Dpm Metals Inc. · TSX:DPM
Dpm Metals — Dundee Precious Metals — CIBC 17th Annual Whistler Institutional Investor Conference 2014
44 slides from Dpm Metals's conference presentation, Jan 22, 2014
Slide 1: Building a Premier, Intermediate, Low-Cost Gold Producer
DUNDEE PRECIOUS METALS BUILDING A PREMIER, INTERMEDIATE, LOW-COST GOLD PRODUCER INVESTOR PRESENTATION CIBC 17th ANNUAL WHISTLER INSTITUTIONAL INVESTOR CONFERENCE JANUARY 22-25, 2014
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains “forward-looking information” or "forward-looking statements" that involve a number of risks and uncertainties. Forward-looking information and forward-looking statements include, but are not limited to, statements with respect to the future pric
Slide 3: Investment Summary
INVESTMENT SUMMARY High Quality Commodity and Solid Assets Geographic Financial Position with Further Diversification Potential Experienced Pipeline of Organic Management Team Growth and Board with Opportunities Strong Track Record Dundee Precious Metals 3
Slide 4: DPM's Global Portfolio of Assets
DPM’S GLOBAL PORTFOLIO OF ASSETS Chelopech Mine, Bulgaria Krumovgrad, Bulgaria Kapan Mine, Armenia • Ownership: 100% • Ownership: 100% • Ownership: 100% • Stage: Producing • Stage: Feasibility • Stage: Producing • 2012 production: 22koz Au; 449koz Ag; 2Mlbs Cu; • Startup: 2016 • Mine Life: 10+ years
Slide 5: Committed to Maintaining a Solid Financial Position
COMMITTED TO MAINTAINING A SOLID FINANCIAL POSITION Capital Structure @ January 20, 2014 $200M Share Price C$3.89 Cash and Credit including: Shares Outstanding 139M $150M undrawn revolving credit facility Market Capitalization C$541M ~$50M in Cash and Short-term Investments Fully diluted shares 146M
Slide 6: Corporate Vision / Strategy
CORPORATE VISION / STRATEGY • Build DPM into a premier, international, intermediate, low-cost gold producer • Optimize value of existing operating assets – Increase mine production and extend LOM – Upgrade/expand smelter and establish long-term contracts that provide a stable return • Grow the busin
Slide 7: Diverse Portfolio of Assets in Attractive Jurisdictions
DIVERSE PORTFOLIO OF ASSETS IN ATTRACTIVE JURISDICTIONS • Producing operations in several jurisdictions with diversification across multiple commodities – Current revenue split by commodity of 46% gold, 30% copper, 19% smelter, 3% silver and 2% zinc – Additional diversification through 3rd party sme
Slide 8: Low-Cost, Mid-Tier Gold Producer with Proven Operating Track Record
LOW-COST, MID-TIER GOLD PRODUCER WITH PROVEN OPERATING TRACK RECORD Production Profile (koz) and Cash Costs Net of By-Products ($/oz) 2013E All-In-Sustaining Costs ($/oz) (1) Average: $987 (1) Source: Scotia Capital (April 2, 2013) Dundee Precious Metals Note: All-in Sustaining Cash Cost = Total cas
Slide 9: Low-Cost, Mid-Tier Gold Producer with Proven Operating Track Record
LOW-COST, MID-TIER GOLD PRODUCER WITH PROVEN OPERATING TRACK RECORD • Low gold cost per ounce drives strong EBITDA margins – Produced gold at a cash cost of ~$117 per ounce (net of by-product credits) in 2012 – Lowest quartile cash costs Targeted Production Growth 22% 155% Gold Copper (koz) (Mlb
Slide 10: Historical Annual Financial Performance
HISTORICAL ANNUAL FINANCIAL PERFORMANCE Au equivalent oz produced (koz) Revenue (US$M) 261 250 205 $385 183 $338 $202 $138 2009 2010 2011 2012 2009 2010 2011 2012 Au production Cu production Ag production Zn production Adjusted EBITDA (US$M)(1) Cash cost, net of by-product credit ($/oz)(2) $117 $125
Slide 11: Chelopech Mine: Low Cost Operation with Lowest Quartile Cash Costs
