ramp-up to full design capacity in the third quarter
of 2019 and higher gold grades at Chelopech. Copper production in 2020 decreased by 4% to 35.6 million
pounds, relative to the corresponding period in 2019, due primarily to lower copper recoveries.
Payable gold in concentrate sold in the fourth quarter of 2020 decreased by 21% to 62,568 ounces, relative
to the corresponding period in 2019, due primarily to the timing of concentrate deliveries from Ada Tepe
and Chelopech in the fourth quarter of 2019 . Payable copper in concentrate sold in the fourth quarter of
2020 of 7.8 million pounds was 30% lower than the corresponding period in 2019 due primarily to the timing
of gold-copper concentrate deliveries.
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Payable gold in concentrate sold in 2020 increased by 3 7% to 270,834 ounces, relative to 2019, due
primarily to additional production and deliveries from Ada Tepe. Payable copper in concentrate sold in 2020
of 33.4 million pounds was comparable to 2019.
Complex concentrate smelted during the fourth quarter of 2020 of 52,4 84 tonnes was 8% higher than the
corresponding period in 2019 due primarily to a 30-day maintenance shutdown that took place in the fourth
quarter of 2019 compared to a 4-day interruption due to a fatality in the fourth quarter of 2020, partially
offset by operational challenges with the offgas system and reduced converter campaign life in the period.
Complex concentrate smelted in 2020 of 231,890 tonnes was 8% higher than 2019 due primarily to a 30-
day maintenance shutdown in 2019 and steadier operations in 2020. As a result of COVID-19, throughput
in 2020 was impacted by a 30 -day curtailment in April in response to a government directive aimed at
limiting staffing levels.
A table comparing production, delivery and cash cost measures for the fourth quarter and twelve months
of 2020 against 2020 guidance can be found on page 12 of this news release. 2020 gold production of
298,289 ounces was at the upper end of 2020 guidance, while gold sold of 270,834 ounces exceeded 2020
guidance. All cash cost measures either met or exceeded 2020 guidance.
Cost of sales in the fourth quarter of 2020 of $81.1 million was $14.1 million lower than the corresponding
period in 2019 due primarily to lower deliveries of concentrate and lower depreciation at Tsumeb as a result
of an impairment charge taken in the fourth quarter of 2019.
Cost of sales in 2020 of $ 330.9 million was $36.4 million higher than 2019 due primarily to increased
deliveries of concentrate from Ada Tepe following the start of commercial production in June 2019. This
was partially offset by the impact of a stronger U.S. dollar relative to the ZAR and lower depreciation at
Tsumeb.
All-in sustaining cost per ounce of gold in the fourth quarter of 2020 of $65 1 was 4% lower than the
corresponding period in 2019 due primarily to lower treatment charges for Chelopech, partially offset by
lower by-product credits and a higher cost per ounce of gold as a result of lower gold grades.
All-in sustaining cost per ounce of gold in 2020 of $654 was 10% lower than 2019 due primarily to low cost
production from Ada Tepe, partially offset by higher general and administrative expenses as a result of
higher share-based compensation reflecting strong share price performance, and higher cash outflows for
sustaining capital expenditures, reflecting a full year of operation as well as the work related to grade control
drilling at Ada Tepe.
Cash cost per tonne of complex concentrate smelted in the fourth quarter and twelve months of 2020 of
$406 and $377, respectively, was 13% and 10% lower than the corresponding periods in 2019 due primarily
to higher volumes of complex concentrate smelted, the impact of a weaker ZAR relative to the U.S. dollar
and higher acid deliveries, partially offset by lower acid prices.
Cash Provided from Operating Activities of Continuing Operations
Cash provided from operating activities in the fourth quarter of 2020 of $70. 5 million was $19. 8 million
higher than the corresponding period in 2019 due primarily to higher realized gold and copper prices, which
was partially offset by lower volumes of payable metals in concentrate s old as a result of the timing of
concentrate deliveries in the fourth quarter of 2019.
Cash provided from operating activities in 2020 was $197.0 million compared to $96.9 million in 2019 and
does not fully reflect the significant increase in earnings i n 2020 as a result of an increase in non -cash
working capital of $ 51.6 million due primarily to longer settlement terms on Ada Tepe sales, increased
deliveries and higher gold prices.
