A N N U A L R E P O R T 2 0 2 3
FOUNDATION
FOR GROWTH
ABOUT DUNDEE PRECIOUS METALS
Dundee Precious Metals Inc. is a Canadian-based international gold mining company with operations and
projects located in Bulgaria, Namibia, Ecuador and Serbia. The Company’s purpose is to unlock resources and
generate value to thrive and grow together. This overall purpose is supported by a foundation of core values,
which guides how the Company conducts its business and informs a set of complementary strategic pillars and
objectives related to ESG, innovation, optimizing our existing portfolio, and growth. The Company’s resources
are allocated in-line with its strategy to ensure that DPM delivers value for all of its stakeholders. DPM’s shares are
traded on the Toronto Stock Exchange (symbol: DPM).
CORPORATE
HEAD OFFICE
Location
Toronto, Canada
TIMOK
Gold project
Location
Serbia
Ownership
100%
Stage
Feasibility study
CHELOPECH
Gold-copper
mine
Location
Chelopech, Bulgaria
Ownership
100%
Stage
Producing
ČOKA
RAKITA
Gold project
Location
Serbia
Ownership
100%
Stage
Preliminary
economic
assessment
TIERRAS
COLORADAS
Exploration
Location
Loja, Ecuador
Ownership
100%
ADA TEPE
Gold mine
Location
Southern Bulgaria
Ownership
100%
Stage
Producing
LOMA
LARGA
Gold-copper
project
Location
Southern Ecuador
Ownership
100%
Stage
Permitting
TSUMEB
Specialty
smelter
Location
Tsumeb, Namibia
Ownership
98%
Operation
Specialty smelter
PRODUCTION AND
FINANCIAL HIGHLIGHTS
All operational and financial information contained in this report are related to
continuing operations, unless otherwise noted.
Gold Contained in
Concentrate Produced
(Koz.)
Copper Contained in
Concentrate Produced
(Mlbs.)
Cost of Sales
($ per Au oz. sold)1
All-in Sustaining Cost
($ per Au oz. sold)1
310
296
273
35
31
31
819
975
919
885
849
657
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
Net Earnings Attributable
to Common Shareholders
from Continuing Operations
($M)
Adjusted Net Earnings
($M)1
Cash Provided from
Operating Activities
($M)
Free Cash Flow
($M)1
204
182
215
117
180
119
262
228
228
251
210
150
2021
2022
2023
2021
2022
2023
2021
2022
2023
2021
2022
2023
1 Cost of sales per ounce of gold sold represents Chelopech and Ada Tepe cost of sales divided by the payable gold in concentrate sold. All-in sustaining cost per ounce of gold
sold; adjusted net earnings; and free cash flow are 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. Refer to the “Non-GAAP Financial Measures” section of the Management’s Discussion and Analysis (“MD&A”) for the year ended
December 31, 2023, contained in this report commencing on page 57, for a detailed description and reconciliation of each of these measures to the most directly comparable
measure under IFRS.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 1
2023 PERFORMANCE
HIGHLIGHTS
2023 was another very strong year for DPM. We delivered strong operating results and robust free cash flow
generation, significantly increased our return of capital to shareholders, and further strengthened our balance
sheet, providing an excellent platform for our future growth, which we significantly transformed during the year
with the discovery of Čoka Rakita in Serbia. Importantly, we also maintained the high standards for sustainability
performance that are core to our culture.
OPERATING
PERFORMANCE
FINANCIAL
PERFORMANCE
ADDING VALUE
TO OUR PORTFOLIO
STAKEHOLDER
VALUE
ACHIEVED ANNUAL
GUIDANCE
296,000
ounces of gold
31M
pounds of copper
INDUSTRY-LEADING
COST PERFORMANCE
$919/OZ.
cost of sales per ounce of
gold sold1
$849/OZ.
all-in sustaining cost per ounce
of gold sold1
ROBUST
CASH FLOW
$262M
cash provided from operating
activities from continuing
operations
$228M
free cash flow1
ČOKA RAKITA
1.8M OZ.
declared Maiden Inferred
Mineral Resource within 1-year
of discovery2
ADVANCED
the project to a preliminary
economic assessment
RETURNING
CAPITAL
$96M
in dividends & share
repurchases
42%
of free cash flow1
returned to shareholders
SOLID ADJUSTED
EARNINGS
$182M
net earnings attributable to
common shareholders from
continuing operations
$180M
adjusted net earnings1
FINANCIAL
STRENGTH
$595M
cash on the balance sheet as at
December 31, 2023
NO DEBT
CHELOPECH
+1 YEAR
extended mine life to 2032 and
advanced brownfields exploration
EXPLORATION
RESULTS
highlighting potential future
opportunities
STRONG
ESG RATING
91ST
PERCENTILE
in the 2023 S&P Global
Corporate Sustainability
Assessment for the 3rd
consecutive year
ECUADOR
ADVANCED
activities related to permitting
and stakeholder relations at
Loma Larga
ONGOING
DRILLING
campaign at the Tierras
Coloradas exploration prospect
1 Cost of sales per ounce of gold sold represents Chelopech and Ada Tepe cost of sales divided by the payable gold in concentrate sold. All-in sustaining cost per ounce of gold
sold; adjusted net earnings; and free cash flow are 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. Refer to the “Non-GAAP Financial Measures” section of the MD&A for the year ended December 31, 2023, contained in this
report commencing on page 60, for a detailed description and reconciliation of each of these measures to the most directly comparable measure under IFRS.
2 With a cut off grade of 5.7g/t. See technical report titled “Maiden Mineral Resource Estimate – Čoka Rakita Gold Project, Serbia” with an effective date of November 16, 2023
and a report date of January 24, 2024 for further details.
2 DUNDEE PRECIOUS METALS ANNUAL REPORT 2023
SOLID THREE-YEAR
OUTLOOK
Our updated three-year outlook reflects annual average production of approximately 240,000 ounces of gold
and 33 million pounds of copper1, with an all-in sustaining cost profile that continues to rank DPM as among the
lowest cost producers. With a solid production profile, significant free cash flow generation and a strong balance
sheet, DPM is well-positioned to continue delivering value for shareholders.
Strong Gold
Production
Gold contained in concentrate
produced (Koz.)
Stable Copper
Production
Copper contained in concentrate
produced (Mlbs.)
Attractive All-in
Sustaining Cost Profile
All-in sustaining cost ($/oz. Au)2
245
to
285
230
to
270
296
31
to
36
30
to
35
29
to
34
$790
to
$930
$720
to
$880
$760
to
$900
190
to
220
31
$849
2023A
2024
Guidance
2025
Outlook
2026
Outlook
2023A
2024
Guidance
2025
Outlook
2026
Outlook
2023A
2024
Guidance
2025
Outlook
2026
Outlook
1 Annual average for the next three years. Guidance and three-year outlook is subject to a number of risks. Refer to the Company’s 2024
guidance and three-year outlook as disclosed on pages 24 to 27 of the MD&A for the year ended December 31, 2023, contained in this report.
2 Projections of all-in sustaining cost per ounce of gold sold is a non-GAAP ratio and is not a defined or standardized measure under IFRS.
Refer to the “Non-GAAP Financial Measures” section contained in the MD&A for the year ended December 31, 2023, contained in this report,
commencing at page 60 for a detailed description and a reconciliation to the most directly comparable measure under IFRS.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 3
FOUNDATION
FOR GROWTH
Dear Shareholders
DPM had an exceptional year in 2023. We demonstrated our
capability as a leading mid-tier gold producer with strong
operational results and robust free cash flow, and we also made
an exciting high-grade gold discovery, adding a major organic
asset to our growth portfolio.
With strong overall gold production, we met our guidance while also setting a new gold production record
at Ada Tepe. Despite industry-wide inflationary pressures, we successfully managed costs and maintained
our position as one of the lowest cost gold producers. Our strong performance combined with a favourable
gold price translated into robust free cash flow, allowing us to reinvest in the Company and also return a
significant amount to our shareholders through our dividend and share buyback programs. The high-grade
gold discovery and aggressive drilling program at Čoka Rakita in Serbia resulted in a maiden Inferred
Mineral Resource estimate, creating the potential for significant organic growth in the vicinity of our existing
operations, while we also extended the mine life at Chelopech.
Inherent to our purpose as a company, we aim to thrive and grow together with all our stakeholders, and our
values and commitment to high standards for sustainability continued to guide our conduct at every level. We
finished 2023 with an overall sustainability performance that ranked in the 91st percentile according to the
S&P Global Corporate Sustainability Assessment.
REVIEW OF 2023 PERFORMANCE
In 2023, we produced 296,072 ounces of gold and 30.5 million pounds of copper at an all-in sustaining
cost of $849 per ounce of gold sold. This combination of strong production and low costs generated
significant free cash flow of $228 million of which $96 million was returned to shareholders through
dividends and an enhanced share buy back program. We ended the year with $595 million in cash and
no debt.
In January 2023, we announced a major high-grade discovery at Čoka Rakita, located just three kilometres
from our Timok gold project in Serbia and in regional proximity to our Chelopech mine in Bulgaria. By early
December, we had declared an Inferred Mineral Resource estimate at Čoka Rakita of 1.8 million ounces of
gold. At Loma Larga, we completed an Investment Protection Agreement with the Government of Ecuador
while we worked to advance permitting, optimize our project feasibility study, and build on our relationship
with local communities.
CHELOPECH: EXTENDING THE LIFE OF OUR LOW-COST FLAGSHIP OPERATION
December 2023 marked the 20-year anniversary of DPM’s acquisition of Chelopech. We are extremely
proud of our team and their deeply ingrained culture of high performance and innovation, which over the
years has transformed the mine into a truly world-class, low-cost operation. Chelopech continued its record
of strong, reliable production in 2023, producing 161,872 ounces of gold and 30.5 million pounds of copper
and achieving its annual guidance.
4 DUNDEE PRECIOUS METALS ANNUAL REPORT 2023
DAVID RAE
President and CEO
In January 2023, we
announced a major
high-grade discovery
at Čoka Rakita, located
just three kilometres
from our Timok gold
project in Serbia.
Another key accomplishment at Chelopech has been its long history of extending mine life. In November
2023, we announced a further mine life extension to 2032, along with an optimized life of mine (”LOM”)
plan and updated Mineral Resource and Mineral Reserve estimate. The new LOM plan adds approximately
128,000 ounces of recoverable gold and 9 million pounds of recoverable copper between 2024 and 2032.
During this period, gold and copper grades are expected to increase by 5% and 3%, respectively, and
recoveries for gold by 5%.
We remain focused on further extending Chelopech’s mine life through in-mine exploration and an
aggressive brownfield exploration program, and we are encouraged by positive results from our recent
drilling campaign.
ADA TEPE: ACHIEVES RECORD PRODUCTION
Ada Tepe is one of the highest grade and lowest cost open pit mines in the world. In 2023, Ada Tepe not
only achieved its gold production guidance, it also set a new record with output of 134,200 ounces of gold,
a 43 per cent increase over 2022. Ada Tepe’s all-in sustaining cost was particularly impressive and was
below the low-end of the guidance range for the year.
Exploration activities at Ada Tepe in 2023 were focused on a resource extension drill program and other
satellite targets on the mine concession, while in the second half of the year we began a 15,000-metre
brownfield drilling campaign at the newly granted Krumovitsa exploration licence.
TSUMEB: DIVESTING TO FOCUS ON DPM’S CORE MINING BUSINESS
In early March of 2024, DPM announced the sale of the Tsumeb smelter to a subsidiary of Sinomine Resource
Group Co. Ltd. (“Sinomine”) for consideration of $49 million. The transaction is expected to close in the third
quarter of 2024.
Given our plan to process all Chelopech concentrate at other third-party smelters beginning in 2024, Tsumeb
was no longer strategic to DPM’s portfolio, and its sale allows DPM to increase our focus and resources on
our core business of mining.
We would like to thank the government of Namibia, the community of Tsumeb and most importantly, our
employees for their support over the past 13 years. We will work closely with Sinomine to ensure a smooth
transition to support a successful future for the operation and all of its stakeholders.
Ada Tepe is one of
the highest grade and
lowest cost open pit
mines in the world.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 5
Our discovery at
Čoka Rakita in Serbia
early in the year
signalled a significant
organic addition to
DPM’s portfolio and
transformed our
prospects for the
future in a region.
BUILDING A STRONG FUTURE
ČOKA RAKITA: HIGH-GRADE ORGANIC GROWTH
Our discovery at Čoka Rakita in Serbia early in the year signalled a significant organic addition to DPM’s
portfolio and transformed our prospects for the future in a region where we have had a presence for many
years. In early December 2023, after only one year of drilling, we announced a maiden Inferred Mineral
Resource estimate of 9.8 million tonnes at a grade of 5.7 grams per tonne for 1.8 million ounces of gold. This
remarkably rapid development confirms the potential of Čoka Rakita as a high-quality gold project. We are
continuing to accelerate the project through our development pipeline, including advancing a Preliminary
Economic Assessment, scheduled for completion in the second quarter of 2024.
Čoka Rakita has the benefit of existing infrastructure, including close proximity to existing roads and power
lines. With metallurgical test work demonstrating gold recoveries of approximately 90%, the project will
also benefit from the nearby regional expertise in underground mining and processing from our Chelopech
operation in Bulgaria.
Planned exploration activities in 2024 include drilling with the goal of upgrading the current Mineral Resource
to the Indicated Mineral Resource category; infill drilling to test the extents of the Mineral Resource; and
additional exploration drilling on existing targets across four licences held by DPM surrounding Čoka Rakita.
LOMA LARGA: FUTURE GROWTH AND EXPLORATION POTENTIAL
Loma Larga in Ecuador is a high-quality underground gold copper development project with the potential for
meaningful gold production growth.
In 2023, we updated the feasibility study and continue to work on optimization opportunities for Loma Larga,
which includes leveraging our expertise with similar deposits such as Chelopech. We also entered into an
investment protection agreement with the Government of Ecuador, providing tax stability and incentives as
well as legal protections such as resolution of disputes through international arbitration.
We are continuing to engage with the government and neighbouring communities on activities related
to permitting for the project and stakeholder relations. During 2023, the Constitutional Court in Ecuador
provided clarity regarding the permitting process for the project, and together with the new government,
DPM is working actively to fulfill the requirements, including re-initiating the environmental consultation
process in March 2024.
At the Tierras Coloradas exploration project, also in Ecuador, we drilled approximately 6,500 metres of
the planned 10,000-metre campaign in 2023, and expect to complete the remainder by the end of the first
quarter of 2024.
We will continue to be disciplined with respect to future investment in Loma Larga and Tierras Coloradas,
which will be based on the overall operating environment in-country and the Company’s other capital
allocation priorities.
6 DUNDEE PRECIOUS METALS ANNUAL REPORT 2023
Our 20th anniversary celebrations
included our senior management
team, Board of Directors, special
guests, as well as representatives
of local communities in Bulgaria.
UNLOCKING RESOURCES AND GENERATING VALUE TO
THRIVE AND GROW TOGETHER
CELEBRATING 20 YEARS
IN BULGARIA
In December 2023, DPM was honoured to celebrate the 20-year anniversary of the
Company’s acquisition of its assets in Bulgaria. Over this period, we have transformed
the Chelopech mine into a modern and highly efficient operation, permitted and built
Ada Tepe into a mine that continues to exceed our expectations, developed a high-
performing local team and established strong relationships with local stakeholders.
We marked the occasion with a visit from our Board of Directors and a celebration
featuring many representatives from the local communities, governments and other
partnerships DPM has developed over our 20-year history in Bulgaria.
We take particular pride in our history of cooperative relations with local communities,
which are based on mutual trust and our focus on creating sustainable benefits to ensure
communities will continue to thrive well beyond the lives of our mines, in-line with our
purpose of unlocking resources and generating value to thrive and grow together.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 7
PROJECT SPOTLIGHT
ČOKA RAKITA, SERBIA
In January 2023, we announced a high-grade discovery at the Čoka Rakita
prospect in Serbia. Following an intensive drilling program, within 11 months,
Čoka Rakita rapidly grew into a 1.8 million ounce Inferred Mineral Resource.
This marked a significant milestone for DPM’s future growth and confirmed
Čoka Rakita’s potential as an attractive, high-quality gold project.
We plan to continue aggressively exploring at Čoka Rakita and the surrounding
licences to generate new discoveries, while also continuing to accelerate the
project through our development pipeline, including advancing a PEA which is
targeted for completion in the second quarter of 2024.
We are excited by Čoka Rakita’s potential in a region where we have had
a presence for many years and where we have developed strong relationships
with local stakeholders.
ČOKA RAKITA MINERAL RESOURCE ESTIMATE
Category
Inferred
Tonnes
(Mt)
9.79
Gold grade (g/t)
Contained
gold (Moz.)
5.67
1.78
HIGHLIGHTS
• In close proximity to excellent infrastructure
and DPM’s shared services in Bulgaria
• Amenable to gravity concentration and
flotation with high recoveries
• Favourable permitting environment and
supportive government (local and national)
• Matches DPM skill set and expertise
• Significant exploration upside
Refer to the news release dated December 11, 2023 and the Čoka Rakita technical report “Maiden Mineral Resource Estimate – Čoka Rakita Gold Project, Serbia”,
with an effective date of November 16, 2023, both of which are available on the Company’s website at www.dundeeprecious.com and on SEDAR+ at www.sedarplus.ca
8 DUNDEE PRECIOUS METALS ANNUAL REPORT 2023
BALANCE SHEET STRENGTH, DISCIPLINED CAPITAL ALLOCATION
In 2023, we generated $262 million of cash provided from operating activities and robust free cash flow of $228 million. We further
strengthened our balance sheet, increasing our cash position by $162 million to $595 million by year end.
We continued our strong track record of disciplined capital allocation, as well as returning excess capital to shareholders through
a sustainable quarterly dividend and share repurchases under our normal course issuer bid. In 2023, we returned $96 million to
shareholders, representing 42% of free cash flow, through $30 million in dividends paid and $66 million for share repurchases.
We are currently reviewing our capital allocation strategy with a view to balancing the need to fund our growth with returning capital
to shareholders. With our strong cash position, no debt, and a $150 million undrawn credit facility, we are in a unique position among
growing gold producers to fund our development pipeline internally while continuing to pay a quarterly dividend.
INDUSTRY-LEADING ESG
Our approach to sustainability is based on generating a net positive impact from our operations – minimizing environmental impact;
maximizing socio-economic value; nurturing trusted stakeholder relationships; and building sustainable livelihoods. Delivering
excellence in sustainability performance continues to be a competitive advantage that has helped DPM unlock real value and deliver
superior long-term returns for all of our stakeholders.
DPM’s long history in Bulgaria provides countless examples of these principles in action, – whether through our mutually beneficial
stakeholder relationships at Chelopech, or the extensive public consultation and engagement process that helped transform Ada
Tepe from a project into the first new mine permitted in the Balkans in over 40 years. In 2023, we were pleased to celebrate the
20th anniversary of DPM’s strong relationships in Bulgaria, including a visit from our Board of Directors and an event featuring many
representatives from the local communities, governments and other partnerships DPM has developed over its 20-year history in Bulgaria.
Our pursuit of superior ESG performance in 2023 was reflected once again in positive ratings from ESG rating agencies. DPM scored
in the 91st percentile among metals and mining companies in the 2023 S&P Global Corporate Sustainability Assessment for the third
consecutive year. We were also included in the 2024 Sustainability Yearbook, which features companies that scored in the top 15 per
cent of their industry.
UNIQUELY POSITIONED TO DELIVER SUPERIOR VALUE
Our current three-year outlook is for continued strong production from our operations with all-in sustaining costs remaining in the low
quartile for the industry. Looking further down the road, we are excited by the potential of the projects in our growth pipeline and
encouraged by our history of exploration success, while our financial strength positions us well to fund our existing projects as well as
assess potential new opportunities.
We continue to believe that DPM represents compelling value given our track record of delivering results and our unique combination
of strengths, including:
• Strong and consistent production from our operations;
• An all-in sustaining cost that ranks among the lowest in the gold industry;
• Strong free cash flow generation;
• A proven record of disciplined capital allocation and returning capital to shareholders;
• Attractive growth pipeline;
• The financial strength to internally fund our growth pipeline;
• Leading ESG performance; and
• A strong technical team with a history of adding value through innovation.
We are proud of what we accomplished in 2023 to deliver on our core purpose – to unlock resources and generate value to thrive and
grow together. We also believe that we are well positioned to continue delivering on this purpose for the benefit of all our stakeholders
in the coming years.
In closing, I would like to thank our dedicated global team for delivering a year of outstanding results, our neighbouring communities
for their continued partnership, and our shareholders for your ongoing support.
To all of you, we look forward to sharing a promising future together.
David Rae
President and Chief Executive Officer
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 9
ANNUAL REPORT 2023
TABLE OF CONTENTS
FOUNDATION FOR GROWTH
Production and Financial Highlights
2023 Performance Highlights
Solid Three-Year Outlook
Foundation for Growth
Celebrating 20 years in Bulgaria
Čoka Rakita, Serbia
MANAGEMENT’S DISCUSSION AND ANALYSIS
Overview
Operating and Financial Highlights
2023 Actual Results in Comparison to 2023 Guidance
Three-Year Outlook
Review of Operating Results by Segment
Development and Other Major Projects
Exploration
Review of Financial Results
Discontinued Operations
Market Review
Liquidity and Capital Resources
Financial Instruments
Off Balance Sheet Arrangements
Selected Quarterly and Annual Information
Critical Accounting Estimates
Non-GAAP Financial Measures
Risks and Uncertainties
Disclosure Controls & Procedures and Internal Control Over Financial Reporting
Cautionary Note Regarding Forward Looking Statements
Cautionary Note to United States Investors Concerning Differences in reporting of
Mineral Resource Estimates
MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING
INDEPENDENT AUDITOR’S REPORT
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Consolidated Statements of Earnings (Loss)
Consolidated Statements of Comprehensive Income (Loss)
Consolidated Statements of Cash Flows
Consolidated Statements of Changes in Shareholders’ Equity
1
2
3
4
7
8
12
14
16
21
22
31
32
33
36
40
42
45
51
53
54
56
59
67
74
74
78
79
80
85
86
87
88
89
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Corporate Information
Note 2.1: Basis of Preparation
Note 2.2: Material Accounting Policy Information
Note 3: Assets and Liabilities held for Sale and Discontinued Operations
Note 4: Agreement to Acquire Osino Resources Corp. (“OSINO”)
Note 5: Accounts Receivable
Note 6: Inventories
Note 7: Financial Instruments
Note 8: Exploration and Evaluation Assets
Note 9: Mine Properties
Note 10: Property, Plant and Equipment
Note 11: Intangible Assets
Note 12: Accounts Payable and Accrued Liabilities
Note 13: Debt
Note 14: Rehabilitation Provisions
Note 15: Other Long-Term Liabilities
Note 16: Leases
Note 17: Share-Based Compensation Plans
Note 18: Expenses by Nature
Note 19: Finance Costs
Note 20: Other Income and Expense
Note 21: Income Taxes
Note 22: Earnings per Share
Note 23: Related Party Transactions
Note 24: Supplementary Cash Flow Information
Note 25: Supplementary Shareholders’ Equity Information
Note 26: Commitments and Other Contingencies
Note 27: Financial Risk Management
Note 28: Operating Segment Information
REPORT UNDER THE FIGHTING AGAINST FORCED LABOUR AND CHILD
LABOUR IN SUPPLY CHAINS ACT
CORPORATE INFORMATION
90
90
90
107
109
109
109
110
114
115
116
117
117
118
119
120
120
121
125
125
126
126
128
128
129
129
131
131
135
140
Management’s Discussion and Analysis
of Consolidated Financial Condition and Results of Operations
for the Quarter and Year Ended December 31, 2023
(All monetary figures are expressed in U.S. dollars unless otherwise stated)
The following is Management’s Discussion and Analysis (“MD&A”) of the consolidated financial condition
and results of operations of Dundee Precious Metals Inc. (“DPM” and, together with its consolidated
subsidiaries, collectively referred to as the “Company”) as at December 31, 2023. This MD&A should be
read in conjunction with DPM’s audited consolidated financial statements for the year ended December
31, 2023 prepared in accordance with IFRS Accounting Standards (“IFRS”). Additional Company
information, including the Company’s most recent annual information form (“AIF”) and other continuous
disclosure documents, can be accessed through the System for Electronic Document Analysis and
Retrieval (“SEDAR+”) at www.sedarplus.ca and the Company’s website at www.dundeeprecious.com. To
the extent applicable, updated information contained in this MD&A supersedes older information
contained in previously filed continuous disclosure documents. Capitalized terms used in this MD&A that
have not been defined have the same meanings attributed to them as in DPM’s audited consolidated
financial statements for the year ended December 31, 2023. Information contained on the Company’s
website is not incorporated by reference herein and does not form part of this MD&A.
This MD&A contains forward looking statements that are based on certain estimates and assumptions
and involve risks and uncertainties. Actual results may vary materially from management’s expectations.
See the “Cautionary Note Regarding Forward Looking Statements” and “Risks and Uncertainties”
sections later in this MD&A for further information.
12 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Certain financial measures referred to in this MD&A are not measures recognized under IFRS and are
referred to as non-GAAP financial 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 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. Non-GAAP financial measures and ratios, together with other financial measures calculated in
accordance with IFRS, are considered to be important factors that assist investors in assessing the
Company’s performance.
The Company uses the following non-GAAP financial measures and ratios in this MD&A:
cash cost per tonne of ore processed
• mine cash cost
•
• mine cash cost of sales
•
•
•
•
•
•
•
•
•
•
•
cash cost per ounce of gold sold
all-in sustaining cost
all-in sustaining cost per ounce of gold sold
smelter cash cost
cash cost per tonne of complex concentrate smelted
adjusted earnings before interest, taxes, depreciation and amortization (“EBITDA”)
adjusted net earnings
adjusted basic earnings per share
cash provided from operating activities, before changes in working capital
free cash flow
average realized metal prices
For a detailed description of each of the non-GAAP financial measures and ratios used in this MD&A and
a detailed reconciliation to the most directly comparable measure under IFRS, please refer to the “Non-
GAAP Financial Measures” section commencing on page 48 of this MD&A.
The technical and scientific information in this MD&A has been prepared in accordance with Canadian
regulatory requirements set out in National Instrument 43-101 Standards of Disclosure for Mineral
Projects (“NI 43-101”) of the Canadian Securities Administrators and the Canadian Institute of Mining,
Metallurgy and Petroleum (“CIM”) – Definition Standards adopted by CIM Council on May 10, 2014 (the
“CIM Definition Standards”) for Mineral Resources and Mineral Reserves, and has been reviewed and
approved by Ross Overall, B.Sc. (Applied Geology), Corporate Mineral Resource Manager of DPM, who
is a Qualified Person (“QP”) as defined under NI 43-101, and who is not independent of the Company.
This MD&A has been prepared as at February 14, 2024.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 13 OVERVIEW
Our Business
DPM is a Canadian-based, international gold mining company engaged in the acquisition of mineral
properties, exploration, development, mining and processing of precious metals. Its common shares
(symbol: DPM) are traded on the Toronto Stock Exchange (“TSX”).
The Company’s purpose is to unlock resources and generate value to thrive and grow together. As
illustrated in the graphic below, this overall purpose is supported by a foundation of core values, which
guide how the Company conducts its business and informs a set of complementary strategic pillars and
objectives relating to Environmental Social Governance (“ESG”), innovation, optimizing our existing
portfolio, and growth. The Company’s resources are allocated in-line with its strategy to ensure that DPM
delivers value for all of its stakeholders.
14 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Continuing operations:
DPM’s principal subsidiaries include:
• 100% of Dundee Precious Metals Chelopech EAD (“Chelopech”), which owns and operates a gold,
copper and silver mine located east of Sofia, Bulgaria; and
• 100% of Dundee Precious Metals Krumovgrad EAD (“Ada Tepe”), which owns and operates a gold
mine located in south eastern Bulgaria, near the town of Krumovgrad.
DPM holds interests in a number of exploration and development properties located in Serbia and
Ecuador through its subsidiaries, including:
• 100% of Crni Vrh Resources d.o.o. and DPM Avala d.o.o., which hold the Čoka Rakita project and
the Timok gold project, respectively, in Serbia; and
• 100% of DPM Ecuador S.A., which is focused on the exploration and development of the Loma
Larga gold project and the Tierras Coloradas exploration property in Ecuador.
Discontinued operations:
DPM also owns:
• 92% of Dundee Precious Metals Tsumeb (Proprietary) Limited (“Tsumeb”), which owns and
operates a custom smelter located in Tsumeb, Namibia. On January 31, 2024, DPM reacquired the
8% ownership interest from Greyhorse Mining (Proprietary) Limited ("GHM") and resumed its 100%
ownership interest in Tsumeb.
In 2023, the Company decided to undertake a strategic review of its Tsumeb operation, including a
potential sale, given that the smelter is no longer expected to process any Chelopech concentrate
commencing in 2024 and as a result, it is no longer seen as strategic to DPM's asset portfolio. As a result,
the assets and liabilities of Tsumeb have been presented as held for sale in the consolidated statement of
financial position as at December 31, 2023 and the operating results and cash flows of Tsumeb have
been presented as discontinued operations in the consolidated statements of earnings (loss) and cash
flows for the years ended December 31, 2023 and 2022. As a consequence, certain comparative figures
in the consolidated statements of earnings (loss) and cash flows have been reclassified to conform with
current year presentation.
All operational and financial information contained in this MD&A are related to continuing operations,
unless otherwise stated.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 15 OPERATING AND FINANCIAL HIGHLIGHTS
1)
2)
3)
Cost of sales per ounce of gold sold represents cost of sales for Chelopech and Ada Tepe divided by payable gold in concentrate sold, while all-
in sustaining cost and cash cost per ounce of gold sold include treatment and freight charges, net of by-product credits, all of which are reflected
in revenue.
All-in sustaining cost per ounce of gold sold; cash cost per ounce of gold sold; free cash flow; average realized metal prices; adjusted net
earnings and adjusted basic earnings per share are non-GAAP financial measures or ratios. Refer to the “Non-GAAP Financial Measures”
section commencing on page 48 of this MD&A for more information, including reconciliations to IFRS measures.
Q4 2023 excludes cash and cash equivalents of $1.8 million from discontinued operations, which was included in assets held for sale as at
December 31, 2023.
Gold Production and Payable Gold Sold(Koz)73697674776663656870ProductionPayable SoldQ42022Q12023Q22023Q32023Q42023Copper Production andPayable Copper Sold(Mlbs)7787976777ProductionPayable SoldQ42022Q12023Q22023Q32023Q42023Mine Cost of Sales All-in Sustaining Cost and Cash Cost ($/oz)1,008872733911876701580541708609990974929901877Mine Cost of Sales (1)All-in Sustaining Cost (2)Mine Cash Cost (2)Q42022Q12023Q22023Q32023Q42023Cash Provided fromOperating Activities andFree Cash Flow from Continuing Operations($M)49665570713066664649Cash from Operating ActivitiesFree Cash Flow (2)Q42022Q12023Q22023Q32023Q42023Revenue ($M) 1131261331221391,7521,9181,9611,9212,025RevenueAverage Realized Gold Price ($/oz) (2)Q42022Q12023Q22023Q32023Q42023Cost of Sales($M)6562606161Cost of SalesQ42022Q12023Q22023Q32023Q42023Net Earnings andAdjusted Net Earnings from Continuing Operations($M)224450375222435037500.120.230.270.200.28Net Earnings from continuing operationsAdjusted Net Earnings (2)Adjusted Basic Earnings per Share (2)Q42022Q12023Q22023Q32023Q42023Return of Capitalto Shareholders($M)7.615.932.927.319.67.67.67.67.67.48.325.319.712.315.948.876.195.8Dividends PaidPayments for Share RepurchasesYear-to-Date CumulativeQ42022Q12023Q22023Q32023Q42023Cash and Cash Equivalents($M)433473542563595Cash and cash equivalents (3)Q42022Q12023Q22023Q32023Q4202316 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 The following table summarizes the Company’s selected operating and financial highlights for the quarter
and year ended December 31, 2023 and 2022:
$ thousands, unless otherwise indicated
Fourth Quarter
Full Year
Operating Highlights
Ore processed
Metals contained in concentrate produced:
Gold
Copper
Payable metals in concentrate sold:
Gold
Copper
Cost of sales per ounce of gold sold
Cash cost per ounce of gold sold(1)
All-in sustaining cost per ounce of gold sold(1)
Capital expenditures incurred(2):
Sustaining(3)
Growth(4)
Total capital expenditures
Financial Highlights
Average realized prices(1):
Gold
Copper
Revenue
Cost of sales
Earnings (loss) before income taxes(5)
From continuing operations
From discontinued operations
Adjusted EBITDA(1),(5)
From continuing operations
From discontinued operations
Net earnings (loss)(5)
From continuing operations
From discontinued operations
Basic earnings (loss) per share(5)
From continuing operations
From discontinued operations
Adjusted net earnings(1),(5)
From continuing operations
From discontinued operations
Adjusted basic earnings per share(1),(5)
From continuing operations
From discontinued operations
Cash provided from operating activities(5)
From continuing operations
From discontinued operations
Free cash flow(1),(5)
From continuing operations
From discontinued operations
Dividends paid
Payments for share repurchases
2023
2022
Change
2023
2022
Change
t
735,524 759,241
(3%)
2,952,711 2,991,782
(1%)
oz
Klbs
oz
Klbs
$/oz
$/oz
$/oz
$/oz
$/lb
$/sh
$/sh
$/sh
$/sh
$/sh
$/sh
8%
(1%)
9%
(2%)
(6%)
(6%)
(4%)
77,083
8,229
73,420
7,436
5%
11%
296,072 273,109
30,835
30,547
69,564
7,009
877
609
876
65,831
6,726
990
701
1,008
8,030
9,959
17,989
12,852
11,162
24,014
2,025
3.74
1,752
3.65
139,339 112,968
65,141
60,980
63,885
58,454
5,431
79,634
72,013
37,632
26,374
11,258
58,254
45,428
7,621
12,826
6%
4%
(11%)
(13%)
(13%)
(38%)
(11%)
(25%)
16%
2%
23%
(6%)
70%
122%
(52%)
37%
59%
(41%)
265,743 242,697
27,224
975
646
885
26,651
919
610
849
31,177
29,316
60,493
39,431
31,435
70,866
(21%)
(7%)
(15%)
1,957
3.82
1,795
3.98
520,091 433,490
244,207 236,668
58,742
216,665
205,702 139,403
(80,661)
287,163 252,869
268,355 222,847
10,963
9%
(4%)
20%
3%
269%
48%
114%
14%
20%
18,808
30,022
(37%)
57,476
33,320
72%
192,939
35,923
52,045
22,062
136%
181,976 116,584
5,431
11,258
(52%)
10,963
(80,661)
0.32
0.29
0.03
55,472
50,041
5,431
0.31
0.28
0.03
78,179
71,268
6,911
51,762
49,336
2,426
7,320
12,247
0.18
0.12
0.06
33,320
22,062
11,258
0.18
0.12
0.06
49,289
48,527
762
33,263
30,039
3,224
7,604
-
78%
142%
(50%)
66%
127%
(52%)
72%
133%
(50%)
1.04
0.98
0.06
0.19
0.61
(0.42)
190,935 129,027
179,972 118,953
10,074
0.68
10,963
1.03
0.97
0.06
0.62
0.06
59%
47%
275,682 232,052
261,626 209,589
807%
56%
64%
(25%)
(4%)
100%
14,056
22,463
231,852 166,437
227,915 150,534
15,903
28,606
13,619
3,937
30,166
65,590
437%
56%
114%
447%
61%
114%
48%
51%
9%
51%
56%
(1%)
19%
25%
(37%)
39%
51%
(75%)
5%
382%
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 17 As at December 31,
Financial Position and Available Liquidity
Cash and cash equivalents(6)
Investments at fair value
Available liquidity(7)
December 31, December 31,
2023
2022
Increase/
(Decrease)
595,285
11,900
745,285
433,176
40,773
583,176
162,109
(28,873)
162,109
1)
2)
3)
4)
5)
6)
7)
Cash cost per ounce of gold sold; all-in sustaining cost per ounce of gold sold; average realized metal prices; adjusted EBITDA; adjusted net
earnings; adjusted basic earnings per share and free cash flow are non-GAAP financial measures or ratios. Refer to the “Non-GAAP Financial
Measures” section commencing on page 48 of this MD&A for more information, including reconciliations to IFRS measures.
Capital expenditures incurred were reported on an accrual basis and do not represent the cash outlays for the capital expenditures.
Sustaining capital expenditures are generally defined as expenditures that support the ongoing operation of the asset or business without any
associated increase in capacity, life of assets or future earnings. This measure is used by management and investors to assess the extent of
non-discretionary capital spending being incurred by the Company each period.
Growth capital expenditures are generally defined as capital expenditures that expand existing capacity, increase life of assets and/or increase
future earnings. This measure is used by management and investors to assess the extent of discretionary capital spending being undertaken by
the Company each period.
These measures include discontinued operations.
Cash and cash equivalents as at December 31, 2023 excluded $1.8 million from discontinued operations, which was included in assets held for
sale.
Available liquidity is defined as cash and cash equivalents plus the available capacity under DPM’s long-term revolving credit facility (“RCF”) at
the end of each reporting period.
Operating Highlights
In 2023, the Company’s mining operations continued to deliver strong results, with Ada Tepe achieving
record gold production, and Chelopech achieving its annual guidance for gold and copper production.
Consolidated all-in sustaining cost per ounce of gold sold was within the guidance range for the year.
• Gold contained in concentrate produced in the fourth quarter and full year of 2023 of 77,083
ounces and 296,072 ounces, respectively, was 5% and 8% higher than the corresponding periods in
2022 due primarily to mining in higher grade zones at Ada Tepe, partially offset by lower gold grades
at Chelopech, in-line with the mine plans for both operations.
•
•
•
•
•
Payable gold in concentrate sold in the fourth quarter and full year of 2023 of 69,564 ounces and
265,743 ounces, respectively, was 6% and 9% higher than the corresponding periods in 2022
primarily reflecting higher gold production.
Copper production in the fourth quarter of 2023 of 8.2 million pounds was 11% higher than the
corresponding period in 2022 due primarily to higher copper grades. Copper production in 2023 of
30.5 million pounds was comparable to 2022 due primarily to lower copper grades largely offset by
higher volumes of ore processed.
Payable copper in concentrate sold in the fourth quarter of 2023 of 7.0 million pounds was 4%
higher than the corresponding period in 2022 due primarily to higher copper production, partially
offset by the timing of deliveries. Payable copper in 2023 of 26.7 million pounds was comparable to
2022, consistent with copper production.
All-in sustaining cost per ounce of gold sold in the fourth quarter of 2023 of $876 was 13% lower
than the corresponding period in 2022 due primarily to higher volumes of gold sold, lower cash
outlays for sustaining capital expenditures, lower prices for power, and higher by-product credits as a
result of higher volumes and realized prices of copper sold, partially offset by a stronger Euro relative
to the U.S. dollar. All-in sustaining cost per ounce of gold sold in 2023 of $849 was 4% lower than
2022 due primarily to higher volumes of gold sold, lower treatment and freight charges at Chelopech
and lower prices for power, partially offset by higher local currency mine operating costs reflecting
higher costs for labour and direct materials, lower by-product credits as a result of lower volumes and
realized prices of copper sold, and higher share-based compensation expenses reflecting DPM’s
strong share price performance.
Sustaining capital expenditures incurred in the fourth quarter of 2023 of $8.0 million were 38%
lower than the corresponding period in 2022 of $12.9 million due primarily to the planned upgrade of
the tailings management facility at Chelopech, which occurred throughout 2022 and was completed in
the second quarter of 2023. Sustaining capital expenditures in 2023 of $31.2 million were 21% lower
18 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 than 2022 of $39.4 million due primarily to the completion of the tailings management facility upgrade
at Chelopech, as well as the inclusion of the capitalized lease and leasehold improvements related to
the new head office in 2022.
• Growth capital expenditures incurred during the fourth quarter and full year of 2023, primarily
related to the Loma Larga gold project, were $10.0 million and $29.3 million, respectively, compared
to $11.2 million and $31.4 million in the corresponding periods in 2022.
Financial Highlights
Financial results in 2023 reflected higher volumes and realized prices of gold sold, partially offset by
higher planned exploration and evaluation expenses.
•
•
•
•
•
•
Revenue in the fourth quarter of 2023 of $139.3 million was 23% higher than the corresponding
period in 2022 due primarily to higher volumes and realized prices of gold sold. Revenue in 2023 of
$520.1 million was 20% higher than 2022 due primarily to higher volumes and realized prices of gold
sold, and lower treatment and freight charges at Chelopech as a result of increased deliveries to third-
party smelters, partially offset by lower volumes and realized prices of copper sold.
Cost of sales in the fourth quarter of 2023 of $61.0 million decreased compared to $65.1 million in
the corresponding period in 2022 due primarily to lower prices for power and lower depreciation
expenses. Cost of sales in 2023 of $244.2 million increased compared to $236.7 million in 2022 due
primarily to higher local currency mine operating costs reflecting higher costs for labour and direct
materials, partially offset by lower prices for power.
Net earnings from continuing operations in the fourth quarter of 2023 of $52.1 million ($0.29 per
share) increased compared to $22.1 million ($0.12 per share) in the corresponding period in 2022
due primarily to higher volumes and realized prices of gold and copper sold, partially offset by higher
planned exploration and evaluation expenses. Net earnings from continuing operations in 2023 of
$182.0 million ($0.98 per share) increased compared to $116.6 million ($0.61 per share) in 2022 due
primarily to higher volumes and realized prices of gold sold, lower treatment and freight charges at
Chelopech and higher interest income, partially offset by higher planned exploration and evaluation
expenses, and higher share-based compensation expenses reflecting DPM’s strong share
performance. Net earnings (loss) in the fourth quarter and full year of 2023 of $57.5 million ($0.32
per share) and $192.9 million ($1.04 per share), respectively, increased compared to $33.3 million
($0.18 per share) and $35.9 million ($0.19 per share) in the corresponding periods in 2022 due
primarily to the same factors affecting net earnings from continuing operations. Net earnings in 2022
were also impacted by an impairment charge of $85.0 million in respect of the Tsumeb smelter, which
was included in net loss from discontinued operations in 2022.
Adjusted net earnings from continuing operations in the fourth quarter and full year of 2023 of
$50.1 million ($0.28 per share) and $180.0 million ($0.97 per share), respectively, increased
compared to $22.1 million ($0.12 per share) and $118.9 million ($0.62 per share) in the corresponding
periods in 2022 due primarily to the same factors affecting net earnings from continuing operations,
except for adjusting items mainly related to gains or losses on derivatives.
Earnings before income taxes from continuing operations in the fourth quarter and full year of
2023 of $58.5 million and $205.7 million, respectively, increased compared to $26.4 million and
$139.4 million in the corresponding periods in 2022, reflecting the same factors that affected net
earnings from continuing operations, except for income taxes, which are excluded.
Adjusted EBITDA from continuing operations in the fourth quarter and full year of 2023 of $72.0
million and $268.4 million, respectively, increased compared to $45.5 million and $222.9 million in the
corresponding periods in 2022, reflecting the same factors that affected adjusted net earnings from
continuing operations, except for interest, income taxes, depreciation and amortization, which are
excluded from adjusted EBITDA.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 19 •
•
•
•
Cash provided from operating activities from continuing operations in the fourth quarter of 2023
of $71.3 million was 47% higher than the corresponding period in 2022 due primarily to higher
adjusted EBITDA from continuing operations generated in the quarter, as well as the timing of
deliveries and subsequent receipt of cash partially offset by the timing of payments to suppliers. Cash
provided from operating activities from continuing operations in 2023 of $261.6 million was 25%
higher than 2022 due primarily to higher adjusted EBITDA from continuing operations generated in
the year, partially offset by the timing of deliveries and subsequent receipt of cash and the timing of
payments to suppliers.
