PDAC CONFERENCE March 4-7, 2018 DPM AN INNOVATIVE,...
Transcript of PDAC CONFERENCE March 4-7, 2018 DPM AN INNOVATIVE,...
PDAC CONFERENCE
March 4-7, 2018
Krumovgrad Gold Project
December 2017
DPM – AN INNOVATIVE, GROWING GOLD PRODUCER
TSX:DPM
2
Forward Looking Statements
Certain statements and other information included in this presentation 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”. Our forward looking statements include, but are not limited to, statements with respect to the estimated capital costs, operating costs and
other project economics with respect to Krumovgrad; timing of development, permitting, construction, commissioning activities and commencement of
production in respect of Krumovgrad; timing of further optimization work at Tsumeb and potential benefits of the rotary furnace installation; price of gold,
copper, silver and acid; toll rates; metals exposure and stockpile interest deductions; the estimation of Mineral Reserves and Mineral Resources and the
realization of such mineral estimates; timing and amount of estimated future production and output, life of mine, costs of production, cash costs and other
cost measures, capital expenditures and timing of the development of new deposits; results of economic studies; success of exploration activities; success
of permitting activities; permitting time lines; currency fluctuations; requirements for additional capital; government regulation of mining and smelting
operations; success of permitting activities; environmental risks; reclamation expenses; potential or anticipated outcome of title disputes or claims; and
timing and possible outcome of pending litigation. 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”, or “does not expect”, “is expected”, “budget”, scheduled”,
“estimates”, “forecasts”, “outlook”, “intends”, “anticipates”, or “does not anticipate”, or “believes”, or variations of such words and phrases or that state that
certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved.
Forward looking statements are based on the opinions and estimates of management 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 presentation, such factors include, among others: the uncertainties with respect to actual results of current exploration
activities, actual results of current reclamation activities, conclusions of economic evaluations and economic studies; changes in project parameters as
plans continue to be refined; possible variations in ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated;
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; 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; fluctuations in metal and acid prices, toll rates and foreign
exchange rates; unanticipated title disputes; claims or litigation; limitation on insurance coverage; cyber attacks; failure to realize projected financial
results from MineRP; risks related to operating a technology business reliant on the ownership, protection and ongoing development of key intellectual
properties; 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.sedar.com.
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. Unless required by securities laws, 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.
TSX:DPM
3
Investment Highlights
Operating in mining friendly jurisdictions
Strong resource and reserve base
High quality, low cost, flagship asset
Near term, low cost growth in gold production
Growing exploration pipeline
Strong balance sheet
Strong management team
Deeply undervalued
Strong Asset Base, Near Term Growth & Deeply Undervalued
TSX:DPM
4
Company Overview
Share Price / 52 week low-high (C$ per share) $3.06 / $2.13 - $3.38
Shares Outstanding – Current 178,492,566
Market Capitalization – Current $427 M
P/NAV 0.70x
Metals contained in concentrate produced
Gold
Copper
197,684 oz
35.8 Mlbs
AISC/oz Au (1,2) $729
Adjusted EBITDA $92 M
+ Krumovgrad starting in Q4 2018 + 85,700 oz/yr
Cash $28.8 M
Investment portfolio (@ Feb. 21, 2018) (21) $40 M
Undrawn RCF $252 M
Debt $23 M
2017 Quick Glance Production & Financial Metrics
Dundee Corporation 20.38%
GMT Capital Corporation 11.15%
EBRD 9.9%
Kopernik Global Advisors 3.46%
USAA Asset Mgmt. 3.18%
Low cost
production
with 50%
growth starting
in Q4 2018
Strong
liquidity
position
Long term
shareholders
Deeply
undervalued
1, 2, 21 See footnotes contained in Appendix on slide 38
Share Capital (@ February 28, 2018)
Liquidity Position (@ December 31, 2017)
Top Five Shareholders (@ February 28, 2018)
TSX:DPM
5
Timok Gold Project
Serbia
Tsumeb Smelter
Namibia
Chelopech Mine
Bulgaria
Sabina Gold & Silver Corp.
