AN INNOVATIVE, GROWTH ORIENTED GOLD PRODUCER€¦ · AN INNOVATIVE, GROWTH ORIENTED GOLD PRODUCER...
Transcript of AN INNOVATIVE, GROWTH ORIENTED GOLD PRODUCER€¦ · AN INNOVATIVE, GROWTH ORIENTED GOLD PRODUCER...
AN INNOVATIVE, GROWTH ORIENTED
GOLD PRODUCER
BMO GLOBAL METALS & MINING CONFERENCE
February 29 – March 2, 2016
Chelopech Mine, Bulgaria
TSX:DPM 2
FORWARD LOOKING STATEMENTS
This presentation contains “forward looking information” or "forward looking statements" that involve a number of risks and uncertainties.
Forward looking information and forward looking statements include, but are not limited to, statements with respect to the future prices of
gold and other metals, the estimation of mineral reserves and resources, the realization of mineral estimates, the timing and amount of
estimated future production and output, costs of production, capital expenditures (including sustaining capex, non-discretionary capex
and discretionary capex), costs and timing of the development of new deposits, success of exploration activities, permitting time lines,
currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated
reclamation expenses, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending litigation.
Often, but not always, forward looking statements can be identified by the use of words such as “plans”, “expects”, or “does not expect”,
“is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “does not anticipate”, or “believes”, or variations
of such words and phrases or 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. Such factors include, among others: the actual results of current exploration activities; actual results of
current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future
prices of gold; 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, fluctuations in metal prices, as well as those risk factors discussed or referred to in
this presentation under and in the Company’s annual information form under the heading "Risk Factors" and other documents filed from
time to time with the securities regulatory authorities in all provinces and territories of Canada and available 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. Accordingly, readers are cautioned not to place undue reliance on
forward looking statements.
TSX:DPM 3
DPM’S GLOBAL PORTFOLIO OF ASSETS
Operating assets
Development asset
Exploration assets
Chelopech Mine
Bulgaria
100%
Avala
Serbia
50.14%
Tsumeb Smelter
Namibia
100%
Sabina
Canada
12%
Krumovgrad Gold Project
Bulgaria
100%
2015 EBITDA Generation 2015 Asset Diversification
Smelter
23%
Gold
48%
Copper
25%
Ag & Zn 4%
Tsumeb
8%
Kapan
4%
Chelopech
88%
Unique Assets With Commodity & Geographic Diversity
2015 Revenue Diversification
Bulgaria
45%
Namibia
47%
Armenia
5%
Canada 3%
TSX:DPM 4
DPM’S VISION AND STRATEGY
Optimize Portfolio Growth Innovation
Grow production and
margins through operational
excellence and high return,
modest capital investments
Maintain / extend life of
mines through near mine
exploration programs
A progressive gold mining company that unlocks and delivers superior value
through innovation and strong partnerships with stakeholders
Build a pipeline of future
growth opportunities
Acquire undervalued
assets and leverage
expertise to unlock value
Wi-Fi enabled UG mine
Real-time operational
management
Big data analytics to
optimize performance and
allow for faster better
decision making
Maintain Financial Strength and Flexibility
TSX:DPM 5
CHELOPECH – A WORLD CLASS, LOW COST MINE
2006 2015
Total ore mined to date ore reserve
Key Transformative Achievements
• Changed mining method, installed new ore handling systems and upgraded equipment
• Expanded mill capacity with SAG grinding and installed new staged flotation reactor technology
• Implemented process improvements to reduce cost and improve performance, including Wi-Fi
underground technology and real time monitoring capability
• Increased mine reserves and resources with focused near mine exploration, including recently announced
15% increase in resource, more than offsetting quadrupling of mine/mill production
21.522.8
15.4
1.09
1.31
1.81
2.03 2.05 2.04
2.0-2.25
2010 2011 2012 2013 2014 2015 2016F
Ore Mined (mt) Ore Mined / Reserves (mt)
2.3
1) Forecast/guidance information is subject to a number of risks. See “Forward Looking Statements” on slide 2.
