Earnings call transcript: Dundee Precious Metals reports strong Q2 2025 earnings

Dundee Precious Metals Inc. reported robust financial results for the second quarter of 2025, surpassing analyst expectations with an EPS of $0.52 against a forecast of $0.464, marking a 12.07% surprise. The company’s revenue reached $186.5 million, exceeding projections by 5.15%. Following the announcement, Dundee’s stock surged by 7.86%, reflecting investor confidence in the company’s performance and outlook. According to InvestingPro data, the company maintains a perfect Piotroski Score of 9 and an overall Financial Health rating of "GOOD," indicating strong operational efficiency and financial stability.

Key Takeaways

• Dundee Precious Metals exceeded both EPS and revenue forecasts for Q2 2025.
• The company’s stock price increased by 7.86% after the earnings announcement.
• Strong free cash flow and no debt highlight a robust financial position.
• The Chelopech and Ada Tepe mines demonstrated significant production capabilities.
• The company is on track to meet its 2025 guidance, with positive future prospects.

Company Performance

Dundee Precious Metals showcased a solid performance in Q2 2025, with revenue increasing by 19% compared to the same period in 2024. The company’s strategic focus on operational efficiency and cost management contributed to its strong results. Dundee’s emphasis on expanding production capabilities and maintaining a low-cost, high-growth profile positions it favorably within the mid-tier precious metals sector.

Financial Highlights

• Revenue: $186 million, a 19% increase from Q2 2024.
• Earnings per share: $0.52, surpassing the forecast of $0.464.
• Free Cash Flow: $95 million, a 12% increase from the previous year.
• All-in Sustaining Costs: $11.18 per ounce of gold sold, a 41% increase year-over-year.
• Cash Balance: $332 million, with no debt.

Earnings vs. Forecast

Dundee Precious Metals outperformed market expectations with an EPS of $0.52, a 12.07% surprise over the forecasted $0.464. Revenue also exceeded projections, reaching $186.5 million against an expected $177.36 million, reflecting a 5.15% surprise. This marks a positive deviation from previous quarters, indicating strong operational execution.

Market Reaction

Following the earnings announcement, Dundee’s stock experienced a notable increase of 7.86%, closing at $22.4. This positive market reaction reflects investor confidence in the company’s financial health and strategic direction. The stock’s movement places it closer to its 52-week high of $24.56, indicating strong investor sentiment. InvestingPro data shows impressive returns, with a year-to-date gain of 126% and a one-year return of 169%, significantly outperforming market averages. Subscribers can access 13 additional ProTips and comprehensive valuation metrics through the Pro Research Report.

Outlook & Guidance

Dundee Precious Metals remains optimistic about its future prospects. The company aims to achieve 600,000 gold equivalent ounces by the end of 2028, supported by favorable gold prices and strong margins across its portfolio. The Adriatic acquisition, expected to close in Q4 2025, is anticipated to enhance growth potential. The company plans to update its three-year outlook post-acquisition.

Executive Commentary

"We continue to deliver strong results and with both mines on track to achieve our 2025 guidance," stated David Ray, CEO. He emphasized the company’s robust free cash flow generation and shareholder returns. Ray expressed excitement about the company’s future, highlighting a clear path forward.

Risks and Challenges

• Rising all-in sustaining costs could impact profitability.
• Dependence on favorable gold prices for sustained margins.
• Potential delays in project developments, such as the Choco Rikita Project.
• Market volatility and macroeconomic pressures could affect investor sentiment.
• Regulatory challenges in new regions of operation.

Q&A

During the earnings call, analysts inquired about the Adriatic acquisition, with management confirming no changes to expectations. Questions also focused on the Ada Tepe mine closure planned for Q2 2026 and the secured environmental permit for Loma Larga, which management confirmed would not impact operations.

Full transcript - Dundee Precious Metals Inc (DPM) Q2 2025:

Conference Operator: Good day and thank you for standing by. Welcome to the Dundee Precious Metals Second Quarter twenty twenty five Earnings Conference Call. At this time, all participants are in a listen only mode. Please be advised that today’s conference is being recorded. After the speakers’ presentation, there will be a question and answer session.