Free cash flow from continuing operations in the fourth quarter and full year of 2023 of $49.3
million and $227.9 million, respectively, was $19.3 million and $77.4 million higher than the
corresponding periods in 2022 due primarily to higher adjusted EBITDA from continuing operations
generated in the periods and lower cash outlays for sustaining capital expenditures. Free cash flow is
calculated before changes in working capital.
Return of capital to shareholders through dividends paid of $30.2 million ($0.04 per share) and
payments for shares repurchased under the Normal Course Issuer Bid (“NCIB”) of $65.6 million in
2023, which in aggregate represented 42% of free cash flow, in-line with the Company's commitment
to a sustainable quarterly dividend and its share buyback program reflecting strong ongoing
operational performance and significant free cash flow generation.
Strong balance sheet as at December 31, 2023 with $595.3 million in cash and cash equivalent, an
undrawn $150.0 million RCF and no debt.
Growth, Exploration and Other Highlights
•
•
•
•
Chelopech life of mine plan: In November 2023, DPM announced a mine life extension to 2032, an
optimized life of mine (“LOM”) plan, and updated Mineral Resource and Mineral Reserve estimate for
the Chelopech mine. The updated LOM adds approximately 128,000 ounces of recovered gold and 9
million pounds of recovered copper between 2024 and 2032. During this period, LOM gold grades
and copper grades increased by 5% and 3%, respectively, and recoveries for gold increased by 5%.
Čoka Rakita gold project: The Company completed a maiden Mineral Resource estimate (“MRE”)
for the Čoka Rakita project in Serbia in December 2023, within 11 months of announcing the initial
discovery. DPM is advancing a preliminary economic assessment (“PEA”) for the project targeting a
throughput rate of 850,000 tonnes per annum, which is expected to be completed in the second
quarter of 2024. Exploration activities continue to focus on an accelerated drilling program extending
the limits of Čoka Rakita, which remains open to the northeast and southwest, and the Company is
aggressively pursuing additional skarn targets on four licences.
Loma Larga gold project: The Company continued to progress activities related to permitting and
stakeholder relations during the fourth quarter. In October 2023, a new President of Ecuador was
elected and the Company is working with the newly formed government to fulfill the requirements of
the August 2023 ruling by the Provincial Court of Azuay. The Company entered into an investment
protection agreement (“IPA”) for the project, providing further legal protections and tax stability. DPM
will continue to progress on the updated feasibility study (“FS”) in order to pursue additional
optimization opportunities and to potentially incorporate the results of drilling, once DPM is able to
recommence those activities.
Tierras Coloradas exploration prospect: The Company commenced a 10,000-metre drilling
program at Tierras Coloradas in August 2023. This drilling program is designed to follow up results
reported in the first quarter of 2023 which confirmed two well-mineralized high-grade vein systems
that remain open in multiple directions, and is expected to be completed by the end of the first quarter
of 2024.
20 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 •
•
Acquisition of Osino: On December 18, 2023, DPM announced an agreement to acquire Osino
Resources Corp. ("Osino"), which holds the advanced-stage Twin Hills gold project offering near-term
production growth, and an extensive exploration portfolio in Namibia. The acquisition of Osino is
subject to the approval of Osino’s securityholders as well as applicable regulatory approvals,
including approval under the Namibia Competition Act. In addition, each of DPM and Osino has the
right to terminate the transaction in certain circumstances. Provided that all approvals are obtained
and neither party exercises its right to terminate, the transaction is expected to close in the first half of
2024.
ESG: DPM scored in the 91st percentile among metals and mining companies in the 2023 S&P
Global Corporate Sustainability Assessment for the third consecutive year, and was included in the
2024 Sustainability Yearbook.
For a more detailed discussion on the operating results of Chelopech and Ada Tepe, activities related to
the growth projects and exploration, as well as the financial results, refer to the “Review of Operating
Results by Segment”, “Development and Other Major Projects”, “Exploration” and “Review of Financial
Results” sections of this MD&A. For a detailed discussion on the operating and financial results of
Tsumeb as a discontinued operation, refer to the “Discontinued Operations” section of this MD&A.
2023 ACTUAL RESULTS IN COMPARISON TO 2023 GUIDANCE
The following table provides a comparison of the Company’s results to its 2023 original and updated
guidance:
$ millions, unless otherwise indicated
Ore processed
Cash cost per tonne of ore processed(3)
Chelopech
Ada Tepe
Metals contained in concentrate produced(4)
Gold(5)
Copper
Payable metals in concentrate sold
Gold(5)
Copper
All-in sustaining cost per ounce of gold sold(3)
Complex concentrate smelted(6)
Cash cost per tonne of complex concentrate smelted(3),(6)
Corporate general and administrative expenses(7)
Exploration and evaluation expenses
Sustaining capital expenditures(6)
Growth and other capital expenditures(6)
Kt
$/t
$/t
Koz
Mlbs
Koz
Mlbs
$/oz
Kt
$/t
Original
Consolidated
Guidance(1)
2,820 - 3,010
Updated
Consolidated
Guidance(2)
2,820 - 3,010
2023
Consolidated
Results
2,953
53 - 58
73 - 79
270 - 315
30 - 35
245 - 290
26 - 31
700 - 860
200 - 230
340 - 410
25 - 28
25 - 30
46 - 57
22 - 31
53 - 58
73 - 79
270 - 315
30 - 35
245 - 290
26 - 31
700 - 860
200 - 230
340 - 410
25 - 28
38 - 46
46 - 57
30 - 39
50
67
296
31
266
27
849
189
414
24
47
45
30
1)
2)
3)
4)
5)
6)
7)
As disclosed in the MD&A issued on February 16, 2023.
As disclosed in the MD&A issued on August 1, 2023.
Cash cost per tonne of ore processed, all-in sustaining cost per ounce of gold sold and cash cost per tonne of complex concentrate smelted are
non-GAAP ratios. Refer to the “Non-GAAP Financial Measures” section commencing on page 48 of this MD&A for more information, including
reconciliations to IFRS measures.
Metals contained in concentrate produced are prior to deductions associated with smelter terms.
Includes gold in pyrite concentrate produced of 54,513 ounces compared to guidance of 45,000 to 51,000 ounces and payable gold in pyrite
concentrate sold of 37,732 ounces compared to guidance of 30,000 to 37,000 ounces, respectively.
These measures relate to or include discontinued operations.
Excludes share-based compensation expense of approximately $12 million, including mark-to-market adjustments from movements in the
Company’s share price of $7 million, compared to guidance of approximately $3 million, given the volatile nature of this expense. This is a
change from the historical approach to the Company's detailed guidance on corporate general and administrative expenses.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 21 DPM achieved its 2023 gold and copper production and delivery guidance as a result of continued strong
operating performance at Chelopech and Ada Tepe.
Both Chelopech and Ada Tepe achieved a cash cost per tonne of ore processed below the low end of
their respective guidance ranges for the year due primarily to lower than expected local currency
operating expenses reflecting improvement to the local inflationary environment during the year.
All-in sustaining cost per ounce of gold sold in 2023 of $849 was at the higher end of the guidance range
of $700 to $860, due primarily to higher treatment charges at Chelopech, lower by-product credits as a
result of lower volumes and prices of copper sold, and higher share-based compensation expense
reflecting strong DPM share price performance, partially offset by lower cash outlays for sustaining capital
and lower than expected local currency operating costs.
Complex concentrate smelted and cash cost per tonne of complex concentrate smelted from discontinued
operations were below and above the 2023 guidance ranges, respectively, due to the unplanned
downtime and the Ausmelt furnace maintenance, which was extended in order to complete repairs to the
off-gas system in 2023.
Sustaining capital expenditures in 2023 of $45 million was below the low end of the guidance range of
$46 million and $57 million, due primarily to the timing of digital and technology related initiatives, as well
as benefits from the cost optimizations of the Ausmelt furnace maintenance in 2023 related to
discontinued operations.
Growth and other capital expenditures in 2023 of $30 million was at the lower end of the updated
consolidated guidance range of $30 million and $39 million, due primarily to the timing of a capitalized
lease related to the electric mobile equipment as part of the Company’s ESG initiatives, which is deferred
to 2024.
THREE-YEAR OUTLOOK
DPM continues to focus on optimizing its existing mining operations and transforming its growth pipeline
by advancing its development projects and exploration activities, as highlighted in the 2024 to 2026
outlook and detailed 2024 guidance below.
22 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 2024 to 2026 Outlook
The production outlook for 2024 to 2026 is based on historical performance and experience at DPM’s
operations and in the case of its mining operations is consistent with the production schedules outlined in
the news release for Chelopech entitled “Dundee Precious Metals Extends Life of Mine Plan to 2032 for
the Chelopech Mine in Bulgaria and Provides Mineral Reserve and Mineral Resource Update and
Highlights from Exploration Activities” dated November 29, 2023, the technical report for Chelopech
entitled “NI 43-101 Technical Report – Mineral Resource and Reserve Update, Chelopech Mine,
Chelopech, Bulgaria” with an effective date of March 31, 2022 (the “Chelopech Technical Report”), and
the technical report for Ada Tepe entitled “NI 43-101 Technical Report – Mineral Resource and Reserve
Update, Ada Tepe Mine, Krumovgrad, Bulgaria” with an effective date of December 31, 2022, all of which
have been filed on SEDAR+ (www.sedarplus.ca) and are posted on the Company’s website
(www.dundeeprecious.com). For 2025 and 2026, production and cost estimates do not fully incorporate
operating performance improvements in respect of mine throughput and potential changes to mine grades
and recoveries. The 2024 to 2026 outlook is forward looking and based on certain estimates and
assumptions which involve risks and uncertainties and is predicated on the Russia-Ukraine and Middle
East conflicts and any related international action having no material impact on DPM’s production and
costs. Actual results may vary materially from management’s expectations. See the “Cautionary Note
Regarding Forward Looking Statements” and “Risks and Uncertainties” sections later in this MD&A for
further information.
Highlights of the three-year outlook include:
• Maintains strong gold production levels: Over the next three years, gold production is expected to
average approximately 240,000 ounces per year based on current mine plans, with a forecasted
reduction in the current 2026 outlook as Ada Tepe reaches the end of its mine life. The outlook for
production will be updated, pending the completion of the Osino acquisition, which is targeted for the
first half of 2024.
•
•
•
Stable copper production: Copper production over the next three years is expected to average
approximately 33 million pounds per year based on current mine plans, with higher forecasted
production in 2025 as compared to the previous outlook.
All-in sustaining cost: All-in sustaining cost per ounce of gold sold is expected to range between
$790 and $930 in 2024, which is higher than previously expected due primarily to lower by-product
credits reflecting a lower copper price assumption and lower volumes of copper sold, and higher local
currency operating costs. 2025 outlook for all-in sustaining cost per ounce of gold sold remains
unchanged from the previous outlook range of $720 to $880, which is lower than 2024 due primarily
to higher anticipated volumes of copper sold. All-in sustaining cost per ounce of gold sold in 2026 is
expected to be between $760 and $900, higher than 2025 due primarily to lower volume of gold sold
from Ada Tepe.
Sustaining capital expenditures: Sustaining capital expenditures are expected to trend lower over
the next three years due primarily to the gradual reduction in activities at Ada Tepe as the mine
approaches its end of life in 2026.
In December 2023, the Company announced that it had entered into a definitive agreement to acquire
Osino. The acquisition of Osino is subject to the approval of Osino's securityholders as well as applicable
regulatory approvals, including approval under the Namibia Competition Act. In addition, each of DPM
and Osino has the right to terminate the transaction in certain circumstances. Provided that all approvals
are obtained and neither party exercises its right to terminate, the transaction is expected to close in the
first half of 2024, following which DPM will provide an update to its 2024 guidance and three-year outlook
in due course.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 23 Chelopech
Ada Tepe
Tsumeb
Corporate
and Other
Consolidated
Guidance
- 2,800 - 3,000
The Company’s detailed guidance for 2024 is set out in the following table:
$ millions, unless otherwise indicated
Ore processed
Cash cost per tonne of ore processed(1)
Metals contained in concentrate
produced(2),(3)
Gold
Copper
Payable metals in concentrate sold(3)
Gold
Copper
All-in sustaining cost per ounce of gold
sold(1),(4)
Complex concentrate smelted(5)
Cash cost per tonne of complex
concentrate smelted(1),(5)
Corporate general and administrative
expenses(6)
Exploration expenses(1)
Evaluation expenses(1),(7)
Sustaining capital expenditures(1),(5),(8)
Growth and other capital
expenditures(1),(5),(8),(9)
Kt
$/t
Koz
Mlbs
Koz
Mlbs
2,090 - 2,200
710 - 800
53 - 58
68 - 75
155 - 175
90 - 110
29 - 34
-
130 - 145
80 - 100
23 - 27
-
$/oz
650 - 790
710 - 830
Kt
$/t
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
200 - 230
310 - 360
-
-
-
24 - 27
-
-
14 - 18
11 - 14
9 - 11
2 - 3
2 - 3
0 - 1
0 - 1
14 - 15
16 - 20
-
-
-
-
-
-
-
-
-
245 - 285
29 - 34
210 - 245
23 - 27
790 - 930
200 - 230
310 - 360
24 - 27
33 - 39
10 - 13
36 - 46
1)
2)
3)
4)
5)
6)
7)
8)
9)
Based on a Euro/US$ exchange rate of 1.10, a US$/ZAR exchange rate of 18.00, a copper price of $3.75 per pound and a sulphuric acid price of
$105 per tonne, where applicable.
Metals contained in concentrate produced are prior to deductions associated with smelter terms.
Gold produced includes gold in pyrite concentrate produced of 50,000 to 55,000 ounces and payable gold sold includes payable gold in pyrite
concentrate sold of 35,000 to 39,000 ounces.
Allocated general and administrative expenses are reflected in consolidated all-in sustaining cost per ounce of gold sold, however are not
reflected in the all-in sustaining cost per ounce of gold sold for Chelopech and Ada Tepe, given that the nature of such expenses is more
reflective of the Company’s consolidated all-in sustaining cost and not pertaining to the individual operations of the Company.
These measures relate to or include discontinued operations.
Excludes share-based compensation expense of approximately $6 million, before mark-to-market adjustments from movements in the
Company’s share price, given the volatile nature of this expense.
Guidance on evaluation expenses relates to Čoka Rakita gold project which was initiated in 2023.
Represents capital expenditures on an accrual basis and do not represent the cash outlays for the capital expenditures.
Growth and other capital expenditures in Corporate and Other include the estimated running cost for the Loma Larga gold project of $10 million to
$11 million, as well as a capitalized lease related to electric mobile equipment carried from 2023 of $4 million as part of the Company’s ESG
initiatives.
Certain key cost measures in the Company’s detailed guidance for 2024 are sensitive to market
assumptions, including copper price and foreign exchange rates. The following table demonstrates the
effect of a 10% change in these market assumptions on the consolidated all-in sustaining cost as well as
the smelter cash cost from discontinued operations provided in the 2024 guidance.
Copper
Euro/US$
US$/ZAR(1),(2)
2024
assumptions
Hypothetical
change
$3.75/lb
1.10
18.00
+/- 10%
+/- 10%
+/- 10%
All-in
sustaining cost
($/oz)
+/- $44/oz
+/- $108/oz
Smelter
cash cost
($/t)
N/A
N/A
N/A
-$35/t /+ $31/t
1)
2)
Relates to discontinued operations.
As at December 31, 2023, approximately 62% of projected Namibian dollar operating expenses related to discontinued operations for 2024 have
been hedged with option contracts providing a weighted average floor rate of 17.94 and a weighted average ceiling rate of 20.24.
24 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 The Company’s three-year outlook is set out in the following table:
$ millions, unless otherwise indicated
Gold contained in concentrate produced(1),(2)
Chelopech
Ada Tepe
Total
Copper contained in concentrate produced(1)
Chelopech
All-in sustaining cost per ounce of gold sold(3),(4)
Complex concentrate smelted(5)
Cash cost per tonne of complex concentrate smelted(3),(5)
Sustaining capital expenditures(3),(6)
Koz
Koz
Koz
Mlbs
$/oz
Kt
$/t
Chelopech
Ada Tepe
Tsumeb(5)
Corporate digital initiatives
Consolidated
2023
Results
2024
Guidance
2025
Outlook
2026
Outlook
162
134
296
31
849
189
414
19
10
14
2
45
155 - 175
160 - 185
140 - 155
90 - 110
70 - 85
50 - 65
245 - 285
230 - 270
190 - 220
29 - 34
790 - 930
200 - 230
310 - 360
31 - 36
720 - 880
200 - 230
310 - 360
30 - 35
760 - 900
200 - 230
310 - 360
14 - 18
11 - 14
9 - 11
2 - 3
36 - 46
12 - 15
8 - 10
12 - 15
2 - 3
34 - 43
12 - 15
4 - 5
10 - 12
2 - 3
28 - 35
1)
2)
3)
4)
5)
6)
Metals contained in concentrate produced are prior to deductions associated with smelter terms.
Gold produced includes gold in pyrite concentrate produced of 50,000 to 55,000 ounces for 2024, 48,000 to 54,000 ounces in 2025, and 45,000
to 49,000 ounces in 2026.
Based on, where applicable, a Euro/US$ exchange rate of 1.10, a US$/ZAR exchange rate of 18.00, and a copper price of $3.75 per pound for all
years, and a sulphuric acid price of $105 per tonne for 2024, $79 per tonne for 2025 and $82 per tonne for 2026, where applicable.
Reflects DPM general and administrative expenses being allocated based on Chelopech and Ada Tepe’s proportion of total revenue, including
discontinued operations. Removing Tsumeb from the allocation would increase all-in sustaining cost by an average of $35 per ounce of gold sold
for each of the three years.
Related to discontinued operations.
Represents capital expenditures on an accrual basis and do not represent the cash outlays for the capital expenditures.
The estimated metals contained in concentrate produced and payable metals in concentrate sold detailed
in the Company’s 2024 guidance and three-year outlook are not expected to occur evenly throughout the
period and are forecast to vary from quarter to quarter depending on mine sequencing, the timing of
concentrate deliveries and planned maintenances. The rate of capital expenditures is also expected to
vary from quarter to quarter based on the schedule for, and execution of, each capital project.
Additional detail on the Company’s three-year outlook is set out below:
Chelopech
Gold and copper contained in concentrate produced are expected to be consistent with production
schedules and expected grades outlined in the most recently issued technical report. Gold contained in
concentrate produced remains unchanged from the previous outlook for 2024 and 2025, with the outlook
for 2026 slightly below the 2025 production level, in-line with the mine plan. The outlook for copper
contained in concentrate produced remains unchanged in 2024 and 2025 from the previous outlook and
is expected to remain at the consistent production level in 2026.
Cash cost per tonne of ore processed in 2024 is expected to be higher than 2023, due primarily to higher
local currency operating costs.
All-in sustaining cost per ounce of gold sold in 2024 is expected to be lower than 2023, due primarily to
lower treatment charges as all Chelopech concentrates will now be delivered to third-party smelters,
partially offset by higher local currency operating costs.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 25 Sustaining capital expenditures in 2024 are expected to be lower than 2023 results, mainly due to the
completion of the tailings management facility in 2023. Sustaining capital expenditures are expected to
trend lower in 2025 and 2026 due primarily to lower expenditures related to mobile equipment. Growth
capital expenditures related to resource development drilling and margin improvement projects are
expected to be between $2 million and $3 million in 2024, relatively consistent year over year.
Ada Tepe
Gold contained in concentrate produced remains unchanged from the previous outlook for 2024 and 2025
and is expected to be lower in 2026, in-line with the mine plan as the mine reaches its end of life before
the end of 2026.
Cash cost per tonne of ore processed is expected to be higher in 2024 as compared to 2023, due
primarily to higher operating costs.
All-in sustaining cost per ounce of gold sold is expected to be higher in 2024 as compared to 2023, due
primarily to lower volumes of gold sold and higher local currency operating costs.
Sustaining capital expenditures are expected to be slightly higher than the previous outlook range of $10
million to $12 million in 2024 due primarily to higher deferred stripping costs and increased costs related
to Ada Tepe’s integrated waste management facility, before reducing to a range of $8 million to $10 million
in 2025, in line with the previous outlook, and reducing further to a range of $4 million to $5 million in 2026
as the mine reaches the end of its life.
Loma Larga gold project
Growth capital expenditures for 2024 associated with the Loma Larga gold project are expected to be
between $10 million and $11 million, approximately half of the amount spent in 2023, covering the
estimated running costs for the year, which mainly include general and administrative expenses, certain
permitting, social and environmental related activities. In 2023, higher spend was a result of the additional
scope of work related to the updated FS work as well as increased activities related to stakeholder
engagement. DPM will continue to take a disciplined approach with respect to future investments in the
Loma Larga gold project, based on the receipt of key milestones, overall operating environment in-country
and other capital allocation priorities.
See the “Development and Other Major Projects – Loma Larga Gold Project” section contained in this
MD&A for further details.
Exploration and evaluation expenses
Exploration expenditures in 2024 are expected to be between $33 million and $39 million due primarily to
higher expected drilling activities at Čoka Rakita and at the new Potaj Čuka prospect located to the north
of Čoka Rakita in Serbia, as well as a new drilling program at the new Krumovitsa licence at Ada Tepe in
Bulgaria.
Evaluation expenditures in 2024 are expected to be between $10 million and $13 million related to the
PEA for the Čoka Rakita project, which is expected to be completed in the second quarter of 2024. If
positive results are achieved from the PEA and the Company decides to proceed with a pre-feasibility
study (“PFS”), the Company may increase its guidance for evaluation expenditures. The amount and
timing for this additional funding is dependent on the timing of the completion of the PEA.
See the “Exploration” and “Development and Other Major Projects - Čoka Rakita Project” sections
contained in this MD&A for further details.
26 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 REVIEW OF OPERATING RESULTS BY SEGMENT
Review of Chelopech Results
$ thousands, unless otherwise indicated
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Operating Highlights
Ore mined
Ore processed
Head grades:
Gold
Copper
Recoveries:
Gold in gold-copper concentrate
Gold in pyrite concentrate
Gold combined recoveries
Copper
Gold-copper concentrate produced
Pyrite concentrate produced
Metals contained in concentrate produced:
Gold in gold-copper concentrate
Gold in pyrite concentrate
Total gold production
Copper
Cost of sales per tonne of ore processed
Cash cost per tonne of ore processed
Gold-copper concentrate delivered
Pyrite concentrate delivered
Payable metals in concentrate sold(1):
Gold in gold-copper concentrate
Gold in pyrite concentrate
Total payable gold
Payable copper
Cost of sales per ounce of gold sold
Cash cost per ounce of gold sold
All-in sustaining cost per ounce of gold sold
Capital expenditures incurred(2):
Sustaining
Growth
Total capital expenditures
t
t
g/t
%
%
%
%
%
t
t
oz
oz
oz
Klbs
$/t
$/t
t
t
oz
oz
oz
Klbs
$/oz
$/oz
$/oz
566,651
556,108
564,825
553,088
2%
2%
2,205,752 2,130,611
2,205,107 2,138,792
4%
3%
2.84
0.78
58.3
22.9
81.2
84.7
3.22
0.74
52.4
26.9
79.3
82.9
(12%)
5%
11%
(15%)
2%
2%
2.94
0.77
51.4
26.1
77.5
82.1
3.28
0.80
53.3
26.2
79.5
82.2
39,792
66,637
36,048
68,716
10%
134,449
123,046
(3%)
274,565
267,642
30,067
11,804
41,871
8,229
64
51
29,968
15,371
45,339
7,436
71
51
39,559
60,467
37,848
67,740
27,576
8,700
36,276
7,009
993
814
985
28,795
10,408
39,203
6,726
1,006
862
1,127
4,622
10,375
717
721
5,339
11,096
0%
107,359
120,053
(23%)
54,513
59,082
(8%)
161,872
179,135
11%
(10%)
0%
5%
30,547
30,835
63
50
63
50
135,178
124,061
(11%)
271,165
266,702
(4%)
(16%)
98,130
110,752
37,732
40,828
(7%)
135,862
151,580
4%
(1%)
(6%)
(13%)
(55%)
(1%)
(52%)
26,651
27,224
1,027
796
955
884
712
858
19,490
23,863
2,869
3,064
22,359
26,927
(10%)
(4%)
(4%)
0%
(3%)
0%
9%
3%
(11%)
(8%)
(10%)
(1%)
0%
0%
9%
2%
(11%)
(8%)
(10%)
(2%)
16%
12%
11%
(18%)
(6%)
(17%)
1)
2)
Represents payable metals in gold-copper and pyrite concentrate sold based on provisional invoices.
Represents capital expenditures on an accrual basis and do not represent the cash outlays for the capital expenditures.
Metals production
Gold contained in gold-copper concentrate produced in the fourth quarter of 2023 of 30,067 was
comparable to the corresponding period in 2022 due primarily to higher gold recoveries largely offset by
lower gold grades. Relative to the fourth quarter of 2022, gold contained in pyrite concentrate produced in
the fourth quarter of 2023 decreased by 23% to 11,804 ounces due primarily to lower gold grades and
recoveries.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 27 Relative to 2022, gold contained in gold-copper concentrate produced in 2023 decreased by 11% to
107,359 ounces due primarily to lower gold grades and recoveries, in-line with the mine plan. Gold
contained in pyrite concentrate produced in 2023 of 54,513 ounces was 8% lower than 2022 due primarily
to lower gold grades.
Copper production in the fourth quarter of 2023 of 8.2 million pounds was 11% higher than the
corresponding period in 2022 due primarily to higher copper grades. Copper production in 2023 of 30.5
million pounds was comparable to 2022 due primarily to lower copper grades largely offset by higher
volumes of ore processed.
Metals sold
Relative to the fourth quarter of 2022, payable gold in gold-copper concentrate sold in the fourth quarter
of 2023 decreased by 4% to 27,576 ounces, due primarily to the timing of deliveries. Payable gold in
pyrite concentrate sold decreased by 16% to 8,700 ounces in the fourth quarter of 2023, compared to the
corresponding period in 2022, due primarily to lower gold production.
Relative to 2022, payable gold in gold-copper concentrate sold in 2023 decreased by 11% to 98,130
ounces and payable gold in pyrite concentrate sold in 2023 decreased by 8% to 37,732 ounces,
respectively, reflecting lower gold production.
Payable copper in the fourth quarter of 2023 of 7.0 million pounds was 4% higher than the corresponding
period in 2022 due primarily to higher copper production, partially offset by the timing of deliveries.
Payable copper in 2023 of 26.7 million pounds was comparable to 2022, consistent with copper
production.
Inventory
Gold-copper concentrate inventory totalled 1,112 tonnes as at December 31, 2023, down from 1,841
tonnes as at December 31, 2022. Pyrite concentrate inventory totalled 17,641 tonnes as at December 31,
2023, up from 14,241 tonnes as at December 31, 2022. These changes in inventory were due primarily to
the timing of deliveries.
Cash cost measures
Cash cost per tonne of ore processed in the fourth quarter and full year of 2023 of $51 and $50,
respectively, was comparable to the corresponding periods in 2022 due primarily to higher prices for
labour and direct materials and a stronger Euro relative to the U.S. dollar, largely offset by lower prices for
power and higher volumes of ore processed.
Cash cost per ounce of gold sold in the fourth quarter of 2023 of $814 was 6% lower than the
corresponding period in 2022 due primarily to higher by-product credits reflecting higher volumes and
prices of copper sold and lower prices for power, partially offset by lower volumes of gold sold and a
stronger Euro relative to the U.S. dollar. Cash cost per ounce of gold sold in 2023 of $796 was 12%
higher than 2022 due primarily to lower volumes of gold sold, lower by-product credits reflecting lower
volumes and prices of copper sold, higher prices for labour and direct materials and a stronger Euro
relative to the U.S. dollar, partially offset by lower treatment and freight charges as a result of increased
deliveries to third-party smelters and lower prices for power.
All-in sustaining cost per ounce of gold sold in the fourth quarter and full year of 2023 was $985 and
$955, respectively, compared to $1,127 and $858 in the corresponding periods in 2022 due primarily to
the same factors impacting cash cost per ounce of gold sold, as well as lower cash outlays for sustaining
capital expenditures.
28 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Capital expenditures
Capital expenditures in the fourth quarter and full year of 2023 of $5.3 million and $22.4 million,
respectively, were $5.8 million and $4.5 million lower than the corresponding periods in 2022 due
primarily to the timing of expenditures. The planned upgrade of the tailings management facility was
completed in the second quarter of 2023.
Mineral Reserve and Mineral Resource update
On November 29, 2023, the Company announced a mine life extension to 2032 and an interim update to
the Mineral Resource and Mineral Reserve estimates and LOM plan for the Chelopech mine. The
updated Mineral Reserve estimate for Chelopech, effective as of May 31, 2023, consists of total Proven
and Probable Mineral Reserves with 17.6 million tonnes (“Mt”) grading 2.77 g/t of gold, 0.79% copper and
8.63 g/t of silver, for 1.57 million ounces of gold, 305.3 million pounds of copper and 4.99 million ounces
of silver.
Compared to the December 31, 2022 Mineral Reserve estimate, the Company successfully added 1% to
contained ounces of gold with contained pounds of copper decreasing by 2% relative to the previous
Mineral Reserve estimate, extending the LOM to 2032. The updated LOM plan added approximately
128,000 ounces of recovered gold and 9 million pounds of recovered copper between 2024 and 2032,
with average LOM gold grade and copper grades increased by 5% and 3% respectively, and recoveries
for gold increased by approximately 5%.
Current Mineral Resources, effective as of May 31, 2023 and exclusive of Mineral Reserves, consist of
Measured and Indicated Mineral Resources with 15.4 Mt grading 2.39 g/t of gold, 0.78% copper and 9.41
g/t of silver, for 1.185 million ounces of gold, 265 million pounds of copper and 4.669 million ounces of
silver.
Inferred Mineral Resources were 4.3 Mt grading 2.00 g/t of gold, 0.71% copper and 8.90 g/t of silver, for
0.274 million ounces of gold, 67 million pounds of copper and 1.219 million ounces of silver. The Mineral
Resources demonstrate the potential to extend the mine life, if such Mineral Resources are converted to
Mineral Reserves.
See the Company’s press release dated November 29, 2023 entitled “Dundee Precious Metals Extends
Life of Mine Plan to 2032 for the Chelopech Mine in Bulgaria; Provides Mineral Reserve and Mineral
Resource Update and Highlights from Exploration Activities” for additional information, including key
assumptions and parameters relating to the foregoing Mineral Resource and Mineral Reserve Estimates,
as well as the Chelopech Technical Report, which have been posted on the Company’s website at
www.dundeeprecious.com and have been filed on SEDAR+ at www.sedarplus.ca.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 29 Review of Ada Tepe Results
$ thousands, unless otherwise indicated
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Operating Highlights
Ore mined
Stripping ratio (waste/ore)
Ore processed
Gold head grade
Gold recoveries(1)
Gold concentrate produced
Gold contained in concentrate produced
Cost of sales per tonne of ore processed
Cash cost per tonne of ore processed
Gold concentrate delivered
Payable gold in concentrate sold(2)
Cost of sales per ounce of gold sold
Cash cost per ounce of gold sold
All-in sustaining cost per ounce of gold sold
Capital expenditures incurred(3):
Sustaining
Growth
Total capital expenditures
t
t
g/t
%
t
oz
$/t
$/t
t
oz
$/oz
$/oz
$/oz
174,017
194,285
(10%)
780,614
733,691
3.32
3.31
0%
3.09
3.44
170,699
206,153
(17%)
747,604
852,990
7.47
86.0
5.04
84.2
2,174
1,716
35,212
28,081
146
72
125
58
2,093
1,655
33,288
26,628
750
384
475
965
464
555
2,825
2,077
686
-
3,511
2,077
48%
2%
27%
25%
17%
24%
26%
25%
(22%)
(17%)
(14%)
36%
100%
69%
6%
(10%)
(12%)
60%
2%
51%
43%
17%
22%
51%
43%
(29%)
(23%)
(26%)
6.51
85.7
4.06
84.4
8,426
5,577
134,200
93,974
140
67
120
55
8,339
5,509
129,881
91,117
806
416
500
1,128
537
676
9,708
9,830
(1%)
686
-
100%
10,394
9,830
6%
1)
2)
3)
Recoveries are after the flotation circuit but before filtration.
Represents payable metals in gold concentrate sold based on provisional invoices.
Represents capital expenditures on an accrual basis and do not represent the cash outlays for the capital expenditures.
Gold production
Gold contained in concentrate produced in the fourth quarter and full year of 2023 of 35,212 ounces and
134,200 ounces, respectively, was 25% and 43% higher than the corresponding periods in 2022 due
primarily to mining higher grade zones, partially offset by lower volumes of ore processed, in-line with the
mine plan. The Ada Tepe mine achieved record production for both the quarter and the year.
Gold sold
Payable gold in concentrate sold in the fourth quarter and full year of 2023 of 33,288 ounces and 129,881
ounces, respectively, was 25% and 43% higher than the corresponding periods in 2022, consistent with
higher production.
Inventory
Gold concentrate inventory totalled 184 tonnes as at December 31, 2023, up from 97 tonnes as at
December 31, 2022.
Cash cost measures
Cash cost per tonne of ore processed in the fourth quarter and full year of 2023 of $72 and $67,
respectively, was 24% and 22% higher than the corresponding periods in 2022 due primarily to lower
volumes of ore processed. Cash cost per tonne of ore processed in 2023 was also impacted by higher
royalties reflecting higher contained ounces of gold mined.
30 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Cash cost per ounce of gold sold in the fourth quarter and full year of 2023 of $384 and $416,
respectively, was 17% and 23% lower than the corresponding periods in 2022 due primarily to higher
volumes of gold sold which primarily benefited from higher gold grades.
All-in sustaining cost per ounce of gold sold in the fourth quarter and full year of 2023 of $475 and $500,
respectively, was 14% and 26% lower than the corresponding periods in 2022 due primarily to lower cash
cost per ounce of gold sold, as well as the timing of cash outlays for sustaining capital expenditures.
Capital expenditures
Capital expenditures in the fourth quarter and full year of 2023 were $3.5 million and $10.4 million,
respectively, compared to $2.1 million and $9.8 million in the corresponding periods in 2022 due primarily
to timing of expenditures. The accelerated grade control drilling program at Ada Tepe was completed in
the first quarter of 2022.
DEVELOPMENT AND OTHER MAJOR PROJECTS
Čoka Rakita Project
In December 2023, DPM announced an Inferred Mineral Resource of 9.79 Mt at a grade of 5.67 g/t for
1.78 million ounces of gold at Čoka Rakita, and subsequently filed a technical report entitled “Maiden
Mineral Resource Estimate - Čoka Rakita Gold Project, Serbia”, with an effective date of November 26,
2023, (the Čoka Rakita Technical Report”). The maiden MRE was completed after only one full year of
drilling on the project, and is based on approximately 81,000 metres of drilling in 173 holes. The Inferred
Mineral Resource contains a significant portion of gold ounces within a continuous high-grade core of
mineralization that amounts to 2.81 Mt at a grade of 10.12 g/t Au for 0.914 million ounces of gold.
Based on the favourable size and quality of the MRE, DPM will continue to accelerate the project and
expects to complete a PEA in the second quarter of 2024, targeting a throughput rate of 850,000 tonnes
per annum.
Čoka Rakita benefits from good infrastructure, including existing nearby roads and power lines. The
project is located in close regional proximity to DPM's existing operations in Bulgaria and is a strong fit
with the Company's underground mining and processing expertise, with metallurgical test work
demonstrating gold recoveries of approximately 90% by gravity concentration and conventional flotation.
DPM is continuing its drilling program focused on extending the limits of Čoka Rakita, which remains open
to the northeast and to the southwest, and is also aggressively pursuing additional skarn targets on the
Čoka Rakita licence as well as on three additional licences to the north and the south. See the
“Exploration – Serbia Exploration” section contained in this MD&A for additional details on the drilling
program at Čoka Rakita.
The Company has budgeted between $10 million and $13 million on the PEA for the project in 2024.
See the Company’s news release dated December 11, 2023 entitled “Dundee Precious Metals
Announces High-Grade Underground Maiden Mineral Resource Estimate of 1.8 Million Inferred Gold
Ounces at its Čoka Rakita Project in Serbia” and the Čoka Rakita Technical Report, respectively, for
additional information, which have been posted on the Company’s website at www.dundeeprecious.com
and have been filed on SEDAR+ at www.sedarplus.ca.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 31 Loma Larga Gold Project
At the Loma Larga project in Ecuador, the Company continued to progress activities related to permitting
and stakeholder relations. In October 2023, a new President of Ecuador was elected and the Company is
working with the newly formed government to fulfill the requirements of the August 2023 ruling by the
Provincial Court of Azuay in connection with the Constitutional Protective Action that was filed in 2022 (the
“Action”).
Based on the Company’s analysis, the decision reaffirmed DPM’s concessions for the Loma Larga project
and clarified that free, prior and informed consultation of certain local indigenous populations must be
carried out by the state, which the Company had already planned as part of its development of the
project. The decision also held that environmental consultation with communities in the project’s area of
influence and certain additional reports on the impact of the project on water resources and the
Quimsacocha National Recreation Area would need to be provided by the Ministry of Environment, Water
and Ecological Transition to the court prior to advancing the project to the exploitation phase.
In line with this ruling, the Government of Ecuador commenced the environmental consultation process
for the Loma Larga project. DPM will continue to support the Government of Ecuador and proactively
engage with stakeholders for the fulfillment of the conditions established by the court.
As previously reported, DPM will continue optimizating the updated FS in order to evaluate additional
opportunities and to potentially incorporate the results of drilling, once these activities are able to
recommence. These scope changes, combined with inflationary pressures consistent with general
industry trends, are expected to result in a significant increase to the estimated initial capital and
operating costs for the project. This may impact project economics and other parameters, including the
Mineral Resource and Mineral Reserve estimate, which are being assessed as the additional work
required for the updated FS nears completion. DPM will continue to take a disciplined approach with
respect to future investments in the Loma Larga project, based on the receipt of key milestones and the
overall operating environment in-country, and other capital allocation priorities.
During the third quarter of 2023, the Company entered into an IPA with the Government of Ecuador for
Loma Larga. The IPA provides tax stability and certain tax incentives, as well as legal protections
including stability of the regulatory framework and resolution of disputes through international arbitration.
The Company maintains a constructive relationship with government institutions and other stakeholders
involved with the development of the project.
The Company has budgeted between $10 million and $11 million for the project in 2024, approximately
half of the amount spent in 2023.
For further details on the Action, please see the news releases issued on February 24, 2022, July 13,
2022 and August 29, 2023, which are available on the Company’s website at www.dundeeprecious.com
and have been filed on SEDAR+ at www.sedarplus.ca. For further details on the IPA, please see the news
release
the Company’s website at
www.dundeeprecious.com and has been filed on SEDAR+ at www.sedarplus.ca.
issued on August 18, 2023, which
is available on
32 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 EXPLORATION
Chelopech Mine
DPM continues to aggressively focus on extending Chelopech’s mine life through its successful in-mine
exploration program. In 2023, the Company continued to advance in-mine exploration activities aimed at
resource development, drilling approximately 44,500 metres with total 244 holes, which included
approximately 26,300 metres of extensional drilling designed to explore for new mineralization along
interpreted geological trends and to test several potential exploration targets.
A total of 13,972 metres of underground drilling were undertaken from four positions towards Target 11,
which is located in the northeastern area of the mine. Drilling expanded both the mineralized contour and
the enveloping silica alteration zone.
Structurally controlled zones of pyrite rich, high-sulphidation mineralization located on the northern flank
of Chelopech were identified. Approximately 2,000 metres were drilled towards Targets 183, 184 and 185
from two positions. As a result, the existing mineralization in the most northwestern parts of the deposit
was extended.
In 2023, approximately 3,725 metres were completed as part of a larger program to test the potential of
the Quartz-Barite-Gold-Sulphide (“QBGS”) zone, which is located in the southeastern section of the mine.
The results of this program returned sporadic, narrow intervals with occasional elevated grade values.
Extensions to the silica envelope of Block 18 were encountered. The QBGS zone remains open in
multiple directions and further resource definition drilling is planned to delineate this zone.
In addition, the in-mine drilling program has focused on testing the upper levels of the western part of the
deposit. Approximately 4,600 metres were completed in the gaps between Blocks 150 and 151, as well as
Blocks 103 – 153 and 150 – 153. No significant mineralization was detected in the gap areas, however,
the ore bodies located in the blocks stated above were either confirmed or extended. High-grade contour
of Block 150 was extended by approximately 20 metres to the southeast and by 15 metres vertically.
Furthermore, the contours of silica alteration of Blocks 150 and 151 were expanded locally. Additionally,
the silica contour of Block 153 was expanded, by approximately 70 metres, both along strike and
vertically.
Holes drilled as part of the drilling program towards Block 7 demonstrated significant intersections and
extended the upper extents of the block’s mineralization contours.
In the first quarter of 2024, the Mineral Resource development strategy for Chelopech will be focused on
extensional drilling in:
•
•
•
The Target North zone, which is located on the northern flank of the Chelopech mine concession
and is manifested as an isolated, structurally and lithologically controlled intervals of high-
sulphidation type of mineralization. Several extensional drilling programs are planned for the
target, including testing the northern area of Block 19 for high-grade structurally controlled
orebodies between levels 450 and 500, and drilling to the west of Block 147 to explore for similar
bodies at a depth of levels 200 to 500.
An area northwest from Block 147 (Target 147 deep). This peripheral part of the deposit is highly
prospective, with lithological and structural characteristics suggesting a steeply dipping, lens like
shape of mineralization. Mineralization is located on the contact zone between a breccia body
and a coherent magmatic rock.
Extensional drilling south-east from Block 700 is planned to better assess the economic
significance of the QBGS zone. This program is a continuation of previous successful drilling
campaigns and will focus on identifying an extension of the mineralized system to the south-east
and at depth.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 33 The Company has budgeted a total of $2 million to $3 million on exploration activities at the Chelopech
mine in 2024, which is included in the guidance for the growth capital expenditures.
Chelopech Brownfield Exploration
During the fourth quarter of 2023, DPM continued to advance the Chelopech brownfield exploration
program at the Brevene exploration licence and the Sharlo Dere target within the mine concession.
Approximately 6,800 metres of surface diamond drilling were completed.
At the Sharlo Dere prospect, a 50-metre by 50-metre infill drilling program has been completed which is
aimed at assessing the economic potential at the Sharlo Dere prospect. For more details about the
brownfield exploration results for Sharlo Dere, please refer to the Company’s news release issued on
November 29, 2023, which is available on the Company’s website at www.dundeeprecious.com and has
been filed on SEDAR+ at www.sedarplus.ca.
In January 2024, the Company received the Commercial Discovery Certificate from the Bulgarian
authorities for the Sveta Petka exploration licence, which includes the Wedge, West Shaft, Krasta and
Petrovden prospects. This allows the Company to apply for concession rights in 2024 for the area which
is now designated as Chelopech North.
An intensive drilling campaign on the Brevene exploration licence has been completed and application for
Geological Discovery was filed in December in 2023, with the goal of obtaining the Geological Discovery
Certificate in mid-2024.
The Company has planned a total of $4 million to $5 million for Chelopech brownfield exploration
activities in 2024.
Ada Tepe Brownfield Exploration
During the fourth quarter of 2023, exploration activities at Ada Tepe camp were focused on a target
delineation campaign and scout drilling on the new Krumovitsa exploration licence.
Krumovitsa Exploration Licence
Scout drilling of several epithermal sediment hosted targets was advanced in the fourth quarter of 2023,
and is planned to continue in the first quarter of 2024. The exploration team has continued systematic
geological mapping and rock sampling in conjunction with spectral data acquisition and interpretation.
Additionally, the Company deployed a passive seismic orientation survey to understand the basin
morphology and enhance undercover targeting.
Chiirite Exploration Licence
Permitting for drilling at Kara Tepe is ongoing and drilling is planned to commence in the second quarter
of 2024, pending the positive outcome of the associated Environmental Impact Assessment process.