(1)
TSX:DPM 6
2010 2011 2012 2013 2014 2015
ADJUSTED EBITDA (US$M)
118
153
196
57
133
101
CHELOPECH – MORE OPPORTUNITIES TO ADD VALUE
• Increase mine production to 2.5mtpy utilizing existing infrastructure in place
• Prepare to mine old sub-level cave areas containing in-situ resources previously left behind
• Near mine and regional exploration to maintain or increase life of mine
5655
46
40 4036 32-36
2010 2011 2012 2013 2014 2015 2016F
Cash Cost / tonne of ore processed (US$/t)
Near Term Priorities
2010 2011 2012 2013 2014 2016F2015
1) A non-GAAP measure. See Full Year 2015 MD&A for reconciliation
2) Adjusted EBITDA represents earnings before income tax plus depreciation and amortization, finance costs, losses/gains on impairment provisions and reversals, unrealized losses/gains on derivative contracts and investments at fair value, realized and
unrealized losses/gains on equity settled warrants, minus interest income.
3) Forecast/guidance information is subject to a number of risks. See “Forward Looking Statements” on slide 2.
(3)
(1), (1)(2)
TSX:DPM 7
180159 152
198 196
215-250
2011 2012 2013 2014 2015 2016F
341
420
479
394409 305-400
2011 2012 2013 2014 2015 2016F
Key Transformative Achievements
• Completed major capex program to upgrade facility to global environmental standards
• Selectively invested to debottleneck facility to support increased production of 240K – 265K tpy
• Secured supply of third party feed to fill added capacity and entered LT sales contracts for all acid produced
TSUMEB – NICHE PLAYER IN A COMPLEX CON MARKET
Smelter Production (000s tonnes)
Ausmelt Offgas Bag-House
Smelter site viewCash Cost/tonne concentrate smelted,
net of by-product credits ($/t)
2) A non-GAAP measure. Refer to the “non-GAAP Financial Measures” section of the 2015 Full Year and Q$ MD&A for reconciliations to IFRS.
(2)
(1)
(1)
1) Forecast/guidance information is subject to a number of risks. See “Forward Looking Statements” on slide 2.
TSX:DPM 8
TSUMEB – POISED TO GENERATE SIGNIFICANT EBITDA
Rotary holding furnace shell
• Commission new converters in Q1 2016 and ramp-up to nameplate capacity
• Optimize existing infrastructure and processes and reduce secondary material to normalized levels
• Advance assessment, permitting and commercial arrangements to support 370,000 tpy opportunity
Converter installation
Near Term Priorities
3-2.5 -7
18.5
8.6
2011 2014 2015
26
63
140130
44
24-28
2011 2012 2013 2014 2015 2016F
Total Capital Expenditures (US$M)
20122013
2) Forecast/guidance information is subject to a number of risks. See “Forward Looking Statements” on slide 2.
(2)
Smelter Adjusted EBITDA (US$M)(1)
1) Adjusted EBITDA represents earnings before income tax plus depreciation and amortization, finance costs, losses/gains on
impairment provisions and reversals, unrealized losses/gains on derivative contracts and investments at fair value, realized and
unrealized losses/gains on equity settled warrants, minus interest income.
