Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or
“the Company”) announced preliminary production results from both
of its mines and smelter for the three months ended March 31, 2022.
The Company confirmed that all operations are on track to meet
previously issued guidance for 2022.
“The first quarter was a solid start to the
year, with production at Chelopech and Ada Tepe in-line with
guidance,” said David Rae, President and Chief Executive Officer.
“At the end of March, we also announced an optimized life of mine
plan for Chelopech, which resulted in higher gold and copper
production, and an extended mine life to 2030.”
Production Highlights
Preliminary results for the first quarter are
provided in the table below:
|
Ore processed |
Metals contained in concentrate produced |
Payable metals in concentrate sold |
Complex concentrate smelted |
|
(Kt) |
Gold(K oz.) |
Copper (Mlbs) |
Gold(K oz.) |
Copper (Mlbs.) |
(Kt) |
Q1 2022 |
|
|
|
|
|
|
Chelopech |
540.9 |
41.5 |
7.7 |
36.3 |
6.5 |
- |
Ada Tepe |
213.7 |
21.4 |
- |
21.1 |
- |
- |
Tsumeb |
- |
- |
- |
- |
- |
47.2 |
Consolidated |
754.6 |
62.9 |
7.7 |
57.4 |
6.5 |
47.2 |
2022 full-year
guidance(1) |
2,900 – 3,100 |
250 – 290 |
32 – 37 |
220 – 255 |
28 – 32 |
210 – 240 |
(1) As disclosed in Management’s Discussion and
Analysis (“MD&A”) for the year ended December 31, 2021, issued
on February 17, 2022 and available at www.sedar.com and at
www.dundeeprecious.com.Operational Highlights
Chelopech produced approximately 41,500 ounces
of gold and 7.7 million pounds of copper in the first quarter. Gold
production was above expectation, largely as a result of higher ore
processed and higher gold recovery achieved in copper concentrate,
partially offset by lower recoveries in pyrite concentrate. Copper
production was slightly below plan due to lower copper grades.
Chelopech is on track to achieve 2022 guidance.
Ada Tepe produced approximately 21,400 ounces of
gold, which was above expectations for the first quarter as a
result of higher gold grade. Ada Tepe is on track to achieve 2022
guidance, with grades and production expected to be stronger in the
second half of the year.
The Tsumeb smelter processed approximately
47,200 tonnes of complex concentrate in the first quarter of 2022.
This was below target for the quarter as a result of maintenance to
the off-gas system as well as reduced baghouse capacity, which
impacted throughput. Additional maintenance to both systems is
expected to take place during the scheduled Ausmelt furnace
maintenance, which is scheduled for the second quarter of 2022.
Tsumeb is on track to meet 2022 guidance.
Chelopech Mineral Resource and Mineral Reserve
Update
On March 31, 2022, DPM announced a mine life
extension to 20301, an optimized life of mine (“LOM”) plan and
updated Mineral Resource and Mineral Reserve estimates for the
Chelopech mine. The updated LOM plan adds approximately 286,000
ounces of gold production and 47 million pounds of copper
production between 2022 and 2030, relative to the previous mine
plan1 reflecting higher metallurgical recoveries and improved
commercial terms.
DPM filed a technical report entitled “NI 43-101
Technical Report and Mineral Reserve Update, Chelopech Mine –
Chelopech, Bulgaria” with an effective date of March 31, 2022 (the
“Chelopech Technical Report”), which is available on SEDAR at
www.sedar.com and on the DPM website at www.dundeeprecious.com.
Update on Activities in Ecuador
As previously reported on February 24, 2022, the
Company’s drilling activities at the Loma Larga project in Ecuador
were paused, pending the hearing of a constitutional protective
action (“the Action”) against the Ministry of Environment, Water
and Ecological Transition. The original hearing date was deferred
following the filing of preliminary motions, and the Company
expects the hearing to commence this month. DPM is working closely
with government ministries and local stakeholders that support the
project in defending the Action, which the Company believes is
without merit.
In parallel, DPM continues to advance its
permitting activities for the project and is receiving strong
support from the government to accelerate the environmental impact
assessment process.
Returning Capital to
Shareholders
In line with its disciplined capital allocation
framework, DPM continues to return capital to shareholders through
a sustainable quarterly dividend and share repurchases under its
Normal Course Issue Bid. In February 2022, DPM announced a 33%
increase to its quarterly dividend from US$0.03 per share to
US$0.04 per share, reflecting the Company’s continued positive
outlook for the business. The increase to US$0.04 per share will
commence with the first quarter dividend, payable on April 18,
2022, to shareholders of record as at 5:00 p.m. Toronto local time
on March 31, 2022.
During the first quarter, DPM repurchased
approximately 1,489,100 common shares at an average price of
Cdn$7.59 per share.
First Quarter 2022 Results
The Company plans to release its first quarter
2022 operating and financial results after market close on
Wednesday, May 4, 2022. The news release, MD&A and consolidated
condensed interim financial statements will be posted on SEDAR at
www.sedar.com and on the Company’s website at
www.dundeeprecious.com.
On Thursday, May 5, 2022, at 9 AM EDT, DPM will
host a conference call and audio webcast to discuss the results,
followed by a question-and-answer session. The call-in numbers and
webcast details are as follows:
Date and Time |
Thursday, May 5, 20229AM EDT |
Webcast link |
https://edge.media-server.com/mmc/p/5r22i6xn |
Telephone dial-in |
Toll-free (Canada and US): 1-844-402-0878International:
1-478-219-0512Passcode:9630647 |
Replay (available for 7 days following the
call) |
Toll-free (Canada and US): 1-855-859-2056International:
1-404-537-3406Passcode: 9630647 |
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, Ecuador and Serbia. The Company’s
purpose is to unlock resources and generate value to thrive and
growth 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. DPM’s shares are traded on the Toronto Stock Exchange
(symbol: DPM).
