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Dundee Precious Metals Announces 2021 First Quarter Results

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(All monetary figures are expressed in U.S. dollars unless otherwise stated)

TORONTO, May 05, 2021 (GLOBE NEWSWIRE) -- Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or the “Company”) today announced its operating and financial results for the first quarter of 2021.

First Quarter Financial and Operating Highlights:

  • Solid metals production – Strong operating performance, including record quarterly production at Ada Tepe, contributed to gold production of 70,258 ounces. Copper production was 7.2 million pounds;

  • Smelter maintenance completed during the quarter – Throughput of 23,009 tonnes of complex concentrate reflects 45-day maintenance shutdown at Tsumeb completed at the end of March;

  • Chelopech and Ada Tepe deliver strong cost performance – Reported an all-in sustaining cost per ounce of gold(1) of $522. Cash cost per tonne of complex concentrate smelted(1) of $967 reflects the impact of the maintenance shutdown;

  • Chelopech Mineral Reserve Update – As previously announced, mine life at Chelopech was extended to 2029 with the successful addition of 3.9 million tonnes (“Mt”) to Mineral Reserves, which more than offset 2020 production depletion of 2.2 Mt for a net addition of 1.7 Mt;

  • Strong free cash flow generation – Generated $47.6 million in cash flow from operating activities and $51.0 million of free cash flow(1);

  • Earnings Reported net earnings attributable to common shareholders from continuing operations of $20.7 million, reflecting the impact of the maintenance shutdown at Tsumeb. Reported adjusted net earnings(1) of $31.0 million or $0.17 per share;

  • Dividends – Declared a second quarter dividend of $0.03 per common share payable on July 15, 2021 to shareholders of record on June 30, 2021;

  • Growing financial strength Ended the quarter with $175.7 million in cash, an investment portfolio of $68.1 million and no debt; and

  • 2021 guidance – Ada Tepe and Chelopech on track to meet previously issued 2021 guidance with complex concentrate smelted updated to reflect the extended shutdown, as previously announced.

“The first quarter was a solid start to the year as we continued to generate significant free cash flow, driven by record quarterly gold production at Ada Tepe and excellent all-in sustaining cost performance,” said David Rae, President and Chief Executive Officer. “Based on this performance and our outlook for the balance of the year, our mining operations are on track to achieve their 2021 guidance. With the completion of the planned maintenance at Tsumeb during the quarter, we are also expecting stronger smelter performance.”


Key Financial and Operational Highlights

$ millions, except where noted

Three Months

Ended March 31,

2021

2020

Revenue(1)

138.0

147.8

Cost of sales(1)

85.6

86.9

Earnings before income taxes(1)

35.3

51.4

Net earnings attributable to common shareholders from continuing operations

20.7

45.7

Net earnings attributable to common shareholders

20.1

43.2

Basic earnings per share from continuing operations

0.11

0.25

Basic earnings per share

0.11

0.24

Adjusted EBITDA(1),(2)

66.2

80.6

Adjusted net earnings(1),(2)

31.0

48.6

Adjusted basic earnings per share(1),(2)

0.17

0.27

Cash provided from operating activities(1)

47.6

11.0

Free cash flow(1),(2)

51.0

50.4

Metals contained in concentrate produced:

Gold (ounces)

Chelopech

36,879

42,631

Ada Tepe

33,379

30,332

Total gold in concentrate produced

70,258

72,963

Copper (‘000s pounds)

7,174

9,381

Silver (ounces)

46,919

56,459

Payable metals in concentrate sold:

Gold (ounces)

Chelopech

35,534

38,765

Ada Tepe

33,033

29,489

Total payable gold in concentrate sold

68,567

68,254

Copper (‘000s pounds)

7,279

9,520

Silver (ounces)

44,159

54,848

Cash cost per tonne of ore processed(2):

Chelopech

41.64

36.28

Ada Tepe

43.28

40.06

All-in sustaining cost per ounce of gold(2)

522

593

Complex concentrate smelted at Tsumeb (tonnes)

23,009

65,010

Cash cost per tonne of complex concentrate smelted at Tsumeb(2)

967

357


(1)

Information relates to continuing operations.

(2)

Adjusted earnings before interest, taxes, depreciation and amortization (“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 months ended March 31, 2021 (the “MD&A”) for more details, including reconciliations to IFRS measures.

