Earnings call transcript: Dundee Precious Metals Q3 2023 shows strong cash flow

Dundee Precious Metals (DPM) reported robust financial performance for the third quarter of 2023, driven by solid revenue and cash flow figures. The company's stock has demonstrated remarkable strength, delivering a 125% return over the past year and maintaining a low beta of 0.61, indicating lower volatility compared to the market. Despite facing higher all-in sustaining costs, the company maintained its position as a low-cost, high-margin gold producer, with an impressive gross profit margin of 60.5%. The earnings call highlighted strategic initiatives and future guidance, including the advancement of the Choka Raquita project. According to InvestingPro analysis, DPM is currently undervalued based on its Fair Value model.

Key Takeaways

• Revenue reached $677 million, with adjusted net earnings of $232 million.
• Free cash flow was strong at $355 million.
• The Choka Raquita project is progressing, with feasibility studies expected by 2025.
• Consistent annual gold production of 200,000 ounces is forecasted.
• Exploration efforts continue to be a priority, with a budget of up to $25 million for 2025.

Company Performance

Dundee Precious Metals demonstrated resilience in the third quarter, with revenue totaling $677 million and showing strong year-over-year growth of 12.8%. The company maintained consistent gold production levels and reported an increase in cash flow from operations, totaling $297 million. Despite a slight increase in all-in sustaining costs, Dundee remains a leader in cost efficiency within the industry. The company is focusing on organic growth opportunities in Serbia and Bulgaria, with a disciplined approach to capital allocation. For deeper insights into DPM's financial health and growth prospects, InvestingPro subscribers can access exclusive ProTips and comprehensive analysis in the Pro Research Report.

Financial Highlights

• Revenue: $677 million
• Adjusted net earnings: $232 million ($1.29 per share)
• Cash flow from operations: $297 million
• Free cash flow: $355 million
• All-in sustaining costs: $872 per ounce of gold sold, up 3% from the prior year

Outlook & Guidance

Dundee Precious Metals is targeting annual gold production of approximately 200,000 ounces, with all-in sustaining costs expected to average $865 per ounce. The company plans to invest over $90 million in growth capital in 2025 and aims to start construction of the Choka Raquita project by mid-2026. The exploration budget for Choka Raquita is set between $23 million and $25 million for the upcoming year.

Executive Commentary

CEO David Ray emphasized the company's strong operational performance and financial health, stating, "We continue to deliver strong performance from our mining operations." He also highlighted the company's focus on cash flow generation and shareholder returns, noting, "Our portfolio is generating solid consistent results."

Risks and Challenges

• Rising all-in sustaining costs could impact profitability if not managed effectively.
• The impending closure of the Adatepe mine in 2026 poses a production challenge.
• Macroeconomic pressures and fluctuations in commodity prices may affect future earnings.
• The success of exploration projects is uncertain and could affect long-term growth.
• Potential regulatory changes in operating regions could pose compliance risks.

Q&A

During the Q&A session, analysts inquired about the potential extension of the Adatepe mine's life and the exploration prospects at Chelopech. Management confirmed their financial capacity to develop multiple projects simultaneously and detailed their strategy for the Loma Largo project. Overall, the session highlighted the company's commitment to growth and operational excellence.

Full transcript - Desert Peak Minerals Inc (DPM) Q4 2024:

Conference Operator: Good day and thank you for standing by. Welcome to the Dundee Precious Metals Fourth Quarter twenty twenty four Earnings Results Conference Call. At this time, all participants are in a listen only mode.

After the speakers' presentation, there will be a question and answer

: session.

Conference Operator: Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jennifer Cameron. Please go ahead.

Jennifer Cameron, Director, Investor Relations, Dundee Precious Metals: Thank you, and good morning. I'm Jennifer Cameron, Director, Investor Relations, and I'd like to welcome you to the Dundee Fresh Metals fourth quarter conference call. Joining us today are members of our senior management team, including David Ray, President and CEO and Navin Dyle, 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 financial measures recognized under IFRS and are referred to as non GAAP measures or ratios.