I would now like to hand the conference over to your speaker today, Jennifer Cameron.

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 the Dundee Precious Metals second 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 meanings under IFRS and may not be comparable to similar measures presented by other companies. The definitions established in 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. I’m pleased to provide you with an overview of our second quarter results to provide insights into our achievements during this period. We’re about to report that DPM delivered record financial results during the quarter, including record revenue, earnings, and free cash flow, results which reflect reliable high margin production from our portfolio and the strength of the current gold price environment. This has been a defining quarter for DPM, not only in terms of our record results, but strategically as our proposed acquisition of Adriatic announced in June creates a premier mining business to deliver peer leading growth. The response to the proposed transaction from both our investors and the broader market has been notably positive, which I believe highlights the clear strategic merits of the deal.

The Virus operation is an excellent fit with our operating expertise and financial strength, and its addition to our portfolio offers a clear and compelling value proposition for all of our shareholders. This represents a key next step in our growth strategy and consolidates our position as a mid tier precious metals producer. The shareholder vote to approve the transaction is scheduled for August 13, and we’ve submitted the documentation for the Bosnian Merger Council. We continue to anticipate closing the transaction in the fourth quarter. Turning now to the highlights from the second quarter, which include solid production of 61,000 ounces of gold and 6,400,000 pounds of copper, generating strong margins with an all in sustaining cost of a thousand and $11 per ounce of gold sold compared to an average realized gold price of $3,334.

And we continue to consistently deliver free cash flow, generating a record $95,000,000 during the quarter and further strengthening our financial capacity to fund growth. We also continue to advance our organic growth pipeline, 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 47,000 ounces of gold and 6,400,000 pounds of copper with an all in sustaining cost of $682 per ounce of gold sold. Cash costs of $63 per ton 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 mound in mine and brownfields exploration work to further extend mine life at Chelopech, targeting a ten plus year reserve life.

During the quarter, results from initial drilling at the wedged zone deep target discovered a new zone a 150 meters downhole of contiguous pyrite rich high sulfidation mineralization. The target, remains open in multiple directions, is located within the northern flank of Challopatch within the mine concession and 300 meters below existing mineral reserves. We’re increasing the 2025 Chelopech exploration program in part to expand the scope of this mineralization and to define the geological setting and structural context. In addition, 12,000 meters of exploration drilling has been planned to test this target’s vertical extent and continuation along strike as well as continuing to test the mineral potential of the shallow levels on the northeastern and southern flanks of the Chelopech Mine concession. Drill testing of newly generated targets has already commenced and will continue to year end 2025.

Ada produced 14,200 ounces of gold with an all in sustaining cost of $1,166 per ounce of gold sold. 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 in the IMWF. With higher production expected in the second half of the year, Ada Tepe is on track to achieve its guidance. We continue to focus on developing quality assets, and our growth priority is advancing Choco Wakita two production, which is targeted for 2028. The feasibility study is advancing as planned and is expected completed by year end.

Most of this surface and underground geotechnical and hydro hydrogeological drilling is now complete. Activity activities planned for the remainder of 2025 in support of a construction decision in mid twenty twenty six include progressing the design to the basic engineering level, advancing the project execution readiness, and commencing operational readiness activities, leveraging Chokravikiva’s regional proximity to Chelopech to train and develop key personnel for operating roles. In parallel, permitting activities continue to advance. We submitted the final report on mineral reserves and mineral resources, known as the elaborative reserves, to the relevant authorities in the first quarter and continue to engage with relative stakeholders regarding the spatial effect. In terms of camp wide exploration, our drilling program focused on testing high priority targets proximal to our ChocoBaquita project, and that continues to yield results from a large prospective land package.

At Dimitroplattok, results are continuing to confirm the presence of a large high grade copper gold silver SPAM system with mineralization concentrated along both the eastern and western 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 Dimitra Potok discovery announced in February 2025, and we have yet to define its limits as it remains open in multiple directions and at depth. We’re also advancing drilling at the Rakita North and Vallesaca prospects and look forward to providing further updates on our progress likely in the third quarter. At the Loma Laga project in Ecuador, we achieved a significant milestone with the receipt of the environmental license in June.

