DPM Metals Inc.

Ladies and gentlemen, thank you for standing by. Welcome to the Dundee Precious Metals fourth quarter and year end 2020 results conference call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session, and instructions will follow at that time. If you require any operator assistance, please press start and zero on your touchtone telephone. I would now like to do so through this conference call. Ms. Jennifer Cameron, you may begin.

Thank you, and good morning. I'm Jennifer Cameron, Director of Investor Relations. and I'd like to welcome you to Dundee Precious Metals' fourth quarter conference call. With me today are David Ray, President and CEO, and Hume Kyle, Chief Financial Officer, as well as Michael Dorfman, Executive Vice President, Corporate Development, who will be commenting on the results and answering your questions. At the close of business yesterday, we released our fourth quarter and annual results and hope you've had an opportunity to review our material. All forward-looking information provided during the call is is subject to forward-looking qualification, which is detailed in our news release and incorporated in full for the purposes of today's call. Certain financial measures referred to during this call are not measures recognized under IFRS and are referred to as non-GAAP measures. These measures have no standardized meaning 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. Please refer to the non-GAAP financial measures section of our most recent MD&A for reconciliations of these non-GAAP measures. Please note that unless otherwise stated, operational and financial information communicated during this call have generally been rounded and references to 2019 pertain to the comparable periods in 2019 and references to averages are based on midpoints of our outlook or guidance. I'll now turn the call over to David Ray.