These measures have no standardized meanings under IFRS and may not be comparable to similar measures presented by other companies. The definitions established and calculations performed by DTM 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 2023 pertain to the comparable periods in 2023 and references to averages are based on midpoints of our outlook for guidance. I'll now turn the call over to David Gray.

David Ray, President and CEO, Dundee Precious Metals: Thank you, Jonathan. Good morning, and thank you all for joining us. Our excellent Q4 and year end results reinforce the DPM strength that underpin our strategy to become a mid tier precious metals company. First, we're a responsible and efficient operator, where we once again achieved our gold production and all in sustaining cost guidance, continuing our exceptional ten year track record of delivery. Most importantly, we've accomplished this while maintaining a high standard for responsible mining with a strong safety and environmental track record, which is ranked as at the top of our industry for the past four years.

Second, we're focused on developing quality assets. We've rapidly advanced Choka Raquita, a testament to the quality of our team and project, completing the pre feasibility study at the end of last year, and we're focused on completing the feasibility study by the end of this year. We have a proven track record in project development, having delivered the $180,000,000 Adatepe project on time and on budget as well as the Chelopech expansion that doubled production and other investments to improve operations and enhance value. And we've also established our exploration credentials with three discoveries in Serbia and our long track record of adding mine life at Chelopech, and exploration will continue to be a significant DPM focus in 2025. Third, we maintain a strong financial position to support growth.

So we've consistently delivered free cash flow generation, including a record $3.00 $5,000,000 in 2024, which has grown our cash position to over $800,000,000 at the beginning of 2025 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. We've returned $261,000,000 to shareholders since 2020 and plan up to $200,000,000 of additional share purchases in 2025. Overall, our accomplishments in 2024 have culminated in an exceptional track record that provides confidence in our ability to grow the business and deliver on our strategic objective to become a mid tier precious metals company. As we enter 2025, we focused on growth as demonstrated by the advancement of our exploration and project portfolio, which is reflected in our three year outlook.

Navin will review the details in a moment, so I'll emphasize our priorities. We continue to fund our high quality organic growth pipeline by investing more than $90,000,000 this year between growth capital and exploration, following on several recent successes. We also continue to deliver on our strong operational track record producing just under 200,000 ounces of gold and 30,000,000 pounds of copper annually over the next three years and continue to be one of the lowest cost gold producers. Turning to Chokerakita. What makes Chokerakita particularly exciting is the significant exploration potential within the footprint of the project, where we have made two additional discoveries, Dimitra Botok and Frasen prospects, which are located approximately one kilometer north of Choca Ratita.

Results from these targets are demonstrating count scale potential for high grade copper gold mineralization. And we're completing additional work in order to understand the footprint, the continuity, the overall size potential and the metallurgy. This will be a significant focus for us in 2025 with planned exploration spending of between $23,000,000 and $25,000,000 and similar levels forecast for $26,000,000 and $27,000,000 With Chokereducator, our growth priority is advancing Chokereducator to production, which is targeted for 2028. In less than twenty four months since announcing the initial discovery, we have outlined a very robust, highly valued accretive project that adds high margin gold production growth to our portfolio. We've proceeded immediately to a feasibility study while advancing permitting activities in parallel with a goal of commencing construction in mid-twenty twenty six.

In 2025, our focus will be on completing surface and underground geotechnical and hydrogeological drilling and the completion of the feasibility study, which is expected by year end. Completed in December, the PFS results featured several improvements from the PEA, including accelerated gold production in the first five years, averaging 170,000 ounces of gold per year, lower all in sustaining costs, which we're now expecting at $644 per ounce of gold over the life of mine and the derisked project timeline and execution plan. And we intend to utilize existing processing facilities and mine equipment from Adatepe, leveraging the project's proximity to Chelopech to train and develop key personnel for operating roles. Overall, we're very excited by Choca Ratucuta's potential in a region where we've had a presence for many years that has a long history of exploration and mining development and where we've developed strong relationships with local stakeholders. With Chelopech and specifically Chelopech mine life, we're also prioritizing in mine and brownfields exploration work to further extend mine life, targeting an increase to over ten years.

