Dundee Precious Metals Inc.

Good day and thank you for standing by. Welcome to the Dundee Pressure's Medal second quarter 2025 earnings conference call. At this time all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speaker's presentation there will be a question and answer session. To ask a question please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 1 again. I would not like to hand the conference over to your speaker today Jennifer Cameron.

Thank you and good morning. I'm Jennifer Cameron, Director of Invest Relations and I'd like to welcome you to the Dundee Purchase Medal second quarter conference call. Joining us today are members of our senior management team including David Ray, President and CEO and Mavind Dyal, Chief Financial Officer. Before we begin I'd like to remind you that all forward-looking information provided during this call is subject to the 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-GAP measures or ratios. These measures have no standardized meanings under IFRS and may not be possible to similar measures presented by other companies. The definitions established in 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 a non-GAP financial measures section of our most recent MD&A for reconciliations of these non-GAP 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 2024 pertain to the conflux of periods in 2024 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 and thank you all for joining us. I'm pleased to provide you with an overview of our second quarter results to provide insights into our achievements during this period. I'm proud to report that DPM delivered record financial results during the quarter including record revenue, earnings and free cash flow. Results which reflect reliable high margin production from our portfolio and the strength of the current gold price environment. This has been a defining quarter for DPM not only in terms of our record results but strategically as our proposed acquisition of Adriatic announced in June creates a premier mining business to deliver peer leading growth. The response to the proposed transaction from both our investors and the broader market has been notably positive which I believe highlights the clear strategic merits of deal. The virus operation is an excellent fit with our operating expertise and financial strength and its addition to our portfolio offers a clear and compelling value proposition for all of our shareholders. This represents a key next step in our growth strategy and consolidates our position as a mid-tier precious metals producer. The shareholder vote to approve the transaction is scheduled for August the 13th and we've submitted the documentation for the Bosnia merger council. We continue to anticipate closing the transaction in the fourth quarter. Turning now to the highlights from the second quarter which include solid production of 61,000 ounces of gold and 6.4 million pounds of copper generating strong margins with an all-in sustaining cost of $1,011 per ounce of gold sold compared to an average realized gold price of $3,334 and we continue to consistently deliver free cash flow generating a record $95 million during the quarter and further strengthening our financial capacity to fund growth. We also continue to advance our organic growth pipeline which I'll touch on in a moment. Looking at our operations in more detail, Celopetje's performance was in line with the mine plan producing 47,000 ounces of gold and 6.4 million pounds of copper with an all-in sustaining cost of $682 per ounce of gold sold. Cash costs of $63 per ton of oil processed were on target for the quarter reflecting Celopetje's track record of solid efficient operations and the mine is on track to meet its 2025 guidance targets for the year. We continue to prioritize in-mine and brownfields exploration work to further extend mine life at Celopetje targeting a 10 plus year reserve life. During the quarter results from initial drilling at the wedge zone deep target discovered a new zone 150 meters downhaul of contiguous pyrite rich high-salt sedation mineralization. The target which remains open in multiple directions is located within the northern flank of Celopetje within the mine concession and 300 meters below existing mineral reserves. We're increasing the 2025 Celopetje exploration program in part to expand the scope of this mineralization and to define the geological setting and structural context. In addition 12,000 meters of exploration drilling has been planned to test this target to vertical extent and continuation along the stride as well as continuing to test the mineral potential of the shallow levels on the northeastern and southern flanks of the Celopetje mine concession. Drill testing of newly generated targets has already commenced and will continue to year end 2025. At a Tepe produced 14,200 ounces of gold with an -in-sustaining cost of $1166 per ounce of gold sold as we guided at the beginning of the year at a Tepe's production is expected to nearly double in the second half of the year compared to the first half due to cell sequencing in the IMWA. With higher production expected in the second half of the year at a Tepe is on track to achieve its guidance. We continue to focus on developing quality assets and our growth priority is advancing Chocawikita 2 production which is targeted for 2028. The feasibility study is advancing as planned and is expected to be completed by year end. Most of this surface and underground geotechnical and hydrogeological drilling is now complete. Activities planned for the remainder of 2025 in support of a construction decision in mid-2026 include progressing the design to the basic engineering level, advancing the project execution readiness and commencing operational readiness activities leveraging Chocawikita's regional proximity to Chalapetch to train and develop key personnel for operating roles. In parallel permitting activities continue to advance we submitted the final report on mineral reserves and mineral resources known as the elaborative reserves to the relevant authorities in the first quarter and continue to engage with relative stakeholders regarding the spatial plant. In terms of camp wide exploration our drilling program focused on testing high priority targets proximal to our Chocawikita project and that continues to yield results from a large prospective land package. At Dimitra Potok results are continuing to confirm the presence of a large high-grade copper gold silverspan system with mineralization concentrated along both the eastern and western sides of an intrusion. Based on drilling to date mineralization has been detected over a 1 kilometer strike length up to 300 meters vertically and up to 500 meters away from the intrusion. The drill program continues to expand the Dimitra Potok discovery announced in February 2025 and we have yet to define its limits as it remains open in multiple directions and that depth. We're also advancing drilling at the Rakita North and Vajasaka prospects and look forward to providing further updates on our progress likely in the first quarter. At the Loma Laga project in Ecuador we achieved a significant milestone with the receipt of the environmental license in June. This follows the successful completion of the prior informed indigenous consultation process in May and is the result of a rigorous process by the government to ensure high Ecuadorian standards are applied in the development of mining projects. Negotiations for the exploitation agreements have been initiated and we're also planning a 23,000 meter drilling campaign for Loma Laga. This program will prioritize geotechnical and hydro hydrogeological monitoring holes as well as metallurgical and resource infill drilling and is expected to commence in Q3. Overall we continue to deliver strong results and with both minds on track to achieve our 2025 guidance and execute on our strategy to deliver above average returns for our stakeholders. I'll now turn the call over to Navin for a review of the financial results.

