(All monetary figures are expressed in Canadian Dollars unless
otherwise stated)
Dundee Precious Metals Inc. ("DPM" or the "Company") (TSX:
DPM)(TSX: DPM.WT)(TSX: DPM.WT.A) today announced its unaudited
results for the second quarter ended June 30, 2009. DPM reported
second quarter net earnings of $3.3 million (basic and diluted net
earnings per share of $0.03). This compares with a second quarter
2008 net loss of $14.1 million (basic and diluted net loss per
share of $0.23).
"Second quarter results were characterized by strong operating
performance at Chelopech that is expected to continue into the
future and a restart of operations at Deno Gold with a considerably
improved cost structure," noted Jonathan Goodman, DPM President
& CEO. "In addition, the Company is now positioned to ramp-up
construction on the Chelopech mine and mill expansion project in
the third quarter of this year, which will position it as a low
cost producer."
The following table summarizes the Company's financial and
operating results for the periods indicated:
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$ millions, except per share amounts Three Months Six Months
------------- --------------
Ended June 30, 2009 2008 2009 2008
----------------------------------------------------------------------------
Net Revenue $ 32.7 $ 32.7 $ 59.7 $ 72.5
Cost of Sales 23.2 28.8 46.6 50.7
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Gross Profit from Mining Operations 9.5 3.9 13.1 21.8
----------------------------------------------------------------------------
Investment and Other Income (Expense) 1.1 (1.4) 0.2 1.0
Net Earnings (Loss) 3.3 (14.1) (2.8) (5.7)
Basic Net Earnings (Loss) Per Share $ 0.03 $ (0.23) $ (0.03) $ (0.09)
Diluted Net Earnings (Loss) Per Share $ 0.03 $ (0.23) $ (0.03) $ (0.09)
Net Cash Provided By (Used in)
Operating Activities (2.2) 21.7 (14.9) 14.3
Capital Expenditures (7.7) (27.6) (16.2) (47.4)
Proceeds on Sale of Short-term
Investments 34.7 - 29.1 -
Proceeds on Sale of Exploration
Property 7.0 - 7.0 -
Other Investing Activities (1.1) 16.9 (2.4) 20.0
Financing Activities (1.6) (1.3) (2.5) (1.9)
----------------------------------------------------------------------------
Net Increase (Decrease) in Cash $ 29.1 $ 9.7 $ 0.1 $ (15.0)
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Concentrate Produced (mt)
Chelopech 18,902 11,987 35,207 26,170
Deno Gold 3,173 2,704 3,173 4,589
Cash Cost per tonne Ore Processed
(US$/t)(1)
Chelopech $ 62.34 $ 68.03 $ 55.25 $ 63.52
Deno Gold $ 66.66 $110.65 $ 66.66 $109.05
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SECOND QUARTER 2009 - FINANCIAL HIGHLIGHTS
- Second quarter of 2009 financial results, relative to second
quarter of 2008, benefited from improved operating performance at
Chelopech and Deno Gold, an 86% reduction in exploration expense
and a 23% reduction in administrative expense.
- Net earnings in the second quarter of 2009 were $3.3 million
compared to a net loss of $14.1 million in the corresponding prior
year period. The increase in earnings was primarily due to higher
gross profit from mining operations and a decrease in exploration
and administrative expenses. The increase in gross profit from
mining operations was primarily due to higher deliveries of
concentrates produced at Chelopech, lower production costs at
Chelopech and reduced operating loss at Deno Gold. These positive
variances were partially offset by a 45% decrease in copper price
in the second quarter of 2009 relative to the corresponding prior
year period.
- The Chelopech operations reported net revenue of $34.1 million
on corresponding concentrate deliveries of 17,685 tonnes. Chelopech
cash cost per tonne of ore processed(1) in the period was 8% lower
than the corresponding prior year period due to the favourable
impact of a 13% depreciation of the average Euro to U.S. dollar
exchange rate, higher volumes of material processed, lower
employment expenses and reduced spending on services as a result of
cost savings initiatives. These favourable variances were partially
offset by higher royalties reflecting the new royalty rates
effective July 31, 2008, higher spending on backfill resulting from
higher volumes of backfill placed in stopes and higher prices for
and usage of certain materials.
