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Dundee
Precious Metals Inc. ("DPM" or the "Company") (TSX:DPM - News; TSX:DPM.WT - News; DPM.WT.A) today announced its unaudited
results for the fourth quarter ended December 31, 2010. DPM reported fourth
quarter of 2010 net earnings attributable to equity shareholders of the Company
of $20.9 million (basic net earnings per share of $0.17 and diluted net
earnings per share of $0.15). This compares with fourth quarter of 2009 net
earnings attributable to equity shareholders of the Company of $3.5 million
(basic and diluted net earnings per share of $0.04).
For
the year 2010, the Company had net earnings attributable to equity
shareholders of the Company of $23.5 million (basic net earnings per share of
$0.20 and diluted net earnings per share of $0.19). This compares with net
earnings attributable to equity shareholders of the Company of $5.1 million
(basic and diluted net earnings per share of $0.05) for the year 2009.
"2010
was an important year for DPM," said Jonathan Goodman, President and
Chief Executive Officer. "In addition to reaching the one million tonne a year production milestone at Chelopech
and securing downstream processing for our Chelopech
concentrate through the smelter purchase, we achieved a 25% increase in gross
profit, year over year. With Deno Gold operating at
its expanded annual capacity of 600,000 tonnes and Chelopech completing its mill expansion, we expect that
2011 will prove to be even more profitable for our shareholders."
The following table summarizes the Company's financial and operating
results for the periods indicated:
---------------------------------------------------------------------------
$ millions, except per share amounts
Ended December 31,
Three Months
Twelve Months
------------------- -------------------
2010
2009
2010
2009
---------------------------------------------------------------------------
Net Revenue
$ 61.4 $ 42.1 $ 201.8 $ 137.5
Cost of Sales
43.8
29.5
150.1
96.8
---------------------------------------------------------------------------
Gross Profit
17.6
12.6
51.7
40.7
---------------------------------------------------------------------------
Investment and Other Income
12.6 0.4 51.4 1.4
Net Impairment Provisions
(3.6)
(0.3)
(54.6)
(4.4)
Exploration Expense
(3.2) (1.3) (7.3) (4.8)
Administrative and Other Expenses
(5.1) (4.5) (15.7) (15.4)
Net Earnings
19.4 3.5 20.5 5.1
Net Earnings Attributable to Equity
Shareholders of the Company
20.9 3.5 23.5 5.1
Basic Net Earnings per Share
$ 0.17 $ 0.04 $ 0.20 $ 0.05
Diluted Net Earnings per Share $ 0.15 $ 0.04 $ 0.19 $ 0.05
Net Cash Provided by Operating
Activities
28.8
22.3
50.3
21.2
Net Cash Used in Investing
Activities
(43.3)
(23.5)
(88.7) (31.6)
Net Cash Provided by (Used in)
Financing Activities
26.1
(1.6)
103.9
(4.7)
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Net Increase (Decrease) in Cash $ 11.6 $ (2.8)$ 65.5 $ (15.1)
---------------------------------------------------------------------------
Concentrate Produced (mt)
Chelopech
20,259
15,634
75,278 71,657
Deno
6,969 3,999 20,757 10,144
NCS - concentrate processed (mt)
37,635
- 119,557
-
Cash Cost per tonne Ore Processed
($/t)(1)
Chelopech
(excluding royalties)
$ 56.34 $ 65.26 $ 51.54 $ 55.23
Deno
Gold (excluding royalties)
$ 63.66 $ 72.01 $ 66.33 $ 72.27
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Fourth
Quarter 2010 and Year-End - Financial Highlights
-- In
the fourth quarter of 2010, the Company recorded net earnings
attributable to
equity shareholders of $20.9 million compared to $3.5
million in the
corresponding prior year period. The period over period
increase in net
earnings attributable to equity shareholders was
primarily due to
unrealized favourable mark-to-market adjustments of
$11.6 million in the
Company's holdings of Sabina Gold & Silver Corp.
("Sabina")special warrants and higher gross profit from
mining and
processing
operations.
-- DPM
recorded a gross profit from mining and processing operations of
$17.6 million in the
fourth quarter of 2010 compared to $12.6 million in
the corresponding
prior year period. The period over period increase was
due primarily to
higher metal prices partially offset by lower gold in
concentrate sold.
Deliveries of concentrates in the fourth quarter of
2010 of 23,346 tonnes were marginally higher than the corresponding
prior year period deliveries of
23,009 tonnes but contained 20,469
ounces of gold
compared to 25,540 ounces in the corresponding prior year
period due to a
drawdown of 2,157 tonnes of high grade gold
concentrate
inventory in the
fourth quarter of 2009.
-- In
the twelve months of 2010, the Company recorded net earnings
attributable to
equity shareholders of $23.5 million compared to $5.1
million in the
corresponding prior year period. The higher, period over
period, net earnings
attributable to equity shareholders was due
primarily to
unrealized favourable mark-to-market adjustments of
$49.7
million in the
Company's holdings of Sabina special warrants and higher
gross profit from
mining and processing operations partially offset by a
$54.0 million
impairment provision taken against the MPF at Chelopech.
The write-down in
the carrying value of the metals processing facility
("MPF")
project to its estimated fair value was partially offset by the
reversal of $3.4
million of royalties accrued in respect of the MPF
project. In view of
the Bulgarian court's final decision to revoke the
MPF Environmental
Impact Asssessment ("EIA"), it is
unlikely
that the MPF project
will proceed. In addition, the July 2008 amendments
to Chelopech's mining concession contract with the Bulgarian
government,
as they relate to
the royalty provisions, no longer apply and no excess
royalty above the
1.5% fixed rate is required to be accrued. As a
result, the excess
royalty accrual above the 1.5% was reversed in the
first quarter of
2010 and applied against the MPF property impairment
provision.
-- DPM
recorded a gross profit from mining and processing operations of
$51.7 million in the
twelve months of 2010 compared to $40.7 million in
the corresponding
prior year period. The period over period increase was
due primarily to
higher gold, copper and zinc prices and an increase in
concentrate
deliveries partially offset by unfavourable
mark-to-market
adjustments and
final settlements on provisional sales and lower gold in
concentrate sold. In
the twelve months of 2010, gold in concentrate sold
totalled
80,352 ounces compared to 104,314 ounces in the corresponding
prior year period.
The decrease in gold in concentrate sold was
primarily due to
lower gold grades at Chelopech in 2010 relative to
2009
and lower gold
recoveries, which were adversely impacted by the
processing of high sulphur to copper ratio ore (Block 151) in 2010.
