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Research Note - Dundee Precious Metals Inc. (DPM:TSX, $7.31|BUY $12.50 TARGET) - 2022 Production Guidance Achieved

The morning of January 10th, 2023, DPM released preliminary production results for Q4/22 and the twelve months ended December 31st, 2022. Consolidated gold production for Q4/22 came in at 73.4 Koz, beating our estimate of 60.3 Koz, and annual consolidated gold production for 2022 came in at 273.1 Koz, within Company guidance. Copper production was a slight miss for the quarter, with DPM producing 7.4 Mlbs vs. our estimate of 9.0 Mlbs. Consolidated annual copper production was slightly below company guidance, coming in at 30.8 Mlbs. We are pleased with the year 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 45.3 Koz compared to our estimate of 39.8 Koz. Copper production came in at 7.4 Mlbs missing our estimate of 9.0 Mlbs, however, the miss was offset by the beat on gold production. The reason for the miss in copper production was due to much lower-than-expected copper head grades. Mill throughput for the quarter was 553 Kt, above our estimate of 540.0 Kt.


Ada Tepe produced 28.1 Koz of Au, well above our estimate of 20.5 Koz. Mill throughput for Q3 was 206.1 Kt, above our estimate of 188.0 Kt. This increase in gold production was due to the planned increase in gold grades, as well as production in Q4 returning to expected levels. DPM completed an updated Mineral Reserve and Mineral resource estimate and life of mine plan or Ada Tepe and expects to release the results in January 2023.


The Tsumeb smelter processed 41.8 Kt of complex concentrate during Q4, below the 64 Kt processed in Q3. The results in Q4/22 were affected by a 17-day shutdown to repair a water leak in the offgas system and instability in the power grid as a results of abnormally heavy rainfall in December. As a reminder, the low production in Q2 resulted from 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 in Q3 and above expected in Q4, despite the 17-day shutdown. The smelter produced approximately 174,100 t of complex concentrate in 2022, below the annual company guidance of 185,000 to 200,000 t.

20221011 - M Partners - DPM - 2022 Gold Production Guidance Achieved
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