First Quarter Operating Highlights

In the first quarter of 2021, the Company achieved a new record for quarterly gold production at Ada Tepe, while production from Chelopech was slightly lower than forecast due to lower copper grades as well as lower copper and gold recovery performance with certain ore blends. Chelopech and Ada Tepe remain on track to achieve their 2021 production guidance. The Company completed the planned Ausmelt furnace maintenance shutdown at Tsumeb and resumed full operations at the end of March. As previously announced, due to the 15-day extension of the Ausmelt maintenance, which also included additional furnace and converter maintenance activities, the Company has revised its 2021 production guidance for Tsumeb to a range of 200,000 tonnes to 220,000 tonnes from the previous range of 220,000 tonnes to 250,000 tonnes.

Net Earnings and Adjusted Net Earnings

Net earnings attributable to common shareholders were $20.1 million ($0.11 per share) in the first quarter of 2021 compared to $43.2 million ($0.24 per share) in the corresponding period in 2020.

Net earnings attributable to common shareholders from continuing operations in the first quarter of 2021 were $20.7 million ($0.11 per share) compared to $45.7 million ($0.25 per share) in the corresponding period in 2020.

Net earnings attributable to common shareholders in the first quarter of 2021 and 2020 were impacted by unrealized losses on Sabina Gold and Silver Corp. (“Sabina”) special warrants and a deferred income tax adjustment not related to current period earnings, both of which are not reflective of the Company’s underlying operating performance and are excluded from adjusted net earnings from continuing operations.

Adjusted net earnings from continuing operations in the first quarter of 2021 were $31.0 million ($0.17 per share) compared to $48.6 million ($0.27 per share) in the corresponding period in 2020. This decrease was due primarily to the planned Ausmelt furnace maintenance shutdown at Tsumeb, partially offset by higher realized gold and copper prices.

Adjusted EBITDA from Continuing Operations

Adjusted EBITDA(1) in the first quarter of 2021 was $66.2 million compared to $80.6 million in the corresponding period in 2020 due primarily to the planned Ausmelt furnace maintenance shutdown at Tsumeb, partially offset by higher realized gold and copper prices.

Production, Delivery and Cost Measures

In the first quarter of 2021, gold contained in concentrate produced decreased by 4% to 70,258 ounces due primarily to lower gold grades and recoveries at Chelopech, partially offset by higher gold grades at Ada Tepe, and copper production decreased by 24% to 7.2 million pounds due primarily to lower copper grades, in each case, relative to the corresponding period in 2020.

Payable gold in concentrate sold in the first quarter of 2021 of 68,567 ounces was comparable to the corresponding period in 2020. Payable copper in concentrate sold in the first quarter of 2021 of 7.3 million pounds was 24% lower than the corresponding period in 2020 consistent with the decrease in copper production as a result of lower copper grades.

Complex concentrate smelted at Tsumeb during the first quarter of 2021 of 23,009 tonnes was 65% lower than the corresponding period in 2020 due primarily to the planned Ausmelt furnace maintenance shutdown, which was completed during the first quarter of 2021. Originally planned for 30 days, the maintenance shutdown was extended to 45 days. This was primarily a result of COVID-19 related safety protocols, travel restrictions and the use of remote commissioning support, as well as an increase in the scope of the maintenance work around the Ausmelt lining replacement and additional converter maintenance.

Cost of sales in the first quarter of 2021 of $85.6 million was comparable to the corresponding period in 2020 due primarily to lower volumes of complex concentrate smelted at Tsumeb, which was offset by the impact of a stronger Euro relative to the U.S. dollar and higher cost per tonne gold-copper concentrate sold.

All-in sustaining cost per ounce of gold in the first quarter of 2021 of $522 was 12% lower than the corresponding period in 2020 due primarily to lower treatment charges for Chelopech as a result of increased deliveries to third party smelters and higher by-product credits, partially offset by the impact of a stronger Euro relative to the U.S. dollar, higher allocated general and administrative expenses and higher cash outlays for sustaining capital expenditures.

Cash cost per tonne of complex concentrate smelted at Tsumeb in the first quarter of 2021 of $967 was $610 higher than the corresponding period in 2020 reflecting the fixed cost nature of the facility and the impact of lower volumes of complex concentrate smelted resulting from the maintenance shutdown, which was completed during the first quarter of 2021.

A table comparing production, delivery and cash cost measures for the first quarter of 2021 against 2021 guidance can be found on page 7 of this news release.