Reflecting this priority in 2025, we are increasing the brownfields exploration budget for Chelopech as we focus on testing near mine targets on the Chelopech concession. Chelopech today has a mine life that extends to 2,032 based on our reserves, a substantial 1,200,000 ounce mineral resource base and a 4,100 hectare land package with significant opportunities to continue the track record of mine life extensions. In addition, the Chelopech North concession approval is anticipated before the end of twenty twenty five and we've just received the geological discovery confirmation in Q4 for BRAVENIQ. At Loma Laga, the progress we've made with Permanente in 2024, we've chosen to complete an updated feasibility study for the project in the second quarter of twenty twenty five. This will update the project economics to reflect the current gold price, capital and operating costs, as well as demonstrating the value and optionality for our growth portfolio.

The prior informed indigenous consultation process, which is the last step of the four before the environmental license is issued that was also initiated and engaged with the engagement with the community progressed during Q4. For 2025, we have budgeted $12,000,000 to $14,000,000 in growth capital for Loma Lager, reflecting the updated feasibility study and our disciplined approach to the business. We will continue allocating additional capital to the project depending on achieving certain permitting milestones, and the intent will be to fund resuming drilling and further advancing permitting. Loma Lager 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 that is a great fit with our technical and operating expertise. I'll now turn the call over to Navin for a review of the financial results.

Navin Dyle, Chief Financial Officer, Dundee Precious Metals: Thanks, Dave. I'll be touching on the financial highlights for the year, provide an overview of our 2025 guidance and three year outlook and conclude with some commentary on our balance sheet and return of capital program. All of my remarks will focus on results from continuing operations unless otherwise noted. Looking at our financial highlights for the year, we achieved consolidated production and costs in line with our guidance and delivered record financial results. Revenue of $6.00 $7,000,000 adjusted net earnings of $232,000,000 or $1.29 per share cash flow provided from operating activities of $297,000,000 and free cash flow of $3.00 $5,000,000 Overall results during the year reflect our strong operating performance, the low cost structure of our operations and a favorable commodity price environment.

Looking at our earnings and cash flow in more detail, revenue was higher than the prior year due primarily to higher realized metal prices and lower treatment charges at Chelopech, partially offset by lower volumes of gold sold at Atatepe. Adjusted net earnings increased compared to the prior year due primarily to higher revenue and interest income, partially offset by higher planned exploration and evaluation expenses, higher income taxes and higher labor costs. Cash flow provided from operating activities was higher than the prior year due primarily to higher earnings and higher cash interest received, partially offset by the timing of collections from sales and payments to suppliers. Free cash flow, which is calculated before changes in working capital, was higher than the prior year due primarily to higher earnings generated during the year. Taking a closer look at our cost metrics, all in sustaining cost of $872 per ounce of gold sold for the year was 3% higher than the prior year due primarily to lower volumes of gold sold, higher labor costs and timing of maintenance activities, largely offset by lower treatment charges at Shell (LON:SHEL) Patch and higher byproduct credits as a result of higher realized copper prices.

In terms of our capital spending, sustaining capital expenditures of $34,000,000 for the year were higher compared to 2023 due primarily to the timing of expenditures and higher deferred stripping costs as a result of higher stripping ratios at Aditepe. Growth capital expenditures of $17,000,000 for the year were lower than the prior year due primarily to lower capital expenditures related to the Loma Largo gold project as expected. Last night, we provided an updated three year outlook, which has been outlined in detail on Slide 15 of the webcast. We continue to fund our high quality organic growth pipeline, while maintaining our portfolio of high margin operations, which has generated our exceptional track record of delivery. Over the next three years, gold production is expected to average approximately 200,000 ounces per year, bolstered by strong and consistent performance from Chelopech.

Adasepa's production profile reflects its mine life ending in mid-twenty twenty six, in line with our plans to utilize its processing equipment and infrastructure for the Choker Aquila project. I'd like to note that in 2025, gold production at Adatepe is forecast to be approximately 50% lower in the first half of the year as compared to the second half due to sequencing of the cells of the integrated mine waste facility. Copper production over the next three years is expected to average approximately 30,000,000 pounds per year based on current mine plan. All in sustaining costs over the next three years is expected to average approximately $865 per ounce of gold sold, continuing to position DPM as one of the lowest cost, highest margin gold producers. Our outlook reflects variations in gold and copper production and sales year over year, as well as the impact of higher local currency operating costs and allocated general and administrative expenses, partially offset by a stronger U.