This follows the successful completion of the prior informed indigenous consultation process in May and is the result of a rigorous process by the government to ensure high Ecuadorian standards are applied in the development of mining projects. Negotiations for the exploitation agreement have been initiated, and we’re also planning a 23,000 meter drilling campaign for Olamalaga. This program will prioritize geotechnical and hydro hydrogeological monitoring holes as well as metallurgical and resource infill drilling and is expected to commence in q three. Overall, we continue to deliver strong results and with both mines on track to achieve our 2025 guidance and execute on our strategy to deliver above average returns for our stakeholders. 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, provide an update on how we are tracking to our guidance for the year as well as any changes and conclude with any 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 results, second quarter highlights include revenue of $186,000,000 adjusted net earnings of $88,000,000 or $0.52 per share, cash flow provided from operating activities of $100,000,000 and free cash flow of $95,000,000 Overall, we saw record financial results during the quarter, which reflected our strong operating performance, the low cost nature of our operation, and a favorable commodity price environment. Looking at our earnings and cash flow in more detail, revenue of $186,000,000 in the quarter was 19% higher than 2024 due to higher realized metal prices, partially offset by lower volumes sold at Ada Tepe.

Adjusted net earnings in the second quarter of $88,000,000 or $0.52 per share increased compared to the prior year due primarily to higher revenue and lower valuation expenses as a result of costs related to the ChocoRaquita project now being capitalized due to the project’s advancement to the feasibility study stage. This was partially offset by higher costs, primarily related to higher mark to market adjustments to share based compensation expenses, reflecting DPM’s strong share price performance this year. Cash flow provided from operating activities of $100,000,000 for the quarter was lower than the prior year, mainly due to the timing of collections from sales and payments to suppliers. Free cash flow, which is calculated before changes in working capital, was $95,000,000 for the quarter, an increase of 12,000,000 compared to 2024 due primarily to higher adjusted net earnings generated in the quarter. Taking a look at our cost metrics.

All in sustaining costs for the first half of the year of $11.18 dollars per ounce of gold sold was 41% higher than the prior year due primarily to lower volumes of gold sold, higher mark to market adjustments to share based compensation expenses, lower by product credits reflecting lower volumes of copper sold, and a stronger euro relative to the US dollar, all partially offset by lower freight charges. Given our strong share price performance in the first half of the year, the mark to market adjustments to share based compensation expenses resulted in an increase of $138 per ounce of gold sold compared to an increase of only $26 per ounce of gold sold in 2024. We reconfirmed our 2025 guidance for all in sustaining costs of $780 to $900 per ounce of gold sold, with lower cost per ounce expected in the second half of the year commensurate with the nearly doubling of production from Ada Tepe. Keeping in mind that our all in sustaining cost guidance remains subject to external factors such as the mark to market impact of BPM share prices, as well as metal prices and foreign exchange movements relative to our guidance assumptions.

In terms of our capital spending, sustaining capital expenditures of 6,000,000 for the the quarter were lower than 2024 due primarily to lower expenditures on mobile equipment at Chelopech as expected, partially offset by higher deferred stripping costs as a result of higher stripping ratios at Ada Tepe in line with the mine plan. Growth capital expenditures of $16,000,000 for the quarter were higher than 2024 as a result of costs related to the ChocoRiquita project being capitalized from the beginning of 2025. Last night, we provided an updated three year outlook supporting our continued focus on funding our high quality organic growth pipeline while maintaining our portfolio of high margin operations, which has generated our exceptional track record of delivery. The three year outlook remains unchanged, except for the following updates to the company’s guidance for 2025. Growth capital expenditures related to the Loma Larga project are now expected to be between 23,000,000 and 25,000,000, up 11,000,000 due to primarily the receipt of the environmental license for exploitation, representing an important milestone, allowing the company to resume drilling at Loma Larga.

