Street Calls of the Week
Introduction & Market Context
Dundee Precious Metals (DPM) delivered record financial results in the second quarter of 2025, with significant year-over-year growth across key metrics. The company’s August 1 presentation highlighted both strong operational performance and strategic initiatives aimed at positioning DPM as a premier mining business. The market has responded favorably to these developments, with DPM’s stock price rising 5.23% to close at $34.61 following the earnings announcement, continuing its impressive 230% return over the past six months.
Quarterly Performance Highlights
DPM reported substantial financial growth in Q2 2025, with revenue reaching $186 million, a 19% increase compared to the same period in 2024. This growth was accompanied by a 24% rise in adjusted net earnings to $88 million ($0.52 per share), representing a 33% increase in earnings per share year-over-year.
The company generated record free cash flow of $95 million in Q2, a 15% increase from Q2 2024, while maintaining a strong financial position with $797 million in cash balance and restricted cash.
As shown in the following comprehensive financial results:
DPM’s operational results were mixed in Q2, with both Chelopech and Ada Tepe mines performing below their annual guidance rates for the first half of the year. However, the company expects production to increase significantly in the second half of 2025, particularly at Ada Tepe where production is forecast to nearly double compared to H1.
The Chelopech mine processed 541,000 tonnes of ore in Q2 with gold head grades of 3.35 g/t and copper head grades of 0.67%. This resulted in 47,000 ounces of gold and 6.4 million pounds of copper contained in concentrates produced during the quarter.
At Ada Tepe, 190,000 tonnes of ore were processed in Q2 with gold grade of 2.91 g/t, producing 14,200 ounces of gold contained in concentrate. The company noted that production is expected to improve substantially in the second half of the year.
Strategic Initiatives
A central element of DPM’s growth strategy is the proposed acquisition of Adriatic Metals, which the company believes will create a premier mining business with a peer-leading growth profile. The presentation highlighted several benefits of this acquisition, including increased mineral reserve life, enhanced capital markets profile, and complementary regional expertise.
DPM is also advancing its Čoka Rakita project, with a feasibility study expected by the end of 2025. The preliminary feasibility study indicates annual gold production of 170,000 ounces at an all-in sustaining cost of $644 per ounce sold, with initial capital expenditures estimated at $379 million. The company is progressing with surface and underground geotechnical drilling while advancing permitting to support construction start-up in mid-2026.
Progress continues at the Loma Larga Gold Project as well, with DPM receiving the environmental license in Q2 2025. The company is planning a 23,000-meter drilling campaign expected to commence in the second half of 2025, consisting of hydrological, geotechnical, metallurgical, resource infill, and extensional drilling.
Forward-Looking Statements
DPM projects significant production growth over the next few years, with gold equivalent production expected to increase from approximately 300,000 ounces in 2025 to around 500,000 ounces by 2027. This growth will be driven by the Adriatic acquisition and the development of Čoka Rakita, transforming DPM into a primary precious metals producer with approximately 70% of revenue currently coming from precious metals, increasing to around 80% once Čoka Rakita is in full production.
The company remains on track to achieve its 2025 guidance for all-in sustaining costs and capital expenditures. For 2025, DPM expects to process 2.09-2.20 million tonnes at Chelopech and 610,000-700,000 tonnes at Ada Tepe, producing 160,000-185,000 ounces of gold at Chelopech and 65,000-80,000 ounces at Ada Tepe.
Detailed Financial Analysis
DPM’s strong financial performance has enabled the company to significantly increase shareholder returns. In the first half of 2025, DPM returned $130 million to shareholders, contributing to total capital returns of $391 million since 2020. This includes $116 million in share repurchases during H1 2025, a remarkable 546% increase compared to the same period in 2024.
The following chart illustrates DPM’s consistent free cash flow generation and increasing capital returns:
All-in sustaining costs were $1,011 per ounce in Q2 2025, with the company maintaining that it is on track to meet its 2025 guidance. Capital expenditures in Q2 included $6 million in sustaining capital and $16 million in growth and other investments, reflecting DPM’s balanced approach to maintaining current operations while investing in future growth.
DPM’s financial strength, operational efficiency, and strategic growth initiatives position the company well for continued success in the precious metals sector. With record financial results, advancing development projects, and a transformative acquisition in progress, DPM appears poised to deliver on its vision of becoming a premier mining business with a peer-leading growth profile.
Full presentation:
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