Nunavut, Canada
Krumovgrad Gold Project
Bulgaria
DPM’s Global Portfolio of Assets
Operating assets
Development asset
Late stage exploration assets
Early stage exploration assets
Malartic JV
Quebec, Canada
Chelopech
• Location: Chelopech, Bulgaria
• Ownership: 100%
• 2017 Production: 197,684 oz Au;
35.8 Mlbs Cu
• Mine Life: 9 years
• Operation: Underground
Krumovgrad
• Location: Southern Bulgaria
• Ownership: 100%
• Stage: Construction
• Production: 103,000 oz (yrs 1-5 avg)
• Mine life: 8 years
• Operation: Open pit
• Commissioning: Q4 2018
Tsumeb
• Location: Tsumeb, Namibia
• Ownership: 100%
• 2017 Concentrate Smelted: 219,000 tonnes
• Operation: Specialty smelter
• Location: Serbia
• Ownership: 100%
• Stage: Advanced exploration
• Resource: 1.72 Moz
Timok Sabina Gold & Silver
• Location: Nunavut, Canada
• Ownership: 10%
• Stage: Pre-construction
• Production: 240,000 Au (yrs 1-8) (18)
• Operation: Open pit/underground
• DPM’s equity stake: $40 M
Corporate Head Office
Toronto, Canada
18 See footnotes contained in Appendix on slide 38
TSX:DPM
6
Bulgaria… • Overview:
• Uninterrupted operations since 2003
• Member of the EU since 2007
• 4th largest gold producer in Europe
• Stable regulatory environment & government
• Corporate Tax Rate: 10%
• Chelopech Royalty Rate: 1.5% of gross Cu, Au and Ag
• Krumovgrad Royalty Rate: sliding scale between 1%
and 4% of gross value
• GDP Forecast: +2.8% in 2017 (IMF)
• Mining industry forms 5% of the GDP (2016)
Namibia…• Overview:
• Political party stability
• 5th largest producer of uranium and 9th largest producer of
diamonds
• Ranked in top 10 as Africa’s most attractive countries over last
5 years according to the Fraser Institute
• Glencore, Rio Tinto, Anglo American, Paladin Energy, etc.
• Corporate Tax Rate: 0% (Export Processing Zone status)
• GDP Forecast: +5.3% in 2017 (IMF)
• Mining industry forms 11.5% of the GDP (Jan. 2017)
Serbia…• Overview:
• EU candidate since 2012
• 3rd largest copper producer in Europe
• Industry benefits from high level government support
• Corporate Tax Rate: 15%
• GDP Forecast: +3.0% in 2017 (IMF)
• Mining industry forms 2% of the GDP (2013)
Operating in Mining Friendly Jurisdictions
TSX:DPM
7
Strong Mineral Resource and Reserve Base
2.0 Moz
0.8 Moz
Proven and probable
Total Gold Ounces
Proven and Probable
Total Copper
1.4 Moz 0.01 Moz
1.7 Moz
3.8 Moz
Measured & Indicated Inferred
Total Gold Ounces
2.8 Moz
398 Mlbs
Measured & Indicated Inferred
Total Copper
2.8 Bnlbs
301 Mlbs
Krumovgrad
ChelopechChelopech
TimokKrumovgrad
Chelopech
Chelopech
3.1 Moz
0.14 Moz
Chelopech
Tulare
Tulare
2.8 Bnlbs
37 Mlbs
4.0 Moz
3, 4, 5, A. See footnotes contained in Appendix on slides 38 & 39
TOTAL MINERAL RESERVES (3,5,A)
TOTAL MINERAL RESOURCES (4,5,A)
Exclusive of Reserves
As of December 31, 2016 As of December 31, 2016
TSX:DPM8
HIGH QUALITY, LOW COST, FLAGSHIP ASSET
Chelopech
Location: Chelopech, Bulgaria
Ownership: 100%
2017 Production: 197,684 oz Au; 35.8 Mlbs Cu
Mine Life: 9 years
Operation: Underground
TSX:DPM
9
57
133
196
153
118
9987
108
0
300
600
900
1200
1500
1800
0
50
100
150
200
250
2010 2011 2012 2013 2014 2015 2016 2017
Cash Cost / tonne of ore processed (US$/t) (6) Ore Mined (Mt)
1.09
1.31
1.812.03 2.05 2.04
2.21 2.22
2010 2011 2012 2013 2014 2015 2016 2017 2018E
56 55
4640 40
3733 34
2010 2011 2012 2013 2014 2015 2016 2017 2018E
Adjusted EBITDA (US$M) (7)
2006 2015 2016
21.5 21.5
14.1 Total ore
mined
since 2006 (Mt)
Ore Reserve (Mt)
16.3
19.8
Gold price trend
Growing throughput in recent years with
opportunity to optimize further
Continuing to optimize through innovation
2018E slightly higher due to FX
Stronger EBITDA due to grades & metal prices Exploration successful in replacing reserves
6, 7, 9 See footnotes contained in Appendix on slide 38
Copper price trend (AuEq)
Chelopech – Continually Improving
2.1-2.2
37-40
9 9
TSX:DPM
10
139
172 140-170
2016 2017 2018E
Chelopech Highlights
Payable gold in concentrate sold (000s oz) (8)
747 729
2016 2017 2018E
Metals contained in concentrate produced (8)
