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Introduction & Market Context
Dundee Precious Metals Inc . (TSX:DPM) reported strong financial results for the first quarter of 2025, highlighted by significant shareholder returns and continued advancement of its growth projects. The company’s stock has performed well over the past year, trading at $19.46 as of May 6, 2025, representing a 6.46% increase and approaching its 52-week high of $20.29.
The gold producer maintained its position as a high-margin operator with robust free cash flow generation, allowing it to significantly increase capital returns to shareholders while continuing to invest in its organic growth pipeline.
Quarterly Performance Highlights
Dundee Precious Metals delivered solid financial performance in Q1 2025, with notable year-over-year improvements across key metrics. Revenue increased 16% to $144 million compared to $124 million in Q1 2024, while adjusted net earnings rose 70% to $55 million ($0.32 per share), up from $33 million ($0.18 per share) in the prior year period.
The company generated $79 million in free cash flow during the quarter, a 32% increase from $60 million in Q1 2024, while cash provided from operating activities grew 53% to $55 million.
DPM maintained a strong balance sheet with $763 million in cash and no debt, providing substantial liquidity for future growth initiatives. The company remains on track to meet its 2025 guidance, with higher production expected in the second half of the year.
Operational Performance
The company’s Chelopech mine in Bulgaria maintained relatively stable production metrics year-over-year, processing 533,000 tonnes of ore in Q1 2025 compared to 521,000 tonnes in Q1 2024. Gold head grade decreased slightly to 2.61 g/t from 2.78 g/t, while copper head grade declined to 0.60% from 0.70%. However, improved recoveries partially offset these decreases, with gold recovery increasing to 83.6% from 80.5%.
The Ada Tepe mine in Bulgaria experienced more significant operational challenges in Q1 2025. Gold contained in concentrate decreased to 12.5 thousand ounces from 25.2 thousand ounces in Q1 2024, primarily due to lower ore processed (147,000 tonnes vs. 180,000 tonnes), lower gold grade (3.29 g/t vs. 5.13 g/t), and reduced gold recovery (79.0% vs. 84.8%).
All-in sustaining costs (AISC) increased to $1,244 per ounce of gold sold in Q1 2025 from $883 per ounce in Q1 2024, impacted by mark-to-market adjustments for share-based compensation. Despite the increase, management reaffirmed its 2025 AISC guidance of $780-$900 per ounce.
Growth Projects Update
Dundee Precious Metals continues to advance its organic growth pipeline, with significant progress on two key projects: Čoka Rakita in Serbia and Loma Larga in Ecuador.
The Čoka Rakita project is progressing according to schedule, with 2025 activities focused on completing geotechnical drilling, advancing permitting, progressing design, and commencing operational readiness activities. The pre-feasibility study highlighted strong economics, including projected annual gold production of 170,000 ounces during the first five full years of operation, AISC of $644 per ounce, and an NPV of $765 million with a 41% IRR at $1,900 per ounce gold price.
The company is conducting an extensive 55,000-meter drilling program at Čoka Rakita, with 14 drill rigs deployed to explore multiple high-grade targets in close proximity to the main deposit. Notably, the Dumitru Potok target has shown mineralization over a 1-kilometer strike length, with significant intercepts including 190 meters at 2.07% copper, 1.23 g/t gold, and 12.19 g/t silver.
For the Loma Larga gold project in Ecuador, DPM continues to advance permitting, stakeholder engagement, and technical work. The company received notice of a 25-year extension of the Cristal concession and submitted baseline ecosystem and water studies in Q3 2024. An updated feasibility study is expected in Q2 2025, which will reflect current gold prices and the capital and operating cost environment.
Capital Allocation & Shareholder Returns
The first quarter of 2025 marked a record period for shareholder returns, with DPM repurchasing 7.5 million shares for $83 million, a dramatic 4,365% increase from the $2 million spent on share repurchases in Q1 2024. The company also maintained its dividend payment of $7 million, bringing total capital returned to shareholders to $90 million, representing 114% of free cash flow generated during the quarter.
Dundee Precious Metals has enhanced its share buyback program for 2025, authorizing up to $200 million in share repurchases as part of its balanced approach to capital allocation, which focuses on maintaining financial strength, reinvesting in the business, and returning capital to shareholders.
Forward Outlook
Looking ahead, Dundee Precious Metals remains well-positioned to deliver on its 2025 guidance, with production expected to increase in the second half of the year. The company continues to focus on its strategy of maintaining high-margin production while advancing its organic growth pipeline.
With average annual production of approximately 200,000 gold ounces and a strong balance sheet, DPM has the financial flexibility to fund its growth initiatives while continuing to return capital to shareholders. The advancement of the Čoka Rakita and Loma Larga projects represents significant potential for production growth in the coming years, with feasibility studies for both projects expected to be completed by the end of 2025.
Management remains committed to capital discipline, as evidenced by the record share repurchases in Q1 2025 and the enhanced buyback program for the remainder of the year. This balanced approach to capital allocation positions Dundee Precious Metals to continue delivering value to shareholders while advancing its next phase of growth.
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