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Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
Understanding the tsumeb smelter
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Understanding the tsumeb smelter

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  • 1. DPM TSUMEB LUNCH AND LEARN MARCH 20, 2014 DUNDEE PRECIOUS METALS UNDERSTANDING THE TSUMEB SMELTER
  • 2. 2 This presentation contains “forward-looking information” or "forward-looking statements" that involve a number of risks and uncertainties. Forward-looking information and forward-looking statements include, but are not limited to, statements with respect to the future prices of gold and other metals, the estimation of mineral reserves and resources, the realization of mineral estimates, the timing and amount of estimated future production and output, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending litigation. Often, but not always, forward-looking statements can be identified by the use of words such as “plans”, “expects”, or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made, and they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any other future results, performance or achievements expressed or implied by the forward- looking statements. Such factors include, among others: the actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold; possible variations in ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, fluctuations in metal prices, as well as those risk factors discussed or referred to in this presentation under and in the Company’s annual information form under the heading "Risk Factors" and other documents filed from time to time with the securities regulatory authorities in all provinces and territories of Canada and available at www.sedar.com. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements. FORWARD LOOKING STATEMENTS
  • 3. SITE OVERVIEW Dundee Precious Metals 3 Effluent plant Acid plant Ausmelt New converters Acid storage tanks Oxygen plants Ausmelt baghouse Hygiene baghouse Arsenic plant Old converters Acid plant laydown area
  • 4. Dundee Precious Metals UNIQUE SMELTER EQUIPPED TO TREAT COMPLEX CONCENTRATES • Secures capacity to treat Chelopech concentrate and derives additional revenues processing complex concentrates from 3rd parties • Toll rates for complex concentrate command a substantial premium • Most recent 3rd party contracts at higher rates than pre-existing arrangements prior to DPM ownership One of a few smelters with ability to process large volumes of complex concentrate Project 2012 dust and emissions upgrades complete Production curtailment has been lifted Additional upgrades reduce SO2 emissions, increase capacity and lower costs 4 • New off-gas and emissions management • New dust management systems • Smelter hygiene improvements • Ramping up to 100% capacity in Q1 2014 • New sulphuric acid plant subject to lump sum turnkey contract • Long-term acid off-take agreement with Rössing • Potential installation of a holding furnace
  • 5. Dundee Precious Metals HISTORY OF TSUMEB SMELTER • Built in 1960-62, commissioned 1963 • Designed specifically to treat complex polymetallic ores from Tsumeb Mine which contained high levels of copper, lead, zinc, arsenic and cadmium • DPM Tsumeb Smelter purchased from Weatherly Mining in March 2010 • Capacity increased from 147,000 tonnes concentrate in 2010 to a current capacity of 240,000 tonnes per annum 5 Asset Overview DPM Ownership 100% Location Namibia Acquisition March 2010 $50M Technology / Product Ausmelt Product Copper blister bars 2013 concentrate throughput 152,457 tonnes Expanding smelter capacity 320 ktpy Emissions & dust capture upgrades $110 M Sulphuric acid capture plant (Q3 ’14) ~$240 million Holding furnace (2017) $70+ million E Complex Concentrate Smelted (‘000 t) 2010 2011 2012 2013 2014E Chelopech Concentrate 56 89 112 74 190-220 3rd Party Concentrate 64 92 47 78 Cash Cost (US$/t) 268 293 374 433 280-350 EBITDA (US$M) 2 3 (3) (7) n/a
  • 6. Dundee Precious Metals IMPACT OF CAPITAL SPEND ON ARSENIC CONTROLS 6 mg/m3 mg/m3
  • 7. Dundee Precious Metals COPPER SMELTING OVERVIEW Feed preparation Offgas cleaning As2O3 production Slag Mill Copper making (converting) Concentrate Reverts Fluxes Fuels Cu Dusts Matte 55% Cu Slag 2.5% Cu Feed 20% Cu Offgas Dust Copper 98.5% Cu 7
  • 8. Dundee Precious Metals CU CONVERTER NORMAL 8
