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Dundee Precious Metals Investor Presentation August 2013

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Dundee Precious Metals Investor Presentation August 2013

  1. 1. DUNDEE PRECIOUS METALS BUILDING A PREMIER, INTERMEDIATE, LOW-COST GOLD PRODUCER AUGUST 2013 Proudly celebrating 30 years as a Toronto Stock Exchange listed company
  2. 2. FORWARD-LOOKING STATEMENTS 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 forwardlooking 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 news release 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. 2
  3. 3. INVESTMENT SUMMARY Strong Financial Position High Quality Assets with Proven Operating Performance and Further Potential Pipeline of Value Adding Organic Growth Dundee Precious Metals Commodity and Geographic Diversification Experienced Management Team and Board with Strong Track Record 3
  4. 4. MAINTAINING A SOLID FINANCIAL POSITION $250M Capital Structure @ August 13, 2013 $150M undrawn revolving credit facility ~$99M in Cash and Short-term Investments @ June 30, 2013 $121M Significant 2012 Operating Cash Flow Share Price C$5.29 Shares Outstanding 139M Market Capitalization $735M Fully diluted shares Additional cash on dilution 146M C$37M 52 week low - high Cash and Credit including: $3.69 - $9.93 Top Shareholders Debt @ June 30, 2013 Total Debt : Total Capital = 9% Dundee Precious Metals 25% Equinox Partners $74.3M Dundee Corporation <10% Gross Revenue by Metals Sold 2011A Gold Copper Silver 2012A 2016E 6% 5% 48% 41% Zinc 4
  5. 5. DPM’S ASSETS LOCATED IN POLITICALLY STABLE REGIONS Head office Operating assets Developing asset Dundee Precious Metals 5
  6. 6. GOLD COMPOUND ANNUAL GROWTH RATE OF 14% Consolidated Gold Production (oz 000’s) Consolidated Copper Production (lbs 000,000) Gold production has increased 70% over four years Copper production has increased 105% over four years Dundee Precious Metals 6
  7. 7. DECREASING CASH COSTS AND INCREASING EBITDA Reduced cash cost per ounce of gold produced 78% over four years1 Consolidated Adjusted EBITDA increased 412% over four years2 $118 $32 2008 2009 $125 $45 2010 2011 2012 ($40) (1) Net of by-product credits (2) Cdn $ Dundee Precious Metals 7
  8. 8. DPM: A LOW COST PRODUCER Cash Cost/Tonne of Ore Processed (1) ($/T) 2013E All-In Sustaining Cash Cost (US$/oz) $1,325 $1,362 $1,212 $1,155 $1,178 Average: $987 $665 $714 $782 DPM Argonaut Alamos $838 $842 $875 $1,005 $884 Allied Primero Timmins Teranga Centerra Alacer AuRico African Golden Semafo Nevada Barrick Star Source: Scotia Capital (April 2, 2013), DPM 2013 Guidance Note: All-in Sustaining Cash Cost = Total cash costs (net of by-products) + sustaining capital + proportionate share of corporate G&A (1) Dundee Precious Metals (2) This is a non-GAAP measure. See 2012 Annual Report for further details. All-in cost is comprised of cash delivered cost which includes mine cash costs, TC’s, RC’s and freight; net of by product credits, sustaining capital; and G&A costs (allocated based on revenue of operation). All-in costs exclude Avala and Dunav and growth capital expenditures. See Appendix for reconciliation to cost of sales. 8