In addition, based on positive results, exploration expenses are now expected to be between $44,000,000 and $49,000,000 up $8,000,000 to support exploration activities associated with near mine exploration on the Chelopech mine concession and drilling at the Brevinae exploration license. The company’s three year outlook does not reflect the potential impact of the proposed acquisition of Adriatic. Upon closing of the transaction, we intend to update our production and cost guidance along with other key operational and financial metrics to incorporate the contribution of Adriatic on a gold equivalent basis. This approach ensures our guidance remains transparent, reliable, and aligned with the timing of the transaction. We continue to maintain a strong balance sheet and cash flow position with a consolidated cash balance of $332,000,000 restricted cash pursuant to the agreement to acquire Adriatic of $465,000,000 no debt, and a $150,000,000 undrawn revolving credit facility.

Given the strength of our balance sheet and our positive outlook for continued strong free cash flow generation, we are in a unique position with the financial flexibility to fund growth opportunities such as the acquisition of Adriatic and our investments in our development and exploration activities, while continuing to return a portion of our free cash flow to our shareholders in line with our commitment to capital discipline. In the 2025, we repurchased 10,000,000 shares at a total cost of 116,000,000 under the company’s normal course issuer bid or NCIB and paid approximately 14,000,000 of dividends. In closing, we continue to deliver strong performance from our mining operations. We are focused on growth, and we’re in a strong cash position to achieve our guidance to continue our track record of generating significant free cash flow. I’ll now turn the call back to Dave for his concluding remarks.

David Ray, President and CEO, Dundee Precious Metals: Thanks very much, Navin. Overall, we continue to deliver sorry. Excuse me. This is an exciting time for DPM and our shareholders as we look to our future as a growing precious metals producer, offering a peer leading development pipeline, a strong balance sheet, and capital returns, all of which are underpinned by our exceptional operational track record. Our portfolio is generating solid consistent results, and we are very well positioned as one of the lowest cost, highest growth producers.

We’re generating strong free cash flow and delivering peer leading returns to shareholders. We’re progressing Choka Rikita and its feasibility study for an accelerated construction decision. We have substantial financial strength to fund growth opportunities and exploration, and we’re focused on executing our strategy to deliver above average returns for our 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. As a reminder, to ask a question, please press 11 on your telephone Our first question comes from Wayne Lam with TD. You may proceed.

Wayne Lam, Analyst, TD: Hey, good morning guys. Just a question on the Adriatic deal. Obviously, guys have done a lot of work around the due diligence process with the independent study in conjunction with the acquisition. Just wondering if you can maybe comment on the most recent update there and the revision guidance post the announcement. And then just curious in the month leading up to the closing, how much input or influence will you have in terms of the operations given your reinterpretation of what’s needed to get get the mine to a steady state?

David Ray, President and CEO, Dundee Precious Metals: Yeah. Thanks for the question, Wayne. First of all, you know, the update in the second quarter, that changes nothing on our view on, virus. You know, we’d anticipated and, you know, made our own assessments of what we expected, and this was in line. In terms of your second question, which was, you know, what’s gonna happen just ahead of closing, it’s important that we recognize that we need to operate as independent companies.

And, you know, while we are talking about things that we might do technically and opportunities in terms of learning for adriatic as their decision as to whether they do or do not take advantage of people. So we’re maintaining an appropriate distance, but, of course, we are talking about integration and how we might go about doing that. But as I just to repeat, we are separate companies and we have to remain so until closing.

Wayne Lam, Analyst, TD: Great. Thanks. And then maybe at Ada Tepe, you guys have been fairly consistent in terms of guiding the wind down in operation next year. But just wondering, given the significant change in the gold price, particularly versus the $1,600 resource price assumption. Would you see any possibility for additional material via an incremental layback?

Or and then just maybe curious if there might be any renewed potential to perhaps consider processing ore from other deposits within a reasonable truckable distance.

David Ray, President and CEO, Dundee Precious Metals: Yeah. Wayne, in terms of obviously, we keep track of what’s going on, and we make sure that whatever we’re treating is economic at any point. If the share price were to go the other way, similarly, we understand, you know, what’s going on in terms of what will happen with an increased share price, and the answer simply is no. So it’s not gonna change the the outlook. So we do keep track of that.

We do anticipate that we will close out at Etepe in the second quarter of next year. Also, we’re not considering the idea of using this as a custom mill, treatment facility for other other, let’s say, potential mice.