  • 9. Dundee Precious Metals COPPER CONVERTING Oxides (slag) to slagmill Cu-sulfide (Matte) To Converters Offgas to gas cleaning section Blister copper 9
  • 10. Dundee Precious Metals ACID PLANT SIMPLIFIED PROCESS Process Gases Drying Tower Converter Absorption Tower Clean & Dry SO2 Conversion of SO2 to SO3 SO3 Sulphuric Acid Product (98%)
  • 11. Dundee Precious Metals PRODUCTION 11 119,557 180,403 159,356 152,457 220,000 - 190,000 0 50,000 100,000 150,000 200,000 250,000 2010 (Q2-Q4) 2011 2012 2013 2014 (guidance) Concentrate(tonnes) Concentrate smelted 152 52 11 8 3 (11) 215 100 120 140 160 180 200 220 240 Actual 2013 performance Oxygen plant late Project 2012 tie-in shut overrun Water leaks, buildups, tap block issues Project 2012 follow- up shutdowns Higher smelting rates + better availabilities 2013 Expected performance Concentratessmelted('000tonnes) 2013 Smelting Performance Factors
  • 12. Dundee Precious Metals OPERATIONAL EXPENSES 12 Fixed cost Variable costinv. variable cost 268 295 374 433 0 100 200 300 400 500 2010 (Q2-Q4) 2011 2012 2013 2014 (guidance) Cashcost/tonne ofconcentratesmelted(USD) Cash cost / tonne of concentrate smelted 380 - 305 27% 16% 12% 4% 2% 3% 7% 9% 5% 6% 2% 7% 100% 0% 20% 40% 60% 80% 100% percentagefromtotalexpenses Expenses breakdown
  • 13. Dundee Precious Metals MOVING TO OPPORTUNITY - NEW OXYGEN PLANT – 420 T/D •Smelting capacity increased from 170kt per annum to potential of 420kt per annum •Old Plant 170t/d 13
  • 14. Dundee Precious Metals INCREASING SMELTING CAPACITY Approved capital Anticipated future capacity 170 70 36 44 100 240 420 0 50 100 150 200 250 300 350 400 450 base capacity (170 tpd O2) new oxygen plant operational (420 tpd O2) optimise smelter availability holding furnace 2 oxygen plants (590 tpd O2) + coolant concentratesktpa 14
  • 15. Dundee Precious Metals AUSMELT AVAILABILITY OPERATIONAL PERFORMANCE IMPROVEMENT • Ausmelt availability (excl. annual shut down): Currently: 78% Aim 2014: 87% Aim 2015: 90% • Further availability gains targeted by: − Decreasing shutdown duration − Increasing campaign life − Increasing crane availability Current 2014 improvements 2015 improvements Dropbox cleaning 3% - 3% - Build ups in offgas system 7% - 3% - 1 % Taphole brick replacement 3% - 1% - 1 % Water leaks 2% - 1% - 0.5 % Feed rate reductions 1% - 1% - Power outages (O2 plant) 0.5% - - TOTAL: 16.5% - 9 % - 2.5% 15
  • 16. Dundee Precious Metals TREATMENT CHARGES Bulk Smelting Market • Global copper concentrate sales have transparent benchmarks. • These typically range from $90 to 130/t between contract and spot tonnage. • Contract durations are normally 1-year and therefore negotiated annually. • Concentrates need to be free of deleterious materials or face being rejected or attract penalties for treatment. • Treating complex elements requires blending with clean concentrates. Complex Concentrates Market • Tsumeb is a niche complex concentrate treatment facility with core arsenic capability. • The complex market concludes multi-year agreements and attracts TC premiums to the clean market of $30 to $50/t. • Thresholds for core arsenic penalties vary but generally start above 0.5% • Charges are on a $ per 0.1% increment over 0.5% and the $ per 0.1% penalty will increase as the arsenic level increases. • Additional Penalties possible - Lead, Zinc, Se, Te, Bi, moisture, etc. 16
  • 17. Dundee Precious Metals CAPEX SPEND 17 8,357 8,820 6,108 9,281 17,051 56,926 130,528 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 2010 (Q2-Q4) 2011 2012 2013 thousandUSD Capital expenditures Growth Sustaining
  • 18. Dundee Precious Metals EBITDA PERFORMANCE 18 2,214 2,798 -2,593 -6,998 -8,000 -6,000 -4,000 -2,000 0 2,000 4,000 2010 (Q2-Q4) 2011 2012 2013 thousandUSD EBITDA
  • 19. ACID PLANT PROJECT PS converters, Gas Cleaning plant, Sulphuric Acid plant and Effluent Treatment plant
  • 20. Dundee Precious Metals • Gas Capture and conversion to H2SO4 • Environmental systems upgrade • High Efficiency Scrubbing • Metals Recovery • Dispatch by rail and road • Water reclamation • Pearce-Smith Converter Replacement • Operational readiness ACID PLANT PROJECT 20
  • 21. Dundee Precious Metals ACID PLANT PROJECT 21
  • 22. dundeeprecious.com One Adelaide Street East Suite 500 Toronto, Ontario M5C 2V9 T: 416 365-5191 Investor Relations T: 416 365-2851 ssrubiski@dundeeprecious.com TSX: DPM – common shares DPM.WT.A – 2015 Warrants Proudly celebrating 30 years as a Toronto Stock Exchange listed company

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