- Following its restart in April 2009 and despite lower than
planned copper grades due to excess mine dilution experienced in
several high grade copper veins, Deno Gold achieved full production
of 30,000 tonnes of ore mined in the month of June. Immediate
action has been taken to address the copper grade shortfalls and
further modifications are being introduced to realize additional
manpower savings. Deno Gold's operating loss in the period was $3.0
million lower than the prior year corresponding period due to
improved and more efficient operations. Deno Gold cash cost per
tonne of ore processed(1) in the period was 40% lower than the
corresponding prior year period due to a 20% devaluation of the
Armenian dram relative to the U.S. dollar, improved operating
performance and reductions in headcount and external contractors.
Improved grades and metal recovery rates resulted in a 17% increase
in concentrate production compared to the second quarter of
2008.
- Working capital requirements in the second quarter of 2009
increased by $8.4 million due primarily to an increase in
inventories as a result of a build-up of concentrate inventories at
Deno Gold following the restart of operations, an increase in
accounts receivable resulting from increased revenue in the period
and a decrease in accounts payable.
- As at June 30, 2009, DPM had cash, cash equivalents and
short-term investments of $74.9 million compared to $104.0 million
at December 31, 2008.
SIGNIFICANT ITEMS
- In the second quarter of 2009, activities related to the
Chelopech mine and mill expansion project progressed in the areas
of the paste fill plant, upgrade to the tailings facility and
modifications to the process circuit to allow tailings reclaim.
- On June 9, 2009, DPM completed its previously announced sale
of the Back River exploration project in Nunavut to Sabina Silver
Corporation ("Sabina"). Pursuant to the transaction, the Company
received in exchange for the Back River project a cash payment of
$7 million, 17 million Sabina common shares and 10 million Special
Warrants, each exercisable for one common share and 1/2 common
share purchase warrant upon Sabina achieving certain exploration
and production milestones or upon the occurrence of certain other
events. On June 30, 2009, the Sabina investment was valued at $24.1
million, of which a) $16.0 million related to Sabina common shares
and b) $8.1 million related to Sabina Special Warrants.
- The Company is currently evaluating value enhancing strategic
opportunities available to it in respect of its Serbian assets.
A complete set of DPM's Consolidated Financial Statements, Notes
to the Consolidated Financial Statements and Management's
Discussion and Analysis for the second quarter ended June 30, 2009
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 to present its Second
Quarter 2009 Financial Results on Friday, July 31, 2009 at 8.30
a.m. (EST).
The call will be webcast live (audio only) at:
http://events.onlinebroadcasting.com/dundee/073109/index.php
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 and mining of precious
metal 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"), a gold, copper, silver
concentrates producer, owner of the Chelopech mine located
approximately 70 kilometres east of Sofia, Bulgaria, and a 95%
interest in Vatrin Investment Limited ("Vatrin"), a private entity
which holds 100% of 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 numerous exploration properties in
one of the larger gold-copper-silver mining regions in Serbia.
SUMMARIZED FINANCIAL RESULTS
Net Revenue
Net revenue from the sale of concentrates of $32.7 million in
the second quarter of 2009 was comparable to the net revenue in the
second quarter of 2008. The benefits of higher deliveries of
concentrates produced at Chelopech due to increased volume of ore
mined and processed, higher metal grades and metal recovery rates
in the second quarter of 2009 relative to the prior year period and
the favourable impact of a weaker Canadian to U.S. dollar exchange
rate were offset by a 45% decrease in copper price and lower
deliveries of concentrates produced at Deno Gold. A weaker Canadian
to U.S. exchange rate in the second quarter of 2009, compared to
the corresponding prior year period, increased revenue by $4.7
million. Deliveries of concentrates produced at Chelopech of 17,685
tonnes in the second quarter of 2009 were 49% higher than second
quarter of 2008 deliveries of 11,891 tonnes. Deliveries of
concentrates produced at Deno Gold of 905 tonnes in the second
quarter of 2009 were lower than deliveries of 3,592 tonnes in the
second quarter of 2008 due to a build-up of concentrate inventories
following the restart of operations in April 2009. Net favourable
mark-to-market adjustments and final settlements of $1.3 million,
related to the open positions of provisionally priced concentrate
sales, were recorded in the second quarter of 2009 compared to net
unfavourable mark-to-market adjustments and final settlements of
$1.5 million in the second quarter of 2008. In the second quarter
of 2009, DPM recorded unrealized and realized losses on its copper
derivatives of $0.3 million and $2.5 million, respectively. The
copper derivative contracts were entered into to mitigate
substantially all the copper price exposure and associated earnings
volatility as a result of the time lag between the receipt of
provisional sales revenue associated with the contractual sales of
concentrates and the specified final pricing period.