  9. 9. CORPORATE VISION AND STRATEGY Vision Building DPM into a premier, intermediate, low-cost gold producer Autoclave fabricated for the MPF to be used for Stage 2 Pyrite Project at Chelopech Strategy Optimize value of existing operating assets • • Increase mine production and extend LOMs Upgrade/expand smelter and establish long-term contracts that provide a stable return Exploration at Kapan Mine Grow the business beyond existing operating assets • • • Develop Krumovgrad gold project Establish deep pipeline of greenfield exploration opportunities Complete acquisitions that offer accretive growth, diversity and gold exposure, while maintaining a conservative capital structure Sustain low quartile operating costs Tsumeb Smelter, Namibia Conceptual Illustration of Krumovgrad Gold Project Maintain a strong balance sheet with ample liquidity Dundee Precious Metals 9
  10. 10. CHELOPECH MINE: LOW COST, LONG LIFE PRODUCER Chelopech Optimization Grade Continue to implement cost/margin improvements Operating at full capacity of two million tonnes of ore per annum Capitalize on lower cost / higher recovery staged flotation reactor technology Resources M&I (at Dec.31, 2012) Reserves (at Dec 31, 2012) Ounces Au (oz) 4.0 g/t 3.8M Cu (lbs) 1.3% 825M Au (oz) 3.6 g/t 2.5M Cu (lbs) 1.1% Cu 519M Estimated Mine Life @ expanded rate 10+ years Perform targeted exploration to replace depletion and increase mineral resources / reserves Install new pyrite concentrate flotation circuit Complete feasibility study on the pyrite gold treatment project Staged Flotation Reactor at Chelopech Operations Dundee Precious Metals 10
  11. 11. CHELOPECH MINE: PYRITE PROJECT TO INCREASE RECOVERIES TO 90% 2013 Catalysts Complete Stage 1 Concentrator Upgrade Q4 2013 Stage 2 POX Facility Feasibility Study Q3 2013 400,000 T pyrite concentrate produced (E) Metals Potential Grades Est. Incremental Production Result Au 6-7 g/t 75,000 - 90,000 oz Ag 10 - 15 g/t 130,000 - 190,000 oz Cu 0.5% - 0.7% 4.5M - 6.0M lbs Project Stages Item Stage 1: Concentrator upgrade Project Highlights Capex Cash cost per oz of gold (net of by-product credits) $615 Stage 2: POX Facility Phase 1 - start production 2017 $93M Phase 2 - start production 2019 Estimated capital costs $202M NPV (5% discount rate) after tax(1) $23M $141M IRR after tax(1) 24% $87M (1) Assumes the following commodity prices after 2016: $1,250/oz Au, $25/oz Ag, and $2.75/lb Cu Dundee Precious Metals 11
  12. 12. KAPAN MINE: POTENTIAL TO INCREASE SIZE AND EXTEND LIFE OF MINE 2013 Catalysts Kapan Optimization Updated NI 43-101 Resource Estimate Complete final portion of drilling of Shahumyan deposit to support resource and potential expanded operation Complete studies to confirm optimal mine plan based on new resource Explore regional license to define additional Mineral Resources Continue operational improvements and cost reductions Product Cu & Zn concentrates containing Au & Ag Deposit Type Polymetallic vein deposit (swarms) Q3 2013 22,000 oz Au 1.56 g/t 0.25% 15.4M lbs Zn Underground Resource Grades 2.5M lbs Cu Open Pit Resource 2012 Metals Production 1.67% 450,000 oz Ag 32.20 g/t Underway Underway Kapan Mine office * Kapan operations were on care and maintenance as of November 2008; operations restarted April 2009. Dundee Precious Metals 12
  13. 13. TSUMEB SMELTER: A UNIQUE STRATEGIC ASSET Limited Global Smelting Capacity for Complex Concentrate • One of the few smelters with ability to process complex concentrate • Upgrades designed to meet internationally accepted environmental standards and expand capacity to process additional 3rd party concentrate Horne Smelter Operated by Xstrata Capacity: 825Kt of concentrate (total) Note: Complex concentrate capacity limited with little to no 3rd party capacity San Luis de Potosi Smelter Shut down in 2012 • Lower per tonne operating costs and more favourable smelting terms are expected to generate significantly higher margins La Oroya Smelter(1) Operated by Doe Run Note: Currently closed Kosaka Smelter Shut down in Q1 2008 Tsumeb Smelter Operated by Dundee Precious Metals Capacity: 240Kt-320Kt of complex concentrate Operating Smelters Closed Smelters Other smelters that process various amounts of complex concentrates Dundee Precious Metals 13