Thanks Dave. I'll be touching briefly on the financial highlights for the quarter, provide an update on how we are tracking to our guidance for the year as well as any changes include with any commentary on our balance sheet and return of capital program. All of my remarks will focus on results from continuing operations unless otherwise noted. Looking at our financial results second quarter highlights include revenue of 186 million, adjusted net earnings of 88 million or 52 cents per share, cash flow provided from operating activities of 100 million and free cash flow of 95 million. Overall we saw record financial results during the quarter which reflected our strong operating performance, the low-cost nature of our operations and a favorable commodity price environment. Looking at our earnings and cash flow in more detail, revenue of 186 million in the quarter was 19% higher than 2024 due to higher realized metal prices partially offset by lower volume sold at Adetepe. Adjusted net earnings in the second quarter of 88 million or 52 cents per share increased compared to the prior year due primarily to higher revenue and lower evaluation expenses as a result of costs related to the ChocoRatita project now being capitalized due to the project's advancements to the feasibility study stage. This is partially offset by higher costs primarily related to higher -to-market adjustments to share-based compensation expenses reflecting DPM's strong share price performance this year. Cash flow provided from operating activities of 100 million for the quarter was lower than the prior year mainly due to the timing of collections from sales and payments to suppliers. Free cash flow which is calculated before changes in working capital was 95 million for the quarter and increase of 12 million compared to 2024 due primarily to higher adjusted net earnings generated in the quarter. Taking a look at our cost metrics, all in sustaining costs for the first half of the year of $1,118 per ounce of gold sold was 41% higher than the prior year due primarily to lower volume of gold sold, higher -to-market adjustments to share-based compensation expenses, lower byproduct credits reflecting as lower volumes of copper sold and a stronger euro relative to the US dollar all partially offset by lower freight charges. Given our strong share price performance in the first half of the year, the -to-market adjustments to share-based compensation expenses resulted in an increase of $138 per ounce of gold sold compared to an increase of only $26 per ounce of gold sold in 2024. We reconfirmed our 2025 guidance for all in sustaining costs of $280 to $900 per ounce of gold sold with lower cost per ounce expected in the second half of the year commensurate with the nearly doubling of production from Adetepe, keeping in mind that our own sustaining cost guidance remains subject to external factors such as the -to-market impact of BPM share prices as well as metal prices and foreign exchange movements relative to our guidance assumption. In terms of our capital spending, sustaining capital expenditures of $6 million for the quarter were lower than 2024 due primarily to lower expenditures on mobile equipment at Chella Petch as expected, partially offset by higher deferred stripping costs as a result of higher stripping ratios at Adetepe in line with the mine plan. Growth capital expenditures of $16 million for the quarter were higher than 2024 as a result of costs related to the Chokarikita project being capitalized from the beginning of 2025. Last night we provided an updated three-year outlook supporting our continued focus on funding our high quality organic growth pipeline while maintaining our portfolio high margin operations which has generated our exceptional track record of delivery. The three-year outlook remains unchanged except for the following updates to the company's guidance for 2025. Growth capital expenditures related to the Loma Larga project are now expected to be between $23 million and $25 million, up $11 million due to primarily the of the environmental license for exploitation representing an important milestone allowing the company to resume drilling at Loma Larga. In addition, based on positive results, exploration expenses are now expected to be between $44 million and $49 million, up $8 million to support exploration activities associated with near mine exploration on the Chella Petch mining concession and drilling at the Brevenet exploration license. The company's three-year outlook does not reflect the potential impact of the proposed acquisition of Adriatic. Upon closing of the transaction we intend to update our production and cost guidance along with other key operational and financial metrics to incorporate the contribution of Adriatic on a gold equivalent basis. This approach ensures our guidance remains transparent, reliable, and aligned with the timing of the transaction. We continue to maintain a strong balance sheet and cash flow position with a consolidated cash balance of $332 million, restricted cash pursuant to the agreement to acquire Adriatic of $465 million, no debt, and a $150 million undrawn revolving credit facility. Given the strength of our balance sheet and our positive outlook for continued strong free cash flow generation, we are in a unique position with the financial flexibility to fund growth opportunities such as the acquisition of Adriatic and our investments in our development and exploration activities while continuing to return a portion of our free cash flow to our shareholders in line with our commitment to capital discipline. In the first half of 2025 we re-purchased 10 million shares at a total cost of $116 million under the company's normal court's issuer bid or NCIB and paid approximately $14 million of dividends. In closing we continue to deliver strong performance from our mining operations. We are focused on growth and we're in a strong cash position to achieve our guidance and continue our track record of generating significant free cash flow. I'll now turn the call back to Dave for his concluding remarks.

