Dundee Precious Metals Inc: Second Quarter 2005.TORONTO -- Dundee Precious Metals Precious Metals Valuable metals such as gold, iridium, palladium, platinum, and silver. Notes: Investing in precious metals can be done either by purchasing the physical asset, or by purchasing futures contracts for the particular metal. Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :DPM (Documents Per Minute) The number of paper documents that can be processed in one minute. ) - CHELOPECH REDEVELOPMENT CONTINUES ON TARGET KRUMOVGRAD PERMITTING PROCESS STARTS WITH POSITIVE MARKS GROWTH PLANS BACKED BY SOLID FINANCIALS AND STRATEGIC INVESTMENTS (All amounts have been expressed in Canadian dollars Noun 1. Canadian dollar - the basic unit of money in Canada; "the Canadian dollar has the image of loon on one side of the coin" loonie dollar - the basic monetary unit in many countries; equal to 100 cents except where indicated). Dundee Precious Metals Inc. (TSX:DPM) ("Dundee Precious", "DPM" or "the Company") continues the development of its projects in Bulgaria and Canada towards sustained production by 2007, backed by a solid financial position, as indicated in the results of its operational, exploration and investment activities during the second quarter 2005. HIGHLIGHTS - Strong financial position: working capital of $55.7 million plus investment portfolio of $159.6 million at market, equate e·quate v. e·quat·ed, e·quat·ing, e·quates v.tr. 1. To make equal or equivalent. 2. To reduce to a standard or an average; equalize. 3. to $4.01 per share; - Definitive Feasibility Study The analysis of a problem to determine if it can be solved effectively. The operational (will it work?), economical (costs and benefits) and technical (can it be built?) aspects are part of the study. Results of the study determine whether the solution should be implemented. for the Krumovgrad Gold Project (Ada Tepe) completed; the Board of Directors approved expenditure of US$75 million to construct the mine; a Project Manager responsible for the construction of the mine appointed in July 2005; - Environmental Impact Assessment ("EIA (Electronic Industries Alliance, Arlington, VA, www.eia.org) A membership organization founded in 1924 as the Radio Manufacturing Association. It sets standards for consumer products and electronic components. ") has been completed and submitted to the Municipality MUNICIPALITY. The body of officers, taken collectively, belonging to a city, who are appointed to manage its affairs and defend its interests. of Krumovgrad and regional authorities; public hearings scheduled for August, to be followed by completion of the governmental approval process; - Chelopech operations profitable for the first six months of 2005. Ore production reaches an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. rate of over 950,000 tonnes in April 2005; - Definitive Feasibility Study to evaluate metal production at Chelopech expected by year end as scope of autoclave autoclave Vessel, usually of steel, able to withstand high temperatures and pressures. The chemical industry uses various types of autoclaves in manufacturing dyes and in other chemical reactions requiring high pressures. increases from 1.5 to 2.0 million tonnes per year and processing optimization optimization Field of applied mathematics whose principles and methods are used to solve quantitative problems in disciplines including physics, biology, engineering, and economics. work continues; - US$10 million financing for Chelopech with the European Bank for Reconstruction and Development European Bank for Reconstruction and Development Bank targeted at Eastern Europe and the former Soviet Union. closed in early April 2005; and - The Company is on schedule to earn a 60% interest in the Back River Project located in Nunavut, Canada. "It's been only a year since we converted into an operating mining company and it is rewarding to see our shareholders base expand and the progress consistently achieved every quarter," said Jonathan Goodman Goodman was a polite term of address, used where Mister (Mr.) would be used today. Compare Goodwife. Goodman refers to:
