Dpm Metals Inc. · TSX:DPM
Dpm Metals — Dundee Precious Metals — Investor Presentation (July 2021)
34 slides from Dpm Metals's investor presentation, July 2021
Slide 1: Entering a New Phase of Free Cash Flow Growth
Entering a New Phase of Free Cash Flow Growth July 2021 TSX: DPM
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements and other information included in this presentation and our other disclosure documents constitute “forward looking information” or “forward looking statements” within the meaning of applicable securities legislation, which we refer to collectively herein
Slide 3: Well-Positioned to Continue Delivering Value to Shareholders
Well-Positioned to Continue Delivering Value to Shareholders DPM’s strong fundamentals continue to represent a compelling value opportunity Growing production, Significant free cash Strong balance Unique declining costs flow generation sheet capabilities ▪ 280,000 Au oz. ▪ Generated $211M ▪ $176M ▪
Slide 4: Business Strategy
Business Strategy Unlocking resources and generating value to thrive and grow together ▪ Supported by foundation of core values that guide how DPM conducts its business & informs a set of complementary strategic pillars ▪ Resources allocated in-line with strategy to ensure DPM delivers value for all
Slide 5: An Industry Leader in ESG
An Industry Leader in ESG Achieving progress on a number of social and environmental initiatives Measuring Economic Robust Corporate Improving Contributing to our Environmental Impact Governance Wellbeing Local Communities Stewardship New strategic objective: Created 52 local jobs One of the lowest
Slide 6: Adding Value Through Innovation
Adding Value Through Innovation Leader in mining innovation and operational excellence Targeting technologies with potential to: ▪ Increase safety Integrated Mine Waste Facility ▪ Lower mining costs ▪ Improve operating performance ▪ Reduce environmental impact Innovation in action ▪ Integrated Mine
Slide 7: Focused on Shareholder Returns
Focused on Shareholder Returns Significant further upside potential as we continue to realize growth in free cash flow from Ada Tepe Year-to-Date Share Price Performance (July 9, 2020 – July 9, 2021) US$1.1B market capitalization 2.0% dividend yield 0.7x consensus P/NAV(5) 12/31/2020 1/30/2021 3/1/2
Slide 8: Our Global Portfolio
Our Global Portfolio Chelopech (100%) 1 Location Stage 2021 Guidance(1) Chelopech, Bulgaria Producing 156 – 171koz Au 34 – 39Mlbs Cu 6 2 Ada Tepe (100%) Location Stage 2021 Guidance(1) Southern Bulgaria Producing 115 – 141koz Au 3 Loma Larga (acquiring 100%) Corporate head office, 41 7 Location Stag
Slide 9: Solid Three-Year Outlook
Solid Three-Year Outlook Highlights strong production profile, attractive AISC and potential to generate significant free cash flow Strong Gold Production Profile Stable Copper Production Gold contained in concentrate produced (‘000s ounces) Copper contained in concentrate produced (Mlbs) 271 – 317
Slide 10: Record Quarterly Gold Production in Q2 2021
Record Quarterly Gold Production in Q2 2021 Strong second quarter preliminary production results OPERATION Q2 HIGHLIGHTS PRODUCTION RESULTS Ada Tepe, Bulgaria Gold contained in concentrate produced (000s oz) 115-141 ▪ Continues to deliver strong gold production 64.2 31.2 ▪ On track to meet 2021 guid
Slide 11: Chelopech, Bulgaria: High quality, low cost flagship asset
Chelopech, Bulgaria: High quality, low cost flagship asset A strong, reliable performer ▪ Strong performance in 2020 with continued mine and mill optimization ▪ Focused on mine and process plant optimization Metals contained in concentrate produced (‘000s oz) Sustaining capital expenditures Gold ('0
Slide 12: Chelopech Near Mine Exploration to Add Resources