Thanks very much Nathan. Overall we continue to deliver, sorry excuse me, and this is an exciting time for DPM and our shareholders as we look to our future as a growing precious metals producer. I bring a peer-leading development pipeline a strong balance sheet and capital returns all of which are underpinned by our exceptional operational track record. Our portfolio is generating solid consistent results and we are very well positioned as one of the lowest cost highest growth producers. We're generating strong free cash flow and delivering peer-leading returns to shareholders. We're progressing Choker Wikida and its feasibility study for an accelerated construction decision. We have substantial financial strength to fund growth opportunities and exploration and we focus on executing our strategy to deliver above average returns for our shareholders as a mid-tier precious metals company. DPM is a clear path forward and we're very excited about our future. I'd now like to open up the call for any questions.

Thank you. As a reminder to ask a question please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 1 again. One moment for questions. Our first question comes from Lane Lam with TD. You may proceed.

Oh hey morning guys. Just a question on the Adriatic deal. Obviously you guys have done a lot of work around the due diligence process with the independent study in conjunction with the acquisition. Just wondering if you can maybe comment on the most recent update there and the revision guidance post the announcement and then just curious in the in the month leading up to the closing how much input or influence will you have in terms of the operations given your reinterpretation of what's needed to get get the mind to a steady state.

Yeah thanks for the question Wayne. First of all you know the updates in the second quarter that changes nothing on our view on virus. You know we'd anticipated and you know made our own assessments of what we expected and this was in line. In terms of your second question which was you know what's going to happen just ahead of closing it's important that we recognize that we need to operate as independent companies and you know while we are talking about things that we might do technically and opportunities in terms of learning for Adriatic is the decision as to whether they do or do not take advantage of you know. So we're maintaining an appropriate distance but of course we are talking about integration and now we might go about doing that. But as I just to repeat we are separate companies and we have to remain so until closing.

Great thanks and then maybe at Atepe you guys have been fairly consistent in terms of guiding the wind down in operation next year. But just wondering given the significant change in the gold price particularly versus the $1,600 resource price assumption would you see any possibility for additional material via an incremental layback or and then just maybe curious if there might be any potential to perhaps consider processing or from other deposits within a reasonable truckable distance.

Yeah Wayne in terms of obviously we keep track of what's going on and we make sure that whatever we're treating is economic at any point that the share price were to go the other way. Similarly we understand you know what's going on in terms of what will happen with an increased share price and the answer simply is no. It's not going to change the outlook. So we do keep track of that. We do anticipate that we will close out of Atepe in the second quarter of next year. Also we're not considering the idea of using this as a custom mill treatment facility for other let's say potential mines.

Okay got it thanks and then maybe just last one at Loma Larga obviously some good news here in terms of the environmental license. Just wondering with the restart drilling and the upcoming update fees how quickly could that asset now be moved forward to a potential construction decision and has the relationship with the community evolved to where there would be fully on board to greenlight the project if say you were just to decide to build it tomorrow?