CHELOPECH MINE: LOW COST OPERATION WITH LOWEST QUARTILE CASH COSTS Recent Accomplishments Asset Overview • Mine/mill expansion completed on time and under DPM Ownership 100% budget in Q4 2012 (doubled capacity to 2 Mtpa) • Produced 120,631 oz of gold and 42.7 Mlbs of Location Bulgaria copper in 2012
Slide 12: Chelopech Mine: Pyrite Recovery Project
CHELOPECH MINE PYRITE RECOVERY PROJECT • Project will economically recover most of Pyrite Project to Increase Gold Recoveries to 90% the contained gold, silver and copper associated with rejected pyrite minerals, 2 Mtpy ore mined 400,000 t pyrite concentrate produced (E) with capacity to produce 380
Slide 13: Kapan Mine: Significant Exploration Package Surrounding the Area
KAPAN MINE: SIGNIFICANT EXPLORATION PACKAGE SURROUNDING THE AREA Recent Accomplishments Asset Overview • Produced 21,843 oz of gold and 2.5 Mlbs of copper in DPM Ownership 100% 2012 Location Armenia • Completed upgrade of mill circuit to reduce lead content in copper concentrate to specified levels
Slide 14: Unique Smelter Equipped to Treat Complex Concentrates
UNIQUE SMELTER EQUIPPED TO TREAT COMPLEX CONCENTRATES One of a few smelters with ability to process large volumes of complex concentrate • Secures capacity to treat Chelopech concentrate and derives additional revenues processing complex concentrates from 3rd parties • Toll rates for complex concent
Slide 15: Tsumeb Smelter Has Potential to Positively Impact Earnings
TSUMEB SMELTER HAS POTENTIAL TO POSITIVELY IMPACT EARNINGS Asset Overview DPM Ownership 100% Location Namibia Acquisition March 2010 $50M Technology / Product Ausmelt Complex Con Smelter Production/Capacity (000’s) Product Copper blister bars 2012 concentrate throughput 159,356 tonnes Expanding smel
Slide 16: Krumovgrad Mine: Open-Pit, Development-Stage Gold Project
KRUMOVGRAD MINE: open-pit, development-stage gold project Recent Accomplishments Asset Overview (1) • Successfully completed the EIA permitting process DPM Ownership 100% • Obtained a 30-year concession to develop deposit Location Bulgaria • Finalized archaeological work to support clearing of Low-s
Slide 17: DPM Exploration Assets
DPM EXPLORATION ASSETS PARTIALLY-OWNED ENTITIES Sabina Gold & Silver Corp. (TSX:SBB), Nunavut Equity Portfolio Holdings Overview (C$mm)(1) • Canadian-based, precious metals company with the goal of Shares Value becoming a mid-tier gold producer Securities % Held (m) ($m) • Assets comprise the high g
Slide 18: DPM Greenfields Exploration Strategy: Generative Pipeline
DPM GREENFIELDS EXPLORATION STRATEGY: GENERATIVE PIPELINE Bulgaria • 3 Exploration Licences granted, another 5 under application, totalling 265km2 • Experienced team of geoscientists credited with the discovery of Ada Tepe Armenia • Systematic regional exploration around Kapan has resumed after a 5
Slide 19: DPM Brownfields Exploration Strategy: Chelopech & Sveta Petka
DPM BROWNFIELDS EXPLORATION STRATEGY: CHELOPECH & SVETA PETKA NW Petrovden Porphyry Target Results to date: PTDD019 369m @0.17% Cu, 0.16g/t Au (incl 64m @0.30 %Cu. 0.25g/t Au from 687m) 371 Stockwork Veins 270m @0.23% Cu, 0.23g/t Au (incl 103m @0.30 %Cu. 0.23g/t Au from 773m) PTDD001 708m @0.079% Cu
Slide 20: DPM Brownfields Exploration Strategy: Kapan
DPM BROWNFIELDS EXPLORATION STRATEGY: KAPAN Kapan Near Mine Golden Drilling Targets Triangle Drill program tests: Target V50 Target • Conceptual targets at Golden Triangle and Shahumyan East • High grade down-plunge Vein Targets on known mineralization V64 Target Outlook V37 Target • Approx. 4,000m
Slide 21: DPM Brownfields Exploration Strategy: Krumovgrad
DPM BROWNFIELDS EXPLORATION STRATEGY: KRUMOVGRAD Geophysical Surveys Khan Krum – Iran Tepe – Kesebir Krumovgrad IRAN TEPE KHAN KRUM Outlook • Geophysics completed by end of 2013 KESEBIR • Finalize target generation • Possible electrical geophysics follow up for targeting • Second phase drilling depe