Chelopech Near Mine Exploration to Add Resources Focused on extending mine life through in-mine & brownfields exploration 2020 Brownfields Exploration ▪ West Shaft: Aggressive target delineation drilling ongoing with ~7,000 m completed. Vozdol Initial results include(i): Krasta ▪ X_WS_01: 19.7 m at
Slide 13: Ada Tepe, Bulgaria
Ada Tepe, Bulgaria Driving growth in production and cash flow ▪ One of the highest grade open pit mines in the world(i) with a LOM gold grade of 4.8 g/t (11) ▪ Contributing significant free cash flow generation to DPM’s portfolio ▪ Delivered impressive performance in 2020 and outperformed gold produ
Slide 14: Ada Tepe Brownfields Exploration to Add Resources
Ada Tepe Brownfields Exploration to Add Resources 2020 Brownfields Exploration ▪ Active exploration within mine concession – 8,000 m on Surnak, Synap and Kuklitsa ▪ Focused on sulphide mineralization, with goal of extending Ada Tepe’s mine life ▪ Chatal Kaya: 6,000 m of target delineation and infill
Slide 15: Loma Larga: Well-Aligned with DPM Core Strengths & Unique Capabilities
Loma Larga: Well-Aligned with DPM Core Strengths & Unique Capabilities to Unlock Value Leverages DPM’s proven strengths in developing world-class assets and applying industry-leading ESG solutions Chelopech Ada Tepe Tsumeb ▪ Similar geology, mining method and ▪ Loma Larga will benefit from ▪ Project
Slide 16: Loma Larga Project, Ecuador: High-Quality Growth Asset
Loma Larga Project, Ecuador: High-Quality Growth Asset Feasibility study results highlight Loma Larga’s potential to add meaningful growth and generate significant value Feasibility Study Summary Metrics (April 2020) DFS Operating Profile Significant Scale Initial mine life 12 years Average annual p
Slide 17: Loma Larga Project, Ecuador
Loma Larga Project, Ecuador Next steps to building additional value for all stakeholders ▪ Prioritize engagement with local communities to develop an acceptable project plan and secure social license ▪ Review permitting schedule in conjunction with the key stakeholders to refine development timeline
Slide 18: Timok Gold Project, Serbia
Timok Gold Project, Serbia PFS Highlights (6, C) Potential for organic growth Total ore mined (Mt) 19.2 ▪ Project advancing to feasibility study, following positive PFS results Average grade (g/t) 1.07 ▪ PFS focused on the development of the oxide and transitional Strip ratio (waste:feed) 2.5:1 port
Slide 19: Timok Gold Project, Serbia
Timok Gold Project, Serbia Adding value through exploration Bigar Hill conceptual BIDD134 37m @ 0.82 g/t Au open pit BIDD146 8m @ 2.96 g/t Au ▪ Prospective targets generating encouraging results ▪ Chocolate: oxide target located approximately 300 m SE of Bigar Hill deposit outlined in late 2020 Choc
Slide 20: Tsumeb, Namibia: Operating Consistency with Growth Potential
Tsumeb, Namibia: Operating Consistency with Growth Potential A secure processing outlet for Chelopech ▪ Growing cash flow generating custom toll business ▪ Focused on operational stability, efficiencies and cost reduction (2) ▪ Finalized new 3-year agreement to fill existing smelter capacity ▪ Optio
Slide 21: Additional Upside through Equity Interests
Additional Upside through Equity Interests Liquid investment portfolio provides upside exposure to high-quality gold projects Sabina Gold and Silver Corp. Velocity Minerals Ltd. Ownership: 8.9% Ownership: 8.5% Rationale: Originally a DPM project, supportive Rationale: DPM’s strong presence and capab
Slide 22: Disciplined Capital Allocation Framework with Quarterly Dividend
Disciplined Capital Allocation Framework with Quarterly Dividend Established to manage substantial free cash flow generation Balances financial strength, Options are not mutually exclusive reinvestment and return of capital Maintain balance sheet Reinvestment Return capital to strength shareholders