166
198 165-195
38.5 35.8
33.7-40.4
2016 2017 2018E
Gold (000s oz) Copper (Mlbs)
Record gold production in 2017
Guidance for another strong year in 2018
Focused on mine and process plant optimization
8, 9 See footnotes contained in Appendix on slide 38
All in sustaining cost (US$/oz gold sold)640-855
9
9 9
TSX:DPM
11
Chelopech – Next Phase of Optimization Underway
Change in mining method
0.5 mtpy 1.0 mtpy
Underground crushing and conveying;
“Taking the lid off the mine”
1.0 mtpy 2.0 mtpy
Digital transformation
Phase 1
2003-2008
Phase 2
2009-2014
Phase 3
2015+
- Dynamic mine planning
- Intelligent use of data
- Digital collaboration
- Smart centre
- Automating mining process
2018
2020
2019
Key benefits:
Recovery improvement in 2017
Deep understanding of Reserve base
Optimization of material & asset flow
Improved anticipation of failures
Increase automation
Real time monitoring of performance vs. plan
TSX:DPM
12
Chelopech – Near Mine Exploration
Drilling demonstrates
excellent potential for hosting
additional resources:
New zone of breccia
pipes, the favourable host
rock for ore, is found over
1500 m & is open to the
east
Large areas remain
between drilled sections
Similar geology, alteration
and style of mineralization
to that of the Central and
Western orebodies
Opens up whole new area
10,000 m drill program
proposed for 2018 to infill
existing holes at SEBP
zone
5,000 m of drilling
planned for Krasta target
in 2018
TSX:DPM13
TRANSITIONING TO FREE CASH FLOW
Tsumeb
Location: Tsumeb, Namibia
Ownership: 100%
2017 concentrate smelted: 219,000 tonnes
Operation: Specialty smelter
TSX:DPM
14
2012 2013 2014 2015 2016 2017 2018E 2019F 2020F 2021F 2022F
(2)
Tsumeb – Increased Stability with Growth Potential
Total Capital Expenditures (US$M)
63
140
130
44
19
8.6
2012 2013 2014 2015 2016 2017 2018E
219
240-
265
196198
152159
265-
300
200
300-
370
Production (‘000s tonnes)Cash cost/t of
con smelted
(net of by
product credits)
Third Party
con supplied
to smelter
(000s)
Chelopech
concentrate
supplied to
smelter (000s)
Potential future
capacity
$440-$500
240-
265
Growth Capital
Sustaining Capital
Secured processing outlet for Chelopech
Growing tolling business to build stand alone cash
flow generating business
Focused on stable operations at current throughput
Option to expand to 370k tpa in the future
Will evaluate strategic partnership alternatives
6, 9 See footnotes contained in Appendix on slide 38
99 99
(6)
Major investment phase complete Major investment phase complete
220-
250
12-18
99
TSX:DPM
15
11
7.2
12-18
2016 2017 2018E
200
219
220-250
2016 2017 2018E
9.7
14
2016 2017
Tsumeb Smelter Highlights
Complex Concentrate Smelted
(‘000s t)
Adjusted EBITDA (US$M) (7) Sustaining Capital (US$M) (6)
Stable performance in 2017
Continuing optimization of facility
Focused on improving availability of oxygen plant and unit cost reductions
Generated free cash flow in 2017
6, 7, 9 See footnotes contained in Appendix on slide 38
9
9
NEAR TERM, LOW COST GROWTH
TSX:DPM16
Krumovgrad
Location: Southern Bulgaria
Ownership: 100%
Stage: Construction
Production: 103,000 oz (yrs 1-5 avg)
Mine life: 8 years
Operation: Open pit
Commissioning: Q4 2018
TSX:DPM
17
Krumovgrad – Robust Economics
Project
Economics
Robust with a
28% After-Tax
IRR *
Production and Operating Costs (10, B)
Annual tons processed 775,000 t
Gold grade 4.04 g/t
Strip ratio 2.6:1 waste:ore (t:t)
Annual gold production 85,700 oz
Year 1 to 5 average 103,020 oz
Annual silver production 38,700 oz
Total cash cost per oz AuEq $403
Average Annual EBITDA (7) $66 million
Year 1 to 5 average $85 million
Construction capital $162 - $168 million
NPV (5%) (@ Dec. 31, 2017) $296 million (adjusted for capital spent)
First concentrate production Q4 2018
LOM 8 years
High grade low strip ratio open pit gold mine
Operating synergies with Chelopech
Fully funded with near term production in Q4 2018
• @ US$1,250/oz Au
• Based on midpoint of updated construction capital
7, 10, B See footnotes contained in Appendix on slides 38 & 39
TSX:DPM
18