In addition, during the fourth quarter and twelve months of 2020, Ada Tepe delivered 6,99 3 ounces and
34,087 ounces of gold, respectively, pursuant to a prepaid forward gold sales arrangement resulting in $9.6
million and $ 46.7 million of deferred revenue being recognized in revenue during the fourth quarter and
twelve months of 2020, respectively, with no corresponding impact on cash as these deliveries were in
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partial satisfaction of the $50.0 million of upfront proceeds received in 2016. In December 2020, the
Company completed its final delivery of gold under this arrangement.
For a detailed discussion on the factors affecting cash provided from operating activities, refer to the
“Liquidity and Capital Resources” section contained in the MD&A.
Free Cash Flow from Continuing Operations
Free cash flow in the fourth quarter of 2020 was $3 9.3 million compared to $1 1.7 million in the
corresponding period in 2019. This increase was due primarily to higher realized gold and copper prices,
the impact of a stronger U.S. dollar relative to the ZAR and lower cash outlays for sustaining capital
expenditures, partially offset b y lower volumes of payable metals in concentrate sold as a result of the
timing of deliveries in the fourth quarter of 2019.
Free cash flow in 2020 was $211.4 million compared to $69.6 million in 2019. This significant increase was
due primarily to higher realized gold prices, additional deliveries from Ada Tepe reflecting a full year of
production, the impact of a stronger U.S. dollar relative to the ZAR and lower cash outlays for sustaining
capital expenditures, partially offset by the impact of the prepaid forward gold sales arrangement, the final
delivery for which was completed in December 2020.
Capital expenditures from Continuing Operations
Capital expenditures incurred during the fourth quarter and twelve months of 2020 were $15.7 million and
$49.3 million, respectively, compared to $20.1 million and $73.7 million in the corresponding periods in 2019.
Growth capital expenditures (1) incurred during the fourth quarter and twelve months of 2020 were $3.4
million and $8.5 million, respectively, compared to $1.5 million and $36.5 million in the corresponding
periods in 2019. The year-over-year decrease was related principally to the construction of the Ada Tepe
gold mine, which was completed in 2019.
Sustaining capital expenditures(1) incurred during the fourth quarter and twelve months of 2020 were $12.3
million and $40.8 million, respectively, compared to $18.6 million and $37.2 million in the corresponding
periods in 2019. The quarter-over-quarter decrease was due primarily to spending related to the 30 -day
maintenance shutdown at Tsumeb in the fourth quarter of 2019. The year -over-year increase was due
primarily to a full year of operation at Ada Tepe as well as the acceler ation of the grade control drilling
program, partially offset by reduced spending at Tsumeb with no extended maintenance shutdown in 2020.
Timok Gold Project, Serbia (the “Timok gold project”)
The Company advanced the pre-feasibility study (“PFS”) for the Timok gold project in the fourth quarter of
2020 and expects to release the results in the first quarter of 2021. As previously announced, the PFS will
now focus on the oxide portion of the Mineral Resource. Additional potential upside from the sulphide
portion of the Mineral Resource will require additional variability testwork and will be considered as part of
a potential feasibility study (“FS”).
Exploration
At the West Shaft prospect, located approximately one kilometre south -west of the Chelopech mine, an
intensive diamond drilling exploration program began in the second half of 2020. The target represents an
extension of the Chelopech hydrothermal system, trending generally east-west. Delineation and extension of
the main controlling structures at depth and laterally are ongoing. Additionally, a second feeder structure has
been inferred to the south and will be tested in early 2021.
Deep directional drilling is continuing at the Wedge prospect, with a focus on testing more conceptual targets.
Additional resource delineation commenced in early 2021 and aims to support the Company’s plans to secure
the rights to the Sveta Petk a exploration license, by means of converting the license into a commercial
discovery.
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A significant extensional and infill drilling program began in the fourth quarter of 2020 at the Surnak and Synap
prospects, which are located approximately 3 kilometres south-west of the Ada Tepe mine. As part of sustained
efforts to support an extension of the Ada Tepe mine life, exploration will continue to focus on the delineation
and optimization of near mine prospects during 2021.