Cash Provided from Operating Activities of Continuing Operations

Cash provided from operating activities in the first quarter of 2021 of $47.6 million was $36.6 million higher than the corresponding period in 2020 due primarily to a favourable period over period change related to working capital, the fulfillment of the prepaid forward gold sales agreement at Ada Tepe in December 2020 and higher realized gold and copper prices, partially offset by lower volumes of complex concentrate smelted as a result of the maintenance shutdown at Tsumeb.

During the first quarter of 2020, Ada Tepe delivered 13,110 ounces of gold pursuant to the prepaid forward gold sales arrangement which resulted in $17.9 million of deferred revenue recognized in revenue, with no corresponding impact on cash as these deliveries were in 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

In the first quarter of 2021, free cash flow of $51.0 million was comparable to the corresponding period in 2020 due primarily to the fulfillment of the prepaid forward gold sales agreement at Ada Tepe in December 2020 and higher realized gold and copper prices, which were offset by lower volumes of complex concentrate smelted as a result of the maintenance shutdown at Tsumeb and higher cash outlays for sustaining capital expenditures.

Capital expenditures from Continuing Operations

Capital expenditures incurred during the first quarter of 2021 were $19.0 million compared to $9.6 million in the corresponding period in 2020.

Sustaining capital expenditures(1) incurred during the first quarter of 2021 were $17.4 million compared to $6.8 million in the corresponding period in 2020. This increase was due primarily to the planned maintenance shutdown at Tsumeb and accelerated grade control drilling at Ada Tepe. Growth capital expenditures(1) incurred during the first quarter of 2021 were $1.6 million compared to $2.8 million in the corresponding period in 2020.

Chelopech Mineral Reserve and Mineral Resource Update

As previously announced on March 30, 2021, 3.9 Mt were successfully added to Chelopech’s Mineral Reserves, which more than offset 2020 production depletion of 2.2 Mt for a net addition of 1.7 Mt. Relative to the previous Mineral Reserve estimate, this represents an increase of 10% in tonnage and an increase in metal content of 5% for gold, 13% for silver and 3% for copper, extending the life of mine to 2029.

Measured and Indicated Mineral Resources, exclusive of Mineral Reserves, increased 22%, representing a 3.2 Mt net increase in tonnage and an increase in metal content of 12% for gold and 6% for copper, further adding to the potential to extend the mine life, if such Mineral Resources are converted to Mineral Reserves.

Timok gold project, Serbia

On February 23, 2021, DPM released the positive results of a pre-feasibility study (“PFS”) on the Timok gold project and announced that it was proceeding with a feasibility study (“FS”). Based on the results of the PFS, the project is expected to produce approximately 547,000 gold ounces over an eight-year mine life, with an average annual gold production of 80,000 ounces for the first six years, at an all-in sustaining cost of $693 per ounce of gold (life of mine average). Initial capital is expected to be $211 million, with several initiatives to reduce the initial capital estimate and optimize overall economics to be evaluated as part of the FS. The PFS focused on the oxide and transitional portion of the project’s Mineral Resource, with additional upside potential from the sulphides to be considered in parallel with the FS following further metallurgical test work. The FS is expected to be completed in the first quarter of 2022.

For additional details, including key assumptions, risks and parameters relating to the FS refer to the news release entitled “Dundee Precious Metals Announces Positive Pre-Feasibility Study and Encouraging New Exploration Results for the Timok Gold Project in Serbia” dated February 23, 2021 and the Technical Report entitled “NI 43-101 Technical Report, Timok Project, Pre-Feasibility Study, Zagubica, Serbia” effective March 30, 2021, which have been posted on the Company’s website at www.dundeeprecious.com and have been filed on SEDAR at www.sedar.com.

Exploration

At Chelopech, target delineation drilling at the Wedge and West Shaft prospects was completed in the first quarter of 2021. In January 2021, a Geologic Discovery Certificate was issued by the Bulgarian Ministry of Energy. This certificate allows for one additional year of exploration for the assessment of, and application for, a Commercial Discovery. Plans for the second quarter of 2021 include a shift of drilling activities towards testing more conceptual targets within the surrounding Brevene exploration license (e.g. Kazana and Bridge) as well the start of significant drilling campaigns at Vozdol and Sharlo Dere.