Net revenue from the sale of concentrates of $59.7 million in
the first six months of 2009 was $12.7 million or 18% lower than
the corresponding prior year period due primarily to a 50% decrease
in copper price and lower deliveries of concentrates produced at
Deno Gold partially offset by higher deliveries of concentrates
produced at Chelopech and the favourable impact of a weaker
Canadian to U.S. dollar exchange rate, which increased revenue by
$9.7 million in the period. Deliveries of concentrates produced at
Chelopech of 34,258 tonnes in the first six months of 2009 were 13%
higher than the corresponding prior year period deliveries of
30,420 tonnes due to increased production in 2009. Deliveries of
concentrates produced at Deno Gold of 905 tonnes in the first six
months of 2009 were lower than deliveries of 4,464 tonnes in the
corresponding prior year period due to a build-up of concentrate
inventories in the second quarter of 2009. Deno Gold was on care
and maintenance in the first quarter of 2009. Net favourable
mark-to-market adjustments and final settlements of $5.9 million,
related to the open positions of provisionally priced concentrate
sales, were recorded in the first six months of 2009 compared to
net favourable mark-to-market adjustments and final settlements of
$1.3 million recorded in the corresponding prior year period. In
the first six months of 2009, DPM recorded unrealized and realized
losses on its copper derivatives of $0.3 million and $3.8 million,
respectively.
The average London Bullion gold price(2) in the second quarter
of 2009 of US$922 per ounce was 3% higher than the second quarter
of 2008 average price of US$896 per ounce. The average London Metal
Exchange ("LME") cash copper price(2) in the second quarter of 2009
of US$2.12 per pound was 45% lower than the second quarter of 2008
average price of US$3.83 per pound. The average LME cash zinc
price(2) in the second quarter of 2009 of US$0.67 per pound was 30%
lower than the second quarter of 2008 average price of US$0.96 per
pound.
The average London Bullion gold price(2) in the first six months
of 2009 of US$915 per ounce was comparable to the corresponding
prior year period average price of US$912 per ounce. The average
LME cash copper price(2) in the first six months of 2009 of US$1.83
per pound was 50% lower than the corresponding prior year period
average price of US$3.68 per pound. The average LME cash zinc
price(2) in the first six months of 2009 of US$0.60 per pound was
42% lower than the corresponding prior year period average price of
US$1.03 per pound.
Cost of sales
Cost of sales of $23.2 million in the second quarter of 2009 was
$5.6 million or 20% lower than the corresponding prior year period
due primarily to lower production costs at Chelopech and Deno Gold
and lower deliveries of concentrates produced at Deno Gold
partially offset by the unfavourable impact of a weaker Canadian to
U.S. dollar exchange rate and higher deliveries of concentrates
produced at Chelopech. A weaker Canadian to U.S. dollar exchange
rate in the second quarter of 2009, relative to the corresponding
prior year period, increased cost of sales by $3.3 million in the
period.
Cost of sales of $46.6 million in the first six months of 2009
was $4.1 million or 8% lower than the corresponding prior year
period due primarily to lower deliveries of concentrates produced
at Deno Gold and lower production costs at Chelopech partially
offset by the unfavourable impact of a weaker Canadian to U.S.
dollar exchange rate and higher deliveries of concentrates produced
at Chelopech. A weaker Canadian to U.S. dollar exchange rate in the
first half of 2009, relative to the corresponding prior year
period, increased cost of sales by $6.7 million in the period.
Cash cost per tonne of ore processed(1) at Chelopech in the
second quarter and first half of 2009 of US$62.34 and US$55.25
were, respectively, 8% and 13% lower than the corresponding prior
year periods due to the favourable impact of a weaker Euro to U.S.
dollar exchange rate, higher volumes of material processed, lower
employment expenses and reduced spending on services resulting from
cost savings initiatives implemented in late 2008 and first quarter
of 2009. These favourable variances were partially offset by higher
royalties reflecting the new royalty rates effective July 31, 2008,
higher spending on backfill resulting from higher volumes of
backfill placed in stopes and higher prices for and usage of
certain materials.