  14. 14. TSUMEB SMELTER HAS POTENTIAL TO POSITIVELY IMPACT EARNINGS Asset Overview DPM Ownership 100% Namibia Technology Complex Con Smelter Capacity (000’s) Location Ausmelt Product 2012 concentrate throughput Copper blister bars 159,356 tonnes Emissions & dust capture upgrades $103M Sulphuric acid capture plant (Q3 2014) $204M Electric holding furnace (Q1 2016) ~$70M+ Tsumeb Smelter Dundee Precious Metals 14
  15. 15. KRUMOVGRAD GOLD PROJECT: LOW CASH COST OPERATION Conceptual Illustration of Krumovgrad Gold Project Future Catalysts Update / finalize mine plan Seek opportunities to increase recoveries through use of SFR technology Proposed Mine Type Gold Recoveries Grade Annual ore tonnage production Annual Au production Mine Life Capital Costs to complete Total cash cost per oz Au Eq Open Pit 85% 3.4 g/t 850,000 tpy 74,000 ounces 2015 Start Production Secure final local approvals required prior to proceeding with ordering long lead items / construction Start Construction 2016 Complete detailed engineering that optimizes value of project Evaluate other exploration opportunities within existing licenses and establish targeted drill program 9 years US$127M $404 Based on Jan. 2012 DFS; Estimated recoveries, capital & operating costs in process of being updated. Dundee Precious Metals 15
  16. 16. DPM EXPLORATION UPDATE: PARTIALLY-OWNED ENTITIES Avala Resources Ltd. (TSX-V: AVZ) • NI-43-101 resources include:  Bigar Hill initial Inferred Resource of 26.4 MT @ 1.6 g/t Au for 1.4Moz   • Korkan initial Inferred Resource of 20.1 MT @ 1.5 g/t Au for 1.0 Moz Kraku Pester initial Indicated resource of 6.3 MT @ 1.3 g/t Au for 0.27 Mozs and Inferred Resource of 2.2 MT @ 1.0 g/t Au for 0.07 Moz Total Inferred Resource of 48.7 MT @ 1.5 g/t Au for 2.5 Moz Dunav Resources Ltd. (TSX-V: DNV) • NI-43-101 inferred resources include:  Kiseljak Mineral Resource initial estimate 300 MT grading 0.27% Cu & 0.26 g/t Au for 1.8 Blbs Cu and 2.5 Moz Au • Equity Portfolio Overview as at August 13, 2013 Securities Shares (m) % Held Value (C$M) Sabina Gold & Silver Special Warrants Warrants (strike at C$1.07) Total 18.5 10 5 9.9% 24 24 Avala Resources Special Warrants Warrants (strike at C$0.30) Total 135 50 25 53% 8.8 8.8 Dunav Resources Warrants (strike at C$0.42) Total 56 27.5 46% 5.0 5.0 Total shares & securities ~ 37.8 Bakrenjaca Au-Ag base metal epithermal system, drilling intersected 11m @ 5.13 g/t Au, 346 g/t Ag and 1.19% Cu Dundee Precious Metals 16
  17. 17. CAPITAL EXPENDITURES: SIGNIFICANT COMPONENT OF CAPEX IS DISCRETIONARY 2013-2017 Total Spend – Sustaining vs Growth ($M) 2013-17 Total - 856 2013-17 Sustaining / Growth - 212 / 644 257 237 164 150 47 Dundee Precious Metals 17