Krumovgrad – Project Progress
Milestone Actual/Expected Completion
Construction permit RECEIVED AUGUST 9, 2016
Mobilize earthworks contractor to site and commence earthworks Q4 2016
Commenced main civil/mechanical/electrical construction Q3 2017
Commissioning and start up Q3 2018
First concentrate production Q4 2018
Construction capital spent (@ Dec 31, 2017) / remainder to be spent in 2018 $79 million / $83-$89 million
Percent complete (@ Dec 31, 2017) 51%
Mill in foreground, flotation in background – Feb. 2018Krumovgrad site – Dec. 2018
Project Progress
Krumovgrad Project Facility
TSX:DPM
19
Surnak prospect
KUPEL NORTHDiscovery Hole
KPDD0098m at 12.81 ppm Au &
4.95 ppm AgSKALAK
SYNAP
KUKLITSA
KUPEL
SURNAK
SURNAK EXPLORATION TARGET
Exploration target potential of 80,000 to
160,000 oz Au contained within 1.8 to 2.4 Mt
grading 1.5 to 2 g/t Au
ADA TEPEProven and Probable
Reserves Au: 806 Koz at 4.05 g/tAg: 443 Koz at 2.2g/t
Surnak is one of six
registered Commercial
Discoveries within the mine
concession
Located 3 km west of Ada
Tepe
Sediment-hosted low
sulphidation epithermal gold
veins like Ada Tepe
Last explored by DPM in
2004-5: gaps in the drill grid
need infill drilling and
mineralization not closed off
6,000 m diamond drill
program to test extension at
Surnak as well as targets at
Kupel, Kupel North, and
Synap
Additional 1,600 m drilling
on regional licences
Krumovgrad – Exploration (22, 23)
Surnak Exploration Target
22, 23 See footnotes contained in Appendix on slides 38 & 39
Chelopech Mine, Bulgaria
FUTURE GROWTH PIPELINE
TSX:DPM
ADVANCED EXPLORATION
20
Location: Serbia
Ownership: 100%
Stage: Advanced exploration
Resource: 1.72 million ounces (19)
Timok
19. See footnotes contained in Appendix on slide 38
TSX:DPM
21
Serbia Advanced ExplorationTimok Gold Project
Previously assumed sulphide resource
Potential for oxides within previous
resource
Potential to increase mineable
resource and improve economics
Total Indicated Mineral Resources
1.72 Moz Au @ 1.54 g/t
contained within 34.7 MT
Inferred Mineral Resources
0.02 Moz Au @ 1.4 g/t
contained within 0.4 MT
Indicated Mineral Resource for Bigar Hill (19)
1.16 Moz Au @ 1.57 g/t
contained within 22.97 MT
Indicated Mineral Resource for Korkan (19)
0.33 Moz Au @ 1.55 g/t
Contained within 6.71 MT
Indicated Mineral Resource for Pester (19)
0.23 Moz Au @ 1.40 g/t
contained within 5.06 MT
19. See footnotes contained in Appendix on slide 38
TSX:DPM
22
Serbia Exploration (23)
Timok Gold Project: Korkan West Discovery
Near resource target drilled Nov. 2016
KW016: 105m at 1.21 g/t gold from
surface
Two phases of drilling at KW during
2017 totalling 41 holes for 6,770 m
Gold mineralization found over a
strike length of 220 m
Almost all reported intervals are oxide
11,500 m drilling planned for 2018
and leachability test work in Q1 2018
If successful proceed to updated
resource and scoping study
KORKAN
BIGAR HILL
KW Zone
KO Zone
46
37
33
47
41
45
42
35
39
166
168
173
Timok Gold ProjectIndicated Mineral
Resources1.72 Moz Au at 1.54 g/t
Inferred Mineral Resources
0.02 Moz Au at 1.4 g/t
KORKAN WESTDISCOVERY
167
169171
38170
172
40
36
43
44
23. See footnotes contained in Appendix on slide 38
KWDD016
TSX:DPM
23
Additional Upside Potential Through Equity Interests
35km2 of prospective Abitibi geology located 25 km west of
Val-d’Or
$2.5 M within first 3 yrs to earn 51% with option to increase
to 71% following an additional $3.5 M expenditure in the
following 3 yrs
Detailed geophysical and geochemical surveys have defined
VMS, intrusion-related and shear zone hosted Au
mineralization targets
Drilling planned for 2018 – 1,500-2,000 m
Value of DPM stake Feb. 28, 2018 = ~$40M (incl. warrants)
M&I resource – 5.3M oz Au
Inferred resource – 1.85M oz Au
Targeting Au production Q1 2021
Production of ~240k oz Au/year (yrs 1 through 8)
Receipt of final project certificate in Q4 2017
Success at Umwelt Vault Zone and Llama extension provides
upside potential to mine life
Proceeding with pre-construction activities for 2018
Sabina Gold and Silver Corp.
