DPMT Analyst Update, January Chelopech 31, 2017 7 April, 2017 Chelopech Mine, Bulgaria
Tsumeb Smelter Operating Results 2016 Results : Safety - After a difficult start to 2016, the smelter has been LTI free for over 4 months. Total 2016 concentrate smelted 200,272 tonnes Acid production 191,630 tonnes Cash cost/t complex con smelted, net of by-product credits $440 Adjusted EBITDA $9.7 million Total Capital Expenditures (US$M) Smelter Adjusted EBITDA (US$M) (11) 140 130 18.5 63 44 26 19 2011 2012 2013 2014 2015 2016 9.7 6.8 3.0 (2.5) (7) 2011 2014 2015 2016 2012 TSX:DPM 11 See footnotes contained in Appendix on slide 32 2 2013
Tsumeb Smelter Optimizing Performance Recent Achievements Major post purchase optimization and environmental upgrade capital projects completed Acid plant now capturing all of the converter and furnace SO 2 offgasses Building on that success Completed Expansion Feasibility Study to 370,000tpa in Q4 2016 Sourcing additional concentrate tonnage for 2018 and beyond Completing Environmental Impact Assessment for submission in April 2017 Exploring partnership options for expansion funding Focusing on plant optimization with the Transformation project 312 120 341 198 196 200 (4) (4) (4) (4) (4) 2 2 2 2 TSX:DPM 2,3,14 See footnotes contained in Appendix on slide 32 3 180 421 Chelopech concentrate supplied to smelter ( 000s t) 159 152 480 Third Party con supplied to smelter ( 000s t) 394 418 Cash cost per tonne of concentrate smelted (net of by product (3,14) credits) 440 485 466 2010 2011 2012 2013 2014 2015 2016 2017F 2018F 2019F 2020F 300-400- 210-240 240-265 Anticipated future capacity 370 369 370 340
Smelter Transformation Project Vision To ensure that we realise the full potential of the smelter and demonstrate that we are reliable, consistent, sustainable and profitable. Guidance Smelt 210-240 kt of Concentrates Cash costs $400 to 485/t Sustaining Capex $12-17M PRIORITIES Steady State Operation Maintenance Systems Materials Handling Technical Services Commercial Systems Stable Operating parameters Operating practices Process Controls Plant availability Operating system Systems integration Feed preparation Slag handling Material reclamation Recirculating load Furnace integrity Metal accounting Logistics Transformation Procurement Sourcing Working Capital FOUNDATION People Environmental Health & Safety Management Operating Model VALUES
Evaluating Implementing Adding Value Sustainability Smelter Transformation Project A rigorous process is being followed to manage the transformation initiatives, complemented by the use of an application, PIPware, which gives visibility on results and progress to all levels Process flow for moving ideas through the pipeline: Prioritized Concepts Validate Opportunity Values Prioritize Ideas Complete PIPware Idea Form Visibility into the Ideas Pipeline Benefit over time Manage High Value Ideas Idea is sustainable All steps are complete for lock in Results confirm lock in Idea Owner to submit checklists for approval Approver (usually Head of Department) to approve checklist Moving stages is treated with discipline to ensure slippage doesn t occur and value is captured
11 discrete initiatives were valued, by their input KPI improvement, have been prioritised, with a single responsible person, and are being managed rigorously Transformation Priority Initiative Lever Impacted Lever Improvement Current Status Steady State Operation Aisle Management Converter Reverts Generation 8 Cu t/d Evaluating Steady State Operation Crew to Crew Best Practices (performance leveling) Operating Rate and Yield 6% Op Rate & 1.5% Yield Evaluating Steady State Operation Matte Holding Vessel Converter In Stack Hours 0.75 hr/d Implementing Maintenance Systems Materials Handling Lance maintenance improvement via planning and preparedness Stabilise blend recipe (NMBM + Secondaries) Downtime 120 hr/yr Evaluating Cu% in slag Reduce Cu% in slag by 0.7% Implementing Materials Handling Control NMBM moisture content Ausmelt Sec. Generation 220 Cu t/ year Evaluating Materials Handling Reduce and maintain constant secondaries particle size Availability (Bin Hangups and feed blockage) 77 hrs/year Evaluating Technical Services Increased Campaign Life of Ausmelt Operating Days & Cost 14 d/yr Implementing Technical Services Increased Campaign Life of Converters Operating Days & Cost 20 d/yr Implementing Commercial Systems Top 2 Contractor Contract Renegotiation Operating Cost TBD Implementing Commercial Systems eprocurement Implementation Operating Cost TBD Implementing 6