Gross profit
Chelopech recorded a gross profit from mining operations of
$11.9 million in the second quarter of 2009 compared to a gross
profit of $9.2 million in the second quarter of 2008. The increase
in gross profit from mining operations of $2.7 million was due to a
49% increase in deliveries of concentrates, higher gold contained
in concentrate produced due to higher grades and recoveries and
lower production costs partially offset by a 45% decrease in copper
price. Net favourable mark-to-market adjustments and final
settlements of $2.4 million, related to the open positions of
provisionally priced concentrate sales, were recorded in the second
quarter of 2009 compared to net unfavourable mark-to-market
adjustments and final settlements of $0.3 million in the second
quarter of 2008. Net losses of $2.8 million related to the copper
derivatives were recorded in the second quarter of 2009.
Chelopech recorded a gross profit from mining operations of
$19.2 million in the first half of 2009 compared to a gross profit
of $29.6 million in the corresponding prior year period. The
decrease in gross profit from mining operations of $10.4 million
was due to a 50% decrease in copper price partially offset by a 13%
increase in deliveries of concentrates due to higher metal grades
and recovery rates, lower production costs and net favourable
mark-to-market adjustments and final settlements, net of losses on
copper derivatives. Net favourable mark-to-market adjustments and
final settlements of $6.3 million, related to the open positions of
provisionally priced concentrate sales, were recorded in the first
six months of 2009 compared to net favourable mark-to-market
adjustments and final settlements of $1.2 million in the first half
of 2008. Offsetting the net favourable mark-to-market adjustments
and final settlements recorded in the first half of 2009 were net
losses related to the copper derivatives of $4.1 million.
Deno Gold recorded a gross loss from mining operations of $2.4
million in the second quarter of 2009 compared to a gross loss from
mining operations of $5.3 million in the corresponding prior year
period due to improved and more efficient operations. Net
unfavourable mark-to-market adjustments and final settlements of
$1.1 million related to the open positions of provisionally priced
concentrate sales were recorded in the second quarter of 2009
compared to net unfavourable mark-to-market adjustments and final
settlements of $1.2 million in the second quarter of 2008.
Deno Gold recorded a gross loss from mining operations of $6.0
million in the first six months of 2009 compared to a gross loss
from mining operations of $7.8 million in the first six months of
2008. Deno Gold was on care and maintenance in the first quarter of
2009. Net unfavourable mark-to-market adjustments and final
settlements of $0.4 million related to the open positions of
provisionally priced concentrate sales were recorded in the first
six months of 2009 compared to net favourable adjustments and final
settlements of $0.1 million in the corresponding prior year
period.
Investment and other income (expense)
Investment and other income was $1.1 million in the second
quarter of 2009 compared to an investment and other expense of $1.4
million. DPM recorded a gain on sale of the Back River project of
$0.7 million in the second quarter of 2009. Included in the second
quarter of 2008 were net realized losses on sale of investments of
$1.3 million and write-down of investments of $1.0 million.
Investment and other income was $0.2 million in the first half
of 2009 compared to investment and other income of $1.0 million in
the corresponding prior year period.
Administrative expense
Administrative expenses were $3.9 million and $8.0 million in
the second quarter and first half of 2009, respectively, compared
to $5.1 million and $10.1 million in the corresponding prior year
periods. The decrease in both periods was primarily due to lower
employment costs and associated expenses and lower spending on
outside services as a result of the cost savings initiatives
introduced in the first quarter of 2009.
Exploration expense
Exploration expense was $1.2 million and $2.8 million in the
second quarter and first half of 2009 compared to $8.9 million and
$14.0 million in the corresponding prior year periods,
respectively, due to a decrease in the level of exploration
activities in Serbia following the suspension of activities in the
fourth quarter of 2008.
Foreign Exchange
Monetary assets and liabilities denominated in foreign
currencies are translated into Canadian dollars at the period end
exchange rates, whereas non-monetary assets and liabilities and
related expenses denominated in foreign currencies are translated
at the exchange rate in effect at the transaction date. Income and
expense items are translated at the exchange rate in effect on the
date of the transaction. Exchange gains and losses resulting from
the translation of these amounts are included in the consolidated
statement of earnings. In the second quarter and first half of
2009, DPM recorded foreign exchange losses of $0.3 million and $3.0
million, respectively, compared with foreign exchange losses of
$1.2 million and $0.7 million in the corresponding prior year
periods.