Chelopech
ore mined in 2009 contained lower sulphur to copper
ratio ore
resulting in higher
gold recoveries. Deliveries of concentrates in the
twelve months of
2010 of 91,157 tonnes were 4,982 tonnes higher than the
corresponding prior
year period deliveries of 86,175 tonnes due
primarily to
increased production of concentrates at Deno Gold
in 2010.
-- As at
December 31, 2010, DPM had cash and cash equivalents of $96.2
million (including Avala's cash and cash equivalents of $16.9 million)
and short-term
investments of $13.2 million. Investments at fair value
totalled
$174.5 million at December 31, 2010 compared to $34.4 million
at December 31,
2009.
Significant
Items and 2011 Outlook
Chelopech
-- In
the year 2010, Chelopech continued to advance its
mine and mill
expansion project to
approximately double its annual concentrate
production capacity
to 150,000 tonnes. The commissioning of the new
paste fill plant was
successfully completed in the third quarter of 2010
and the
commissioning of the new semi-autogenous grinding
("SAG") mill
was completed
successfully in January 2011. Construction of the mine and
mill expansion is
expected to be completed in the fourth quarter of
2011.
-- On
December 3, 2010, DPM and Chelopech finalized a
$66.75 million long-
term loan agreement
with the European Bank for Reconstruction and
Development
("EBRD") and Unicredit Bulbank ("UCB"). The proceeds from
this loan agreement
are to be used to assist in the financing of the
Chelopech
mine and mill expansion and to refinance existing debt. As of
December 31, 2010,
$44.25 million had been drawn under the facility, of
which $16.25 million
was used to refinance existing EBRD debt. The loan,
which is guaranteed
by DPM and secured by a first ranking charge over
the shares of Chelopech, is repayable in ten equal semi-annual
instalments,
commencing June 2013 and bears interest at a rate of LIBOR
plus 3.25% until
completion of the Chelopech mine and mill expansion
and
LIBOR plus 2.80%
thereafter.
-- In
compliance with its obligations under its Concession Contract, on
November 15, 2010, Chelopech delivered a $25 million insurance
policy/performance
bond to the Bulgarian Ministry of Economy, Energy and
Tourism ("MoEET") to ensure the performance of Chelopech's obligations
for the planned or
pre-term closure and rehabilitation of the Chelopech
operations.
-- Under
the terms of its loan agreement with the EBRD and UCB, the Company
is required to
provide metal price protection on 15% of Chelopech's
2012, 2013 and 2014
projected payable copper production. In fulfillment
of this obligation,
in January 2011, the Company entered into monthly
settled forward
sales contracts to fix 2,868 tonnes of the year
2012
projected payable
copper production at a fixed price of $9,224/tonne
($4.18/lb), 3,036 tonnes of the year 2013 projected payable copper
production at a
fixed price of $8,814/tonne ($4.00/lb) and 3,264 tonnes
of the year 2014
projected payable copper production at a fixed price of
$8,386/tonne ($3.80/lb). All gains and losses on these contracts
will be
reported through the
income statement.
Acquisition
of Tsumeb Smelter Assets and Related Business
-- On
March 24, 2010, DPM completed the acquisition of NCS from
WeatherlyInternational
plc ("WTI") through the purchase of 100% of
the shares of NCS.
The total consideration paid to WTI for NCS was
$33.0 million
consisting of: (i) $18.0 million in cash and (ii)
the
issuance of
4,446,420 fully paid common shares of DPM.
-- On
May 26, 2010, DPM completed its agreement with Louis Dreyfus
Commodities Metals
Suisse SA ("LDC") to settle approximately $11.4
million of financial
obligations owed by NCS to LDC, through a cash
payment of $2.0
million and the issuance of 2,903,525 common shares of
DPM. LDC will
continue to have exclusive rights to purchase the
Chelopech
concentrate for toll processing through NCS (including return
of blister copper to
LDC) and to source the balance of the concentrate
for the Tsumeb smelter through to and including 2020.
Sale
of Serbian Assets
-- In July 2010, DPM concluded
its agreement with PJV Resources Inc.
("PJV")
and Rodeo Capital Corp. (now Avala Resources Ltd.)
wherein
it received a 50.3%
direct controlling interest in Avala, 36.7
million share
purchase
warrants exercisable
at Cdn$0.50 per share and $1.6 million cash in
exchange for Dundee Plemeniti Metali d.o.o ("Metali"). DPM
was also
issued Special
Rights to acquire an aggregate of 50,000,000 additional
Avala
common shares for no additional consideration, of which
25,000,000 are issuable
upon a positive decision to proceed to a
feasibility study on
all or part of the projects and an additional
25,000,000 are
issuable upon a positive decision to bring all
or part of the
projects into production. As at December 31, 2010, DPM
held 50.9% of Avala common shares.
-- Pursuant to the certificates
and indenture governing certain of the
Avala
warrants issued on July 30, 2010, Avala had the
right to
accelerate the
expiry date of such warrants any time after October 25,
2010 if the closing
price of its common shares is above Cdn$1.00 for 20
consecutive trading
days. On December 13, 2010, having met this
precondition, Avala issued notification of its decision to accelerate
the expiry date of
this portion of the share purchase warrants to
January 14, 2011. In
response, DPM exercised 2,428,500 full warrants to
purchase the same
number of Avala common shares at Cdn$0.50 per share
in
December 2010. Avala also has the right to accelerate the expiry date on
the 34,290,179
common share purchase warrants issued to DPM on July 30,
2010, as part of the
consideration for its acquisition of Metali, any
time after January
26, 2011 if the closing price of its common share is
above Cdn$1.00 for
20 consecutive trading days. Upon notification of
acceleration, the
Company will have 30 days to exercise such warrants.
Krumovgrad
-- On
February 9, 2011, it was announced that the Council of Ministers of
the Republic of
Bulgaria had approved the granting of a 30 year
concession to BMM to
develop the Khan Krum Deposit in Krumovgrad. The
council of
Minister's resolution is subject to publication in the State
Gazette of the
Republic of Bulgaria. The Council of Minister's
resolution was
published in the State Gazette on February 18, 2011.
Exercise of the
concession rights by the Company is also subject to a
positive EIA
resolution being issued by the Bulgarian Minister of
Environment and
Waters ("MoEW").
-- In January
2011, the MoEW delivered a "positive
grade" to both the EIA
and the Natura 2000 Compatibility Assessment Report for
the Krumovgrad Gold Project proposal, which had been
submitted in
October 2010,
meaning that all information required under the EIA
regulation is
complete. Based on this positive assessment of the quality
of the submissions,
and in compliance with the requirements under the
Bulgarian
environmental legislation, DPM has commenced the public
dissemination of the
EIA documentation which will culminate with
organized public
hearings with the municipality of Krumovgrad and
other
potentially affected
municipalities or villages.