Good morning, everybody. Thank you for joining us. I'm pleased to provide you with an overview of our fourth quarter and full year 2020 results and provide some insights into our achievements over this period. It's normally my pleasure to begin my commentary by speaking about our strong safety record, but that's sadly not the case for Q4 2020. As we previously announced in November, we had a fatality at our smelter operation in Namibia as a direct consequence of a breach of our golden rules for safety. One of our colleagues, Andreas Shimi, sustained fatal injuries while performing maintenance on a piece of equipment. We're providing support to Mr. Shimi's family, including his five children, throughout this difficult time. The safety and well-being of our people is our highest priority, and we're focused on applying what we have learned from this incident across the organization to ensure every employee arrives home safely each day. It goes without saying that 2020 was very challenging around the world as a result of the COVID-19 pandemic. I'm particularly proud of how our team adapted to the unprecedented challenges of the pandemic and the steps we've taken to safeguard the health and safety of our workforce and our local communities, all while continuing to deliver exceptional results in a challenging environment. In 2020, we contributed approximately $1 million in support of a number of initiatives, largely focused on assisting local hospitals by providing additional medical facilities, supplies, transportation, and medical equipment. Turning now to our results, 2020 was another milestone year for DPM across a number of areas. We delivered strong operational performance with all our operations meeting or exceeding their annual guidance. and achieved a new record for gold production of 298,000 ounces. Each of our operations delivered strong cost performance, with overall all-in sustaining costs for the year of $654 per gold ounce at the low end of our revised guidance. We generated record financial results, including $211 million of free cash flow and $193 million in adjusted net earnings. We significantly strengthened our balance sheet, ending the year with $150 million of cash, no debt, and over $100 million of investments. And we delivered all remaining ounces under our prepaid gold sales arrangement, which is expected to positively impact our 2021 free cash flow. We advanced the pre-feasibility study at TMOC and plan to release the results during the first quarter. We also continued to advance our exploration activities at Adetepe and Celepec. We reached an agreement to sell our interest in MineRP for approximately $40 million in cash payable on closing and potential additional payments in the form of an earn-out. We completed a 9.9% investment in Velocity Minerals, a gold exploration and development company with projects in southeast Bulgaria and close to Adetepe, and we increased our quarterly dividend by 50% to $0.03 per share an increase that reflects our strong free cash flow generation. We were pleased to see that our significant achievements in 2020 were recognized by the market, with our share price increasing by approximately 64% in 2020, outperforming both the GDXJ and the GDX indices. For those following and looking at the presentation, I'm now on to the climate change report slide. We continue to focus on generating value through our strong ESG performance, In December, we published our inaugural climate change report. This report follows TCFD recommendations and outlines our efforts to achieve reductions in energy, water use, emissions, and our consumption of raw materials. We're continually striving to be an ESG leader, which is demonstrated by the positive ratings DPM has received from ESG rating agencies, including an A rating by MSCI. Turning to our operating performance and the highlights, I'll start with Adatepe. So since ramping up to full production last year, our operating team at Adatepe has continued to deliver impressive results ahead of our expectations, a rare accomplishment in our industry. In the first year of operation, Adatepe produced approximately 119,000 gold ounces and exceeded its guidance for the year, demonstrating its potential to drive strong operating results within our portfolio. In Q4, Adatepe produced approximately 26,000 gold ounces, which was in line with expectations for the quarter. With cash costs of $42 per ton of ore processed during the quarter and $40 per ton for the year, Adatepe outperformed our cost expectations for the year, coming in below guidance for reasons which Hume will discuss shortly. We're continuing with our exploration efforts around Adetepe, and in the fourth quarter, we conducted a significant extensional and infill drilling program at the Cernak and Sinat prospects, which are located approximately three kilometers southwest of the mine. During this year, we also completed approximately 6,000 meters of target delineation and infill drilling at Chattel Kayak. As part of our sustained efforts to support an extension of the Adatepe mine life, exploration will continue to focus on the delineation and optimization of near-mine prospects during 2021. This year, we're planning approximately 23 kilometers of drilling at Adatepe, including 9,000 meters for additional resource and conceptual target extension on the mine concession, as well as advancing the Chattel Cay and other prospects in regional licenses. Turning to Chelapeche, Chelapeche continued its track record of consistent performance, producing approximately 179,000 ounces of gold and 36 million pounds of copper. In Q4, Chelapeche produced over 38,000 ounces of gold and 7.6 million pounds of copper, in line with our expectations for the quarter. Cost performance continues to be steady and in line with expectations, with cash costs of $38 per ton of ore processed, for both the quarter and the year, which was at the low end of guidance for 2020. We also continue to focus on extending the mine life through our in-mine and brownfield exploration programs. At the West Shaft Prospect, which is located approximately one kilometer southwest of the Chalapetch Mine, an intensive diamond drilling exploration program began in the second half of 2020, with delineation and extension at depth ongoing. Additionally, a second feeder structure has been inferred to the south and will be tested in early 2021. Deep directional drilling is also continuing at the Wedge Prospect with a focus on testing more conceptual targets. Additional resource delineation commenced in early 2021 and aims to support our plans to secure the rights to the Spetspedka exploration license by means of converting the license into a commercial discovery. In 2021, we have approximately 38 kilometers of drilling planned, concentrated on near-mine exploration drilling related to the Svetopet commercial discovery process, which includes the West Shaft and Wedge targets, and on drilling more conceptual targets, including Bridge and Vozdal on the Breveni exploration license. We're also planning approximately 40,000 meters of in-mine exploration drilling for resource development. The SUMED smelter processed approximately 232,000 tons of complex concentrate in 2020 and approximately 52,500 tons of complex concentrate in Q4. For the year, SUMED met its annual guidance despite the operation being impacted by a 30-day reduction in throughput related to COVID-19 during the second quarter and downtime associated with our activities post the fatality in November. For 2021, a 30-day Osmalt reline shutdown is assumed in the guidance provided. This outage will be completed within Q1 2021. Looking further out, our strong 2020 results demonstrate our ability to deliver significant free cash flow and our commitment to deploying this capital in a disciplined manner. Looking forward, we expect another strong year in 2021. and that we provided our detailed guidance for 2021, which includes higher production and improved costs relative to our previous three-year outlook. This reflects current mine plans, including the optimized mine plan for Atatepe, which we announced in October. The updated three-year outlook highlights our strong gold production profile, attractive all-in sustaining costs, and declining sustaining capital expenditures, and positions as well to continue delivering strong results, and returns for our shareholders. In terms of future growth, our team-up project in Serbia is advancing. We advanced the pre-feasibility and we look forward to sharing the results later in the first quarter. In October, we were pleased to be investing further in gold exploration in southeastern Bulgaria through our equity financing in Velocity Minerals. Given our strong presence and capabilities in the region, we believe that we are uniquely positioned to support Velocity as a strategic shareholder And recently in January, we increased our position in IMV metals to 23.5%. We also continue to pursue our growth strategy by evaluating additional opportunities that have the potential to generate strong returns and enhance the value of the company. Before I wrap up, I'd like to acknowledge all of our dedicated employees across the company for their outstanding efforts to proactively respond to the challenges of COVID-19 while also maintaining the continuity of our operations. Overall, DPM has never been in a better position to deliver value for our shareholders and other stakeholders, and I'm very excited about the future. Our strong gold production profile and free cash flow generation, combined with our unique skills in innovation and building strong partnerships with local communities, position us well to continue delivering value for our shareholders. I'll now turn the call over to Hume for a review of our financial results and comment on our 2021 guidance and three-year outlook. following which we will open the call to questions.