The Company has planned a total of $4 million to $5 million for Ada Tepe brownfield exploration activities
and another $1 million to $2 million for Ada Tepe greenfield exploration activities in 2024.
Serbia Exploration
In the fourth quarter, exploration activities in Serbia continued to focus on an accelerated drilling program
at the Čoka Rakita deposit, with approximately 19,500 metres completed.
34 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Infill drilling is well advanced, covering the core of the system, in order to provide additional confidence on
the continuity and high-grade nature of the mineralization, and the Company completed a maiden MRE
for Čoka Rakita in December 2023 (see “Development and Other Major Projects - Čoka Rakita Gold
Project” section contained in this MD&A for further details).
The Company also continued scout drilling to test other camp-wide targets near Čoka Rakita and
completed additional deep magneto-telluric (MT) survey covering the Čoka Rakita and Dumitru Potok
targets, which highlighted a deep, high-conductivity anomaly that is currently being tested. Scout drilling
intercepted favourable geological indicators on the north and north west flank of the system where
additional marble hosted skarn mineralization was encountered.
Following the grant of the two new exploration licences over the area hosting the Timok gold project, the
Company is currently preparing an aggressive exploration program and plans to start testing the
favourable stratigraphy for carbonate replacement and skarns on the new Potaj Čuka exploration licence,
located to the north of Čoka Rakita, as well as on the new Pešter Jug exploration licence, which is to the
west of Čoka Rakita. This program is expected to commence in early 2024, pending approval of the work
program and permitting procedures, with approximately 25,000 meters of drilling planned for the first year
of exploration at these targets.
The Company has budgeted between $20 million and $22 million for Serbian exploration activities.
For further details, see the Company’s news release dated December 11, 2023 entitled “Dundee Precious
Metals Announces High-Grade Underground Maiden Mineral Resource Estimate of 1.8 Million Inferred
Gold Ounces at its Čoka Rakita Project in Serbia” and the Čoka Rakita Technical Report, respectively, for
additional information, which have been posted on the Company’s website at www.dundeeprecious.com
and have been filed on SEDAR+ at www.sedarplus.ca.
Ecuador Exploration
Loma Larga Concessions
On the Loma Larga concessions, drilling activities remain paused following the decision on the appeal of
the Action, which was received in mid-August 2023. (see the “Development and Other Major Projects –
Loma Larga Gold Project” section contained in this MD&A for further details). The 15,800-metre program
consists of hydrogeological, geotechnical, metallurgical, condemnation and extensional drilling.
Tierras Coloradas Concessions
In the first quarter of 2023, the Company reported the results of a 2,700-metre diamond drilling program
completed in the fourth quarter of 2022. The drilling program was designed to test a series of epithermal
veins, previously identified by field work and scout drilling in 2020. Drilling confirmed two high-grade vein
systems that remain open in multiple directions.
The Company commenced a 10,000-metre drilling program in August 2023, completed a total of
approximately 4,200 metres during the fourth quarter of 2023 for a total of approximately 6,500 metres for
the year. Assay results are pending. The primary focus of the drilling campaign is to further assess the
extension and geometry of the Aparecida and La Tuna vein systems, to test other additional high-grade
veins and to follow up on soil anomalies with high-sulfidation epithermal or porphyry type geochemical
signatures.
During 2023, detailed surface mapping was performed in conjunction with soil and rock chip-channel
sampling, in order to determine the surface footprint and identify drilling targets. Additional field work will
continue in the first quarter of 2024.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 35 The change in status of the Tierras Coloradas project from early to advanced stage exploration was
initiated in 2023, but is delayed following the suspension of legislation establishing the process for
environmental consultations required for licensing of industrial and mining projects by the Constitutional
Court of Ecuador.
The Company invested approximately $5 million at Tierras Coloradas in 2023 and has budgeted another
$4 million to $5 million in 2024 to support the expanded drilling program and anticipates that the
remainder of the 10,000-metre drilling campaign will be completed by the end of the first quarter of 2024.
DPM will also take a disciplined approach with respect to future investment in Tierras Coloradas, based
on the the drilling results, overall operating environment in-country and other capital allocation priorities.
For further details on the drilling program at Tierras Coloradas, please see press release entitled “Dundee
Precious Metals Announces Significant Diamond Drilling Results at Tierras Coloradas, Ecuador; Results
Include Drill Intercept of 17.3 metres at 46.09 g/t Au”, issued on February 27, 2023, which has been
posted on the Company’s website at www.dundeeprecious.com and has been filed on SEDAR+ at
www.sedarplus.ca.
REVIEW OF FINANCIAL RESULTS
$ thousands, unless otherwise indicated
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Revenue
Cost of sales
General and administrative expenses
Corporate social responsibility expenses
Exploration and evaluation expenses
Finance costs
Other income and expense
Earnings before income taxes from
continuing operations
Income tax expense
Net earnings from continuing operations
Per share from continuing operations
$/sh
Adjusted EBITDA from continuing
operations
Adjusted net earnings from continuing
operations
Per share from continuing operations
Revenue
139,339
112,968
23%
520,091
433,490
60,980
10,001
2,462
13,457
957
65,141
10,384
3,503
8,382
770
(6%)
(4%)
(30%)
61%
24%
20%
3%
28%
244,207
236,668
36,525
28,543
4,948
6,240
(21%)
46,558
24,230
3,499
3,340
92%
5%
(6,972)
(1,586)
340%
(21,348)
(4,934)
333%
58,454
26,374
6,409
52,045
0.29
4,312
22,062
0.12
122%
49%
136%
142%
205,702
139,403
23,726
22,819
181,976
0.98
116,584
0.61
48%
4%
56%
61%
72,013
45,428
59%
268,355
222,847
20%
$/sh
50,041
0.28
22,062
0.12
127%
133%
179,972
0.97
118,953
0.62
51%
56%
Revenue in the fourth quarter of 2023 of $139.3 million was 23% higher than the corresponding period in
2022 due primarily to higher volumes and realized prices of gold sold.
Revenue in 2023 of $520.1 million was 20% higher than 2022 due primarily to higher volumes and
realized prices of gold sold, and lower treatment and freight charges at Chelopech as a result of
increased deliveries to third-party smelters, partially offset by lower volumes and realized prices of copper
sold.
36 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 The following table summarizes revenue by segment:
$ thousands
Chelopech(1)
Ada Tepe(1)
Total revenue
Fourth Quarter
Full Year
2022
Change
2023
2022
Change
2023
72,336
67,003
66,361
46,607
139,339
112,968
9%
44%
23%
268,790
271,648
251,301
161,842
520,091
433,490
(1%)
55%
20%
1)
Includes the value of payable metals sold, deductions for treatment charges, penalties, transportation and other selling costs, and final
settlements to reflect any physical and cost adjustments on provisionally priced sales.
At Chelopech, revenue in the fourth quarter of 2023 of $72.3 million was 9% higher than the
corresponding period in 2022 due primarily to higher realized gold and copper prices, partially offset by
lower volumes of gold sold. Revenue in 2023 of $268.8 million was comparable to 2022 due primarily to
lower volumes of gold sold and lower volumes and realized prices of copper sold, partially offset by higher
realized gold prices and lower treatment and freight charges.
At Ada Tepe, revenue in the fourth quarter and full year of 2023 of $67.0 million and $251.3 million,
respectively, was 44% and 55% higher than the corresponding periods in 2022 due primarily to higher
volumes and realized prices of gold sold.
Cost of sales
Cost of sales in the fourth quarter of 2023 of $61.0 million decreased compared to $65.1 million in the
corresponding period in 2022 due primarily to lower prices for power and lower depreciation expenses.
Cost of sales in 2023 of $244.2 million increased compared to $236.7 million in 2022 due primarily to
higher local currency mine operating costs reflecting higher costs for labour and direct materials, partially
offset by lower prices for power.
General and administrative expenses
General and administrative expenses in the fourth quarter and full year of 2023 of $10.0 million and $36.5
million, respectively, was $0.4 million lower and $8.0 million higher than the corresponding periods in
2022 due primarily to mark-to-market adjustments to share-based compensation expenses, reflecting
DPM’s strong share price performance.
Share-based compensation expense included in general and administrative expenses in the fourth
quarter and full year of 2023 was $2.4 million and $11.8 million, respectively, compared to $3.0 million and
$4.8 million in the corresponding periods in 2022.
Exploration and evaluation expenses
Exploration and evaluation expenses in the fourth quarter and full year of 2023 of $13.5 million and $46.6
million, respectively, increased compared to $8.4 million and $24.2 million in the corresponding periods in
2022 due primarily to accelerated drilling and evaluation activities at Čoka Rakita in Serbia following the
high-grade discovery announced in January 2023, additional drilling at Brevene in Chelopech and
increased focus on drilling at Tierras Coloradas in Ecuador.
For a more detailed discussion on the Company’s exploration activities, refer to the “Exploration” section
of this MD&A.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 37 Finance costs
Finance costs are comprised of interest and other deemed financing costs in respect of the Company’s
debt facilities, lease obligations and rehabilitation provisions.
Finance costs in the fourth quarter and full year of 2023 were $1.0 million and $3.5 million, respectively,
compared to $0.8 million and $3.3 million in the corresponding periods in 2022.
Other income and expense
The following table summarizes items making up other income and expense:
Fourth Quarter
$ thousands
Realized (gains) losses on foreign exchange forward contracts(1)
Net gains on derivatives(1)
Net losses on Sabina special warrants(1)
Net foreign exchange (gains) losses(2)
Interest income
Other, net
Total other (income) and expense
1)
2)
Refer to the “Financial Instruments” section of this MD&A for more details.
Primarily related to the revaluation of foreign denominated monetary assets and liabilities.
Income tax expense
2023
-
(2,004)
-
1,896
(6,171)
(693)
(6,972)
2022
(2,159)
-
-
3,453
(3,656)
776
(1,586)
Full Year
2023
4,516
(2,004)
-
(2,064)
(23,250)
1,454
(21,348)
2022
(3,029)
-
2,369
1,677
(6,494)
543
(4,934)
The effective tax rate of the Company can vary significantly from one period to the next based on a
number of factors. For the fourth quarter and full year of 2023 and 2022, the Company’s effective tax rate
was impacted primarily by the Company’s overall earnings, mix of foreign earnings or losses, which are
subject to lower tax rates in certain jurisdictions, and changes in unrecognized tax benefits relating to
corporate operating, exploration and evaluation costs, as well as unrealized gains or losses on the
Company’s publicly traded securities recognized in other comprehensive income (loss).
$ thousands, unless otherwise indicated
Fourth Quarter
Full Year
Earnings before income taxes from continuing operations
Combined Canadian federal and provincial statutory income tax rates
Expected income tax expense
Lower rates on foreign earnings
Changes in unrecognized tax benefits
Non-taxable portion of capital (gains) losses
Non-deductible share-based compensation expense
Other, net
Income tax expense
Effective income tax rates
Net earnings from continuing operations
2023
58,454
26.5%
15,490
(11,433)
3,695
2022
26,374
26.5%
6,989
(985)
70
(1,543)
(2,458)
62
138
6,409
11.0%
74
622
4,312
16.3%
2023
2022
205,702
139,403
26.5%
54,511
26.5%
36,942
(37,400)
(26,593)
7,741
(1,102)
260
(284)
23,726
11.5%
9,492
2,223
296
459
22,819
16.4%
Net earnings from continuing operations in the fourth quarter of 2023 of $52.1 million ($0.29 per share)
increased compared to $22.1 million ($0.12 per share) in the corresponding period in 2022 due primarily
to higher volumes and realized prices of gold and copper sold, partially offset by higher planned
exploration and evaluation expenses.
38 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Net earnings from continuing operations in 2023 of $182.0 million ($0.98 per share) increased compared
to $116.6 million ($0.61 per share) in 2022 due primarily to higher volumes and realized prices of gold
sold, lower treatment and freight charges at Chelopech and higher interest income, partially offset by
higher planned exploration and evaluation expenses, and higher share-based compensation expenses
reflecting DPM’s strong share performance.
Adjusted net earnings from continuing operations
The following table summarizes the key drivers affecting the changes in adjusted net earnings from
continuing operations:
$ millions
Adjusted net earnings from continuing operations – 2022
Higher realized metal prices
Higher volumes of metal sold
Higher interest income
Lower (higher) treatment and freight charges
Higher exploration and evaluation expenses
Other
Lower (higher) share-based compensation expense
Lower (higher) local currency mine operating expenses
Fourth
Quarter
22.1
19.5
8.3
2.5
(1.4)
(5.1)
(1.2)
0.7
4.7
Full
Year
119.0
39.7
39.2
16.8
7.7
(22.3)
(7.9)
(7.3)
(4.9)
Adjusted net earnings from continuing operations – 2023
50.1
180.0
Adjusted net earnings from continuing operations in the fourth quarter and full year of 2023 of $50.1
million ($0.28 per share) and $180.0 million ($0.97 per share), respectively, increased compared to $22.1
million ($0.12 per share) and $118.9 million ($0.62 per share) in the corresponding periods in 2022 due
primarily to the same factors affecting net earnings from continuing operations.
Earnings before income taxes from continuing operations
Earnings before income taxes from continuing operations, in the fourth quarter and full year of 2023 of
$58.5 million and $205.7 million, respectively, increased compared to $26.4 million and $139.4 million in
the corresponding periods in 2022, reflecting the same factors that affected net earnings from continuing
operations, except for income taxes, which are excluded.
Adjusted EBITDA from continuing operations
Adjusted EBITDA from continuing operations in the fourth quarter and full year of 2023 was $72.0 million
and $268.4 million, respectively, compared to $45.5 million and $222.9 million in the corresponding
periods in 2022, reflecting the same factors that affected adjusted net earnings from continuing
operations, except for interest, income taxes, depreciation and amortization, which are excluded from
adjusted EBITDA.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 39 DISCONTINUED OPERATIONS
In 2023, the Company decided to undertake a strategic review of its Tsumeb operation, including a
potential sale, given that the smelter is no longer expected to process any Chelopech concentrate
commencing in 2024 and as a result, it is no longer seen as strategic to DPM's asset portfolio. As a result,
the assets and liabilities of Tsumeb have been presented as held for sale in the consolidated statement of
financial position as at December 31, 2023 and the operating results and cash flows of Tsumeb have
been presented as discontinued operations in the consolidated statements of earnings (loss) and cash
flows for the years ended December 31, 2023 and 2022. As a consequence, certain comparative figures
in the consolidated statements of earnings (loss) and cash flows have been reclassified to conform with
current year presentation.
Tsumeb Operating and Financial Highlights
$ thousands, unless otherwise indicated
Fourth Quarter
2023
2022
Change
2023
Full Year
2022
Change
t
t
t
$/t
$/t
t
t
Operating Highlights
Complex concentrate smelted:
Chelopech
Third parties
Total
Cost of sales per tonne of complex concentrate
smelted
Cash cost per tonne of complex concentrate
smelted
Sulphuric acid:
Production
Deliveries
Tsumeb capital expenditures incurred(1):
Sustaining
Growth
Total capital expenditures
Financial Highlights
Tsumeb revenue
Tsumeb cost of sales
Tsumeb impairment charge
Earnings (loss) before income taxes from
discontinued operations
Adjusted EBITDA from discontinued operations
Net earnings (loss) from discontinued
operations
Adjusted net earnings from discontinued
operations
19,139
48,752
67,891
10,532
31,303
41,835
82%
56%
62%
41,816
62,368
146,987 111,754
188,803 174,122
(33%)
32%
8%
411
320
621
(34%)
443
(28%)
525
414
694
(24%)
463
(11%)
71,286
58,528
45,717
59,943
56%
(2%)
195,265 198,386
185,197 203,912
3,392
-
3,392
3,848
-
3,848
(12%)
0%
(12%)
13,649
378
14,027
18,797
963
19,760
36,705
39,895
(8%)
114,309 136,305
(2%)
(9%)
(27%)
(61%)
(29%)
(16%)
(18%)
27,875
25,969
-
-
7%
0%
99,047 120,779
-
85,000
(100%)
5,431
7,621
11,257
12,826
(52%)
(41%)
10,963
(80,661)
114%
18,808
30,022
(37%)
5,431
11,257
(52%)
10,963
(80,661)
114%
5,431
11,257
(52%)
10,963
10,074
9%
1) Represents capital expenditures on an accrual basis and do not represent the cash outlays for the capital expenditures.
Production and sulphuric acid deliveries
Complex concentrate smelted in the fourth quarter of 2023 of 67,891 tonnes was 26,056 tonnes higher
than the corresponding period in 2022 reflecting improved operating performance as a result of the
maintenance work which occurred in the third quarter of 2023, compared to a 17-day shutdown to repair a
water leak in the off-gas system and instability in the power grid as a result of abnormally heavy rainfall in
December 2022. Complex concentrate smelted in 2023 of 188,803 tonnes was 14,681 tonnes higher than
2022 due primarily to increased plant availability following the completion of the maintenance work in the
third quarter of 2023.
40 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Sulphuric acid production in the fourth quarter of 2023 of 71,286 tonnes was 25,569 tonnes higher than
the corresponding period in 2022, consistent with higher volumes of complex concentrate smelted.
Sulphuric acid production in 2023 of 195,265 tonnes was 3,121 tonnes lower than 2022, due primarily to
lower sulphuric acid contained in complex concentrate smelted.
Sulphuric acid deliveries in the fourth quarter and full year of 2023 of 58,528 tonnes and 185,197 tonnes,
respectively, were 1,415 tonnes and 18,715 tonnes lower than the corresponding periods in 2022
reflecting the timing of deliveries.
Cash cost per tonne of complex concentrate smelted
Cash cost per tonne of complex concentrate smelted in the fourth quarter of 2023 of $320 was $123 lower
than the corresponding period in 2022 due primarily to higher volumes of complex concentrate smelted
reflecting improved operating performance following the Ausmelt furnace maintenance shutdown, partially
offset by lower sulphuric acid by-product credits. Cash cost per tonne of complex concentrate smelted in
2023 of $414 was $49 lower than 2022 due primarily to higher volumes of complex concentrate smelted
and a weaker ZAR relative to the U.S. dollar, partially offset by lower sulphuric acid by-product credits.
Tsumeb capital expenditures
Capital expenditures in the fourth quarter and full year of 2023 were $3.4 million and $14.0 million,
respectively, compared to $3.8 million and $19.8 million in the corresponding periods in 2022, reflecting
benefits from the cost optimizations of the Ausmelt furnace maintenance shutdown in 2023.
Tsumeb revenue
Revenue in the fourth quarter of 2023 was $36.7 million compared to $39.9 million in the corresponding
period in 2022 due primarily to lower estimated metal recoveries, partially offset by higher volumes of
complex concentrate smelted. Revenue in 2023 was $114.3 million compared to $136.3 million in 2022
due primarily to lower estimated metal recoveries and lower acid revenue resulting from lower volumes
and market prices, partially offset by higher volumes of complex concentrate smelted.
Tsumeb cost of sales
Cost of sales in the fourth quarter of 2023 of $27.9 million was $1.9 million higher than the corresponding
period in 2022 due primarily to higher volumes of complex concentrate smelted. Cost of sales in 2023 of
$99.0 million was $21.8 million lower than 2022 due primarily to a weaker ZAR relative to the U.S. dollar
and lower depreciation expense following the impairment charge taken in the third quarter of 2022.
Tsumeb impairment charge
During the year ended December 31, 2022, the carrying value of Tsumeb exceeded its estimated
recoverable amount resulting in an impairment charge of $85.0 million. This charge was primarily
attributable to lower forecast toll revenue as a result of an expected reduction in higher arsenic bearing
third-party concentrate feed being received by the smelter, commencing in 2024, concurrent with when
the smelter is not expected to be processing any Chelopech concentrate.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 41 Net earnings (loss) from discontinued operations
Net earnings from discontinued operations in the fourth quarter of 2023 of $5.4 million, decreased
compared to $11.2 million in the corresponding period in 2022 due primarily to lower estimated metal
recoveries, partially offset by higher volumes of complex concentrate smelted. Net earnings from
discontinued operations in 2023 of $10.9 million, increased compared to a net loss from discontinued
operations of $80.7 million in 2022 due primarily to the impairment charge of $85.0 million and
restructuring costs of $5.7 million.
Adjusted net earnings from discontinued operations
Adjusted net earnings from discontinued operations in the fourth quarter and full year of 2023 was $5.4
million and $10.9 million, respectively, compared to $11.2 million and $10.1 million in the corresponding
periods in 2022 due primarily to the same factors affecting net earnings (loss) from discontinued
operations, except for adjusting items mainly related to the impairment charge and restructuring costs.
Adjusted EBITDA from discontinued operations
Adjusted EBITDA from discontinued operations in the fourth quarter and full year of 2023 was $7.6 million
and $18.8 million, respectively, compared to $12.8 million and $30.0 million in the corresponding periods
in 2022 due primarily to the same factors affecting adjusted net earnings from discontinued operations,
except for interest, income taxes, depreciation and amortization, which are excluded from adjusted
EBITDA.
Tsumeb secondary materials
As at December 31, 2023, Tsumeb had approximately $45.9 million of recoverable third party in-process
secondary materials, which it is obligated to process and return, generally in the form of blister, to IXM
S.A. (“IXM”) pursuant to a tolling agreement.
In April 2021, the Company and IXM agreed to amend the existing tolling agreement to provide for,
among other things: i) targeted declining excess secondary material balances, above which excess
secondary material would be required to be purchased by the Company; ii) the elimination of all excess
secondary material by April 30, 2023; iii) an increase in the defined level of normal secondary material;
and iv) an extension of the tolling agreement by three years to December 31, 2026.
As at December 31, 2023, the value of excess secondary materials, as defined in the tolling agreement,
was approximately $9.8 million. Given the fact that the Company had a receivable from IXM of $17.2
million related to the estimated metal exposure at Tsumeb as at December 31, 2023, IXM has agreed to
waive the requirement to purchase secondary material above the agreed normal levels.
MARKET REVIEW
Commodity prices
Commodity prices are the principal determinants of the Company’s results of continuing operations and
financial condition.
42 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 The following table summarizes the average trading prices for gold and copper based on the London
Bullion Market Association (“LBMA”) for gold and the London Metal Exchange (“LME”) for copper (Grade
A) for the quarter and year ended December 31, 2023 and 2022 and highlights the overall year over year
change in commodity prices:
Metal Prices
(Market Average)
LBMA gold
LME settlement copper
Fourth Quarter
2023
1,976
3.71
2022
1,729
3.63
Change
14%
2%
Full Year
2022
1,800
4.00
2023
1,943
3.85
Change
8%
(4%)
$/oz
$/lb
The Company’s average realized gold price for the fourth quarter and full year of 2023 of $2,025 and
$1,957 per ounce, respectively, was 16% and 9% higher than the corresponding periods in 2022,
reflecting year over year changes in market prices. The average realized copper price for the fourth
quarter and full year of 2023 of $3.74 and $3.82 per pound, respectively, was 2% higher than and 4%
lower than the corresponding periods in 2022, also reflecting year over year changes in market prices.
The price of gold is subject to volatile price movements over short periods of time and is affected by
numerous industry and macro-economic factors that are beyond the Company’s control including, but not
limited to, the supply of and demand for gold, interest rates (and interest rate expectations), inflation rates
(and inflation expectations), currency movements and the relative strength of the U.S. dollar, economic
data and market volatility, as well as central bank reserves and investor behaviours. These diverse
sources of impacts can counterbalance one another and provide gold with its uniquely stable performance
at times. Over the course of 2023, average price of gold increased by 8% and reached a record high
daily close price of $2,078 per ounce in late December. Gold prices in 2023 were impacted by demand
from emerging markets, central banks, as well as increased geopolitics risks, partially offset by the impact
of higher interest rates and the U.S dollar strength.
Overall, our view is that the demand for gold, amount of gold in the central bank reserves, the value of the
U.S. dollar, and the desire to hold gold as a hedge against inflation and currency devaluation, all help
drive the price of gold in the near-term.
The price of copper is largely influenced by the health of the global economy. This is due to its widespread
applications in all sectors of the economy, such as power generation and transmission, construction,
transportation, factory equipment and electronics. Copper prices remained largely flat year over year,
having seen strong gains in the first quarter of 2023, declines in middle of the year before rebounding in
the fourth quarter. Tight supply and fluctuating demand, particularly from slowing economic activity in
China were the significant factors impacting copper in 2023. In the short term the copper market may face
constrained supply growth in light of recent announcements of lower forecasted production from a few
larger mines.
In the long run, the supply and demand fundamentals are supportive for copper prices, with the
expectation of eventually increasing global demand, particularly for the green energy transition, facing
potential constrained growth of supply.
The Company regularly enters into cash settled commodity swap contracts to swap future contracted
monthly average metal prices for fixed metal prices in order to reduce the price exposure associated with
the time lag between the provisional and final determination of its gold and copper concentrate sales (“QP
Hedges”). In addition, the Company periodically enters into cash settled commodity swap and option
contracts to reduce its price exposure on future sales associated with projected payable copper
production (“Production Hedges”) given the higher volatility in copper prices. The Company sells and
hedges gold and copper metal contained in concentrates produced at prices that are effectively
determined by reference to the traded prices on major commodity exchanges, including the LME and the
LBMA. The Company currently has no hedges in place for its expected payable copper to be sold in
2024.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 43 Foreign exchange rates
As an entity reporting in U.S. dollars with operations in several countries, fluctuations in foreign exchange
rates between the U.S. dollar and the Bulgarian lev, which is pegged to the Euro, the Namibian dollar,
which is pegged to the South African rand (“ZAR”) on a 1:1 basis, and the Canadian dollar (“Cdn$”) can
also impact the Company’s results of operations and financial condition.
The following table sets out the average foreign exchange rates for the principal currencies impacting the
Company and highlights the overall year over year strengthening (weakening) of the U.S. dollar relative to
these currencies.
Foreign Exchange Rates
(Market Average)
US$/Cdn$
Euro/US$
US$/ZAR
2023
1.3619
1.0764
1.3580
1.0211
Fourth Quarter
Full Year
2022
Change
2022
Change
2023
1.3495
1.0815
1.3017
1.0541
0%
(5%)
6%
4%
(3%)
13%
18.7168
17.6117
18.4389
16.3531
In 2023, the U.S. dollar showed resilience as the U.S economy defied expectations of a significant
slowdown, lowering inflation and an end to the Federal Reserve’s rate hike cycle. Specifically, the U.S
dollar performance varied against different currencies.
The U.S dollar appreciated approximately 4% against the Canadian dollar in 2023 and ranged from
$1.3125 to $1.3900 throughout the year. The significant driver was the strength of the US economy which
benefited from government spending related to the Inflation Reduction Act and resilience of household
spending. Heading into 2024, the direction of the U.S dollar relative to the Canadian dollar is expected to
be driven by the central bank monetary policy decision in each respective country and growth of the
global economy effecting risk appetite for commodities and US treasuries.
The U.S dollar depreciated by 3% against the Euro over the course of 2023 and showed much lower
volatility compared to the previous year in which the European Union (“EU”) was absorbing the impact of
the fuel and energy price shocks. Heading into 2024, the U.S dollar is expected to be largely determined
by the timing of the Federal Reserve interest rate cuts throughout the year, and the central bank’s ability
to successfully orchestrate a soft landing for the US economy.
The U.S dollar appreciated by 13% against the ZAR in 2023. This was largely driven by the performance
of the South African economy being negatively impacted by the nationwide power shortages that have
become a recurring issue during the year and this situation is likely to continue into 2024 and beyond.
Fluctuations in these exchange rates increase the volatility of the Company’s cost measures reported in
the U.S. dollars. The Company periodically undertakes to purchase, in advance, a portion of its foreign
denominated cash flow requirements on a spot or forward basis to reduce this exposure. The Company
also enters into foreign exchange option contracts in order to reduce the foreign exchange exposure
associated with projected operating expenses and capital expenditures denominated in foreign
currencies. In 2023, approximately 84% of Namibian dollar operating expenses related to discontinued
operations for 2023 were hedged with option contracts providing, on a US$/ZAR basis, a weighted
average floor rate of 15.69 and a weighted average ceiling rate of 17.69. In addition, approximately 62%
of projected Namibian dollar operating expenses related to discontinued operations for 2024 have been
hedged with option contracts providing a weighted average floor rate of 17.94 and a weighted average
ceiling rate of 20.24. The Company currently has no Euro or Canadian dollar hedges in place.
44 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Energy costs
Energy costs are the single largest cost to the Company’s producing mines other than labour costs,
representing approximately 12% of its total mine cash cost at an average annual consumption rate of
approximately 165,000 megawatt hours (“MWh”). The fluctuation in energy costs can also impact the
Company’s key cost measures and results of continuing operations.
European energy prices continued to rise through the first half of 2023, resulting from the effects of
distorted energy supply chains due to Russia’s invasion of Ukraine before stabilizing and posting modest
declines for the remainder of the year. Bulgarian energy prices showed a sharper decline during the year,
reaching a 30-month low of Bulgarian lev 160 per MWh ($89 per MWh) in December 2023.
The Company’s Chelopech and Ada Tepe mines are located in Bulgaria, Eastern Europe. As Bulgaria is a
net exporter of power, Chelopech and Ada Tepe are not currently reliant on Russia for their power needs.
In addition, the Company’s exposures to the rising prices for energy were mitigated by the Bulgarian
government power subsidies starting from October 2021 and extended through to the end of 2023. The
power subsidies were applicable to both residential and commercial business operations to mitigate the
surge in electricity prices. In 2023, the Company paid an average of Bulgarian lev 220 per MWh ($122 per
MWh), net of the government power subsidy, which was based on progressive measures enacted through
the year with set price thresholds per MWh. This was slightly lower than in 2022 which the Company paid
an average of Bulgarian lev 269 per MWh ($147 per MWh). No further government power subsidies have
been announced by the Bulgarian government beyond 2023.
Fuel costs
Fuel costs are also a significant cost element to the Company through direct purchases of fuel and diesel
related to operation of mobile fleet, or indirectly through transportation costs as well as costs for other
direct materials including grinding media, reagents and certain spare parts which rely on fuel as an input
cost. In aggregate, approximately 25% to 30% of the Company’s mine cash costs are directly or indirectly
impacted by fuel costs. Fuel costs are affected directly by the crude oil prices, and therefore, fluctuations
in the crude oil prices can also impact the Company’s key cost measures and results of continuing
operations.
Crude oil prices typically fluctuate based on seasonal demand and supply and global political and
economic events. One of the main benchmarks for fuel prices, Brent Crude, saw significantly less volatility
in 2023, with average prices declining by approximately 19% year over year compared to an increase of
42% in 2022. Global markets have largely adjusted to events of the previous year, with the EU reducing
its imports of crude oil from Russia, demand for global crude oil falling short of expectations on lower
economic growth and higher crude oil supply from non-OPEC+ member such as the United States, Brazil
and Guyana. Those factors helped to offset the impacts from reduction in supply from members of
OPEC+ along with heightened geopolitical risks in the Middle East in the fourth quarter of 2023. These
key drivers are expected to continue to impact crude oil prices in 2024.
The Company does not have any oil hedges in place.
LIQUIDITY AND CAPITAL RESOURCES
As at December 31, 2023, the Company held cash of $595.3 million, and $150.0 million of undrawn
capacity under its RCF.
The Company’s liquidity is impacted by several factors which include, but are not limited to, gold and
copper market prices, production levels, capital expenditures, operating cash costs, interest rates and
foreign exchange rates. These factors are monitored by the Company on a regular basis.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 45 As at December 31, 2023, the Company’s cash resources and available capital under its RCF continue to
provide sufficient liquidity and capital resources to meet its current operating and capital expenditure
requirements, all contractual commitments, as well as a number of margin improvement and growth-
related expenditures. The Company may, from time to time, raise additional capital or amend its RCF to
ensure it maintains its financial strength and has sufficient liquidity to support the funding requirements
associated with one or more of its growth capital projects and the overall needs of the business.
Capital Allocation - Osino Acquisition, Declaration of Dividend and Share Repurchases
As part of its strategy, the Company adheres to a disciplined capital allocation framework that is based on
three fundamental considerations – balance sheet strength, reinvestment in the business, and the return
of excess capital to shareholders. Maintaining a strong balance sheet includes ensuring adequate
liquidity, managing within prudent financial metrics, and building a strong cash position to support
accretive growth. Reinvestment in the business includes investing in its operating assets to sustain and
optimize performance; investing in resource development to extend the life of its mines and to identify
new gold resources; further advancing existing resources towards production; as well as investing in new
projects to grow beyond its existing asset base. Returning capital to shareholders includes dividends, and
under certain circumstances, opportunistic share repurchases. These alternatives are not mutually
exclusive, nor are they exhaustive, and are assessed in a balanced manner with a view to maximizing
total shareholder returns over the long-term.
Acquisition of Osino
On December 18, 2023, the Company announced that it had entered into a definitive agreement whereby
DPM will acquire all of the issued and outstanding shares of Osino (the "Osino Shares") for consideration
consisting of Cdn$0.775 in cash per Osino Share and 0.0801 of a DPM common share per Osino Share.
The principal assets of Osino are comprised of the Twin Hills open pit gold project, as well as an
extensive exploration portfolio, in Namibia. The acquisition of Osino is subject to the approval of Osino's
securityholders as well as applicable regulatory approvals, including approval under the Namibia
Competition Act. In addition, each of DPM and Osino has the right to terminate the transaction in certain
circumstances. Provided that all approvals are obtained and neither party exercises its right to terminate,
the transaction is expected to close in the first half of 2024.
Concurrently with the transaction, DPM agreed to purchase an aggregate of Cdn$10 million Osino
Shares, in two equal tranches at a price of Cdn$1.13 per share pursuant to a private placement. The first
tranche of the private placement was completed on December 22, 2023, whereby DPM acquired
4,424,779 Osino Shares at a cost of $3.8 million (Cdn$5.0 million), and the second and final tranche was
completed on January 30, 2024, whereby DPM acquired an additional 4,424,778 Osino Shares at a cost
of $3.7 million (Cdn$5.0 million).
As at December 31, 2023, DPM held a total of 8,235,379 Osino Shares with a fair value of $8.2 million,
which was included in investment at fair value in the consolidated statements of financial position.
Declaration of dividend
In 2023, the Company declared a quarterly dividend of $0.04 (2022 – $0.04) per common share to its
shareholders of record resulting in total dividend distributions of $29.6 million (2022 – $30.5 million)
recognized against its retained earnings in the audited consolidated statements of changes in
shareholders’ equity. The Company paid an aggregate of $30.2 million (2022 – $28.6 million) of dividends
which were included in cash used in financing activities in the audited consolidated statements of cash
flows for the year ended December 31, 2023 and recognized a dividend payable of $7.3 million
(December 31, 2022 – $7.6 million) in accounts payable and accrued liabilities in the audited consolidated
statements of financial position as at December 31, 2023.
46 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 On February 14, 2024, the Company declared a dividend of $0.04 per common share payable on April 15,
2024 to shareholders of record on March 31, 2024.
The Company’s dividend has been set at a level that is considered to be sustainable in the near to mid-
term due to effective governance and based on the Company’s free cash flow outlook and is expected to
allow the Company to build additional balance sheet strength to support the estimated capital funding
associated with its current and future projects and other growth opportunities, which represent a key
element of DPM’s strategy. The declaration, amount and timing of any future dividend are at the sole
discretion of the Board of Directors and will be assessed based on the Company’s capital allocation
framework, having regard for the Company’s financial position, overall market conditions, and its outlook
for sustainable free cash flow, capital requirements, and other factors considered relevant by the Board of
Directors.
Share repurchases under the NCIB
The Company renewed its NCIB effective March 1, 2023, pursuant to which the Company is able to
purchase up to 16,500,000 common shares representing approximately 10% of the public float as at
February 16, 2023, over a period of twelve months commencing March 1, 2023 and terminating on
February 28, 2024. In accordance with TSX rules, the Company will not acquire on any given trading day
more than 112,323 common shares, representing 25% of the average daily volume of common shares for
the six months ended January 31, 2023. The price that the Company will pay for common shares in open
market transactions will be the market price at the time of purchase and any common shares that are
purchased under the NCIB will be cancelled.
The Company’s Board of Directors authorized management to repurchase up to $100 million of the
Company’s shares over a period of twelve months, which began on March 1, 2023.
During the year ended December 31, 2023, the Company purchased a total of 9,738,063 (2022 –
2,471,500) shares, all of which were cancelled as at December 31, 2023. The total cost of these
purchases was $65.6 million (2022 – $13.6 million) at an average price per share of $6.74 (Cdn$9.10)
(2022 – $5.51 (Cdn$7.14)), of which $29.6 million (2022 – $7.5 million) was recognized as a reduction in
share capital, and $36.0 million (2022 – $6.1 million) as a reduction in retained earnings in the
consolidated statements of changes in shareholders’ equity. Cash payments of $65.6 million (2022 –
$13.6 million) were included in cash used in financing activities in the consolidated statements of cash
flows for the year ended December 31, 2023.
The Board of Directors has approved the renewal of the NCIB (the “New Bid”) and the Company expects
to seek acceptance thereof from the TSX in due course during the first quarter of 2024. If accepted, the
New Bid will be made in accordance with the applicable rules and policies of the TSX and applicable
Canadian securities laws, and the Company expects be able to purchase up to 10% of the public float of
common shares over a period of twelve months commencing after the receipt of TSX approval.
In the event that the New Bid is accepted by the TSX, the actual timing and number of common shares
that may be purchased thereunder will be undertaken in accordance with DPM’s capital allocation
framework, having regard for such things as DPM’s financial position, business outlook and ongoing
capital requirements, as well as its share price and overall market conditions. The Company is currently
reviewing its capital allocation strategy in balancing between the capital required for its growth projects
and return of capital to shareholders.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 47 Cash Flow
The following table summarizes the Company’s cash flow activities from continuing operations:
$ thousands
Fourth Quarter
Full Year
2023
2022
Change
2023
2022
Change
Cash provided from operating activities of
continuing operations, before changes in
working capital(1)
Changes in working capital
Cash provided from operating activities of
continuing operations
Cash provided from (used in) investing activities of
continuing operations
Cash used in financing activities of continuing
operations
Increase in cash and cash equivalents of
continuing operations
Cash and cash equivalents at beginning of period,
continuing operations
Cash and cash equivalents at end of period,
continuing operations
59,295
43,354
11,973
5,173
37%
131%
262,525
190,871
38%
(899)
18,718
(105%)
71,268
48,527
47%
261,626
209,589
25%
(18,035)
(21,063)
14%
596
(66,957)
101%
(20,117)
(8,894)
(126%)
(96,442)
(44,655)
(116%)
33,116
18,570
78%
165,780
97,977
69%
562,169
410,935
37%
429,505
331,528
30%
595,285
429,505
39%
595,285
429,505
39%
1)
Cash provided from operating activities, before changes in working capital, is a non-GAAP financial measure. Refer to the “Non-GAAP Financial
Measures” section commencing on page 48 of this MD&A for more information, including reconciliations to IFRS measures.
The primary factors impacting period over period cash flows are summarized below.
Operating activities
Cash provided from operating activities of continuing operations in the fourth quarter of 2023 of $71.3
million was 47% higher than the corresponding period in 2022 due primarily to higher adjusted EBITDA
from continuing operations generated in the quarter, as well as the timing of deliveries and subsequent
receipt of cash partially offset by the timing of payments to suppliers. Cash provided from operating
activities of continuing operations in 2023 of $261.6 million was 25% higher than 2022 due primarily to
higher adjusted EBITDA from continuing operations generated in the year, partially offset by the timing of
deliveries and subsequent receipt of cash and the timing of payments to suppliers.
Free cash flow from in the fourth quarter and full year of 2023 of $49.3 million and $227.9 million,
respectively, was $19.3 million and $77.4 million higher than the corresponding periods in 2022 due
primarily to higher adjusted EBITDA from continuing operations generated in the periods and lower cash
outlays for sustaining capital expenditures. Free cash flow is calculated before changes in working capital.
Investing activities
Cash used in investing activities of continuing operations in the fourth quarter of 2023 was $18.0 million
while cash provided from investing activities of continuing operations in 2023 was $0.6 million, compared
to cash used in investing activities of continuing operations of $21.1 million and $67.0 million in the
corresponding periods in 2022.
48 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 The following table provides a summary of the Company’s cash outlays for capital expenditures related to
continuing operations:
$ thousands
Chelopech
Ada Tepe
Corporate & Other
Total cash capital expenditures
Fourth Quarter
2023
6,319
3,243
4,942
14,504
2022
10,600
1,840
8,618
21,058
Change
(40%)
76%
(43%)
(31%)
Full Year
2022
23,349
10,193
32,920
66,462
2023
22,183
9,469
23,746
55,398
Change
(5%)
(7%)
(28%)
(17%)
Cash outlays for capital expenditures from continuing operations in the fourth quarter and full year of 2023
of $14.5 million and $55.4 million, respectively, were $6.6 million and $11.1 million lower than the
corresponding periods in 2022 due primarily to lower sustaining capital expenditures as expected.
Other factors impacting investing activities in 2023 are summarized below:
•
•
Cash proceeds of $56.5 million from disposition of B2Gold Corp (“B2Gold”) shares as a result of
B2Gold’s acquisition of Sabina Gold and Silver Corp (“Sabina”). See “Financial Instruments” section
of this MD&A for further details; and
Release of restricted cash of $3.5 million in respect of the disposition of MineRP Holdings Inc.
Financing activities
Cash used in financing activities of continuing operations in the fourth quarter and full year of 2023 was
$20.1 million and $96.4 million, respectively, compared to $8.9 million and $44.7 million in the
corresponding periods in 2022, due primarily to payments for shares repurchased under the NCIB.
Financial Position
$ thousands
As at December 31,
Cash and cash equivalents(1)
Accounts receivable, inventories and other current assets(1)
Assets held for sale
Investments at fair value
Non-current assets, excluding investments at fair value(1)
Total assets
Current liabilities(1)
Liabilities held for sale
Non-current liabilities(1)
Total equity
Increase/
2022
(Decrease)
2023
595,285
138,823
82,817
11,900
461,411
433,176
177,745
-
40,773
505,560
1,290,236
1,157,254
84,491
37,374
47,821
1,120,550
96,885
-
67,275
993,094
162,109
(38,922)
82,817
(28,873)
(44,149)
132,982
(12,394)
37,374
(19,454)
127,456
1)
These measures as at December 31, 2023 excludes the respective assets and liabilities related to discontinued operations, which were included
in assets and liabilities held for sale.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 49 Cash and cash equivalents increased by $162.1 million to $595.3 million in 2023 due primarily to earnings
generated in the year, plus the cash proceeds from the disposition of B2Gold shares, partially offset by
cash outlays for capital expenditures, dividends paid and payments for shares repurchased, as well as
changes in working capital primarily related to the timing of deliveries and subsequent receipt of cash,
and cash redemptions on share-based compensation liabilities. Accounts receivable, inventories and
other current assets decreased by $38.9 million to $138.8 million due primarily to the reclassification of
the respective assets related to Tsumeb to assets held for sale as at December 31, 2023, partially offset
by the timing of deliveries and subsequent receipt of cash. Investments at fair value decreased by $28.9
million to $11.9 million due primarily to the B2Gold acquisition of Sabina and the Company’s subsequent
disposition of B2Gold shares. Non-current assets, excluding investments at fair value, decreased by
$44.2 million to $461.4 million due primarily to the reclassification of the respective assets related to
Tsumeb to assets held for sale as at December 31, 2023, and depreciation and depletion, partially offset
by capital expenditures.
Current liabilities decreased by $12.4 million to $84.5 million in 2023 and non-current liabilities decreased
by $19.5 million to $47.8 million, respectively, due primarily to the reclassification of the respective
liabilities related to Tsumeb to liabilities held for sale. Total equity increased by $127.5 million to $1,120.6
million due primarily to the current period earnings and realized gains on DPM’s divestment of Sabina
shares, partially offset by share repurchases and dividend distributions.