Back River Project, Nunavut
DPM Ownership – 10.2% (18)
Malartic Property, Quebec
Joint Venture
18. See footnotes contained in Appendix on slide 38
SUMMARY
TSX:DPM
GROWTH OPTIMIZATION INNOVATION
24
TSX:DPM
25
Chelopech Record gold
production
Digital transformation
15,000 m regional drilling
30,000 m resource
drilling
Digital
transformation
Digital
transformation
Tsumeb Stable production
Transition to free
cash flow
Further optimize
EIA approval
Commercial
agreements for
expansion
Decision on
expansion
Commence
expansion
construction
Krumovgrad Construction 50%
complete
Construction completion
and commissioning (Q3)
First concentrate
production (Q4)
6,000 m drilling on
satellite deposits
Ramp-up (Q1)
Commercial
production
Timok Drilling of Korkan
West targets
11,500 m Korkan West
drilling
Resource update
Leachability tests
Scoping study
PEA or
Prefeasibility
study
2017 2018 2019 2020
Key Value Generating Catalysts
TSX:DPM
26
US$95MUS$95M
DPM Outlook – A Growing Low Cost Producer
AuEq Production
Growing to
>350,000 oz
at $600/oz
2016 2017 2018F 2018F + Krumovgrad
747
640-855
607
All-in Sustaining Cost (US$/oz) (1, 17)
Krumovgrad gold production
commences Q4 2018
2016 2017 2018F 2018F + Krumovgrad
Au Cu Ag
Gold Equivalent Production (000s oz) (15)
(based on metals contained in concentrate produced)
254
369
266280
1, 9, 15, 17, 20, See footnotes contained in Appendix on slide 38
(9) (9, 20)
(9, 20)(9)
(15)
(15)
Annual EBITDA Less: Sustaining Capex
From Operating AssetsTotal ~$183M
~ US$81M
Chelopech(FYE Dec 31, 2017)
Krumovgrad (20)
(years 1 to 5)
Tsumeb(FYE Dec 31, 2017)
~ US$8M
Total ~$102M
Tsumeb(FYE Dec 31, 2017)
Chelopech(FYE Dec 31, 2017)
US$8M
2017 With Krumovgrad
(years 1 to 5)
(years 1 to 5)
729
TSX:DPM
27
$139
$485
$378
$198
$156 $154 $153 $153
$111$85
$37
Klondex Roxgold TMAC Resolute Premier Guyana Alacer DPM Argonaut Teranga Asanko
845
640607
811861 898 901 923 960 963 987
1,1741,217
DPM +Krum
DPM Guyana Klondex Resolute Roxgold Teranga Alacer TMAC Argonaut Premier Asanko
Deeply Undervalued Investment Opportunity
2018E All In Sustaining Costs (US$/oz) 6,12
EV/Reserves ($/oz) 12
(11)(13)
EV/2018E Gold Production ($/oz)
Undervalued on Mineral Reserves…
… and Cash Flow
… and Production
… with AISC in lowest quartile
6, 11,12, 13 See footnotes contained in Appendix on slide 38
(11)
(13)
EV/2018E AdjCF 12
(12)(13)$
2,7
84
$1
,79
3
$5
,19
8
$4
,79
2
$4
,69
2
$2
,57
3
$2
,43
0
$2
,35
8
$2
,14
7
$1
,62
0
$1
,48
2
$979
Alacer TMAC Premier DPM Roxgold Guyana Resolute Argonaut DPM +Krum
Klondex Teranga Asanko
5.9x3.1x
42.0x
28.2x
16.0x
8.1x 7.7x 7.7x 7.6x 7.2x5.2x 5.1x
Premier Alacer TMAC Resolute Klondex Asanko Argonaut Teranga DPM Guyana Roxgold DPM +Krum
TSX:DPM
28
Deeply Undervalued Investment Opportunity
Leverage Ratio 12
Debt to Capital
2018E P/NAV 12
Stability in operating jurisdictions
Tsumeb capital program complete & transitioning to FCF
Balance sheet deleveraged
Krumovgrad permitting & near term growth
DPM valuation
With a strong balance sheet… … and undervalued on P/NAV
Historical concerns have been addressed:
12 See footnotes contained in Appendix on slide 38
Roxgold Argonaut Guyana Klondex Teranga Premier DPM Alacer Asanko Resolute
1.00x
0.85x
0.78x 0.78x0.79x
0.63x
0.74x0.70x
0.53x
0.61x
27%25%
14%
12%
7%
4%3%
2%1%
Asanko Roxgold Alacer Guyana Premier Klondex DPM Resolute Teranga Argonaut
28%
TSX:DPM
29
Investment Highlights
Operating in mining friendly jurisdictions
Strong resource and reserve base
High quality, low cost, flagship asset
Near term, low cost growth in gold production
Growing exploration pipeline
Strong balance sheet
Strong management team
Deeply undervalued
Strong Asset Base, Near Term Growth & Deeply Undervalued
THANK YOU
TSX:DPM
Corporate Head Office:
One Adelaide Street East, Suite 500
Toronto, Ontario, M5C 2V9
T: 416 365-5191
Investor Relations
T: 416 365-2549
TSX:DPM
www.dundeeprecious.com
30
APPENDICES
TSX:DPM31
TSX:DPM
32
Business Strategy
TSX:DPM
33
Mineral Resources (4,14,A,B) Million Tonnes Au (Moz) Cu (Mlbs) Au (g/t) Cu (%)
Chelopech
M&I
Inferred
12.6
1.8
1.399
0.138
301
37
3.45
2.4
1.08
0.96
Krumovgrad
Inferred (Upper Zone) 0.3 0.013 1.31
Timok
Indicated
Inferred
34.7
0.4
1.720
0.000
1.54
1.4
Tulare
Inferred (Kiseljak)
Inferred (Yellow Creek)
459.0
88.0
3.000
0.800
2,200
600
0.2
0.3
0.22
0.3
Total Mineral Resources
Measured & Indicated
Inferred
47.4
549.5
3.119
3.951
301
2,837
Mineral Reserves (4,14,A,B) Million Tonnes Au (Moz) Cu (Mlbs) Au (g/t) Cu (%)
Chelopech
Proven
Probable
11.4
8.4