2011
Outlook
-- Total capital expenditures for
the year 2011 are expected to range
between $155 million
and $165 million, including $62 million to complete
the mine and mill
expansion at Chelopech, $35 million for
environmental
and plant
optimizations projects at NCS and $25 million at Deno
Gold to
further enhance
underground operations and advance the proposed open pit
project. This
current estimate is about $15 million higher than the
guidance provided in
November 2010 due to additional expenditures for
environmental and
operating improvements at NCS. Pending completion of
the definitive
feasibility study for the Krumovgrad project in
Bulgaria
and receipt of
approvals of its EIA, the
Company also expects
to move forward with the construction of this
project.
-- For
the year 2011, mine output at Chelopech is expected
to range between
1.2 million and 1.3
million tonnes of ore, in line with its planned
ramp
up to an annualized
production rate of two million tonnes of ore. At
this level, Chelopech is expected to produce approximately 100,000
tonnes
of concentrate. Following completion of its mine/mill expansion
to 600,000 tonnes of ore in 2010, Deno
Gold is expected to produce
between 25,000 and
30,000 tonnes of concentrate.
-- The Company's estimated metals
in concentrate produced for the year 2011
is set forth in the
following table:
----------------------------------------------------------------------------
Metals in Concentrate
Produced:
Chelopech
Deno Gold
Total
----------------------------------------------------------------------------
Gold (ounces)
90,000 - 92,000
30,000 - 33,000 120,000 -
125,000
Copper (million
pounds)
32.5 - 35.5
3.0 - 3.5
35.5 - 39.0
Zinc (million pounds)
-
21.0 - 23.0
21.0 - 23.0
Silver (ounces)
150,000 - 160,000 500,000
- 530,000 650,000 - 690,000
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-- Unit cash cost per tonne of ore processed, excluding royalties, at
Chelopech
for the year 2011 is expected to be approximately 5% lower
than the year 2010
average unit cash cost of ore processed assuming
current exchange
rate Euro to U.S. dollar. Unit cash cost per tonne
of
ore processed,
excluding royalties, at Deno Gold for the year 2011
is
expected to be
comparable to the fourth quarter of 2010 average cash
cost per tonne of ore processed.
A
complete set of DPM's Consolidated Financial Statements, Notes to the
Consolidated Financial Statements and Management's Discussion and Analysis
for the twelve months ended December 31, 2010 will be posted on the Company's
website at www.dundeeprecious.com and will
be filed on Sedar at www.sedar.com.
Conference
Call
DPM
will be holding an analyst call on Thursday, February 24, 2010 at 8.30 a.m.
(EST).
The
call will be webcast live (audio only) at: http://www.gowebcasting.com/2181.
Listen only call 416-340-2220 or toll free 866-542-4237.
The
audio webcast for this conference call will be archived and available on the
Company's website at www.dundeeprecious.com.
Overview
DPM
is a Canadian-based, international mining company engaged in the acquisition,
exploration, development, mining and processing of precious metals
properties. Its common shares and share purchase warrants (symbols: DPM;
DPM.WT; DPM.WT.A) are traded on the Toronto Stock Exchange ("TSX").
DPM's business objectives are to identify, acquire, finance, develop and
operate low-cost, long-life mining properties.
The
Company's operating interests include its 100% ownership of Chelopech Mining EAD ("Chelopech"),
its principal asset being the Chelopech mine, a
gold, copper, silver concentrates producer, located approximately 70 kilometres east of Sofia, Bulgaria, 100% ownership of
Namibia Custom Smelters (Pty) Ltd. ("NCS"), a copper concentrate
processing facility located in Tsumeb, Namibia, and
a 100% interest in Deno Gold Mining Company CJSC
("Deno Gold"), its principal asset being
the Kapan mine, a gold, copper, zinc, silver
concentrates producer located about 320 kilometres
south east of the capital city of Yerevan in Southern Armenia. DPM's
interests also include a 100% interest in the Krumovgrad
development stage gold property located in south eastern Bulgaria, near the
town of Krumovgrad, and certain exploration and
exploitation properties in Serbia. The Company also presently holds a 50.9%
controlling interest in Avala Resources Ltd., a TSX
Venture Exchange ("TSXV") listed company (TSX VENTURE:AVZ - News) focused on the exploration
and development of the Timok and Potoj Cuka copper and gold
projects in Serbia. In July 2010, the Company established DPM Assurance
(Barbados) Inc. ("DPMA"), a qualifying insurance company in
Barbados, principally to provide reinsurance coverage for surety risks
originating from its affiliates.
Summarized
Financial Results
Net
revenue
Net
revenue of $61.4 million in the fourth quarter of 2010 was $19.3 million
higher than the corresponding prior year period net revenue of $42.1 million
due primarily to a 24% increase in gold prices and 30% increase in copper
prices partially offset by lower gold in concentrate sold. The drawdown and
sale of higher grade gold concentrate in the fourth quarter of 2009
contributed to the relative reduction in gold in concentrate sold in the
fourth quarter of 2010. Also contributing to the period over period increase
in net revenue was the inclusion of NCS's revenue following its acquisition by
DPM in March 2010. Net unfavourable mark-to-market
adjustments and final settlements of $0.5 million, related to the open
positions of provisionally priced concentrate sales, were recorded in the
fourth quarter of 2010 compared to net favourable
mark-to-market adjustments and final settlements of $0.4 million in the
fourth quarter of 2009.
Deliveries
of concentrates produced at Chelopech of 17,883 tonnes in the fourth quarter of 2010 were comparable to
the fourth quarter of 2009 deliveries of 17,791 tonnes.
Gold in concentrate sold in the fourth quarter of 2010 of 13,076 ounces was
31% lower than the corresponding prior year period. Copper in concentrate
sold of 6.1 million pounds was comparable to the corresponding prior year
period.
Deliveries
of copper and zinc concentrates produced at Deno
Gold of 1,828 tonnes and 3,635 tonnes
in the fourth quarter of 2010 were, respectively, 194 tonnes
and 51 tonnes higher than the corresponding prior
year period. Gold in concentrate sold in the fourth quarter of 2010 of 7,393
ounces was 10% higher than the corresponding prior year period. Copper and
zinc in concentrate sold in the fourth quarter of 2010 of 0.8 million pounds
and 4.1 million pounds were, respectively, 2% and 6% higher than the
corresponding prior year period.