  18. 18. DPM VALUE PROPOSITION: TRADING AT A SIGNIFICANT DISCOUNT TO OUR PEERS Enterprise Value ($ Millions unless noted) Market Capitalization (Fully diluted) (1) 758 Debt (2) 74 Corporate Cash (2) (106) Strategic Investments (2) (22) Ent. value, excl cash & strategic investments 704 EBITDA Potential (3) Chelopech (4) 220 Kapan (4) 25 Krumovgrad (4) 85 Tsumeb (4) 100 G&A (35) Total EBITDA (4) 395 Enterprise value / EBITDA (5) 1.8x EBITDA Exceeds Capex during 2H2013 – 2017 Capital expenditures (6) EBITDA (3,4) Dundee Precious Metals 650 - 750 1,100 1. Fully diluted value based on closing share price of $5.18/share on Aug. 12, 2013 and add’l shares issued from outstanding warrants 2. As at June 30, 2013; cash excludes Avala and Dunav cash of $18 million and includes cash from issuing additional shares; strategic investments assumes Sabina warrants, Avala and Dunav valued at nil 3. Pro forma completion of capital projects and based on $1,400 Au and $3.20 Cu 4. Reflects estimated avg LOM EBITDA for Chelopech, Kapan (at existing not expanded capacity), and Krumovgrad; and Tsumeb annual throughput is 320,000 tpa of complex concentrate at recently contracted toll rates 5. Enterprise value excludes potential excess cash generated during 2H2013 – 2017 period 6. Includes estimated sustaining capital and growth capital, including Tsumeb acid plant and electric holding furnace; Chelopech pyrite projects; and Krumovgrad gold project 18
  19. 19. DPM FUTURE CATALYSTS Q3 2013 Q3 2014 Tsumeb Ramps Up to 100% Capacity Tsumeb Acid Plant Commissioning Kapan Initial Resource Estimate Chelopech Pyrite Stage 2 Feasibility Study 2015 Krumovgrad Construction Begins Q4 2013 Krumovgrad Capital Cost and Mine Plan Update 2016 Chelopech Pyrite Stage 1 Construction Complete Krumovgrad Begins Production Chelopech Mine Dundee Precious Metals 19
  20. 20. COMPELLING INVESTMENT OPPORTUNITY Strong Financial Position High Quality Assets with Proven Operating Performance and Further Potential Pipeline of Value Adding Organic Growth Dundee Precious Metals Commodity and Geographic Diversification Experienced Management Team and Board with Strong Track Record 20
  21. 21. DUNDEE PRECIOUS METALS MANAGEMENT TEAM Jonathan Goodman Executive Chairman Rick Howes President & Chief Executive Officer David Rae Senior Vice President, Operations Adrian Goldstone Paul Proulx Michael Dorfman Hume Kyle Richard Gosse Lori Beak Executive Vice President, Sustainable Business Development Senior Vice President, Corporate Services Senior Vice President, Corporate Development Executive Vice President & Chief Financial Officer Senior Vice President, Exploration Senior Vice President, Investor & Regulatory Affairs & Corporate Secretary Simon Meik Hans Nolte Vice President, Processing Vice President & General Manager, Tsumeb Smelter Hratch Jabrayan Vice President & General Manager, Kapan Mine Iliya Garkov Vice President & General Manager, Krumovgrad Gold Project Nikolay Hristov Vice President & General Manager, Chelopech Mine Reuben Mills Vice President, Safety & Asset Risk Management Rob Taylor Vice President Projects Jeremy Cooper Vice President, Commercial Affairs Dundee Precious Metals 21
  22. 22. Proudly celebrating 30 years as a Toronto Stock Exchange listed company 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 dundeeprecious.com
  23. 23. APPENDICES 23
  24. 24. ANALYST COVERAGE BMO CIBC World Markets Leon Esterhuizen Cormark Securities Mike Kozak Dundee Securities Josh Wolfson GMP Securities Oliver Turner Paradigm Capital Don MacLean RBC Capital Markets Sam Crittenden Scotia Capital Leily Omoumi Stifel, Nicolaus & Co. Dundee Precious Metals John Hayes Michael Scoon 24