1.075
0.920
232
166
2.92
3.42
0.92
0.90
Krumovgrad
Proven (Upper Zone)
Proven (Wall)
Probable (Upper Zone)
Probable (Wall)
1.1
1.5
3.5
0.1
0.124
0.325
0.337
0.020
3.46
6.83
3.00
5.54
Total P&P Mineral Reserves 26.00 2.801 398 3.35
Strong Mineral Resource and Reserve Base
4, 14,A,B See footnotes contained in Appendix on slides 38 & 39
TSX:DPM
34
2018 Guidance
US millions, unless otherwise indicated Chelopech Tsumeb Consolidated (5)
Ore mined/milled (‘000s tonnes) 2,100-2,200 - 2,100-2,200
Complex concentrate smelted (‘000s tonnes) - 220-250 220-250
Metals contained in concentrates produced (1)(2)
Gold (‘000s ounces) 165-195 - 165-195
Copper (million pounds) 33.7-40.4 - 33.7-40.4
Payable metals in concentrate sold (1)
Gold (‘000s) 140-170 - 140-170
Copper (million pounds) 31.0-37.0 - 31.0-37.0
Cash cost per tonne of ore processed ($) (3)(4) 37-40 - 37-40
All-in sustaining cost per ounce of gold ($) (3)(4)(5) - - 640-855
Cash cost per tonne of complex concentrate smelted, net of by-product credits ($) (3)(4) - 440-500 440-500
General & administrative expenses (3)(6) - - 20-24
Exploration expenses (3) - - 10-15
Sustaining capital expenditures (3)(4) 17-21 12-18 29-39
1) Gold produced includes gold in pyrite concentrate produced of 47,000 to 55,000 ounces and payable gold sold includes payable gold in pyrite concentrate sold of 30,000 to 35,000 ounces.
2) Metals contained in concentrate produced are prior to deductions associated with smelter terms.
3) Based on foreign exchange rates and, where applicable, metal prices that approximate current rates and prices after reflecting existing 2018 copper and ZAR hedges. In particular, 56% of 2018 payable copper
production has been hedged at a fixed price of $2.62 per pound and 28% of ZAR denominated operating expenses have been hedged at a fixed rate of 13.59.
4) Cash cost per tonne of ore processed, all-in sustaining cost per ounce of gold and cash cost per tonne of complex concentrate smelted, net of by-product credits, and sustaining capital expenditures have no
standardized meaning under GAAP. Refer to the “Non-GAAP Financial Measures” section of the MD&A for reconciliations to IFRS.
5) Includes the treatment charges, transportation and other selling costs related to the sale of pyrite concentrate, and payable gold in pyrite concentrate sold. Cash cost per ounce of gold sold, net of by-product
credits, excluding payable gold in pyrite concentrate sold and related costs, is expected to be between $550 and $600 in 2017. All-in sustaining cost per ounce of gold, excluding payable gold in pyrite
concentrate sold and related costs, is expected to be between $630 and $855 in 2018.
6) Excludes mark-to-market adjustments on share-based compensation and MineRPs’ general and administrative expenses.
TSX:DPM
35
Hedge Position at December 31, 2017
Production Hedges - Swaps YearVolume Hedged
(lbs) % Hedged Average fixed price ($/lb)
Payable copper 2018 19,166,966 53% $2.62
QP Hedges Year Volume Hedged % Hedged Average fixed price
Payable gold 2017 9,865 oz 100% $1,284.29/oz
Payable copper 2017 1,014,125 lbs 100% $3.09/lb
Payable silver 2017 5,805 oz 100% $17.00/oz
Operating Cost FX Hedges YearForeign Currency
Amount Hedged% Hedged Average exchange rate
ZAR 2018 475,681,917 28% 13.5909
Production Hedges - Options Year Volume Hedged % HedgedAvg Ceiling
PriceFloor Price
Payable copper 2018 12,698,611 lbs 37% $3.32/lb $2.80/lb
Capital Expenditure FX Hedges YearForeign Currency
Amount Hedged% Hedged
Average exchange rate
(Foreign currency/US$)
Euro 2018 56,045,000 100% 1.1429
Production Hedges - Prepaid Forward Gold Sale Year Volume Hedged (oz) % Hedged Avg Forward Price
Payable Gold
Payable Gold
2019
2020
18,013
27,969
9%
11%
$1,390
$1,425
TSX:DPM
36
Creating a Leading Technology Provider
MineRP
Faster deployment of Terrative to support its
growth and value potential outside of DPM
Complementary technologies to be sold to
existing and future clients across sectors
Establishes DPM at the forefront of digital
innovation and unlocking the full potential for
further operational benefits at existing sites
Unique opportunity for DPM shareholders to
participate in the growth in value of this
exciting business
Positions DPM to remain focussed on its core
mining operations
MineRP management will continue to
manage MineRP at arms length
DPM acquired a 78% interest (70% fully
diluted) for an investment of ~US$20 million
in cash and Terrative assets
22% held by MineRP management
DPM has provided MineRP Holdings Inc.