Slide 23: Attractive Valuation
Attractive Valuation DPM offers a compelling value opportunity Growing production, Significant free cash flow Strong Unique declining costs generation balance sheet capabilities ▪ 280,000 Au oz. ▪ Generated $211M ▪ $176M ▪ Adding value through innovation average annual production(1) of free cash flo
Slide 24: Key Value Generating Catalysts
Key Value Generating Catalysts 2020 2021 Chelopech ✓ Encouraging results from West Shaft, Wedge and ✓ Mine life extended to 2029 Krasta exploration prospects ▪ Optimization programs to reduce costs ▪ Approximately 40,000 m of in-mine drilling ▪ Approximately 38,000 m of exploration drilling at West
Slide 25: Appendix
Appendix TMX:DPM 25
Slide 26: 2021 Guidance
2021 Guidance US millions, unless otherwise indicated Chelopech Ada Tepe Tsumeb Consolidated Guidance Ore processed (‘000s tonnes) 2,090 – 2,200 835 – 925 - 2,925 – 3,125 Complex concentrate smelted (‘000s tonnes) - - 200 – 220 - Metals contained in concentrates produced (1)(2) Gold (‘000s ounces) 1
Slide 27: Three-Year Outlook (2020-2022)
Three-Year Outlook (2020-2022) US millions, unless otherwise indicated 2020 Results 2021 Guidance 2022 Outlook 2023 Outlook Gold contained in concentrate produced (‘000s oz) (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
Slide 28: Operating in Mining Friendly Jurisdictions
Operating in Mining Friendly Jurisdictions Bulgaria Namibia Serbia ▪ Uninterrupted operations since 2003 ▪ Political party stability ▪ EU candidate since 2012 ▪ Member of the EU since 2007 ▪ 5th largest producer of uranium and 9th ▪ 3rd largest copper producer in Europe ▪ 4th largest gold producer i
Slide 29: Strong Mineral Resource and Reserve Base
Strong Mineral Resource and Reserve Base Mineral Reserves (10,11, A, B) Million Au Cu Au Cu (%) Mineral Resources (10, 11, A, B) Million Au Cu Au Cu (%) Tonnes (Moz) (Mlbs) (g/t) Tonnes (Moz) (Mlbs) (g/t) Chelopech Chelopech Proven M&I 7.8 0.681 146 2.71 0.84 17.4 1.467 315 2.63 0.82 Probable Inferr
Slide 30: Hedge Position as at March 31, 2021
Hedge Position as at March 31, 2021 QP Hedges Volume Hedged Weighted Average Fixed Price Payable gold 31,290 ounces $1,761.67/oz. Payable copper 10,394,783 pounds $3.66/pound Call options sold Put options purchased Percentage of Forecast Year of projected Amount Hedged Operating Cost FX Hedges Avg.
Slide 31: Top Shareholders & Analyst Coverage
Top Shareholders & Analyst Coverage ▪ Dundee Precious Metals has 182M shares outstanding (as of May 5, 2021) Top Shareholders Analyst Coverage Blackrock Inc. 10.9% Beacon Securities Bereket Berhe Van Eck Associates Corporate 10.0% CIBC World Markets Cosmos Chiu First Eagle Investment Management 6.9%
Slide 32: Footnotes and Disclaimers
Footnotes and Disclaimers 1. Forecast/guidance information is subject to a number of risks. 2021 guidance and the Company’s three-year outlook as disclosed in Management’s Discussion and Analysis (“MD&A”) for the period ended March 31, 2021, issued on May 5, 2021, which can be found on the Company’s
Slide 33: Footnotes and Disclaimers
Footnotes and Disclaimers Qualified Person Disclosure A. The Mineral Resource and Mineral Reserve estimates for Chelopech and other scientific and technical information which supports this press release was prepared by Petya Kuzmanova, MIMMM, CSci, Senior Resource Geologist, of the Company, under th
Slide 34: Corporate Head Office Investor Relations
Corporate Head Office 1 Adelaide Street East, Suite 500 Toronto, Ontario M5C 2V9 T: 416 365-5191 Investor Relations 1 Adelaide Street East, Suite 500 T: 416 219-6177 www.dundeeprecious.com Follow us on Twitter @DundeePrecious Visit our LinkedIn page linkedin.com/company/dundee-precious-metals-inc/
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