Net
revenue of $201.8 million in the twelve months of 2010 was $64.3 million
higher than the corresponding prior year period net revenue of $137.5 million
due to a 26% increase in gold prices, a 46% increase in copper prices, a 31%
increase in zinc prices and higher deliveries of concentrates partially
offset by lower gold in concentrate sold. Net unfavourable
mark-to-market adjustments and final settlements of $3.3 million, related to
the open positions of provisionally priced concentrate sales, were recorded
in the twelve months of 2010 compared to net favourable
mark-to-market adjustments and final settlements of $6.5 million in the
twelve months of 2009. In the twelve months of 2010, DPM recorded net losses
on its copper and zinc derivatives of $0.2 million, compared to net losses on
copper derivatives of $4.4 million in the twelve months of 2009. Also
contributing to the period over period increase in net revenue was the
inclusion of NCS's revenue following its acquisition by DPM in March 2010.
Deliveries
of concentrates produced at Chelopech of 73,061 tonnes in the twelve months of 2010 were 3% lower than
the corresponding prior year period deliveries of 75,542 tonnes.
Gold in concentrate sold in the twelve months of 2010 of 58,065 ounces was
38% lower than the corresponding prior year period. Copper in concentrate
sold of 25.0 million pounds was 4% lower than the corresponding prior year
period.
Deliveries
of copper and zinc concentrates produced at Deno in
the year 2010 of 5,478 tonnes and 12,618 tonnes were, respectively, 2,921 tonnes
and 4,542 tonnes higher than the corresponding
prior year period due to operational improvements and the ramp-up of the
mine/mill expansion. In addition, Deno Gold was on
care and maintenance in the first quarter of 2009. Gold in concentrate sold
in the twelve months of 2010 of 22,287 ounces was 98% higher than the
corresponding prior year period. Copper in concentrate sold in the twelve
months of 2010 was 2.4 million compared to 1.2 million pounds in the
corresponding prior year period. Zinc in concentrate sold in the twelve
months of 2010 of 14.3 million pounds was 62% higher than the corresponding
prior year period.
The
average London Bullion gold price(2) in the fourth
quarter of 2010 of $1,369 per ounce was 24% higher than the fourth quarter of
2009 average price of $1,102 per ounce. The average London Metal Exchange
("LME") cash copper price(2) in the fourth quarter of 2010 of $3.92
per pound was 30% higher than the fourth quarter of 2009 average price of
$3.02 per pound. The average LME cash zinc price(2)
in the fourth quarter of 2010 of $1.05 per pound was 5% higher than the
fourth quarter of 2009 average price of $1.00 per pound.
The
average London Bullion gold price(2) in the twelve
months of 2010 of $1,224 per ounce was 26% higher than the corresponding
prior year period average price of $973 per ounce. The average LME cash
copper price(2) in the twelve months of 2010 of
$3.42 per pound was 46% higher than the corresponding prior year period
average price of $2.34 per pound. The average LME cash zinc price(2) in the twelve months of 2010 of $0.98 per pound
was 31% higher than the corresponding prior year period average price of
$0.75 per pound.
Cost
of sales
Cost
of sales of $43.8 million and $150.1 million in the fourth quarter and twelve
months of 2010 were $14.3 million and $53.3 million higher than the
corresponding prior year periods cost of sales of $29.5 million and $96.8
million, respectively, due primarily to the inclusion of expenses related to
the processing of concentrates at NCS.
Cash
cost per tonne of ore processed(1), excluding
royalties, at Chelopech in the fourth quarter of
2010 of $56.34 was 14% lower than the corresponding prior year period cash
cost per tonne of ore processed(1), excluding royalties,
of $65.26 due to higher volume of material mined and processed, the favourable impact of an 8% depreciation of the Euro
relative to the U.S. dollar period over period and lower cement usage in
backfill activities partially offset by higher consumption of and prices for
power and diesel, higher employment expenses and increased maintenance costs.
Cash cost per tonne of ore processed(1), including
royalties, at Chelopech in the fourth quarter of
2010 of $61.66 was 14% lower than fourth quarter of 2009 cash cost per tonne of ore processed(1), including royalties, of
$71.61.
Cash
cost per tonne of ore processed(1), excluding
royalties, at Chelopech in the twelve months of
2010 of $51.54 was 7% lower than the corresponding prior year period cash
cost per tonne of ore processed(1), excluding
royalties, of $55.23 due primarily to higher volume of material mined and
processed, the favourable impact of a weaker Euro
relative to the U.S. dollar, period over period and lower cement usage in
backfill activities partially offset by higher pending on supplies and
services, higher employment expenses and increased prices for and consumption
of power and fuels. Cash cost per tonne of ore
processed(1), including royalties, at Chelopech in
the twelve months of 2010 of $56.22 was 8% lower than the corresponding prior
year period cash cost per tonne of ore
processed(1), including royalties, of $61.00.
Cash
cost per tonne of ore processed(1),
excluding royalties, at Deno Gold in the fourth
quarter and twelve months of 2010 of $63.66 and $66.33 were, respectively,
12% and 8% lower than the corresponding prior year periods cash cost per tonne of ore processed(1), excluding royalties, of $72.01
and $72.27 due to higher volume of material processed partially offset by
higher maintenance costs, higher vein drive development costs to access
additional working spaces and higher employment expenses. Cash cost per tonne of ore processed(1),
including royalties, at Deno Gold in the fourth
quarter and twelve months of 2010 were $69.87 and $70.31, respectively. Deno Gold did not pay a profit based royalty in 2009.
Gross profit
The following table shows the breakdown of gross profit (loss) by location:
--------------------------------------------------------------------------
$ thousands
Ended December 31,
Three Months
Twelve Months
----------------------
---------------------
2010
2009 2010
2009
-------------------------------------------------------------- -----------
Chelopech
$ 14,444 $ 9,698 $ 41,214 $ 41,594
Deno Gold
6,865
2,888
13,558
(865)
NCS (3,682)
-
(3,132)
-
--------------------------------------------------------------------------
Total gross profit
$ 17,627 $
12,586 $ 51,640 $ 40,729
--------------------------------------------------------------------------
--------------------------------------------------------------------------
In
December 2010, a year-to-date charge of $2.1 million on the net value of the
metals in concentrate held by the smelter and smelter fee advances, as per
the tolling agreement between LDC and NCS, was reclassified from financing
costs to net revenue, resulting in a reduction in net revenue. Included in
the NCS gross loss in the fourth quarter and twelve months of 2010 was a
depreciation expense of $1.4 million and $2.4 million, respectively, on the
intangible assets identified as part of the finalization of the purchase
price allocation for the acquisition of NCS which was completed in the fourth
quarter.