the upholding by individuals of the principles, laws, ethics and conventions of their profession. , and their commitment to the Company and its shareholders" he added. MINING AND EXPLORATION ACTIVITIES Chelopech The Chelopech Mine is continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the while undertaking a significant redevelopment of its mining and processing methods and capacities. As a result, there will continue to be quarterly variations in its operations until all planning is complete and changes are effected. Redevelopment Underground development continues to be ahead of plan for the year. The conversion of mining methods to long hole open stoping has commenced and has accounted for approximately 65% of the ore production during the quarter. Construction of a 2,300 metre metre In poetry, the rhythmic pattern of a poetic line. Various principles have been devised to organize poetic lines into rhythmic units. Quantitative verse, the metre of Classical Greek and Latin poetry, measures the length of time required to pronounce syllables, decline from surface to the underground mine workings began in April 2004 from both the surface portal and the underground exit point. Completion of the decline is critical to achieving an annualized production rate of 2.0 million tonnes per year of ore mined. Specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. equipment to advance the decline through difficult ground conditions has arrived at the site and is being assembled as·sem·ble v. as·sem·bled, as·sem·bling, as·sem·bles v.tr. 1. To bring or call together into a group or whole: assembled the jury. 2. . The decline is expected to be completed in 2006. Pressure Oxidation oxidation /ox·i·da·tion/ (ok?si-da´shun) the act of oxidizing or state of being oxidized.ox·idative ox·i·da·tion n. 1. The combination of a substance with oxygen. 2. Plant The Company's feasibility study to evaluate direct metal production using autoclave technology is continuing. The scope of the autoclave has been increased from 1.5 to 2.0 million tonnes per year. In addition, before completing the feasibility study, additional testing is being undertaken to confirm gold and copper recoveries from variability in the ore samples, thus providing further confidence in the long term stability of the operation and additional samples for environmental testing. Costs of Production Ore mined and processed over the three month period ended June 30, 2005 averaged over 70,000 tonnes per month compared to an average of approximately 54,000 tonnes per month mined in the prior year comparable period. Ore grades Ore grade is a measure that describes the concentration of a valuable natural material (such as metals or minerals) in its surrounding ore. Ore grade is used to assess the economic feasibility of a mining operation: the cost of extracting a natural material from its ore is directly and recoveries were lower than the prior year's comparable period and slightly better than the first quarter of 2005. Due to excessive rainfall in the latter half of the second quarter, access to the higher grade areas was restricted. Cost per unit of ore mined decreased from the prior quarter and from the prior year comparable period. This is in line with expectations as a result of fixed costs fixed costs, n.pl the costs that do not change to meet fluctuations in enrollment or in use of services (e.g., salaries, rent, business license fees, and depreciation). being allocated to greater production volumes. A large proportion of Chelopech's operating costs operating costs npl → gastos mpl operacionales are fixed and it is expected that unit costs will continue to decrease as production increases. Ore production at the end of June 2005 is ahead of plan and it is expected that the mine will meet or exceed the current year target. The cash cost per pound of copper was higher and per ounce ounce, in zoology ounce, in zoology: see leopard. ounce, unit of measurement ounce: see English units of measurement. of gold in concentrate was lower than the prior quarter although higher than expectation due to lower than planned ore grades and metal recovery rates as a result of the area of the orebody currently being mined. Krumovgrad On July 5, 2005, the Company's Board of Directors accepted the Definitive Feasibility Study and the required capital expenditure of US$75 million to construct the mine at Krumovgrad. The feasibility study confirmed the economic viability of the project and allows the Company to proceed with the plans for the construction of the mine, subject to obtaining the necessary permits and approvals. Environmental Impact Assessment An EIA was submitted to the Ministry of Environment and Waters ("MOEW MOEW Ministry of Environment and Waters (Bulgaria) ") in April, 2005. The document has been prepared in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with both Bulgarian legislation and European Union European Union (EU), name given since the ratification (Nov., 1993) of the Treaty of European Union, or Maastricht Treaty, to the European Community guidelines guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. . The EIA was approved for content and released for the second part of the process in July 2005, which involves the presentation of the EIA to the Municipality of Krumovgrad and regional