Wayne Lam, Analyst, TD: Okay, got it. Thanks. And then, maybe just last one, at Loma Larga, obviously some good news here in terms of the environmental license. Just wondering with the restart drilling and the upcoming, update fees, how quickly could that asset now be moved forward to a potential construction decision? And has the relationship with the community evolved to where they would be fully on board to greenlight the project if, say, you were just to decide to build it tomorrow?

David Ray, President and CEO, Dundee Precious Metals: Okay. So we obviously need to go back to drilling. So starting with that, we have, 22, 23,000 meters of drilling planned. This is gonna be primarily focused on g geotech and hydrogeological information as well as condemnation. So that’s to support the final decisions within the feasibility.

That’s gonna take, let’s say between the feasibility and the drilling, somewhere north of six months for the the information to be brought in. So then the reporting, you’re looking at least another six months. So we’re some way out. So, basically, you know, watch this space in terms of what drilling is progressing and when we’re actually ready to bring that into the feasibility study. In terms of the second part, the relationship, this is an ongoing thing where you’re continuing to develop the relationship, with the local communities.

And there are concerns that you have to address and overcome in the sense of people’s perceptions of what might happen, which unfortunately are colored by other unfortunate situations with illegal and informal informal mining in country. So, you know, we continue to build that. We have time until we get to a point where there is a construction decision and anticipate success in bringing forward all of our stakeholders such that we can start constructing and bring to fruition Loma Laga in good time.

Wayne Lam, Analyst, TD: Okay. Got it. Alright. Yeah. Thanks for taking my questions.

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

Conference Operator: Thank you. Our next question comes from Fahad Tariq with Jefferies. You may proceed.

Fahad Tariq, Analyst, Jefferies: Hi. Thanks for taking my question. Maybe just continuing on the theme of Loma Larga. Now that you’ve derisked it with the environmental permit and you’re doing some additional drilling in the second half of this year, maybe talk about how Loma Larga fits into the rest of the portfolio as a priority? I mean, it stands out a bit, I guess, geographically.

And maybe think about, is that something that you think would be core to the portfolio longer term, or is that something that you’re looking maybe to monetize after it’s been derisked some more?

David Ray, President and CEO, Dundee Precious Metals: Yeah. Thanks, Fahed. So if we have a look at Loma Laga. So, historically, we’ve been progressing this project at the pace that we can. There’s been some necessary steps in terms of information that we needed to provide, which we’ve now completed, and also the fire informed consultation, all of which have been completed, and now successfully got the EIA in conversations with the government about the exploitation permit.

So in terms of fit, we’d always identified this asset as a good fit, actually, with our skill set. And this, you know, some years, like, well before we acquired the asset back in 2021. You know, clearly in proximity of our existing operations, Choka Rikita and the other opportunities in Serbia and now in Bosnia And Herzegovina, these these things obviously stand out in terms of the opportunity to realize value through proximity, expertise, you know, of deployment of capital and this type of thing. But we do see Loma Laga as an asset that will bring value to the organization. So we’ll continue to pursue that to a point where we’re expecting to construct and operate.

We will, of course, as we do with all of our assets, consider strategically what’s the best thing for the organization going forward. But at this point, we anticipate construction and realizing production.

Fahad Tariq, Analyst, Jefferies: Okay. That’s clear. And then maybe just a housekeeping item. When when is the updated feasibility study expected again for Loma Llorida? I know it was the second quarter, but then it got pushed out with the with the Adriatic transaction.

So just what’s the most recent timeline?

David Ray, President and CEO, Dundee Precious Metals: Well, that remains the case. At this point, you know, we’ll look to release that at an appropriate time so that information is available. Recall it was not a complete feasibility update. It was only focused on the capital increases, since the IND study plus impacts on OpEx and metal prices, but it did not take into account updates to reserves and resources due to cutoff grade changes. So part of the 22,000 meters will do some work actually on that.

So the next feasibility update, I would anticipate cutoff grade change, result the results implications, and then the capital and OpEx coming to a full feasibility study. So in terms of timing, you know, we’re anticipating at this point that that is something that will come out later potentially at the end of the transaction when we when we close the transaction with Adriane.