Drilling activities continued at the Surnak, Synap and Kuklitsa prospects, in the Khan Krum mining concession around Ada Tepe, as part of sustained efforts to support an extension of the Ada Tepe mine life. At Surnak, drilling has been completed and re-modeling, followed by internal scoping, is planned in the second quarter of 2021. Additional drilling is also planned at Synap and Kuklitsa, as well as target generation and scout drilling commencing on other licenses.

At Timok, drilling continued at the Chocolate, Chocolate South, Frasen and Čoka Rakita targets located south-east of the Bigar Hill deposit and has generated encouraging results both extending shallow oxide resources and identifying high grade sulphide mineralization. During the second quarter of 2021, drilling will continue more aggressively to support the completion of critical target delineation, infill drilling and the application for the mining concession.

Financial Position and Liquidity

As at March 31, 2021, the Company had no debt and a cash position of $175.7 million, investments valued at $68.1 million primarily related to its 8.9% interest in Sabina, 23.5% interest in INV Metals Inc. and 8.5% interest in Velocity Minerals Ltd., as well as $150.0 million of available capital under its revolving credit facility.

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.

On February 11, 2021, the Company declared a quarterly dividend of $0.03 (2020 – $0.02) per common share payable on April 15, 2021 to shareholders of record on March 31, 2021 resulting in dividend distributions of $5.5 million (2020 – $3.6 million) recognized against its retained earnings in the condensed interim consolidated statements of changes in shareholders’ equity for the three months ended March 31, 2021. As at March 31, 2021, the Company recognized a dividend payable of $5.5 million (December 31, 2020 – $5.4 million) in accounts payable and accrued liabilities in the condensed interim consolidated statements of financial position. For the three months ended March 31, 2021, the Company also paid $5.4 million (2020 – $nil) of dividends which was included in cash used in financing activities in the condensed interim consolidated statements of cash flows.

On May 5, 2021, the Company declared a dividend of $0.03 per common share payable on July 15, 2021 to shareholders of record on June 30, 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.

2021 Guidance

With higher quarterly production expected over the balance of the year, DPM is on track to meet its previously issued guidance for 2021 for Ada Tepe and Chelopech, including expected gold production of 271,000 ounces to 317,000 ounces and 34 million pounds to 39 million pounds of copper. DPM’s 2021 all-in sustaining cost per ounce of gold is expected to be at the lower end of its $625 to $695 guidance.

As previously announced on April 9, 2021, the Company revised its 2021 production guidance for Tsumeb to a range of 200,000 tonnes to 220,000 tonnes from the previous range of 220,000 tonnes to 250,000 tonnes, as a result of a 15-day extension of the Ausmelt furnace maintenance shutdown, which included additional furnace and converter maintenance activities. In 2021, cash cost per tonne of complex concentrate smelted is expected to range between $450 and $520 per tonne, unchanged from the previously issued guidance for 2021.

For additional information regarding the Company’s detailed guidance for 2021, please refer to the “Three-Year Outlook” section of the MD&A.

COVID-19

To date, with the proactive measures taken by each of the Company’s operations, the COVID-19 pandemic has had minimal impact on DPM’s production. DPM is closely monitoring the COVID-19 situation and has put measures in place to safeguard the health of its workforce and support the continuity of its operations. Given the highly uncertain and evolving nature of this situation, the Company is not able to reliably estimate the likelihood, timing, duration, severity and scope of this pandemic and the potential impact it could have on the Company’s future operating and financial results. As a result, the 2021 guidance is predicated on the COVID-19 pandemic continuing to be effectively managed with minimal impact on DPM’s operations. For additional details on COVID-19, including the related risks faced by the Company, refer to the “Overview – Operational and Financial Highlights” and “Risk and Uncertainties” sections contained in the MD&A.

(1) Adjusted net earnings, adjusted basic earnings per share, adjusted 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.

Selected Production, Delivery and Cost Performance Versus Guidance

Q1 2021

2021
Consolidated
Guidance

Chelopech

Ada Tepe

Tsumeb

Consolidated

Ore processed (‘000s tonnes)

543.6

218.7

-

762.3

2,925 – 3,125

Metals contained in concentrate

produced

Gold (‘000s ounces)

36.9

33.4

-

70.3

271 – 317

Copper (million pounds)

7.2

-

-

7.2

34 – 39

Payable metals in concentrate sold

Gold (‘000s ounces)

35.5

33.0

-

68.5

243 – 285

Copper (million pounds)

7.3

-

-

7.3

31 – 36

All-in sustaining cost per ounce

589

450

-

522

625 – 695

of gold(1),(3)

Complex concentrate smelted

-

-

23.0

23.0

200 – 220

(‘000s tonnes)(2)

Cash cost per tonne of complex

-

-

967

967

450 – 520

concentrate smelted(1)


(1)

All-in sustaining cost per ounce of gold and cash cost per tonne of complex concentrate smelted are Non-GAAP measures and have no standardized meaning under IFRS. Refer to the “Non-GAAP Financial Measures” section of the MD&A for reconciliations to IFRS measures.