S. Dollar assumption relative to the euro. We are forecasting consistent investment in exploration over the next three years, reflecting our success in generating value through the drill bit. Our sustaining capital over the next three years has remained unchanged from our previous outlook with the exception of sustaining capital at Adatepe in 2025, which is expected to be approximately $14,000,000 which includes reclassified expense costs for waste survey. Our three year outlook for growth capital primarily relates to the Choco Raquita project, which is expected to commence construction mid-twenty twenty six and achieve first production of concentrate in 2028.

The company will start capitalizing costs related to the Chocariquita project from 2025 onwards as a result of the project's advancement to the feasibility study stage. In 2025, growth capital expenditures also include expenditures related to the Loma Largo Gold project, including planned expenditures to complete an updated feasibility study in the second quarter of twenty twenty five. Upon achievement of certain milestones for the project, the company may increase its guidance for capital expenditures related to the Lova Largo boat project. We continue to maintain a strong balance sheet and cash position with a consolidated cash balance of $635,000,000 no debt and a $150,000,000 undrawn revolving credit facility, including an additional $171,000,000 in cash received in early January twenty twenty five following the conclusion of the DPM tolling arrangement as part of the SUVEZ disposition, our year end cash balance rises to over $800,000,000 As Dave pointed out during his remarks, we have consistently demonstrated our disciplined approach to capital allocation, which is based on three fundamental considerations: maintaining a strategic cash position to fund organic growth and pursue strategic transactions reinvestment in the business to grow value and the long term sustainability of our business and returning excess capital to shareholders through a mix of dividends and share repurchases with a view to maximizing total shareholder returns over the long term.

In line with this approach, over the past five years, we have returned $261,000,000 of capital to shareholders, approximately 25% of our total free cash flow over that period. In 2024, we repurchased 5,700,000.0 shares at a total cost of $50,900,000 under the company's normal court issuer bid or NCIB and paid $28,900,000 of dividend. The current NCIB expires on 03/17/2025. The company's Board of Directors has approved the renewal of the NCIB, subject to approval by the TSX. The company expects to be able to purchase up to 10% of the public float of common shares over a period of twelve months under the renewal.

Continuing our track record of peer leading capital returns for the calendar year 2025, the company's Board of Directors has authorized the repurchase of up to $200,000,000 worth of the company shares and we ramped up share repurchases through January in line with this approach. In closing, we continue to deliver strong performance from our mining operations and we are in a strong cash position to achieve our guidance and continuing our track record of generating significant free cash flow. I'll now turn the call back to Dave for his closing remarks.

David Ray, President and CEO, Dundee Precious Metals: Thanks, Gavin. It's another exciting year for BPM as we advance our organic pipeline and continue to build value and momentum in 2025. Our portfolio is generating solid consistent results

: and

David Ray, President and CEO, Dundee Precious Metals: we're very well positioned as one of the lowest cost producers. We're harvesting free cash flow and delivering peer leading returns to shareholders through our enhanced share buyback program. We're also progressing the Chokerakita feasibility study for an accelerated construction decision. So we got substantial financial strength to fund growth opportunities and fund exploration following our success in 2024, and we focused on executing our strategy to deliver above average returns for our shareholders as a mid tier precious metals company. DPM is a clear path forward and we're very excited about our future.

And I'd now like to open up the call for any questions.

Conference Operator: Thank you. And our first question today comes from Cosmos Chiu of CIBC (TSX:CM). Your line is open.

: Hi, thanks Dave, Navin, Jennifer and team. Maybe my first question is on the Tepe here. I know it's coming to an end in terms of mine life. But Dave, based on exploration and drilling, is there really are you really not able to extend the mine life here? Remember, I was on-site with you when it first started.

I was always thinking that there was a potential possibility sometime down the road that you could actually find more ounces, extend the mine life, but here we are.

