DPM Metals Inc.

Good morning and welcome to Dundee Precious Metals Second Quarter 2021 Earnings 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 anyone should require assistance during the conference, please press star then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Jennifer Cameron, Director of Investor Relations. You may begin.

Thank you, and good morning. I'd like to welcome you to Dundee Precious Metals' second quarter conference call. Joining us on the call today are David Ray, President and CEO, Hume Kyle, Chief Financial Officer, and Michael Dorfman, Executive Vice President, Corporate Development. After the close of business yesterday, we released our second quarter results and hope you have had an opportunity to review our material. All forward-looking information provided during this call is subject to the forward-looking qualifications, 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 are related to continuing operations and have generally been rounded. References to 2020 pertain to the comparable periods in 2021, and references to averages are based on midpoints of our outlook or guidance. I'll now turn the call over to David Ray.

Thanks, Jennifer. Good morning, and thank you all for joining us. As you've seen from our news release circulated last night, we delivered an exceptional quarter, achieving multiple records for operating and financial performance. Highlights from our results include excellent operating performance at our mines, which resulted in production of 85,000 ounces of gold and 10 million pounds of copper. Strong cost performance at all our operations, with all-in sustaining costs of $605 per gold ounce. Record financial results. including free cash flow of $67 million and reporting $67 million of adjusted net earnings for the quarter. Closing with the sale of MineRP, which brought in proceeds of approximately $46 million, and we continue to build our financial strength, exiting the quarter with a cash balance of $261 million. As you may also have seen from our news release earlier this week, we successfully closed the previously announced acquisition of INB Metals, adding the high-quality Loma Laga project to our development pipeline. This is a project that we believe fits extremely well with our core strengths and our proven track record as an environmentally and socially responsible mining company, and that has the potential to add meaningful production growth to our portfolio. As we move forward, our approach to developing Loma Lago will reflect our firm commitment to the highest standards for engagement with local communities and environmental stewardship, and we'll leverage DPM's technical depth, financial strength, and our strong track record of delivering innovative solutions to unlock the significant potential of Loma Lago. I'm joining today's call from Ecuador as we take the first step in engaging with the national and local stakeholders and our local teams. and we look forward to continuing this engagement as we work to advance the project. In terms of next steps, we intend to explore further optimization studies at Loma Laga while continuing to advance the permitting process and will be taking a disciplined approach to project development. This includes minimizing upfront spend during the permitting process while engaging with local communities in line with international best practices and working to secure an investor protection agreement with the Ecuadorian governments. prior to making any significant capital commitments. Turning to a review of our operating performance, I'll start with Chalopech. Chalopech delivered an excellent quarter, producing 52,638 gold ounces and 10 million pounds of copper, which was a significant increase compared with the first quarter as a result of mining in higher-grade zones and improved recoveries. Cost performance continues to be strong, with second quarter oil and sustaining cost at $638 per gold ounce, which is below the low end of Chalopech's 2021 guidance range. We continue to focus on extending the mine life through our in-mine and brownfields exploration programs, and during the quarter, significant effort was dedicated to testing conceptual targets within the Breveni exploration license, as well with the completion of the scout drilling of several near-mine prospects, including Bosdol, Petrovden, and Shaladiri, which are expected to continue over the summer season. We continue to advance work to support and optimize infill and mineral resource delineation draw programs planned for Sveta Petka. That, at the moment, is an exploration license, but it's in anticipation of moving into the commercial discovery activity, where the contract is anticipated to be signed off within the last part of the year. With mineral reserves that now extend to 2029, an updated mineral resource base, and increased in-mine and brownfield exploration drilling, we believe there is strong potential to continue our track record of mine life extensions at Chalapeche. Turning to Adetepa, we've continued to deliver impressive performance, producing approximately 32,500 gold ounces in the second quarter. Adetepa also achieved strong cost performance during the quarter. with an all-in sustaining cost of $563, which is at the low end of its guidance range. This highlights its significant potential to drive free cash flow generation in our portfolio. We continue our exploration efforts around Atatepa with 23,000 meters of drilling planned for the year, including 9,000 meters of additional resource and conceptual target extension on the mine concession, as well as advancing the Chattel Kaya and other prospects on regional licenses. Drilling activities have been completed at CERNAC, SINAP, and KUKLITSA. At CERNAC, a new geological model has been completed in order to support internal technical assessments. We've now shifted our focus towards a significant camp-wide surface data evaluation and compilation program, which includes additional mapping programs as well as geochemical and geophysical surveys to support exploration targeting exercises. Turning to cement, complex concentrate smelted increased in the second quarter, following the completion of the off-smelt furnace maintenance at the end of March. The smelter processed approximately 59,600 tons of complex concentrate during Q2, and the cash cost per ton was $400. significantly lower than the first quarter and more typical for Sumit, reflecting the increase of concentrate processed as the facility returned to a higher level of throughput following the maintenance shutdown in the first quarter. It's worth noting that while Canada and other parts of the world are seeing an encouraging decline in COVID cases, we are seeing a third wave in Namibia linked to the Delta variant. At all of our sites, we continue to maintain the strict protocols which we had in place throughout the pandemic to prioritize the health and well-being of our workforce and to provide support to our local communities. Recently at SUMED, this included donations of medical supplies and oxygen produced from our smelting facilities, which then displaced medical oxygen for use in local medical facilities. In terms of future growth, we continue to advance our team-up project in Serbia. Earlier this year, following the positive results of the pre-feasibility study, we initiated a feasibility study, which we expect to complete in the first quarter of 2022, with the results to follow in the second quarter of that year. Drilling programs were completed at the Czoklet, Czoklet South, Brazen and Czoka Rikita targets, all located southeast of the Bigger Hill deposit. This information is now being processed to support the preparation for the feasibility study. Plans for the next quarter include scout and target delineation drilling on the adjacent UMCA exploration license south of Bigger Hill, as well as other regional early stage exploration programs. 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 In closing, overall, our strong gold production profile and significant free cash flow generation, combined with our operating track record and unique skills of innovation and building strong partnerships with local communities, position us well to continue delivering value for our shareholders. We are focused on demonstrating the potential of our portfolio to generate significant free cash flow and our commitment to deploying this capital in a disciplined manner. We firmly believe that DPM's strong fundamentals continue to represent a compelling value opportunity for investors. I'll now turn the call over to him for a review of our financial results and comments on our 2021 guidance and three-year outlook, following which we will open the call to questions.