A shallow oxide gold mineralization was identified in 2020 at the Chocolate prospect, 300 metres south east of
the Timok gold project’s Bigar Hill deposit. Infill and target delineation drilling programs are ongoing and are
planned to be completed in the first quarter of 2021. Furthermore, scout drilling commenced at the Coka Rakita
prospect, designed to test the potential for epithermal and porphyry related gold mineralization. The drilling
program aims to delineate additional Mineral Resources to further support the Timok Gold Project.
Financial Position and Liquidity
DPM ended the fourth quarter of 2020 with a cash position of $149.5 million, $106.6 million of investments,
comprised primarily of its 9.4% interest in Sabina, 19.4% equity interest in INV Metals Inc. (“INV”) and 9.9%
investment in Velocity Minerals Ltd . (“Velocity’), and $150.0 million of undrawn capacity under its RCF. In
2020, the Company completed all outstanding deliveries under its prepaid forward gold sales arrangement.
Capital Allocation and Declaration of Dividend
As part of its strategy, the Company adheres to a disciplined capital allocation framework that is based on
three fundamental considerations – balance sheet strength, reinvestment in the business, and the return of
capital to shareholders. With Ade Tepe contributing its first full year of production since its successful
commissioning and ramp-up in 2019, 2020 marked the beginning of a period of significant free cash flow
generation, which will be used to further strengthen DPM’s balance sheet, reinvest in the business, and
return cash to shareholders by way of dividends.
On December 8, 2020, DPM declared a 50% increase to its quarterly dividend to $0.03 per common share,
beginning with the dividend payable on January 15, 2021 to shareholders of record on December 31, 2020.
On February 11, 2021, the Company declared a quarterly dividend of $0.03 per common share payable on
April 15, 2021 to shareholders of record on March 31, 2021.
The Company’s dividend has been set at a level that is considered to be sustainable based on 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.
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, the Company has not experienced any material disruptions to its operations
as a result of the 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 o perations.
As previously reported, the Tsumeb smelter in Namibia curtailed its operations by shutting down ancillary
plants for 30 days in April 2020 in response to a government directive to the natural resources sector aimed
at limiting staffing levels . Full operations 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.
DPM continues to engage with local communiti es and authorities in Bulgaria, Namibia and Serbia as they
respond to the challenges of the pandemic. To date, the Company has contributed approximately $1 .0
million to support numerous initiatives to benefit local communities. This financial support has focused on
local hospitals to provide additional medical facilities, supplies, transportation and protective equipment.
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(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, free cash flow,
and growth and sustaining capital expenditures are Non-GAAP measures and have no standardized meaning under 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 MD&A for further discussion
of these items, including reconciliations to IFRS measures.
THREE-YEAR OUTLOOK
DPM continues to focus on increasing the profitability of its business by optimizing existing operating assets,
which are expected to maintain higher levels of gold production and declining all -in sustaining costs as
highlighted in the 2021 to 2023 outlook and supplemental detailed 2021 guidance below.
2021 to 2023 Outlook
The outlook is based on historical performance and experience at DPM’s operations and is consistent with
the production schedules outlined in the technical report for Chelopech entitled “NI 43-101 Technical Report
- Mineral Resource and Reserve Update, Che lopech Mine, Chelopech, Bulgaria” dated March 30, 2020
(the “Chelopech Technical Report”), and the technical report for Ada Tepe entitled “NI 43 -101 Technical
Report – Mineral Reserve and Mineral Resource Update for the Ada Tepe Mine, Krumovgrad, Bulgaria”
dated November 23, 2020 (the “Ada Tepe Technical Report”). For 2022 and 2023, all production and cost
estimates do not yet incorporate any cost savings, operating performance improvements in respect of mine
and smelter throughput and potential improvement s to mine grades and recoveries. The Chelopech
Technical Report and the Ada Tepe Technical Report have been filed on SEDAR ( www.sedar.com) and
are available on the Company’s website (www.dundeeprecious.com).
Highlights of three-year outlook include:
• Continued solid gold production: Over the next three years, gold production is expected to average
approximately 280,000 ounces per year . Gold production in 2021 is expected to range between
271,000 ounces and 317,000 ounces, which is higher than the previously provided 2021 outlook of
250,000 ounces to 295,000 ounces. Based on current mine plans, gold production is expected to range
between 240,000 ounces and 280,000 ounces in 2022 and between 265,000 ounces and 310,000
ounces in 2023. The positive change in production profile in 2021 and 2022 relative to the previous ly
provided outlook is consistent with the updated mine plan as per the Chelopech Technical Report and
the Ada Tepe Technical Report.