with up to US$5 million of additional
financing to support working capital and
growth initiatives
MineRP Holdings Inc.+ =
Strategic HighlightsTransaction Overview
Independent software vendor ("ISV") for
the mining industry
Industry leading platform
Improves productivity in planning and
operations by integrating applications
Headquartered in South Africa
Wireless underground
communications technology
developed at Chelopech
TSX:DPM
37
DPM Summary
Chelopech
Krumovgrad
Subtotal
~$95 MM EBITDA Less: Sustaining (1) / yr
$81 MM first 5 yrs EBITDA Less: Sustaining (2) / yr(~$61 MM LOM)
~US$176 MM EBITDA Less: Sustaining (1)(2) / yr
• Exploration / mine life extension• Consistent track record of reserve
replacement
Sabina Equity(Incl. warrants)
$40 M equity value (as at February 28, 2018)
Tsumeb
Timok
Other Assets
Debt
Market Cap: $427 MShare Price: C$3.06
• Transitioning to FCF positive• $8 MM in EBITDA Less: Sustaining (1)
• 370 Ktpa potential capacity with significant operating leverage and modest capital
1.7 MM oz resource in Serbia• Exploration• Oxide potential
Khalkos JV, Tulare and other Serbian licenses, Armenian JV, Kapan NSR, MineRP (78%)
$23M (as at December 31, 2017)
• Exploration on original license
1 Based on FYE Dec. 31, 2017 audited annual financial statements.
2 Based on NI 43-101 technical report entitled “Revised NI 43-101 Technical Report, Ada Tepe Deposit, Krumovgrad Project, Bulgaria” dated November 7, 2017
Cash $29M (as at December 31, 2017)
TSX:DPM
38
Footnotes and Disclaimers
1. AISC per ounce of gold represents cost of sales at Chelopech less depreciation, amortization and other non-cash items plus treatment charges, penalties, transportation and other selling costs, sustaining capital expenditures,
rehabilitation related to accretion expenses and an allocated portion of the Company’s G&A expenses less by-product revenues in respect of copper and silver including realized gains on copper derivative contracts divided by the
payable gold in copper and pyrite concentrates sold. Based on metals prices that approximate current rates.
2. Chelopech figures as per 2017 public filings; AISC includes gold production in pyrites
3. Effective dates for Reserves – contained in the 2016 Annual Information form dated March 28, 2017 for the year ended December 31, 2016, filed on sedar at www.SEDAR.com and available on our website at
www.dundeeprecious.com
4. Measured and Indicated Mineral Resources are in addition to Mineral Reserves
5. See slide 33 in Appendix for detailed Mineral Reserve and Mineral Resource Estimates
6. A non-GAAP measure. Refer to the “non-GAAP Financial Measures” section of the Q4 2017 MD&A for reconciliations to IFRS
7. Adjusted EBITDA represents earnings before interest, taxes, depreciation and amortization, adjusted for impairment charges, unrealized losses/gains on derivative contracts and investments at fair value, minus interest income
8. Includes gold in pyrite concentrate produced
9. Forecast/guidance information is subject to a number of risks. 2018E is based on guidance issued February 15, 2018. See “Forward Looking Statements” on slide 2
10. Krumovgrad figures as per June 6, 2016 press release.
11. Source DPM Guidance issued February 15, 2018
12. Source RBC Capital Markets, February 12, 2018 - Au US$1,300/oz, Ag US$17.50/oz, Cu US$3.00/lb; DPM balance sheet as at Dec. 31, 2017; Adjusted cash flow defined as cash flow from operations before sustaining capital
expenditures
13. Includes DPM 2018E plus Krumovgrad LOM average as per June 6, 2016 press release using RBC Capital Markets’ metal prices
14. Contained in the 2016 Annual Information Form dated March 28, 2017, filed on sedar at www.SEDAR.com and available on our website at www.dundeeprecious.com
15. Based on Au of $1,250/oz, Cu of $2.75/lb, Euro/US$ = 1.15
16. Calculated using Au production
17. AISC based on 2018 guidance for concentrate smelted
18. Source: Technical report for the Initial project Feasibility Study on the Back River Gold Property, Nunavut, Canada, Dated October 28, 2015, filed on sedar at www.SEDAR.com
19. Source: Timok Gold Project, Serbia – Updated Mineral Resource contained in the 2016 Annual Information Form, Dated March 28, 2017, filed on sedar at www.SEDAR.com
20. Based on NI 43-101 technical report entitled “Revised NI 43-101 Technical Report, Ada Tepe Deposit, Krumovgrad Project, Bulgaria” dated November 7, 2017, filed on sedar at www.SEDAR.com; Using gold price $1,250/oz
21. Includes 5 million warrants valued at US$5.0M as at December 31, 2017
22. Previous exploration work at the Surnak Prospect, which includes over 10,800 metres of trenching and drilling, has been used to outline an exploration target of 80,000 to 160,000 oz Au contained within 1.8 to 2.4 Mt grading 1.5
to 2 g/t Au. The exploration target potential was derived upon review of historic Mineral Resource estimates at Surnak, in combination with ongoing development of the 3D geologic model at Surnak. The potential ranges of
tonnes and grade are conceptual in nature are based on previous drill results that defined the approximate length, thickness, depth and grade of the portion of the historic Mineral Resource estimate. There has been insufficient
exploration to define a current Mineral Resource and the company cautions that there is a risk further exploration will not result in the delineation of a current Mineral Resource.
