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Dundee Precious Metals Inc. (DPM) reported its first-quarter 2025 financial results, revealing earnings per share (EPS) of $0.32, which fell short of the forecasted $0.3779. The company also reported revenue of $144.15 million, below the expected $151.32 million. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value metrics. Following the earnings announcement, DPM’s stock experienced a slight decline, closing at $19.46, a 0.41% drop from its previous close. The company has shown remarkable strength, delivering a 171% return over the past year.
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Key Takeaways
- EPS of $0.32 missed the forecast of $0.3779.
- Revenue of $144.15 million was below expectations.
- Stock price dropped by 0.41% post-earnings release.
- Record share repurchase of 7.5 million shares.
- Strong free cash flow of $79 million, up $19 million YoY.
Company Performance
Dundee Precious Metals demonstrated robust operational performance in Q1 2025, with revenue reaching $144 million, an increase from the prior year. InvestingPro data shows the company maintains strong financial health with a score of 2.36 (FAIR), supported by excellent price momentum and profit metrics. The company maintained its strong cash flow position, with free cash flow rising to $79 million. Despite the earnings miss, DPM’s strategic initiatives, such as the aggressive share repurchase program and exploration projects, underscore its commitment to long-term growth and shareholder value.
Financial Highlights
- Revenue: $144 million, up from the previous year.
- Adjusted Net Earnings: $55 million or $0.32 per share.
- Free Cash Flow: $79 million, a $19 million increase YoY.
- Consolidated Cash Balance: $763 million.
- Share Repurchase: 7.5 million shares at $83 million cost.
Earnings vs. Forecast
Dundee Precious Metals reported an EPS of $0.32, missing the forecast of $0.3779 by approximately 15.3%. Revenue came in at $144.15 million, falling short of the expected $151.32 million. This earnings miss contrasts with the company’s historical performance, where it has often met or exceeded expectations.
Market Reaction
Following the earnings release, DPM’s stock price declined by 0.41%, closing at $19.46. This movement is modest compared to the company’s 52-week range of $10.39 to $20.29. The stock is currently trading near its 52-week high, with impressive gains of 66% over the past six months. The stock’s reaction reflects investor sentiment concerning the earnings miss and revenue shortfall, despite strong operational metrics.
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Outlook & Guidance
Dundee Precious Metals remains on track to meet its 2025 production and cost guidance. The company is advancing its ChocoRiquita project, with production targeted for 2028, and continues exploration at the Dimitri Potok discovery. The company plans to return up to $200 million to shareholders in 2025.
Executive Commentary
CEO David Ray stated, "We continue to deliver strong results and with both mines on track to achieve our guidance, we are well positioned to continue our strong operating track record." CFO Navin Dial emphasized, "We continue to deploy our capital in a disciplined manner that balances our desire to reinvest in growing and optimizing our business with our commitment to returning capital to our shareholders."
Risks and Challenges
- Rising all-in sustaining costs, which increased by 41% YoY.
- Potential delays in project timelines due to permitting and environmental approvals.
- Volatility in metal prices impacting revenue and profitability.
- Geopolitical risks associated with international operations.
- Supply chain disruptions affecting production schedules.
Q&A
During the earnings call, analysts inquired about the potential for separate processing facilities for the ChocoRiquita and Dimitri Potok projects. Management highlighted the favorable treatment charges and lower freight costs expected, which could positively impact future profitability.
Full transcript - Dundee Precious Metals Inc (DPM) Q1 2025:
Conference Operator: Good day and thank you for standing by. Welcome to the Dundee Precious Metals First Quarter twenty twenty five Results Conference Call. At this time, all participants are in listen only mode. After the speakers’ presentation, there will be a question and answer session. To ask a question during this session, you’ll need to press 11 on your telephone.
You’ll then hear an automated message advising your hand is raised. To withdraw your question, please press 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your first speaker today, Jennifer Cameron. Please go ahead.
Jennifer Cameron, Director of Investor Relations, Dundee Precious Metals: Thank you, and good morning. I’m Jennifer Cameron, Director of Investor Relations, and I’d like to welcome you to our first quarter conference call. Joining us today are members of our senior management team, including David Ray, president and CEO, and Navin Dial, chief financial officer. Before we begin, I’d like to remind you that all forward looking information provided during this call is subject to the forward looking qualification, which is detailed in our news release and incorporated in full for the purposes of today’s call. Certain financial measures referred to during this call are not measures recognized under IFRS and are referred to as non GAAP measures or ratios.