  25. 25. 2013 GUIDANCE Metals Contained in Concentrate Produced Chelopech Kapan Total 125,000 – 143,000 25,000 – 30,000 150,000 – 173,000 43.0 – 46.0 2.5 – 3.0 45.5 – 49.0 - 16.5 – 18.5 16.5 – 18.5 210,000 – 230,000 Gold (ounces) 490,000 – 520,000 700,000 – 750,000 $14 - $17 million $8 - $12 million $22 - $29 million Copper (million pounds) Zinc (million pounds) Silver (ounces) Sustaining Capital expenditures Total growth capital expenditures $210 - $240 million Construction of acid plant at Tsumeb Pyrite Project at Chelopech Krumovgrad development and construction work Kapan Gold exploration and/or development work Mine output at Chelopech (tonnes of ore) Mine out put at Kapan (tonnes of ore) 550,000 – 600,000 Concentrate smelted at Tsumeb (tonnes) 185,000 – 200,000 Sustaining capital expenditures at Tsumeb Dundee Precious Metals 1.9 – 2.05 million $13 - $16 million 25
  26. 26. Q2 2013 SUMMARY Q2 2013 Q2 2012 $3.6 million $9.4 million $0.03 $0.08 Chelopech $20.4 million $36.4 million Kapan ($2.4 million) $(2.2)million Tsumeb Smelter ($1.6 million) ($6.0 million) $16.3 million $28.1 million 31,936 29,250 10,599,954 9,682,137 Silver (ounces) 51,987 52,462 Cash cost/T ore processed (incl. royalties) $40.25 $48.68 Cash cost/T ore processed (excl. royalties) $36.24 $43.56 8,681 4,803 830,875 505,706 5,843,821 3,387,510 Silver (ounces) 163,031 96,596 Cash cost/T ore processed (incl. royalties) $67.48 $76.03 Cash cost/T ore processed (excl. royalties) $60.61 $76.03 Adjusted Net Earnings Adjusted basic EPS Gross profit (loss) Total Gross profit Chelopech Production Gold (ounces) Copper (lbs) Kapan Production Gold (ounces) Copper (lbs) Zinc (lbs) Dundee Precious Metals 26
  27. 27. HEDGE POSITION • As at June 30, 2013, the Company had outstanding derivative contracts to mitigate a portion of its price exposure. These are summarized below: Commodity Hedged Volume Hedged (lbs) * Average fixed price Payable gold 545 ounces $1,425.96/ounce Payable silver 7,435 ounces $23.12/ounce Year of projected payable copper production Volume Hedged (lbs) * Average fixed price ($/lb) 2013 $3.94 2014 7,195,880 $3.73 Total Dundee Precious Metals 3.346,613 10,524,493 $3.79 27
  28. 28. CHELOPECH MINE: UPDATED MINERAL RESERVES AND RESOURCES Chelopech Mineral Reserves – December 31, 2012 Gold Tonnes (M) Grade (g/t) Ounces (M) Grade (%) Proven 12.3 3.4 1.4 1.3 Probable 9.3 3.8 1.1 Total 21.6 3.6 2.5 Copper Pounds (M) Category Silver Grade (g/t) Ounces (M) 340 9.3 3.7 0.9 180 5.7 1.7 1.1 519 7.7 5.4 Chelopech Mineral Resources – December 31, 2012 Gold Category Measured Silver Pounds (M) Grade (g/t) Ounces (M) 15.1 4.0 2.0 1.5 490 10.3 5.0 14.0 4.0 1.8 1.1 336 8.5 3.8 29.1 4.0 3.8 1.3 825 9.4 8.8 Inferred 5. 6. Grade (%) M&I 4. Grade (g/t) Ounces (M) Indicated 1. 2. 3. Tonnes (M) Copper 9.3 2.9 0.9 0.9 182 10.6 3.2 The rounding of tonnage and grade figures has resulted in some columns showing relatively minor discrepancies in sum totals. All Mineral Resources and Mineral Reserves Estimates have been determined and reported in accordance with NI 43-101 and the classification adopted by the CIM. Chelopech Mineral Reserves are based on a gold equivalent cut-off of 4 g/t (Au g/t + 2.06xCu%) and a cut-off of USD 10 profit/tonne using NSR analysis, as of December 31, 2012. This information has been prepared by Gordon Fellows who is a QP as defined in NI 43-101 and not independent of the Company. Chelopech Mineral Resources are based on a gold equivalent cut-off 3 g/t (Au g/t + 2.06xCu%) and a greater than USD 0 profit/tonne test using NSR analysis, as of December 31, 2012. This information has been prepared by Petya Kuzmanova and reviewed and approved by Julian Barnes. Julian Barnes is a QP as defined in NI 43-101 and not independent of the Company. Mineral Reserves and Mineral Resources for Chelopech are based on long term metals prices of USD 1,250/oz Au, USD 2.75/lb Cu, USD 25/oz Ag. Measured and Indicated Mineral Resources are inclusive of Proven and Probable Mineral Reserves. Dundee Precious Metals 28