For further information please contact:
David RaePresident and Chief
Executive OfficerTel: (416) 365-5092drae@dundeeprecious.com
Jennifer CameronDirector,
Investor RelationsTel: (416)
219-6177jcameron@dundeeprecious.com
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 expressions. 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 any of the Company’s operations or in its exploration and
development activities; expected cash flows; the price of gold,
copper, silver and sulphuric acid; toll rates, metals exposure and
stockpile interest deductions at Tsumeb; Tsumeb’s ability to
continue to benefit from the Export Processing Zones Act and an
expected new Sustainable Special Economic Zone regime in Namibia;
the estimation of Mineral Reserves and Mineral Resources and the
realization of such mineral estimates; estimated capital costs,
all-in sustaining costs, operating costs and other financial
metrics, including those set out in the outlook and guidance
provided by the Company; currency fluctuations; the impact of any
impairment charges; the processing of Chelopech concentrate; timing
of further optimization work at Tsumeb; potential benefits of any
upgrades and/or expansion, including the potential rotary furnace
installation at the Tsumeb smelter; DPM’s strategy, plans, targets
and goals in respect of environmental, social and governance
issues, including climate change, greenhouse gas emissions
reduction targets, tailings management facilities and human rights
initiatives; results of economic studies, including the Timok gold
project preliminary feasibility study (“Timok PFS”) and the Loma
Larga gold project feasibility study (“Loma Larga FS”); expected
milestones; success of exploration activities; the timing of the
completion and results of the feasibility study for the Timok gold
project (“Timok FS”); expectations with respect to the potential to
incorporate additional existing Mineral Resources into the Timok
mine plan by processing the sulphide portion of the mineral body;
development of the Loma Larga gold project, including expected
production, successful negotiations of an investment protection
agreement and exploitation agreement and granting of environmental
and construction permits in a timely manner; success of permitting
activities; permitting timelines; success of investments, including
potential acquisitions; requirements for additional capital;
government regulation of mining and smelting operations;
environmental risks; reclamation expenses; potential or anticipated
outcome of title disputes or claims; benefits of digital
initiatives; the timing and amount of dividends; the timing and
number of common shares of the Company that may be purchased
pursuant to the NCIB; and timing and possible outcome of pending
litigation or legal proceedings. Forward Looking Statements are
based on certain key assumptions and the opinions and estimates of
management, 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 press release, such factors include, among
others, fluctuations in metal and sulphuric acid prices, toll rates
and foreign exchange rates; continuation or escalation of the
conflict in Ukraine; risks relating to the Company’s business
generally and the impact of global pandemics, including COVID-19,
resulting in changes to the Company’s supply chain, product
shortages, delivery and shipping issues, closure and/or failure of
plant, equipment or processes to operate as anticipated, employees
and contractors becoming infected, low vaccination rates, lost work
hours and labour force shortages; regulatory changes, including
changes impacting the complex concentrate market; inability of
Tsumeb to secure complex copper concentrate on terms that are
economic; possible variations in ore grade and recovery rates;
inherent uncertainties in respect of conclusions of economic
evaluations and economic studies, including the Timok PFS and the
Loma Larga FS; uncertainties with respect to timing of the Timok
FS; changes in project parameters, including schedule and budget,
as plans continue to be refined; uncertainties with respect to
realizing the anticipated benefits from the acquisition of INV
Metals Inc. and the development of the Loma Larga gold project;
uncertainties with respect to actual results of current exploration
activities; uncertainties and risks inherent to developing and
commissioning new mines into production, which may be subject to
unforeseen delays; uncertainties inherent with conducting business
in foreign jurisdictions where corruption, civil unrest, political
instability and uncertainties with respect to the rule of law may
impact the Company’s activities; limitations on insurance coverage;
accidents, labour disputes and other risks of the mining industry;
delays in obtaining governmental approvals or financing or in the
completion of development or construction activities; actual
results of current and planned reclamation activities; opposition
by social and non-governmental organizations to mining projects and
smelting operations; unanticipated title disputes; claims or
litigation; failure to achieve certain cost savings or the
potential benefits of any upgrades and/or expansion, including the
potential rotary holding furnace installation at the Tsumeb
smelter; increased costs and physical risks, including extreme
weather events and resource shortages, related to climate change;
cyber-attacks and other cybersecurity risks; there being no
assurance that the Company will purchase additional common shares
of the Company under the NCIB; risks related to the implementation,
cost and realization of benefits from digital initiatives;
uncertainties with respect to realizing the targeted MineRP
Holdings Inc. earn-outs; 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) filed from time
to time with the securities regulatory authorities in all provinces
and territories of Canada and available on SEDAR at www.sedar.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 actual actions, events or 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 could 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.
1 Subject to the extension of the current
concession contract, which expires in July 2029. DPM intends to
submit an extension application when appropriate and expects that
the application will be successful based on previous regulatory
processes. Refer to the news release “Dundee Precious Metals
Announces Mine Life Extension and Update to Mineral Resource
and Mineral Reserve Estimates for Chelopech” dated March 31, 2022
and available on the DPM website at
www.dundeeprecious.com.
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