Dundee Precious Metals Announces 2012 Fourth Quarter and Annual Results and 2013 Guidance

Dundee Precious Metals Announces 2012 Fourth Quarter and Annual Results and 
2013 Guidance 
- Fourth quarter performance in line with expectations, contributing
to record 2012 adjusted earnings  
- Increased annual production achieved with strong operating
performance from Chelopech  
- Capital projects progressing well - expansion at Chelopech
successfully completed in December 2012; NCS' new gas handling
systems on track to be commissioned in February 2013; and
installation of lead circuit at Deno Gold completed in January 2013
with commissioning underway  
- Delivered lower mining cash costs from increased volumes and
stronger U.S. dollar; NCS smelting costs impacted by temporary
curtailment but expected to trend lower  
- Exploration activities at Deno Gold, Avala, Dunav and Sabina
continue to produce encouraging results  
- Beginning 2013 in strong financial position with $122 million in
cash and a newly established undrawn $150 million long-term revolving
credit facility 
TORONTO, ONTARIO -- (Marketwire) -- 02/15/13 --  
(All monetary figures are expressed in U.S. dollars unless otherwise
stated) 
Dundee Precious Metals Inc. ("DPM" or the "Company")
(TSX:DPM)(TSX:DPM.WT.A) today reported fourth quarter 2012 adjusted
net earnings (1) of $21.5 million ($0.17 per share) compared to $31.9
million ($0.25 per share) for the same period in 2011. Reported
fourth quarter 2012 net earnings attributable to common shareholders
were $14.7 million ($0.12 per share) compared to $22.7 million ($0.18
per share) for the same period in 2011. Adjusted net earnings in the
year 2012 were $80.9 million ($0.65 per share) compared to $80.1
million ($0.64 per share) for the same period in 2011. Net earnings
attributable to common shareholders in the year 2012 were $54.4
million ($0.43 per share) compared to $86.1 million ($0.69 per share)
for the same period in 2011.  
The quarter over quarter decrease in adjusted net earnings was driven
primarily by higher taxes, a higher cost per tonne of concentrate
produced at Deno Gold and higher depreciation, operating and
administrative expenses. These unfavourable variances were partially
offset by higher volumes of payable gold and silver sold and a
stronger U.S. dollar. Net earnings attributable to common
shareholders
 were also impacted by after-tax unrealized
mark-to-market losses related to the Company's metal price hedges and
investment in Sabina Gold & Silver Corp. ("Sabina") special warrants
of $6.9 million (2011 - unrealized losses of $9.2 million). For 2012,
the increase in adjusted net earnings was due primarily to higher
volumes of payable gold and copper sold, a stronger U.S. dollar and
higher gold prices, partially offset by lower copper prices, lower
volumes smelted at NCS, a higher cost per tonne of concentrate
produced at Deno Gold, higher depreciation, administrative and
exploration expenses and higher taxes. Net earnings attributable to
common shareholders were also impacted by after-tax unrealized
mark-to-market losses related to metal price hedges and the Sabina
special warrants of $26.5 million (2011 - unrealized gains of $0.8
million).  
"Our performance in 2012 was underpinned by strong operating and
financial results from Chelopech where we completed our mine
expansion in December, on time and under budget, and delivered record
production. The capital projects to address Deno Gold's lead content
and NCS' fugitive emissions are nearing completion with each
operation expected to be in position to return to normal operating
levels in the first half of 2013," said Jonathan Goodman, President
and CEO. "We are in very good shape financially, ending the year with
$122 million in cash and anticipating continued strong cash flow
generation in 2013. Further, we have access to a new undrawn $150
million revolving credit facility, positioning the Company with
maximum flexibility to fund further growth in 2013." 
Adjusted EBITDA (1) in the fourth quarter and twelve months of 2012
was $37.7 million and $124.6 million, respectively, compared to $37.0
million and $117.5 million in the corresponding periods in 2011,
driven by the same factors affecting adjusted net earnings, with the
exception of depreciation and income tax. 
Concentrate production in the fourth quarter of 2012 of 32,428 tonnes
was 25% lower than the corresponding period in 2011 due primarily to
lower copper grades at Chelopech and lower volumes of ore processed
at Deno Gold. Concentrate production in 2012 of 135,809 tonnes was 8%