Okay so we obviously need to go back to drilling so starting with that we have -23,000 meters of drilling planned. This is going to be primarily focused on geotech and hydrogeological information as well as condemnation. So that's to support final decisions within the feasibility. That's going to take let's say between the feasibility and the drilling somewhere north of six months the information to be brought in for then the reporting you're looking at at least another six months. So we're some way out. So basically you know watch this in terms of what drilling is progressing and when we're actually ready to bring that into the feasibility study. In terms of the second part the relationship this is an ongoing thing where you're continuing to develop the relationship with the local communities and there are concerns that you have to address and overcome in the sense of people's perceptions of what might happen which unfortunately are colored by other unfortunate situations with illegal and informal mining in country. So you know we continue to that we have time until we get to a point where there is a construction decision and anticipate success in bringing forward all of our stakeholders so that we can start constructing and bring to fruition Loma Laga in the time.

Okay got it. Thanks for taking my questions.

Thank you. Thank you. Our next question comes from Farhad Tariq with Jeffreys you may proceed.

Hi thanks for taking my question. Maybe just continuing on the theme of Loma Laga. Now that you've de-risked it with the environmental permit and you're doing some additional drilling in the second half of this year maybe talk about how Loma Laga fits into the rest of the portfolio as a priority. I mean it stands out a bit I guess geographically and maybe think about is that something that you think would be core to the portfolio longer term or is that something that you're looking maybe to monetize after it's been de-risked some more?

Yeah thanks Farhad. So if we have a look at Loma Laga so historically we've been progressing this project to the pace that we can. There's been some necessary steps in terms of information that we needed to provide which we've now completed and also the fire informed consultation all of which have been completed and now successfully got the EIA in conversations with the government about the exploitation permit. So in terms of fit we'd always identified this asset as a good fit actually with our skill set and this you know some years like well before we acquired the asset back in 2021. You know clearly in proximity of our existing operations Chukarikita and the other opportunities in Serbia and now in Bosnia and Herzegovina these things obviously stand out in terms of the opportunity to realize value through proximity, expertise you know of deployment of capital in this type of thing. But we do see Loma Laga as an asset that will bring value to the organization so we'll continue to pursue that to a point where we're expecting to construct and operate. We will of course as we do with all of our assets consider strategically what's the best thing for the organization going forward. But at this point we anticipate construction and realizing production.

Okay that's clear and then maybe just a housekeeping item. When is the updated feasibility study expected again for Loma Laga? I know it was a second quarter but then it got pushed out with the with the Adriatic transaction so just what's the most recent timeline?

Well that remains the case at this point you know we'll look to release that at an appropriate time so that information is available. Recall it was not a complete feasibility update it was only focused on the capital increases since the INB study plus impacts on OPEX and metal prices but it did not take into account updates to reserves and resources due to cut-off grade changes. So part of the 22,000 meters will do some work actually on that so for the next feasibility update I would anticipate cut-off grade change results and resource implications and then the capital and OPEX coming to a full feasibility study. So in terms of timing you know we're anticipating at this point that is something that will come out later potentially at the end of the transaction when we close the transaction with Adrian.

Okay great thank you.

Thank you. Our next question comes from Eric Winwell with Scotiabank you may proceed.

Hey good morning David and thanks for taking my question. Just want to follow up quickly on Serbia you know you're obviously increasing the exploration budget there I guess you're liking what you're seeing and maybe on this Tulare exploration license which we don't hear a whole lot about any comments there and also I guess seeing some forest fires in country I'm assuming you're still not seeing any impact from those. Thank you.

Yep so we you know continue to find Serbia an attractive destination to do the work that we do within this since 2004 so we have a long track record for the local communities and the authorities clearly exciting in terms of exploration upside. I think you know the we're really focusing our attention at this moment is that a kilometer depth so it takes a little longer to be able to get information that we can share in terms of what's happened. We have indicated that drilling does continue to on it meter pots up with an intent to expand the view on that discovery and you know at this point we've communicated that it's a one kilometer strike length 300 meter depth at a minimum of 500 meter width so it is very exciting. We anticipate there'll be more information coming on this in the fall. In terms of Tulare we have done work on this historically there were two different companies that we brought in under one name. These were assets we've been involved in since 2004 but other people were directing that work too until 2016 when we took them both back in. Tulare was a copper focused asset as opposed to Avala which was more gold focused so we've done some work on this during the course of the year I believe with 3,300 meters to do a 6,600 meter drill program so by the end of the year we'll have a sense of you know what this is but it has we would see that and if you look at prior technical reports looks like the same thing so it's a big lower grade asset that we're trying to just fully understand with the idea being that we want to realize the value of these sort of hidden gems in our portfolio.

Okay I'll appreciate that. Forest fires again no impact in country at this point?