Slide 22: Cash Flow with Flexible Capital Program Projected
CASH FLOW WITH FLEXIBLE CAPITAL PROGRAM PROJECTED • Discretionary capex provides Planned Capex Largely Discretionary flexibility to prudently pace spending • Ability to conserve additional cash and increase financial flexibility in response to unforeseen events or lower commodity prices • Sources of
Slide 23: Able to Adapt to Potential Downside Risks
ABLE TO ADAPT TO POTENTIAL DOWNSIDE RISKS • DPM has ability to conserve additional cash and increase financial flexibility in response to unforeseen events or lower commodity prices – Reduce exploration spending – Delay development projects – Stage construction projects over longer periods Chelopech
Slide 24: EBITDA Growth Potential
EBITDA GROWTH POTENTIAL Capital investments expected to deliver additional value - Implied current share price / 2017F EBITDA ~ 1.5 - 2x Adjusted EBITDA ($M) At Current Prices - Jan 14, 2014 100% Incremental EBITDA $148 M - $172M (1) (2) (1) 2012 EBITDA exclusive of Avala and Dunav. Dundee Precious
Slide 25: DPM Future Catalysts
DPM FUTURE CATALYSTS Chelopech Pyrite Tsumeb Ramps Tsumeb Acid Plant Recovery Circut Up to 100% Commissioned Complete Capacity Krumovgrad Krumovgrad Krumovgrad Capital Cost and Construction Begins Mine Plan Update Begins Production 2014 2015 2016 Internal Conceptual Study on Expanded Kapan Undergrou
Slide 26: Compelling Investment Opportunity
COMPELLING INVESTMENT OPPORTUNITY High Quality Commodity and Solid Assets Geographic Financial Position with Further Diversification Potential Experienced Pipeline of Organic Management Team Growth and Board with Opportunites Strong Track Record Dundee Precious Metals 26
Slide 27: Dundee Precious Metals Management Team
DUNDEE PRECIOUS METALS MANAGEMENT TEAM Jonathan Goodman Executive Chairman Rick Howes President & Chief Executive Officer David Rae Adrian Goldstone Paul Proulx Michael Dorfman Hume Kyle Richard Gosse Lori Beak Senior Vice President, Executive Vice President, Senior Vice President, Senior Vice Presi
Slide 28: Contact Information
Proudly celebrating 30 years as a Toronto Stock Exchange listed company One Adelaide Street East Suite 500 Toronto, Ontario M5C 2V9 T: 416 365-5191 Investor Relations T: 416 365-2851 ssrubiski@dundeeprecious.com TSX: DPM – Common Shares DPM.WT.A – 2015 Warrants dundeeprecious.com
Slide 29: Appendices
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Slide 30: Analyst Coverage
ANALYST COVERAGE BMO John Hayes CIBC World Markets Leon Esterhuizen Cormark Securities Mike Kozak Dundee Securities Josh Wolfson GMP Securities Oliver Turner Paradigm Capital Don MacLean RBC Capital Markets Sam Crittenden Scotia Capital **In transition** Dundee Precious Metals 30
Slide 31: Sustainable Development
SUSTAINABLE DEVELOPMENT People, Health and Safety Environment Local Communities Develop and operate sustainable Promote sustainable growth and Provide economic benefits and businesses where the health and responsibility through pragmatic participate in community safety of our employees is environmen
Slide 32: Key Sensitivities - 5% Change
KEY SENSITIVITIES - 5% CHANGE EBITDA Item ($ mm) Commodity Prices 16.0 Mine production 12.5 FX 7.2 Mine costs 6.5 Smelter production 4.0 Smelter Toll rate 3.5 Smelter costs 3.8 (1) Based on current prices, and estimated 2013 concentrate deliveries and concentrate smelted Dundee Precious Metals 32
Slide 33: 2013 Guidance
2013 GUIDANCE Metals Contained in Concentrate Produced Chelopech Kapan Total Gold (ounces) 125,000 – 143,000 23,000 – 25,000 148,000 – 168,000 Copper (million pounds) 43.0 – 46.0 2.3 – 2.5 45.3 – 48.5 Zinc (million pounds) - 14.5 – 15.0 14.5 – 15.0 Silver (ounces) 210,000 – 230,000 420,000 – 435,000