Contractual Obligations, Commitments and Other Contingencies
The Company had the following minimum contractual obligations and commitments related to continuing
operations as at December 31, 2023:
$ thousands
Lease obligations
Capital commitments
Purchase commitments
Other obligations
Total contractual obligations and commitments
Debt and Available Credit Facilities
At December 31, 2023, the Company had no debt.
up to 1 year
1 – 5 years Over 5 years
3,761
6,431
12,315
1,793
24,300
8,841
1,147
-
4
1,061
9,906
-
-
676
1,823
Total
13,749
6,431
12,319
3,530
36,029
The Company has a number of credit facilities that can be accessed by DPM or its subsidiaries, including
DPM’s committed revolving credit facility of $150.0 million with a consortium of four banks that matures in
July 2026. Pursuant to an accordion feature, this facility can be increased to $250.0 million, subject to
certain conditions. The cost of borrowing is based on the Secured Overnight Financing Rate (“SOFR”),
plus a spread, which is currently 2.25%, and can range between 2.25% and 3.50% depending upon
DPM’s leverage. As at December 31, 2023 and December 31, 2022, DPM was in compliance with all
financial covenants and $nil was drawn under the RCF.
Chelopech and Ada Tepe have a $21.0 million multi-purpose credit facility that matures on November 30,
2024 and is guaranteed by DPM. As at December 31, 2023, $18.6 million (December 31, 2022 – $17.3
million) had been utilized in the form of letters of credit and letters of guarantee, primarily in respect of
concession contracts with the Bulgarian Ministry of Energy.
Chelopech and Ada Tepe also have a Euro 21.0 million ($23.2 million) credit facility to support mine
closure and rehabilitation obligations in respect of concession contracts with the Bulgarian Ministry of
Energy. This credit facility matures on November 30, 2024 and is guaranteed by DPM. As at December
31, 2023, $23.2 million (December 31, 2022 – $22.5 million) had been utilized in the form of letters of
guarantee.
50 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Ada Tepe also has a $10.3 million multi-purpose credit facility that matures on November 30, 2024 and is
guaranteed by DPM. As at December 31, 2023, $1.6 million (December 31, 2022 – $0.2 million) had been
utilized in the form of letters of credit and letters of guarantee, primarily in respect of exploration contracts
with the Bulgarian Ministry of Energy.
Advances under these facilities at Chelopech and Ada Tepe bear interest at a rate equal to the one-month
SOFR plus 2.5%. The letters of credit and guarantee bear a fee of 0.6% based on the amounts issued.
Outstanding Share Data
DPM’s common shares are traded on the TSX under the symbol DPM. As at February 14,
2024,181,433,538 common shares were issued and outstanding.
DPM also has 1,757,634 options outstanding as at February 14, 2024 with exercise prices ranging from
Cdn$3.74 to Cdn$9.97 per share (weighted average exercise price – Cdn$6.99 per share).
Other Contingencies
The Company is involved in legal proceedings, from time to time, arising in the ordinary course of its
business. It is not expected that any material liability will arise from current legal proceedings or have a
material adverse effect on the Company’s future business, operations or financial condition.
FINANCIAL INSTRUMENTS
As at December 31, 2023, the Company had the following financial instruments measured at fair market
value:
$ thousands
As at December 31,
Consolidated statements of financial position Financial assets
Investments at fair value
Other current assets
Assets held for sale
Publicly traded securities
Derivatives
Commodity swap contracts
Foreign exchange forward contracts
Foreign exchange option contracts
Financial liabilities
Accounts payable and accrued liabilities
Commodity swap contracts
Foreign exchange option contracts
Foreign exchange forward contracts
2023
2022
10,852
1,048
-
-
819
1,179
-
-
40,554
219
149
531
-
3,259
1,787
318
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 51 The fair value gains or losses on each of these financial instruments have been summarized in the table
below:
$ thousands
Fourth Quarter
Full Year
2023
2022
2023
2022
Consolidated statements of
Gains (losses) on financial
earnings (loss)
Revenue
instruments
Commodity swap contracts
(4,827)
(7,523)
(10,019)
6,732
Other income and expense
Sabina special warrants
Foreign exchange forward contracts
Net earnings (loss) from
discontinued operations
Consolidated statements of
Foreign exchange option contracts
Gains (losses) on financial
comprehensive income (loss)
instruments, net of income taxes
-
-
-
-
(2,369)
2,159
(4,516)
3,029
(1,144)
(872)
(3,803)
(1,140)
Other comprehensive
income (loss)
Foreign exchange option contracts
Publicly traded securities
2,593
730
5,124
8,984
2,569
(300)
21,890
(5,292)
For a more detailed description of the accounting policies and the nature of the gains or losses on these
financial instruments, see note 7, Financial Instruments, to the consolidated financial statements for the
year ended December 31, 2023.
Investments at Fair Value
As at December 31, 2023, the Company’s investments at fair value were $11.9 million (December 31,
2022 – $40.8 million).
On April 19, 2023, B2Gold successfully completed its previously announced acquisition of Sabina through
the issuance of 0.3867 of a common share of B2Gold for each Sabina common share, representing a
consideration of Cdn$2.11 per Sabina share on a fully diluted basis based on the closing price of B2Gold
on the TSX as at the closing date. As a result, DPM exchanged its ownership interest in Sabina for
13,940,753 common shares of B2Gold, valued at $56.8 million (Cdn$76.1 million) at the date of the
transaction. On de-recognition of its investment in Sabina, the Company recognized a fair value gain of
$2.2 million in other comprehensive income (loss). The Company subsequently disposed of all B2Gold
common shares held for cash proceeds of $56.5 million and transferred the accumulated fair value gains
of $17.7 million on Sabina common shares from accumulated other comprehensive income (loss) to
retained earnings in the second quarter of 2023.
Commodity Swap Contracts
The Company is subject to price risk associated with fluctuations in the market prices for metals. The
Company regularly enters into cash settled QP Hedges from time to time to swap future contracted
monthly average metal prices for fixed metal prices to eliminate or substantially reduce the metal price
exposure associated with the time lag between the provisional and final determination of concentrate
sales.
The Company designates the spot component of commodity swap contracts in respect of QP Hedges as
fair value hedges. The fair value gain or loss on QP Hedges is calculated based on the corresponding
LME forward copper prices and New York Commodity Exchange forward gold prices, as applicable.
As at December 31, 2023, the impact of a 5% increase or decrease in metal prices impacting the
Company’s accounts receivable and outstanding commodity swap contracts, with all other variables held
constant, would decrease or increase earnings before income taxes from continuing operations by $1.2
million (2022 – $0.6 million) and would decrease or increase equity by $1.1 million (2022 – $0.6 million).
52 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Foreign Exchange Option Contracts related to discontinued operations
The Company’s foreign currency exposures arise primarily from a significant portion of its operating and
capital costs being denominated in currencies other than the U.S. dollar, the Company’s functional
currency. The Company enters into foreign exchange option contracts from time to time in order to reduce
the foreign exchange exposure associated with projected operating expenses and capital expenditures
denominated in foreign currencies. Foreign exchange option contracts are entered into, to provide price
protection below a specified “floor” rate and participation up to a specified “ceiling” rate. The option
contracts entered into are comprised of a series of call options and put options (which when combined
create a price “collar”) that are structured so as to provide for a zero upfront cash cost.
The Company designates the intrinsic value of foreign exchange option contracts as cash flow hedges.
The time value component of foreign exchange option contracts is treated as a separate cost of hedging.
The fair value gain or loss on foreign exchange option contracts was calculated based on foreign
exchange forward rates quoted in the market. As at December 31, 2023, approximately 64% of the
Company’s projected Namibian dollar operating expenses for 2024, which is linked to the ZAR, have
been hedged.
The Company is also exposed to credit and liquidity risks in the event of non-performance by
counterparties in connection with its commodity swap contracts and foreign exchange option contracts.
These risks, which are monitored on a regular basis, are mitigated, in part, by entering into transactions
with financially sound counterparties and, where possible, ensuring contracts are governed by legally
enforceable master agreements.
OFF BALANCE SHEET ARRANGEMENTS
The Company has not entered into any off-balance sheet arrangements.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 53 SELECTED QUARTERLY AND ANNUAL INFORMATION
Selected financial results for the last eight quarters, which have been prepared in accordance with IFRS
Accounting Standards, are shown in the table below:
$ millions
except per share amounts
Revenue
Net earnings (loss)
From continuing operations
From discontinued operations
Basic earnings (loss) per share:
From continuing operations
From discontinued operations
Diluted earnings (loss) per share:
From continuing operations
From discontinued operations
Adjusted net earnings
From continuing operations
From discontinued operations
Adjusted basic earnings per share
From continuing operations
From discontinued operations
Cash provided from (used in)
operating activities
From continuing operations
From discontinued operations
2023
2022
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
139.3
121.9
132.5
126.4
113.0
89.3
108.5
122.7
57.5
52.1
5.4
0.32
0.29
0.03
0.32
0.29
0.03
55.5
50.0
5.4
0.31
0.28
0.03
78.2
71.3
6.9
27.1
36.7
(9.6)
0.15
0.20
(0.05)
0.15
0.20
(0.05)
27.1
36.7
(9.6)
0.15
0.20
(0.05)
67.4
70.1
(2.7)
61.7
49.6
12.1
0.33
0.26
0.06
0.33
0.26
0.06
62.2
50.1
12.1
0.33
0.27
0.06
59.2
54.6
4.6
46.6
43.6
3.0
0.25
0.23
0.02
0.24
0.23
0.02
46.1
43.1
3.0
0.24
0.23
0.01
70.9
65.7
5.2
33.3
22.1
11.2
0.18
0.12
0.06
0.18
0.12
0.06
33.3
22.1
11.2
0.18
0.12
0.06
49.3
48.5
0.8
(57.7)
17.9
(75.6)
(0.30)
0.09
33.5
34.5
26.8
42.1
(1.0)
(15.3)
0.17
0.18
0.14
0.22
(0.39)
(0.01)
(0.08)
(0.30)
0.09
0.17
0.18
0.14
0.22
(0.39)
(0.01)
(0.08)
25.4
18.0
7.4
0.13
0.09
0.04
31.5
21.8
9.7
33.3
36.3
37.0
42.5
(3.0)
(5.5)
0.17
0.18
0.19
0.22
(0.01)
(0.03)
72.5
62.7
9.8
78.8
76.5
2.3
$/sh
$/sh
$/sh
$/sh
$/sh
$/sh
$/sh
$/sh
$/sh
The variations in the Company’s quarterly results were driven largely by fluctuations in gold and copper
grades and recoveries, timing of metal deliveries, volumes of complex concentrate smelted, gold, copper
and sulphuric acid prices, foreign exchange rates, smelter toll rates, smelter metal recoveries,
depreciation, gains and losses related to Sabina special warrants, gains and losses on commodity swap
contracts related to hedging the Company’s metal price exposures, realized gains or losses on foreign
exchange option contracts related
foreign denominated operating
expenditures, restructuring costs and impairment charge.
the Company’s
to hedging
The following table summarizes the quarterly average realized prices for gold and copper and highlights
the quarter over quarter variability:
$ millions
Average Realized Metal Prices
Gold ($/oz)
Copper ($/lb)
2023
2022
Q4
Q3
Q2
Q1
Q4
Q3
Q2
Q1
2,025
1,921
1,961
1,918
1,752
1,712
1,812
1,876
3.74
3.72
3.77
4.06
3.65
3.53
4.42
4.58
Other key items impacting the Company’s quarter over quarter results from discontinued operations
include:
•
Lower volumes of complex concentrate smelted at Tsumeb in Q2 2022, Q4 2022 and Q1 to Q3 2023
as a result of planned maintenance and additional unplanned downtime due primarily to water leaks
to the off-gas system;
Tsumeb restructuring cost in Q1 2022; and
Tsumeb impairment charge in Q3 2022.
•
•
54 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 The following is a summary of selected annual information for the Company’s last three fiscal years:
$ thousands, except per share amounts
Revenue
Tsumeb impairment charge
Net earnings (loss)
From continuing operations
From discontinued operations
Adjusted net earnings
From continuing operations
From discontinued operations
Basic earnings (loss) per share
From continuing operations
From discontinued operations
Diluted earnings (loss) per share
From continuing operations
From discontinued operations
Adjusted net earnings per share
From continuing operations
From discontinued operations
Dividend declared per share
Total assets(2)
Non-current liabilities(3)
2023
520,091
-
192,939
181,976
10,963
190,935
179,972
10,963
1.04
0.98
0.06
1.04
0.98
0.06
1.03
0.97
0.06
0.16
2022(1)
433,490
85,000
35,923
116,584
(80,661)
129,027
118,953
10,074
0.19
0.61
(0.42)
0.19
0.61
(0.42)
0.68
0.62
0.06
0.16
2021(1)
522,093
-
209,824
204,056
5,768
202,081
196,313
5,768
1.12
1.09
0.03
1.12
1.09
0.03
1.09
1.06
0.03
0.12
1,290,236
1,157,254
1,168,410
47,821
67,275
78,198
$/sh
$/sh
$/sh
$/sh
$/sh
$/sh
$/sh
$/sh
$/sh
$/sh
1)
2)
3)
2021 and 2022 operating results and cash flows have been restated to reflect Tsumeb as a discontinued operation.
Include discontinued operations in all years.
2023 excludes non-current liabilities related to the discontinued operations, which were included in liabilities held for sale.
The following table summarizes the annual average realized prices for gold and copper and highlights the
year over year variability:
Average Realized Metal Prices
Gold
Copper
$/oz
$/lb
2023
1,957
3.82
2022
1,795
3.98
2021
1,790
3.82
Other key items impacting the Company’s financial results over the period from 2021 to 2023 include:
Continuing operations:
•
•
•
•
Declining combined gold recoveries at Chelopech in 2023 relative to 2022 and improving relative to
2021;
Declining gold grades at Chelopech in 2023 relative to 2022 and 2021 due to mining in lower grade
zones, in line with its mine plan;
Improving gold grades at Ada Tepe in 2023 relative to 2022 and 2021 due to mining higher grade
zones, in line with its mine plan;
A weaker U.S. dollar in 2023 and 2021 relative to a stronger U.S. dollar in 2022 compared to the
Euro;
Acquisition of INV Metals Inc. accounted for as an asset acquisition in 2021;
•
• Growth capital expenditures for the Loma Larga gold project incurred in 2023 and 2022;
•
Dividend distribution of $30.2 million in 2023 compared to $30.5 million in 2022 and $22.4 million in
2021; and
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 55 •
Purchased 9,738,063 common shares under the NCIB for a total cost of $65.6 million in 2023 and
2,471,500 common shares under the NCIB for a total cost of $13.6 million in 2022.
Discontinued operations:
•
•
The MineRP Disposition in 2021;
Lower volumes of complex concentrate smelted at Tsumeb in 2023 and 2022, relative to 2021, as a
result of planned maintenance and operational issues in both years; and
A stronger U.S. dollar in 2023 and 2022 relative to a weaker U.S. dollar in 2021 compared to the ZAR.
•
CRITICAL ACCOUNTING ESTIMATES
The preparation of the Company’s consolidated financial statements in accordance with IFRS requires
management to make judgments, estimates and assumptions that affect the amounts of assets, liabilities
and contingent liabilities on the date of the consolidated financial statements and the amounts of
revenues and expenses during the periods reported. Estimates and assumptions are evaluated and are
based on management’s experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. However, actual outcomes can differ from these
estimates.
The significant areas of estimation and uncertainty considered by management in preparing the
consolidated financial statements include, but are not limited to:
Mineral exploration and evaluation expenditures
Exploration and evaluation activities involve the search for Mineral Resources and Mineral Reserves, the
assessment of technical and operational feasibility and the determination of an identified Mineral
Resource or Mineral Reserve’s commercial viability.
The application of the Company’s accounting policy for exploration and evaluation expenditures requires
judgment in determining whether it is probable that future economic benefits will be generated from the
exploitation of an exploration and evaluation asset when activities have not yet reached a stage where a
reasonable assessment of the existence of Mineral Reserves can be determined. The estimation of
Mineral Resources is a complex process and requires significant assumptions and estimates regarding
economic and geological data and these assumptions and estimates impact the decision to either
expense or capitalize exploration and evaluation expenditures. Management is required to make certain
estimates and assumptions about future events and circumstances in order to determine if an
economically viable extraction operation can be established. Any revision to any of these assumptions
and estimates could result in the impairment of the capitalized exploration and evaluation costs. If new
information becomes available after expenditures have been capitalized that the recovery of these
expenditures is no longer probable, the expenditures capitalized are written down to the recoverable
amount and charged to net earnings (loss) in the period the new information becomes available.
Mine properties
Commencement of commercial production
All expenditures undertaken in the development, construction, installation and/or completion of mine
production facilities are capitalized and initially classified as “Mines under construction”. Upon the
commencement of commercial production, all related assets included in “Mines under construction” are
reclassified to “Mine Properties – Producing mines” or “Property, plant and equipment”.
56 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Determination of commencement of commercial production is a complex process and requires significant
assumptions and estimates. The commencement of commercial production is defined as the date when
the mine is capable of operating in the manner intended by management. The Company considers
primarily the following factors, among others, when determining the commencement of commercial
production:
•
All major capital expenditures to achieve a consistent level of production and desired capacity have
been incurred;
A reasonable period of testing of the mine plant and equipment has been completed;
A predetermined percentage of design capacity of the mine and mill has been reached; and
Required production levels, grades and recoveries have been achieved.
•
•
•
Mineral Resource and Mineral Reserve estimates
The estimation of Mineral Resources and Mineral Reserves, as defined under NI 43-101, is a complex
process and requires significant assumptions and estimates. The Company prepares its Mineral
Resource and Mineral Reserve estimates based on information related to the geological data on the size,
depth and shape of the ore body which is compiled by appropriately qualified persons. Mineral Resource
and Mineral Reserve estimates are based upon factors such as metal prices, capital requirements,
production costs, foreign exchange rates, geotechnical and geological assumptions and judgments made
in estimating the size and grade of the ore body. Mineral Resource and Mineral Reserve estimates,
together with forecast production, determine the life of mine estimates and therefore changes in the
Mineral Resource or Mineral Reserve estimates may impact the carrying value of exploration and
evaluation assets, mine properties, property, plant and equipment, depletion and depreciation charges,
rehabilitation provisions and deferred income tax assets.
Impairment of non-financial assets
At each reporting date, the carrying values of mine properties, intangible assets and property, plant and
equipment are assessed for impairment if indicators of potential impairment or reversal of previously
recognized impairment exist. If any such indication exists, an estimate of the asset’s recoverable amount
is calculated. The recoverable amount is determined as the higher of the fair value less costs of disposal
(“FVLCD”) and its value in use based on discounted cash flows. This is determined on an asset-by-asset
basis, unless the asset does not generate cash flows that are largely independent of those from other
assets or groups of assets. If this is the case, individual assets are grouped together into a Cash
Generating Unit (“CGU”) for impairment purposes. Such CGUs represent the lowest level for which there
are separately identifiable cash inflows that are largely independent of the cash flows from other assets or
groups of assets. Management has assessed the Company’s CGUs as being an individual operating site.
The assessment of impairment is based on a number of external and internal factors, some of which are
outside of the Company’s control, and requires the use of estimates and assumptions related to these
factors for each CGU. External factors include market considerations ranging from overall economic
activity and the supply of and demand for the materials used in and products produced by the Company
to changes in commodity prices, toll rates, discount rates, foreign exchange rates and regulatory
requirements. Internal factors include considerations such as production volume, ability to convert
resources into reserves, capital and operating expenditures, and future development and expansion
plans.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 57 These significant estimates and assumptions, some of which may be subjective, require that
management make decisions based on the best available information at each reporting period. It is
possible that the actual recoverable amount could be significantly different than those estimates. A
significant decline in the asset’s market value, reductions in metal price forecasts, increases in estimated
future costs of production, increases in estimated future capital costs, reductions in the amount of
recoverable reserves, resources and exploration potential, and/or adverse market conditions can result in
a write-down of the carrying amounts of the Company’s assets. Judgment is also required when
considering whether significant changes in any of these items indicate a previous impairment may have
reversed.
Rehabilitation provisions
Mining, processing, development and exploration activities are subject to various laws and regulations
governing the protection of the environment. The Company recognizes a liability for its rehabilitation
obligations in the period when a legal and/or constructive obligation is identified. The liability is measured
at the present value of the estimated costs required to rehabilitate operating locations based on the risk-
free nominal discount rates that are specific to the countries in which the operations are located.
The nature of these restoration and rehabilitation activities includes: i) dismantling and removing
structures; ii) rehabilitating mines and tailing dams; iii) dismantling operating facilities; iv) closure of plant
and waste sites; and v) restoration, reclamation and re-vegetation of affected areas.
Significant estimates and assumptions are made by management in determining the nature and costs
associated with the rehabilitation liability. The estimates and assumptions required include estimates of
the timing, extent and costs of rehabilitation activities, technology changes, regulatory changes, and
changes in the discount and inflation rates. These uncertainties may result in future expenditures being
different from the amounts currently provided.
Changes in the underlying assumptions used to estimate the rehabilitation liability as well as changes to
environmental laws and regulations could cause material changes in the expected cost and expected
future settlement value.
At as December 31, 2023, the undiscounted future cost for estimated mine closure and rehabilitation
costs before inflation was estimated to be $78.2 million. The carrying value of the estimated mine closure
and rehabilitation cost was $51.0 million at December 31, 2023 and $50.3 million at December 31, 2022.
All these amounts included the rehabilitation costs at Tsumeb.
Revenue recognition related to toll smelting arrangements
Revenue from processing concentrate is recognized when concentrate has been smelted and is based on
the toll rate specified in the toll agreement, which can vary based on the composition of the concentrate
processed and prevailing market conditions at the time the agreement was entered. Revenue from
processing concentrate is adjusted for any over or under recoveries of metals delivered relative to
contracted rates under the tolling agreement between Tsumeb and IXM. These adjustments represent
metal exposure and are calculated by comparing (i) the copper, gold and silver content in the concentrate
received and processed by Tsumeb multiplied by the percentage accountable in the IXM contract to (ii)
the accountable copper, gold and silver in the blister delivered to IXM and in the in-circuit material still
being processed by Tsumeb.
Many aspects of the metal exposure are subject to estimation, including the amount of metal contained in
concentrate received, in-circuit material and blister delivered where final assays have not been
completed. These significant estimates are based on the Company’s process knowledge, joint surveys
with IXM and multiple assay results, the final results of which could differ from initial estimates.
58 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Deferred income taxes
Deferred income tax is provided using the balance sheet method on temporary differences on the
reporting date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes. Deferred income tax liabilities are recognized for all taxable temporary differences.
Deferred income tax assets are recognized for all deductible temporary differences, and the carry forward
of unused tax credits and unused tax losses, to the extent that it is probable that taxable income will be
generated in future periods to utilize these deductible temporary differences.
Judgment is required in determining whether deferred income tax assets are recognized on the
consolidated statements of financial position. Deferred income tax assets, including those arising from
unutilized tax losses, require management to assess the likelihood that the Company will generate future
taxable income in order to utilize the deferred income tax assets. Estimates of future taxable income are
based on forecasted cash flows from operations or other activities and the application of existing tax laws
in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from
estimates, the ability of the Company to realize the net deferred income tax assets recorded on the
reporting date could be impacted.
Additionally, future changes in tax laws in the jurisdictions in which the Company operates could impact
tax deductions in future periods and the value of its deferred income tax assets and liabilities.
NON-GAAP FINANCIAL MEASURES
Certain financial measures referred to in this MD&A are not measures recognized under IFRS and are
referred to as non-GAAP financial 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 DPM are based on management’s reasonable
judgment and are consistently applied. These measures are used by management and investors to assist
with assessing the Company’s performance, including its ability to generate sufficient cash flow to meet its
return objectives and support its investing activities and debt service obligations. In addition, the Human
Capital and Compensation Committee of the Board of Directors uses certain of these measures, together
with other measures, to set incentive compensation goals and assess performance. 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. Non-GAAP financial measures and ratios, together with
other financial measures calculated in accordance with IFRS, are considered to be important factors that
assist investors in assessing the Company’s performance.
Non-GAAP Cash Cost and All-in Sustaining Cost Measures
Mine cash cost; smelter cash cost; mine cash cost of sales; and all-in sustaining cost are non-GAAP
financial measures. Cash cost per tonne of ore processed; cash cost per ounce of gold sold; all-in
sustaining cost per ounce of gold sold; and cash cost per tonne of complex concentrate smelted are non-
GAAP ratios. These measures capture the important components of the Company’s production and
related costs. Management and investors utilize these metrics as an important tool to monitor cost
performance at the Company’s operations. In addition, the Human Capital and Compensation Committee
of the Board of Directors uses certain of these measures, together with other measures, to set incentive
compensation goals and assess performance.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 59 The following tables provide a reconciliation of the Company’s cash cost per tonne of ore processed to its
cost of sales:
$ thousands
unless otherwise indicated
Chelopech
Ore processed
Cost of sales
Add/(deduct):
Depreciation and amortization
Change in concentrate inventory
Mine cash cost(1)
Cost of sales per tonne of ore processed(2)
Cash cost per tonne of ore processed(2)
Ada Tepe
Ore processed
Cost of sales
Add/(deduct):
Depreciation and amortization
Change in concentrate inventory
Mine cash cost(1)
Cost of sales per tonne of ore processed(2)
Cash cost per tonne of ore processed(2)
Fourth Quarter
Full Year
2023
2022
2023
2022
564,825
36,025
553,088
39,438
2,205,107
2,138,792
139,550
133,929
(7,225)
(80)
28,720
64
51
(7,456)
(3,985)
27,997
71
51
(27,443)
(827)
111,280
63
50
(26,132)
(1,671)
106,126
63
50
170,699
24,956
206,153
25,703
747,604
104,657
852,990
102,739
(12,920)
(13,948)
(54,593)
(55,984)
313
12,349
146
72
193
11,948
125
58
164
50,228
140
67
181
46,936
120
55
t
$/t
$/t
t
$/t
$/t
1)
2)
Cash costs are reported in U.S. dollars, although the majority of costs incurred are denominated in non-U.S. dollars, and consist of all production
related expenses including mining, processing, services, royalties and general and administrative.
Represents cost of sales and mine cash cost, respectively, divided by tonnes of ore processed.
60 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 The following table provides, for the periods indicated, a reconciliation of the Company’s cash cost per
ounce of gold sold and all-in sustaining cost per ounce of gold sold to its cost of sales:
$ thousands, unless otherwise indicated
For the quarter ended December 31, 2023
Cost of sales(1)
Add/(deduct):
Depreciation and amortization
Treatment charges, transportation and other related
selling costs(2)
By-product credits(3)
Mine cash cost of sales
Rehabilitation related accretion and depreciation expenses(4)
Allocated general and administrative expenses(5)
Cash outlays for sustaining capital(6)
Cash outlays for leases(6)
All-in sustaining cost
Payable gold in concentrate sold(7)
Cost of sales per ounce of gold sold(8)
Cash cost per ounce of gold sold(8)
All-in sustaining cost per ounce of gold sold(8)
$ thousands, unless otherwise indicated
For the quarter ended December 31, 2022
Cost of sales(1)
Add/(deduct):
Depreciation and amortization
Treatment charges, transportation and other related
selling costs(2)
By-product credits(3)
Mine cash cost of sales
Rehabilitation related accretion and depreciation expenses(4)
Allocated general and administrative expenses(5)
Cash outlays for sustaining capital(6)
Cash outlays for leases(6)
All-in sustaining cost
Payable gold in concentrate sold(7)
Cost of sales per ounce of gold sold(8)
Cash cost per ounce of gold sold(8)
All-in sustaining cost per ounce of gold sold(8)
oz
$/oz
$/oz
$/oz
oz
$/oz
$/oz
$/oz
Chelopech
Ada Tepe
36,025
24,956
Total
60,981
(7,225)
(12,920)
(20,145)
27,679
(26,938)
29,541
275
-
5,602
310
35,728
36,276
993
814
985
1,090
(328)
12,798
276
-
2,557
169
15,800
33,288
750
384
475
28,769
(27,266)
42,339
551
9,435
8,159
479
60,963
69,564
877
609
876
Chelopech
Ada Tepe
39,438
25,703
Total
65,141
(7,456)
(13,948)
(21,404)
26,529
(24,717)
33,794
264
-
9,879
251
44,188
39,203
1,006
862
1,127
864
(260)
12,359
295
-
1,840
280
14,774
26,628
965
464
555
27,393
(24,977)
46,153
559
7,412
11,719
531
66,374
65,831
990
701
1,008
1)
2)
3)
4)
5)
6)
7)
8)
Included in cost of sales were share-based compensation expenses of $0.4 million (2022 - $0.4 million) in the fourth quarter of 2023. .
Represents revenue deductions for treatment charges, refining charges, penalties, freight and final settlements to adjust for any differences
relative to the provisional invoice.
Represents copper and silver revenue.
Included in cost of sales and finance cost in the consolidated statements of earnings (loss).
Represents an allocated portion of DPM’s general and administrative expenses, including a share-based compensation expense of $1.9 million
(2022 – $1.5 million) for the fourth quarter of 2023, based on Chelopech’s and Ada Tepe’s proportion of total revenue, including revenue from
discontinued operations. Allocated general and administrative expenses are reflected in consolidated all-in sustaining cost per ounce of gold sold
and are not reflected in the cost measures for Chelopech and Ada Tepe.
Included in cash used in investing activities and financing activities, respectively, in the consolidated statements of cash flows.
Includes payable gold in pyrite concentrate sold in the fourth quarter of 2023 of 8,700 ounces (2022 – 10,408 ounces).
Represents cost of sales, mine cash cost of sales and all-in sustaining cost, respectively, divided by payable gold in concentrate sold.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 61 $ thousands, unless otherwise indicated
For the year ended December 31, 2023
Cost of sales(1)
Add/(deduct):
Depreciation and amortization
Treatment charges, transportation and other related
selling costs(2)
By-product credits(3)
Mine cash cost of sales
Rehabilitation related accretion and depreciation expenses(4)
Allocated general and administrative expenses(5)
Cash outlays for sustaining capital(6)
Cash outlays for leases(6)
All-in sustaining cost
Payable gold in concentrate sold(7)
Cost of sales per ounce of gold sold(8)
Cash cost per ounce of gold sold(8)
All-in sustaining cost per ounce of gold sold(8)
$ thousands, unless otherwise indicated
For the year ended December 31, 2022
Cost of sales(1)
Add/(deduct):
Depreciation and amortization
Treatment charges, transportation and other related
selling costs(2)
By-product credits(3)
Mine cash cost of sales
Rehabilitation related accretion expenses(4)
Allocated general and administrative expenses(5)
Cash outlays for sustaining capital(6)
Cash outlays for leases(6)
All-in sustaining cost
Payable gold in concentrate sold(7)
Cost of sales per ounce of gold sold(8)
Cash cost per ounce of gold sold(8)
All-in sustaining cost per ounce of gold sold(8)
oz
$/oz
$/oz
$/oz
oz
$/oz
$/oz
$/oz
Chelopech
Ada Tepe
Total
139,550
104,657
244,207
(27,443)
(54,593)
(82,036)
101,083
(105,040)
108,150
1,195
-
19,314
1,122
129,781
135,862
1,027
796
955
5,247
(1,260)
54,051
1,173
-
8,783
898
64,905
129,881
806
416
500
106,330
(106,300)
162,201
2,368
30,976
28,097
2,020
225,662
265,743
919
610
849
Chelopech
133,929
Ada Tepe
102,739
Total
236,668
(26,132)
(55,984)
(82,116)
111,016
(110,959)
107,854
1,020
-
20,285
959
130,118
151,580
884
712
858
2,943
(793)
48,905
1,353
-
10,193
1,185
61,636
91,117
1,128
537
676
113,959
(111,752)
156,759
2,373
22,940
30,478
2,144
214,694
242,697
975
646
885
1)
2)
3)
4)
5)
6)
7)
8)
Included in cost of sales were share-based compensation expenses of $1.8 million (2022 - $1.2 million) in 2023.
Represents revenue deductions for treatment charges, refining charges, penalties, freight and final settlements to adjust for any differences
relative to the provisional invoice.
Represents copper and silver revenue.
Included in cost of sales and finance cost in the consolidated statements of earnings (loss).
Represents an allocated portion of DPM’s general and administrative expenses, including a share-based compensation expense of $9.0 million
(2022 – $3.2 million) in 2023, based on Chelopech and Ada Tepe’s proportion of total revenue, including revenue from discontinued operations.
Allocated general and administrative expenses are reflected in consolidated all-in sustaining cost per ounce of gold sold and are not reflected in
the cost measures for Chelopech and Ada Tepe.
Included in cash used in investing activities and financing activities, respectively, in the consolidated statements of cash flows.
Includes payable gold in pyrite concentrate sold in 2023 of 37,732 ounces (2022 – 40,828 ounces).
Represents cost of sales, mine cash cost of sales and all-in sustaining cost, respectively, divided by payable gold in concentrate sold.
62 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 The following tables provide a reconciliation of the Company’s cash cost per tonne of complex
concentrate smelted to its cost of sales from discontinued operations:
$ thousands
unless otherwise stated
Complex concentrate smelted
Tsumeb cost of sales
Add/(deduct):
Depreciation and amortization
Sulphuric acid revenue
Smelter cash cost
Cost of sales per tonne of complex concentrate
smelted(1)
Cash cost per tonne of complex concentrate
smelted(1)
Fourth Quarter
Full Year
2023
67,891
27,874
(1,490)
(4,679)
21,705
411
320
2022
41,835
25,968
(800)
(6,625)
18,543
621
443
2023
188,803
99,047
(4,834)
(15,988)
78,225
525
414
2022
174,122
120,779
(17,023)
(23,052)
80,704
694
463
t
$/t
$/t
1)
Represents cost of sales and smelter cash cost, respectively, divided by tonnes of complex concentrate smelted.
Adjusted net earnings and adjusted basic earnings per share
Adjusted net earnings is a non-GAAP financial measure and adjusted basic earnings per share is a non-
GAAP ratio used by management and investors to measure the underlying operating performance of the
Company. Presenting these measures from period to period helps management and investors evaluate
earnings trends more readily in comparison with results from prior periods.
Adjusted net earnings are defined as net earnings (loss), adjusted to exclude specific items that are
significant, but not reflective of the underlying operations of the Company, including:
•
•
•
•
impairment charges or reversals thereof;
unrealized and realized gains or losses related to investments carried at fair value;
significant tax adjustments not related to current period earnings; and
non-recurring or unusual income or expenses that are either not related to the Company’s operating
segments or unlikely to occur on a regular basis.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 63 The following table provides a reconciliation of adjusted net earnings to net earnings (loss):
$ thousands
except per share amounts
Continuing Operations:
Fourth Quarter
Full Year
2023
2022
2023
2022
Net earnings from continuing operations
52,045
22,062
181,976
116,584
Add/(deduct):
Net gains on derivatives, net of income taxes of
$nil
Net loss on Sabina special warrants, net of
income taxes of $nil
Adjusted net earnings from continuing operations
Basic earnings per share from continuing operations
Adjusted basic earnings per share from continuing
operations
$/sh
$/sh
Discontinued Operations:
(2,004)
-
50,041
0.29
-
-
22,062
0.12
0.28
0.12
(2,004)
-
-
2,369
179,972
118,953
0.98
0.97
0.61
0.62
Net earnings (loss) from discontinued operations
5,431
11,258
10,963
(80,661)
Add/(deduct):
Tsumeb impairment charges
Tsumeb restructuring costs
Adjusted net earnings from discontinued operations
Basic earnings (loss) per share from discontinued
operations
Adjusted basic earnings per share from discontinued
operations
Consolidated:
Net earnings
Add/(deduct):
Net gains on derivatives, net of income taxes of
$nil
Net loss on Sabina special warrants, net of
income taxes of $nil
Tsumeb impairment charges
Tsumeb restructuring costs
Adjusted net earnings
Basic earnings per share
Adjusted basic earnings per share
Adjusted EBITDA
-
-
-
-
-
-
5,431
11,258
10,963
$/sh
$/sh
0.03
0.03
0.06
0.06
0.06
0.06
85,000
5,735
10,074
(0.42)
0.06
57,476
33,320
192,939
35,923
(2,004)
-
-
-
-
-
-
-
(2,004)
-
-
-
-
2,369
85,000
5,735
55,472
33,320
190,935
129,027
$/sh
$/sh
0.32
0.31
0.18
0.18
1.04
1.03
0.19
0.68
Adjusted EBITDA is a non-GAAP financial measure used by management and investors to measure the
underlying operating performance of the Company’s operating segments. Presenting these measures
from period to period helps management and investors evaluate earnings trends more readily in
comparison with results from prior periods. In addition, the Human Capital and Compensation Committee
of the Board of Directors uses adjusted EBITDA, together with other measures, to set incentive
compensation goals and assess performance.
Adjusted EBITDA excludes the following from earnings before income taxes:
•
•
•
depreciation and amortization;
interest income;
finance cost;
64 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 •
•
•
impairment charges or reversals thereof;
unrealized and realized gains or losses related to investments carried at fair value; and
non-recurring or unusual income or expenses that are either not related to the Company’s operating
segments or unlikely to occur on a regular basis.
The following table provides a reconciliation of adjusted EBITDA to earnings (loss) before income taxes:
$ thousands
Continuing Operations:
Fourth Quarter
Full Year
2023
2022
2023
2022
Earnings before income taxes from continuing operations
58,454
26,374
205,702
139,403
Add/(deduct):
Depreciation and amortization
Finance costs
Interest income
Net gains on derivatives
Net losses on Sabina special warrants
20,777
957
(6,171)
(2,004)
-
21,940
770
(3,656)
-
-
84,408
3,499
(23,250)
(2,004)
-
84,229
3,340
(6,494)
-
2,369
Adjusted EBITDA from continuing operations
72,013
45,428
268,355
222,847
Discontinued Operations:
Earnings (loss) before income taxes from discontinued
operations
Add/(deduct):
Depreciation and amortization
Finance costs
Interest income
Tsumeb impairment charges
Tsumeb restructuring costs
5,431
11,258
10,963
(80,661)
1,490
717
(17)
-
-
800
785
(17)
-
-
4,834
3,089
(78)
-
-
17,023
2,985
(60)
85,000
5,735
30,022
Adjusted EBITDA from discontinued operations
7,621
12,826
18,808
Consolidated:
Earnings before income taxes
Add/(deduct):
Depreciation and amortization
Finance costs
Interest income
Net gains on derivatives
Net losses on Sabina special warrants
Tsumeb impairment charges
Tsumeb restructuring costs
Adjusted EBITDA
63,885
37,632
216,665
58,742
22,267
1,674
(6,188)
(2,004)
-
-
-
22,740
1,555
(3,673)
-
-
-
-
89,242
6,588
(23,328)
(2,004)
-
-
-
101,252
6,325
(6,554)
-
2,369
85,000
5,735
79,634
58,254
287,163
252,869
Cash provided from operating activities, before changes in working capital
Cash provided from operating activities, before changes in working capital, is a non-GAAP financial
measure defined as cash provided from operating activities excluding changes in working capital as set
out in the Company’s consolidated statements of cash flows. This measure is used by the Company and
investors to measure the cash flow generated by the Company’s operating segments prior to any
changes in working capital, which at times can distort performance.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 65 Free cash flow
Free cash flow is a non-GAAP financial measure defined as cash provided from operating activities,
before changes in working capital which includes changes in share-based compensation liabilities, less
cash outlays for sustaining capital, mandatory principal repayments and interest payments related to debt
and leases. This measure is used by the Company and investors to measure the cash flow available to
fund growth capital expenditures, dividends and share repurchases.
The following table provides a reconciliation of cash provided from operating activities, before changes in
working capital and free cash flow to cash provided from operating activities:
$ thousands
Fourth Quarter
Full Year
2023
2022
2023
2022
Continuing Operations:
Cash provided from operating activities of continuing
operations
Add:
71,268
48,527
261,626
209,589
Changes in working capital
(11,973)
(5,173)
899
(18,718)
Cash provided from operating activities of continuing
operations, before changes in working capital
Cash outlays for sustaining capital(1)
Principal repayments related to leases
Interest payments(1)
Free cash flow from continuing operations
Discontinued Operations:
Cash provided from operating activities of discontinued
operations
Add:
59,295
(8,798)
(916)
(245)
43,354
(12,095)
(662)
(558)
262,525
190,871
(30,192)
(36,191)
(2,959)
(1,459)
(2,584)
(1,562)
49,336
30,039
227,915
150,534
6,911
762
14,056
22,463
Changes in working capital
1,128
8,237
5,824
13,861
Cash provided from operating activities of discontinued
operations, before changes in working capital
Cash outlays for sustaining capital(1)
Principal repayments related to leases
Interest payments(1)
Free cash flow from discontinued operations
Consolidated:
8,039
(4,834)
(681)
(98)
2,426
8,999
(5,065)
(545)
(165)
3,224
19,880
(12,969)
(2,482)
(492)
3,937
36,324
(17,632)
(2,036)
(753)
15,903
Cash provided from operating activities
78,179
49,289
275,682
232,052
Add:
Changes in working capital
(10,845)
3,064
6,723
(4,857)
Cash provided from operating activities, before changes in
working capital
Cash outlays for sustaining capital(1)
Principal repayments related to leases
Interest payments(1)
Free cash flow
67,334
(13,632)
(1,597)
(343)
51,762
52,353
(17,160)
(1,207)
(723)
33,263
282,405
227,195
(43,161)
(53,823)
(5,441)
(1,951)
(4,620)
(2,315)
231,852
166,437
1)
Included in cash used in investing and financing activities, respectively, in the consolidated statements of cash flows.
66 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Average realized metal prices
Average realized gold and copper prices are non-GAAP ratios used by management and investors to
highlight the price actually realized by the Company relative to the average market price, which can differ
due to the timing of sales, hedging and other factors.
Average realized gold and copper prices represent the average per unit price recognized in the
Company’s consolidated statements of earnings (loss) prior to any deductions for treatment charges,
refining charges, penalties, freight and final settlements to adjust for any differences relative to the
provisional invoice.
The following table provides a reconciliation of the Company’s average realized gold and copper prices to
its revenue:
$ thousands
unless otherwise indicated
Total revenue
Add/(deduct):
Treatment charges and other deductions(1)
Silver revenue
Revenue from gold and copper
Revenue from gold
Payable gold in concentrate sold
Average realized gold price per ounce
Revenue from copper
Payable copper in concentrate sold
Average realized copper price per pound
Fourth Quarter
Full Year
2023
2022
2023
2022
139,339
112,968
520,091
433,490
28,769
(1,020)
167,088
140,843
69,564
2,025
26,245
7,009
3.74
27,393
(446)
139,915
115,341
65,831
1,752
24,574
6,726
3.65
106,330
113,959
(4,459)
(3,319)
621,962
520,122
265,743
1,957
101,840
26,651
3.82
544,130
435,657
242,697
1,795
108,473
27,224
3.98
oz
$/oz
Klbs
$/lb
1)
Represents revenue deductions for treatment charges, refining charges, penalties, freight and final settlements to adjust for any differences
relative to the provisional invoice.
RISKS AND UNCERTAINTIES
The operating results and financial condition of the Company are subject to a number of inherent risks
and uncertainties associated with its business activities, which include the acquisition, exploration,
development, financing, construction, commissioning and operation of its mine, mill and concentrate
processing facilities. The operating results and financial condition are also subject to numerous external
factors, which include economic, social, geopolitical, warfare, environmental, regulatory, health, legal, tax
and market risks impacting, among other things, precious metals and copper prices, sulphuric acid prices,
toll rates, foreign exchange rates, inflation, the availability and cost of capital to fund the capital
requirements of the business and the supply chain related to the business, uncertainty of production and
cost estimates and the potential for unexpected costs and expenses, and changes in general economic
conditions or conditions in the financial markets. Each of these risks could have a material adverse impact
on the Company’s future business, results of operations and financial condition, and could cause actual
results to differ materially from those described in any Forward-Looking Statements contained in this
MD&A. The Company endeavours to manage these risks and uncertainties with good governance and in
a balanced manner with a view to mitigating risk while maximizing total shareholder returns. The
Company continually strives to identify and to effectively manage the risks of each of its business units.
