Research Note - Dundee Precious Metals Inc. (DPM:TSX,$6.10|BUY $15.50 TARGET) Q3 Production In-Line

This morning, DPM released preliminary production results for Q3/22. Consolidated gold production came in at 63.9 Koz, beating our estimate of 60.2 Koz (Table 1), and within Company guidance. Copper production was a slight miss, with DPM producing 6.9 Mlbs for the quarter vs. our estimate of 9.0 Mlbs. We are pleased with the quarter and DPM’s operational consistency despite the supply chain issues and inflationary pressures the Company is facing.

 

At Chelopech, production during the quarter came in at 43.1 Koz compared to our estimate of 39.8 Koz. Copper production came in at 6.9 Mlbs missing our estimate of 9.0 Mlbs, however, the miss was made up by the beat on gold production. The reason for the miss on copper production was due to lower-than-expected copper head grades. Mill throughput for the quarter was 515.8 Kt, below our estimate of 540.0 Kt. The operation benefitted from higher gold grades and recoveries and is on track to meet the upper end of annual guidance.  

  

Ada Tepe produced 20.8 Koz of Au, in line with our estimate of 20.5 Koz. Mill throughput for Q3 was 216.0 Kt, above our estimate of 188.0 Kt.   

 

The Tsumeb smelter processed 63.8 Kt of complex concentrate during Q3, well above the 21.1 Kt processed in Q2 and also above our estimate of 40.0 Kt. As a reminder the low production in Q2 was because of a 45-day maintenance shutdown. The maintenance was expected to improve operational performance and we are seeing the benefits already with the smelter producing near record-level production this quarter.

 

Progress at Loma Larga: The Company provided an update on the Loma Larga project in Ecuador, stating that the feasibility study is targeted for completion by the end of 2022. Drilling activities on site remain paused, pending the outcome of the appeals process related to the decision on the constitutional protective action. DPM expects resolution on this matter in the fourth quarter of 2022.



20221011 - M Partners - DPM - Q3 Production
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