Dundee Precious Mtl ((TSE:DPM)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Dundee Precious Metals’ recent earnings call painted a picture of robust financial health and operational success, despite facing some cost-related challenges. The company reported strong free cash flow and a successful share buyback program, alongside notable exploration achievements. However, increased all-in sustaining costs and a one-time levy impacted earnings, presenting obstacles that the company is actively addressing.
Strong Financial Performance
Dundee Precious Metals reported a revenue of $144 million for the first quarter of 2025, a significant increase from the previous year, driven by higher realized metal prices. The company’s adjusted net earnings reached $55 million, or $0.32 per share, reflecting a solid improvement over last year’s figures.
Robust Free Cash Flow
The company generated approximately $79 million in free cash flow during the quarter, highlighting its strong financial capacity and ability to reinvest in growth opportunities while maintaining shareholder value.
Share Buyback Program
Dundee executed a record repurchase of 7.5 million shares at a total cost of $83 million, effectively returning 114% of free cash flow to shareholders in the first quarter, demonstrating a commitment to enhancing shareholder returns.
Operational Success at Chelopech
Chelopech mine reported production of approximately 37,000 ounces of gold and 5.9 million pounds of copper, with an all-in sustaining cost of $673 per ounce of gold sold, showcasing efficient operations and cost management.
Exploration Success
The company achieved strong exploration results in Serbia, particularly at Dumitru Potok, where drilling confirmed a large high-grade copper, gold, and silver skarn system, promising future growth potential.
Higher All-in Sustaining Costs
Dundee faced a 41% increase in all-in sustaining costs, reaching $1,244 per ounce of gold sold. This was attributed to lower volumes of gold sold and higher mark-to-market adjustments for share-based compensation.
One-Time Levy Impact
A one-time levy to the 2025 Bulgarian state budget resulted in an after-tax amount of $22 million, impacting the company’s earnings for the quarter.
Challenges at Ada Tepe
Ada Tepe mine produced 12,500 ounces of gold with an all-in sustaining cost of $1,340 per ounce, higher than the costs at Chelopech, indicating operational challenges that need addressing.
Forward-Looking Guidance
Looking ahead, Dundee Precious Metals remains optimistic about its growth prospects. The company reported solid production figures and maintained a strong balance sheet with no debt and a $150 million undrawn revolving credit facility. The advancement of the Coka Rakita project, targeting production by 2028, and continued exploration in Serbia, particularly at Dumitru Potok and Frasen prospects, are key focal points for future development.
In summary, Dundee Precious Metals’ earnings call highlighted a strong financial and operational performance, underscored by significant free cash flow and successful exploration activities. Despite challenges with increased costs and a one-time levy, the company remains well-positioned for future growth and shareholder returns, supported by a robust balance sheet and strategic initiatives.