This includes developing appropriate risk management strategies, policies and procedures, processes
and systems. There can be no assurance that the Company has been or will be successful in identifying
all risks or that any risk-mitigating strategies adopted to reduce or eliminate risk will be successful.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 67 The following subsections describe some of the more significant business risks and uncertainties affecting
the Company. These risks, along with other potential risks not specifically discussed in this MD&A, should
be considered when evaluating the Company and its three-year outlook along with the more
comprehensive discussion of risks contained in the “Risk Factors” section of our most recent AIF.
Additional risks not identified below may affect the Company.
Metal Prices
The fluctuation in the price of a metal sold by the Company can significantly impact revenues as well as
all-in sustaining cost per ounce of gold and other cost measures that are reported net of by-product
credits. Accordingly, the prices of gold and copper are major factors influencing the Company’s business,
results of operations and financial condition, and, in turn, the price for its common shares.
Metal prices can fluctuate widely and are affected by numerous factors beyond the Company’s control,
including overall global market conditions; the sale or purchase of gold and silver by various central
banks, financial institutions and Exchange Traded Funds; interest rates; foreign exchange rates; inflation
or deflation; global and regional supply and demand; and the political and economic conditions of major
gold, silver and copper producing and consuming countries throughout the world. If gold and/or copper
prices were to decline significantly from current levels, there can be no assurance that cash flow from
operations, together with cash on hand and available credit under the Company’s RCF, will be sufficient to
meet the Company’s operating and capital requirements, including its contractual commitments and
mandatory debt repayments, and the Company could be forced to discontinue production, reassess the
feasibility of a particular project, and/or could lose its interest in, or be forced to sell, some of its
properties. In addition, a significant commodity price decline could result in significant reductions in
Mineral Reserve and Mineral Resource estimates, which could have a material adverse impact on the
value of one or more of the Company’s cash generating units and result in an impairment of the carrying
value of certain assets, including exploration and evaluation assets, mine properties, and property, plant
and equipment.
In accordance with established risk management policies approved by our Board of Directors, the
Company enters into QP Hedges to reduce the metal price exposure associated with the time lag
between the provisional and final determination of concentrate sales. The Company also selectively
enters into Production Hedges to reduce its price exposure on future sales and in respect of certain cost
measures that are impacted by variability in by-product metal credits. These Production Hedges are
entered primarily to provide price protection below a specified “floor” price and, to reduce the upfront cost
of these contracts, are typically accompanied by option contracts that provide price participation up to a
specified “ceiling” price. The Company sells and hedges gold and copper metal contained in concentrates
produced at prices that are effectively determined by reference to the traded prices on major commodity
exchanges, including the LME and the LBMA.
International Conflicts and Geopolitical Risks
International conflicts and other geopolitical tensions and events, including war, military action, terrorism,
trade disputes and international responses thereto have historically led to, and may in the future lead to,
uncertainty or volatility in global commodity and financial markets, and/or disruptions to supply chains and
shipping lanes. World-wide political and economic risks are intensifying, including as a result of the
conflicts in Ukraine and the Middle East, which create significant levels of uncertainty. Volatility in
commodity prices and supply chain and shipping lanes disruptions may adversely affect the Company's
business, financial condition and results of operations. The extent and duration of the Russia-Ukraine and
Middle East conflicts and related international action cannot be accurately predicted at this time and the
effects of such conflict may magnify the impact of the other risks, including those relating to commodity
price volatility and global financial conditions.
68 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 The Company’s Chelopech and Ada Tepe mines are located in Bulgaria, Eastern Europe. Bulgaria does
not share a border with either Russia or Ukraine and is part of the North Atlantic Treaty Organization and
the EU. The main sources of Bulgaria’s electric energy are nuclear and coal facilities, which together
comprise approximately 80% of Bulgaria’s total energy generation. Although Russia has halted natural
gas deliveries to Bulgaria, approximately 5% of Bulgaria’s total energy supply is generated from natural
gas and DPM has not experienced and does not anticipate any disruption of power supply to its mines as
a result. In June 2022, the Council of Europe adopted sanctions that, among other things, prohibit the
purchase, import or transfer of crude oil and certain petroleum products from Russia to the EU. A
temporary exemption is available for those EU member states that, due to their geographic situation,
suffer from a specific dependence on Russian supplies and have no viable alternative options. Bulgaria
has secured this exemption until end of 2024. As a result, the impact of the conflict in Ukraine on the
Company has been limited to date to increased costs for energy, fuel and other direct materials.
Further escalation of the conflict in Ukraine, including an outbreak of and/or expansion of hostilities into
other countries or regions within Europe could have a material adverse effect on the Company’s
operations due to, among other factors, disruption in the Company’s supply chain, increased input costs,
and increased risk (or perception of increased risk) in the profile of the Company’s operations in Eastern
Europe.
In addition, the conflict in the Middle East between Israel and the Hamas, and the potential for a wider
regional conflict, has also had a significant impact on global stability. Attacks by Houthi rebels in the Red
Sea has put significant risks on shipping lanes in the area and has resulted in increased shipping costs to
various business entities including the Company. Continued attacks on shipping in the Middle East may
result in further increases in shipping costs and longer transit times and delays in delivering products or
procuring supplies. Further escalation of the conflict may spark confrontations in other parts of the Middle
East and have further adverse consequences on global markets, supply chains and shipping lanes and
the Company’s business.
The Company continues to monitor these events and will proactively manage the situation, although there
is no assurance that the Company’s operations will not be adversely affected by current geopolitical
tensions and/or associated government sanctions.
Inflation and Global Economic Conditions
The global economy has faced significant instability in recent years, marked by increased inflation and
supply chain disruptions. Global economic conditions could further deteriorate, and the economy may
contract and enter into a recession. Additionally, future economic shocks may be precipitated by a number
of causes, including geopolitical instability, a rise in the price of oil and other energy costs, natural
disasters, and outbreaks of pandemic or epidemic medical issues or other public health emergencies. Any
sudden or rapid destabilization of global economic conditions could impact the Company’s ability to obtain
equity or debt financing in the future on terms favourable to the Company. Additionally, any such
occurrence could cause decreases in asset values that are deemed to be other than temporary, which
may result in impairment charges. Further, in such an event, the Company’s operations and financial
condition could be adversely impacted.
In addition to potentially affecting the price of gold, copper and silver, general inflationary pressures may
also affect labour, commodity and other input costs, which could have a material adverse effect on the
Company’s financial condition, results of operations and capital expenditures for the development of its
projects. The Company has been impacted by these inflationary pressures in the form of higher costs for
key inputs required for its operations, most notably higher energy costs. The Company has made
assumptions around the expected costs of these key inputs, and the Company’s actual costs in an
inflationary environment may differ materially from those assumptions. These inflationary impacts may be
felt directly through purchases of diesel and fuel, as well as through higher transportation costs, and
indirectly through higher costs of products which rely on energy as an input cost.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 69 Smelter Toll Rates, Sulphuric Acid Prices, Metal Recoveries and Feed
The availability of sufficient volumes of high value complex concentrate, at suitable toll rates, is critical to
the ongoing viability and profitability of the Tsumeb smelter, given the fixed cost nature of the operation.
To facilitate the procurement of complex concentrates, the Company entered into an agreement with IXM
that currently matures on December 31, 2026. There is no assurance that this agreement will be renewed
with IXM upon its expiry.
Under this agreement, the Company typically secures complex concentrate volumes at specified toll rates
covering the next 12-24 months. As at December 31, 2023, the Company has contracted high value
complex concentrate covering over 75% of its expected concentrate requirements through to the end of
2024. There can be no assurance that such concentrate will be available to the smelter in the future or
that the parties will agree on contracted toll rates that will be sufficient to generate an adequate return.
Failure to find sufficient quantities of suitable high value complex concentrate to be processed at
acceptable toll rates could have a material adverse impact on the Company’s business, financial condition
and results of operations.
Under the agreement with IXM, Tsumeb must return specified quantities of copper, gold and silver, and
maintain specified maximum levels of in-process metal. Metal over and under recoveries at the smelter
are subject to smelter processing capabilities, contracted terms, and various estimates, including the
quantities of metal contained in concentrate received, material in-process and blister delivered. These
estimates are based on the Company’s process knowledge and multiple assay results. Actual metal
deliveries could differ materially from initial estimates and could have a material adverse impact on the
Company’s business, financial condition and results of operations as any over or under recovery of
metals is recorded in revenue. In the event that in-process metals at the smelter exceed specified
maximum contractual levels, Tsumeb may be required to purchase such excess in-process metal. IXM
may agree to waive such purchase requirement, as it did in all applicable years, when in-process metal
exceeded maximum contractual levels.
Tsumeb produces sulphuric acid as a by-product of the smelting operation. Historically, the vast majority
of this sulphuric acid has been sold to customers in Namibia, with the balance exported to other countries
in Africa. The revenue from sulphuric acid sales makes up approximately 15% to 20% of Tsumeb’s
revenue and changes in the market price of and demand for sulphuric acid can have a material impact on
Tsumeb’s financial results. As at December 31, 2023, approximately 90% of Tsumeb’s forecast sulphuric
acid production over the next three years is expected to be sold domestically under a reference price
contract which includes floor and ceiling prices. The remainder of Tsumeb’s sulphuric acid production is
expected to be sold at market terms under spot or longer-term agreements. An inability to sell or deliver
sufficient acid production whereby Tsumeb’s sulphuric acid storage capacity is exceeded would result in a
reduction of smelter operating levels up to and including a full stoppage.
Foreign Exchange
By virtue of its international operations, the Company incurs costs and expenses in a number of foreign
currencies. The revenue from its mining and smelting operations received by the Company is
denominated in U.S. dollars since the prices of the metals that it produces are referenced in U.S. dollars,
while the majority of operating and capital expenditures of its mining and smelter operations are
denominated in Bulgarian lev, which is pegged to the Euro, the Namibian dollar, which is tied to the ZAR,
and the Canadian dollar. Fluctuations in these foreign exchange rates give rise to foreign exchange
exposures, either favourable or unfavourable, which could have a material impact on the Company’s
business, financial condition and results of operations. Fluctuations in the U.S. dollar relative to certain
currencies can also have an impact on commodity prices quoted in U.S. dollars, such that a stronger U.S.
dollar tends to have a negative impact on U.S. quoted prices while a weaker U.S. dollar tends to have a
favourable impact. As a result, this relationship is considered in conjunction with the Company’s risk
assessment.
70 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 From time to time, the Company enters into foreign exchange option contracts in order to reduce the
foreign exchange exposures associated with projected operating expenses and capital expenditures
denominated in foreign currencies.
Operations
Mining operations and related processing and infrastructure facilities are subject to a number of risks,
including risks related specifically to the mining and metals industry. Such risks include, without limitation,
environmental hazards, industrial accidents, disruptions in the supply of critical materials and supplies,
disruptions due to pandemic conditions, delays in obtaining work visas or other authorizations, labour
disputes, changes in laws, technical difficulties or failures, equipment failure, failure of retaining dams
around tailings disposal areas which may result in environmental pollution and consequent liability,
unusual and unexpected geologic formations, seismic activity, rock bursts, cave-ins, flooding and other
conditions involved in the drilling and removal of material. Such risks could result in damage to, or
destruction of, mines and other processing facilities, damage to life or property, environmental damage,
delays in mining and processing, delays in scheduled maintenance, losses and possible legal liability. Any
prolonged downtime or shutdowns at the Company’s mining and processing facilities could have a
material adverse impact on the Company’s business, financial condition and results of operations.
Success of the Company’s operations also depends on adequate public infrastructure. Reliable roads,
bridges, power sources and water supplies are important determinants which affect capital and operating
costs. Natural events, such as seismic events and severe climatic conditions, as well as sabotage,
government or other interference in the maintenance or provision of such infrastructure could have a
material adverse impact on the Company’s business, financial condition and results of operations.
Mineral Resources and Mineral Reserves
The Mineral Resources and Mineral Reserves disclosed by the Company are estimates and no
assurance can be given that the anticipated tonnages and grades will be achieved or that the indicated
level of recovery will be realized. There are numerous uncertainties inherent in estimating Mineral
Resources and Mineral Reserves, including many factors beyond the Company’s control. Such estimation
is a subjective process and the accuracy of any estimate is a function of the quantity and quality of
available data and of the assumptions made and judgments used in engineering and geological
interpretation. Short-term operating factors, such as the need for orderly development of the ore bodies or
the processing of new or different ore grades, may cause the mining operation to be unprofitable in any
particular accounting period. In addition, there can be no assurance that gold, silver or copper recoveries
in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during
production.
Fluctuations in gold, silver and copper prices, results of drilling, change in cut-off grades, metallurgical
testing, production and the evaluation of mine plans subsequent to the date of any estimates may require
revision of such Mineral Resource and Mineral Reserve estimates. The volume and grade of Mineral
Reserves mined and processed, and the recovery rates achieved may not be the same as currently
anticipated. Any material reduction in the estimated Mineral Resources and Mineral Reserves could have
a material adverse impact on the Company’s business, financial condition and results of operations. A
significant decrease in the Mineral Resource and Mineral Reserve estimates could have a material
adverse impact on the carrying value of exploration and evaluation assets, mine properties, property,
plant and equipment, depletion and depreciation charges, and estimated mine closure and rehabilitation
costs, and could result in an impairment of the carrying value.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 71 Need for Mineral Reserves
As mines have limited lives based on Proven and Probable Mineral Reserves, the Company must
continually develop, replace and expand its Mineral Reserves and Mineral Resources as its mines
produce gold, copper and silver concentrates. The Company’s ability to maintain or increase its annual
production of gold, copper and silver and its aggregate Mineral Reserves will be significantly dependent
on its ability to expand its Mineral Resource base both at its existing mines and new mines it intends to
bring into production in the future.
Exploration
Exploration is speculative and involves many risks that even a combination of careful evaluation,
experience and knowledge utilized by the Company may not eliminate. Once a site with mineralization is
discovered, it may take several years from the initial phases of drilling until production is possible.
Substantial expenditures are normally required to locate and establish Mineral Reserves and to permit
and construct mining and processing facilities. While the discovery of mineralization may result in
substantial rewards if an ore body is proven, few properties that are explored are ultimately developed
into producing mines.
Financing, Interest Rate and Liquidity
The Company relies on the cash flows generated from its mining and smelting operations, including
provisional payments received from its customers, cash on hand, available credit under its RCF, and its
ability to raise debt and equity from the capital markets to fund its operating, investment and liquidity
needs. The cyclical nature of the Company’s businesses, general economic conditions and the volatility of
capital markets are such that conditions could change dramatically, affecting the Company’s cash flow
generating capability, its ability to maintain, or draw upon, its RCF or the existing terms under its
concentrate sales or toll agreements, as well as its liquidity, cost of capital and its ability to access
additional capital, which could have a material adverse impact on the Company’s earnings and cash flows
and, in turn, could affect total shareholder returns. To reduce these risks, the Company: (i) prepares
regular cash flow forecasts to monitor its capital requirements, available liquidity and compliance with its
debt covenants; (ii) strives to maintain a prudent capital structure that is comprised primarily of equity
financing and a long-term committed RCF; and (iii) targets a minimum level of liquidity comprised of
surplus cash balances and/or available committed lines of credit to avoid being placed into a situation
where it is required to raise additional capital at times when the costs or terms would be regarded as
unfavourable.
The Company’s exposure to the risk of changes in market interest rates relates primarily to the interest
earned on the Company’s cash and cash equivalent and short-term investments, as well as potential
interest paid on future drawdowns under its RCF, which is based on a floating reference rate.
Furthermore, there can be no assurance that the Company’s operations will be profitable or that the
Company will be able to raise capital on terms that it considers reasonable. Adverse commodity market,
general economic conditions and adverse capital market conditions could result in a delay or the indefinite
postponement of development or construction projects and could have a material adverse impact on the
Company’s business, financial condition, results of operations and share price.
72 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Environmental, Health and Safety
Mining and smelting operations, including exploration, development and production of mineral deposits
and disposal of tailings and hazardous materials, generally involve a high degree of risk and are subject
to conditions and events beyond the Company’s control. The Company’s operations are subject to all of
the hazards and risks normally encountered in the mining and smelting sectors including: adverse
environmental conditions; industrial and environmental accidents; metallurgical and other processing
problems; unusual or unexpected rock formations; ground or slope failures; structural cave-ins or slides;
flooding or fires; seismic activity; rock bursts; equipment failures; failures to contain hazardous materials
(including arsenic) within the designated areas; and periodic interruptions due to weather conditions; as
well as intentional acts by individuals or groups who intend to harm or disrupt the Company’s operations.
These risks could result in the destruction of mines or processing facilities, the failure of tailings
management facilities and damage to infrastructure, causing partial or complete shutdowns, personal
injury or death, environmental or other damage to the Company’s properties or the properties of others,
monetary losses and potential legal liability. Although the Company conducts extensive maintenance and
monitoring and incurs significant costs to maintain its operations, equipment and infrastructure, including
tailings management facilities, unanticipated failures or damage may occur that could cause injuries,
production loss or environmental pollution resulting in significant legal and/or economic liability.
The Company’s mining and smelting operations are subject to extensive environmental, health and safety
regulations in the various jurisdictions in which it operates. These regulations address, among other
things, emissions; air and water quality standards; land use; rehabilitation and reclamation; and safety
and work environment standards, including human rights. They also set forth limitations on the
generation, transportation, storage and disposal of various wastes, including hazardous wastes.
Environmental, health and safety legislation continues to evolve and, while the Company takes active
steps to monitor this legislation, it could result in stricter standards and enforcement, increased capital
and operating costs and burdens to achieve compliance, increased fines and penalties for non-
compliance, more stringent environmental assessments of proposed projects and a heightened degree of
responsibility for companies and their officers, directors and employees. Amendments to current laws and
regulations governing the Company’s mining, processing, development and exploration activities, or more
stringent implementation thereof, could have a material adverse impact on the Company’s business,
financial condition and results of operations, and cause increases in exploration expenses, capital
expenditures, production costs or future rehabilitation costs or reduction in levels of production at
producing properties or require abandonment or delays in development of new mining properties and/or
expansion of existing properties.
Environmental hazards may exist on the properties in which the Company holds interests, which are
unknown to the Company at present, and which have been caused by previous or existing owners or
operators of the properties. The Company may also acquire properties with known or undiscovered
environmental risk. Any indemnifications by the previous owners or others may not be adequate to pay all
the fines, penalties and costs incurred related to such properties. Some of the Company’s properties have
also been used for mining, processing, smelting and related operations for many years before the
Company acquired them and were acquired “as is” or with assumed environmental liabilities from
previous owners or operators. The Company has been required to address contamination at its properties
in the past and may need to do so in the future, either for existing environmental conditions or for leaks,
discharges or contamination that may arise from its ongoing operations or other contingencies. The cost
of addressing environmental conditions or risks, and liabilities associated with environmental damage
may be significant, and could have a material adverse impact on the Company’s business, financial
condition and results of operations. Production at the Company’s mines and processing facilities involves
the use of various chemicals, including certain chemicals that are designated as hazardous substances.
Contamination from hazardous substances, either at the Company’s own properties or other locations for
which it may be responsible, may subject the Company to liability for the investigation or remediation of
contamination, as well as for claims seeking to recover costs for related property damage, personal injury
or damage to natural resources. The occurrence of any of these events could have a material adverse
impact on the Company’s business, financial condition and results of operations.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 73 In 2016, the Company completed a major multi-year capital program at its smelter in Namibia directed at
modernizing the environmental equipment being utilized and debottlenecking its processing capacity. This
included the completion of a sulphuric acid plant, which has reduced the plant’s SO2 emissions. The
Company’s environmental and occupational health and safety performance will be subject to continued
monitoring by the Namibian authorities and deviation from expected environmental and occupational
health and safety outcomes could have a material adverse impact on the Company’s future production,
business, financial condition and results of operations.
Osino Acquisition
There is no certainty that the acquisition will be completed in accordance with the terms of the current
agreement, or at all. Each of the Company and Osino has the right to terminate the acquisition in certain
circumstances. In addition, the completion of the acquisition is subject to a number of conditions
precedent, certain of which may be outside of the control of both parties, including the approval under the
Namibia Competition Act. These factors may affect the ability of the Company to complete the acquisition
of Osino on the terms the parties have agreed upon or at all. A substantial delay in obtaining certain
regulatory approvals or the imposition of unfavourable terms or conditions in any approval could also
have an adverse effect on the business financial condition or results of operations of the Company.
DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER
FINANCIAL REPORTING
The Company’s management, under the supervision of the Chief Executive Officer (“CEO”) and the Chief
Financial Officer (“CFO”), has designed disclosure controls and procedures (“DC&P”) and internal control
over financial reporting (“ICFR”), as defined in NI 52-109, based on the Internal Control – Integrated
Framework (2013) developed by COSO (Committee of Sponsoring Organizations of the Treadway
Commission).
The CEO and CFO evaluated or caused to be evaluated under their supervision the design and operating
effectiveness of the DC&P and ICFR as defined by NI 52-109 as at December 31, 2023. Based on this
evaluation, the CEO and CFO concluded that the Company's DC&P and ICFR were designed and
operating effectively as at December 31, 2023.
NI 52-109 also requires Canadian public companies to disclose in their MD&A any change in ICFR that
has materially affected, or is reasonably likely to materially affect, ICFR. No material changes were made
to the ICFR in the year ended December 31, 2023. Only reasonable, rather than absolute, assurance that
misstatements are prevented or detected on a timely basis by ICFR can be provided due to the inherent
limitations of the ICFR system. Such limitations also apply to the effectiveness of ICFR as it is also
possible that controls may become inadequate because of changes in conditions or deterioration in
compliance with policies and procedures.
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
Certain statements and other information included in this MD&A and our other disclosure documents
constitute “forward looking information” or “forward looking statements” within the meaning of applicable
securities legislation, which we refer to collectively hereinafter as “Forward Looking Statements”.
Forward Looking Statements are statements that are not historical facts and are generally, but not always,
identified by the use of forward looking terminology such as “plans”, “expects”, “is expected”, “budget”,
“scheduled”, “estimates”, “forecasts”, “guidance”, “outlook”, “intends”, “anticipates”, “believes”, or
variations of such words and phrases or that state that certain actions, events or results “may”, “could”,
74 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms or similar
expressions. The Forward Looking Statements in this MD&A relate to, among other things: expected cash
flows; the price of gold, copper, silver and sulphuric acid; toll rates, metal exposure and stockpile interest
deductions at Tsumeb; the estimation of Mineral Reserves and Mineral Resources and the realization of
such mineral estimates; estimated capital costs, all-in sustaining cost, operating costs and other financial
metrics, including those set out in the outlook and guidance provided by the Company; currency
fluctuations; the impact of any impairment charges; Tsumeb’s ability to continue to benefit from the Export
Processing Zones and expected new Sustainable Special Economic Zone regime in Namibia; the
processing of Chelopech concentrate; timing of further optimization work at Tsumeb; potential benefits of
any upgrades and/or expansion, including the potential rotary holding furnace installation at the Tsumeb
smelter; the strategic review of Tsumeb and the potential outcome thereof; DPM’s strategy, plans, targets
and goals in respect of environmental, social and governance issues, including climate change,
greenhouse gas emissions reduction targets, tailings management facilities and human rights initiatives;
results of economic studies; expected milestones; timing and success of exploration activities, including at
the Čoka Rakita target; the timing of the completion and results of an updated FS for the Loma Larga gold
project; the timing and possible outcome of pending litigation or legal proceedings, including the timing of
the legal proceedings related to the Action and resumption of drilling activities at Loma Larga;
expectations with respect to the potential to incorporate additional existing Mineral Resources into the
Timok mine plan by processing the sulphide portion of the ore body; development of the Loma Larga gold
project, including expected production, successful negotiations of an exploitation agreement and granting
of environmental and construction permits in a timely manner; success of permitting activities; permitting
timelines; success of investments, including potential acquisitions; completion of the acquisitions of
Osino; anticipated timing for completion of the acquisition of Osino, including receipt of all required
regulatory and securityholder approvals; anticipated benefits and synergies resulting from the proposed
acquisition of Osino, including additional mineral resources and future production, expectations regarding
the financial strength of the Company following completion of the transaction and future exploration,
development and growth potential; the anticipated timing for any construction decision in respect of the
Twin Hills project and any update to the Company’s anticipated future production as result of any such
construction decision; requirements for additional capital; government regulation of mining and smelting
operations; environmental risks; reclamation expenses; potential or anticipated outcome of title disputes
or claims; benefits of digital initiatives; the timing and amount of dividends; the anticipated timing for the
application for approval of the NCIB and receipt thereof from the TSX; and the anticipated timing of the
commencement of the NCIB and the number of common shares of the Company that may be purchased
thereunder.
Forward Looking Statements are based on certain key assumptions and the opinions and estimates of
management and QP (in the case of technical and scientific information), as of the date such statements
are made, and they involve known and unknown risks, uncertainties and other factors which may cause
the actual results, performance or achievements of the Company to be materially different from any other
future results, performance or achievements expressed or implied by the Forward Looking Statements. In
addition to factors already discussed in this document, such factors include, among others: fluctuations in
metal and sulphuric acid prices, toll rates and foreign exchange rates; risks arising from the current
inflationary environment and the impact on operating costs and other financial metrics, including risks of
recession and the risk that the power subsidy in Bulgaria may be discontinued; the commencement,
continuation or escalation of geopolitical and/or intrastate conflicts and crises, including without limitation,
in Ukraine, the Middle East, Ecuador, and other jurisdictions from time to time, and their direct and indirect
effects on the operations of DPM; the continued exemption from the Council of Europe’s sanctions in
favour of Bulgaria with respect to the import of Russian oil and economic sanctions against Russia and
Russian persons which may impact supply chains; regulatory changes, including changes impacting the
complex concentrate market; inability of Tsumeb to secure complex copper concentrate on terms that are
economic; the anticipated timing for completion and result of the strategic review in respect of Tsumeb;
possible variations in ore grade and recovery rates; inherent uncertainties in respect of conclusions of
economic evaluations, economic studies and mine plans, including the Loma Larga FS and the Čoka
Rakita PEA; uncertainties with respect to timing of the updated Loma Larga FS and the Čoka Rakita PEA;
changes in project parameters, including schedule and budget, as plans continue to be refined;
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 75 uncertainties with respect to realizing the anticipated benefits from the development of the Loma Larga
and Čoka Rakita gold projects; uncertainties with respect to the Company’s ability to complete the
proposed acquisition of Osino, including the ability to obtain all required regulatory and securityholder
approvals; neither Osino nor DPM exercising their rights to terminate the definite agreement in respect of
the proposed acquisition of Osino; the ability of the Company to realize the anticipated benefits of the
proposed acquisition of Osino, including the ability to develop and commence production from the Twin
Hills project successfully or at all following any construction decision that may be made in respect thereof;
uncertainties with respect to actual results of current exploration activities; uncertainties and risks inherent
to developing and commissioning new mines into production, which may be subject to unforeseen delays;
uncertainties inherent with conducting business in foreign jurisdictions where corruption, civil unrest,
political instability and uncertainties with the rule of law may impact the Company’s activities; limitations
on insurance coverage; accidents, labour disputes and other risks of the mining industry; delays in
obtaining governmental approvals or financing or in the completion of development or construction
activities; actual results of current and planned reclamation activities; opposition by social and non-
governmental organizations to mining projects and smelting operations; unanticipated title disputes;
claims or litigation; failure to achieve certain cost savings or the potential benefits of any upgrades and/or
expansion, including the potential rotary holding furnace installation at the Tsumeb smelter; increased
costs and physical risks, including extreme weather events and resource shortages, related to climate
change; cyber-attacks and other cybersecurity risks; there being no assurance that the Company will
receive approval from the TSX to undertake the NCIB nor that it will purchase additional common shares
of the Company thereunder; risks related to the implementation, cost and realization of benefits from
digital initiatives; as well as those risk factors discussed or referred to in any other documents (including
without limitation the Company’s most recent AIF) filed from time to time with the securities regulatory
authorities in all provinces and territories of Canada and available on SEDAR+ at www.sedarplus.ca. This
list is not exhaustive of the factors that may affect any of the Company’s Forward Looking Statements.
The Forward Looking Statements are based on what the Company’s management considers to be
reasonable assumptions, beliefs, expectations and opinions based on the information currently available
to it. Without limitation to the foregoing, the following section outlines certain specific Forward Looking
Statements contained in the “Three-Year Outlook” section of this MD&A, unless otherwise noted, and
provides certain material assumptions used to develop such Forward Looking Statements and material
risk factors that could cause actual results to differ materially from the Forward Looking Statements
(which are provided without limitation to the additional general risk factors discussed herein):
Ore processed: assumes Chelopech and Ada Tepe mines perform at planned levels. Subject to a number
of risks, the more significant of which is failure of plant, equipment or processes to operate as anticipated.
Cash cost per tonne of ore processed: assumes Chelopech and Ada Tepe ore mined/milled are in line
with the guidance provided; foreign exchange rates remain at or around current levels; and operating
expenses at Chelopech and Ada Tepe are at planned levels. Subject to a number of risks, the more
significant of which are: lower than anticipated ore mined/milled; a weaker U.S. dollar relative to the Euro;
and unexpected increases in labour and other operating costs.
Metals contained in concentrate produced: assumes grades and recoveries are consistent with current
estimates of Mineral Resources and Mineral Reserves and DPM’s current expectations; and ore mined/
milled is consistent with guidance. Subject to a number of risks, the more significant of which are: lower
than anticipated ore grades, recovery rates and ore mined/milled.
76 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 All-in sustaining cost: assumes that metals contained in concentrate produced and cash cost per tonne of
ore processed at Chelopech and Ada Tepe are each in line with the guidance provided; copper and silver
prices remain at or around current levels; the timing, destination and commercial terms in respect of
concentrate deliveries are consistent with DPM’s current expectations; payable metals in concentrate sold
are consistent with the guidance provided; and general and administrative expenses, sustaining capital
expenditures and leases are consistent with the guidance provided. Subject to a number of risks, the
more significant of which are: lower than anticipated metals contained in concentrate produced;
concentrate deliveries and metal prices; a higher than anticipated cash cost per tonne of ore processed;
and higher than anticipated sustaining capital expenditures, leases and general and administrative
expenses.
Complex concentrate smelted at Tsumeb: assumes no significant disruption in equipment availability,
planned maintenance activities or concentrate supply. Subject to a number of risks, the more significant of
which are: unanticipated operational issues; delays in maintenance activities; lower than anticipated
equipment availability; and disruptions to or changes in the supply of complex concentrate, including
changes in the proportion of third party and Chelopech feed.
Cash cost per tonne of complex concentrate smelted: assumes complex concentrate smelted is
consistent with the guidance provided; no delays in planned maintenance activities; sulphuric acid prices
are at or around current levels; sulphuric acid production and operating expenses are at planned levels;
and foreign exchange rates remain at or around current levels. Subject to a number of risks, the more
significant of which are: lower than anticipated complex concentrate smelted and sulphuric acid
production; lower than anticipated sulphuric acid prices; strengthening of the ZAR relative to the U.S.
dollar; and higher than anticipated operating and transportation costs due to a variety of factors, including
higher than anticipated inflation, labour and other operating costs.
Sustaining and growth capital expenditures: assumes foreign exchange rates remain at or around current
levels, and all capital projects proceed as planned and at a cost that is consistent with the budget
established for each project. Subject to a number of risks, the more significant of which are: technical
challenges, delays related to securing necessary permits and approvals, equipment deliveries, equipment
performance, and the speed with which work is performed; availability of qualified labour; and changes in
project parameters and estimated costs, including foreign exchange impacts.
Liquidity (see comments contained in “Liquidity and Capital Resources” section): assumes the operating
and cost performance are consistent with current expectations; metal and sulphuric acid prices, and
foreign exchange rates remain at or around current levels; concentrate and sulphuric acid sales
agreements, and smelter toll terms are consistent with current terms and/or forecast levels; progress of
capital projects is consistent with current expectations; and DPM’s RCF remains in place. Subject to a
number of risks, the more significant of which are: lower than anticipated metals production at Chelopech
and Ada Tepe, complex concentrate throughput and sulphuric acid production at Tsumeb, concentrate
deliveries and metal prices; lower than anticipated reductions in secondary material at Tsumeb; a weaker
U.S. dollar relative to local operating currencies; changes in contractual sales and/or toll terms and
sulphuric acid prices; changes to capital project parameters, schedule and/or costs; and the inability to
draw down on DPM’s RCF due to a breach or potential breach of one of its covenants.
General: assumes ability to carry on exploration and development activities; ability to operate in a safe,
technical difficulties;
efficient and effective manner; no significant unanticipated operational or
maintenance of good relations with the communities surrounding Chelopech, Ada Tepe, Tsumeb and
Loma Larga; no significant events or changes relating to regulatory, environmental, health and safety
matters; and no material increase in the negative effects of the conflict in Ukraine and current global
economic and political conditions, including inflationary pressures, beyond what has been factored into
the Company’s Forward Looking Statements.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 77 The reader is cautioned that the foregoing list is not exhaustive of all factors and assumptions which may
have been used. Although the Company has attempted to identify important factors that could cause
actual actions, events or results to differ materially from those described in Forward Looking Statements,
there may be other factors that cause actions, events or results not to be anticipated, estimated or
intended. There can be no assurance that Forward Looking Statements will prove to be accurate, as
actual results and future events could differ materially from those anticipated in such statements. The
Company’s Forward Looking Statements reflect current expectations regarding future events and are only
as of the date hereof. Other than as it may be required by law, the Company undertakes no obligation to
update Forward Looking Statements if circumstances or management’s estimates or opinion should
change. Accordingly, readers are cautioned not to place undue reliance on Forward Looking Statements.
CAUTIONARY NOTE TO UNITED STATES INVESTORS CONCERNING DIFFERENCES IN
REPORTING OF MINERAL RESOURCE ESTIMATES
This MD&A has been prepared in accordance with the requirements of Canadian securities laws, under
which disclosure of mineral properties are governed by NI 43-101.
There are differences between the standards and terms used for reporting Mineral Reserves and Mineral
Resources in Canada, and in the United States pursuant to the rules and regulations of United States
Securities and Exchange Commission (the “SEC”). The terms “Mineral Resource”, “measured mineral
resource”, “indicated mineral resource” and “inferred mineral resource” are defined by the CIM and the
CIM Definition Standards on Mineral Resources and Mineral Reserves adopted by the CIM Council, and
must be disclosed according to Canadian securities regulations.
These standards differ from the requirements of the SEC applicable to domestic United States reporting
companies. Accordingly, information contained in this MD&A containing descriptions of the Company’s
mineral deposits may not be comparable to similar information made public by United States companies
subject to the reporting and disclosure requirements under the United States federal securities laws and
the rules and regulations thereunder.
78 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
The accompanying consolidated financial statements of Dundee Precious Metals Inc. (the “Company”)
and all information in this financial report are the responsibility of management. The consolidated
financial statements have been prepared in accordance with International Financial Reporting
Standards and, where appropriate,
judgments.
Management has reviewed the financial information presented throughout this report and has ensured
it is consistent with the consolidated financial statements.
include management’s best estimates and
Management maintains a system of internal control designed to provide reasonable assurance that
assets are safeguarded from loss or unauthorized use, and that financial information is timely and
reliable. However, any system of internal control over financial reporting, no matter how well designed
and implemented, has inherent limitations and may not prevent or detect all misstatements.
The Board of Directors is responsible for ensuring that management fulfils its responsibilities for
financial reporting and is ultimately responsible for reviewing and approving the consolidated financial
statements. The Board carries out this responsibility principally through its Audit Committee.
The Board of Directors appoints the Audit Committee, and all of its members are independent
directors. The Audit Committee meets periodically with management and the auditors to review
internal controls, audit results, accounting principles and related matters. The Board of Directors
approves the consolidated financial statements on the recommendation from the Audit Committee.
PricewaterhouseCoopers LLP, an independent firm of Chartered Professional Accountants, was
appointed by the shareholders at the last annual meeting to examine the consolidated financial
statements and provide an independent professional opinion. PricewaterhouseCoopers LLP has full
and free access to the Audit Committee.
_(signed) ”David Rae”_________
David Rae
President and Chief Executive Officer
_(signed) “Navin Dyal”__
Navin Dyal
Executive Vice President and
Chief Financial Officer
February 14, 2024
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 79
Independent auditor’s report
To the Shareholders of Dundee Precious Metals Inc.
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of Dundee Precious Metals Inc. and its subsidiaries (together, the Company) as at
December 31, 2023 and 2022, and its financial performance and its cash flows for the years then ended in
accordance with IFRS Accounting Standards.
What we have audited
The Company’s consolidated financial statements comprise:
the consolidated statements of financial position as at December 31, 2023 and 2022;
the consolidated statements of earnings (loss) for the years then ended;
the consolidated statements of comprehensive income (loss) for the years then ended;
the consolidated statements of cash flows for the years then ended;
the consolidated statements of changes in shareholders’ equity for the years then ended; and
the notes to the consolidated financial statements, comprising material accounting policy information
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Company in accordance with the ethical requirements that are relevant to our
audit of the consolidated financial statements in Canada. We have fulfilled our other ethical responsibilities
in accordance with these requirements.
PricewaterhouseCoopers LLP
PwC Tower, 18 York Street, Suite 2500, Toronto, Ontario, Canada, M5J 0B2
T: +1 416 863 1133, F: +1 416 365 8215, ca_toronto_18_york_fax@pwc.com
“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
80 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements for the year ended December 31, 2023. These matters were
addressed in the context of our audit of the consolidated financial statements as a whole, and in forming
our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Recognition of the Tsumeb metal exposure
adjustment
Our approach to addressing the matter included the
following procedures, among others:
Refer to note 2.2 – Material accounting policy
information and note 3 – Assets and liabilities held
for sale and discontinued operations to the
consolidated financial statements.
Tested the operating effectiveness of controls
relating to the metal exposure process,
including management’s estimate of the metal
exposure adjustment.
As at December 31, 2023, the Company’s assets
held for sale included a metal recovery of
$17.2 million related to estimated metal exposure at
Tsumeb.
Observed the metal stockpile survey performed
near year-end.
Obtained a customer confirmation in respect of
the quantities of concentrate treated, blister
returned and metal in-circuit at year-end.
Tested how management estimated the
Tsumeb metal exposure adjustment at year-
end and evaluated the reasonableness of the
estimated amount of metal contained in
concentrate received, in-circuit material and
blister delivered, where final assays have not
been completed at year-end, by comparing to
historical recovery rates and historical
adjustments to provisional assays.
Revenue from processing concentrate is adjusted
for any over or under recoveries of metals delivered
relative to contracted rates under the tolling
agreement between Tsumeb and its customer.
These metal exposure adjustments are calculated
by comparing (i) the copper, gold and silver
(together, metal) content in the concentrate
received and processed by Tsumeb multiplied by
the percentage payable in the agreement to (ii) the
metal in the blister delivered to the customer and in
the in-circuit material still being processed.
The metal exposure adjustment is subject to
estimation, including the amount of metal contained
in concentrate received, in-circuit material and
blister delivered where final assays have not been
completed.
We considered this a key audit matter due to (i) the
significant judgment by management in estimating
the Tsumeb metal exposure adjustment, including a
high degree of estimation uncertainty and (ii) the
significant audit effort and subjectivity in performing
procedures related to management’s assumptions.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 81 Other information
Management is responsible for the other information. The other information comprises the Management’s
Discussion and Analysis, which we obtained prior to the date of this auditor’s report and the information,
other than the consolidated financial statements and our auditor’s report thereon, included in the annual
report, which is expected to be made available to us after that date.
Our opinion on the consolidated financial statements does not cover the other information and we do not
and will not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed on the other information that we obtained prior to the date of this
auditor’s report, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard. When we read the information, other
than the consolidated financial statements and our auditor’s report thereon, included in the annual report,
if we conclude that there is a material misstatement therein, we are required to communicate the matter to
those charged with governance.
Responsibilities of management and those charged with governance for the
consolidated financial statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS Accounting Standards, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to liquidate
the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an audit conducted in accordance with Canadian generally accepted auditing standards
will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and
82 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Canadian generally accepted auditing standards, we exercise
professional judgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the consolidated financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of
not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of
internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Company’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.
Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the consolidated financial statements or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Company to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit. We
remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 83 From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated financial statements of the current period and
are therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Manuel Pereyra.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Ontario
February 14, 2024
84 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at December 31, 2023 and 2022
(in thousands of U.S. dollars)
ASSETS
Current Assets
Cash and cash equivalents
Accounts receivable
Inventories
Other current assets
Assets Held for Sale
Non-Current Assets
Investments at fair value
Exploration and evaluation assets
Mine properties
Property, plant & equipment
Intangible assets
Deferred income tax assets
Other long-term assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Accounts payable and accrued liabilities
Income tax liabilities
Current portion of long-term liabilities
Liabilities Held for Sale
Non-Current Liabilities
Rehabilitation provisions
Share-based compensation liabilities
Other long-term liabilities
TOTAL LIABILITIES
EQUITY
Share capital
Contributed surplus
Retained earnings
Accumulated other comprehensive loss
TOTAL SHAREHOLDERS' EQUITY
TOTAL LIABILITIES AND EQUITY
Notes
2.2(e)
5
6
3
7
8
9
10
11
21
12
21
15
3
14
17
15
December 31, December 31,
2023
2022
595,285
99,230
38,491
1,102
734,108
82,817
816,925
11,900
147,431
89,503
192,175
14,849
13,015
4,438
473,311
1,290,236
78,639
213
5,639
84,491
37,374
121,865
25,440
9,933
12,448
47,821
169,686
433,176
126,437
45,813
5,495
610,921
-
610,921
40,773
126,231
113,520
237,103
15,501
6,590
6,615
546,333
1,157,254
86,529
83
10,273
96,885
-
96,885
45,823
8,122
13,330
67,275
164,160
25(c)
559,059
6,304
556,777
(1,590)
1,120,550
1,290,236
583,027
6,436
411,786
(8,155)
993,094
1,157,254
The accompanying notes are an integral part of the consolidated financial statements
Signed on behalf of the Board of Directors
(Signed) "David Rae"
David Rae, Director
(Signed) "Anthony Walsh"
Anthony Walsh, Director
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 85 CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, except per share amounts)
Continuing Operations
Revenue
Costs and expenses
Cost of sales
General and administrative expenses
Corporate social responsibility expenses
Exploration and evaluation expenses
Finance costs
Other income and expense
Earnings before income taxes from continuing operations
Current income tax expense
Deferred income tax expense (recovery)
Net earnings from continuing operations
Discontinued Operations
Net earnings (loss) from discontinued operations
Net earnings
Net earnings (loss):
From continuing operations
From discontinued operations
Net earnings
Earnings (loss) per share
- Basic
From continuing operations
From discontinued operations
- Diluted
From continuing operations
From discontinued operations
2023
2022
Notes
28
18
18
18
19
20
21
21
3
22
22
22
22
520,091
433,490
244,207
236,668
36,525
4,948
46,558
3,499
28,543
6,240
24,230
3,340
(21,348)
314,389
(4,934)
294,087
205,702
139,403
29,824
(6,098)
21,199
1,620
181,976
116,584
10,963
192,939
(80,661)
35,923
181,976
10,963
192,939
116,584
(80,661)
35,923
0.98
0.06
0.98
0.06
0.61
(0.42)
0.61
(0.42)
The accompanying notes are an integral part of the consolidated financial statements
86 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars)
Net earnings
Notes
2023
2022
192,939
35,923
Other comprehensive income (loss) items that may be reclassified
subsequently to profit or loss:
Foreign exchange option contracts designated as cash flow
hedges from discontinued operations
Unrealized losses, net of income tax of $nil for all periods
Deferred cost of hedging, net of income tax of $nil for all periods
Realized losses transferred to cost of sales, net of income tax of $nil
for all periods
Other comprehensive income (loss) items that will not be
reclassified subsequently to profit or loss:
Unrealized gains (losses) on publicly traded securities, net of income
tax of $nil for all periods
Transferred to retained earnings on derecognition of investment in
Sabina
Remeasurement of pension obligations, net of income tax recovery of
$34 (2022 - $108)
7(c)
7(c)
7(c)
7(a)
7(a)
Comprehensive income
Comprehensive income (loss)
From continuing operations
From discontinued operations
Comprehensive income
The accompanying notes are an integral part of the consolidated financial statements
(3,263)
2,029
(1,544)
104
3,803
1,140
21,890
(5,292)
(17,717)
-
(177)
6,565
199,504
(903)
(6,495)
29,428
185,972
13,532
199,504
110,389
(80,961)
29,428
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 87 CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars)
Notes
24(a)
24(b)
4
7(a)
25(a)
25(b)
OPERATING ACTIVITIES
Earnings before income taxes
Depreciation and amortization
Changes in working capital
Other items not affecting cash
Proceeds from (payments for) settlement of derivative contracts
Interest received
Income taxes paid
Cash provided from operating activities of continuing operations
Cash provided from operating activities of discontinued operations
INVESTING ACTIVITIES
Purchase of publicly traded securities
Proceeds from disposal of B2Gold shares
Proceeds from disposal of mine properties, property, plant and
equipment and intangible assets
Expenditures on exploration and evaluation assets
Expenditures on mine properties
Expenditures on property, plant and equipment
Expenditures on intangible assets
Decrease in restricted cash
Cash provided from (used in) investing activities of continuing
operations
Cash used in investing activities of discontinued operations
FINANCING ACTIVITIES
Proceeds from exercise of stock options
Dividends paid
Payments for share repurchases
Principal repayments related to leases
Interest and finance fees paid
Cash used in financing activities of continuing operations
Cash used in financing activities of discontinued operations
Increase in cash and cash equivalents of continuing operations
Increase (decrease) in cash and cash equivalents of discontinued
operations
Cash and cash equivalents at beginning of year, continuing operations
Cash and cash equivalents at beginning of year, discontinued
operations
2023
2022
205,702
84,408
(899)
(5,636)
(16,014)
23,192
139,402
84,229
18,718
(23,872)
9,094
6,565
(29,127)
(24,547)
261,626
14,056
209,589
22,463
(4,273)
56,459
69
(21,201)
(6,569)
(24,607)
(3,020)
3,738
(500)
-
5
(26,694)
(9,549)
(29,147)
(1,072)
-
596
(12,969)
(66,957)
(18,852)
3,732
(30,166)
(65,590)
(2,959)
(1,459)
(96,442)
(2,934)
165,780
3,377
(28,606)
(13,619)
(2,584)
(3,223)
(44,655)
(2,789)
97,977
(1,847)
822
429,505
331,528
3,671
2,849
Cash and cash equivalents at end of year, continuing operations
2.2(e)
595,285
429,505
Cash and cash equivalents at end of year, discontinued operations
3
1,824
3,671
The accompanying notes are an integral part of the consolidated financial statements
88 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, except for number of shares)
December 31, 2023
December 31, 2022
Number
Amount
Number
Amount
Notes
Share Capital
Authorized
Unlimited common and preference shares with no
par value
Issued
Fully paid common shares with one vote per share
Balance at beginning of year
Shares issued on exercise of stock options
190,000,202
583,027 191,441,200
585,050
1,171,399
3,732
1,060,102
3,377
Share repurchases
25(b)
(9,738,063)
(29,549)
(2,501,100)
(7,551)
Transferred from contributed surplus on exercise of
stock options
Balance at end of year
1,849
2,151
181,433,538
559,059 190,000,202
583,027
Contributed surplus
Balance at beginning of year
Share-based compensation expense
Transferred to share capital on exercise of stock
options
Other changes in contributed surplus
Balance at end of year
Retained earnings
Balance at beginning of year
Net earnings
Transferred from accumulated other
comprehensive income (loss) on derecognition of
investment in Sabina
Dividend distributions
Share repurchases
Balance at end of year
7(a)
25(a)
25(b)
Accumulated other comprehensive loss
Balance at beginning of year
Other comprehensive income (loss)
Balance at end of year
Total equity at end of year
6,436
944
(1,849)
773
6,304
411,786
192,939
17,717
(29,624)
(36,041)
556,777
(8,155)
6,565
(1,590)
1,120,550
8,629
1,116
(2,151)
(1,158)
6,436
412,394
35,923
-
(30,463)
(6,068)
411,786
(1,660)
(6,495)
(8,155)
993,094
The accompanying notes are an integral part of the consolidated financial statements
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 89 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
1.
CORPORATE INFORMATION
Dundee Precious Metals Inc. (“DPM”) is a Canadian based international gold mining company engaged in
the acquisition of mineral properties, exploration, development, mining and processing of precious metals.
DPM is a publicly listed company incorporated under the federal laws of Canada. DPM has common
shares traded on the Toronto Stock Exchange (“TSX”). The address of DPM’s registered office is 150
King Street West, Suite 902, P.O. Box 30, Toronto, Ontario M5H 1J9.
As at December 31, 2023, DPM’s consolidated financial statements included DPM and its subsidiary
companies (collectively, the “Company”).
Continuing operations:
DPM’s principal subsidiaries included:
• 100% of Dundee Precious Metals Chelopech EAD (“Chelopech”), which owns and operates a gold,
copper and silver mine located east of Sofia, Bulgaria; and
• 100% of Dundee Precious Metals Krumovgrad EAD (“Ada Tepe”), which owns and operates a gold
mine located in south eastern Bulgaria, near the town of Krumovgrad.
DPM held interests in a number of exploration and development properties located in Serbia and Ecuador
through its subsidiaries, including:
• 100% of Crni Vrh Resources d.o.o. and DPM Avala d.o.o., which hold the Čoka Rakita project and
the Timok gold project, respectively, in Serbia; and
• 100% of DPM Ecuador S.A. (“DPM Ecuador”), which is focused on the exploration and
development of the Loma Larga gold project and the Tierras Coloradas exploration property in
Ecuador.
Discontinued operations (note 3):
DPM also owns:
• 92% of Dundee Precious Metals Tsumeb (Proprietary) Limited (“Tsumeb”), which owns and
operates a custom smelter located in Tsumeb, Namibia. On January 31, 2024, DPM reacquired the
8% ownership interest from Greyhorse Mining (Proprietary) Limited ("GHM") and resumed its 100%
ownership interest in Tsumeb.
2.1
BASIS OF PREPARATION
The Company’s consolidated financial statements have been prepared in accordance with IFRS
Accounting Standards ("IFRS"). These consolidated financial statements were approved by the Board of
Directors on February 14, 2024.
2.2
MATERIAL ACCOUNTING POLICY INFORMATION
These consolidated financial statements have been prepared on a historical cost basis except for publicly
traded securities and derivative assets and liabilities (note 7) that are measured at fair value.
The Company’s material accounting policies are set out below. The Company has consistently applied
these accounting policies to all periods presented in these consolidated financial statements.
90 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
(a)
Basis of consolidation
Subsidiaries are all entities over which the Company has control. The Company controls an entity when
the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power over the entity.
The Company uses the acquisition method of accounting for business combinations. The fair value of the
acquisition of a subsidiary is based on the fair value of the assets acquired and liabilities assumed, and
the fair value of the consideration. The fair value of the assets acquired and liabilities assumed includes
any contingent consideration arrangement. Acquisition related costs are expensed as incurred. At the
date of acquisition, identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair values. The Company also recognizes any non-
controlling interest in the acquiree at fair value.
The excess, if any, of the consideration paid and the amount of any non-controlling interest recognized
over the fair value of the identifiable net assets acquired is recorded as goodwill. In the case of a bargain
purchase, where the total consideration paid and the non-controlling interest recognized are less than the
fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the
consolidated statements of earnings (loss).
Subsidiaries are fully consolidated from the date on which control is acquired by the Company and they
are deconsolidated from the date that control ceases. The financial statements of the subsidiaries are
prepared for the same reporting period as the parent company using consistent accounting policies. All
inter-company balances, revenues and expenses and earnings and losses resulting from inter-company
transactions are eliminated on consolidation.
Non-controlling interests in the net assets of consolidated subsidiaries are a separate component of the
Company’s equity. Non-controlling interests consist of the non-controlling interests on the date of the
original business combination plus the non-controlling interests’ share of changes in equity since the date
of acquisition.
(b)
Critical accounting estimates and judgments
The preparation of the Company’s consolidated financial statements in accordance with IFRS requires
management to make judgments, estimates and assumptions that affect the amounts of assets, liabilities
and contingent liabilities on the date of the consolidated financial statements and the amounts of
revenues and expenses during the period reported. Estimates and assumptions are evaluated and are
based on management’s experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. However, actual outcomes can differ from these
estimates.
The significant areas of estimation and/or judgment considered by management in preparing the
consolidated financial statements include, but are not limited to:
• Mineral Resource and Mineral Reserve estimates (note 2.2(l));
• impairment of non-financial assets (note 2.2(p));
• rehabilitation provisions and contingencies (note 2.2(q));
• revenue recognition related to toll smelting arrangements (note 2.2(t)); and
• deferred income tax assets and liabilities (note 2.2(w)).
(c)
Presentation and functional currency
The Company’s presentation currency is the U.S. dollar and the functional currency of DPM and its
consolidated subsidiaries is the U.S. dollar as it was assessed by management as being the primary
currency of the economic environment in which the Company operates.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 91 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
(d)
Foreign currency
Foreign currency transactions
Monetary assets and liabilities denominated in foreign currencies are translated into U.S. dollars at
exchange rates on the reporting date. Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are translated at the exchange rates on the dates that their fair
values are determined. Non-monetary assets and liabilities denominated in foreign currencies that are
measured at historical cost are translated at the exchange rates on the dates of the transactions. Income
and expense items are translated at the exchange rate on the dates of the transactions. Exchange gains
or losses resulting from the translation of these amounts are included in net earnings (loss), except those
arising on the translation of equity instruments that are fair valued through other comprehensive income
(loss).
Foreign operations
Foreign operations are comprised of subsidiaries of the Company that have a functional currency other
than the U.S. dollar. The assets and liabilities of foreign operations, including fair value adjustments
arising on acquisition, are translated into U.S. dollars at exchange rates on the reporting date. The
income and expenses of foreign operations are translated into U.S. dollars at exchange rates on the
dates of the transactions. Foreign currency differences are recognized as currency translation
adjustments in other comprehensive income (loss). Accumulated currency translation adjustments are
reclassified to net earnings (loss) upon the disposal of the associated foreign operation when the gain or
loss on disposal is recognized.
(e)
Cash and cash equivalents
Cash and cash equivalents comprise cash deposits, guaranteed investment certificates (“GICs”) and/or
other highly rated and liquid securities with an original maturity of less than three months. As at December
31, 2023, cash and cash equivalents comprised of cash at banks of $490.3 million (December 31, 2022 –
$383.4 million) and GICs of $105.0 million (December 31, 2022 – $49.8 million) in the consolidated
statements of financial position.
(f)
Inventories
Inventories of ore and concentrate are measured and valued at the lower of average production cost and
net realizable value. Net realizable value is the estimated selling price of the concentrate in the ordinary
course of business based on the prevailing metal prices on the reporting date, less estimated costs to
complete production and to bring the concentrate to sale. Production costs that are inventoried include
the costs directly related to bringing the inventory to its current condition and location, such as materials,
labour, other direct costs (including external services and depreciation, depletion and amortization),
production related overheads and royalties.
Inventories of sulphuric acid, arsenic calcines, spare parts, supplies and other materials are valued at the
lower of average cost and net realizable value. Obsolete, redundant and slow moving inventories are
identified at each reporting date and written down to their net realizable values. Arsenic calcines not
expected to be processed in the next 12 months are classified as long-term inventory and included in
other long-term assets.
92 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
(g)
Financial assets and liabilities excluding derivative instruments related to hedging
activities
Financial assets
Initial recognition and measurement
Non-derivative financial assets are classified and measured as “financial assets at fair value”, as either
through profit or loss (“FVPL”) or through other comprehensive income (“FVOCI”), and “financial assets at
amortized cost”, as appropriate. The Company determines the classification of financial assets at the time
of initial recognition based on the Company’s business model and the contractual terms of the cash flows.
All financial assets are recognized initially at fair value plus, in the case of financial assets not at FVPL,
directly attributable transaction costs on the trade date at which the Company becomes a party to the
contractual provisions of the instrument.
Financial assets with embedded derivatives are considered in their entirety when determining their
classification at FVPL or at amortized cost. The Company has classified accounts receivable on
provisionally priced sales as financial assets measured at FVPL. Other accounts receivable held for
collection of contractual cash flows are measured at amortized cost.
Subsequent measurement – Financial assets at FVPL
Financial assets measured at FVPL include financial assets management intends to sell in the short term
and any derivative financial instrument that is not designated as a hedging instrument in a hedge
relationship. Financial assets measured at FVPL are carried at fair value in the consolidated statements of
financial position with changes in fair value recognized in other income and expense in the consolidated
statements of earnings (loss). The Company’s investment in warrants, embedded derivatives, accounts
receivable on provisionally priced sales and foreign exchange forward contracts not related to hedging
activities are classified as financial assets at FVPL.
Subsequent measurement – Financial assets at FVOCI
Financial assets measured at FVOCI are non-derivative financial assets that are not held for trading and
the Company has made an irrevocable election at the time of initial recognition to measure the assets at
FVOCI. The Company’s investments in publicly traded equity securities are classified as financial assets
at FVOCI.
After initial measurement, investments measured at FVOCI are subsequently measured at fair value with
unrealized gains or losses recognized in other comprehensive income (loss) in the consolidated
statements of comprehensive income (loss).
Subsequent measurement – Financial assets at amortized cost
Financial assets measured at amortized cost are non-derivative financial assets that are held for
collection of contractual cash flows, where those cash flows represent repayments of principal and
interest. The Company’s other accounts receivable is classified as financial assets at amortized cost.
Dividends from all financial assets are recognized in other income and expense in the consolidated
statements of earnings (loss) when the right to receive the dividend is established.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 93 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Derecognition
A financial asset is derecognized when the contractual rights to the cash flows from the asset expire or
are transferred, or the Company no longer retains substantially all the risks and rewards of ownership.
On derecognition of a financial asset, the difference between the carrying amount measured at the date of
derecognition and the consideration received is recognized in other income and expense in the
consolidated statements of earnings (loss) except for financial assets at FVOCI, for which the cumulative
gain or loss remains in accumulated other comprehensive income (loss) or is transferred to retained
earnings and is not reclassified to profit or loss.
Impairment of financial assets
The Company’s only financial assets subject to impairment are other accounts receivable, which are
measured at amortized cost. The Company has elected to apply the simplified approach to impairment as
permitted by IFRS 9, Financial Instruments, which requires the expected lifetime loss to be recognized at
the time of initial recognition of the receivable. To measure estimated credit losses, accounts receivable
have been grouped based on shared credit risk characteristics, including the number of days past due. An
impairment loss is reversed in subsequent periods if the amount of the expected loss decreases and the
decrease can be objectively related to an event occurring after the initial impairment was recognized.
Financial liabilities
Recognition and measurement
Financial liabilities are measured at amortized cost, unless they are required to be measured at FVPL as
is the case for held for trading or derivative instruments, or the Company has opted to measure the
financial liability at FVPL. The Company’s financial liabilities include accounts payable and accrued
liabilities, which are initially recognized at fair value and subsequently measured at amortized cost.
Derecognition
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or
expires with any associated gain or loss recognized in other income and expense in the consolidated
statements of earnings (loss).
(h)
Derivative financial instruments and hedging activities
Derivatives are initially recognized at fair value on the dates they are entered into and are subsequently
re-measured at their fair value at the end of each reporting period. The method of recognizing the
resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so,
the nature of the item being hedged.
For a derivative instrument to qualify for hedge accounting, the Company documents at the inception of
the transaction the relationship between a hedging instrument and hedged item, as well as its risk
management objectives and strategy for undertaking the hedging transaction. The Company also
documents its assessment, both at inception and on an ongoing basis, of whether the derivative used to
hedge an underlying exposure is highly effective in offsetting changes in the cash flows of the hedged
item.
The full fair value of a hedging derivative is classified as a non-current asset or liability when the
remaining maturity is more than 12 months.
94 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Foreign exchange option contracts designated as cash flow hedges
The Company designates the intrinsic value of foreign exchange option contracts entered to hedge a
portion of its projected operating expenses and capital expenditures denominated in foreign currencies as
cash flow hedges.
The effective portion of changes in fair value of the intrinsic value of the options are initially recognized in
other comprehensive income (loss) in the consolidated statements of comprehensive income (loss). For
hedges of operating expenses, the accumulated fair value change initially recognized in other
comprehensive income (loss) in the consolidated statements of comprehensive income (loss) is
subsequently recognized in cost of sales in the consolidated statements of earnings (loss) in the period
when the underlying hedged operating expenses occur. For hedges of capital expenditures, the
accumulated fair value change initially recognized in other comprehensive income (loss) in the
consolidated statements of comprehensive income (loss) is subsequently included in the carrying value of
the underlying assets hedged in the period the underlying hedged capital expenditures occur.
The time value, which forms a component of these foreign exchange option contracts, is treated as a
separate cost of hedging. As a result, any unrealized fair value change in the time value component of the
outstanding foreign exchange option contracts is initially recognized as a deferred cost of hedging in other
comprehensive income (loss) in the consolidated statements of comprehensive income (loss). The
accumulated cost of hedging is subsequently recognized in cost of sales or included in the carrying value
of the underlying assets hedged in the period the underlying hedged operating expenses or capital
expenditures occur.
Commodity swap contracts designated as fair value hedges
The Company designates the spot component of commodity swap contracts to hedge the metal price
exposure associated with the time lag between the provisional and final determination of concentrate
sales (“QP Hedges”) as a fair value hedge.
The effective portion of changes in fair value of the spot component of these commodity swap contracts
are recognized in revenue in the consolidated statements of earnings (loss), together with any changes in
the fair value of the hedged accounts receivable on the provisionally priced sales.
The forward point component of these commodity swap contracts is accounted for separately as a cost of
hedging. As a result, any change in the fair value of the forward point component is recognized in revenue
in the consolidated statements of earnings (loss).
When a hedging instrument expires, or is sold or terminated, or when a hedge no longer meets the
criteria for cash flow hedge accounting, the accumulated deferred gains or losses remain in other
comprehensive income (loss) until the period the underlying transaction that was hedged occurs at which
point they are reclassified and recognized in revenue in the consolidated statements of earnings (loss). If
the underlying hedged transaction is no longer expected to occur, the accumulated gains or losses that
were initially recognized in other comprehensive income (loss) are immediately reclassified to other
income and expense in the consolidated statements of earnings (loss).
The gains or losses relating to the ineffective portion of all cash flow or fair value hedges, if any, are
recognized immediately in other income and expense in the consolidated statements of earnings (loss).
(i)
Offsetting of financial instruments
Financial assets and financial liabilities are offset if there is a currently enforceable legal right to offset the
recognized amounts and there is an intention to settle on a net basis, or realize the assets and settle the
liabilities simultaneously.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 95 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
(j)
Fair value of financial instruments
The fair value of financial instruments that are traded in active markets at each reporting date is
determined by reference to quoted market prices or dealer price quotations (bid price for long positions
and ask price for short positions), without any deduction for transaction costs.
For instruments not traded in an active market, the fair value is determined using appropriate valuation
techniques. Such techniques may include using recent arm’s length transactions; reference to the current
fair value of another instrument that is substantially the same; discounted cash flow analysis or other
valuation models. These valuation models require the use of assumptions, including future stock price
volatility and probability of exercise.
Changes in the underlying assumptions could materially impact the Company’s investments at FVPL.
Further details on measurement of the fair values of financial instruments are provided in note 7.
(k)
Mineral exploration and evaluation expenditures
Exploration and evaluation activities involve the search for Mineral Resources and Mineral Reserves, the
assessment of technical and operational feasibility and the determination of an identified Mineral
Resource or Mineral Reserve’s commercial viability. Once the legal right to explore has been acquired,
exploration and evaluation expenditures are expensed as incurred until economic production is probable.
Exploration expenditures in areas where there is a reasonable expectation to convert existing estimated
Mineral Resources to estimated Mineral Reserves or to add additional Mineral Resources with additional
drilling and evaluations in areas near existing Mineral Resources or Mineral Reserves and existing or
planned production facilities, are capitalized.
Exploration properties that contain Proven and Probable Mineral Reserves, but for which a development
decision has not yet been made, are subject to periodic review for impairment when events or changes in
circumstances indicate the project’s carrying value may not be recoverable.
Exploration and evaluation assets are reclassified to “Mine Properties – Mines under construction” when
the technical feasibility and commercial viability of extracting the Mineral Resources or Mineral Reserves
are demonstrable and construction has commenced or a decision to construct has been made.
Exploration and evaluation assets are assessed for impairment before reclassification to “Mines under
construction”, and the impairment charge, if any, is recognized through net earnings (loss).
The application of the Company’s accounting policy for exploration and evaluation expenditures requires
judgment in determining whether it is probable that future economic benefits will be generated from the
exploitation of an exploration and evaluation asset when activities have not yet reached a stage where a
reasonable assessment of the existence of Mineral Reserves can be determined. The estimation of
Mineral Resources is a complex process and requires significant assumptions and estimates regarding
economic and geological data and these assumptions and estimates impact the decision to either
expense or capitalize exploration and evaluation expenditures. Management is required to make certain
estimates and assumptions about future events and circumstances in order to determine if an
economically viable extraction operation can be established. Any revision to any of these assumptions
and estimates could result in the impairment of the capitalized exploration and evaluation costs. If new
information becomes available after expenditures have been capitalized that the recovery of these
expenditures is no longer probable, the expenditures capitalized are written down to the recoverable
amount and charged to net earnings (loss) in the period the new information becomes available.
96 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
(l)
Mine properties
Mine Properties – Mines under construction
All expenditures undertaken in the development, construction, installation and/or completion of mine
production facilities are capitalized and initially classified as “Mines under construction”. All expenditures
related to the construction of mine declines and ore body access, including mine shafts and ventilation
raises, are considered to be capital development and are capitalized. Expenses incurred after reaching
the ore body are regarded as operating development costs and are included in the cost of ore hoisted.
Upon the commencement of commercial production, all related assets included in “Mines under
construction” are reclassified to “Mine Properties – Producing mines” or “Property, plant and equipment”.
Determination of commencement of commercial production is a complex process and requires significant
assumptions and estimates. The commencement of commercial production is defined as the date when
the mine is capable of operating in the manner intended by management. The Company considers
primarily the following factors, among others, when determining the commencement of commercial
production:
• All major capital expenditures to achieve a consistent level of production and desired capacity have
been incurred;
• A reasonable period of testing of the mine plant and equipment has been completed;
• A predetermined percentage of design capacity of the mine and mill has been reached; and
• Required production levels, grades and recoveries have been achieved.
Mine Properties – Producing mines
All assets reclassified from “Mines under construction” to “Producing mines” are stated at cost less
accumulated depletion and accumulated impairment charges. Costs incurred for the acquisition of land
are stated at cost.
The initial cost of a producing mine comprises its purchase price or construction cost, any costs directly
attributable to bringing it to a working condition for its intended use, the initial estimate of the rehabilitation
costs, and for qualifying assets, applicable borrowing costs during construction. The purchase price or
construction cost is the aggregate amount of cash consideration paid and the fair value of any other
consideration given to acquire the asset.
When a mine construction project moves into production, the capitalization of certain mine construction
costs ceases, and from that point on, costs are either regarded as inventory costs or expensed as cost of
sales, except for costs related to mine additions or improvements, open pit stripping activities that provide
a future benefit, and underground mine development or mineable reserve development, which qualify for
capitalization.
Depletion
The depletion of a producing mine asset is based on the unit-of-production method over the estimated
economic life of the related deposit.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 97 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Mineral Resource and Mineral Reserve estimates
The estimation of Mineral Resources and Mineral Reserves, as defined under National Instrument
43-101, Standards of Disclosure for Mine Projects (“NI 43-101”), is a complex process and requires
significant assumptions and estimates. The Company prepares its Mineral Resource and Mineral Reserve
estimates based on information related to the geological data on the size, depth and shape of the ore
body which is compiled by appropriately qualified persons. Mineral Resource and Mineral Reserve
estimates are based upon factors such as metal prices, capital requirements, production costs, foreign
exchange rates, geotechnical and geological assumptions and judgments made in estimating the size and
grade of the ore body. Mineral Resource and Mineral Reserve estimates, together with forecast
production, determine the life of mine estimates and therefore changes in the Mineral Resource or
Mineral Reserve estimates may impact the carrying value of exploration and evaluation assets (note
2.2(k)), mine properties, property, plant and equipment (note 2.2(m)), depletion and depreciation charges
(note 2.2(m)), rehabilitation provisions (note 2.2(q)), and deferred income tax assets (note 2.2(w)).
(m)
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated
impairment charges.
The initial cost of property, plant and equipment comprises its purchase price or construction cost, any
costs directly attributable to bringing it to a working condition for its intended use, the initial estimate of the
rehabilitation costs, and for qualifying assets, applicable borrowing costs during construction. The
purchase price or construction cost is the aggregate amount of cash consideration paid and the fair value
of any other consideration given to acquire the asset. Where an item of property, plant and equipment is
comprised of significant components with different useful lives, the components are accounted for as
separate items of property, plant and equipment. Right-of-use assets relating to leases are also included
in property, plant and equipment (note 2.2(r)).
Depreciation
The depreciation of property, plant and equipment related to a mine is based on the unit-of-production
method over the estimated economic life of the related deposit, except in the case of an asset whose
estimated useful life is less than the life of the deposit, in which case the asset is depreciated over its
estimated useful life based on the straight-line method. For all other property, plant and equipment,
depreciation is based on the estimated useful life of the asset on a straight-line basis. Depreciation of
property, plant and equipment used in a capitalized exploration or development project is capitalized to
the project.
Depreciation of property, plant and equipment, which are depreciated on a straight-line basis over their
estimated useful lives, is as follows:
Asset Category
Buildings
Machinery and Equipment
Vehicles
Computer Hardware
Office Equipment
Estimated useful life
(Years)
10 - 20
3 - 20
5
2 - 4
3 - 10
Construction work-in-progress includes property, plant and equipment in the course of construction and is
carried at cost less any recognized impairment charge. These assets are reclassified to the appropriate
category of property, plant and equipment and depreciation of these assets commences when they are
completed and ready for their intended use.
98 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
An item of property, plant and equipment, including any significant part initially recognized, is
derecognized upon disposal or when no future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset, calculated as the difference between the net
disposal proceeds and the carrying amount of the asset, is recognized in profit or loss when the asset is
derecognized.
The residual values, useful lives and methods of depreciation of all assets are reviewed at each financial
year end and are adjusted prospectively, if appropriate. Significant judgment is involved in the
determination of estimated residual values and useful lives. The actual residual values and useful lives
may differ from current estimates.
Depreciation of mine specific assets is based on the unit-of-production method. The life of these assets is
assessed annually with regard to both their anticipated useful life and the present assessments of the
economically recoverable reserves and resources of the mine property where these assets are located.
These calculations require the use of estimates and assumptions, including the amount of recoverable
reserves and resources. Any changes to these calculations based on new information are accounted for
prospectively.
Rates of depreciation and, in turn, the annual depreciation expense could therefore be materially affected
by changes in underlying estimates. Changes in estimates can be the result of differences in actual
production or changes in forecast future production, changes in Mineral Resources or Mineral Reserves
through exploration activities, differences between estimated and actual costs of mining and differences in
metal prices used in the estimation of Mineral Reserves.
Major maintenance and repairs
Expenditures on major maintenance include the cost of replacing part of an asset and overhaul costs.
When part of an asset is being replaced and it is probable that future economic benefits associated with
the replacement or overhauled item will flow to the Company through an extended life, the expenditure is
capitalized as a separate asset and the carrying amount of the replaced part is written off.
(n)
Intangible assets
Intangible assets include software, exploration and software licences and long-term customer contracts.
Intangible assets acquired are measured upon initial recognition at cost, which comprises the purchase
price plus any costs directly attributable to the preparation of the asset for its intended use. Identifiable
intangible assets acquired through business combinations are initially recognized at fair value as at the
date of acquisition.
Research expenditures are recognized as an expense as incurred. Development costs that are directly
attributable to the design and testing of an identifiable software product are capitalized and recognized as
an intangible asset.
Intangible assets are carried at cost less accumulated amortization and any accumulated impairment
charges and are amortized on a straight-line basis over their estimated useful lives.
The amortization periods applicable to intangible assets over their estimated useful lives are as follows:
Asset Category
Computer Software
Exploration and Software Licences
Estimated useful life
(Years)
3 - 5
3 - 5
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 99 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Changes in the expected useful life or the expected pattern of consumption of future economic benefits
embodied in the intangible assets require the use of estimates and assumptions and are accounted for by
changing the amortization period or method, as appropriate, and are treated as changes in accounting
estimates. The amortization expense attributable to an intangible asset is recognized in the consolidated
statements of earnings (loss) in the applicable expense category to which the intangible asset relates.
The gain or loss arising from the derecognition of an intangible asset is measured as the difference
between the net disposal proceeds and the carrying amount of the asset and is recognized in profit or
loss when the asset is derecognized.
(o)
Assets and liabilities held for sale and discontinued operations
Non-current assets or assets in a disposal group that are expected to be recovered primarily through sale
rather than through continuing use are classified as assets held for sale. For this to be the case, the asset
or a disposal group must be available for immediate sale in its present condition subject only to terms that
are usual and customary for sales of such assets or disposal groups and its sale must be highly probable.
A disposal group is a group of assets which the Company intends to dispose of in a single transaction.
These assets are measured at the lower of their carrying amount and fair value less cost to sell.
Impairment charges on initial classification as held for sale and subsequent gains or losses on re-
measurement are recognized in net earnings (loss) from discontinued operations. The reversal of any
previously recognized impairment charge cannot exceed the carrying amount that would have been
determined had no impairment charge been recognized for the asset held for sale.
Assets and liabilities in a disposal group are classified as held for sale and are presented separately in
the consolidated statements of financial position.
The measurement of assets held for sale requires the use of estimates and assumptions related to the
carrying value and its recoverability through sale. Actual sale proceeds may differ materially from the
carrying value.
A discontinued operation is a component of the Company that has been disposed of or is classified as
held for sale and represents a separate line of business or geographical area of operations. The operating
results and cash flows of discontinued operations are presented separately in the consolidated
statements of earnings (loss) and cash flows.
(p)
Impairment of non-financial assets
At each reporting date, the carrying values of mine properties, intangible assets and property, plant and
equipment are assessed for impairment if indicators of potential impairment exist. If any indication of
potential impairment exists, an estimate of the asset’s recoverable amount is calculated. The recoverable
amount is determined as the higher of the fair value less costs of disposal (“FVLCD”) and its value in use
based on discounted cash flows. This is determined on an asset-by-asset basis, unless the asset does
not generate cash flows that are largely independent of those from other assets or groups of assets. If this
is the case, individual assets are grouped together into a Cash Generating Unit (“CGU”) for impairment
purposes. Such CGUs represent the lowest level for which there are separately identifiable cash inflows
that are largely independent of the cash flows from other assets or groups of assets. Management has
assessed the Company’s CGUs as being an individual operating site.
If the carrying amount of an asset or CGU exceeds its recoverable amount, the carrying amount of the
asset or CGU is reduced to its recoverable amount with the corresponding impairment being charged to
earnings (loss) in the period of impairment. Impairment charge is recognized in the consolidated
statements of earnings (loss) in those expense categories consistent with the function of the impaired
asset.
100 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
An assessment is also made at each reporting date as to whether there is any change in events or
circumstances relating to a previously recognized impairment. If a change has occurred, the Company
makes an estimate of the recoverable amount for the previously impaired asset or CGU. A previously
recognized impairment charge is reversed only if there has been a change in the estimates used to
determine the asset or CGU’s recoverable amount since the last impairment charge was recognized. If
this is the case, the carrying amount of the asset or CGU is increased to its newly determined recoverable
amount. The increased amount cannot exceed the carrying amount that would have been determined, net
of depreciation and amortization, had no impairment charge been recognized for the asset or CGU in
prior years.
The assessment of impairment is based on a number of external and internal factors, some of which are
outside of the Company’s control, and requires the use of estimates and assumptions related to these
factors for each CGU. External factors include market considerations ranging from overall economic
activity and the supply of and demand for the materials used in and products produced by the Company
to changes in commodity prices, toll rates, discount rates, foreign exchange rates and regulatory
requirements. Internal factors include considerations such as production volume, ability to convert
resources into reserves, capital and operating expenditures, and future development and expansion
plans.
These significant estimates and assumptions, some of which may be subjective, require that
management make decisions based on the best available information at each reporting period. It is
possible that the actual recoverable amount could be significantly different than those estimates. A
significant decline in the asset’s market value, reductions in metal price forecasts, increases in estimated
future costs of production, increases in estimated future capital costs, reductions in the amount of
recoverable reserves, resources and exploration potential, and/or adverse market conditions can result in
a write-down of the carrying amounts of the Company’s assets. Judgment is also required when
considering whether significant changes in any of these items indicate a previous impairment may have
reversed.
(q)
Provisions and contingencies
General
Provisions are recognized when: a) the Company has a present obligation (legal or constructive) as a
result of a past event; and b) it is probable that an outflow of resources embodying economic benefits will
be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.
Where some or all of the expenditure required to settle a provision is expected to be reimbursed by
another party, the reimbursement shall be recognized when it is virtually certain that reimbursement will
be received if the Company settles the obligation. The reimbursement shall be treated as a separate
asset. If the effect of the time value of money is material, provisions are discounted using a current pre-
tax discount rate that reflects, where appropriate, the risks specific to the liability. Where discounting is
used, the increase in the provision as a result of the passage of time is recognized in finance cost in the
consolidated statements of earnings (loss).
A contingent liability is not recognized in the case where no reliable estimate can be made; however,
disclosure is required unless the possibility of an outflow of resources embodying economic benefits is
remote. By its nature, a contingent liability will only be resolved when one or more future events occur or
fail to occur. The assessment of a contingent liability inherently involves the exercise of significant
judgment and estimates of the outcome of future events.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 101 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Rehabilitation provisions
Mining, processing, development and exploration activities are subject to various laws and regulations
governing the protection of the environment. The Company recognizes a liability for its rehabilitation
obligations in the period when a legal and/or constructive obligation is identified. The liability is measured
at the present value of the estimated costs required to rehabilitate operating locations based on the risk
free nominal discount rates that are specific to the countries in which the operations are located. A
corresponding increase to the carrying amount of the related asset is recorded and depreciated in the
same manner as the related asset.
The nature of these restoration and rehabilitation activities includes: i) dismantling and removing
structures; ii) rehabilitating mines and tailing dams; iii) dismantling operating facilities; iv) closure of plant
and waste sites; and v) restoration, reclamation and re-vegetation of affected areas. Other environmental
costs incurred at the operating sites, such as environmental monitoring, water management and waste
management costs, are charged to profit or loss when incurred.
The liability is accreted over time to its expected future settlement value. The accretion expense is
recognized in finance costs in the consolidated statements of earnings (loss).
The Company assesses its rehabilitation provisions at each reporting date. The rehabilitation liability and
related assets are adjusted at each reporting date for changes in the discount rates and in the estimated
amount, timing and cost of the work to be carried out. Any reduction in the rehabilitation liability and
therefore any deduction in the related rehabilitation asset may not exceed the carrying amount of that
asset. If it does, any excess over the carrying value is immediately credited to profit or loss.
Significant estimates and assumptions are made by management in determining the nature and costs
associated with the rehabilitation liability. The estimates and assumptions required include estimates of
the timing, extent and costs of rehabilitation activities, technology changes, regulatory changes, and
changes in the discount and inflation rates. These uncertainties may result in future expenditures being
different from the amounts currently provided.
(r)
Leases
The determination of whether an arrangement is, or contains, a lease is based on the substance of the
agreement on the inception date.
As a lessee, the Company recognizes a lease obligation and a right-of-use asset in the consolidated
statements of financial position on a present-value basis at the date when the leased asset is available for
use. Each lease payment is apportioned between a finance charge and a reduction of the lease
obligation. Finance charges are recognized in finance costs in the consolidated statements of earnings
(loss). The right-of-use asset is included in property, plant and equipment and is depreciated over the
shorter of its estimated useful life and the lease term on a straight-line basis.
Lease obligations are initially measured at the net present value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• variable lease payments that are based on an index or a rate;
• amounts expected to be payable under residual value guarantees;
• the exercise price of a purchase option if the Company is reasonably certain to exercise that option;
and
• payments of penalties for terminating the lease, if the lease term reflects the Company exercising that
option.
Lease payments are discounted using the interest rate implicit in the lease, or if this rate cannot be
determined, the Company’s incremental borrowing rate.
102 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Right-of-use assets are initially measured at cost comprising the following:
• the amount of the initial measurement of the lease obligation;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
• rehabilitation costs.
Payments associated with short-term leases and leases of low-value assets are recognized on a straight-
line basis as an expense in the consolidated statements of earnings (loss). Short-term leases are leases
with a lease term of 12 months or less. Low-value assets comprise primarily small equipment.
(s)
Share capital
Common shares issued by DPM are classified as equity. Costs directly attributable to the issuance of new
shares are recognized in equity as a deduction from the share proceeds. Costs to repurchase and cancel
the Company’s shares are recognized as a reduction in share capital to the extent of its book value. The
excess of the purchase price over the book value is recognized as a reduction in contributed surplus to
the extent of available surplus and any further excess is recognized as a reduction in retained earnings in
the consolidated statements of changes in shareholders’ equity.
(t)
Revenue recognition
Revenue from the sale of concentrate containing gold, copper and silver is recognized when control has
been transferred, which is considered to occur when products have been delivered and the significant
risks of loss have been transferred to the buyer. Revenue is measured based on the consideration
specified in the contract.
Revenue from the sale of concentrate is initially recorded based on a provisional value which is a function
of prevailing market prices, estimated weights and grades less smelter and other commercial deductions.
Under the terms of the concentrate sales contracts, the final metal price for the payable metal is based on
a predetermined quotational period of London Metal Exchange and London Bullion Market daily prices.
The price of the concentrate is the sum of the metal payments less the sum of specified deductions,
including treatment and refining charges, penalties for deleterious elements, and freight. The terms of
these contracts result in embedded derivatives because of the timing difference between the prevailing
metal prices for provisional payments and the actual contractual metal prices used for final settlement.
These embedded derivatives are adjusted to fair value at the end of each reporting period through to the
date of final price determination with any adjustments recognized in revenue.
Any adjustments to the amount receivable for each shipment on the settlement date, caused by final
assay results, are adjusted through revenue at the time of determination.
Revenue from processing concentrate is recognized when the concentrate has been smelted and is
based on the toll rate specified in the toll agreement, which can vary based on the composition of the
concentrate processed and prevailing market conditions at the time the agreement was entered. Under
each toll agreement, Tsumeb incurs a carrying charge in respect of the concentrate it processes until
blister copper is delivered. This carrying charge is recorded as a reduction of revenue.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 103 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Revenue from processing concentrate is also adjusted for any over or under recoveries of metals
delivered relative to contracted rates under the tolling agreement between Tsumeb and IXM S.A. (“IXM”).
These adjustments represent metal exposure and are calculated by comparing (i) the copper, gold and
silver content in the concentrate received and processed by Tsumeb multiplied by the percentage
accountable in the IXM contract to (ii) the accountable copper, gold and silver in the blister delivered to
IXM and in the in-circuit material still being processed by Tsumeb. Many aspects of the metal exposure
are subject to estimation, including the amount of metal contained in concentrate received, in-circuit
material and blister delivered where final assays have not been completed. These significant estimates
are based on the Company’s process knowledge, joint surveys with IXM and multiple assay results, the
final results of which could differ from initial estimates.
Revenue from the sale of sulphuric acid, a by-product from processing concentrate at the Tsumeb
smelter, is measured at the price specified in the sales contract and is recognized when the control has
been transferred, which is considered to occur when the products have been delivered to the location
specified in the sales contract and the risk of loss has been transferred to the buyer.
(u)
Borrowing costs
Borrowing costs directly related to the acquisition and the construction of a qualifying capital asset are
capitalized and added to the cost of the asset until such time as the asset is considered substantially
ready for its intended use. Where funds are borrowed specifically to finance a project, the amount
capitalized represents the actual borrowing costs incurred. Where funds used to finance a project form
part of general borrowings, the amount capitalized is calculated using the weighted average cost
applicable to relevant general borrowings of the Company during the period. All other borrowing costs are
recognized in profit or loss in the period in which they are incurred.
(v)
Share-based compensation transactions
Equity-settled transactions
Stock options are granted to directors and selected employees to buy common shares of the Company.
Stock options vest equally over a three-year period and expire five years from the date of grant. Grants of
stock options are based on the five-day volume weighted average price (“Market Price”) of DPM’s
common shares on the TSX the day before the effective grant date and reflect the Company’s estimate of
the number of awards that will ultimately vest. Stock options are measured on the date of grant by
reference to the fair value determined using a Black-Scholes valuation model, further details of which are
given in note 17. The value is recognized as a general and administrative expense in the consolidated
statements of earnings (loss) and an increase to contributed surplus in the consolidated statements of
changes in shareholders’ equity over the period in which the performance and/or service conditions are
fulfilled.
The dilutive effect of outstanding stock options is reflected as additional share dilution in the computation
of diluted earnings per share.
104 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Cash-settled transactions
A Deferred Share Unit (“DSU”) Plan was established for directors in lieu of cash compensation. The DSUs
are paid in cash following separation of a director from the Company based on the closing price of DPM’s
common shares on the applicable redemption date as elected by the director. The cost of the DSUs is
measured initially at fair value based on the closing price of DPM’s common shares preceding the day the
DSUs are granted. The cost of the DSUs is recognized as a liability under share-based compensation
liabilities in the consolidated statements of financial position and as a general and administrative expense
in the consolidated statements of earnings (loss). The liability is remeasured to fair value based on the
Market Price of DPM’s common shares at each reporting date up to and including the settlement date,
with changes in fair value recognized in general and administrative expenses in the consolidated
statements of earnings (loss).
A Share Unit (“SU”) Plan was established for directors, certain employees and eligible contractors
(“Participant”) of DPM and its wholly-owned subsidiaries in consideration of past services to the
Company.
Under this plan, the Board of Directors may, at its sole discretion, (i) grant non-performance based SUs,
referred to as restricted share units (“RSUs”) and SUs with a performance-based component, referred to
as performance share units (“PSUs”), subject to performance conditions to be achieved by the Company;
and (ii) determine the entitlement date or dates of such RSUs and PSUs. Non-performance based RSUs
vest equally over a three-year period and are paid in cash based on the Market Price of DPM’s publicly
traded common shares on the entitlement date or dates. PSUs vest after three years from the grant date
and are paid in cash based on the Market Price of DPM’s common shares, subject to performance criteria
established by the Board of Directors on the entitlement date or dates.
The cost of the RSUs and PSUs is measured initially at fair value on the grant date based on the Market
Price of DPM’s common shares preceding the effective grant date. The cost of RSUs and PSUs is
recognized as a liability under share-based compensation liabilities, with the current portion recognized in
accounts payable and accrued liabilities, in the consolidated statements of financial position and as an
expense in the consolidated statements of earnings (loss) over the vesting period. The liability is
remeasured to fair value based on the Market Price of DPM’s common shares and, in the case of PSUs,
subject to performance criteria, at each reporting date up to and including the settlement date, with
changes in fair value recognized in the consolidated statements of earnings (loss).