Investment
and other income
Investment
and other income were $12.6 million and $51.4 million in the fourth quarter
and twelve months of 2010, respectively, compared to investment and other
income of $0.4 million and $1.4 million in the corresponding prior year
periods. Included in the fourth quarter and twelve months of 2010 were
unrealized favourable mark-to-market adjustments
related to the Sabina Special Warrants, which are held for trading, of $11.6
million and $49.7 million respectively.
Income
tax expense
In
the fourth quarter of 2010, DPM reported an income tax recovery of $5.1
million at an effective tax recovery rate of 36% on earnings before income
taxes of $14.3 million. At a 31% statutory tax rate for 2010, the expected
income tax expense was $4.4 million. The variance was due primarily to the
lower rates on foreign earnings and the non-taxable portion of unrealized
gains on warrants.
For
the year ended December 31, 2010, DPM reported an income tax recovery of $9.5
million at an effective tax recovery rate of 86% on earnings before income
taxes of $11.0 million. At a 31% statutory tax rate for 2010, the expected
income tax expense was $3.4 million. The variance was due primarily to the
reversal of the tax valuation allowance and the non-taxable portion of
capital gains and unrealized gains on special warrants, partially offset by
an unrecognized tax benefit relating to foreign losses. The valuation
allowance was reversed since it is more likely than not that DPM will be able
to recognize future tax assets against future taxable income.
Summary of Operating Cash Flow, Investing and Financing Activities
The following table summarizes the Company's cash flow activities for
the
periods indicated:
---------------------------------------------------------------------------
$ thousands
Ended December 31,
Three Months
Twelve Months
--------------------
--------------------
2010
2009
2010 2009
---------------------------------------------------------------------------
Net cash provided by operating
activities
$ 28,821 $ 22,325 $ 50,287 $ 21,233
Net cash used in investing
activities
(43,333)
(23,522)
(88,725) (31,639)
Net cash provided by (used in)
financing activities
26,064
(1,631) 103,894 (4,741)
---------------------------------------------------------------------------
Increase (decrease) in cash and
cash equivalents
11,552
(2,828)
65,456 (15,147)
Cash and cash equivalents at
beginning of period
84,673
33,034
30,769
42,169
Change due to conversion to
U.S. dollar reporting
-
563
-
3,747
---------------------------------------------------------------------------
Cash and cash equivalents at
end of period
$ 96,225 $ 30,769 $ 96,225 $ 30,769
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Operating
Activities
Cash
provided by operating activities in the fourth quarter of 2010 was $28.8
million compared to $22.3 million in the fourth quarter of 2009. The increase
in cash provided by operating activities, period over period, was due to
improved gross profit from mining and processing operations resulting from
stronger metal prices partially offset by lower gold in concentrate sold.
Cash
provided by operating activities in the twelve months of 2010 was $50.3
million compared to $21.2 million in the corresponding prior year period. The
period over period increase in cash provided by operating activities was due
primarily to improved gross profit from mining and processing operations
resulting from stronger metal prices and higher deliveries of concentrates
partially offset by lower gold in concentrate sold.
Investing
Activities
Cash
used in investing activities in the fourth quarter and twelve months of 2010
was $43.3 million and $88.7 million, respectively, compared to cash used in
investing activities of $23.5 million and $31.6 million in the corresponding
prior year periods.
Proceeds
on sale of short-term investments totalled $31.6
million in the twelve months of 2010 compared to $3.8 million in the
corresponding prior year period. Short-term investments include bankers'
acceptances and treasury bills with original maturities between three months
and less than one year at the time the investment is made.
In
the twelve months of 2010, there was an increase in restricted cash of $15.1
million due primarily to the funding of DPMA, a qualifying insurance company
established to provide reinsurance coverage for surety risks originating from
DPM's affiliates.
On
December 22, 2010, DPM, through a wholly owned subsidiary company, purchased
the remaining five percent interest in Vatrin it
did not own, resulting in DPM holding a 100% equity interest, for net cash
consideration of $1.5 million and the elimination of all associated third
party indebtedness. Vatrin holds 100% of Deno Gold.
In
August 2010, DPM purchased 1,539,713 common shares of Sabina for $4.0 million
(Cdn$4.2 million).
In
April 2010, the Company subscribed for 4,857,000 units of PJV Resources at a
unit price of Cdn$0.35 per unit for total cash consideration of $1.7 million
(Cdn$1.7 million). Each unit consisted of one common share of PJV and one
half of one common share purchase warrant. Each full warrant was exercisable
to purchase a common share of Avala at Cdn$0.50 per
share. The shares of PJV were converted to shares of Avala
as part of the July 2010 business combination between PJV, Avala and Metali and are
eliminated on consolidation.
On
March 24, 2010, the Company completed the acquisition of NCS from WTI through
the purchase of 100% of the shares of NCS. The cash consideration provided to
WTI by DPM was $17.0 million, net of cash acquired of $1.0 million.
Prior
to its acquisition of NCS in March 2010, DPM advanced $3.0 million to NCS in
accordance with the binding letter of intent signed in January 2010 with WTI
for the purchase of NCS. In the twelve months ended December 31, 2009, DPM
advanced $4.0 million to NCS in accordance with the agreement DPM signed with
NCS in December 2008.
In
June 2009, DPM completed the sale of its Back River exploration project in
Nunavut to Sabina for a cash payment of $6.2 million (Cdn
$7.0 million), 17 million Sabina common shares and 10 million Sabina special
warrants.
The following table provides a summary of the Company's capital
expenditures:
---------------------------------------------------------------------------
$ thousands
Ended December 31,
Three Months
Twelve Months
-------------------------
-------------------------
2010
2009
2010
2009
---------------------------------------------------------------------------
Chelopech
$ (17,562) $ (9,510) $ (47,495) $ (27,347)
Deno Gold
(4,344) (1,861) (18,894) (6,067)
NCS
(3,407)
-
(8,357)
-
BMM
(1,776)
(909)
(4,650) (1,001)
Other
(27)
(136)
(334)
(356)
---------------------------------------------------------------------------
Total capital
expenditures
$ (27,116)
$ (12,416) $ (79,730) $ (34,771)
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Capital
expenditures at Chelopech in the fourth quarter and
twelve months of 2010 were, respectively, 85% and 74% higher than the
corresponding prior year periods due to the ramp-up of the mine and mill
expansion project in 2010. Capital expenditures at Deno
Gold in the fourth quarter and twelve months of 2010 were significantly
higher than the corresponding prior year periods due to the mine and mill
expansion and land acquisition in 2010.