These measures have no standardized meaning under IFRS and may not be comparable to similar measures presented by other companies. The definitions established and calculations performed by DPM are based on management’s reasonable judgment and are consistently applied. These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. Please refer to the non GAAP financial measures section of our most recent MD and A for reconciliations of these non GAAP measures. Please note that unless otherwise stated, operational and financial information communicated during this call are related to continuing operations and have generally been rounded.
References to 2024 pertain to the comparable periods in 2024, and references to averages are based on midpoints of our outlook or guidance. I’ll now turn the call over to David Ray.
David Ray, President and CEO, Dundee Precious Metals: Good morning, and thank you all for joining us. Before we begin today’s discussion, I want to take a moment to acknowledge the recent passing of Peter Gillett, who served as the chair of our board since 2022 and as a director for the past sixteen years. His steady leadership and oversight helped guide our transformation into the responsible growing precious metals producer that we are today, and he will be missed by us all. I’d also like to welcome Juanita Montalvo to a new role as chair. Juanita has served on the board since 2017, and with more than twenty five years of international experience in mining, she has a strong track record in the development of large scale projects, operational and strategic decision making, and brings extensive governance expertise.
She assumes the role as an exciting time for the company as we advance our organic pipeline and continue to be well positioned to deliver value to all of our stakeholders now and over the long term. Turning now to our quarterly results. As you would have seen from our news release circulated last night, our first quarter was a solid start to the year, a result of our low cost structure and the benefit of high metal prices improving our already robust margins. Highlights from our quarter include solid production of approximately 50,000 ounces of gold and 5,900,000 pounds of copper, generating strong margins and all in sustaining cost of $12.44 dollars per ounce of gold sold and continued financial strength as we ended up the quarter with a consolidated cash balance of $763,000,000 We continue to consistently deliver free cash flow, generating approximately $79,000,000 during the quarter and further strengthened our financial capacity to fund growth. At the same time, our investors are benefiting from our low cost, high margin gold production as we harvest free cash flow by returning excess capital to shareholders, demonstrated by the repurchase of a record 7,500,000.0 shares during the quarter.
We also continued to advance our organic growth pipeline and generate strong results from our exploration activities in Serbia, which I’ll touch on in a moment. Looking at our operations in more detail, Chelopech’s performance was in line with the mine plan, producing approximately 37,000 ounces of gold and 5,900,000 pounds of copper, with an all in sustaining cost of $673 per ounce of gold sold. Cash costs of $53 per tonne of ore processed were on target for the quarter, reflecting Chelopech’s track record of solid efficient operations, and the mine is on track to meet its 2025 guidance targets for the year. We continue to prioritize in mine and brownfields exploration work to further extend mine life at Chelopech, targeting an increase to over ten years. During the quarter, in mine extensional drilling activities were focused on discovering new mineralized zones as well as infill drilling at Charlevoir, where modeling for a new resource estimate is ongoing.
As we guided at the beginning of the year, Ada production is expected to nearly double in the second half of the year compared to the first half due to cell sequencing of the IMF. With higher production expected in the second half of the year, Adutepe is on track to achieve its guidance for the year. We continue to focus on developing quality assets, and our growth priority is advancing chocoRequidative production, which is targeted for 2028. The feasibility study is advancing as planned and is expected to be completed by year end.
Activities planned for 2025 in support of starting up construction in mid twenty twenty six include completing the geotechnical and hydrogeology hydrogeological drilling, progressing the design to the basic engineering level, advancing the project execution readiness, and commencing operational readiness activity, which is leveraging ChocoRiquita’s regional proximity to Chelopech to train and develop key personnel for operating roles. In parallel, permitting activities continue to advance. Submitted the final report on mineral reserves and resources known as the elaborative reserves to the relevant authorities in the first quarter and continue to engage with relevant stakeholders regarding the spatial plan. What makes Choka Rikita particularly exciting is the significant exploration potential within the footprint of the project, where we’ve made several additional discoveries, including the Dimitra Potok and Frazen prospects, which are located only one kilometer north of Choka Rikita. Our 55 kilometer drilling program focused on testing high priority targets of our Choka Rikita project is advancing well with, 14 drill rigs currently in operation.
At Dimitri Potok with impressive drilling results we shared at the February, they confirmed the presence of a large high grade copper gold silver scan system with mineralization concentrated along both the eastern and western sides of an intrusion. Based on drilling to date, mineralization has been detected over a one kilometer strike length up to 300 meters vertically and up to 500 meters away from the intrusion. The drill program continues to expand the Dimitri Potok discovery, and we have yet to define its limits as it remains open in multiple directions and at depth. We are also advancing drilling at the Choqua Requita North and Vallesaca prospects and look forward to providing further updates on our progress. At the Loma Laga gold project in Ecuador, the updated feasibility study is on track for completion in the second quarter of twenty twenty five.