higher than 2011 due primarily to higher volumes of ore mined and
processed at Chelopech, partially offset by lower volumes of ore
processed at Deno Gold and lower copper grades at Chelopech. In the
fourth quarter and twelve months of 2011, 19,967 tonnes and 60,083
tonnes of oxidized ore, stockpiled on surface from past mining
operations, were processed at Deno Gold to supplement mine production
and to fully utilize the mill. There was no oxidized ore processed in
2012.  
Concentrate smelted at NCS in the fourth quarter of 2012 of 45,823
tonnes was comparable to the corresponding prior year period.
Concentrate smelted in 2012 of 159,356 tonnes was 12% lower than the
corresponding period in 2011 due primarily to the impact of the
Namibian Minister of Environment and Tourism's directives to limit
production to 50% and 75% of the smelter's operating capacity during
the second quarter of 2012 and the balance of 2012, respectively. The
new gas cleaning systems were completed in January 2013 and tie-ins
and commissioning will be conducted during the first quarter of 2013.
Thereafter, testing will be performed to ensure that the
modifications are producing a decrease in emissions before approval
is granted to lift the existing curtailment.  
Deliveries of concentrate in the fourth quarter of 2012 of 35,261
tonnes were 4% lower than the corresponding period in 2011 due
primarily to lower concentrate production at Chelopech. This was
partially offset by an inventory drawdown of copper concentrate
produced at Deno Gold as deliveries that had been delayed in the
first nine months of 2012 as a result of the high lead content in
copper concentrate were sold in the fourth quarter of 2012. In the
fourth quarter of 2012, payable gold in concentrate sold was up 14%
and payable copper in concentrate sold decreased by 3%. Deliveries of
concentrate in 2012 of 136,948 tonnes were 11% higher than 2011 due
primarily to increased concentrate production at Chelopech, partially
offset by lower copper and zinc concentrate production at Deno Gold.
Payable copper and gold in concentrate sold in 2012 were up 14% and
23%, respectively, relative to 2011 due primarily to increased
production at Chelopech.  
Consolidated cash cost of sales per ounce of gold sold, net of
by-product credits, in the fourth quarter of 2012 was $193 compared
to negative $151 for the fourth quarter of 2011. The quarter over
quarter increase was due primarily to lower realized copper prices,
higher treatment charges and a higher cash cost per tonne of ore
processed at Deno Gold. Cash cost of sales per ounce of gold sold,
net of by-product credits, in 2012 was $117 compared to negative $63
during the same period in 2011. This increase was due primarily to
higher treatment charges, a higher cash cost per tonne of ore
processed at Deno Gold and lower by-product prices, partially offset
by higher volumes of payable metals sold.  
Cash provided from operating activities, before changes in non-cash
working capital, during the fourth quarter and twelve months of 2012
was $30.7 million and $121.1 million, respectively, down $11.1
million and $2.5 million from the corresponding prior year periods
due primarily to the same factors affecting adjusted net earnings and
higher income tax payments.  
Capital expenditures in the fourth quarter and twelve months of 2012
were $51.0 million and $149.0 million, respectively, compared to
$30.2 million and $117.6 million in the corresponding periods in
2011. These increases were due primarily to increased construction
activities in connection with NCS' capital program, partially offset
by reduced construction activities at Chelopech with the completion
of its expansion.  
As at December 31, 2012, DPM maintained a solid financial position
with minimal debt, representing 10% of total capitalization, a
consolidated cash position of $121.5 million and an investment
portfolio valued at $75.6 million. In February 2013, DPM refinanced
$81.25 million in term loans, essentially shifting the Chelopech
loans to DPM, and closed a $150 million committed long-term revolving
credit facility with a small consortium of banks, including its
existing lenders. 
For 2013, mine output at Chelopech is expected to range between 1.90
million and 2.05 million tonnes of ore, reflecting the expanded
capacity of the mine and mill. Mine output at Deno Gold is expected
to range between 550,000 and 600,000 tonnes. Concentrate smelted at
NCS is expected to range between 195,000 and 215,000 tonnes, provided
the existing temporary curtailment is lifted by no later than
mid-year 2013.  