Financing
Activities
Cash
provided by financing activities in the fourth quarter and twelve months of
2010 totalled $26.1 million and $103.9 million,
respectively, compared to cash used in financing activities of $1.6 million
and $4.7 million in the corresponding prior year periods.
In
the twelve months of 2010, debt and leases repayments were $2.4 million and
$3.8 million, respectively, compared to $3.6 million and $1.1 million in the
corresponding prior year period.
On
December 3, 2010, DPM and Chelopech finalized a
$66.75 million long-term loan agreement with the EBRD and UCB. The proceeds
from this loan financing are to be used to refinance existing EBRD debt and
to assist in the financing of the Chelopech mine
and mill expansion. As of December 31, 2010, $44.25 million had been drawn
under the facility, of which $16.25 million was used to refinance the
existing EBRD debt. The proceeds from debt financing, net of fees and
expenses, were $27.1 million.
On
July 30, 2010, DPM concluded its previously announced agreement with PJV and Avala wherein it received a 50.3% direct controlling interest
in Avala, 36.7 million warrants (including the
April 2010 subscription of shares and warrants), $1.6 million in cash as well
as Special Rights to acquire an additional 50 million Avala
common shares for no additional consideration if certain events occur in
exchange for DPM's Serbian subsidiary, Metali. Net
proceeds on the sale of DPM's interest in Metali
were $20.9 million.
In
the first quarter of 2010, the Company completed an equity financing for
gross proceeds of $64.8 million (Cdn$66.0 million). The equity financing
consisted of the sale of 20,000,000 common shares at Cdn$3.30 per share. The
proceeds, net of expenses and fees, were $62.0 million (Cdn$63.1 million).
Average
Metal Prices
The
following table, summarizing the average metal prices for the London Bullion
Market Association ("LBMA") gold, LME copper Grade A, LME special
high grade ("SHG") zinc and LBMA silver prices, is used to
illustrate the Company's average metal price exposures based on its key
reference prices for the periods indicated.
----------------------------------------------------------------------------
Average
Ended December 31,
Three Months Twelve
Months
------------------ ------------------
2010
2009
2010
2009
----------------------------------------------------------------------------
London Bullion gold ($/oz)
$ 1,369 $ 1,102 $ 1,224 $ 973
LME settlement copper ($/lb)
3.92
3.02
3.42
2.34
LME settlement SHG zinc ($/lb)
1.05
1.00
0.98
0.75
LBMA spot silver ($/oz)
$ 26.43 $ 17.58 $ 20.16 $ 14.65
----------------------------------------------------------------------------
Non-GAAP
Financial Measures
Reference
is made to cash cost per tonne of ore processed
because it is understood that certain investors use this information to
assess the Company's performance and also determine the Company's ability to
generate cash flow for investing activities. This measurement captures all of
the important components of the Company's production and related costs. In
addition, management utilizes this metric as an important management tool to
monitor cost performance of the Company's operations. This measurement, which
is a non-GAAP measure, has no standardized meaning under Canadian GAAP and is
therefore unlikely to be comparable to similar measures presented by other
companies. This measurement is intended to provide additional information and
should not be considered in isolation or as a substitute for measures of
performance prepared in accordance with Canadian GAAP. The following table
provides, for the periods indicated, a reconciliation of the Company's cash
cost measure and Canadian GAAP cost of sales:
----------------------------------------------------------------------------
$ thousands, unless otherwise
indicated
For the year ended December 31,
2010
Chelopech Deno Gold Other Total
----------------------------------------------------------------------------
Ore processed (mt)
1,000,781
428,865
Cost of sales
$ 72,579 $
32,743 $ 44,833 $ 150,155
Add/(deduct):
Amortization
(12,960)
(5,374)
Reclamation costs and other
(1,337)
(788)
Change in concentrate
inventory
(2,018)
3,572
----------------------------------------------------------------------------
Total cash cost of production $ 56,264 $
30,153
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash cost per tonne of ore
processed, including
royalties $ 56.22 $ 70.31
Cash cost per tonne of ore
processed, excluding
royalties $ 51.54 $ 66.33
----------------------------------------------------------------------------
----------------------------------------------------------------------------
$ thousands, unless otherwise
Total
indicated
For the year ended December 31,
Deno
2009
Chelopech
Gold
----------------------------------------------------------------------------
Ore processed (mt)
980,928
218,235
Cost of sales
$ 75,647 $
21,197
$ 96,844
Add/(deduct):
Amortization
(12,401)
(3,170)
Reclamation costs and other
(1,841)
(752)
Care and maintenance costs
-
(3,074)
Change in concentrate
inventory
(419)
1,696
Foreign exchange
(1,148)
(125)
Total cash cost of production $ 59,838 $
15,772
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash cost per tonne of ore
processed, including
royalties $ 61.00 $ N/A
Cash cost per tonne of ore
processed, excluding
royalties $ 55.23 $ 72.27
----------------------------------------------------------------------------
Mineral Reserves and Resources
The Chelopech Mineral Resources, as of September
2010, are set out below.
Mineral Resources
Gold
Silver
Copper
---------------- ---------------- ----------------
Tonnes Grade Ounces Grade Ounces Grade Lbs
(million)
(g/t)
(M) (g/t) (M) (%) (M)
----------------------------------------------------------------------------
Measured
15.84
4.2 2.14 10.9 5.55 1.6 558.7
Indicated
12.70
4.0 1.63 7.2 2.94 1.1 307.9
----------------------------------------------------------------------------
Measured and
Indicated
28.54
4.1 3.77 9.1 8.49 1.4 866.6
Inferred
8.10
2.9 0.76 10.3 2.68 0.9 160.7
----------------------------------------------------------------------------
(1) The rounding of tonnage and grade figures has resulted in some
columns
showing relatively minor discrepancies in sum totals.
(2) All Mineral Resource Estimates have been determined and reported in
accordance with National Instrument 43-101("NI 43-101") and the
classification adopted by the Canadian Institute of Mining ("CIM")
Council
in August 2000.
(3) Cut-off Grade @ 3.2g/t Gold Equivalent is based on the following
formula: (Au g/t + 2.5xCu%). The Mineral Resource
has been depleted as of
September 30, 2010. Resource estimates are based on various other
assumptions and key parameters and are subject to risks as more fully
described in the supporting technical report (see note 4).