  29. 29. CHELOPECH MINE: EXPLORATION RESULTS Q2 2013 Significant intercepts (cut-off grade 3g/tAuEq) Grades Hole ID Northing (mRL) Easting (mRL) Dip Az From (m) To (m) Interval (m) Cu (%) Au (g/t) EXT19_260_17 29786 6043 -10.0 031.7 109.5 148.5 39.0 0.69 3.19 EXT19_260_18 29785 6042 -35.8 030.9 163.5 186.0 22.5 0.65 8.03 EXT19_290_03 29778 6042 -18.5 017.1 132.0 144.0 12.0 0.53 4.16 EXT151_165_12 29305 5459 -39.5 211.8 21.0 40.5 19.50 0.98 3.32 EXT151_165_11 29305 5460 -16.0 211.6 27.0 39.0 12.0 1.39 2.84 EXT151_165_14 29306 5459 -23.7 231.5 28.5 45.0 16.5 0.43 2.71 EXT151_225_01 29186 5611 -18.0 132.5 10.5 34.5 24.0 0.68 3.14 EXT151_225_02 29186 5611 -39.7 132.1 10.5 64.5 54.0 0.83 2.52 EXT151_225_03 29185 5610 -21.5 154.2 6.0 28.5 22.5 1.56 5.21 G103_225_16 29175 5710 -26.9 87.8 16.5 64.7 48.2 0.98 2.24 1. 2. 3. 4. 5. 6. 7. 8. 9. Dundee Precious Metals Significant intercepts are located within the Chelopech Mine Concession and proximal to the mine workings. Gold Equivalent calculation is based on the following formula: (Au g/t + 2.06xCu%). Minimum downhole width reported is 1.5 metres with a maximum internal dilution of 4.5 metres. True widths are approximately 90% of the intersection width. Drill holes with prefix G indicate grade control drilling which is performed using BQ diamond drill core. All other holes are drilled with NQ diamond core. Coordinates are in mine-grid. No factors of material effect have hindered the accuracy and reliability of the data presented above. No upper cuts applied. For detailed information on drilling, sampling and analytical methodologies refer to the NI 43-101 “Preliminary Economic Assessment Report for the Chelopech Pyrite Recovery Project” (the “PEA Technical Report”) filed on SEDAR at www.sedar.com on September 10, 2012. 29
  30. 30. CHELOPECH MINE: CASH COST RECONCILIATION Cost of Sales: Less amortization & other Plus other charges, including freight Less by-product credits Cash cost of sales after by-product credits Gold oz (payable metal) Q2 2013 Actual Q1 2013 Actual Year 2012 Actual Year 2011 Actual Year 2010 Actual Year 2009 Actual Year 2008 Actual 27,381 31,991 98,298 88,838 $72,707 74,499 67,245 (8,264) (7,948) (19,542) (15,499) (14,425) (14,242) (11,966) 21,490 23,832 86,228 65,125 41,234 38,317 26,006 (33,560) (41,434) (163,940) (147,812) (87,320) (64,198) (59,376) 7,047 6,441 1,044 (9,348) 12,196 34,376 21,909 32,392 34,732 116,644 83,796 58,065 93,081 70,878 $2181 US$ thousands, unless otherwise indicated $1852 $93 $(112)4 $2105 $3696 $3097 Cash cost of sales/oz gold, (net of by-product credits) 1Based on US$3.34/lb copper 2Based on US$3.64/lb copper 3Based on US$3.95/lb copper 4 Based on US$4.27/lb copper 5Based on US$3.42/lb copper 6Based on US$2.34/lb copper 7 Based on US$3.16/lb copper Dundee Precious Metals 30