(w)
Income taxes
Current income tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or
paid to the taxation authorities on the taxable loss or income for the period. The tax rates and tax laws
used to compute the amount are those enacted or substantively enacted by the end of the reporting
period.
Current income tax assets and current income tax liabilities are only offset if a legally enforceable right
exists to offset the amounts and the Company intends to settle on a net basis or to realize the asset and
settle the liability simultaneously.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 105 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Deferred income tax
Deferred income tax is provided using the balance sheet method on temporary differences on the
reporting date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes. Deferred income tax liabilities are recognized for all taxable temporary differences.
Deferred income tax assets are recognized for all deductible temporary differences, and the carry forward
of unused tax credits and unused tax losses, to the extent that it is probable that taxable income will be
generated in future periods to utilize these deductible temporary differences.
The following temporary differences do not result in deferred income tax assets or liabilities:
• The initial recognition of assets or liabilities, not arising from a business combination, that does not
affect accounting or taxable profit;
• Initial recognition of goodwill, if any; and
• Investments in subsidiaries, associates and jointly controlled entities where the timing of the reversal
of temporary differences can be controlled and reversal in the foreseeable future is not probable.
The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient future taxable income will be generated to
allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred income tax assets
are reassessed at the end of each reporting period and are recognized to the extent that it has become
probable that future taxable income will be generated to allow the deferred income tax asset to be
recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to be in effect
in the period when the asset is expected to be realized or the liability is expected to be settled, based on
tax rates that have been enacted or substantively enacted by the end of the reporting period.
Deferred income tax assets and liabilities are offset if a legally enforceable right exists to offset current
income tax assets against current income tax liabilities and the deferred income taxes relate to the same
taxable entity and the same taxation authority.
Current and deferred income taxes related to items recognized directly in equity are recognized in equity
and not in profit or loss. Management periodically evaluates positions taken in tax returns with respect to
situations in which applicable tax regulations are subject to interpretation and establishes provisions
where appropriate.
Judgment is required in determining whether deferred income tax assets are recognized on the
consolidated statements of financial position. Deferred income tax assets, including those arising from
unutilized tax losses, require management to assess the likelihood that the Company will generate future
taxable income in order to utilize the deferred income tax assets. Estimates of future taxable income are
based on forecasted cash flows from operations or other activities and the application of existing tax laws
in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from
estimates, the ability of the Company to realize the net deferred income tax assets recorded on the
reporting date could be impacted.
Additionally, future changes in tax laws in the jurisdictions in which the Company operates could impact
tax deductions in future periods and the value of its deferred income tax assets and liabilities.
(x)
Earnings per share
Basic earnings per share is computed by dividing the net earnings available to common shareholders by
the weighted average number of shares outstanding during the reporting period.
106 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Diluted earnings per share reflects the potential dilution that could occur if additional common shares are
assumed to be issued under securities that entitle their holders to obtain common shares in the future.
The number of additional shares for inclusion in diluted earnings per share is determined using the
treasury stock method, whereby stock options and warrants, whose exercise price is less than the
average market price of the Company’s common shares, are assumed to be exercised at the beginning of
the period with proceeds based on the average market price for the period. The incremental number of
common shares issued under stock options and warrants is included in the calculation of diluted earnings
per share.
3.
ASSETS AND LIABILITIES HELD FOR SALE AND DISCONTINUED OPERATIONS
On January 31, 2024, DPM reacquired the 8% ownership interest from GHM and resumed its 100%
ownership interest in Tsumeb.
In 2023, the Company decided to undertake a strategic review of its Tsumeb operation, including a
potential sale, given that the smelter is no longer expected to process any Chelopech concentrate
commencing in 2024 and as a result, it is no longer seen as strategic to DPM's asset portfolio.
As at December 31, 2023, the Company determined that Tsumeb has met the accounting criteria for
assets held for sale (note 2.2(o)) and as a result, the assets and liabilities of Tsumeb have been
presented as held for sale in the consolidated statement of financial position as at December 31, 2023
and the operating results and cash flows of Tsumeb have been presented as discontinued operations in
the consolidated statements of earnings (loss) and cash flows for the years ended December 31, 2023
and 2022. As a consequence, certain comparative figures in the consolidated statements of earnings
(loss) and cash flows have been reclassified to conform with current year presentation.
The following table summarizes the assets and liabilities of Tsumeb which have been aggregated and
presented as held for sale as at December 31, 2023:
As at December 31, 2023
Cash
Inventories
Accounts receivable
Other current assets
Restricted cash
Mine properties
Property, plant, & equipment
Intangible assets
Other long-term assets
Total assets held for sale
Accounts payable and accrued liabilities
Current portion of long-term liabilities
Rehabilitation provisions
Share-based compensation liabilities
Other long-term liabilities
Total liabilities held for sale
1,824
10,790
36,889
819
1,209
945
28,507
1,258
576
82,817
11,125
3,977
21,578
532
162
37,374
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 107 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
The following table summarizes the operating results of Tsumeb which have been aggregated and
presented as discontinued operations for the years ended December 31, 2023 and 2022:
Revenue
Costs and expenses
Cost of sales
General and administrative expenses
Impairment charges
Finance cost
Other expense (a)
2023
2022
114,309
136,305
99,047
120,779
118
-
3,089
1,092
257
85,000
2,985
7,945
103,346
216,966
Earnings (loss) before income taxes from discontinued operations
10,963
(80,661)
Income taxes
Net earnings (loss) from discontinued operations
-
-
10,963
(80,661)
(a) Other expense for the year ended December 31, 2022 included Tsumeb restructuring costs which
were related to severance payment and other employee benefits related to a comprehensive cost
saving initiative at Tsumeb.
During the year ended December 31, 2022, the Company performed an impairment testing of Tsumeb
and as a result, the carrying value of Tsumeb exceeded its estimated recoverable amount resulting in an
impairment charge of $85.0 million being recognized in net earnings (loss) from discontinued operations,
of which $84.3 million related to property, plant, and equipment and $0.7 million related to intangible
assets.
The following table summarizes Tsumeb's minimum contractual commitments as at December 31, 2023:
Capital commitments
Purchase commitments
Total commitments
Tsumeb secondary materials
up to 1 year
1 - 5 years
2,140
8,013
10,153
-
3,569
3,569
Total
2,140
11,582
13,722
As at December 31, 2023, Tsumeb had approximately $45.9 million of recoverable third party in-process
secondary materials, which it is obligated to process and return, generally in the form of blister, to IXM
pursuant to a tolling agreement.
In April 2021, the Company and IXM agreed to amend the existing tolling agreement to provide for,
among other things: i) targeted declining excess secondary material balances, above which excess
secondary material would be required to be purchased by the Company; ii) the elimination of all excess
secondary material by April 30, 2023; iii) an increase in the defined level of normal secondary material;
and iv) an extension of the tolling agreement by three years to December 31, 2026.
As at December 31, 2023, the value of excess secondary materials, as defined in the tolling agreement,
was approximately $9.8 million. Given the fact that the Company had a receivable from IXM of $17.2
million related to the estimated metal exposure at Tsumeb as at December 31, 2023, IXM has agreed to
waive the requirement to purchase secondary material above the agreed normal levels.
108 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
4.
AGREEMENT TO ACQUIRE OSINO RESOURCES CORP. (“OSINO”)
On December 18, 2023, the Company announced that it had entered into a definitive agreement whereby
DPM will acquire all of the issued and outstanding shares of Osino (the "Osino Shares") for consideration
consisting of Cdn$0.775 in cash per Osino Share and 0.0801 of a DPM common share per Osino Share.
The principal assets of Osino are comprised of the Twin Hills open pit gold project, as well as an
extensive exploration portfolio, in Namibia. The acquisition of Osino is subject to the approval of Osino's
securityholders as well as applicable regulatory approvals, including approval under the Namibia
Competition Act. In addition, each of DPM and Osino has the right to terminate the transaction in certain
circumstances. Provided that all approvals are obtained and neither party exercises its right to terminate,
the transaction is expected to close in the first half of 2024.
Concurrently with the transaction, DPM agreed to purchase an aggregate of Cdn$10 million Osino
Shares, in two equal tranches at a price of Cdn$1.13 per share pursuant to a private placement. The first
tranche of the private placement was completed on December 22, 2023, whereby DPM acquired
4,424,779 Osino Shares at a cost of $3.8 million (Cdn$5.0 million), and the second and final tranche was
completed on January 30, 2024, whereby DPM acquired an additional 4,424,778 Osino Shares at a cost
of $3.7 million (Cdn$5.0 million).
As at December 31, 2023, DPM held a total of 8,235,379 Osino Shares with a fair value of $8.2 million,
which was included in investment at fair value in the consolidated statements of financial position.
5.
ACCOUNTS RECEIVABLE
Accounts receivable
Supplier advances and other prepaids
Value added tax receivable
6.
INVENTORIES
Ore and concentrate
Spare parts, supplies and other
December 31,
2023
91,303
December 31,
2022
113,951
4,607
3,320
99,230
9,599
2,887
126,437
December 31,
2023
14,054
December 31,
2022
12,787
24,437
38,491
33,026
45,813
For the year ended December 31, 2023, the cost of inventories recognized as an expense and included in
cost of sales from continuing operations was $205.8 million (2022 – $202.0 million), including a provision
for slow moving inventories of $0.4 million (2022 – $0.4 million).
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 109 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
7.
FINANCIAL INSTRUMENTS
Set out below is a comparison, by category, of the carrying amounts of the Company’s financial
instruments that are recognized in the consolidated statements of financial position:
Financial instrument
December 31,
December 31,
classification
2023
2022
Carrying Amount
Financial assets
Cash and cash equivalents
Accounts receivable on provisionally
priced sales
Other accounts receivable
Restricted cash
Derivatives
Publicly traded securities (a)
Amortized cost
595,285
433,176
Fair value through profit or loss
Amortized cost
Amortized cost
Fair value through profit or loss
Fair value through other
comprehensive income
75,602
23,628
602
1,048
75,707
50,730
5,641
219
10,852
40,554
Commodity swap contracts (b)
Derivatives for fair value hedges
Foreign exchange option contracts (c) Derivatives for cash flow hedges
Foreign exchange forward contracts
Fair value through profit or loss
Financial liabilities
Accounts payable and accrued
liabilities
Amortized cost
Commodity swap contracts (b)
Derivatives for fair value hedges
Foreign exchange option contracts (c) Derivatives for cash flow hedges
Foreign exchange forward contracts
Fair value through profit or loss
-
819
-
77,460
1,179
-
-
149
-
531
81,165
3,259
1,787
318
The carrying values of all the financial assets and liabilities measured at amortized cost approximate their
fair values as at December 31, 2023 and 2022.
(a) Publicly traded securities
Publicly traded securities include a portfolio of equity investments in publicly traded mining and
exploration companies, including the Company's investment in Osino.
For the year ended December 31, 2023, the Company recognized unrealized gains on these publicly
traded securities of $21.9 million (2022 – unrealized losses of $5.3 million) in other comprehensive
income (loss) that will not be reclassified subsequently to profit or loss.
On April 19, 2023, B2Gold Corp. ("B2Gold") successfully completed its previously announced acquisition
of Sabina Gold and Silver Corp. ("Sabina") through the issuance of 0.3867 of a common share of B2Gold
for each Sabina common share, representing a consideration of Cdn$2.11 per Sabina share on a fully-
diluted basis based on the closing price of B2Gold on the TSX as at the closing date. As a result, DPM
exchanged its ownership interest in Sabina for 13,940,753 common shares of B2Gold, valued at $56.8
million (Cdn$76.1 million) at the date of the transaction. The Company subsequently disposed of all
B2Gold common shares held for cash proceeds of $56.5 million and transferred the accumulated fair
value gains of $17.7 million on the derecognition of Sabina common shares from accumulated other
comprehensive income (loss) to retained earnings during the year ended December 31, 2023.
110 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
(b) Commodity swap contracts
The Company enters into cash settled commodity swap contracts from time to time to swap future
contracted monthly average metal prices for fixed metal prices to eliminate or substantially reduce the
metal price exposure associated with the time lag between the provisional and final determination of
concentrate sales (“QP Hedges”).
As at December 31, 2023, the Company’s outstanding QP Hedges, all of which mature within five months
from the reporting date, are summarized in the table below:
Commodity hedged
Volume hedged
Weighted average fixed price of QP Hedges
Payable gold
Payable copper
20,120 ounces
7,220,131 pounds
$2,044.99 /ounce
$3.77 /pound
The Company designates the spot component of commodity swap contracts in respect of QP Hedges as
fair value hedges.
The fair value gain or loss on commodity swap contracts is calculated based on the corresponding
London Metal Exchange forward copper prices and New York Commodity Exchange forward gold prices,
as applicable. As at December 31, 2023, the net fair value loss on all outstanding QP Hedges was $1.2
million (December 31, 2022 – $3.2 million), of which $nil (December 31, 2022 – $0.1 million) was included
in other current assets and $1.2 million (December 31, 2022 – $3.3 million) in accounts payable and
accrued liabilities.
For the year ended December 31, 2023, the Company recognized, in revenue, net losses of $10.0 million
(2022 – net gains $6.8 million) on QP Hedges.
(c) Foreign exchange option contracts related to discontinued operations
The Company enters into foreign exchange option contracts from time to time to reduce the foreign
exchange exposure associated with projected operating expenses and capital expenditures denominated
in foreign currencies. Foreign exchange option contracts are entered into to provide price protection
below a specified “floor” rate and participation up to a specified “ceiling” rate. The option contracts entered
into are comprised of a series of call options and put options (which when combined create a price
“collar”) that are structured so as to provide for a zero upfront cash cost.
As at December 31, 2023, the Company had outstanding foreign exchange option contracts in respect of
a portion of its projected Namibian dollar ("NAD") operating expenses which are linked to the South
African Rand (“ZAR”) as summarized in the table below:
Year of projected
operating expenses
2024
Amount hedged
in ZAR(i)
964,081,956
Call options sold
Weighted average
ceiling rate US$/ZAR
Put options purchased
Weighted average
floor rate US$/ZAR
20.24
17.94
(i)
The NAD is pegged to the ZAR on a 1:1 basis.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 111 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
The Company designates the intrinsic value of foreign exchange option contracts as cash flow hedges.
The time value component of foreign exchange option contracts is treated as a separate cost of hedging.
The fair value gain or loss on these outstanding contracts was calculated based on foreign exchange
forward rates quoted in the market. As at December 31, 2023, the net fair value gain on all outstanding
foreign exchange option contracts was $0.8 million, which was included in assets held for sale. As at
December 31, 2022, the net fair value loss of $1.8 million was included in accounts payable and accrued
liabilities.
The Company recognized realized losses of $3.8 million (2022 – $1.1 million) for the year ended
December 31, 2023 in net earnings (loss) from discontinued operations on the spot component of settled
contracts.
For the year ended December 31, 2023, the Company recognized unrealized losses of $3.3 million (2022
– $1.5 million) in other comprehensive income (loss) on the spot component of the outstanding foreign
exchange option contracts. The Company also recognized unrealized gains of $2.0 million (2022 – $0.1
million) on the time value component of the outstanding foreign exchange option contracts in other
comprehensive income (loss) as a deferred cost of hedging.
Effects of hedge accounting
Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic
prospective effectiveness assessments to ensure that an economic relationship exists between the
hedged items (the Company’s accounts receivable on provisionally priced sales, projected payable metal
production, and projected operating expenses and capital expenditures denominated in foreign
currencies) and the hedging instruments (commodity swap contracts and foreign exchange forward and
option contracts). The hedges are effective when the critical terms of the hedging instrument match with
the critical terms of the hedged item.
Hedge ineffectiveness can arise from:
• Differences in the timing and/or amount of the cash flows of the hedged item and the hedging
instrument; and
• Fair value movements related to counterparty credit risk, which impact the hedging instrument and
the hedged item differently.
The Company’s hedging relationships are such that the ratio between the underlying hedged item and the
hedging instrument is 1:1. To measure for potential hedge ineffectiveness, the Company compares
change in the fair value of the hedging instrument to change in the fair value of the underlying hedged
item.
112 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Set out below is a summary of effects of hedge accounting on the Company’s consolidated statements of
financial position by risk category for its fair value and cash flow hedges:
Commodity swap contracts designated as fair value hedges (a)
Carrying amount
Assets included in other current assets
Liabilities included in accounts payable and accrued liabilities
Notional amount
Changes in fair value used for measuring ineffectiveness
Hedging instruments
Hedged items
Foreign exchange option contracts designated as cash flow hedges
from discontinued operations
Carrying amount
Assets included in assets held for sale
Liabilities included in accounts payable and accrued liabilities
Notional amount ZAR (in 000's)
Changes in fair value used for measuring ineffectiveness
Hedging instruments
Hedged items
2023
2022
-
(1,179)
(1,179)
68,347
(1,193)
1,181
149
(3,259)
(3,110)
91,380
(3,224)
3,369
819
-
-
(1,787)
964,082
1,378,176
173
(173)
(403)
403
(a) As at December 31, 2023, the carrying value of the hedged item, comprised of accounts receivable
on provisionally priced sales, was $75.6 million (December 31, 2022 – $75.7 million).
See note 25(c) for the effects of hedge accounting on the consolidated statements of earnings (loss) and
the consolidated statements of comprehensive income (loss).
Fair value hierarchy
The Company uses the following hierarchy for determining and disclosing the fair value of financial
instruments by valuation technique:
• Level 1: based on quoted (unadjusted) prices in active markets for identical assets or liabilities;
• Level 2: based on inputs which have a significant effect on fair value that are observable, either
directly or indirectly from market data; and
• Level 3: based on inputs which have a significant effect on fair value that are not observable from
market data.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 113 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
The following table illustrates the classification of the Company’s financial instruments within the fair value
hierarchy as at December 31, 2023 and 2022:
Financial assets
Accounts receivable on provisionally priced
sales
Derivatives
Publicly traded securities
Foreign exchange option contracts
Financial liabilities
Commodity swap contracts
Financial assets
Accounts receivable on provisionally priced
sales
Derivatives
Publicly traded securities
Commodity swap contracts
Foreign exchange forward contracts
Financial liabilities
Commodity swap contracts
Foreign exchange option contracts
Foreign exchange forward contracts
Level 1
Level 2
Level 3
Total
As at December 31, 2023
-
-
10,852
-
-
75,602
-
-
819
1,179
-
1,048
-
-
-
75,602
1,048
10,852
819
1,179
Level 1
Level 2
Level 3
Total
As at December 31, 2022
-
-
40,554
-
-
-
-
-
75,707
-
-
149
531
3,259
1,787
318
-
219
-
-
-
-
-
-
75,707
219
40,554
149
531
3,259
1,787
318
During the years ended December 31, 2023 and 2022, there were no transfers between Level 1 and
Level 2 fair value measurements, and no transfers into or out of Level 3 fair value measurements.
8.
EXPLORATION AND EVALUATION ASSETS
Balance at beginning of year
Additions
Capitalized depreciation
Balance at end of year
December 31,
2023
126,231
December 31,
2022
98,925
20,502
698
147,431
26,649
657
126,231
Additions to the exploration and evaluation assets for the year ended December 31, 2023 included $20.0
million (2022 – $19.2 million) related to the Loma Larga gold project in Ecuador.
Exploration and evaluation expenditures expensed directly to net earnings from continuing operations
amounted to $46.6 million (2022 – $24.2 million) for the year ended December 31, 2023.
114 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
9.
MINE PROPERTIES
Cost:
Balance at beginning of year
Additions
Capitalized depreciation
Change in rehabilitation provisions (note 14)
Disposals
Reclassified as assets held for sale (note 3)
Balance at end of year
Accumulated depletion:
Balance at beginning of year
Depletion
Disposals
Balance at end of year
Net book value:
At beginning of year
At end of year
December 31,
2023
December 31,
2022
336,959
6,569
565
503
-
(944)
330,262
8,567
620
(2,268)
(222)
-
343,652
336,959
223,439
30,710
-
254,149
113,520
89,503
192,225
31,436
(222)
223,439
138,037
113,520
The costs comprising mine properties related to producing mines. Of the total depletion expense from
continuing operations, $30.7 million (2022 – $33.1 million) was charged to cost of sales for the year
ended December 31, 2023.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 115 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
10.
PROPERTY, PLANT AND EQUIPMENT
Cost:
Balance as at January 1, 2022
Additions
Capitalized depreciation
Disposals
Impairment charge (note 3)
Change in rehabilitation provisions (note 14)
Transfers
Balance as at December 31, 2022
Additions
Capitalized depreciation
Disposals
Change in rehabilitation provisions (note 14)
Transfers
Reclassified as assets held for sale (note 3)
Balance as at December 31, 2023
Accumulated depreciation and impairment:
Machinery Construction
Work-in-
Progress
and
Equipment
Buildings
80,928
6,634
-
595,038
19,238
-
(1,419)
(15,960)
23,483
26,984
744
(104)
(12,406)
(111,468)
(12,158)
(1,074)
(359)
72,304
1,858
-
(159)
(806)
10
(801)
227
17,865
504,940
2,528
-
(9,524)
(2,147)
42,927
(47,554)
-
(17,506)
21,443
39,071
501
-
-
(42,937)
(8,398)
Total
699,449
52,856
744
(17,483)
(136,032)
(847)
-
598,687
43,457
501
(9,683)
(2,953)
-
(56,753)
72,406
491,170
9,680
573,256
Balance as at January 1, 2022
36,950
327,194
Depreciation expense
Capitalized depreciation
Depreciation relating to disposals
Impairment charge (note 3)
Balance as at December 31, 2022
Depreciation expense
Capitalized depreciation
Depreciation relating to disposals
Reclassified as assets held for sale (note 3)
Balance as at December 31, 2023
Net book value:
As at December 31, 2022
As at December 31, 2023
6,151
571
(1,407)
(4,384)
37,881
7,305
636
(68)
(199)
45,555
58,282
1,419
(15,874)
(47,318)
323,703
48,092
1,124
(9,346)
(28,047)
335,526
-
-
-
-
-
-
-
-
-
-
-
364,144
64,433
1,990
(17,281)
(51,702)
361,584
55,397
1,760
(9,414)
(28,246)
381,081
34,423
26,851
181,237
155,644
21,443
9,680
237,103
192,175
Of the total depreciation expense from continuing operations, $49.7 million (2022 – $47.4 million) was
charged to cost of sales and $1.1 million (2022 – $0.9 million) was charged to general and administrative
expenses for the year ended December 31, 2023.
See note 16 for the carrying value of right-of-use assets under leases recognized in property, plant and
equipment as at December 31, 2023 and 2022 and other lease related information for the years ended
December 31, 2023 and 2022.
116 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
11.
INTANGIBLE ASSETS
Cost:
Balance at beginning of year
Additions
Disposals
Impairment charge (note 3)
Reclassified as assets held for sale (note 3)
Balance at end of year
Accumulated amortization and impairment:
Balance at beginning of year
Amortization
Capitalized amortization
Amortization relating to disposals
Impairment charge (note 3)
Reclassified as assets held for sale (note 3)
Balance at end of year
Net book value:
At beginning of year
At end of year
December 31,
2023
December 31,
2022
36,036
3,991
-
-
(8,359)
31,668
20,535
3,385
-
-
-
(7,101)
16,819
15,501
14,849
36,026
2,554
(406)
(2,138)
-
36,036
18,667
3,733
10
(406)
(1,469)
-
20,535
17,359
15,501
Of the total intangible asset amortization expense from continuing operations, $1.6 million (2022 – $1.6
million) was charged to cost of sales and $1.3 million (2022 – $1.2 million) was charged to general and
administrative expenses for the year ended December 31, 2023.
12.
ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable
Accrued liabilities
Commodity swap contracts (note 7(b))
Foreign exchange option contracts (note 7(c))
Foreign exchange forward contracts
Share-based compensation liabilities - current portion (note 17)
Dividend payable (note 25(a))
Value added tax payable
December 31,
2023
12,340
December 31,
2022
22,025
47,350
1,179
-
-
6,589
7,279
3,902
78,639
40,824
3,259
1,787
318
7,943
7,600
2,773
86,529
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 117 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
13.
DEBT
(a) DPM Revolving Credit Facility
DPM has a committed revolving credit facility (the “RCF”) with a consortium of four banks that matures in
July 2026, and is secured by pledges of DPM’s investments in Ada Tepe, Chelopech and the Loma Larga
gold project and by guarantees from each of the subsidiaries that hold these assets. Initially, DPM is
permitted to borrow up to an aggregate principal amount of $150.0 million, which can be increased
pursuant to an accordion feature that permits, subject to certain conditions, the facility to be increased to
$250.0 million. The cost of borrowing is based on the Secured Overnight Financing Rate (“SOFR”), plus a
spread, which is currently 2.25%, and can range between 2.25% and 3.50% depending upon DPM’s
leverage. The RCF contains financial covenants that require DPM to maintain: (i) a Debt Leverage Ratio
below 3.75:1, and (ii) a minimum net worth equal to $600 million plus (minus) 50% of ongoing net
earnings (loss) plus 50% of all equity raised by DPM, in each case, after March 31, 2022, and as defined
under the RCF.
As at December 31, 2023 and 2022, DPM was in compliance with all financial covenants and $nil was
drawn under the RCF.
(b) Other credit agreements and guarantees
Chelopech and Ada Tepe have a $21.0 million multi-purpose credit facility that matures on November 30,
2024 and is guaranteed by DPM. As at December 31, 2023, $18.6 million (December 31, 2022 – $17.3
million) had been utilized in the form of letters of credit and letters of guarantee, primarily in respect of
concession contracts with the Bulgarian Ministry of Energy.
Chelopech and Ada Tepe also have a Euro 21.0 million ($23.2 million) credit facility to support mine
closure and rehabilitation obligations in respect of concession contracts with the Bulgarian Ministry of
Energy. This credit facility matures on November 30, 2024 and is guaranteed by DPM. As at December
31, 2023, $23.2 million (December 31, 2022 – $22.5 million) had been utilized in the form of letters of
guarantee.
Ada Tepe also has a $10.3 million multi-purpose credit facility that matures on November 30, 2024 and is
guaranteed by DPM. As at December 31, 2023, $1.6 million (December 31, 2022 – $0.2 million) had been
utilized in the form of letters of credit and letters of guarantee, primarily in respect of exploration contracts
with the Bulgarian Ministry of Energy.
Advances under these facilities bear interest at a rate equal to the one month SOFR plus 2.5%. The
letters of credit and guarantee bear a fee of 0.6% based on the amounts issued.
118 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
14.
REHABILITATION PROVISIONS
The rehabilitation provisions represent the present value of rehabilitation costs relating to the Chelopech,
Tsumeb and Ada Tepe sites, which are expected to be incurred between 2024 and 2049.
Key assumptions used in determining the rehabilitation provisions were as follows:
Discount period
Chelopech
Ada Tepe
Tsumeb
Local discount rate
Chelopech/Ada Tepe
Tsumeb
Local long-term inflation rate
Chelopech/Ada Tepe
Tsumeb
December 31,
2023
December 31,
2022
2024 - 2043
2024 - 2038
2024 - 2049
2023 - 2043
2023 - 2038
2023 - 2049
3.9 %
12.7 %
1.9 %
4.9 %
18,812
5,482
(2,950)
(99)
2,232
23,477
-
(2,079)
(1,055)
2,599
4.2 %
12.1 %
2.6 %
4.5 %
Total
51,626
6,157
(9,338)
(354)
2,859
50,950
10
(2,603)
(1,800)
3,762
(22,942)
-
(22,942)
27,377
Changes to rehabilitation provisions were as follows:
Chelopech
Ada Tepe
Tsumeb
Balance as at January 1, 2022
Change in cost estimate
Remeasurement of provisions (b)
Expenditures incurred
Accretion expense (note 19)
Balance as at December 31, 2022
Change in cost estimate (a)
Remeasurement of provisions (b)
Expenditures incurred
Accretion expense (note 19)
Reclassified as liabilities held for sale
(note 3)
Balance as at December 31, 2023
22,658
675
(4,134)
-
413
19,612
(1,535)
224
(675)
825
-
18,451
10,156
-
(2,254)
(255)
214
7,861
1,545
(748)
(70)
338
-
8,926
(a) During the year ended December 31, 2023, Chelopech and Ada Tepe updated their estimated
rehabilitation costs based on the current activities, updated closure plans and existing closure
obligations.
(b) Remeasurement of provisions resulted from changes in discount rates, inflation rates and foreign
exchange rates at each site.
The current portion of rehabilitation provisions of $2.0 million (December 31, 2022 – $5.1 million) is
presented as current portion of long-term liabilities on the consolidated statements of financial position
(note 15).
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 119 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
15.
OTHER LONG-TERM LIABILITIES
Leases (note 16)
Pension obligations
Other liabilities
Less: Current portion
16.
LEASES
December 31,
2023
12,534
December 31,
2022
14,584
3,010
2,543
18,087
(5,639)
12,448
2,731
6,288
23,603
(10,273)
13,330
The Company leases various property, equipment and vehicles with lease terms ranging between one to
15 years. Extension and termination options are included in a number of property and equipment leases
across the Company. These terms are used to maximize operational flexibility in terms of managing
contracts, the majority of which are exercisable jointly by both the Company and the respective lessor.
Lease terms are negotiated on an individual basis and contain a wide range of terms and conditions.
Some of the Company’s leased assets are pledged as security for the related lease obligations.
Right-of-use assets recognized in property, plant and equipment (note 10) as at December 31, 2023 and
2022 were as follows:
Buildings
Machinery and Equipment
December 31,
2023
5,977
December 31,
2022
6,077
1,661
7,638
3,502
9,579
Additions to the right-of-use assets during the year ended December 31, 2023 were $1.1 million (2022 –
$3.9 million).
Lease obligations related to right-of-use assets recognized in the current portion of long-term liabilities
and other long-term liabilities (note 15) as at December 31, 2023 and 2022 were as follows:
Current portion of long-term liabilities
Other long-term liabilities
December 31,
2023
3,096
December 31,
2022
4,543
9,438
12,534
10,041
14,584
120 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Expenses related to leases recognized in net earnings from continuing operations in the consolidated
statements of earnings (loss) for the years ended December 31, 2023 and 2022 were as follows:
Depreciation charge of right-of-use assets
Buildings
Machinery and Equipment
Finance charges (note 19)
Expense relating to short-term leases
Expense relating to leases of low-value assets that are not short-term leases
2023
2022
1,148
1,720
2,868
332
731
46
1,112
1,881
2,993
272
795
30
Expense relating to variable lease payments not included in lease obligations
1,537
1,530
Total cash outflows for leases from continuing operations for the year ended December 31, 2023 were
$3.4 million (2022 – $2.9 million).
17.
SHARE-BASED COMPENSATION PLANS
SU plan
DPM has a SU Plan for directors, certain employees and eligible contractors of DPM and its wholly-
owned subsidiaries in consideration of past services to the Company. The Board of Directors administers
this plan and determines the grants.
(a) RSUs
These RSUs vest equally over a three-year period and are paid in cash based on the Market Price of
DPM’s publicly traded common shares on the entitlement date or dates, which should not be later than
December 31 of the year that is three years after the year of service for which the RSUs are granted, as
determined by the Board of Directors in its sole discretion.
The following is a summary of the RSUs granted for the years indicated:
Balance as at January 1, 2022
RSUs granted
RSUs redeemed
RSUs forfeited
Mark-to-market adjustments
Balance as at December 31, 2022
RSUs granted
RSUs redeemed
RSUs forfeited
Mark-to-market adjustments
Reclassified to liabilities held for sale (note 3)
Balance as at December 31, 2023
Number of RSUs
Amount
1,724,571
840,499
(903,171)
(146,739)
1,515,160
715,688
(782,505)
(46,440)
(317,643)
1,084,260
6,286
4,262
(5,411)
(366)
(328)
4,443
4,356
(5,745)
(69)
2,552
(1,345)
4,192
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 121 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
The current portion of RSUs of $2.8 million (December 31, 2022 – $3.1 million) was included in accounts
payable and accrued liabilities on the consolidated statements of financial position (note 12).
As at December 31, 2023, there was $3.0 million (December 31, 2022 – $2.6 million) of expenses relating
to unvested RSUs remaining to be charged to net earnings in future periods relating to the RSU plan.
(b) PSUs
Under the SU Plan, the Board of Directors may, at its sole discretion, (i) grant SUs with a performance-
based component, referred to as PSUs, subject to performance conditions to be achieved by the
Company, and (ii) determine the entitlement date or dates of such PSUs. These PSUs vest after three
years and are paid in cash based on the Market Price of DPM’s publicly traded common shares, subject
to established performance criteria, on the entitlement date or dates, which shall not be later than
December 31 of the year that is three years after the year of service for which the PSUs were granted, as
determined by the Board of Directors in its sole discretion.
The following is a summary of the PSUs granted for the years indicated:
Balance as at January 1, 2022
PSUs granted
PSUs redeemed
PSUs forfeited
Mark-to-market adjustments
Balance as at December 31, 2022
PSUs granted
PSUs redeemed
Mark-to-market adjustments
Reclassified to liabilities held for sale (note 3)
Balance as at December 31, 2023
Number of PSUs
Amount
981,702
278,829
(411,850)
(17,948)
830,733
312,371
(352,410)
(25,681)
765,013
3,487
1,438
(2,956)
(33)
488
2,424
1,478
(3,002)
2,581
(103)
3,378
The current portion of PSUs of $2.0 million (December 31, 2022 – $1.5 million) was included in accounts
payable and accrued liabilities on the consolidated statements of financial position (note 12).
As at December 31, 2023, there was $2.4 million (December 31, 2022 – $1.7 million) of expenses
remaining to be charged to net earnings from continuing operations in future periods relating to unvested
PSUs.
DSU plan
DPM has a DSU Plan for directors, whereby directors receive a portion of their annual compensation in
the form of DSUs. The DSUs are redeemable in cash equal to the closing price of DPM’s common shares
on the applicable redemption date as elected by the director.
122 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
The following is a continuity of the DSUs for the years indicated:
Balance as at January 1, 2022
DSUs granted
DSUs redeemed
Mark-to-market adjustments
Balance as at December 31, 2022
DSUs granted
DSUs redeemed
Mark-to-market adjustments
Balance as at December 31, 2023
Number of DSUs
Amount
1,752,134
235,372
(145,802)
1,841,704
187,520
(674,503)
1,354,721
10,617
1,189
(949)
(1,706)
9,151
1,241
(4,831)
3,391
8,952
The current portion of DSUs of $1.8 million (December 31, 2022 – $3.3 million) was included in accounts
payable and accrued liabilities on the consolidated statements of financial position (note 12).
DPM stock option plan
The Company has established an incentive stock option plan for the directors, selected employees and
consultants. Pursuant to the plan, the exercise price of the stock option cannot be less than the Market
Price of DPM’s common shares on the trading date preceding the effective date of the stock option grant.
The aggregate number of shares that can be issued from treasury under this plan is 12,500,000. Stock
options granted vest equally over a three-year period and expire five years from the date of grant.
During the year ended December 31, 2023, the Company granted 264,250 (2022 – 649,468) stock
options with a fair value of $0.7 million (2022 – $1.1 million). The estimated value of the stock options
granted will be recognized as an expense in the consolidated statements of earnings (loss) and an
addition to contributed surplus in the consolidated statements of changes in shareholders’ equity over the
vesting period. The Company recorded stock option expenses of $0.9 million (2022 – $1.1 million) for the
year ended December 31, 2023 under this stock option plan.
As at December 31, 2023, there was $0.6 million (December 31, 2022 – $0.8 million) of expenses
remaining to be charged to net earnings in future periods relating to unvested stock options.
The fair value of options granted was estimated using the Black-Scholes option pricing model. The
expected volatility is estimated based on the historic average share price volatility. The inputs used in the
measurement of the fair values at the time the options were granted were as follows:
Five year risk free interest rate
Expected life in years
Expected volatility
Dividends per share
2023
3.1%
5.00
47.32%
0.16
2022
2.4% - 3.3%
4.75
45.7% - 46.78%
0.16
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 123 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
The following is a stock option continuity for the years indicated:
Balance as at January 1, 2022
Options granted
Options exercised
Options expired
Options forfeited
Balance as at December 31, 2022
Options granted
Options exercised
Balance as at December 31, 2023
Number of
options
3,395,345
649,468
(1,060,102)
(301,028)
(18,900)
2,664,783
264,250
(1,171,399)
1,757,634
Weighted average
exercise price per share
(Cdn$)
5.17
7.37
4.04
10.66
6.80
5.53
9.97
4.33
6.99
The following lists the options outstanding and exercisable as at December 31, 2023:
Range of
exercise prices
per share
(Cdn$)
3.74 - 5.17
5.18 - 7.51
7.52 - 9.97
3.74 - 9.97
Number of
options
outstanding
501,365
594,342
661,927
1,757,634
Options outstanding
Weighted
average
exercise price
per share
(Cdn$)
Weighted
average
remaining
years
Options exercisable
Weighted
average
exercise price
per share
(Cdn$)
Number of
options
exercisable
0.93
3.15
3.00
2.46
4.43
7.36
8.60
6.99
501,365
174,484
238,492
914,341
4.43
7.34
7.70
5.84
The following table summarizes total share-based compensation expenses recognized by the Company
in net earnings from continuing operations in the consolidated statements of earnings (loss) for the years
ended December 31, 2023 and 2022:
Share-based compensation expenses recognized in:
Cost of sales
General and administrative expenses
Exploration and evaluation expenses
Total
2023
2022
1,829
11,753
293
13,875
1,177
4,787
-
5,964
124 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
18.
EXPENSES BY NATURE
Cost of sales, general and administrative expenses, and exploration and evaluation expenses, as
reported in net earning from continuing operations in the consolidated statements of earnings (loss), have
been regrouped by the nature of the expenses as follows:
Raw materials, consumables and spare parts
Staff costs
Service costs
Share-based compensation expense
Royalties (a)
Drilling, assaying and other exploration and evaluation expenses
Insurance
Depletion of mine properties (note 9)
Depreciation of property, plant and equipment (note 10)
Amortization of intangible assets (note 11)
Other costs
2023
73,197
54,111
39,770
13,875
18,869
32,618
3,643
30,680
50,796
2,932
6,799
2022
77,709
45,545
35,345
5,964
15,648
16,413
4,088
33,119
48,299
2,811
4,500
327,290
289,441
(a) Chelopech pays royalties at a fixed rate of 1.5% annually based on the gross value of the gold, silver
and copper contained in the ore mined. Ada Tepe pays royalties at a variable royalty rate on a sliding
scale between 1.44% and 4% applied to the gross value of the gold and silver contained in the ore
mined based on a range of pre-tax profit to sales ratios. For the years ended December 31, 2023 and
2022, the royalty rate was 1.5% for Chelopech and 4.0% for Ada Tepe.
19.
FINANCE COSTS
Borrowing costs
Accretion expense related to rehabilitation provisions (note 14)
Finance charges under leases (note 16)
2023
2,004
1,163
332
3,499
2022
2,441
627
272
3,340
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 125 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
20.
OTHER INCOME AND EXPENSE
Realized (gains) losses on foreign exchange forward contracts
Net gains on derivatives
Net losses on Sabina special warrants
Net foreign exchange (gains) losses
Interest income
Other, net
2023
4,516
(2,004)
-
(2,064)
(23,250)
1,454
(21,348)
2022
(3,029)
-
2,369
1,677
(6,494)
543
(4,934)
21.
INCOME TAXES
The major components of income tax expense recognized in net earnings (loss) from continuing
operations are as follows:
Current income tax expense on earnings
Deferred income tax expense (recovery) related to origination and reversal of
temporary differences
Income tax expense
2023
29,824
(6,098)
23,726
2022
21,199
1,620
22,819
The reconciliation of the combined Canadian federal and provincial government statutory income tax
rates to the effective tax rate is as follows:
Earnings before income taxes from continuing operations
Combined Canadian federal and provincial statutory income tax rates
Expected income tax expense
Lower rates on foreign earnings
Changes in unrecognized tax benefits
Non-taxable portion of capital (gains) losses
Non-deductible share-based compensation expense
Other, net
Income tax expense
2023
2022
205,702
139,403
26.5 %
54,511
26.5 %
36,942
(37,400)
(26,593)
7,741
(1,102)
260
(284)
9,492
2,223
296
459
23,726
22,819
126 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
The significant components of the Company’s deferred income taxes as at December 31, 2023 and 2022
are as follows:
Deferred income tax assets
Non-capital losses
Capital losses
Cumulative Canadian exploration and evaluation expenses
Depreciable property, plant and equipment
Financing costs
Share-based compensation expense
Rehabilitation provisions
Investments
Other
Gross deferred income tax assets
Unrecognized tax benefits
Total deferred income tax assets
Deferred income tax liabilities
Depreciable property, plant and equipment
Other
Total deferred income tax liabilities
Net deferred income tax assets
December 31,
2023
December 31,
2022
75,791
5,944
2,220
12,672
4,853
2,569
2,223
642
1,314
108,228
(94,929)
13,299
-
-
284
284
13,015
79,453
7,110
2,220
8,497
5,477
2,042
2,251
2,258
373
109,681
(101,882)
7,799
-
1,035
174
1,209
6,590
As at December 31, 2023, the Company had $13.0 million (December 31, 2022 – $6.6 million) of net
deferred income tax assets after offsetting deferred income tax assets and liabilities incurred by the same
legal entities in the same jurisdictions in its consolidated statements of financial position.
Of the total deferred income tax assets recognized in 2023, $11.4 million (2022 – $7.7 million) is expected
to be recovered after more than 12 months. Of the total deferred income tax liabilities recognized in 2023,
$nil (2022 – $1.0 million) is expected to be payable after more than 12 months.
As at December 31, 2023, the Company had Canadian non-capital losses of $256.9 million (December
31, 2022 – $280.4 million) expiring between 2025 and 2043 and Serbian non-capital losses of $51.4
million (December 31, 2022 – $34.4 million) expiring between 2024 and 2028 for which no deferred
income tax assets had been recognized.
The Company is subject to assessments by various taxation authorities which may interpret tax legislation
and tax filing positions differently than the Company. Such differences are provided for when it is probable
that the Company’s filing position will not be upheld and the amount of the tax exposure can be
reasonably estimated. As at December 31, 2023 and 2022, no provisions have been made in the
consolidated financial statements for potential tax liabilities relating to such assessments and
interpretations.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 127 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
22.
EARNINGS PER SHARE
Net earnings (loss)
From continuing operations
From discontinued operations
Basic weighted average number of common shares
Effect of stock options
Diluted weighted average number of common shares
Basic earnings (loss) per share
From continuing operations
From discontinued operations
Diluted earnings (loss) per share
From continuing operations
From discontinued operations
23.
RELATED PARTY TRANSACTIONS
Key management remuneration
2023
2022
181,976
10,963
116,584
(80,661)
184,987,439
190,518,584
430,371
639,008
185,417,810
191,157,592
0.98
0.06
0.98
0.06
0.61
(0.42)
0.61
(0.42)
The Company’s related parties include its key management. Key management includes directors, the
Chief Executive Officer (“CEO”), the Executive Vice Presidents and the Senior Vice Presidents reporting
directly to the CEO.
The remuneration of the key management of the Company recognized in the consolidated statements of
earnings for the years ended December 31, 2023 and 2022 was as follows:
Salaries, management bonuses and director fees
Other benefits
Share-based compensation
Total remuneration
2023
3,908
293
9,100
13,301
2022
5,040
274
2,559
7,873
128 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
24.
SUPPLEMENTARY CASH FLOW INFORMATION
(a) Changes in working capital
(Increase) decrease in accounts receivable and other assets
(Increase) decrease in inventories
Increase in accounts payable and accrued liabilities
Increase (decrease) in other liabilities
(b) Other items not affecting cash
Share-based compensation expense
Realized (gains) losses on commodity swap contracts
Realized (gains) losses on foreign exchange forward contracts
Net gains on derivatives
Net losses on Sabina special warrants
Net finance income
Other, net
2023
(6,083)
(3,743)
2,849
6,078
(899)
2023
944
11,950
4,516
(2,004)
-
(19,752)
(1,290)
(5,636)
2022
14,339
642
5,104
(1,367)
18,718
2022
1,116
(7,917)
(3,029)
-
2,369
(3,154)
(13,257)
(23,872)
25.