(4) The "Chelopech Cu-Au Resource and Reserve,
Bulgaria, Technical Report
for the Chelopech Project" is currently being
prepared by Brian R. Wolfe
from Coffey Mining Pty Ltd. ("Coffey"), and Gordon Fellows from Chelopech
Mining, both of whom are Qualified Persons under NI 43-101. The former
is
independent of the Company. The report will be filed on Sedar
at
www.sedar.com by March 31, 2011.
(5) The information in the above table has been prepared under the
supervision of Dr. Julian Barnes, a Qualified Person within the meaning of
NI 43-101 and independent of the Company.
The Chelopech Mineral Reserves, as of January 1,
2011, are set out below.
Mineral Reserves
Gold
Copper
-------------------- --------------------
Tonnes Grade Ounces Grade Lbs
(million) (g/t) (M)
(%)
(M)
----------------------------------------------------------------------------
Proven
14.59
3.66
1.72
1.37 439
Probable
6.26 4.37 0.88
1.04 144
----------------------------------------------------------------------------
Total Reserves
20.85 3.87 2.60
1.27 583
----------------------------------------------------------------------------
(1) The rounding of tonnage and grade figures has resulted in some
columns
showing relatively minor discrepancies in sum totals.
(2) All Mineral Reserve Estimates have been determined and reported in
accordance with NI 43-101 and the classifications adopted by the CIM Council
in August 2000.
(3) All Mineral Reserves are completely included within the quoted Mineral
Resources.
(4) NSR cut-off is +$10/t; the average sulphur
content in mill feed is
14.0%; Mineral Reserves are depleted, and are based on metal prices of
$900/oz gold and copper price of $2.50/lb; metallurgical recoveries are
based on current and modelled algorithms for each
block. The weighted
average recoveries are 84.4%CuRec, 54.89%AuRec and 21.48%AgRec.Smelting and
Transport costs are $189/t and $139/t, respectively with smelter recoveries
of 93%AuRec, 94%CuRec and 90%AgRec. Reserve estimates are based on various
other assumptions and key parameters and are subject to risks as more fully
described in the supporting technical report (see note 5).
(5) The "Chelopech Cu-Au Resource and Reserve,
Bulgaria, Technical Report
for the Chelopech Project" is currently being
prepared by Brian R. Wolfe
from Coffey and Gordon Fellows from Chelopech
Mining, both of whom are
Qualified Persons under NI 43-101. The former is independent of the Company.
The report will be filed on Sedar at www.sedar.com
by March 31, 2011.
(6) The information in the above table has been prepared under the
supervision of Dr. Julian Barnes, a Qualified Person within the meaning of
NI 43-101 and independent of the Company.
Definition
of Mineral Resource and Reserve
The
Mineral Resource and Reserve estimate has been performed in compliance with
the NI 43-101 and as defined by the CIM Standards. According to the standards,
a Mineral Resource is defined as "a concentration or occurrence of base
and/or precious metals in or on the earth's crust in such form and quantity
and of such grade or quality that it has reasonable prospects for economic
extraction. The location, quantity, grade, geological characteristics and
continuity of a Mineral Resource are known, estimated or interpreted from
specific geological evidence and knowledge". A Mineral Reserve is
defined as "the economically mineable part of a Measured or Indicated
Mineral Resource demonstrated by at least a Preliminary Feasibility Study.
This Study must include adequate information on mining, processing,
metallurgical, economic and other relevant factors
that demonstrate, at the time of reporting, that economic extraction can be
justified. A Mineral Reserve includes diluting materials and allowances for
losses that may occur when the material is mined" (CIM Definitions
Standards November 27, 2010).
Scientific
and Technical Data
Since
the 2008 Mineral Resource and 2009 Mineral Reserve estimate had been
computed, additional drilling, development and mapping have better defined
the resources at depth while, the updated reserves have been calculated using
the newly adopted net smelter return ("NSR") methodology instead of
the previously practised single cut-off grade and
Mineable Reserves Optimizer ("MRO") analysis.
The
Mineral Resource estimate is based on a single cut-off grade of 3.2g/tAuEq using a gold equivalent formula of AuEq = 2.5xCu + Au with wireframes based on geological
and grade continuity (greater than 3g/tAuEq). On
evaluation of the results and comparison with the 2008 Mineral Resource
estimate, not taking into consideration the mined out material from the
period between the estimates, the tonnes were reduced
by 22% for Measured and Indicated Resources and 21% for Inferred Resources.
Gold and copper grades increased by 8% and 9%, respectively, for Measured and
Indicated Resources, while Inferred Resources saw a 7% increase in gold grade
and no change to copper grade compared to the 2008 Mineral Resource. Gold and
copper metal decreased by 12% and 11% for Measured and Indicated Resources
while, down 13% and 21% for Inferred Resources, respectively.
Primarily,
the changes in the Mineral Resource estimate compared to the 2008 Mineral
Resource have been attributed to a number of factors including an updated
void model, additional drilling and improved ore body delineation. At depth,
Blocks 16, 18, 19 and 151 were better constrained due to the "Deeps"
drilling while grade control drilling tightened the boundaries of Blocks 19
and 151. Additional Mineral Resources with higher gold grades were gained
from Blocks 145, 147 and 149 while, in areas where the Mineral Resource
wireframes were expanded, more low-grade material was included inside the
modeled wireframe, which resulted in a lower overall grade estimate and a
reduction in the volume influenced by higher grade intersections.
For
the January 1, 2011, Mineral Reserve estimate, DPM applied the NSR
methodology with designed stopes and development
instead of a single cut-off grade and MRO analysis. This approach was adopted
after the completion of a "hill of values" study in 2009 conducted
by Coffey. It was shown that the break-even grade of Block 151 is significantly
higher than the other mining blocks. This implies the use of a single mine
cut-off grade was not the economic optimum.
NSR
refers to the revenues expected from the mill feed, taking into consideration
metal prices, mill and smelter recoveries, concentrate grades, transportation
costs of the concentrate to the smelter, treatment and refining charges, and
other deductions at the smelter. There are numerous benefits of a net smelter
return model compared to a single metal cut off grade approach. These benefits
include a) polymetallic ores can be converted into
a dollar per tonne variable; b) investigation of
the potential viability of selected reserve blocks can be quickly assessed;
c) the profitability of planned stopes can be
assessed as a daily task; d) the effect of commodity price fluctuations can
be quickly applied to the reserve model and e) minimum profit per tonne appraisals can be easily applied prior to a
decision to mine a stope.
Limitations
of the NSR block valuation approach include a tendency to smooth the
statistical distribution of block values, relative to the statistical
distribution of the copper, gold and additional element block estimates.