Donald DeMarco, Analyst, National Bank: Okay. Great. Thank you. Thank

Conference Operator: you. Our next question comes from Eric Windmill with Scotiabank. You may proceed.

Eric Windmill, Analyst, Scotiabank: Hey, good morning, David and team. Thanks for taking my question. Just wanted to follow-up quickly on Serbia. You’re increasing exploration budget there. I guess you’re liking what you’re seeing.

And maybe on this Tulare exploration license, which we don’t hear a whole lot about, any comments there? And also, I guess, seeing some forest fires in country, I’m assuming you’re still not seeing any impact from those. Thank you.

David Ray, President and CEO, Dundee Precious Metals: Yep. So we, you know, continue to find Serbia an attractive destination to do the work that we do within this since 02/2004. So we have a long track record for the local communities and the authorities. Clearly, exciting in terms of exploration upside. I think, you know, the where we’re really focusing our attention at this moment is at a kilometer depth, so it takes a little longer to be able to get information that we can share in terms of what’s happening.

We have indicated that drilling does continue to, omit Dimitra Potok with an intent to expand the, the view on that discovery. And, you know, at this point, we’ve communicated that it’s a one kilometer strike length, 300 meter depth at a minimum, and 500 meter width. So it is very exciting. We anticipate there’ll be more information coming on this in the form. In terms of TULARI, we have done work on this.

Historically, there were two different companies that we brought in under one name. These were assets we’ve been involved in since 02/2004, but other people were directing that work through until 2016 when we took them both back in. Telari was a copper focused asset as opposed to Havala, which was more gold focused. So we’ve done some work on this during the course of the year. I believe we’re 3,300 meters to do a 6,600 meter drill program.

So by the end of the year, we’ll have a sense of, you know, what this is, but it it it has, we would see that. And if you look at prior technical reports, they’ll tell you the same thing. So it’s a big lower grade asset that we’re trying to just fully understand with the idea being that we want to realize the value of these sort of hidden gems in our portfolio.

Eric Windmill, Analyst, Scotiabank: Okay. I appreciate that. And forest fires, again, no impact in country at this point? Or

David Ray, President and CEO, Dundee Precious Metals: Oh, yeah. Sorry, Eric. I didn’t answer that. The answer is no. We obviously watch watch for that.

We’ve got forest fires in both Bulgaria and Serbia, so the answer is no. We continue to support the authorities and groups around us to do what we can as stakeholders within our communities to make sure that not only our assets are protected, but our stakeholders around us are as well.

Eric Windmill, Analyst, Scotiabank: Okay. Great. Noel, I really appreciate that. Noel, thanks very much. I’ll hop back in the queue.

Okay. Cheers.

Conference Operator: Thank you. Our next question comes from Donald DeMarco with National Bank. You may proceed.

Donald DeMarco, Analyst, National Bank: Thank you, operator, and good morning, David and team. My first question is for Navin. So Navin, see the $465,000,000 that’s been moved into restricted cash ahead of an Adriatic closing. Can you comment on this in the context of the $437,000,000 cash component of the purchase price and the $200,000,000 in closing costs and debt repayments and so on that were in addition to that? So is that restricted cash amount enough?

Navin Dial, Chief Financial Officer, Dundee Precious Metals: Hi, Don. Yeah. It’s not the restricted cash amount is actually just covering off the the the costs that we will incur as a result of the transaction costs, you know, related to basically acquiring Adriatic. It also includes a very, small amount for, stamp duties as well as for, certain transaction related costs. So it does not cover the full debt repayments that, otherwise we’re contemplating for, repaying certain of Adriatic’s debt.

Now that would just come out of our regular cash balance post transaction, but we’re required under the The UK rules to set aside the cash component of the transaction, and that’s what you’re seeing there.

Donald DeMarco, Analyst, National Bank: Okay. Thank you. Then I’ll just shift over to Chokuwakita. So, David, with the FS pending release in Q4, what are the next steps after that? Will this be followed by a go forward decision?

Do you expect to start spending CapEx Q4 or Q1 twenty twenty six? And if you could just remind us again in the context of Adriatic, is is ChocoRaquita internally funded, or would you look for potential external sources of funding to to round that out?