David Ray, President and CEO, Dundee Precious Metals: Yes. Cosmos, we continue to explore that Atepe. So we've got $3,000,000 to $4,000,000 in the budget for next year. It's recognizing that while there still may be some potential for additional ounces in the pit, you're not talking quarters or years, you're talking about maybe months. So what we focused on is what the potential for these businesses.

And it does take a good amount of time to permit mining projects in Bulgaria. So what we're doing is we're making the decision that even if we found something today, it's going to take probably two or more to permit a new project. So that being the case, we've decided that the right thing to do at the moment is on completion of the Adatepec mine and the treatment of that material will basically move our assets across to Choke Raquita. We continue to explore and have additional plans, particularly around the current asset over the next year or two to do that. But like I said, we do find something, it's going to be a long term opportunity as an organic growth, an organic project.

And it's quite likely that the metallurgical process could be different from what we've got, which also then means that it makes sense of us to reuse that facility at Chocoque either in the interim.

: Great. Maybe this will make Navin's life even harder, but whenever there's a mine closure, there's always accounting complexities. I think Navin kind of touched on it in terms of some of the stripping costs. But is there anything that we should be aware of like depreciation can be a bit wonky as you enter the last years of mine life. Any closure costs, reclamation costs that we should be aware of, which can be even more complex since you're transferring some of the equipment to Serbia.

So or is that really a 2026 issue? Anything that you can share with us?

Navin Dyle, Chief Financial Officer, Dundee Precious Metals: Sure, Cosmos. Yes, it's probably more of a 2026 impact. But to note that we already have an asset retirement obligation for Adepe. I think that's going to change much with our decision to move that equipment over to Choco Raquita. As we've said before, the reason we're doing that and the real benefit to doing that is really from a timing perspective in terms of execution of the plan to complete Choco Raquita.

It's not so much going to save us a whole lot of money. So we have in our account records, in our books an asset retirement application. We also have reclamation letters of credit that we have outstanding as well. So I don't think you should expect to see anything unusual as part of that. Great.

And then

: one last question on Adatepe. As you mentioned, you're taking some of the equipment and infrastructure again to Chacoquita. How about the employees? Like are there any plans for the employees at Adatepe?

David Ray, President and CEO, Dundee Precious Metals: We take a lot of pride in developing people in the place at which we operate longer term, but certainly there's opportunities in the meantime. We will be doing training of people from Serbia at Otepe. We'll also be having our maintenance people or the assumption is we'll have our maintenance people supporting the commissioning activities that we have at Chokeba Rekiva. So we do have opportunities for employment, but what we are also trying to do as an alternative to that is we're looking at what we can do to continue our support of developing small businesses with the people at our site and we're encouraging them at the moment to look for opportunities that are not related to the mine and therefore can outlast the mine. Currently, we've got about half of our employee based in terms of numbers, so around 140 to 150 people employed in small businesses that we've encouraged and supported the development of through the course of the life of mine of the project.

And we're going to continue to do things that encourage that going forward. So it's a mix of different things. At some part, there will be transfer of people, particularly to support the early days of the operation. Then we'll have some commissioning and maintenance opportunities, which again complete the construction involved in the commissioning. And then in addition to that, we'll be doing what we can to mitigate the impact by continuing to support small business generation in Aditepe.

: Great. And then Dave, maybe one last question here. Great to see that Chacoquita is really moving ahead and you have a target of starting production in 2028. But when I look at your three year production guidance last night, nonetheless, based on our discussion on Adatepe as well, there's going to be a dip in 2027 in terms of production. Is that something that keeps you up at night?

And then maybe a second part to that question is, as you mentioned, and as I mentioned, over $800,000,000 in cash and liquidity or in cash, not just in cash. And you've touched on capital allocation, you've touched on return of capital, you've turned on reinvesting in the business. Could you maybe talk a bit more on external opportunities as well to the extent anything that you can share with us?

David Ray, President and CEO, Dundee Precious Metals: Okay. So let's start with does it keep me awake at night? So obviously prefer to be to have a growing profile moving forward. Clearly not the situation with Adetec coming off in '26 and continuing to develop through that time choke of Aquila, but being absent of second operation until the second half of twenty twenty eight. I would say that's priced into our share price.