TSX:DPM 9
KRUMOVGRAD – LOW COST GOLD PROJECT
Conceptual Illustration of
Krumovgrad Gold Project
Key Recent Achievements
Near Term Priorities
Project Economics
High Return Project
Annual gold production 85,700 oz
Capital cost to complete US$164M
Total cash cost per ozAuEq $389
Average annual
EBITDA $64.9M
• Finalize land purchase
• Obtain remaining construction related permits by
mid-2016
• Finalize execution schedule, engineering and
costing
• Advance financing plans to support construction and
2018 production
1) See footnote contained in Appendix on slide 16 for technical information disclosure
• Secured final main DDP in November 2015
• Received final approval for re-designation from
forestry to industrial land in February 2016
• Identified significant intersection at Kupel North
target and two additional nearby high priority targets
(1)
3) EBITDA is defined as earnings before interest, taxes, depreciation and amortization
4) Assuming gold and silver prices of $1250/oz and $23.00/oz, respectively
2) AuEq ounces include silver ounces produced and sold converted to a AuEq based on the ratio of the average metal prices for the commodities
(2)
(3),(4)
TSX:DPM 10
KAPAN: TO BE SOLD TO POLYMETAL
Transaction Highlights
Anticipated Proceeds
US$25 million at close
• US$10 million in cash
• US$15 million in Polymetal common shares
Subject to normal course working capital adjustments
2% net smelter return royalty on future production (1)
Closing Date
Within 4 – 6 weeks, subject to normal conditions precedent
Exclusions
Certain joint venture arrangements and related exploration assets and licenses in the
central part of the country
Implications
Reduces 2016 gold and copper production by approximately 15% and 5%
Strengthens balance sheet, reduces future capital requirements, and eliminates high
cost production
Increases focus on core portfolio of assets(1) Royalty is subject to a cap of US$25 million
TSX:DPM 11
CONSOLIDATED RESULTS AND OUTLOOK
626
736
2013 2014 2015 2016F
687
790-890
153 161169 120-
145162
263
2013 2014 2015 2016F 2018F 2020F
198215-250
300
370
2013 2014 2015 2016F 2018F 2020F
196
4643
40 32.8-35.5 34 34
2013 2014 2015 2016F 2018F 2020F
Payable Copper (Mlbs)Payable Gold (Koz) Smelter Production (Kt)
All-in Sustaining Cost (US$/oz)Capital Expenditures (US$M) Adjusted EBITDA (US$M)
152
2013 2014 2015 2016F 2017F 2018F 2019F 2020F
216 Sustaining CAPEX
Non-discretionary Growth CAPEX
Discretionary Growth CAPEX
184
87
49-59
93
19
98
2013 2014 2015
88
103
19
124
1) Forecast/guidance information is subject to a number of risks. See “Forward Looking Statements” on slide 2.
2) Reflects payable production and, in the case of gold, includes estimated payable gold in pyrite concentrate sold
3) 2016F is based on guidance issued Feb. 10, 2016. 2018 and 2010 forecast production is based on the completion of several growth projects within currently contemplated time frames.
4) Adjusted EBITDA represents earnings before income tax plus depreciation and amortization, finance costs, losses/gains on impairment provisions and reversals, unrealized losses/gains on derivative contracts and investments at fair value, realized and unrealized
losses/gains on equity settled warrants, minus interest income.
(1) (1) (1)
(1) (1)
(2)(2) (3)
(3)
(3)
(3)
(3)
(4)
TSX:DPM 12
COMMITTED TO MAINTAINING A STRONG BALANCE SHEET
0.94 1.12
1.67
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2013 2014 2015
(1) Debt, including current portion
(2) Undrawn portion of RCF and cash
180 201187
0
50
100
150
200
250
300
2013 2014 2015
Net Debt / EBITDA (x)
Net Debt / Capitalization (% at end of period) Total Available Liquidity (US$M at end of period)(2)
Debt, Net of Cash (US$M)(1)
35
122 121
0
50
100
150
2013 2014 2015
4
15 16
0.0
5.0
10.0
15.0
20.0
2013 2014 2015
TSX:DPM 13
RARE DEEP-VALUE INVESTMENT OPPORTUNITY
$0.00
$20.00
$40.00
$60.00
$80.00
$100.00
$120.00
$140.00
$0.00
$2.00
$4.00
$6.00
$8.00
$10.00
$12.00
20132012 2014
Hard Hit Sector Valuations Creating
A Rare Investment Opportunity
DPM share priceGDX performance
2015
(89%)
(75%)
Attractive Valuation Metrics
P/2016F CFPS (Cons. Est.)(4)
1.0x 1.0x
0.9x
0.5x 0.5x
0.3x
New Gold Alacer Alamos Primero Argonaut DPM
Average: 0.7x
10.2x
9.4x
8.2x
3.7x
2.7x
1.9x
Alamos Alacer New Gold Argonaut Primero DPM
Average: 6.0x
4) Source: Capital IQ as at February 19, 2016
P/NAV (Cons. Est.)(4)
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$0
$500
$1,000
$1,500
$2,000
2013 2014 2015
Cu price
2012
Au price
2016
2016
$500
$750
$1,000
Alacer Dundee New Gold Primero Alamos
1) Source: Co. midpoints of AISC per ounce of gold guidance provided in Q4 2015 reporting
Average = $869/oz
$790-890/oz
Below Average 2016F All-In-Sustaining Mine Cost(1)(2)(3)
2) Forecast/guidance information is subject to a number of risks. See “Forward Looking Statements” on slide 2.
