Despite having amassed throughput of 174,122 tonnes at Tsumeb – below 2022 guidance – Dundee Precious Metals is forecasting complex concentrate smelted to be between 200,000 and 230,000 tonnes in each of 2023, 2024 and 2025, reflecting its expectation for a consistent rate of throughput following a plan to resolve water leak issues in the off-gas system by April 2023.
This is potentially 690 000t for the three years.
David Rae, President and Chief Executive Officer of the miner revealed this last week further noting that over 90% of concentrate feed is currently contracted through to the end of 2023, with the remaining feed in 2023 and additional feed thereafter expected to be contracted in the normal course.
“Sustaining capital expenditures are expected to be between US$14 million and US$17 million for each of 2023 and 2025, and between US$10 million and US$13 million in 2024, reflecting the timing of scheduled maintenance shutdowns based on an expected 18-month operating cycle for the Ausmelt furnace,” the miner affirmed.
Overall, sustaining capital expenditures are expected to trend lower over the next three years, due primarily to the completion of the upgraded tailings management facility at Chelopech and the gradual reduction in activities at Ada Tepe as the mine approaches its end of life in 2026.
“The estimated metals contained in concentrate produced, payable metals in concentrate sold and volumes of complex concentrate smelted detailed in the Company’s 2023 detailed guidance and three-year outlook are not expected to occur evenly throughout the year and are forecasted to vary from quarter to quarter depending on mine sequencing, the timing of concentrate deliveries and planned outages, including furnace maintenance shutdowns at Tsumeb. The rate of capital expenditures is also expected to vary from quarter to quarter based on the schedule for, and execution of, each capital project,” the miner explained.
Tsumeb Smelter’s Q4 performance
Rae explained that performance during the fourth quarter of 2022 at the Tsumeb smelter was impacted by a 17-day shutdown to repair a water leak in the off-gas system as well as instability in the power grid as a result of abnormally heavy rainfall in December. As a result, complex concentrate smelted for the year of 174,122 tonnes was 6% below the low end of its 2022 guidance range. Cash cost per tonne of complex concentrate smelted in the fourth quarter was US$443.
“Copper production in the fourth quarter and twelve months of 2022 of 7.4 million pounds and 30.8 million pounds, respectively, was 19% and 11% lower than the corresponding periods in 2021 due primarily to lower copper grades,” noted Rae.
The miner also revealed that in 2022, cash cost per tonne of complex concentrate smelted of US$463 was towards the higher end of the updated guidance range, due primarily to the fixed cost nature of the facility and the impact of lower volumes of complex concentrate smelted, partially offset by a stronger U.S. dollar.
Commenting on the overall performance of the firm, Rae said that in 2022, Dundee Precious Metals delivered strong operating results, achieving its gold production guidance while managing industry cost pressures.
“We generated US$166 million of free cash flow in 2022, of which we returned 27% to shareholders through share repurchases and our sustainable quarterly dividend. We also continued to invest in our future, as we progressed the feasibility study update at Loma Larga and announced a highgrade discovery at Čoka Rakita in Serbia,” said Rae adding: “Our strong three-year outlook for gold production and attractive all-in sustaining costs, reflecting the improved life of mine plan for Ada Tepe, combined with our financial strength and significant free cash flow generation position us well to continue generating value for all of our stakeholders. Our focus in 2023 will be on continuing to deliver strong operating performance, achieving key milestones at Loma Larga, and advancing our portfolio of prospective exploration targets.”
Exploration
In 2023, the Company is increasing its level of spending on exploration, reflecting higher expected drilling activities following the discovery of a high-grade deposit at Čoka Rakita in Serbia, and an advanced brownfield drill program at Chelopech focusing on the Sveta Petka Commercial Discovery application process as well as additional drilling at Sharlo Dere.
Therefore, expenditures related to exploration in 2023 are expected to be between US$25 million and US$30 million.
On February 16, 2023, the Company’s Board of Directors declared a dividend ofUS $0.04 per common share payable on April 17, 2023, to shareholders of record on March 31, 2023.