So from a share price point of view, that's not really an issue. But obviously, we would like to see an ability to grow the organization. So what are we doing? We do keep an eye out for M and A opportunities. We're particularly looking for things that we can bring synergies to because it's a highly competitive environment where people are paying full price and more for other assets.

So we do continue to look for that. But if you go back to the Yocino transaction, we're disciplined in terms of what we are prepared to do. So it needs to be in and of itself interesting as an asset we might consider. So first of all, quality, then we consider risks. And then we sort of bring what we can provide in terms of technical expertise or perhaps if it's an operating asset, our operating track record bringing improved production reliability and performance.

We're very well positioned, I think, to be able to act on these value generating opportunities. But like I said, I would prefer it that we had a growth profile rather than it did in 2027, but that's not what's keeping me up at night.

: Great. Thanks, Dave and team. Those are the questions I have. Thanks a lot.

Conference Operator: Thank you. And our next question comes from Don DeMarco of National Bank Financial. Your line is open.

Don DeMarco, Analyst, National Bank Financial: Thank you, operator, and good morning, Dave. Congratulations on a strong Q4 and also strong outlook in 2025 guidance. So first, looking at the Chelopech production outlook, what drove the favorable delta versus the twenty twenty three minutee plant, particularly in 2027 where I see the outlook at about 20,000 more ounces of gold per year than the mine plant?

David Ray, President and CEO, Dundee Precious Metals: So anytime that we do a review of the outlook, we consider what opportunities do we have to maximize value of the asset. So while we're very disciplined and we don't make changes, let's say for frivolous reasons, We are constantly looking to see what those opportunities might be in terms of sequence of opportunities. We also bring in, of course, what additional drilling information we have because as we get closer to these assets to production, so we have more information at a tighter drill spacing. So I would say this is just part of our ongoing review when we do look at the outlook. So we look one year out, two years out, five years out in terms of the sort of windows that we look within.

And then what new information is coming in, what does that tell us in terms of how we can actually maximize the asset. And I would say one of the reasons that we've been successful with our all in sustaining costs at the time is we continue to look for these opportunities to maximize the asset and that's why you see that type of variability.

Don DeMarco, Analyst, National Bank Financial: Okay. Okay. I'm encouraged to see that. And what is the pecking order prospects at Chelopech? I mean the financials MD and A mentioned, Charlotte Dairy, Target (NYSE:TGT) 01/1954.

When do you expect a potential resource for these and or an updated mine plan at Chelopech?

David Ray, President and CEO, Dundee Precious Metals: I did say that we'd be doing work through 2024 and part of 2025 in terms of Charlotte Deery, which is one of the areas where historically there's not been a lot of drilling. We've been focusing our attention. So that's certainly one and that's effectively in the gap between the center of Salopec and up towards C, the Northeast. So that's something that you'll see additional information coming out during the course of this year. Other things that Chelopech can be smaller but higher, right?

So if you remember back to 01/1947 and 01/1954 well, 01/1954 specifically, this was a smaller but high grade asset quite close to existing infrastructure. We identified back in about 2015 and subsequently, I think we ended up with about 4,000,000 tons coming out of that area and high grade value of that. So at this point as well, we're also working on something called 700, we've got 147, one hundred and 40 nine. So there's tons and there's quality in terms of this conversation and I would say in Charlotte, more likely to be tons and quality will be things like area seven zero seven and so on, 149, one hundred and 40 seven. Then I also mentioned earlier on that one of the things that we're doing to try and increase our real estate we can work within is adding Chelopech North.

So this was previously set at Petco. And we're anticipating during the course of this year to get the concessions for that to be able to do more work there and consider bringing that in to our mine plans. And then we've just gone to a geological discovery. So what this is doing is it's opening up the opportunity rather than just being constrained to the concession. Our primary goal at Chelopech is to get to beyond ten years of mine life as an imperative.

We believe that the opportunity is there and that's why we've wrapped up the amount that we have in 2025.

Don DeMarco, Analyst, National Bank Financial: Okay. Well, thank you for that. And we'll stay tuned as drilling progresses at Chelpech over the year. So question for Navin. So Navin, in Q4, it appears that there was another $60,000,000 spent in buildup of working capital related to Tsumeb.