3) AISC per ounce of gold represents cost of sales at Chelopech less depreciation, amortization and other non-cash items plus
treatments charges, penalties, transportation and other selling costs, sustaining capital expenditures, rehabilitation related
accretion expenses and an allocated portion of the Company’s G&A expenses less by-product revenues in respect of copper,
silver and zinc including realized gains on copper derivative contracts divided by the payable gold in copper and zinc
concentrates sold.
BMO GLOBAL METALS & MINING CONFERENCE
February 29 – March 2, 2016
Chelopech Mine, Bulgaria
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 – Common Shares
www.dundeeprecious.com
Thank You
TSX:DPM
APPENDICES
TSX:DPM 16
APPENDIX CONTENTS
Footnotes and Disclaimers…………………………………………………………………. 17
Senior Management Team………………………………………………………………….. 18
Market Cap., Major Shareholders, Analyst Coverage…………………………………… 19
2016 Guidance………………………………………………………………………………. 20
Hedge Positions at Dec. 31, 2015…………………………………………………………. 21
DPM Exploration Assets……………………………………………………………………. 22
Chelopech Mine – Updated Mineral Reserves and Resources………………………… 23
Krumovgrad – Upper Zone Mineral Reserve and Resource Estimates……………….. 24
Krumovgrad – Wall Mineral Reserve and Resource Estimates………………………… 25
TSX:DPM 17
FOOTNOTES AND DISCLAIMERS
Without limitation to the foregoing, the following outlines certain specific forward looking statements contained in this presentation 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 and in the Full Year 2015 MD&A).
Sustaining CAPEX, Non-Discretionary CAPEX and Discretionary CAPEX: 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 approvals, equipment deliveries,
equipment performance, and the speed with which work is performed; availability of qualified labour; and changes in project parameters, timing and decision to proceed with projects and/or any components there
of and estimated costs, including foreign exchange impacts.
Gold and Copper Production: projected levels of metal production assumes grades and recoveries are consistent with current estimates of Mineral Resources and Mineral Reserves and DPM’s current
expectations and timing of potential expansion at Kapan and construction start-up of Krumovgrad project and decision to proceed with projects and/or any components there of; and ore mined/milled is consistent
with planned levels. Subject to a number of risks, the more significant of which are: lower than anticipated ore grades, recovery rates and ore mined/milled.
Smelted Concentrate: assumes no significant disruption in equipment availability or concentrate supply. Subject to a number of risks, the more significant of which are: unanticipated operational issues; timing and
decision to proceed with expansion projects, including the holding furnace, and/or any components there of; unanticipated issues related to the commissioning and operation of the acid plant and converters and
any further expansion components including a holding furnace; lower than anticipated equipment availability; and disruptions to or changes in the supply of concentrate.
Technical Information related to slide 10 – Kapan PEA Summary
The Mineral Resource and LOM Mineral Inventory estimates and other scientific and technical information which supports this presentation were prepared by CSA Global (UK) Ltd. (“CSA”), in accordance with
Canadian regulatory requirements set out in NI 43-101, and were reviewed and approved by, as relates to Mineral Resources, Malcolm Titley BSc, MAIG, Director and Principal Geologist, of CSA, and Julian
Bennett, BSc ARSM FIMMM CEng, Mining Consultant, as relates to the LOM Mineral Inventory. Both Malcolm Titley and Julian Bennett are independent Qualified Persons (“QP”), as defined under NI 43-101. The
NI 43-101 technical report entitled “NI 43-101 Technical Report, Shahumyan Project, Kapan, Republic of Armenia” dated September 30, 2014, in respect of the Mineral Resource and Life of Mine Mineral Inventory
estimates disclosed herein (the “Kapan Technical Report”), was filed October 8, 2014 on SEDAR at www.sedar.com. Simon Meik, Corporate Director of Processing, and Edgar Urbaez, Corporate Director of
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 LOM Mineral Inventory estimates contained herein may be subject to legal, political, environmental or other risks that could materially affect the potential development of such estimates.