• Stable copper production : Copper production between 2021 and 2023 is expected to be
approximately 35 million pounds per year, which is in line with 2020 production.
• Attractive all-in sustaining cost: 2021 all-in sustaining cost guidance has decreased to a range of
$625 to $695 per ounce from the previous ly provided outlook of $670 to $750 due primarily to lower
treatment charges and higher by -product prices , partially offset by higher sustaining capital
expenditures. For 2022, all -in sustaining cost is expected to range between $730 to $810, which is
higher than the previously provided outlook of $670 and $750 as a result of variations in gold grades,
consistent with the current mine plan. All-in sustaining cost in 2023 is expected to decrease to between
$630 and $710 due to higher gold production and lower sustaining capital expenditures .
• Stable smelter performance: Annual estimates for complex concentrate smelted vary due to the
timing of scheduled furnace maintenance shutdown s, with the next shutdown occurring in the first
quarter of 2021. Based on an expected 18 -month operating cycle, c omplex concentrate smelted is
expected to remain unchanged in 2022 and to increase in 2023. Cash cost per tonne of concentrate
smelted is expected to increase in 2021 and 2022 as a result of planned furnace maintenance
shutdowns and forecast weak er acid prices. In 2023, cash cost per tonne of concentrate smelted is
expected to decrease as a result of increased throughput.
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• Sustaining capital expenditures trending lower: Sustaining capital expenditures for 2021 are
expected to range between $56 million and $72 mil lion, up from $40 million in 2020 as a result of
initiating an accelerat ed life of mine grade control drilling program at Ada Tepe , which was originally
planned to occur over several years and was previously classified as an operating cost, as well as
investments to upgrade Chelopech’s tailings management facility following completion of the work to
extend its life in 2019 and 2020, and the furnace maintenance shutdown at Tsumeb. Following 2021,
sustaining capital expenditures are expected to trend lower, with 2022 sustaining capital expenditures
expected to range between $38 million and $50 million, with a further reduction to a range of $33 million
to $44 million expected in 2023.
The Company’s three-year outlook is set out in the following table:
$ millions,
unless otherwise indicated
2020
Results
2021
Guidance
2022
Outlook
2023
Outlook
Gold contained in concentrate produced (‘000s
ounces)(1),(2)
Chelopech 179 156 – 176 145 – 165 150 – 170
Ada Tepe 119 115 – 141 95 – 115 115 – 140
Total 298 271 – 317 240 – 280 265 – 310
Copper contained in concentrate produced
(million pounds)
Chelopech 36 34 – 39 32 – 39 32 – 39
All-in sustaining cost per ounce of gold(3),(4) 654 625 – 695 730 – 810 630 – 710
Complex concentrate smelted (‘000s tonnes) 232 220 – 250 220 – 250 230 – 265
Cash cost per tonne of complex concentrate
smelted(3),(4)
377 450 – 520 450 – 520 420 – 490
Sustaining capital expenditures ($millions)(3),(4)
Chelopech 17 20 – 25 14 – 18 9 – 12
Ada Tepe 13 16 – 21 6 – 8 6 – 8
Tsumeb 8 16 – 20 16 – 20 16 – 20
Corporate digital initiatives 3 4 – 6 2 – 4 2 – 4
Consolidated 41 56 – 72 38 – 50 33 – 44
1) Gold produced includes gold in pyrite concentrate produced of 50,000 to 56,000 ounces for 2021, and 46,000 to 52,000 ounces i n each of 2022 and 2023.
2) Metals contained in concentrate produced are prior to deductions associated with smelter terms.
3) All costs and capital expenditures are based on, where applicable, a Euro/US$ exchange rate of 1.18, a US$/ZAR exchange rate of 16.00, a copper p rice of
$3.32 per pound in 2021 and $3.00 per pound in each of 2022 and 2023, and an average acid price of $45 per tonne, and have not been adjusted for inflation.
4) All-in sustaining cost per ounce of gold, cash cost per tonne of complex concentrate smelted and sustaining capital expenditures have no standardized meaning
under IFRS. Refer to the “Non-GAAP Financial Measures” section of the MD&A for more information.