Dundee Precious Metals Announces 2013 First Quarter Results

Dundee Precious Metals Announces 2013 First Quarter Results 
(All monetary figures are expressed in U.S. dollars unless otherwise
stated) 
- Excellent mine and mill operating results at Chelopech dampened by
weaker metal prices and higher Tsumeb driven treatment charges;  
- Kapan's performance impacted by lower grades and residual issues
related to equipment availability and the commissioning of a new
flotation circuit, which have now been substantially resolved;  
- Tsumeb's production lower with planned commissioning for Project
2012 and is now returning to normal levels; and  
- Financial position remains strong with $102 million in cash and
$150 million undrawn committed revolving credit facility. 
TORONTO, ONTARIO -- (Marketwired) -- 05/08/13 -- Dundee Precious
Metals Inc. ("DPM" or the "Company") (TSX:DPM)(TSX:DPM.WT.A) today
reported first quarter 2013 adjusted net earnings(1) of $6.6 million
($0.05 per share) compared to $31.3 million ($0.25 per share) for the
same period in 2012. Reported first quarter 2013 net earnings
attributable to common shareholders were $0.7 million ($0.01 per
share) compared to $8.2 million ($0.07 per share) for the same period
in 2012. 
The quarter over quarter decrease in adjusted net earnings was due
primarily to higher operating expenses and lower volumes of
concentrate smelted at Tsumeb, driven by a planned outage during the
quarter, which resulted in higher treatment charges for Chelopech,
lower metal prices, and higher cost per tonne of concentrate sold,
depreciation and taxes. These unfavourable variances were partially
offset by higher volumes of payable gold and copper in concentrate
sold and a stronger U.S. dollar relative to the ZAR and the Armenian
dram. Net earnings attributable to common shareholders were also
impacted by after-tax unrealized mark-to-market gains of $1.3 million
(2012 - unrealized losses of $14.6 million) related to the Company's
metal price hedges and unrealized losses of $7.2 million (2012 - $8.5
million) on the investment in Sabina Gold & Silver Corp. ("Sabina")
special warrants.  
"Our performance in the first quarter of 2013 reflected strong
operating results from Chelopech following the completion of our mine
expansion in December. Volumes at Kapan and Tsumeb were each lo
wer
due to one-off commissioning activities and, in the case of Kapan,
lower grades and equipment availability," said Rick Howes, President
and CEO. "I am pleased to say that most of the issues have been
resolved and each operation is now returning to expected levels. We
are in good shape financially with over $250 million in cash and
undrawn committed bank lines, which positions us well despite the
recent market volatility." 
Adjusted EBITDA(1) in the first quarter was $26.5 million, compared
to $40.8 million in the corresponding period in 2012, driven by the
same factors affecting adjusted net earnings, with the exception of
depreciation and income tax. 
Concentrate production in the first quarter of 2013 totalled 37,402
tonnes compared to 36,978 tonnes in the corresponding period in 2012
due primarily to higher volumes of ore mined and processed at
Chelopech following the completion of the mine and mill expansion
project in the fourth quarter of 2012, partially offset by lower
copper grades at Chelopech, and lower zinc grades and volumes of ore
processed at Kapan.  
Concentrate smelted at Tsumeb in the first quarter of 2013 of 34,493
tonnes was 18% lower than the corresponding period in 2012 due
primarily to the commissioning of Project 2012 environmental
improvements during February and March 2013, which was impacted by
contractor issues and a number of engineering and construction
related flaws identified and addressed during final commissioning. As
a result, the commissioning period was extended from nine days to 28
days. January 2013 smelter performance, on the other hand, was better
than expected and, despite minor residual performance issues, the new
dust handling system has performed well in the second quarter. Over
the balance of the year, Tsumeb's results are expected to be much
stronger after the removal of the current curtailment, planned
increases in volumes and scheduled increases in treatment charges.
These improvements will be most evident after the annual Ausmelt
furnace maintenance and commissioning of the second oxygen plant
scheduled for June/July 2013.  
Deliveries of concentrate in the first quarter of 2013 of 36,403
tonnes were 7% higher than the corresponding period in 2012 due
primarily to higher concentrate production at Chelopech partially
offset by lower zinc concentrate production at Kapan. In the first
quarter of 2013, payable gold in concentrate sold was up 14% and
payable copper in concentrate sold increased by 9%.  
Consolidated cash cost of sales per ounce of gold sold, net of
by-product credits, in the first quarter of 2013 was $267 compared to
negative $112 for the first quarter of 2012. This quarter over
quarter increase was due primarily to lower realized copper and
silver prices and higher treatment charges. 
Cash provided from operating activities, before changes in non-cash
working capital, during the first quarter of 2013 was $24.3 million
down $23.8 million from the corresponding prior year period due
primarily to lower adjusted net earnings and lower proceeds from
settlement of derivative commodity contracts.  
Cash outlays for capital items in the first quarter of 2013 totalled
$61.2 million compared to $25.8 million in the corresponding period
in 2012 due primarily to the construction activities at Tsumeb
related to the new acid plant and Project 2012, a capital program to
increase capacity and improve environmental performance and
operational efficiency.  
As at March 31, 2013, DPM maintained its solid financial position
with minimal debt, representing 10% of total capitalization, a
consolidated cash position of $101.6 million and an investment
portfolio valued at $52.7 million. In the first quarter of 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, our mine production guidance remains unchanged from the
guidance provided in the MD&A issued on February 15, 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 Kapan is expected to range between
550,000 and 600,000 tonnes. With the extended commissioning period in
the first quarter of 2013, we have reduced the guidance on
concentrate smelted at Tsumeb to a range between 185,000 and 200,000
tonnes, which reflects the existing temporary curtailment being
lifted by no later than mid-year 2013.  
The Company's estimated metals production for 2013 is set out in the
following table:  