See the Kapan Technical Report for more information with respect to the key assumptions, parameters, methods and risks of determination associated with the foregoing Mineral Resource and LOM Mineral
Inventory estimates.
Technical Information related to slide 9 – Updated Krumovgrad Project Economics
The Mineral Resource and Mineral Reserve estimates 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 “NI 43-101 Technical Report, Ada Tepe Deposit, Krumovgrad Project, Bulgaria” dated March 21,
2014, in respect of the study for the construction and operation of its Krumovgrad gold project disclosed herein, was filed March 31, 2014 on SEDAR at www.sedar.com. Simon Meik, Processing, 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.
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.
TSX:DPM 18
DPM SENIOR MANAGEMENT TEAM
Rick Howes
President & Chief Executive Officer
Hume KyleExecutive Vice President & Chief Financial Officer
David RaeExecutive Vice President & Chief Operating Officer
John LindsaySenior Vice President, Projects
Paul ProulxSenior Vice President, Corporate Services
Michael DorfmanSenior Vice President, Corporate Development
Richard GosseSenior Vice President, Exploration
Lori BeakSenior Vice President, Governance, and
Corporate Secretary
Nikolay HristovSenior Vice President, Sustainable Business
Development
TSX:DPM 19
MKT CAP, MAJOR SHAREHOLDERS, ANALYST COVERAGE
Share Price (C$ per share) $1.15
Shares Outstanding – Current 140M
Market Capitalization – Current C$161M
52 week low – high (C$ per share) $0.84 – $3.19
Share Capital @ February 26, 2016 Analyst Coverage
Firm Analyst
BMO **In transition**
CIBC Capital Markets Ben McEwen
Dundee Securities Josh Wolfson
GMP Securities Oliver Turner
Paradigm Capital Don MacLean
Raymond James **In transition**
RBC Capital Markets Sam Crittenden
Scotia Capital Trevor Turnbull
Dundee Corporation 25.23%
GMT Capital 10.28%
Van Eck Associates 4.35%
J.P Morgan Asset Mgmt. (UK) 4.29%
USAA Asset Mgmt. 4.09%
Major Shareholders
TSX:DPM 20
UPDATED 2016 GUIDANCE TO REFLECT SALE OF KAPAN
US millions, unless otherwise indicated Chelopech Kapan(6) Tsumeb Consolidated
Ore mined/milled (‘000s tonnes) 2,030-2,250 95-110 - 2,125-2,360
Complex concentrate smelted (‘000s tonnes) - - 215-250 215-250
Metals contained in copper and zinc concentrates produced (1)(2)
Gold (‘000s ounces) 95-108 4-6 - 100-114
Copper (million pounds) 33.2-37.8 0.5-0.7 - 33.7-38.5
Zinc (million pounds) - 2.3-3.0 - 2.3-3.0
Silver (‘000s ounces) 204-234 90-110 - 294-344
Payable gold in pyrite concentrate sold (‘000s ounces) 26-40 - - 26-40
Cash cost per tonne of ore processed ($) (3)(5) 32-36 80-90 - 34-39
Cash cost per ounce of gold sold, net of by-product credits ($) (1)(3)(5) 560-760 970-1,200 - 580-770
All-in sustaining cost per ounce of gold ($) (1)(3)(5) - - - 840-920
Cash cost per tonne of complex concentrate smelted, net of by-product credits ($) (3)(5) - - 305-400 305-400
Cash cost per ounce of gold sold in pyrite concentrate ($) (5) 790-890 - - 790-890
General & administrative expenses (3)(4) - - - 17-21
Exploration expenses (3)(4) - - - 5-6
Sustaining capital expenditures (3) 10-12 3-5 12-16 27-31
1) Excludes metals in pyrite concentrate and, where applicable, the treatment charges, transportation and other selling costs related to the sale of
pyrite concentrate, which is reported separately.