Income tax recovery
DPM's effective tax recovery rate of 10% for the first six
months of 2009 was lower than the statutory rate of 33.0% due
primarily to the unrecognized tax benefits relating to operating
losses and non-deductible stock compensation and write-down of
investments partially offset by the benefit of profits earned in
jurisdictions having a lower tax rate. Following the sale of the
Back River project, a reversal of the flow-through shares liability
of $6.0 million was recognized as recovery in the period. In
addition, there was an increase in the valuation allowance on
investments and property of $6.1 million in the period.
Operating cash flow (shortfall)
The following table summarizes the Company's cash flow
(shortfall) from operating activities for the periods
indicated:
----------------------------------------------------------------------------
$ thousands Three Months Six Months
--------------- ----------------
Ended June 30, 2009 2008 2009 2008
----------------------------------------------------------------------------
Net earnings (loss) $ 3,316 $(14,118) $ (2,784) $ (5,690)
Non-cash charges (credits) to
earnings:
Amortization of property,
plant and equipment 4,749 3,613 9,317 7,142
Net losses (gains) on sale
of investments - 1,289 47 (496)
Write-downs of investments
to market value - 951 1,130 951
Losses on copper derivatives 523 - 1,847 -
Other (2,438) (289) (1,706) (65)
----------------------------------------------------------------------------
Total non-cash charges to
earnings 2,834 5,564 10,635 7,532
Increase (decrease) in non-cash
working capital (8,376) 30,225 (22,781) 12,481
----------------------------------------------------------------------------
Net cash provided by (used in)
operating activities $(2,226) $ 21,671 $ (14,930) $ 14,323
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash used in operating activities in the second quarter of 2009
was $2.2 million compared with cash provided in operating
activities of $21.7 million in the second quarter of 2008. The
increase in cash used in operating activities in the second quarter
of 2009 relative to the corresponding prior year period was
primarily due to an increase in working capital requirements
partially offset by higher gross profit from mining operations. The
non-cash working capital requirements of $8.4 million in the second
quarter of 2009 was primarily due to an increase in inventories as
a result of a build-up of concentrate inventories at Deno Gold
following the restart of the operations in April 2009, an increase
in accounts receivable due to increased revenue in the period and a
decrease in accounts payable.
Cash used in operating activities in the first half of 2009 was
$14.9 million compared with cash provided by operating activities
of $14.3 million in the first half of 2008. The increase in cash
used in operating activities in the first half of 2009 relative to
the corresponding prior year period was primarily due to an
increase in working capital requirements and lower gross profit
from mining operations. The non-cash working capital requirements
of $22.8 million in the first half of 2009 was primarily due to a
decrease in accounts payable, an increase in accounts receivable
and an increase in inventories.
The following table summarizes the Company's investing
activities for the periods indicated:
----------------------------------------------------------------------------
$ thousands Three Months Six Months
--------------- ----------------
Ended June 30, 2009 2008 2009 2008
----------------------------------------------------------------------------
Proceeds on sale of
exploration property $ 7,000 $ - $ 7,000 $ -
Proceeds on sale of
investments at fair value - 16,214 2,304 19,191
Proceeds on sale of
short-term investments 34,695 - 29,137 -
Loan advances (1,120) - (4,887) -
Capital expenditures (7,698) (27,637) (16,168) (47,360)
Proceeds on sale of property,
plant and equipment 43 709 137 709
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Net cash provided by (used
in) investing activities $ 32,920 $ (10,714) $ 17,523 $ (27,460)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Capital expenditures at Chelopech in the second quarter and
first half of 2009 of $5.9 million and $12.0 million were,
respectively, 53% and 51% lower than the corresponding prior year
periods due to a reduction in non-critical expenditures, including
those related to the expansion project. Capital expenditures at
Deno Gold in the second quarter and first half of 2009 of $1.3
million and $3.8 million were, respectively, 83% and 72% lower than
the corresponding prior year periods due primarily to the
suspension of exploration activities in the fourth quarter of
2008.