 
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Metals contained           Chelopech               Kapan               Total
 in concentrate                                                             
 produced:                                                                  
----------------------------------------------------------------------------
                                                                            
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 remain in a range between $42 and $46 at
Chelopech and between $71 and $80 at Kapan. The cash cost per tonne
of concentrate smelted at Tsumeb is expected to range between $345
and $370, up from our previous guidance of $320 to $355. 
For 2013, the Company's growth capital expenditures relate primarily
to the construction of an acid plant at Tsumeb, stage 1 of the Pyrite
Project at Chelopech, the development work 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 Kapan. In aggregate,
these expenditures are expected to range between $210 million and
$240 million, down from the previous guidance of between $240 million
and $300 million reflecting our initial response to the recent
decline in metal prices and delays at Krumovgrad related in part to
upcoming local elections. 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 throughout 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 Tsumeb, the
lifting of the existing temporary production 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 three months ended March
31, 2013 (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                                              
Ended March 31,                                               Three Months  
                                                                            
                                                               2013     2012
----------------------------------------------------------------------------
Revenue                                                        88.0    100.0
Gross profit                                                   24.3     48.4
Earnings before income taxes                                    4.4      4.3
Net earnings attributable to common shareholders                0.7      8.2
Basic earnings per share                                       0.01     0.07
Adjusted EBITDA (1)                                            26.5     40.8
Adjusted net earnings (1)                                       6.6     31.3
Adjusted basic earnings per share (1)                          0.05     0.25
Cash flow provided from operating activities, before                        
changes in non-cash working capital                            24.3     48.1
                                                                            
Concentrate produced (mt)                                    37,402   36,978
Metals in concentrate produced:                                             
  Gold (ounces)                                              44,472   41,910
  Copper ('000s pounds)                                      12,602   12,234
  Zinc ('000s pounds)                                         3,358    4,443
  Silver (ounces)                                           155,404  187,526
Tsumeb - concentrate smelted (mt)                            34,493   41,924
Deliveries of concentrates (mt)                              36,403   34,169
Payable metals in concentrate sold:                                         
                                                                            
  Gold (ounces)                                              38,273   33,585
  Copper ('000s pounds)                                      11,314   10,413
  Zinc ('000s pounds)                                         3,003    3,845
  Silver (ounces)                                           106,719  114,399
                                                                            
Cash cost of sales per ounce of gold sold, net of by-                       
product credits ($) (1)                                         267    (112)
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(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 condensed interim unaudited consolidated financial statements,
and MD&A for the three months ended March 31, 2013, 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 2013 first quarter
results on Thursday, May 9, 2013, at 9:00 a.m. (E.S.T.). Participants
are invited to join the live webcast (audio only) at:
http://www.gowebcasting.com/4252. 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 Kapan 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 l
ocated in
Bulgaria, Serbia, and northern Canada, including interests held
through its 53.1% owned subsidiary, Avala Resources Ltd., its 45.5%
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.
Rick Howes
President and Chief Executive Officer
(416) 365-2408
Rick.Howes@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
www.dundeeprecious.com
 
 
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