2) Metals contained in concentrate produced are prior to deductions associated with smelter terms.
3) Based on foreign exchange rates and metal prices that approximate current rates and prices. The assumed copper price reflects the impact of 64%
of 2016 copper production being hedged at $2.32 per pound.
4) Excludes expenses of Avala.
5) Cash cost per tonne of ore processed, cash cost per ounce of gold sold, net of by-product credits, all-in sustaining cost per ounce of gold, cash cost
per tonne of complex concentrate smelted, net of by-product credits and cash cost per ounce of gold sold in pyrite concentrate have no
standardized meaning under GAAP. Refer to the “Non-GAAP Financial Measures” section of this MD&A for reconciliations to IFRS.
6) Assumes Kapan is sold at the end of March 2016
TSX:DPM 21
HEDGE POSITIONS AS AT Dec. 31, 2015
Year of projected payable copper
production
Volume Hedged
(lbs) % Hedged Average fixed price ($/lb)
2016 25,264,945 64% $2.32
QP Commodity Hedged(1) (2) Volume Hedged % Hedged Average fixed price
Payable gold 24,655 oz 100% $1,086.39/oz
Payable copper 13,359,997 lbs 100% $2.21/lb
Payable silver 110,810 oz 100% $14.09/oz
Payable Zinc 1,036,171 lbs 100% $0.73/lb
Year of projected payable
gold in pyrite con production
Volume Hedged
(oz)
% Hedged(payable gold in pyrite
con production)
Average fixed price of Pyrite
Production Hedges ($/oz)
2016 11,540 35% 1,177.35
Year of projected
operating expenses (1) (2) Foreign currency hedgedAmount hedged in
foreign currency% Hedged
Average exchange rate
Foreign currency/US$
2016Euro
South African rand
11,700,000
756,000,000
23%
21%
1.1112
13.0369
2017Euro
South African rand
10,800,000
720,000,000
62%
59%
1.1287
13.8699
TotalEuro
South African rand
22,500,000
1,476,000,000
1.1196
13.4304
1) Refer to Notes 7c and 7d in “Notes to Consolidated Financial Statements” of the 2015 Full Year MD&A for further detail on these hedges
2) Refer to Note 2.2h in “Notes to Consolidated Financial Statements” of the 2015 Full Year MD&A for commodity hedge accounting treatment
TSX:DPM 22
Sabina Gold & Silver Corp. (TSX:SBB), Nunavut
• Canadian-based, precious metals company with assets in Nunavut
• Assets include:
• High Grade Back River Gold Project. Initial feasibility study indicates:
Processing rate of 3,000 tpa
Avg. annual Au production of 198,100 oz @ $534/oz cash cost
Post-tax IRR of 24.2% and NPV of C$480.3M; LOM 11.8 yrs
Initial capital estimate of $15M and sustaining capital of $185M
• Hackett River payable silver royalty from Glencore Zinc:
22.5% of first 190M oz Ag, 12.5% thereafter
• Other gold claims
Avala Resources Ltd. (TSX-V:AVZ), Serbia
PARTIALLY OWNED EXPLORATION / DEVELOPMENT ASSETS
Equity Portfolio Holdings Overview (C$M)1
Securities Shares (m) % Held
Sabina Gold & Silver
Special Warrants
Total
23.5
5.0
12%
Avala Resources
Special Rights
Warrants
21.9
5.0
2.4
50.14%
Avala Sabina 12%
Timok Gold Project
• 2.5 million oz in resource category: 920,000 mineable oz
(2014 PEA, using $1300 gold and 5% discount rate)
• DPM plans to explore for additional mineable ounces
Kiseljak Copper Gold Porphyry Project
• 547 million tonnes at 0.22 g/t gold and 0.23% copper
• Assess potential to find higher grades close to surface
Lenovac option agreement with Rio Tinto
• 132km2 licence south of the Freeport-Reservoir discovery at
Cekaru Peki
• Rio Tinto committed to spend C$1M in first year