This will update the project economics to reflect the current gold price, capital and operating cost environment as well as demonstrate the value and optionality in our growth portfolio. The Ministry of Energy and Mines has continued to advance the Pride informed indigenous consultation towards completion, which is the last requirement before we apply for the environmental license. Towards the April, we received notice that the term of the Cristawa concession, the main concession of the Loma Laga gold project, has been extended by twenty five years. Loma Laga remains an attractive growth option in our portfolio with mineral reserves of 1,900,000 ounces of gold and 80,000,000 pounds of copper, which are a clear fit with our technical and operating expertise. Overall, we continue to deliver strong results and with both mines on track to achieve our guidance, we are well positioned to continue our strong operating track record while also focusing on achieving key milestones for our next phase of growth.
I’ll now turn the call over to Navin for a review of the financial results.
Navin Dial, Chief Financial Officer, Dundee Precious Metals: Thanks, Dave. I’ll be touching briefly on the financial highlights for the quarter and conclude with some commentary on our balance sheet and return of capital program. Overall results during the quarter reflect our solid gold production and a favorable commodities price environment. All of my remarks will focus on results from continuing operations unless otherwise noted. Looking at our earnings and cash flow.
Revenue of $144,000,000 in the quarter was higher than prior year due primarily to higher realized metal prices, partially offset by lower volumes of gold sold. Adjusted net earnings in the quarter of $55,000,000 or $0.32 per share increased compared to the prior year due primarily to higher revenue as well as lower valuation expense as a result of the capitalization of costs beginning this year related to the Chokorikita project, partially offset by higher mark to market adjustments to share based compensation expenses resulting from a 46% increase in the company’s share price during the quarter. Adjusted net earnings excludes a onetime levy to the 2025 Bulgarian state budget for an after tax amount of 22,000,000. Cash flow provided from operating activities and free cash flow of 55,000,000 and 79,000,000 respectively reflects an increase of 19,000,000 in each case compared to the prior year due to higher adjusted net earnings generated. Taking a closer look at our cost metrics, all in sustaining costs of $12.44 per ounce of gold sold was 41% higher than the prior year due primarily to lower volumes of gold sold and higher mark to market adjustments for share based compensation expenses.
Given the 46 percent increase in our share price during the quarter, mark to market adjustments to share based compensation increased our all in sustaining costs by $214 per ounce compared to an increase of only $38 per ounce in the prior year. We are on track to meet all our all in sustaining cost guidance for the year, and we are closely monitoring the market dynamics outside of our control, which impact costs, such as metal prices and foreign exchange rates compared to our budget assumptions. Looking at the aspects of our costs that are more within our control, on a cash cost per tonne basis, performance of Chelopech and Ada Tepe were in line with our expectations for the quarter. In terms of our capital spending, sustaining capital expenditures of GBP 8,000,000 were higher than the prior year due primarily to higher deferred stripping costs as a result of higher stripping ratios at Ada Tepe as anticipated in the mine plan for this year. Growth capital expenditures of $12,000,000 were higher than the prior year due primarily to costs related to the ChocoRaquita project being capitalized from the beginning of twenty twenty five as a result of the project’s advancement to the feasibility study stage.
We continue to maintain a strong balance sheet and cash position with a consolidated cash balance of 763,000,000, no debt, and a 150,000,000 undrawn revolving credit facility. With our significant financial strength and robust free cash flow, we’re well positioned to fund our growth opportunities and exploration prospects while continuing to deliver peer leading returns to shareholders through our enhanced share buyback program. Starting in the fourth quarter of last year, we ramped up our share buyback significantly. We repurchased a record number of shares during the first quarter, buying back 7,500,000.0 shares at a total cost of 83,000,000. Combined with our $04 per share quarterly dividend, we returned an aggregate of 114% of our free cash flow to shareholders in the first quarter.
Towards the March, we renewed our normal course issuer bid, enabling us to repurchase up to 15,000,000 common shares, approximately 10% of our public float, in line with our plan to return up to 200,000,000 to shareholders in 2025. We continue to deploy our capital in a disciplined manner that balances our desire to reinvest in growing and optimizing our business with our commitment to returning capital to our shareholders. We will continue to take a balanced approach to capital allocation that focuses on balance sheet strength, capital returns to shareholders and reinvestment in the business to sustain growth over the long term. In closing, we continue to deliver strong performance from our mining operations and strive to maintain our track record of generating significant free cash flow. I’ll now turn the call back to Dave for concluding remarks.