  31. 31. CHELOPECH MINE: CASH COST PER TONNE OF ORE RECONCILIATION US$ thousands, unless otherwise indicated For the periods indicated Q2 2013 Actual Q1 2013 Year 2012 Actual Year 2011 Actual Year 2010 Actual Year 2009 Actual Year 2008 Actual Ore processed (mt) 501,134 513,360 1,819,687 1,353,733 1,000,781 980,928 900,563 Cost of sales 27,381 31,991 98,298 $ 88,838 $ 72,707 75,647 67,423 Add (deduct): Depreciation, amortization & other non-cash costs (8,264) (7,948) (19,542) (15,499) (14,425) (15,390) (11,966) 1,054 (2,911) 4,535 862 (2,018) (419) (178) Total cash cost of production 20,171 21,132 83,291 $ 74,201 $ 56,264 59,838 55,279 Cash cost per tonne of ore processed, including royalties $40.25 $41.16 $ 45.77 $ 54.81 $ 56.22 $ 61.00 $ 61.38 Cash cost per tonne of ore processed, excluding royalties $36.24 $36.55 $ 41.16 $ 49.99 $ 51.54 $ 55.23 $ 57.87 Change in concentrate inventory 1. Gold, copper and zinc are accounted for as co-products. Total cash costs are net of by-product silver revenue. Dundee Precious Metals 31
  32. 32. KAPAN MINE: MINERAL RESOURCE ESTIMATE Shahumyan Deposit – September 2008 Inferred Mineral Resource – Ordinary Kriging Estimate 10mE x 10mN x 10mRL Block Size – 5m Capped Input Composite Data Cut off (AuEq - g/t) Tonnage (Mt) Gold Equiv. (g/t) Copper (%) Gold (g/t) Silver (g/t) Zinc (%) 0.50 335.8 1.19 0.11 0.48 8.39 0.41 0.75 226.5 1.47 0.13 0.61 10.32 0.49 1.00 147.1 1.80 0.15 0.79 12.62 0.57 1.25 98.3 2.14 0.17 0.99 14.99 0.65 1.50 69.8 2.45 0.18 1.19 17.00 0.72 1.75 49.2 2.80 0.19 1.43 19.14 0.78 2.00 36.3 3.13 0.19 1.68 20.87 0.83 AuEq US$ price assumptions: Cu $2.50/lb, Au $850/oz, Ag $16/oz and Zn $1.00/lb Dundee Precious Metals 32
  33. 33. KAPAN MINE: EXPLORATION RESULTS Q2 2013 Surface significant intercepts (SHDDR holes, cut-off grade 0.5 g/t AuEq) and underground significant intercepts (E holes, cut-off grade 1.0g/t AuEq) Hole ID Northing (mRL) Easting (mRL) RL Dip Azi From (m) To (m) Interval (m) & AuEQ Au (g/t) Ag (g/t) Cu (%) Zn (%) E712DE039 4343207 8623972 712 -46.4 313.8 87.0 90.0 3m @ 19.67 11.11 187.2 1.81 3.37 E712DE040 4343207 8623972 712 -54.8 315.4 87.0 89.0 2m @ 60.32 47.47 343.9 2.65 2.94 E712DE044 4343208 8623974 714 -54.8 302.6 97.0 99.0 2m @ 28.07 19.06 161.0 1.72 5.42 E712DW015 4343183 8623801 714 -50.4 355.6 140.0 143.0 3m @ 7.46 4.59 18.4 1.49 0.07 SHDDR0557 4343577 8623580 916 -60.9 0.9 28.0 35.0 7m @ 6.22 1.54 78.7 0.59 3.89 SHDDR0560 4343572 8623579 916 -72.7 352.4 0.0 6.6 6.6m @ 4.93 2.87 39.3 0.30 1.45 SHDDR0560 4343572 8623579 916 -72.7 352.4 95.0 102.0 7m @ 5.11 1.19 54.2 0.36 4.09 SHDDR0560 4343572 8623579 916 -72.7 352.4 248.0 254.0 6m @ 4.88 1.82 64.5 0.75 1.07 SHDDR0561 4343636 8623531 927 -55.0 7.3 223.0 228.0 5m @ 6.58 3.50 43.2 0.50 2.53 SHDDR0562 4343540 8623470 929 -59.3 355.5 296.0 298.0 2m @ 23.72 17.52 130.4 0.17 6.05 SHDDR0563A 4343634 8623531 927 -63.2 6.8 239.0 244.0 5m @ 7.96 3.22 49.2 1.70 1.75 SHDDR0568 4343560 8623517 923 -62.3 8.1 142.0 157.0 15m @ 6.82 2.57 43.9 0.86 3.57 1. 2. 3. 4. 5. 6. 7. 8. Dundee Precious Metals In situ gold equivalent (AuEq) grade based on the following long-term metal prices: $1,250 per ounce for gold, $25 per ounce for silver, $3.00 per pound for copper and $1.00 per pound for zinc. Holes with the prefix SHDDR are surface HQ diamond drilling, while E holes are underground drilling. Significant intercepts for surface holes are located within the Central and Southern Zones while underground drilling is located within the Central Zone and Southern Zones of the Shahumyan Deposit. True widths are approximately 90% of the intersection width. Minimum width reported is 2 metres and a maximum internal dilution of 2 metres. All survey coordinates are transformed to AUSPOS. No factors of material effect have hindered the accuracy and reliability of the data presented above. No upper cuts have been applied. 33