Slide 34: Q3 2013 Summary
Q3 2013 SUMMARY Q3 2013 Q3 2012 Sept 30 2013 Sept 30 2012 YTD YTD Adjusted Net Earnings $10.1 million $18.7 million $20. million $59.4 million Adjusted basic EPS $0.07 $0.15 $0.15 $0.47 Gross profit (loss) Chelopech $28.5 million $38.2 million $85.3 million $127.0 million Kapan $4.3 million $2.0 mil
Slide 35: Hedge Position as at September 30, 2013
HEDGE POSITION AS AT SEPTEMBER 30, 2013 QP Hedged Volume Hedged Average fixed price Payable copper 7,138,560 lbs $3.26/lbs Payable zinc 947,987 lbs $0.84/lbs Payable gold 21,710 oz $1,336.22/oz Payable silver 25,290 oz $20.83/oz Year of projected payable Volume Hedged (lbs) Average fixed price ($/lb
Slide 36: Chelopech Mine: Updated Mineral Reserves and Resources
CHELOPECH MINE: UPDATED MINERAL RESERVES AND RESOURCES Chelopech Mineral Reserves – December 31, 2012 Gold Copper Silver Tonnes Grade Ounces Grade Pounds Grade Category (M) (g/t) (M) (%) (M) (g/t) Ounces (M) Proven 12.3 3.4 1.4 1.3 340 9.3 3.7 Probable 9.3 3.8 1.1 0.9 180 5.7 1.7 Total 21.6 3.6 2.5
Slide 37: Chelopech Mine: Exploration Results Q3 2013
CHELOPECH MINE: EXPLORATION RESULTS Q3 2013 Significant intercepts (cut-off grade 3g/tAuEq) Grades Hole ID Northing Easting Dip Az From To (m) Interval (mRL) (mRL) (m) (m) Cu (%) Au (g/t) EXT19E_290_04 29779 6043 -6.9 030.3 124.5 163.5 39.0 0.65 2.40 EXT19E_290_07 29778 6043 -11.4 033.2 67.5 94.5 27
Slide 38: Chelopech Mine: Cash Cost Reconciliation
CHELOPECH MINE: CASH COST RECONCILIATION US$ thousands, Q3 2013 Q2 2013 Q1 2013 Year 2012 Year 2011 Year 2010 Year 2009 unless otherwise indicated Actual Actual Actual Actual Actual Actual Actual Cost of Sales: 32,840 27,381 31,991 98,298 88,838 $72,707 74,499 Less amortization & other (8,160) (8,26
Slide 39: Kapan Mine: Underground Mineral Resource Estimate
KAPAN MINE: UNDERGROUND MINERAL RESOURCE ESTIMATE Dundee Precious Metals Kapan Shahumyan Deposit Mineral Resource Estimate as at January 31, 2013 Reported at a gold equivalent cut-off 2.24 Au g/t Gold Tonnes Au Contained Ag Cu Zn Pb S Classification Equiv Density Mt g/t Koz g/t % % % % g/t Indicated
Slide 40: Kapan Mine: Exploration Results Q3 2013
KAPAN MINE: EXPLORATION RESULTS Q3 2013 Significant intercepts (AuEq cut-off grade of 3.5 g/t) received during the third quarter of 2013: Au Ag True Cu Zn AuEq g/t g/t HOLE ID EAST NORTH RL AZ. DIP FROM TO Width % Best % Best g/t Best Best m Value Value Value Value EIN4S008 8623568 4344606 723 161.8
Slide 41: Kapan Mine: Cash Cost Reconciliation
KAPAN MINE: CASH COST RECONCILIATION US$ thousands, unless otherwise Q3 2013 Q2 2013 Q1 2013 Year 2012 Year 2011 Year 2010 Year 2009 indicated Actual Actual Actual Actual Actual Actual Actual Cost of Sales: 9,672 13,445 9,502 50,547 47,276 33,637 21,072 Less amortization & other (1,364) (1,578) (1,6
Slide 42: Krumovgrad Gold Project
KRUMOVGRAD GOLD PROJECT Dundee Precious Metals 42
Slide 43: Krumovgrad Gold Project Reserves and Resources
KRUMOVGRAD GOLD PROJECT Krumovgrad Mineral Reserves – December 31, 2011 Gold Silver Tonnes Grade Ounces Grade Category (M) (g/t) (M) (g/t) Ounces (M) Proven 2.94 4.70 0.44 2.54 0.24 Probable 4.30 2.44 0.34 1.52 0.21 Total 7.24 3.36 0.78 1.92 0.45 Krumovgrad Mineral Resources – December 31, 2011 Gold
Slide 44: Contact Information
Proudly celebrating 30 years as a Toronto Stock Exchange listed company One Adelaide Street East Suite 500 Toronto, Ontario M5C 2V9 T: 416 365-5191 Investor Relations T: 416 365-2851 ssrubiski@dundeeprecious.com TSX: DPM – common shares DPM.WT.A – 2015 Warrants dundeeprecious.com
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