Recovery
algorithms used for the Mineral Reserve estimate are based on the current Chelopech operation using gold, copper, silver and sulphur grades, DPM long term metal price forecasts for
gold of $900 per ounce, for copper of $2.50 per pound and for silver $17 per
ounce and smelter costs and transport costs of $185 per tonne
and $139 per tonne, respectively. Also, based on
the results presented by Coffey, a fair and responsible cut-off grade that
balances economic risk and mine life was chosen at +$10 per tonne.
Therefore,
due to the higher than average sulphur content of
Block 151, recoveries are lower compared to all other blocks, hence a higher
grade cut-off should be applied. The NSR methodology automatically takes this
into account while previous reserves did not. To illustrate the difference in
recoveries, Blocks 19 and 150 return an average recovery range of 86-88% for
copper and 63-66% for gold while Block 151 has an average recovery of 82% for
copper and 47% for gold.
This
change in methodology from a single cut-off of 3.2g/tAuEq
to an NSR model has therefore reduced the Mineral Reserves of Block 151 by
3%, compared to the 2009 Mineral Reserves. A majority of the uneconomical
material in Block 151 under NSR methodology is in the lower levels where gold
and sulphur grades are high (greater than 4g/tAu and greater than 23%S) and copper grades are low
(less than 0.5%Cu). Petrological and metallurgical
analysis is planned to determine if changes to the current processing
workflow can occur, in order to convert this material to Mineral Reserves.
A
direct comparison between the 2009 and 2010 Proven Reserves saw a tonnage
increase of 34% and a drop in gold and copper grade of 4% and 2%,
respectively. This resulted in an increase in gold and copper metal of 32%
and 29%, respectively. Probable Reserves, on the other hand, dropped with tonnes down 49%, gold grade up 28%, copper grade down 5%
and gold and copper metal both down 32% and 52%, respectively. This change in
Proven and Probable Reserves was due to the increase in the amount of capital
and ore development conducted in 2010, in order to ramp up production to 2
million tonnes per annum. The definition used for
Probable Reserves is defined as designed stopes and
development that lies more than 15 metres (1/2 stope height) below any level with crosscutting ore
development. Data was unavailable to compare the Proven and Probable Reserves
separately, taking into account what was mined out between the 2009 and 2010
Mineral Reserve.
However,
when taking into consideration the mined out material between Mineral Reserve
estimates, the total Chelopech Mineral Reserve
(Proven and Probable) result is positive. The 2010 Mineral Reserve contains
4% less tonnes, a 7% increase in gold grade and a
2% increase in gold metal, a 7% increase in copper grade and a 1% decrease in
copper metal. These differences are attributed to the updated voids model and
additional exploration and grade control drilling which has better defined
the extents and boundaries of Blocks 19, 103, 150, 151 and 149 while new
discoveries, Blocks 145 and 147, added high-grade gold Mineral Reserves.
Risks
and Uncertainties
The
figures for Mineral Resources and Mineral Reserves disclosed by the Company
in this press release and other disclosure documents of the Company are
estimates only and no assurance can be given that the anticipated tonnages
and grades will be achieved or that the indicated level of recovery will be
realized. There are numerous uncertainties inherent in estimating Mineral
Resources, including many factors beyond the Company's control. Such
estimation is a subjective process and the accuracy of any resource estimate
is a function of the quantity and quality of available data and of the
assumptions made and judgments used in engineering and geological
interpretation. Short-term operating factors, such as the need for orderly
development of the ore bodies or the processing of new or different ore
grades, may cause the mining operation to be unprofitable in any particular
accounting period. In addition, there can be no assurance that gold, silver,
zinc or copper recoveries in small scale laboratory tests will be duplicated
in larger scale tests under on-site conditions or during production.
This
press release uses the terms "Measured", "Indicated" and
"Inferred" Mineral Resources. United States investors are advised
that while such terms are recognized and required by Canadian regulations,
the U.S. Securities and Exchange Commission ("SEC") does not
recognize them. "Inferred Mineral Resources" have a great amount of
uncertainty as to their existence and as to their economic and legal
feasibility. It cannot be assumed that all or any part of an Inferred Mineral
Resource will ever be upgraded to a higher category. Under Canadian rules,
estimates of Inferred Mineral Resources may not form the basis of feasibility
or other economic studies. United States investors are cautioned not to
assume that all or any part of Measured or Indicated Mineral Resources will
ever be converted into Mineral Reserves. United States investors are also
cautioned not to assume that all or any part of an Inferred Mineral Resource
exists, or is economically or legally mineable.
(1) Cash cost per tonne ore processed is a non-GAAP measure. A
reconciliation of the Company's cash cost per tonne
ore processed to cost of
sales under Canadian GAAP for the years 2010 and 2009 is shown in the table
entitled "Non-GAAP Financial Measures."
(2) Refer to the Average Metal
Prices section for the average metal prices
used to illustrate the Company's average metal price exposure based on its
key reference prices.
To
view the Financial Statements, please click the following link: http://media3.marketwire.com/docs/dpmfin223.pdf
Cautionary
Note Regarding Forward-Looking Statements
This
press release contains "forward-looking statements" that involve a
number of risks and uncertainties. Forward-looking statements include, but
are not limited to, statements with respect to the future price of gold,
copper, zinc and silver the estimation of mineral reserves and resources, the
realization of mineral estimates, the timing and amount of estimated future
production, costs of production, capital expenditures, costs and timing of
the development of new deposits, success of exploration activities,
permitting time lines, currency fluctuations, requirements for additional
capital, government regulation of mining operations, environmental risks,
unanticipated reclamation expenses, title disputes or claims, limitations on
insurance coverage and timing and possible outcome of pending litigation.
Often, but not always, forward-looking statements can be identified by the
use of words such as "plans", "expects", or "does
not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts",
"intends", "anticipates", or "does not anticipate",
or "believes", or variations of such words and phrases or state
that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or
be achieved. Forward-looking statements are based on 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. Such
factors include, among others: the actual results of current exploration
activities; actual results of current reclamation activities; conclusions of
economic evaluations; changes in project parameters as plans continue to be
refined; future prices of gold, copper, zinc and silver; possible variations
in ore grade or recovery rates; failure of plant, equipment or processes to
operate as anticipated; 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, fluctuations in metal prices, as well as those risk factors
discussed or referred to in Management's Discussion and Analysis under the
heading "Risks and Uncertainties" and other documents filed from
time to time with the securities regulatory authorities in all provinces and
territories of Canada and available at www.sedar.com. 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. 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.
Contact:
Jonathan Goodman
Dundee Precious Metals Inc.
President and Chief Executive Officer
(416) 365-2408
jgoodman@dundeeprecious.com
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