MOVING TO CONVERTER OPTIMIZATION - THE IMPACT OF MATTE HOLDING CAPACITY ON BLISTER PRODUCTION 1 converter 3 charges in 48 hours Current Operations 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 Fill up slag and copper blow Cast Delays Fill up slag and copper blow Cast Delays 34 36 38 40 42 44 46 48 Fill up slag and copper blow Cast Delays two converters slag and copper blow Delays Cast Fill up slag and copper blow Delays Cast Fill up slag and copper blow 4.4 charges in 48 hours slag and copper blow Delays Cast Fill up slag and copper blow Delays Cast Fill up Converter is filled up with 4 ladles of matte Slag and copper blow Blister is removed from converter, casted and converter cleaned Various delays during the charge and between charges - mostly waiting for matte from the Ausmelt and breakdowns hours 1 converter 3 charges in 48 hours 2 4 6 8 10 12 14 16 18 Matte Holding Vessel installed end 2 nd quarter 20 22 24 Fill up slag and copper blow Cast Delays Fill up slag and copper blow 26 28 30 32 34 36 38 40 42 44 46 48 Cast Delays Fill up slag and copper blow Cast Delays 1 converter & MHV Fill up slag and copper blow Cast Delays Fill up slag and copper blow Cast Delays Fill up slag and copper blow Cast Delays Fill up slag and co 3.5 charges per 48 hours MHV shortens converter fill-up time from 3 hours to 2 hours Slag and copper blow Blister is removed from converter, cast and the converter mouth cleaned The delays are reduced by 30 minutes due to the MHV, mostly waiting for matte delays Dundee Precious Metals 7
New Concentrate (NMBM) Annual Equivalent Capacity The equivalent capacity is calculated using only one Ausmelt shutdown per annum Normal secondary stocks are when copper rework reduces to normal meaning lower secondaries displacement of new concentrate in the Ausmelt 23% Copper in NMBM was used to calculate the required blister production during secondary normal stock levels Dundee Precious Metals 8
Blister Production - The Converter s throughput, blow time and yield has seen consistent performance in excess of the baseline 2016 production level Converting Rate (t/hr) Converter Blow Time (hr/day) Converter Yield (%) Top 10% of Days 25.2 Top 10% of Days 28.2 Top 10% of Days 93.7 Best Week 26.8 Best Week 22.7 Best Week 90.5 Top 25% of Days 20.7 71% Top 25% of Days 24.4 68% Top 25% of Days 89.3 19% Best Month 18.5 Best Month 18.7 Best Month 85.8 Best Rolling 30- Day Average 17.6 26% Best Rolling 30- Day Average 19.3 11% Best Rolling 30- Day Average 75.7 9% Average 14.7 Average 16.8 Average 78.9 0 10 20 30 0 10 20 30 0 25 50 75 100 Dundee Precious Metals 9
NEAR TERM PRESSURES ON TSUMEB The asset value of the smelter was impaired following a review of the complex copper concentrate market balance. This showed: A delay in the availability of new concentrates to market Ongoing weakness in the TC s and penalties for complex copper concentrates & OPPORTUNITY Tsumeb took advantage of the closure of the BCL smelter to recruit additional near-term technical resources to accelerate optimization of the smelter and this is producing positive results post completion of the smelter outage in February and March. Dundee Precious Metals 10
Growing Complex Concentrates Market Mines In Operation Annual Tonnage As (%) Chelopech 90,000 105,000 5.5% South America 150,000 200,000 4.0% - 9.0% Small Producers (into blends) 30,000 50,000 2.5% - 7.0% Total Complex 270,000-355,000 Other Pyrite/Cu Con/Antimony 100,000 150,000 4.0% - 5.0% Total Concentrate 370,000 505,000 Projects Possible Production Copper and Pyrite Concentrates Annual Tonnage As (%) 400,000 4.0% 10.0% TSX:DPM 11