  34. 34. KAPAN MINE: CASH COST RECONCILIATION Cost of Sales: Less amortization & other Plus other charges, including freight Less by-product credits Cash cost of sales after by-product credits Gold oz (payable metal) Q2 2013 Actual Q1 2013 Actual Year 2012 Actual Year 2011 Actual Year 2010 Actual Year 2009 Actual Year 2008 Actual 13,445 9,502 50,547 47,276 33,637 21,072 36,319 (1,578) (1,617) (9,989) (9,140) (7,056) (6,996) (5,400) 2,874 1,672 6,218 11,893 8,912 5,142 4,976 (8,827) (5,780) (32,075) (47,588) (28,562) (13,591) (13,520) 5,914 3,777 14,701 3,028 6,931 5,627 22,375 5,733 3,541 18,204 26,230 22,287 11,233 11,388 $1,0321 US$ thousands, unless otherwise indicated $1,0672 $8083 $1154 $3115 $5016 $1,9657 Cash cost of sales/oz gold, (net of by-product credits) 1Based on US$3.34/lb copper 2Based on US$3.64/lb copper 3Based on US$3.95/lb copper 4 Based on US$4.27/lb copper 5Based on US$3.42/lb copper 6Based on US$2.34/lb copper 7 Based on US$3.16/lb copper Dundee Precious Metals 34
  35. 35. KAPAN MINE: CASH COST PER TONNE OF ORE RECONCILIATION US$ thousands, unless otherwise indicated For the periods indicated Q2 2013 Actual Q1 2013 Actual Year 2012 Actual Year 2011 Actual Year 2010 Actual Year 2009 Actual Year 2008 Actual Ore processed (mt) 162,648 119,663 509,419 581,852 428,865 218,235 269,033 13,445 9,502 50,547 $ 47,276 $ 33,637 $ 21,197 $ 36,319 (1,578) (1,617) (10,883) (9,140) (7,056) (4,047) (3,668) - - - - - (3,074) (1,732) (892) 1,189 (718) 416 3,572 1,696 (1,485) 7,263 9,074 38,946 $ 38,552 $ 30,153 $ 15,772 $ 29,434 Cash cost per tonne of ore processed (royalties not applicable in 2009) $67.48 $75.83 $ 76.45 $ 66.26 $ 70.31 $ 72.27 $ 109.40 Cash cost per tonne of ore processed, excluding royalties $60.61 $72.36 $ 69.10 $ 62.57 $ 66.33 $ 72.27 $ 109.40 Cost of sales Add (deduct): Depreciation, amortization & other non-cash costs Care and maintenance costs Change in concentrate inventory Total cash cost of production 1. Gold, copper and zinc are accounted for as co-products. Total cash costs are net of by-product silver revenue. Dundee Precious Metals 35
  36. 36. KRUMOVGRAD GOLD PROJECT Dundee Precious Metals 36
  37. 37. KRUMOVGRAD GOLD PROJECT Krumovgrad Mineral Reserves – December 31, 2011 Gold Silver Tonnes (M) Grade (g/t) Ounces (M) Grade (g/t) Ounces (M) Proven 2.94 4.70 0.44 2.54 0.24 Probable 4.30 2.44 0.34 1.52 0.21 Total 7.24 3.36 0.78 1.92 0.45 Category Krumovgrad Mineral Resources – December 31, 2011 Gold Category Measured Grade (g/t) Ounces (M) 3.30 4.90 0.52 3.00 0.28 4.69 2.50 0.38 2.00 0.24 M&I 7.99 3.50 0.90 2.00 0.51 Inferred Dundee Precious Metals Grade (g/t) Ounces (M) Indicated 1. 2. 3. 4. 5. Tonnes (M) Silver 0.40 1.20 0.02 1.00 0.01 Rounding of tonnage and grade figures has resulted in some columns showing relatively minor discrepancies in sum totals. All Mineral Resource Estimates have been determined and reported in accordance with NI 43-101 and the classification adopted by the CIM. Krumovgrad Mineral Reserves and Resources are based on the Krumovgrad 2012 Technical Report using a variable economic cut-off grade and 0.5 g/t Au respectively. All Mineral Reserves and Resources are based on long term metals prices of $1,250 Au, $3/lb Cu, $25/oz Ag and $1/lb Zn. Measured and Indicated Mineral Resources are inclusive of Proven and Probable Reserves. 37
  38. 38. Proudly celebrating 30 years as a Toronto Stock Exchange listed company 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 dundeeprecious.com

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