(2)

Previous guidance in respect of complex concentrate smelted was a range of 220,000 tonnes to 250,000 tonnes.

(3)

Chelopech’s all-in sustaining cost per ounce of gold is expected to range between $685 and $755. Ada Tepe’s all-in sustaining cost per ounce of gold is expected to range between $560 and $630.

This news release and DPM’s unaudited condensed interim consolidated financial statements and MD&A for the three months ended March 31, 2021 are posted on the Company’s website at www.dundeeprecious.com and have been filed on SEDAR at www.sedar.com.

Qualified Person

The technical and scientific information in this news release, with respect to the Company’s material mineral projects, has been prepared in accordance with Canadian regulatory requirements set out in National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) of the Canadian Securities Administrators and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves, and has been reviewed and approved by Ross Overall, B.Sc. (Applied Geology), Corporate Mineral Resource Manager of DPM, who is a Qualified Person as defined under NI 43-101, and who is not independent of the Company.

First Quarter 2021 Results

On Thursday, May 6, 2021 at 9:00 AM EDT, DPM will host a conference call and audio webcast to discuss the results, followed by a question-and-answer session. Participants are encouraged to dial into the call 15 minutes before its scheduled start time or to join via the audio webcast to reduce hold time in advance of the call.

The call-in numbers and webcast details are as follows:

Date:

Thursday, May 6, 2021

Time:

9:00 AM EDT

Webcast:

https://produceredition.webcasts.com/starthere.jsp?ei=1461227&tp_key=94bb2f728d

North America Toll Free:

1-888-390-0605

International:

1-416-764-8609

Toll Free Replay:

1-888-390-0541

International Replay:

1-416-764-8677

Passcode:

711635#

Replay Available Until:

May 20, 2021 (14 days following the call)

Virtual Annual Meeting of Shareholders

DPM’s Annual Meeting of Shareholders will be held on Thursday, May 6, 2021 at 4:00 PM EDT. DPM has once again elected to hold the meeting via live audio webcast, in light of the ongoing COVID-19 pandemic. Materials for the meeting, including a user guide for accessing the virtual meeting, are available on our website at:
https://www.dundeeprecious.com/English/Investors/Disclosure-and-Reporting/default.aspx#quarterly-section

The details for the meeting, including the link to the audio webcast, are as follows:

Date:

Thursday, May 6, 2021

Time:

4:00 PM EDT

Webcast:

https://web.lumiagm.com/?fromUrl=230058628

For further information, please contact:

DUNDEE PRECIOUS METALS INC.

David Rae
President and Chief Executive Officer
Tel: (416) 365-5092
drae@dundeeprecious.com

Hume Kyle
Executive Vice President and Chief Financial Officer
Tel: (416) 365-5091
hkyle@dundeeprecious.com

Jennifer Cameron
Director, Investor Relations
Tel: (416) 219-6177
jcameron@dundeeprecious.com

About Dundee Precious Metals

Dundee Precious Metals Inc. is a Canadian-based international gold mining company with operations and projects located in Bulgaria, Namibia 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).

Cautionary Note Regarding Forward Looking Statements

This news 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 news 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 and exploration and development activities; 2021 financial and operating performance at each of the Company’s operations, including production, operating costs, capital costs and other financial metrics set out in the 2021 updated guidance and three year outlook; expected cash flow; the realization of Mineral Reserve and Resource estimates; the completion of the Timok gold project feasibility study; and payment of dividends. Forward Looking Statements are based on certain key assumptions and the opinions and estimates of management and Qualified Person (in the case of technical and scientific information), 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 news release, such factors include, among others: risks relating to the Company’s business generally and the impact of global pandemics, including COVID-19, including 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, lost work hours and labour force shortages; fluctuations in metal and acid prices, toll rates and foreign exchange rates; possible variations in ore grade and recovery rates; inherent uncertainties in respect of conclusions of economic evaluations and economic studies, including the PFS and the FS; uncertainties with respect to timing of the FS; changes in project parameters, including schedule and budget, as plans continue to be refined; 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 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; cyber-attacks and other cybersecurity risks; risks related to the implementation, cost and realization of benefits from digital initiatives; as well as those risk factors discussed or referred to in the Company’s MD&A under the heading “Risks and Uncertainties” and under the heading “Cautionary Note Regarding Forward Looking Statements” which include further details on material assumptions used to develop such Forward Looking Statements and material risk factors that could cause actual results to differ materially from Forward Looking Statements, and 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 and assumptions 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. Other than as it may be required by law, 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.