David Ray, President and CEO, Dundee Precious Metals: Thanks, Navin. This is another exciting year for DPM as we advance our organic growth pipeline and continue to build value and momentum. Our portfolio is generating solid consistent results, we are very well positioned as one of the lowest cost producers. We are harvesting free cash flow and delivering peer leading returns to shareholders through our enhanced share buyback program. We’re progressing the Choka Rikita feasibility study for an accelerated construction decision.
We have substantial financial strength to fund growth opportunities and fund exploration following our success in 2024, and we’re focused on executing our strategy to deliver above average returns for shareholders as a mid tier precious metals company. BPM has a clear path forward, and we’re very excited about our future. I’d now like to open up the call for any questions.
Conference Operator: Thank you. At this time, we will conduct a question and answer session. As a reminder, to ask a question, you will need to press 11 on your telephone and wait for your name to be announced. Our first question comes from Don DeMarco from National Bank. The floor is yours.
Don DeMarco, Analyst, National Bank: Thank you, operator. And good morning, David and team. Congratulations on another strong free cash flow quarter. First question is, what is the broader conceptual plan for development in Serbia? I mean, we’ve got Cokerakita’s on a well defined path, but given what you know about Dimitri, Pollock, and Frasen, if these prove out, would these potentially be processed in a separate facility?
That is you might have a pair of mines and plants on these licenses.
David Ray, President and CEO, Dundee Precious Metals: Yeah. Thanks, Don. The the base thinking is that, the Choco Rakuten processing facility that’s part of our current feasibility study in progress is to have a dedicated facility to the ChocoRaquita deposit. And Dimitro Potok would have a separate facility. That’s the base assumption.
Now having said that, there’s lots of overlap between these, these two assets. So they could well be side by side, but they’re essentially gonna be different different flow sheets and different facilities. So there will be some synergies, but the idea is to keep these two separate.
Don DeMarco, Analyst, National Bank: Okay. Thank you. And so then focusing on Coker Burkitta, production is targeted for 2028. And at this stage, what do you think are the risks to achieving this timeline? You mentioned permitting.
Is there any permitting risks, or what are the other risks that could, put pressure on this timeline?
David Ray, President and CEO, Dundee Precious Metals: We’ve obviously, detailed pretty clearly down to a granular level exactly what we have to do and feel comfortable with what’s happening to achieve our timelines, which put us into a position that we complete permitting and get a construction decision by mid twenty twenty six, which would lead to first production in mid twenty twenty eight. So we continue to watch this very carefully. But as I say, at this point, we’re still comfortable that that timeline is is entirely achievable.
Don DeMarco, Analyst, National Bank: Okay. Good to hear. And then finally, we have the Loma Largo FS that’s pending in q two. Would you be looking at the economics in this FS to determine a go forward reevaluate the project at this point? And if so, if it’s favorable, what would the next steps be?
David Ray, President and CEO, Dundee Precious Metals: So just to be clear, what we’ve done, is recognize that we had a gap between the feasibility study that we came in with from INB and what we subsequently published one year later, which was just a replication of that that information. And we felt the need, despite having updated the reserves and resources, to provide something that took into account the differences that have happened on both capital and operating costs and also the metal price environment. But what we have not done is we’ve not gone back and reassessed the cutoff grade and what that means in terms of the reserves and resources. So what will happen is that the piece of work that’s completing in this quarter will just have capital OpEx metal price adjustments. What will be necessary after that is then to look at with the information from drilling geotech hydrogeology condemnation.
We’ll then take that and we’ll reassess that all of the assumptions for earthworks, civils, and other considerations are in fact, correct. We’re assuming they are, highly likely they are, but we need to confirm that. And then what we’ll do is we’ll recalculate the cutoff grade, redo the reserves and resources, and then update the, feasibility study, which I would anticipate to be largely the same as it is now in terms of facilities and infrastructure and operation. But there’s two different activities there, and the first one will really give more of an update, absent changing the reserves and resources, of where we stand today with the current capital operating costs and, metal price environment.
Don DeMarco, Analyst, National Bank: Okay. Great. And so with that, when would you expect to have all the information you need in order to make a go forward decision on this project?
David Ray, President and CEO, Dundee Precious Metals: And that’s a great question. So, obviously, what we’re doing at the moment is we’re watching the advance of all of the things that are required to get us to a stage, where we can advance the project. The steps that we’re looking to complete are the constitutional court items of which the fourth element is in progress at the moment, and we would be looking forward to that completing in the relatively near future, presumably after the new government is in place, which is only towards the May. So it’s a piece of work there. Once that is completed, we then make the application for the environmental permits, the EIA.