Oh yeah sorry Eric I didn't answer that. The answer is no we obviously watch watch for that. We've got forest fires in both Bulgaria and Serbia so the answer is no we continue to support the authorities and groups around us to do what we can as stakeholders within our communities to make sure that not only our assets are protected but our stakeholders around us are as well.

Okay great no I really appreciate that. Well thanks very much I'll hop back in the queue. Okay cheers.

Thank you and as a reminder to ask a question please press star 1 1 on your telephone. Our next question comes from Donald DiMarco with National Bank you may proceed.

Thank you operator and good morning David and Dean. My first question is for Navin. So Navin I see the 465 million that's been moved into restricted cash

ahead

of an adiabatic closing. Can you comment on this in the context of the 437 million cash component of the purchase price and the 200 million in closing costs and debt repayments and so on that were in that like so is that restricted cash amount enough?

Hi Don yeah it's not the restricted cash amount is actually just covering off the the cost that will incur as a result of the transaction costs you know related to the basically acquiring Adriatic. It also includes a very very small amount for stamp duties as well as for certain transaction related costs so it does not cover the full debt repayments that otherwise were contemplating for repaying certain of Adriatic's debts. Now that would just come out of our regular cash balance post transaction but we're required under the the UK rules to set aside the cash component of the transaction and that's what you're seeing there.

Okay thank you. Then I'll just shift over to Chocova-Kita. So David with the FS pending release in Q4 what are the next steps after that? Will this be followed by a go-forward decision? Do you expect to start spending CAPF Q4 or Q1 2026? And if you could just remind us again in the context of Adriatic is Chocova-Kita internally funded or would you look for potential external sources of funding to round that out?

Okay so the next step saw that we're completing the feasibility at the same time we're working on a serving feasibility in additional steps in addition to completing the certificate of resources and the exploitation permit. We anticipate an EIA which is an application that goes in at the end of the year that's the key thing then once we're into the new year we anticipate all of that completed in a construction decision at mid-year so starting to build in the end of the year. Some of the costs in terms of capital and we intend to reuse equipment from Adetepe as you know so a good amount of the assessed equipment from there so you know other acquisitions we can I think we'll talk about that more in due course but I think the key thing at the moment is to see that we're on track anticipate that we'll basically get permission internally to start building an external to start building and that will start happening in Q3 next year.

And yeah Don we have we you know very confident in our ability to fund Chokarokita internally as well as you know based on the cash flow and the capital requirements so we'll be focused on the ramp up of various and ensuring Chokarokita remains on track.

Okay great thanks for that and David I think you maybe you just mentioned the word acquisition you know with that you know with Chokarokita development about to convince Adriatic ramping up subject to the deal closing you know what what has done these M&A priority and focus over the next year or so. Is it on the back burner for the time being or is it I think that's what you might have alluded to but if you just clarify thank you.

Yeah Don I wasn't actually alluding to that. We've got a very exciting organic growth portfolio you know that's what we have already with Chokarokita potential to reach a plot of going forward Loma Laga and then on top of that we've got the 4400 hectares around Barish operations plus some additional sort of regional potential so that's all pretty exciting for us. We do the same as we have done historically. We look for opportunities where there are assets which may create value within the company. I would say that's a little less of something that's on the front burner now but you know it's something that we do consistently over time. If we find the right asset we will consider that but right now I would say that you know we've managed to really change our outlook so we've published information that shows that 600,000 ounces gold equivalent by the end of quite well really by the time the Chokarokita comes online so as you've sort of exit 28 going into 29 and that's without Loma Laga which is another 175,000 ounces or so per year of 10 years. That's a really exciting portfolio to sort of have in front of us and I think the one thing that perhaps

people

don't realize is that it's carrying on at that same margin that we have from Chalapetch and Adetet and Chokarokita that's exporting for Barish or just under $9 and so on.

Yeah, certainly that's not lost on us and so as a final question will you be releasing three-year guidance as you have or three-year outlook as you have in the past so with the next update we might see Adriatic perhaps if the subject to deal closing and then might even catch a little bit of Chokarokita?

Yeah, absolutely Don. So the plan would be that since we've completed the acquisition of Adriatic we would release updated three-year outlook and to the extent that there is updated information around Loma Laga in terms of the textual report as well as if the feasibility study has been complete for Chokarokita we would certainly update that.

Okay, thank you very much. That's all for me and good luck with the rest of the quarter guys.

Thanks Don. Thank you. I would now like to turn the call back over to Jennifer Cameron for any closing remarks.

Well thanks everyone for joining us. If you have any further questions please feel free to reach out and for those of us in Ontario hope you guys have a safe and happy long weekend. We'll talk to you next quarter. Thank you.

Thank you. This concludes the conference. Thank you for your participation. You may now disconnect.