What was the nature of these expenditures? And did the post quarter $170,000,000 cash inflow include a repayment of this?

Navin Dyle, Chief Financial Officer, Dundee Precious Metals: Yes, Don. So the $60,000,000 was additional purchases of concentrate material during that period of time as we were still within that temporary tolling agreement. And the $171,000,000 that we have there that we collected in the January, '1 hundred and '60 '2 million dollars of that is essentially clearing out the majority of that working capital that we committed to those purchases of that raw material. And it included a small portion of that we sold back to ISM. There's a relatively small amount of accounts receivable still left to collect that will collect in the normal course over the next six months as that material is processed.

Don DeMarco, Analyst, National Bank Financial: Okay, excellent. Thanks for clarifying that. And then just as a final question, David, back to you. M and A, I mean, you've got a pipeline here with Coco Raquita, you've got Loma Largo, which seems to be advancing. Is M and A part of your playbook?

And how does it rank in terms of priority and where you might be looking at this point?

David Ray, President and CEO, Dundee Precious Metals: John, I think the priority depends on we keep a look for opportunities that make sense, where we can bring synergy as an organization, as I already mentioned. And that will stack up against the other opportunities that we have internally. So we don't just see that we have Chelopech, as mentioned, Choka Riquita and Loma Laga as our opportunities. We think there's significant potential still in Serbia. So clearly, if there's more organic opportunity for us where we're not paying something upfront in order to then build the project and realize value, that would take priority.

But I would say that we look for exciting opportunities that we can bring in quality first, can we manage the risk, what difference does it make to the organization and then where would that fit in terms of our priorities. But at the moment, further off, within our portfolio as well.

Don DeMarco, Analyst, National Bank Financial: Okay. So I think I heard you say that there's good organic opportunities within Serbia, maybe Bulgaria. And so those might take priority over singular outright new M and A at this point?

David Ray, President and CEO, Dundee Precious Metals: It's a question of looking for what can actually change the dynamic of what's the priority. We'd love to have something that's, but effectively we focus on creating a platform for robust growth and that could be a mix of organic opportunities plus acquisitions. And the intent is overall that we find something that's not per share accretive with above average returns for investment.

Don DeMarco, Analyst, National Bank Financial: Okay, great. Well, thanks again for congratulations on the strong finish to the year and good luck in 2025. Thank you.

David Ray, President and CEO, Dundee Precious Metals: Thanks, Tom.

Conference Operator: Thank you. And our next question comes from Jeremy Hoye of Canaccord Genuity. Your line is open.

Jeremy Hoye, Analyst, Canaccord Genuity: Hi. Thanks very much, David and Jennifer for taking my questions. A great quarter.

: I was hoping we could talk

Jeremy Hoye, Analyst, Canaccord Genuity: a bit about Loma Largo. We've been focusing on Chocorapiquita, the growth potential at Chelopech and M and A. But you sort of have an opportunity in Loma Largo. It's been on the back burner. I think you're expressing even more confidence now moving ahead with this feasibility study.

If all goes well with permitting and you get the green light to build that, how are you thinking about that asset strategically?

David Ray, President and CEO, Dundee Precious Metals: Yes. Thanks for recognizing that this is something that we've been basically playing fairly low key while continuing to make good progress in terms of advancing some of the things we need to do to get to a construction decision. So how does this fit? Should we get a green light? So we have three out of the four items that we require at the moment to complete what was required by the constitutional court.

We actually came very close to completing these before the end of the year. So we anticipate that ongoing work with Escalares, which is the community in which we have to do the prior informed consultation that will happen and probably closing out at sometime shortly after the second stage of the presidential election. And at that point, we'll see what it is then we need to do. So let me just differentiate something just for clarity in terms of what we're doing in terms of the additional capital and operating cost assessment we're doing as part of the feasibility. While we're doing this first piece of work now is we realized that we haven't had an update since 2020 in terms of what would be the capital cost, what would be operating cost and what does that mean in terms of the valuation of the project.

