Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or the “Company”) today announced its operating and financial results for the second quarter of 2020.
Second Quarter Financial and Operating Highlights:
- Record gold production – Produced 81,365 ounces of gold in concentrate, as Ada Tepe delivered its highest quarterly production to date, and Chelopech continued its track record of consistent performance. Copper production was 9.4 million pounds;
- Solid smelter performance – Achieved throughput of 58,516 tonnes at Tsumeb despite a 30-day reduction in throughput in April related to the management of staffing levels as a result of COVID-19;
- Record quarterly free cash flow generation – Generated $75.5 million in cash flow from operating activities and a record $58.4 million of free cash flow(1);
- Growing earnings – Reported record net earnings attributable to common shareholders of $48.8 million, reflecting strong gold production and excellent cost performance from Chelopech and Ada Tepe combined with higher gold prices. Reported adjusted net earnings(1) were $45.8 million or $0.25 per share;
- Strong cost performance at all operations – Reported an all-in sustaining cost per ounce of gold(1) of $729 and a cash cost per tonne of complex concentrate smelted(1) of $345. Cash cost guidance for Ada Tepe has been reduced to $44 to $50 per tonne to reflect strong operating performance;
- Strengthened financial position – Ended the quarter with approximately $226 million of cash resources, comprised of $76 million in cash and an undrawn $150 million long-term revolving credit facility (“RCF”), as well as an investment portfolio of $65 million; and
- Well-positioned to deliver 2020 guidance – With strong performance in the first half of the year, DPM is tracking towards the higher end of guidance for gold production and remains on track to meet previously issued guidance metrics.
1) 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, net of by-product credits, are not defined measures under IFRS. Refer to the “Non-GAAP Financial Measures” section of the MD&A for more details, including reconciliations to IFRS measures.
“We continued to deliver exceptional performance in the second quarter, achieving record gold production and strong cost performance at all of our operations. Our strong operational results, combined with higher gold prices, generated record net earnings and free cash flow, demonstrating the significant potential of our operating assets. Based on our strong results and our expectations for the second half of the year, we remain on track for another milestone year in 2020,” said David Rae, President and CEO.
“Our achievements in the first half of the year are a reflection of the outstanding efforts at all our sites to proactively respond to the challenges of the COVID-19 pandemic as we continue to prioritize the health and safety of our workforce and provide support in our local communities.”
On-Track to Meet 2020 Guidance
DPM’s 2020 production guidance remains unchanged from the guidance issued in February 2020, including expected gold production of 257,000 to 299,000 ounces and 35 to 40 million pounds of copper. Based on the strong operating performance achieved in the first six months of 2020, Chelopech and Ada Tepe are on track to achieve the higher end of their 2020 production and delivery guidance. Tsumeb remains on track to achieve its 2020 production guidance.
DPM’s 2020 all-in sustaining cost guidance of $700 to $780 per ounce and cash cost per tonne of complex concentrate smelted guidance of $370 to $450 remain unchanged. Cash cost guidance for Ada Tepe has been reduced to $44 to $50 per tonne from $50 to $60 per tonne reflecting strong operating performance in the first half of 2020 and lower consumable costs.