23. For more information regarding the company’s current Mineral Resource and Mineral Reserve estimates, please refer to Dundee Precious Metals Annual Mineral Reserve and Mineral Resource Statement as at December 31,
2016 contained in our Annual Information Form, dated March 28, 2017, which is available on our website at http://www.dundeeprecious.com and on sedar at www.SEDAR.com
TSX:DPM
39
Footnotes and Disclaimers Cont’d
A. The Mineral Resource and Mineral Reserve estimates for Chelopech and other scientific and technical information which supports this presentation was prepared by Petya Kuzmanova, MIMMM, CSci, Senior Resource
Geologist, of the Company, under the guidance of CSA Global (UK) Ltd. (“CSA”), in accordance with Canadian regulatory requirements set out in National Instrument 43-101 Standards of Disclosure for Mineral Projects, and
were reviewed and approved by, as relates to Mineral Resources, Malcolm Titley, BSc, MAIG, Principal Consultant of CSA, Ross Overall, Senior Corporate Resource Geologist, of the Company, and as relates to Mineral
Reserves, Karl van Olden, BSc (Eng), GDE, MBA, FAusIMM, Mining Manager of CSA. Malcolm Titley, Ross Overall and Karl van Olden are Qualified Persons (“QP”), as defined under NI 43-101 and are independent of the
company, with the exception of Mr. Overall who is not independent of the company. Ross Overall, Senior Corporate Resource Geologist, of the company, who is a QP, as defined under NI 43-101, has reviewed and approved
the contents of this presentation.
B. The Mineral Resource and Mineral Reserve estimates for the Krumovgrad project and other scientific and technical information which supports this presentation was prepared by CSA Global (UK) Ltd. (“CSA”), in accordance
with Canadian regulatory requirements set out in National Instrument 43-101 Standards of Disclosure for Mineral Projects, and were reviewed and approved by, as relates to Mineral Resources, Galen White, BSc (Hons)
FAusIMM FGS, Director and Principal Consultant of CSA, and Julian Bennett, BSc ARSM FIMMM CEng, as relates to Mineral Reserves. Both Galen White and Julian Bennett are independent Qualified Persons (“QP”), as
defined under NI 43-101. The NI 43-101 technical report (the “Krumovgrad Technical Report”) entitled “Revised NI 43-101 Technical Report, Ada Tepe Deposit, Krumovgrad Project, Bulgaria” dated November 7, 2017, in
respect of the study for the construction and operation of its Krumovgrad gold project disclosed herein, was filed November 7, 2017 on SEDAR at www.sedar.com. Simon Meik, former Corporate Director Processing of the
Company, and Edgar Urbaez, formerly Corporate Director, Technical Services, both of DPM, who are QPs and not independent of the Company, have reviewed and approved the contents of this presentation. The Mineral
Resource and Mineral Reserve estimates contained herein may be subject to legal, political, environmental or other risks that could materially affect the potential development of such Mineral Resources. See the Krumovgrad
Technical Report for more information with respect to the key assumptions, parameters, methods and risks of determination associated with the foregoing Mineral Resource estimates.
Qualified Person Disclosure
Cautionary note to U.S. Investors concerning estimates of Mineral Resources. These estimates have been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of U.S.
securities laws. The terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in NI 43-101 and recognized by Canadian securities laws but are not defined
terms under the U.S. Securities and Exchange Commission (“SEC”) Guide 7 (“SEC Guide 7”) or recognized under U.S. securities laws. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these
categories will ever be upgraded to mineral reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all
or any part of an “inferred mineral resource” will ever by upgraded to a higher category. Under Canadian securities laws, estimates of “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies. U.S.
investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Accordingly, these mineral resource estimates and related information may not be comparable to
similar information made public by U.S. companies subject to the reporting and disclosure requirements under the U.S. federal securities laws and the rules and regulations thereunder, including SEC Guide 7.