 
The Company's estimated metals production for 2013 is set out in the        
 following table:                                                           
                                                                            
----------------------------------------------------------------------------
Metals contained in                                                         
 concentrate produced:         Chelopech         Deno Gold             Total
----------------------------------------------------------------------------
                                                                            
Gold (ounces)          125,000 - 143,000   25,000 - 30,000 150,000 - 173,000
Copper (million                                                             
 pounds)                     43.0 - 46.0         2.5 - 3.0       45.5 - 49.0
Zinc (million pounds)                  -       12.0 - 14.5       12.0 - 14.5
Silver (ounces)        182,000 - 195,000 438,000 - 528,000 620,000 - 723,000
----------------------------------------------------------------------------

 
Assuming current exchange rates, 2013 unit cash cost per tonne of ore
processed is expected to range between $42 and $46 at Chelopech and
between $71 and $80 at Deno Gold. The cash cost per tonne of
concentrate smelted at NCS is expected to range between $320 and
$355. 
For 2013, the Company's approved growth capital expenditures(1) are
expected to range between $240 million and $300 million. These
expenditures relate primarily to the construction of an acid plant
and electric furnace at NCS, stage 1 of the Pyrite Project at
Chelopech, the development and construction activities related to the
Krumovgrad Gold Project, and exploration and/or development work
being undertaken to enhance underground operations and advance the
open pit project at Deno Gold. Sustaining capital expenditures(1) are
expected to range between $35 million and $45 million. Further
details can be found in the Company's MD&A under the section "2013
Outlook". 
The 2013 outlook provided above may not occur evenly through the
year. The estimated metals contained in concentrate produced and
volumes of concentrate smelted may vary from quarter to quarter
depending on the areas being mined, the timing of concentrate
deliveries and planned outages, and in the case of NCS, the lifting
of the existing temporary curtailment. Also, the rate of capital
expenditures may vary from quarter to quarter based on the schedule
for and execution of each capital project, and, where applicable,
receipt of the necessary permits and approvals.  
(1) Adjusted net earnings, adjusted basic earnings per share,
adjusted earnings before interest, taxes, depreciation and
amortization ("EBITDA"), and growth and sustaining capital
expenditures are not defined measures under International Financial
Reporting Standards ("IFRS"). Presenting these measures from period
to period helps management and investors evaluate earnings and cash
flow trends more readily in comparison with results from prior
periods. Refer to the "Non-GAAP Financial Measures" section of the
management's discussion and analysis for the year ended December 31,
2012 (the "MD&A") for further discussion of these items, including
reconciliations to net earnings attributable to common shareholders
and earnings before income taxes. 


 
Key Financial and Operational Highlights                                    
                                                                            
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$ millions, except where noted              Three Months     Twelve Months  
                                          ---------------- -----------------
Ended December 31,                            2012    2011     2012    2011 
----------------------------------------------------------------------------
Revenue                                      103.1    88.5    384.7   338.5 
Gross profit                                  39.2    39.1    157.0   131.8 
Earnings before income taxes                  16.2    16.6     49.7    88.6 
Net earnings attributable to common                                         
 shareholders                                 14.7    22.7     54.4    86.1 
Basic earnings per share                      0.12    0.18     0.43    0.69 
Adjusted EBITDA (1)                           37.7    37.0    124.6   117.5 
Adjusted net earnings (1)                     21.5    31.9     80.9    80.1 
Adjusted basic earnings per share (1)         0.17    0.25     0.65    0.64 
Cash flow provided from operating                                           
 activities, before changes in non-cash                                     
 working capital                              30.7    41.8    121.1   123.6 
                                                                            