• If Rio Tinto incurs expenditures of US$3M by December 31,
2017, it will earn a 51% interest in project; If Rio Tinto incurs
additional expenditures of US$5M by end of 2019, it will earn a
65% interest in the project; If Rio Tinto incurs additional
expenditures of US$32M by end of 2023, it will earn a 75%
interest in the project
Transaction Summary
• February 12, 2016, DPM entered into an agreement with AVZ
to acquire the 21,735,018 shares of AVZ that it does not
already own
• DPM will issue 0.044 DPM shares for each of the AVZ shares
not already owned, representing 956,341 new DPM shares
• Exchange ratio represents 25% premium for AVZ shareholders
based on 10 day volume weighted average prices
• Closing must occur before April 30, 2016
TSX:DPM 23
CHELOPECH MINE: UPDATED MINERAL RESERVES AND RESOURCES
Chelopech Mineral Reserves – December 31, 2014
Category
Tonnes
(M)
Gold Copper Silver
Grade
(g/t)
Ounces
(M)
Grade
(%)
Pounds
(M)
Grade
(g/t) Ounces (M)
Proven 12.3 3.19 1.257 1.07 289 8.28 3.266
Probable 10.6 3.10 1.051 0.76 177 5.58 1.893
Total 22.8 3.14 2.308 0.93 467 7.03 5.160
Chelopech Mineral Resources – September 30, 2015
Category
Tonnes
(M)
Gold Copper Silver
Grade (g/t)
Ounces
(M)
Grade
(%)
Pounds
(M)
Grade
(g/t) Ounces (M)
Measured 22.3 3.78 2.706 1.20 590 9.25 6.627
Indicated 9.1 3.67 1.075 1.00 201 9.35 2.742
M&I 31.4 3.73 3.767 1.14 791 9.27 9.364
Inferred 2.9 2.48 0.228 0.83 52 9.11 0.8391. The rounding of tonnage and grade figures has resulted in some columns showing relatively minor discrepancies in sum totals;
2. Mineral Reserves, Measured, Indicated and Inferred Mineral Resources have been reported in accordance with NI 43-101 and the classification adopted by the CIM;
3. Measured and Indicated Mineral Resources are additional to Minerals Reserves;
4. Mineral Resources and Reserves may be subject to legal, political, environmental and other risks and uncertainties. Refer to the most recent annual information form of the Company filed on the SEDAR website at www.sedar.com and the Company's
Technical Reports for more information with respect to key assumptions, parameters and risks relating to the above estimates.
5. Mineral Reserves and Resources estimates have been reviewed and prepared by CSA, that provides multi-disciplinary services to the global resources industry and is independent of the Company;
6. Mineral Reserves and Resources estimates are based on long term metals prices of USD 1,250/oz Au, USD 23/oz Ag, and USD 2.75/lb Cu and USD 0.85/lb Zn, and as of September 30, 2015;
7. Chelopech Mineral Resources are based on a gold equivalent cut-off 3.0 g/t (Au + Cu*2.06) and a greater than USD 0 profit/tonne test using NSR analysis;
8. Chelopech Mineral Reserves are based on a gold equivalent cut-off of 3.0 g/t (Au + Cu*2.06) and a cut-off of USD 10 profit/tonne using NSR analysis.
9. A Mineral Resource is an inventory of mineralization that under realistically assumed and justifiable technical and economic conditions might become economically extractable, while a Mineral Reserve includes diluting materials and allowances for losses
that are expected to occur when the material is mined. Under the previous method, when Minerals Reserves are reported as part of Measured and Indicated Resources, these diluting materials and allowances are excluded from the estimate of
Resources.