Non-GAAP Financial Measures

Certain financial measures referred to in this news release are not measures recognized under IFRS and are referred to as non-GAAP measures. These measures have no standardized meanings under IFRS and may not be comparable to similar measures presented by other companies. The definitions established and calculations performed by DPM are based on management’s reasonable judgment and are consistently applied. These measures are used by management and investors to assist with assessing the Company’s performance, including its ability to generate sufficient cash flow to meet its return objectives and support its investing activities and debt service obligations. In addition, the Human Capital and Compensation Committee of the Board of Directors uses certain of these measures, together with other measures, to set incentive compensation goals and assess performance. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. Non-GAAP financial measures, together with other financial measures calculated in accordance with IFRS, are considered to be important factors that assist investors in assessing the Company’s performance.

Non-GAAP Cash Cost and All-in Sustaining Cost Measures

Cash cost per tonne of ore processed, cash cost per pound of copper in gold-copper concentrate produced, cash cost per ounce of gold in gold-copper concentrate produced, cash cost per ounce of gold in gold concentrate produced, cash cost per ounce of gold sold, net of by-product credits, all-in sustaining cost per ounce of gold and cash cost per tonne of complex concentrate smelted, net of by-product credits, capture the important components of the Company’s production and related costs. Management and investors utilize these metrics as an important tool to monitor cost performance at the Company’s operations. In addition, the Human Capital and Compensation Committee of the Board of Directors uses certain of these measures, together with other measures, to set incentive compensation goals and assess performance.

Adjusted net earnings from continuing operations and adjusted basic earnings per share from continuing operations

Adjusted net earnings from continuing operations and adjusted basic earnings per share from continuing operations are used by management and investors to measure the underlying operating performance of the Company. Presenting these measures from period to period helps management and investors evaluate earnings trends more readily in comparison with results from prior periods.

Adjusted EBITDA from continuing operations

Adjusted EBITDA from continuing operations is used by management and investors to measure the underlying operating performance of the Company’s operating segments. Presenting these measures from period to period helps management and investors evaluate earnings trends more readily in comparison with results from prior periods. In addition, the Human Capital and Compensation Committee of the Board of Directors uses adjusted EBITDA from continuing operations, together with other measures, to set incentive compensation goals and assess performance.

Free cash flow from continuing operations

Free cash flow from continuing operations is defined as cash provided from operating activities from continuing operations, before changes in non-cash working capital, less cash outlays for sustaining capital of continuing operations, mandatory principal repayments and interest payments related to debt and leases. This measure is used by the Company and investors to measure the cash flow available to fund the Company’s growth capital expenditures.

Cash provided from operating activities of continuing operations, before changes in non-cash working capital

Cash provided from operating activities of continuing operations, before changes in non-cash working capital, is defined as cash provided from operating activities of continuing operations excluding changes in non-cash working capital as set out in the Company’s consolidated statements of cash flows. This measure is used by the Company and investors to measure the cash flow generated by the Company’s operating segments prior to any changes in non-cash working capital, which at times can distort performance.

Growth capital expenditures

Growth capital expenditures are generally defined as capital expenditures that expand existing capacity, increase life of assets and/or increase future earnings. This measure is used by management and investors to assess the extent of discretionary capital spending being undertaken by the Company each period.

Sustaining capital expenditures

Sustaining capital expenditures are generally defined as expenditures that support the ongoing operation of the asset or business without any associated increase in capacity, life of assets or future earnings. This measure is used by management and investors to assess the extent of non-discretionary capital spending being incurred by the Company each period.

For additional information with respect to the Non-GAAP measures used by the Company, including reconciliation to the nearest IFRS measures, refer to the detailed “Non-GAAP Financial Measures” section contained in the MD&A available on SEDAR at www.sedar.com.