We’ve already done all the work on that, so that should be it’s not something that’s a lengthy process as we as we see it at the moment. Then what would happen is we would then go back and we would initiate the drilling. Probably least six months of drilling, and then you have to do the update to the feasibility study. So you’re looking at something that’s probably nine to twelve months out from the point at which we clear that herd. Okay.
So this is gonna be something that’s timing after Chokarikita in terms of, a construction decision is what I would say right now. But this next quarter to six months are gonna be really important in terms of the timeline for that.
Don DeMarco, Analyst, National Bank: Okay. Great. Okay. Well, thank you for that, and, look forward to these reporting milestones this year. That’s all for me.
Good luck with q two and the rest of the year. Thank you.
Conference Operator: Thank you for your question. One moment, please. Our next question comes from Jeremy Hoy of Canaccord Genuity. The floor is yours.
Jeremy Hoy, Analyst, Canaccord Genuity: Thanks for taking my question. Just one quick one from me today. You guys advanced Chokorakita pretty rapidly from discovery through to initial resource and a PEA. You’re also aggressively drilling these new prospects, Dimutru, Podoc and Frazen. Do you have a high level timeline in mind for when we might see a resource and the later technical studies for these prospects?
David Ray, President and CEO, Dundee Precious Metals: It’s a little early for that, Jeremy, but what I would say is that we’re looking to do what we can so that by the end of the year, there’s an ability to take an estimate on what Dimitri, Bottock and Phrasem is likely to be in terms of its overall scale. So somewhat similar to what we did in January of twenty twenty three with, with Choka Wakita. So, but if if you consider that Choka Wakita is two fifty to four fifty meters underground, If you have a look at, Dimitri Potok, here we’re talking about something that’s 900 meters to, you know, 1.1 kilometers, 1.2 kilometers underground, let’s say. So it actually takes longer to get there and do the work, that you can then use to make these estimates. And then, of course, it you have to look at the nature of the material and what does that mean in terms of the drill spacing.
So all of these things come into an ability for us to actually make that estimate on timing. So at this point, we’re excited excited to be finding what we are. We’re looking to do something which by the end of the year should give us some sense of scale, and then that will allow us to start thinking about timelines.
Jeremy Hoy, Analyst, Canaccord Genuity: Okay. Great. Well, we’ll look forward to seeing those exploration results. Thanks for taking my question. I’ll step back in the queue.
David Ray, President and CEO, Dundee Precious Metals: Thanks, Chad.
Conference Operator: Thank you for your question. At this time, I am now showing no further questions. Thank you for your participation in today’s conference. This does
Jennifer Cameron, Director of Investor Relations, Dundee Precious Metals: I see one more.
Conference Operator: Oh, there’s one more. Alright. One moment, please, while I prepare the queue. Our next question comes from Birkett Birhi from Beacon Securities. The floor is yours.
Birkett Birhi, Analyst, Beacon Securities: Hi, David. Congratulations again for another strong free cash flow quarter. My question relates to your TCRCs, and I do not know how much you can comment on this, but I was trying to figure out if you’re benefiting from the low TCRC environment at the moment. But looking at your numbers, at least relative to last year and the last few quarters, I do not see an appreciable difference. Am I reading this wrong, or is there a better TCRC environment for you guys at the moment?
Navin Dial, Chief Financial Officer, Dundee Precious Metals: Hi, Marikette. It’s Ivan. Yeah. What we did at the beginning, essentially, at the late at the end of last year, we had essentially taken the benefit of the historically lows TCs and RCs, and we have essentially locked in a number of our contracts related to that, over the course of this year. What we are seeing right now is a TC market that for clean concentrate that continues to decline.
And as you as you know, our concentrate at Chelopech is a bit more complex. So but I think, you know, what you can infer from this is that we are benefiting from the historically recent historical loads of TCs. What I would also comment as well is that, what we’re also seeing is freight costs significantly lower than we have seen in in the recent past. And we’ve been able to take advantage of that as well, locking in our sea freight costs for the balance of the year. So you should see overall, you know, on balance year over year TCs that are perhaps the same and then for lower freight costs for the balance of the year.
Birkett Birhi, Analyst, Beacon Securities: Perfect. Thanks.
Conference Operator: Thank you for your question. At this time, I’m now showing no further questions. This concludes our call. Thank you for your participation in today’s conference. You may now disconnect.
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