TSX:DPM 24
KRUMOVGRAD GOLD PROJECT: UPPER ZONE MINERAL RESERVE AND RESOURCE ESTIMATES
Krumovgrad Mineral Reserves – December 31, 2014
Category
Tonnes
(M)
Gold Silver
Grade (g/t) Ounces (M) Grade (g/t) Ounces (M)
Proven 1.1 3.46 0.124 1.91 0.068
Probable 3.5 3.00 0.337 1.75 0.197
Total 4.6 3.11 0.461 1.79 2.66
Krumovgrad Mineral Resources – December 31, 2014
Category
Tonnes
(M)
Gold Silver
Grade (g/t) Ounces (M) Grade (g/t) Ounces (M)
Inferred 0.3 1.31 0.013 1.06 0.011
1. The rounding of tonnage and grade figures has resulted in some columns showing relatively minor discrepancies in sum totals;
2. Mineral Reserves, Measured, Indicated and Inferred Mineral Resources have been reported in accordance with NI 43-101 and the classification adopted by the CIM;
3. Measured and Indicated Mineral Resources are additional to Mineral Reserves;
4. Mineral Reserves and Resources may be subject to legal, political, environmental and other risks and uncertainties. Refer to the most recent annual information form of the Company filed on the SEDAR website at
www.sedar.com and the Company’s Technical Reports for more information with respect to key assumptions, parameters and risks relating to the above estimates;
5. Mineral Reserves and Resources estimates have been reviewed and prepared by CSA, that provides multi-disciplinary services to the global resources industry and is independent of the Company;
6. Mineral Reserves and Resources estimates are based on long term metals prices of USD 1,250/oz Au, USD 23/oz Ag, USD 2.75/lb Cu and USD 0.85/lb Zn, and as of December 31, 2014;
7. Krumovgrad Mineral Reserves and Resources are based on a gold cut-off grade of 0.6 g/t for the Upper Zone and Overburden and of 0.8 g/t for the Wall;
8. A Mineral Resource is an inventory of mineralization that under realistically assumed and justifiable technical and economic conditions might become economically extractable, while a Mineral Reserve includes diluting
materials and allowances for losses that are expected to occur when the material is mined. Under the previous method, when Mineral Reserves are reported as part of Measured and Indicated Resources, these diluting
materials and allowances are excluded from the estimate of Resources.
TSX:DPM 25
KRUMOVGRAD GOLD PROJECT: WALL MINERAL RESERVE AND RESOURCE ESTIMATES
Krumovgrad Mineral Reserves – December 31, 2014
Category
Tonnes
(M)
Gold Silver
Grade (g/t) Ounces (M) Grade (g/t) Ounces (M)
Proven 1.5 6.83 0.325 3.50 0.166
Probable 0.1 5.54 0.020 2.93 0.011
Total 1.6 6.74 0.345 3.46 0.177
Krumovgrad Mineral Resources – December 31, 2014
Category
Tonnes
(M)
Gold Silver
Grade (g/t) Ounces (M) Grade (g/t) Ounces (M)
Inferred 0.0 0.87 0.00 0.88 0.000
1. The rounding of tonnage and grade figures has resulted in some columns showing relatively minor discrepancies in sum totals;
2. Mineral Reserves, Measured, Indicated and Inferred Mineral Resources have been reported in accordance with NI 43-101 and the classification adopted by the CIM;
3. Measured and Indicated Mineral Resources are additional to Mineral Reserves;
4. Mineral Reserves and Resources may be subject to legal, political, environmental and other risks and uncertainties. Refer to the most recent annual information form of the Company filed on the SEDAR website at www.sedar.com
and the Company’s Technical Reports for more information with respect to key assumptions, parameters and risks relating to the above estimates;
5. Mineral Reserves and Resources estimates have been reviewed and prepared by CSA, that provides multi-disciplinary services to the global resources industry and is independent of the Company;
6. Mineral Reserves and Resources estimates are based on long term metals prices of USD 1,250/oz Au, USD 23/oz Ag, USD 2.75/lb Cu and USD 0.85/lb Zn, and as of December 31, 2014;
7. Krumovgrad Mineral Reserves and Resources are based on a gold cut-off grade of 0.6 g/t for the Upper Zone and Overburden and of 0.8 g/t for the Wall;
8. A Mineral Resource is an inventory of mineralization that under realistically assumed and justifiable technical and economic conditions might become economically extractable, while a Mineral Reserve includes diluting materials
and allowances for losses that are expected to occur when the material is mined. Under the previous method, when Mineral Reserves are reported as part of Measured and Indicated Resources, these diluting materials and
allowances are excluded from the estimate of Resources.
BMO GLOBAL METALS & MINING CONFERENCE
February 29 – March 2, 2016
Chelopech Mine, Bulgaria
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 – Common Shares
www.dundeeprecious.com