Historically, what we've done is we've said, when we get the clearance with the environmental commissions, we'll then go back and do the drilling for geotech hydrogeology condemnation as well as doing a small amount of resource drilling. We've not been able to do that to this point and basically came to the conclusion that we'd like to do what we can to understand the value of this project and it be public. So the intent of this first piece of work, which should be completed in the second quarter, is really to update the capital costs and the operating costs. And from that then with the resource that we've used in 2023, then the value of this asset can be understood. There's still a further piece of work then done to be done.

Once we get the environmental clearance. We'll still have to go in and do the drilling, which will be, as I said, geotech, hydrogeology condemnation in order to confirm that all of the assumptions, particularly in the location of the metallurgical facility and the tailings facility are correct. And then we'll finalize the feasibility study, which would then be the thing taking us to a decision on construction. So two different studies going on. And when we talk about the work for Q2, it's really more intent surfacing and understanding value and then there'll be a further piece of work after that.

Jeremy Hoye, Analyst, Canaccord Genuity: Understood. Okay. That's great color. And then in terms of, I guess, sort of the strategic options, do you I assume you wouldn't want to build that at the same time as Choka Rakeda, but maybe you could do if there's capacity on all fronts. Does it slot in right after?

Would you consider partners? Divesting it? Could you talk a bit about that?

David Ray, President and CEO, Dundee Precious Metals: So we're looking to realize value for the organization and that could be any or all of what you just discussed. So there are companies in the region that have a tremendous track record, which we could look to participate in what we're doing. Obviously, a decision to move ahead could also be a decision that it makes more sense with somebody else. So if we find more within Serbia, that could be something we decide. But ultimately, it's all down to how is it that we develop an exciting organic growth portfolio, which makes sense for us as DPM.

At this point, Loma Lago, we believe has got lots of upside potential. It's an attractive project given its large resource and upside on that resource. And it's got a relatively low all in sustaining cost. So I would say to your point, we would be open to different options in terms of whether we build it, others build it and how we go about sort of taking that transition. But it really depends on what's happening in the rest of our organic growth portfolio and any potential M and A that we do in the meantime.

Jeremy Hoye, Analyst, Canaccord Genuity: Yes, understood. A lot of factors to consider. Thanks, David. That's pretty clear. One quick final one from me.

We've sort of been poking at this M and A question quite a bit, but a specific one from a client. And in the past, for opportunities and filters for opportunities, you've been pretty clear about the regions you like and size, which is, I believe, around 150,000 ounces or above. With Chocoriquita already coming in and then with the LomaLara guys, is there any opportunity to look at potential earlier stage things or even smaller producers below that 150,000 mark?

David Ray, President and CEO, Dundee Precious Metals: Yes, we're definitely open to all the conversations so far has been around the short term. And we're definitely open to longer term opportunities that may be a good fit with us as an organization as we look beyond say 02/1930. At this point, the opportunity is up to 2,030. We're already stacking up a good list of things. And by the way, I didn't answer your one question, which was could we build Choka Riquita and Loma Lava at the same time?

The answer is yes. Financially, that would not stress the organization. We could still do that. So I would say that in terms of what we're going to do going forward, we're really intense on the overall health of the company and building an organization, which is generating great returns, mid tier producer, bottom quartile of cost generating free cash flow and returning value to shareholders. And how we get there will be something that will be dynamic with the extension and the performance of our current assets.

What comes about in Serbia, which is something beyond just Choka Rekita as well as what opportunities transpire with Loma Lager or external acquisitions.

Jeremy Hoye, Analyst, Canaccord Genuity: Yes, definitely a lot of opportunity on that property there in Serbia. Well, great. Thank you very much for your answers and have a great day and good luck in 2025.

David Ray, President and CEO, Dundee Precious Metals: Thank you.

Conference Operator: Thank you. I'm showing no further questions at this time. I'd like to turn it back to Jennifer Cameron for closing remarks.

Jennifer Cameron, Director, Investor Relations, Dundee Precious Metals: Well, thank you all for joining us. We hope you enjoy the long weekend for those who aren't here in Ontario.

Conference Operator: Should you have any questions, we'll

Jennifer Cameron, Director, Investor Relations, Dundee Precious Metals: be happy to connect. Thank you and take care.

Conference Operator: This concludes today's conference call. Thank you for participating and you may now disconnect.

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