In the second quarter and first half of 2009, DPM advanced $1.1
million (US$1.0 million) and $4.9 million (US$4.0 million) to
Namibia Custom Smelters (Pty) Limited ("NCS"), a subsidiary of
Weatherly International plc, as per the agreement DPM signed with
NCS in December 2008 to advance up to US$7.0 million of loans to
NCS. The total commitment of US$7.0 million had been advanced as at
June 30, 2009.
Financing Activities
The following table summarizes the Company's financing
activities for the periods indicated:
----------------------------------------------------------------------------
$ thousands Three Months Six Months
--------------- ----------------
Ended June 30, 2009 2008 2009 2008
----------------------------------------------------------------------------
Redemption of deferred share
units $ - $ - $ - $ (58)
Repayment of debt (1,409) (1,271) (2,120) (1,834)
Repayment of lease (209) - (416) -
----------------------------------------------------------------------------
Net cash used in financing
activities $ (1,618) $ (1,271) $ (2,536) $ (1,892)
----------------------------------------------------------------------------
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AVERAGE METAL PRICES
The following table, summarizing the average metal prices for
the London Bullion Market Association ("LBM") gold, LME copper
Grade A, LME special high grade ("SHG") zinc and LBM silver prices,
is used to illustrate the Company's average metal price exposures
based on its key reference prices for the periods indicated.
----------------------------------------------------------------------------
US$ Average Three Months Six Months
--------------- ----------------
Ended June 30, 2009 2008 2009 2008
----------------------------------------------------------------------------
London Bullion gold ($/oz) $ 922 $ 896 $ 915 $ 912
LME settlement copper ($/lb) 2.12 3.83 1.83 3.68
LME SHG zinc ($/lb) 0.67 0.96 0.60 1.03
LBM spot silver ($/oz) $ 13.73 $ 17.17 $ 13.17 $ 17.43
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NON-GAAP FINANCIAL MEASURES
We have referred to cash cost per tonne of ore processed because
we understand 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 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 between the Company's cash cost measure and Canadian
GAAP cost of sales:
----------------------------------------------------------------------------
$ thousands, unless otherwise indicated
For the quarter ended June 30, 2009 Chelopech Deno Gold Total
----------------------------------------------------------------------------
Ore processed (mt) 257,721 67,787
Cost of sales (Cdn$) $ 21,390 $ 1,740 $ 23,130
Cost of sales (US$) $ 17,834 $ 1,536 $ 19,370
Add (deduct):
Amortization (2,991) (661)
Reclamation costs and other (497) (128)
Change in concentrate inventory 1,720 3,772
----------------------------------------------------------------------------
Total cash cost of production (US$) $ 16,066 $ 4,519
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash cost per tonne of ore processed (US$) $ 62.34 $ 66.66
----------------------------------------------------------------------------
----------------------------------------------------------------------------
$ thousands, unless otherwise indicated
For the quarter ended June 30, 2008 Chelopech Deno Gold Total
----------------------------------------------------------------------------
Ore processed (mt) 201,887 74,955
Cost of sales (Cdn$) $ 15,346 $ 13,454 $ 28,800
Cost of sales (US$) $ 14,905 $ 13,069 $ 27,974
Add/(Deduct):
Amortization and other (2,423) (733)
Change in concentrate inventory 1,251 (4,042)
----------------------------------------------------------------------------
Total cash cost of production (US$) $ 13,733 $ 8,294
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash cost per tonne of ore processed (US$) $ 68.03 $ 110.65
----------------------------------------------------------------------------
(1) A reconciliation of the Company's cash cost per tonne ore processed to
cost of sales under Canadian GAAP for the second quarters of 2009 and
2008 is shown in the table entitled "Non-GAAP Financial Measures."
(2) Refer to the quarterly information 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/dpm0730financials.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. 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.
Contacts: Dundee Precious Metals Inc. Jonathan Goodman President
and Chief Executive Officer (416) 365-2408
jgoodman@dundeeprecious.com Dundee Precious Metals Inc. Stephanie
Anderson Executive Vice President and Chief Financial Officer (416)
365-2852 sanderson@dundeeprecious.com Dundee Precious Metals Inc.
Lori Beak Vice President, Investor Relations and Corporate
Secretary (416) 365-5165 lbeak@dundeeprecious.com
www.dundeeprecious.com
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