SUPPLEMENTARY SHAREHOLDERS’ EQUITY INFORMATION
(a) Dividend
During the year ended December 31, 2023, the Company declared a quarterly dividend of $0.04 (2022 –
$0.04) per common share to its shareholders of record resulting in dividend distributions of $29.6 million
(2022 – $30.5 million) recognized against its retained earnings in the consolidated statements of changes
in shareholders’ equity. The Company paid an aggregate of $30.2 million (2022 – $28.6 million) of
dividends which were included in cash used in financing activities in the consolidated statements of cash
flows for the year ended December 31, 2023 and recognized a dividend payable of $7.3 million
(December 31, 2022 –-$7.6 million) in accounts payable and accrued liabilities in the consolidated
statements of financial position as at December 31, 2023.
On February 14, 2024, the Company declared a dividend of $0.04 per common share payable on April 15,
2024 to shareholders of record on March 31, 2024.
(b) Share repurchases under the Normal Course Issuer Bid (“NCIB”)
The Company renewed its NCIB on March 1, 2023 with an expiry date of February 28, 2024. The
maximum number of shares that can be repurchased during this period is 16,500,000 shares. The NCIB
also allows the Company to implement an automatic share repurchase plan with its designated broker in
order to facilitate the purchase of its shares.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 129 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
During the year ended December 31, 2023, the Company purchased a total of 9,738,063 (2022 –
2,471,500) shares, all of which were cancelled as at December 31, 2023. The total cost of these
purchases was $65.6 million (2022 – $13.6 million) at an average price per share of $6.74 (Cdn$9.10)
(2022 – $5.51 (Cdn$7.14)), of which $29.6 million (2022 – $7.5 million) was recognized as a reduction in
share capital, and $36.0 million (2022 – $6.1 million) as a reduction in retained earnings in the
consolidated statements of changes in shareholders’ equity. Cash payments of $65.6 million (2022 –
$13.6 million) were included in cash used in financing activities in the consolidated statements of cash
flows for the year ended December 31, 2023.
(c) Changes in accumulated other comprehensive loss
2023
2022
Cash flow hedge reserves
Foreign exchange option contracts from discontinued operations
Balance at beginning of year
Unrealized losses, net of income taxes
Realized losses transferred to cost of sales, net of income taxes
Balance at end of year
Deferred cost of hedging reserves
Foreign exchange option contracts from discontinued operations
Balance at beginning of year
Deferred cost of hedging, net of income taxes
Balance at end of year
Unrealized gains (losses) on publicly traded securities
Balance at beginning of year
Unrealized gains (losses), net of income taxes
Transferred to retaining earnings on derecognition of investment in Sabina
(note 7)
Balance at end of year
Pension obligations
Balance at beginning of year
Remeasurements of pension obligations, net of income taxes
Balance at end of year
Accumulated currency translation adjustments
Balance at beginning and end of year
Accumulated other comprehensive loss
(410)
(3,263)
3,803
130
(1,340)
2,029
689
(3,056)
21,890
(17,717)
1,117
(903)
(177)
(1,080)
(2,446)
(1,590)
(6)
(1,544)
1,140
(410)
(1,444)
104
(1,340)
2,236
(5,292)
-
(3,056)
-
(903)
(903)
(2,446)
(8,155)
130 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
26.
COMMITMENTS AND OTHER CONTINGENCIES
(a) Commitments
The Company had the following minimum contractual commitments from continuing operations as at
December 31, 2023:
Capital commitments
Purchase commitments
Total commitments
(b) Contingencies
up to 1 year
1 - 5 years
6,431
12,315
18,746
-
4
4
Total
6,431
12,319
18,750
The Company is involved in legal proceedings, from time to time, arising in the ordinary course of its
business. It is not expected that any material liability will arise from current legal proceedings or have a
material adverse effect on the Company’s future business, operations or financial condition.
27.
FINANCIAL RISK MANAGEMENT
The Company’s principal financial liabilities comprise accounts payable and accrued liabilities and long-
term debt. The main purpose of these financial instruments is to assist with the management of the
Company’s short term and long term cash flow requirements. The Company has various financial assets,
such as cash and accounts receivable, which arise directly from its operations.
The main risks that could adversely affect the Company’s financial assets, liabilities or future cash flows
are market risk (which includes commodity price risk, interest rate risk and foreign currency risk), liquidity
risk and credit risk. Management reviews each of these risks and establishes policies for managing them
as summarized below.
The following discussion also includes a sensitivity analysis that is intended to illustrate the sensitivity to
changes in market variables on the Company’s financial instruments and the impact on net earnings
(loss) and shareholders’ equity, where applicable. Financial instruments affected by market risk include
cash, accounts receivable, investments at fair value, commodity swap contracts, foreign exchange option
contracts, long-term debt, accounts payable and accrued liabilities. The sensitivity has been prepared
using financial assets and liabilities held as at the reporting dates.
The Company has established financial risk management policies to identify and analyze the risks of the
Company, to set appropriate risk limits and controls, and to monitor risks and adherence to limits.
Financial risk management policies and systems are reviewed regularly to reflect changes in market
conditions and the Company’s activities. The Company, through its training and management standards
and procedures, aims to develop a disciplined and constructive control environment in which all
employees involved in financial risk management activities understand their roles and obligations.
Market risk
Market risk is the risk that the future cash flows or the fair value of a financial instrument will fluctuate
because of changes in market prices. Market risk is comprised of three types of risks: commodity price
risk, interest rate risk and foreign currency risk. The impact of each of these components is discussed
below.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 131 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Commodity price risk
The Company is subject to price risk associated with fluctuations in the market prices for metals. The
Company sells its products at prices that are effectively determined by reference to the traded prices on
the London Metal Exchange and London Bullion Market. The prices of gold and copper are major factors
influencing the Company’s business, results of operations and financial condition. The Company regularly
enters into commodity swap contracts to reduce the price exposure associated with the time lag between
the provisional and final determination of its concentrate sales. In addition, the Company periodically
enters into commodity swap contracts to reduce the price exposure associated with projected payable
copper production.
The Company’s risk management policy, which was approved by the Board of Directors, requires
provisional concentrate sales to be fully hedged and permits hedging up to 90%, 85% and 80% of its
projected payable copper production in the subsequent 1, 2, and 3 year reporting periods, respectively.
As at December 31, 2023, the impact of a 5% increase or decrease in metal prices impacting the
Company’s accounts receivable and outstanding commodity swap contracts, with all other variables held
constant, would decrease or increase earnings before income taxes from continuing operations by $1.2
million (2022 – $0.6 million) and would decrease or increase equity by $1.1 million (2022 – $0.6 million).
The following table demonstrates the effect on 2023 and 2022 earnings before income taxes from
continuing operations of a 5% increase in commodity prices on its sales, excluding the impact of any
hedges and with all other variables held constant. The impact on equity is the same as the impact on net
earnings from continuing operations.
Effect of a 5% increase in metal prices on earnings before income taxes
from continuing operations
Gold
Copper
Total increase
2023
25,884
5,140
31,024
2022
21,911
5,487
27,398
The effect of a 5% decrease in metal prices, excluding the impact of any hedges and with all other
variables held constant, would decrease earnings before income taxes from continuing operations by an
equivalent amount.
Interest rate risk
Interest rate risk is the risk that the future cash flows or fair value of a financial instrument will fluctuate
because of changes in market interest rates. The Company’s exposure to the risk of changes in market
interest rates relates primarily to the Company’s cash and floating rate denominated debt and other
financial liabilities. As at December 31, 2023, the Company had no debt or floating rate denominated
financial liabilities. For the year ended December 31, 2023, a 100 basis point increase or decrease in
interest rates across the yield curve, with all other variables held constant, would increase or decrease
earnings before income taxes from continuing operations by $6.0 million (2022 – $4.3 million). The impact
on equity is the same as the impact on net earnings from continuing operations.
132 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Foreign currency risk
The Company’s foreign currency exposures arise primarily from a significant portion of its operating and
capital costs being denominated in currencies other than the U.S. dollar, the Company’s functional
currency. The Company periodically undertakes to purchase, in advance, a portion of its foreign
denominated cash flow requirements on a spot or forward basis to reduce this exposure. The Company
also enters into foreign exchange option contracts in order to reduce the foreign exchange exposure
associated with projected operating expenses and capital expenditures denominated in foreign
currencies.
The Company’s risk management policy, which was approved by the Board of Directors, permits up to
85%, 80% and 75% of its projected operating expenses denominated in foreign currency to be hedged in
the subsequent 1, 2, and 3 year reporting periods, respectively. The policy also permits projected capital
expenditures denominated in foreign currency to be fully hedged.
The following table demonstrates the effect on 2023 and 2022 earnings before income taxes from
continuing operations and equity of a 5% appreciation of the U.S. dollar relative to the Company’s key
foreign currencies on the Company’s outstanding financial assets and liabilities denominated in foreign
currencies, excluding the impact of any hedges and with all other variables held constant.
Effect of a 5% appreciation of the U.S. dollar on
Earnings before income taxes
from continuing operations
2023
1,719
(1,301)
418
2022
2,091
(1,082)
1,009
Equity
2023
1,561
(758)
803
2022
1,822
946
2,768
Euro
Canadian Dollar
Total increase
The effect of a 5% depreciation of the U.S. dollar relative to these foreign currencies on the Company’s
outstanding foreign denominated financial assets and liabilities, excluding the impact of any hedges and
with all other variables held constant, would be to decrease earnings before income taxes from continuing
operations and equity by equivalent amounts.
Credit risk
The exposure to credit risk arises through the potential failure of a customer or another third party to meet
its contractual obligations to the Company. During 2023, the Company had contracts with 12 customers in
connection with its mining operations, one of whom accounted for approximately 50% (2022 – 39%) of the
Company’s revenue from continuing operations. Under the terms of the Company’s concentrate sales
contracts, the purchasers make an initial advance payment equal to 70% to 100% of the provisional value
of each lot at the time title transfers. This serves to mitigate a portion of the Company’s credit risk. In
2023, the Company also had contracts with four customers in connection with its smelting operations, one
of whom accounted for approximately 86% (2022 – 83%) of the Company’s revenue from discontinued
operations.
With respect to credit risk arising from the other financial assets of the Company, which comprise cash,
equity investments and derivative financial assets, the Company’s maximum exposure is equal to the
carrying amount of these instruments. The Company limits its counterparty credit risk on these assets by
dealing with highly rated counterparties, issuers that are subject to minimum credit ratings, and/or
maximum prescribed exposures.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 133 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Liquidity risk
The Company relies on the cash flows generated from its operations, including provisional payments
received from its customers, retained cash balances, available lines of credit under its RCF and its ability
to raise debt and equity from the capital markets to fund its operating, investment and liquidity needs. The
cyclical nature of the Company’s businesses and the volatility of capital markets are such that conditions
could change dramatically, affecting the Company’s cash flow generating capability, its ability to maintain,
or draw upon, its RCF or the existing terms under its concentrate sales and/or smelting agreements, as
well as its liquidity, cost of capital and its ability to access new capital, which could adversely affect the
Company’s earnings and cash flows and, in turn, could affect total shareholder returns. To reduce these
risks, the Company: (i) prepares regular cash flow forecasts to monitor its capital requirements, available
liquidity and compliance to debt covenants; (ii) strives to maintain a prudent capital structure that is
comprised primarily of equity financing and long-term debt, currently in the form of a committed RCF; and
(iii) targets a minimum level of liquidity comprised of surplus cash balances and/or undrawn committed
lines of credit to avoid having to raise additional capital at times when the costs or terms would be
regarded as unfavourable.
The table below summarizes the maturity profile of the Company’s financial liabilities based on
contractual undiscounted payments.
Accounts payable and accrued liabilities
Commodity swap contracts
Lease obligations
Other obligations
Accounts payable and accrued liabilities
Commodity swap contracts
Foreign exchange option contracts
Foreign exchange forward contracts
Lease obligations
Other obligations
As at December 31, 2023
up to 1 year
1 - 5 years over 5 years
77,460
1,179
3,761
1,793
84,193
-
-
8,841
1,061
9,902
-
-
1,147
676
1,823
Total
77,460
1,179
13,749
3,530
95,918
up to 1 year
81,165
3,259
1,787
318
5,416
127
92,072
1 - 5 years over 5 years
As at December 31, 2022
Total
-
-
-
-
9,854
1,567
11,421
-
-
-
-
1,403
486
1,889
81,165
3,259
1,787
318
16,673
2,180
105,382
134 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Capital management
The Company’s objective for capital management is to: (i) maintain sufficient levels of liquidity to fund and
support its exploration, evaluation, development and operating activities; (ii) maintain a strong financial
position to ensure it has ready access to debt and equity markets to supplement its existing cash balance
and free cash flow being used to fund its growth activities; and (iii) comply with all financial covenants set
out in its credit agreements and guarantees. See note 13 for discussion on the Company’s compliance
with these requirements. The Company monitors its financial position and the potential impact of adverse
market conditions on an ongoing basis. The Company manages its capital structure and makes
adjustments to it based on prevailing market conditions and according to its business strategy. The
Company's long term funding strategy is to maintain a capital structure comprised primarily of equity
sourced from equity offerings and net earnings generated from its businesses and, as a result, the
targeted level of debt making up the Company’s capital base is relatively low. Given the long term nature
of the assets being funded and the U.S. dollar denominated revenue stream generated therefrom, the
Company’s general strategy around any debt financing is to raise long-term U.S. dollar denominated debt
to supplement these equity financings.
Overall financial leverage is monitored based upon a number of non-financial and financial factors,
including a number of credit related ratios contained in DPM’s loan agreements and net debt (defined as
total debt less cash and cash equivalents) as a percentage of total capital (defined as total equity plus net
debt). As of December 31, 2023, the Company was in compliance with all loan covenants and its net debt
as a percentage of total capital was negative 113% (December 31, 2022 – negative 77%).
28.
OPERATING SEGMENT INFORMATION
Operating segments are components of an entity whose operating results are regularly reviewed by the
chief operating decision maker in deciding how to allocate resources and in assessing performance and
for which separate financial information is available.
The Company has two reportable operating segments – Chelopech and Ada Tepe in Bulgaria. The nature
of their operations, products and services are described in note 1, Corporate Information. These
segments are organized predominantly by the products and services provided to customers and
geography of the businesses. The Corporate and Other segment includes corporate, exploration and
evaluation and other income and cost items that do not pertain directly to an operating segment. There
are no significant inter-segment transactions that have not been eliminated on consolidation.
The operating results of Tsumeb have been presented as a discontinued operation and the assets and
liabilities of Tsumeb have been presented as held for sale as a result of the Company's plan to sell the
smelter (note 3).
The accounting policies of the segments are the same as those described in note 2.2, Material
Accounting Policy Information. Segment performance is evaluated based on several operating and
financial measures, including net earnings (loss), which is measured consistently with net earnings (loss)
in the consolidated financial statements.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 135 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
The following table summarizes the relevant information by segment for the years ended December 31,
2023 and 2022:
Continuing operations
Revenue (a)
Costs and expenses
Cost of sales
General and administrative expenses
Corporate social responsibility expenses
Exploration and evaluation expenses
Finance costs
Other income and expense
Earnings (loss) before income taxes from
continuing operations
Income tax expense
Net earnings (loss) from continuing
operations
Other disclosures
Year ended December 31, 2023
Chelopech
Ada Tepe
Corporate &
Other
268,790
251,301
139,550
104,657
-
-
12,530
1,431
(1,125)
-
-
3,389
623
(1,484)
152,386
107,185
-
-
36,525
4,948
30,639
1,445
(18,739)
54,818
Total
520,091
244,207
36,525
4,948
46,558
3,499
(21,348)
314,389
116,404
11,279
144,116
12,135
(54,818)
312
205,702
23,726
105,125
131,981
(55,130)
181,976
Depreciation and amortization (b)
Share-based compensation expenses (c)
Capital expenditures (d)
27,443
1,265
22,359
54,593
564
10,394
2,372
12,046
27,740
84,408
13,875
60,493
136 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Year ended December 31, 2022
Chelopech
Ada Tepe
Corporate &
Other
Continuing operations
Revenue (a)
Costs and expenses
Cost of sales
General and administrative expenses
Corporate social responsibility expenses
Exploration and evaluation expenses
Finance costs
Other income and expense
Earnings (loss) before income taxes from
continuing operations
Income tax expense
Net earnings (loss) from continuing operations
Other disclosures
Depreciation and amortization (b)
Share-based compensation expenses (c)
Capital expenditures (d)
271,648
161,842
133,929
102,739
-
-
12,876
833
(216)
-
-
2,769
502
(648)
147,422
105,362
124,226
13,223
111,003
26,132
807
26,927
56,480
9,359
47,121
55,984
370
9,830
Total
433,490
236,668
28,543
6,240
24,230
3,340
(4,934)
294,087
139,403
22,819
116,584
-
-
28,543
6,240
8,585
2,005
(4,070)
41,303
(41,303)
237
(41,540)
2,113
4,787
34,109
84,229
5,964
70,866
(a) Revenues from Chelopech and Ada Tepe were generated from the sale of concentrate. For the year
ended December 31, 2023, $258.5 million or 50% (2022 – $169.3 million or 39%) of revenues from
the sale of concentrate were derived from a single external customer. Revenues of $83.8 million or
16% (2022 – $112.2 million or 26%) from the sale of concentrate were also derived from another
single external customer.
(b) Depreciation and amortization relating to operating segments were included in cost of sales.
Depreciation and amortization relating to Corporate and Other were included in general and
administrative expenses, as well as exploration and evaluation expenses.
(c) Share-based compensation expenses relating to operating segments were included in cost of sales
and those relating to Corporate and Other were included in general and administrative expenses and
exploration and evaluation expenses (note 17).
(d) Capital expenditures represent cash outlays and non-cash accruals in respect of exploration and
evaluation assets (note 8), mine properties (note 9), property, plant and equipment (note 10) and
intangible assets (note 11). Capital expenditures for the year ended December 31, 2023 for
Corporate and Other included $21.0 million (2022 – $20.6 million) related to the Loma Larga gold
project in Ecuador.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 137 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
The following table summarizes the Company’s revenue recognized for the years ended December 31,
2023 and 2022:
Revenue recognized at a point in time from:
Sale of concentrate (a)
Revenue from contracts with customers
Mark-to-market price adjustments on provisionally priced sales
Net mark-to-market gains (losses) on QP Hedges
Total revenue
2023
2022
519,965
519,965
10,145
(10,019)
520,091
434,859
434,859
(8,101)
6,732
433,490
(a) For the year ended December 31, 2023, the Company’s revenue from the sale of concentrate
included an adjustment of $4.8 million (2022 – $5.8 million) in connection with the final determination
and settlement of prior year provisional sales.
The following table summarizes total assets and total liabilities by segment as at December 31, 2023 and
2022:
Chelopech
Ada Tepe
Tsumeb
130,468
164,483
-
199,293
130,558
-
294,951
329,851
-
-
82,817
82,817
As at December 31, 2023
Corporate &
Other
404,347
178,270
-
Total
734,108
473,311
82,817
582,617
1,290,236
Total current assets
Total non-current assets
Assets held for sale (note 3)
Total assets
Liabilities
Liabilities held for sale (note 3)
-
-
Total liabilities
60,078
27,728
37,374
37,374
-
44,506
60,078
27,728
-
44,506
132,312
37,374
169,686
Total current assets
Total non-current assets
Total assets
As at December 31, 2022
Chelopech
Ada Tepe
Tsumeb
Corporate &
Other
103,463
169,655
273,118
97,589
169,244
266,833
45,356
26,564
71,920
364,513
180,870
545,383
Total
610,921
546,333
1,157,254
Total liabilities
57,196
24,379
42,038
40,547
164,160
DPM is domiciled in Canada. Revenues by geographic location are based on the location in which the
revenues originate. Revenues of continuing operations for the years ended December 31, 2023 and 2022
all originated from Europe.
138 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the years ended December 31, 2023 and 2022
(in thousands of U.S. dollars, unless otherwise indicated)
Assets by geographic location as at December 31, 2023 and 2022 are summarized below:
Total current assets
Financial assets
Deferred income tax assets
Other non-current assets
Assets held for sale (note 3)
Total assets
Total current assets
Financial assets
Deferred income tax assets
Other non-current assets
Total assets
Canada
398,393
11,900
-
12,252
-
Europe
334,968
-
13,015
300,023
-
422,545
648,006
Canada
359,108
40,773
-
9,175
409,056
Europe
205,356
-
6,590
349,490
561,436
As at December 31, 2023
Africa
Ecuador
Total
-
-
-
-
82,817
82,817
747
734,108
-
-
136,121
-
11,900
13,015
448,396
82,817
136,868
1,290,236
As at December 31, 2022
Africa
Ecuador
Total
45,381
1,301
-
25,262
71,944
1,076
610,921
-
-
42,074
6,590
113,742
114,818
497,669
1,157,254
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 139 DPM’s Report under the Fighting Against Forced Labour and Child Labour in Supply
Chains Act
This report has been prepared by Dundee Precious Metals Inc. (DPM) in response to reporting
requirements for relevant Canadian companies under Canada’s Fighting Against Forced Labour and
Child Labour in Supply Chains Act (the Act) and has been organized to address each area specified
under the Act’s reporting requirements.
PART 1: Statement of Commitment
The International Labour Organization (ILO) estimates that in 2021, there were approximately
28 million people around the world working in forced labour situations. That statistic is a grim
reminder of the scope of modern slavery, its invasive presence in global supply chains, and the
extent of its destructive impact on individual lives and communities.
Companies everywhere share a clear responsibility for reducing and mitigating the risks of
forced labour and child labour in their own organizations and supply chains.
For DPM, that responsibility begins with our overarching commitment to human rights,
embedded in our corporate values, our Corporate Responsibility Policy, our Code of Business
Conduct & Ethics, and our Human Rights Standard, which establishes specific requirements
aimed at preventing any form of human rights abuse at our operations or in our supply chain.
Those commitments are in turn guided by the standards established in ILO Conventions, the
United Nations Guiding Principles on Business and Human Rights and the United Nations
Global Compact, and are consistent with (or exceed) the laws, regulations and standards in the
countries where we operate.
In 2023, Canada joined other jurisdictions, including Australia, the UK, and the US, in
introducing legislation to increase transparency of modern slavery in supply chains by requiring,
among other measures, annual reporting.
The following is DPM’s first report under the Act, which has been organized to address the
information required by section 11 of the Act. It provides a comprehensive account of the
policies, programs, and specific actions DPM implemented in the previous year to prevent and
reduce the risk of forced labour and child labour in our operations and supply chains – including,
among other measures, country and supplier risk assessments, supplier screening, employee
training, and providing safe and secure channels for employees, stakeholders, communities,
suppliers and their respective workers to report human rights concerns.
We remain committed to open and transparent annual reporting on our approach, progress, and
challenges.
(signed) "David Rae"
David Rae
President and Chief Executive Officer
140 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 PART 2: DPM’s Corporate Structure, Activities and Supply Chains
DPM is a Canadian-based international gold mining company that is listed on the Toronto Stock
Exchange. Our operations and projects are located in Bulgaria, Namibia, Serbia and Ecuador.
We operate the Chelopech underground gold-copper mine and the Ada Tepe open pit gold
mine, both located in Bulgaria, as well as the Tsumeb specialty smelter located in Namibia.
DPM also owns the Loma Larga project in Ecuador and the Čoka Rakita project in Serbia; and
holds interests in a number of other gold development and exploration properties in various
locations in Serbia and Ecuador.
We have incorporated principles of responsible business conduct through the adoption of
various policies and programs, including our Code of Business Conduct & Ethics, Corporate
Responsibility Policy and Human Rights Standard described in further detail below.
In 2022, our global workforce encompassed over 2,000 full time employees and engaged
approximately 1,600 contractors. Approximately 75% of our total employees were covered by a
collective bargaining agreement.
We monitor the countries where we operate to identify developments that could lead to
governance, environmental and social risks, including risks associated with forced labour or
child labour.
The countries where we currently operate, Bulgaria and Namibia, along with the countries
where we have exploration and/or development projects, Ecuador and Serbia respectively, have
different exposures to and potential for forced labour and child labour (as detailed below). Our
approach to identifying the parts of our business and supply chain that carry risk of forced
labour and child labour, and steps taken to assess and manage that risk, is informed by our
country-level and operational-level risk profile assessments. The purpose of these assessments
is to identify areas of higher risk; we then use this information to prioritize our efforts in
implementing and monitoring a targeted set of controls.
As described below, DPM developed an internal risk-rating of forced labour and child labour
based upon a composite assessment of a number of international human rights and modern
slavery indices. Based on this risk assessment, we have determined that our current operating
assets have a low risk of forced labour and child labour.
However, we acknowledge that risks can also arise in our extended supply chain. As required by
the Act, this report describes the measures taken in 2023 to identify, mitigate and eliminate the
risks of forced labour and/or child labour at both our operations and within our supply chain.
The mining industry’s value chain spans a global complex network. DPM has a diverse global
supply chain through which we procure a range of goods and services to support our
exploration, mining, processing, transportation and corporate support activities. Our operations’
supply chains are primarily locally and/or regionally based. Overall, the majority of the
company’s goods are procured from suppliers based in Bulgaria, Serbia and Canada
respectively. The majority of our supplier spending can be generalized into the procurement of
goods, construction, operational and technical services and support and administrative
functions. Our risk assessment of forced labour and/or child labour in this supply chain is
described in detail in Part 4 of this report.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 141 PART 3: Policies and due diligence processes in relation to forced labor and child labour
Governance
The Sustainability Committee of DPM’s Board of Directors provides ongoing oversight of the
Company’s overall sustainable development activities to ensure the management of the
organization’s environmental and social impacts. This includes human rights and, specifically,
the risks of forced labour and child labour. A core component of the Sustainability Committee’s
mandate is to provide oversight of potential human rights impacts associated with our
operations and in the communities in which we operate. Composed entirely of independent
directors, the Sustainability Committee meets quarterly, including an in-camera session without
management present at each meeting.
At the executive level, the Senior Vice President (SVP), Sustainable Business Development
reports directly to the President and Chief Executive Officer (CEO) and is responsible for
sustainability and human rights at the group level. The Director, Sustainability reports directly to
the SVP, Sustainable Business Development and leads DPM’s overall human rights
management strategy, working across the Executive team and Sustainability Directors at each
operational site to integrate human rights management throughout the Company’s operational
and functional areas.
The SVP, European Operations and the Vice President and Managing Director of our Namibian
smelter, both of whom report directly to the CEO, have direct oversight and leadership of their
site-level teams that manage human rights-related risks throughout their operations and
respective supply chains. Similarly, the General Manager of the Company’s activities in Ecuador
and the General Manager of Exploration, overseeing our Serbian activities, both provide
leadership and management of this issue throughout their teams as well.
Policies and due diligence
When we conduct business the right way, we build trust with one another and with all our
external stakeholders. Our Code of Business Conduct and Ethics (Code) is established by the
DPM Board of Directors as a statement of the principles and commitments intended to direct
and guide the conduct of the Company. The Code sets the expectation that we conduct our
business with respect for the human rights of all individuals affected by our business activities. It
reflects our values, describes the Company’s expectations, and serves as a resource to help
guide our decisions. The Code applies to everyone who works for DPM, including employees
and members of our Board of Directors, and to third parties, including suppliers working with us
or on our behalf, who are contractually required by the Company to comply with the Code. The
Code sets the expectation that all third parties (i.e., anyone who does business with DPM,
including our suppliers) adhere to principles consistent with those set out in our Code and
aligned with our core values. Additionally, our contracts with suppliers include provisions
requiring the suppliers to comply with local laws and regulations and applicable professional
standards.
Our Code explicitly refers to our Corporate Responsibility Policy which outlines our commitment
to managing the Company’s impacts across all areas of our business including, among others,
conducting our business in a manner that respects human rights and striving to avoid
contributing to adverse human rights impacts, including child and forced labour. The policy
further elaborates that DPM, its employees and members of our Board of Directors are
expected to understand the Company’s impact and influence across the entire value chain and,
wherever possible, apply responsible business practices to sourcing and materials stewardship.
142 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 To operationalize our policy commitments, we developed a Human Rights Standard that
explicitly outlines the minimum requirements with which all our sites must comply, including
requirements regarding forced and child labour. It is informed by the principles contained in the
United Nations Guiding Principles on Business and Human Rights, which include guiding
principles regarding forced labour and child labour and provide guidance on the following:
•
•
•
•
•
identifying, preventing, mitigating and being accountable for our human rights impacts
using a risk-based due diligence approach;
preventing or mitigating adverse human rights impacts that directly or indirectly arise
from our operations;
processes for the remediation of adverse human rights impacts within our sphere of
influence;
ensuring employees, communities, stakeholders, security providers and third parties
(including suppliers) are aware of our commitment to respect human rights and that the
Company’s business is conducted with respect for human rights; and
in line with the Company’s values and the principles set out in our Code, encourage
individuals to report and ‘speak-up’ when they see something that could result in a
violation of, or an adverse impact on, human rights, which encompasses child and
forced labour.
Our Human Rights Standard applies to everyone who works for the Company, including all
employees and our Board of Directors. It also directly applies to certain third-party suppliers who
have contractually committed to complying with our policies and standards and sets the
expectation that all third parties (i.e., anyone who does business with DPM, including our
suppliers) adhere to principles consistent with those set out in the standard.
To further enable our workforce to live the principles and commitments espoused in our Code,
Corporate Responsibility Policy and Human Rights Standard described above, we currently use
a comprehensive risk-based third-party due diligence process (3PDD) that was developed to
manage bribery, corruption, reputational and sanction compliance risks. In 2023, we modified
our 3PDD to include human-rights related due diligence, including forced labour and child
labour. The 3PDD process is used as an input to determine the measures we take to engage
with our suppliers’ compliance with the Code.
PART 4: The parts of DPM’s business and supply chain that carry a risk of forced labor or
child labour, and the steps taken to assess and mitigate that risk.
Human Rights risk assessment - DPM assets
Throughout 2023, we engaged in risk-based human rights risk assessments across our sites
including our operations in Bulgaria and Namibia, development projects in Serbia and Ecuador
and our corporate head office in Canada. The results of those assessments allowed us to begin
implementing more immediate controls related to child and forced labour in the short-term (such
as internal training), while also helping to identify areas of opportunities to further integrate
human rights considerations into company processes like our supply chain procurement
processes.
In addition to assessing the activities connected to our own operational boundaries, we also
conducted a risk assessment of each country where our assets are located to better
contextualize and understand the potential risk for human rights impacts and vulnerabilities for
forced labour and child labour to occur. Our country-specific assessments also reviewed
governance indicators such as the rule of law, political stability, level of corruption and conflict-
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 143 affected areas, and environmental factors, including climate change and ecosystem health,
which could potentially exacerbate human rights and labour rights issues.
As a result of these assessment activities, we believe the risk for forced labour and child labour
within our operations is low.
Human Rights risk assessment -DPM Suppliers
2023 was our first year assessing the human rights risk of our supplier base supporting our
operations. The process involved identifying and assessing over 1,900 Tier 1 suppliers, the
products and services we procured, classified into 8 broader industry categories, and evaluating
each supplier’s country of origin risk, across 40 different countries.
As described above, as a result of our assessment of our Tier 1 suppliers we have begun
incorporating human-rights related questions, with an emphasis on forced labour and child
labour, as a consideration during supplier pre-qualification.
Sector Risk
After conducting a detailed desk-top evaluation of our supplier base1 which involved referencing
credible sources of information about the risks of forced labour and child labour and then
subsequently evaluating where our operations and supply chain could be exposed to those
risks, we believe that the following sector categories and their associated goods/services could
potentially be at a higher risk for forced labour and/or child labour:
Sector and potential related risks for forced/child
labour
Construction Services
- Risk of workers to excessive recruitment fees and debt
bondage
- Dangerous working conditions with high levels of
industrial accidents
- Risks of workers being subject to late or non-payment of
wages
- Restrictions on movement
- Restrictions on trade unions and freedom of association
Manufacturing
- Hazardous/undesirable work
- Vulnerable, easily replaced, and/or low-skilled workforce
- Migrant workforce
- Presence of labor contractors, recruiters, agents or
other middlemen in labor supply chain
- Long, complex, and/or non-transparent supply chains
Goods/Services
commonly
provided by that
sector
Drilling,
Procurement and
Construction
Management
Description relevant to
DPM
Building, maintenance,
demolition, renovation
and repair of structures
Electronics,
machinery,
equipment, spare
parts
Manufacturing involves
the transformation of raw
materials from
agriculture, forestry,
fishing, and mining or
quarrying, as well as the
transformation of other
manufacturing products
into new products.
1 Based on a review of the United Nations Global Compact: Business and Human Rights Navigator, the
International Labor Organization: Global Estimates of Modern Slavery Forced Labour and Forced Marriage 2022,
the US Department of Labor: 2022 list of goods produced by child labor or forced labor, the Verité and the U.S.
Department of State’s Office to Monitor and Combat Trafficking in Persons Responsible Sourcing Tool, and the
International Council on Mining and Metals’ 2023 Guidance on Human Rights Due Diligence in Supply Chains
144 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 High Risk Services
- Migrant workforce
- Undesirable work
- Presence of labor contractors, recruiters, agents or
other middlemen in labor supply chain
- Debt bondage
- Exploitative working conditions
- Restrictions on trade unions and freedom of association
Transport
- Exploitative working conditions
- Health and safety issues
- Restrictions on trade unions and freedom of association
-Hazardous/undesirable work
- Vulnerable, easily replaced, and/or low-skilled workforce
- Migrant workforce
- Presence of labor contractors, recruiters, agents or
other middlemen in labor supply chain
- Long, complex, and/or non-transparent supply chains
Catering, cleaning,
security, waste and
recycling,
maintenance
services
Wide range of economic
activities, including trade,
hospitality, and non-
market social and other
services.
Road and freight
services, third party
warehousing
Includes transport
service workers and
warehousing services.
Raw Materials and Commodities supply chain
- Exploitative working conditions
- Discrimination in the supply chain
- Health and safety issues
- Restrictions on trade unions and freedom of association
- Child labour
Bricks, gravel,
cement, lime, steel
balls, blasting
agents, lubricants,
tires, chemical
agents
Materials and agents
used in our mines
production operations
and smelter processing
Country of Origin Risk
In addition to evaluating the sector risks, we also assessed the countries of origin of our Tier 1
suppliers for their potential human rights impacts2 (which includes but is broader than forced
labour and child labour risks). This resulted in an internally developed risk-rating, based upon a
composite assessment of a number of international human rights/modern slavery indices listed
under footnote 2.
We found that over 70% of our Tier 1 suppliers are located in countries that present a lower
inherent risk for human rights violations. Around 29% of our suppliers are located in countries
with medium risk for violations and only about 1% of our suppliers are located in countries with a
high-risk rating overall.
Country
Bulgaria
Serbia
Canada
Overall Human rights
risk
Low
Medium
Low
% suppliers
53%
16%
9%
2 A composite qualitative rating based on Global Slavery Index, the World Bank’s Worldwide Governance
Indicators, the International Labor Organization’s database on Collective Bargaining Rates and Working hours and
the Global Risk Profile’s ESG Index.
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 145 Ecuador
Namibia
United States
United Kingdom
South Africa
Australia
Germany
Netherlands
Others
Medium
Medium
Low
Low
Medium
Low
Low
Low
-
5%
3%
3%
3%
2%
2%
1%
1%
4%
Further to a broader human rights impact evaluation, we also conducted a more focused
assessment of the countries of origin of our Tier 1 suppliers for their specific risk for modern
slavery based on the Global Slavery Index. We found that over 74% of our Tier 1 suppliers are
located in countries that present a lower vulnerability to modern slavery. Around 25% of our
suppliers are located in countries with medium vulnerability to modern slavery and only about
1% of our suppliers are located in countries with high vulnerability.
Country
Bulgaria
Serbia
Canada
Ecuador
Namibia
United States
United Kingdom
South Africa
Australia
Germany
Netherlands
Others
Vulnerability to modern slavery
(0-least vulnerable, 100-most
vulnerable)3
% suppliers
26
34
11
48
47
25
14
52
7
11
6
53%
16%
9%
5%
3%
3%
3%
2%
2%
1%
1%
4%
-
PART 5: Measures taken to remediate instances of forced labor or child labor, including
measures taken to compensate vulnerable families for any loss of income.
3 Source: Global Slavery Index
146 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 Access to Remedy
We have several outlets for employees, stakeholders, communities, suppliers and workers in
the extended supply chain to report concerns and access remedies around human rights,
including those around the risks of forced labour and child labour.
We have created a Speak Up process, including an EthicsPoint hotline operated by an
independent third-party, which is a publicly available mechanism to report any unethical
behaviour, including human rights violations. In addition, across our sites, we also have
implemented grievance mechanisms accessible to our stakeholders and communities so that
we may receive and address complaints or grievances in an expedited and transparent manner.
These processes are available for workers in our extended supply chain to report on risks
associated with forced labour and child labour and are publicly available on our website for
everyone to utilize.
We have four reporting channels as part of the Speak-Up process, including the EthicsPoint
hotline, which allows for anonymous reporting of misconduct and ethical concerns. Reports
submitted through the hotline are referred to the Corporate Compliance Officer (except when
the Corporate Compliance Officer is personally implicated or the reports implicate a member of
the Executive team or a member of Board of Directors, in which case the report is appropriately
escalated) and to the appropriate Board Committee Chair, depending on the nature of the
report. The Board receives quarterly updates on Speak-Up reports received and the status of
investigations, if any, and Committee Chairs discuss the reports at their respective meetings.
The Code includes protection from retaliation for anyone who files a report, raises a concern, or
participates in an investigation in good faith.
For performance reporting on our Speak-Up reports, please see more in our 2022 Sustainability
Report.
At the site level, we have also provided a local grievance mechanism to receive human rights
grievances with the intention of transparent and expeditious resolution and a commitment to
non-retaliation against anyone who submits a complaint.
The Company did not receive any grievances related to forced labour or child labour and has
not changed its business relationships as a result of our due diligence efforts relating to forced
labour or child labour in 2023 and as such, has no measures to report with respect to
remediation.
PART 6: Modern slavery awareness training compliance for employees
Our Human Rights Standard includes providing human rights training at all our sites. Although
our employees receive training in good governance practices (such as anti-bribery, anti-
corruption, and workplace harassment) that are associated with preventing and mitigating
human rights risks, we recognize that we need to provide more updated training across our
operations to specifically address the risks of forced labour and child labour in our supply
chains.
Using our risk-based approach (as described above), in 2023, we identified the increased
potential for human rights risks to occur at our development project in Ecuador. As such, we
engaged an independent, internationally recognized third party to conduct in-person,
participatory and comprehensive human rights training. A full day of training focused on the
Voluntary Principles for Security and Human Rights for our security personnel followed by a
second day of training focused on overall human rights identification and mitigation, with an
ANNUAL REPORT 2023 DUNDEE PRECIOUS METALS 147 emphasis on modern slavery and scenarios around the use of child labour and forced labour.
This second day of training was provided to our management teams and key personnel in
stakeholder relations, supply chain, human resources, sustainability and finance.
PART 7: How DPM assesses its effectiveness in ensuring that forced and child labor are
not being used across its business and supply chains
Effectiveness
Our EthicsPoint hotline and grievance mechanisms provide a forum to receive issues related to
actual and/or perceived human rights impacts amongst our employees, communities and
supplier base. Beginning with our 2022 Sustainability Report, we have started to publish the
number of and types of complaints we have received, which we will continue to report in our bi-
annual sustainability reporting. This provides us with an avenue to track and communicate our
performance on the risks of forced labour and child labour. Progress in this area will be publicly
reported during our next report under the Act to be submitted in 2025, with further details to be
provided in our bi-annual sustainability report, also to be published in 2025.
PART 8: Board of Directors’ Approval
In accordance with the requirements of the Act, and in particular section 11 thereof, I attest that I
have reviewed the information contained in the report for the entity or entities listed above.
Based on my knowledge, and having exercised reasonable diligence, I attest that the
information in the report is true, accurate and complete in all material respects for the purposes
of the Act, for the reporting year listed above.
Peter Gillin, Chair, Board of Directors
February 14, 2024
(signed) "Peter Gillin"
__________________ “I have the authority to bind Dundee Precious Metals, Inc.”
Signature
148 DUNJDEE PRECIOUS METALS ANNUAL REPORT 2023 CORPORATE
INFORMATION
Directors
Officers
Nicole Adshead-Bell1,2
Vancouver, British Columbia,
Canada
David Rae
President and Chief Executive Officer
Iliya Garkov
Senior Vice President, European
Operations
Navin Dyal
Executive Vice President and
Chief Financial Officer
Michael Dorfman
Executive Vice President,
Corporate Development
Kelly Stark-Anderson
Executive Vice President, Corporate
Affairs, General Counsel and Corporate
Secretary
Nikolay Hristov
Senior Vice President,
Sustainable Business Development
Sylvia Chen
Vice President, Finance
Mark Crawley
Vice President, Commercial
Anna Ivanova
Vice President, Business Optimization
Zebra Kasete
Vice President and Managing Director,
Tsumeb
Mirco Nolte
Vice President, Operational Excellence
Matthieu Risgallah
Vice President, Innovation & Technology
Alex Wilson
Vice President, Human Resources
Robert M. Bosshard 1
Toronto, Ontario, Canada
Jaimie Donovan3,4
Toronto, Ontario, Canada
R. Peter Gillin5
Toronto, Ontario, Canada
Kalidas Madhavpeddi1,2,4
Phoenix, Arizona, USA
Juanita Montalvo3,4
Toronto, Ontario, Canada
David Rae
Toronto, Ontario, Canada
Marie-Anne Tawil1,2,3
Westmount, Québec, Canada
Anthony P. Walsh1,2
Vancouver, British Columbia,
Canada
Shareholder Contact
Jennifer Cameron
Director, Investor Relations
jcameron@dundeeprecious.com
Tel: 416-365-2549
Fax: 416-365-9080
1 Audit Committee
2 Human Capital and Compensation
Committee
3 Corporate Governance and
Nominating Committee
4 Sustainability Committee
5 Board Chair
Corporate Office
Stock Listing
and Symbol
Dundee Precious Metals Inc.
150 King Street West
Suite 902, P.O. Box 30
Toronto, Ontario, Canada, M5H 1J9
Tel: 416-365-5191
Fax: 416-365-9080
The Toronto Stock Exchange
DPM – Common Shares
Copies of the Company’s Quarterly and
Annual Reports are available on
written request from our registrar.
Regional Offices
Registrar
Ecuador
Cuenca office:
Dundee Precious Metals
Padre Julio Matovelle 755 y Migue Díaz
Tel: +593 7 2815 161
Computershare
Investor Services Inc.
100 University Avenue, 8th Floor
Toronto, Ontario, Canada M5J 2Y1
Tel:
Quito office:
Dundee Precious Metals
El Tiempo N37-67 y El Comercio
Tel: +593 2 2468 674
Tel:
Fax:
Fax:
514-982-7555
(International direct dial)
(toll-free): 800-564-6253
(North America)
416-263-9394 (International)
(toll free): 888-453-0330
(North America)
Website: www.computershare.com
Email: service@computershare.com
Sofia
Dundee Precious Metals
26 Bacho Kiro Street, 3rd Floor
Sofia 1000, Bulgaria
Tel: +359-2-9301500
Fax: +359-2-9301595
Windhoek
Dundee Precious Metals
35 Schanzen Road
Klein Windhoek
Windhoek, Namibia
Tel: +264-0-61-385000
Fax: +264-0-61-385001
150 King Street West, Suite 902
P.O. Box 30
Toronto, Ontario M5H 3T9
www.dundeeprecious.com
Connect with us:
dundeepreciousmetals
@DundeePrecious
dundeeprecious