David Ray, President and CEO, Dundee Precious Metals: Okay. So the next steps are that, we’re completing the feasibility at the same time we’re working on a serving feasibility, an additional step in addition to completing the certificate of resources and the exploitation permit. We anticipate an EIA, which is an application that goes in at the end of the year. That’s the key thing then once we’re into the new year. We anticipate all of that completed in a construction decision at midyear, so starting to build in midyear.

Some of the of the costs in terms of capital along the by the fact we intend to reuse equipment from Ada Tepe, as as you know, so a good amount of assist equipment from there. So, you know, other acquisitions, we can I think we’ll talk about that more in due course, I think the key thing at the moment is to see that we’re on track, anticipate that we’ll, basically get permission, internally to start building and externally to start building and that’ll start happening in Q3 next year? Yeah. And,

Navin Dial, Chief Financial Officer, Dundee Precious Metals: yeah, Don, we have we’re, you know, very confident in our ability to fund, Chokratiquita internally, as well as, know, based on the cash flow and the capital requirements. So we’ll be focused on the ramp up of of various and ensuring Chokratiquita remains on track.

Donald DeMarco, Analyst, National Bank: Okay, great. Thanks for that. And David, I think maybe you just mentioned the word acquisition. With that, with ChocoRiquita development about to commence Adriatic ramping up subject to the deal closing. You know, what what is Dundee’s, M and A priority and focus over the next year or so?

Is it on the back burner for the time being, or is it, I think that’s what you might have alluded to, but if you just clarify. Thank you.

David Ray, President and CEO, Dundee Precious Metals: Yeah, Don. I wasn’t actually alluding to that. The we’ve got a very exciting organic growth portfolio. You know, that’s what we had already with Chokoriki, the potential Dimitra Flotsop going forward, Loma Laga. And then on top of that, we’ve got the 4,400 hectares around operations plus some additional sort of regional potential there.

So that’s all pretty exciting for us. But we we do the same as we have done historically. We look for opportunities where there are assets which may create value within the company. I would say that’s a little less of something that’s on the front burner now, but, you know, it’s something that we do consistently over time. If we find the right asset, we will consider that.

But right now, I would say that, you know, we’ve managed to really change our outlook. So we’ve published information that shows that we’re looking for 600,000 ounces gold equivalent by the end of well, really by the time the Choco Liquita comes online. So as you sort of exit ’28 going into ’29 and that’s without Loma Lago, which is another 175,000 ounces or so for a year over ten years. So that’s a really exciting portfolio to sort of have in front of us. And I think the one thing that perhaps, people don’t realize is that it’s carrying on at that same margin that we have from Challopech and Aditya and Chokoriki to at $6.44, Viretia just under $9 and so on.

Donald DeMarco, Analyst, National Bank: Yeah. Yeah. Certainly, that’s not lost on us. And so as a final question, will you be releasing three year guidance as you have in or three year outlook as you have in the past? So with the next update, we might see Adriatic perhaps if it’s subject to deal closing, and then might even catch a catch a little bit of ChocoVaquita?

Navin Dial, Chief Financial Officer, Dundee Precious Metals: Yeah. Absolutely, Don. So the plan would be

David Ray, President and CEO, Dundee Precious Metals: that if we include the

Navin Dial, Chief Financial Officer, Dundee Precious Metals: acquisition of Adriatic, we would release updated three year outlook. And to the extent that there is updated information, you know, around Loma Larga in terms of the technical report as well as if the feasibility study has been complete for for Chocoquito, we would certainly update that. Let’s update that as well.

Donald DeMarco, Analyst, National Bank: Okay. Thank you very much. That’s all for me, and, good luck with the rest

Navin Dial, Chief Financial Officer, Dundee Precious Metals: of the quarter, guys.

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

Conference Operator: Thank you. I would now like to turn the call back over to Jennifer Cameron for any closing remarks.

Jennifer Cameron, Director of Investor Relations, Dundee Precious Metals: Well, thanks, everyone, for joining us. If you have any further questions, please feel free to reach out. And for those of us in Ontario, hope you guys have a safe and and happy long weekend. We’ll talk to you next quarter. Thank you.

Conference Operator: Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.