Concentrate produced (mt)                   32,428  43,151  135,809 125,253 
Metals in concentrate produced:                                             
  Gold (ounces)                             32,667  41,044  142,474 120,757 
  Copper ('000s pounds)                     10,884  13,928   45,171  39,794 
  Zinc ('000s pounds)                        2,880   5,130   15,425  19,585 
  Silver (ounces)                          143,501 177,870  665,857 670,819 
NCS - concentrate smelted (mt)              45,823  47,588  159,356 180,403 
Deliveries of concentrates (mt)             35,261  36,864  136,948 123,789 
Payable metals in concentrate sold:                                         
  Gold (ounces)                             35,815  31,434  134,848 110,026 
  Copper ('000s pounds)                     10,981  11,324   42,104  36,838 
  Zinc ('000s pounds)                        3,082   2,826   14,204  16,898 
  Silver (ounces)                          180,155 117,254  547,193 595,914 
                                                                            
Cash cost of sales per ounce of gold sold,                                  
 net of by-product credits ($) (1)             193    (151)     117     (63)
----------------------------------------------------------------------------
                                                                            
(1) Adjusted EBITDA; adjusted net earnings; adjusted basic earnings per     
 share; and cash cost of sales per ounce of gold sold, net of by-product    
 credits are not defined measures under IFRS. Refer to the MD&A for         
 reconciliations to IFRS measures.                                          

 
DPM's annual audited consolidated financial statements, and MD&A for
the fourth quarter and year ended December 31, 2012, are posted on
the Company's website at www.dundeeprecious.com and have been filed
on Sedar at www.sedar.com. 
The Company will be holding a call to discuss its 2012 fourth quarter
and annual results on Friday, February 15, 2013, at 9:00 a.m.
(E.S.T.). Participants are invited to join the live webcast (audio
only) at: http://www.gowebcasting.com/4130. Alternatively
participants can access a listen only telephone option at
416-695-6616 or North America Toll Free at 1-800-766-6630. A replay
of the call will be available at 905-694-9451 or North America Toll
Free at 1-800-408-3053, passcode 4317707. The audio webcast for this
conference call will also be archived and available on the Company's
website at www.dundeeprecious.com. 
Dundee Precious Metals Inc. is a Canadian based, international gold
mining company engaged in the acquisition, exploration, development,
mining and processing of precious metals. The Company's principal
operating assets include the Chelopech operation, which produces a
gold, copper and silver concentrate, located east of Sofia, Bulgaria;
the Deno Gold operation, which produces a gold, copper, zinc and
silver concentrate, located in southern Armenia; and the Tsumeb
smelter, a concentrate processing facility located in Namibia. DPM
also holds interests in a number of developing gold properties
located in Bulgaria, Serbia, and northern Canada, including interests
held through its 53.1% owned subsidiary, Avala Resources Ltd., its
47.3% interest in Dunav Resources Ltd. ("Dunav") and its 10.7%
interest in Sabina Gold & Silver Corp.  
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 and output,
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.
Contacts:
Dundee Precious Metals Inc.
Jonathan Goodman
President and Chief Executive Officer
(416) 365-2408
jgoodman@dundeeprecious.com 
Dundee Precious Metals Inc.
Hume Kyle
Executive Vice President and Chief Financial Officer
(416) 365-5091
hkyle@dundeeprecious.com 
Dundee Precious Metals Inc.
Lori Beak
Senior Vice President, Investor & Regulatory Affairs and
Corporate Secretary
(416) 365-5165
lbeak@dundeeprecious.com
 
 
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