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• Revenue: $147 million, a 21% increase from 2023.

• Adjusted Net Earnings: $46 million or 26 per share.

• Free Cash Flow: $71 million, an increase of $25 million compared to 2023.

• Cash Flow from Operating Activities: $52 million.

• All-in Sustaining Cost: $1,005 per ounce, 10% higher than the prior year.

• Consolidated Cash Balance: $658 million with no debt.

• Gold Production: Approximately 60,000 ounces.

• Copper Production: 7 million pounds.

• Sustaining Capital Expenditures: $11 million.

• Growth Capital Expenditures: $3 million, lower compared to 2023.

• Share Buyback Program: $3.4 million shares repurchased at a total cost of $28.3 million.

• Dividends Paid: $21.7 million.

• Warning! GuruFocus has detected 5 Warning Sign with DPMLF.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Dundee Precious Metals Inc (DPMLF) reported strong production with approximately 60,000 ounces of gold and 7 million pounds of copper in the third quarter.

• The company achieved very strong margins, with a 53% increase quarter over quarter, reflecting an all-in sustaining cost of $1,005 per ounce and an average gold price of $2,548 per ounce.

• Dundee Precious Metals Inc (DPMLF) generated robust free cash flow of $71 million and maintained a strong financial position with a consolidated cash balance of $658 million and no debt.

• The company is on track to achieve its 2024 guidance targets, marking the 10th consecutive year of meeting or outperforming its gold production and cost guidance.

• Progress continues on the Aoka Rakita project, with the pre-feasibility study on track for completion in the first quarter of 2025, and two new high-grade discoveries announced.

Negative Points

• Temporary challenges impacted performance during the quarter, including lower than expected head grades, recoveries, and fleet availability, resulting in lower production at certain operations.

• The all-in sustaining cost of $1,005 per ounce was 10% higher than the prior year, primarily due to lower volumes of gold sold and higher share-based compensation expenses.

• The company experienced a net cash outflow of $94.8 million related to a tolling agreement, which could impact short-term liquidity.

• There are potential risks associated with changes in China's VAT tax applicability on certain concentrates, which could affect future deliveries and costs.

• The Loma Larga project continues to face permitting and stakeholder relation challenges, with progress being slower than anticipated.

Q & A Highlights

Q: Do you anticipate any more working capital build-up over the next four months, or is this a one-off that reverses at the end of four months? Also, regarding capital allocation, why are share buybacks lower this year despite higher gold prices? A: (Navin Dyal, CFO) We expect working capital to fluctuate due to purchases and timing of returns, but it should normalize by year-end. Regarding capital allocation, we regularly discuss share buybacks and maintain a balanced approach, focusing on balance sheet strength, shareholder returns, and reinvestment in growth opportunities. (David Rae, CEO) We consider M&A opportunities and have exciting organic growth projects like Aoka Rakita and Loma Larga, which influence our capital allocation decisions.