authorities for review for a period of 30 days. At the end of this period, a public hearing is held. The public hearing is planned for this month. Results of the public hearing are incorporated into the EIA which is then resubmitted to the MOEW for final approval. This final review can take up to three months. Back River Project As at June 30, 2005, the Company has eligible expenditures of approximately $14 million. The Company is mid way through its $9 million exploration program for 2005 having completed 8,000 metres of diamond drilling Diamond Drilling is a highly specialized industry used for mineral exploration around the world. Most commonly using wireline and core bits with diamond encrusted matrix. To drill holes to max depths of twelve thousand feet, for the recovery of core used in verifying mineral to date. Our objectives for the year are to better define the resources at the Goose Lake Goose Lake may refer to: The United States
FINANCIAL RESULTS The Company reported a net loss of $3.8 million or $0.07 per share and $5.3 million or $0.10 per share for the three and six months ended June 30, 2005 compared with a net loss of $10.7 million or $0.20 per share, and net income of $9.3 million or $0.19 per share for the three and five months ended June 30, 2004, respectively. As at June 30, 2005, the Company had working capital of $55.7 million, investments in publicly tradeable securities with a market value of $160 million which aggregates to $4.01 per share. In addition, the Company had mining assets with a book value totaling $111.2 million offset by related long term liabilities of $27.2 million.
Operations Summary
Cdn$ million
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Three Months Three Months Six Months Five Months
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
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Revenue from
Mining
operations
Gold/copper
concentrate $ 10.8 $ 10.0 $ 22.4 $ 10.0
Cost of sales 9.4 8.7 21.2 8.7
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1.4 1.3 1.2 1.3
Net investment
revenue 0.2 14.6 0.9 39.7
Other income 0.1 0.1 0.3 0.1
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Net revenue 1.7 16.0 2.4 41.1
Expenses (5.8) (33.6) (8.1) (34.3)
Income taxes
recovery (0.3) (6.9) (0.4) (2.5)
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Net Income (loss) $ (3.8) $ (10.7) $ (5.3) $ 9.3
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Net income (loss)
per share
Basic and
fully diluted $ (0.07) $ (0.20) $ (0.10) $ 0.19
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Total assets $ 308.2 $ 297.9 $ 308.2 $ 297.9
Total long-term
liabilities 27.2 12.5 27.2 12.5
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The Company began consolidating the results from the mining
operations on April 1, 2004, the effective date of conversion from an
investment company to a mining company.
Net revenue of $1.7 million and $2.4 million for the three and six months ended June 30, 2005 resulted from the following: (1) the financial results of the mining business for the three and six month period ending June 30, 2005 which had an operating gain of $1.4 million and $1.2 million on the sale of 14,478 and 29,702 dry tonnes of gold/copper concentrate, respectively; and (2) gains on the sale of investments for the three and six month period ended June 30, 2005 of $0.2 million and $0.9 million net of investment write-downs of $1.6 million, respectively.
Cash Flow Summary
Cdn$ million
---------------------------------------------------------------------
Three Months Three Months Six Months Five Months
June 30, June 30, June 30, June 30,
2005 2004 2005 2004
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Cash provided
from (used) in
Operating
activities $ (0.8) $ 12.0 $ (2.9) $ (16.5)
Property, plant
and equipment (14.8) (7.4) (39.4) (7.4)
Investment and
other transactions (4.0) 38.5 (3.7) 53.8
Financing
activities 11.7 19.0 7.0 62.7
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$ (7.9) $ 62.1 $(39.0) $ 92.6
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Operating Activities For the three and six months ended June 30, 2005, the Company had an operating cash requirement of $0.8 million and $2.9 million, respectively. Net income (loss) adjusted for non cash items absorbed $1.5 million in both the three and six month periods, whereas changes in non-cash working capital provided $0.7 million primarily from the increased level of accounts payable balances in the quarter, versus requiring $1.4 million over the six months period as a result of higher levels of accounts receivable accounts receivable n. the amounts of money due or owed to a business or professional by customers or clients. Generally, accounts receivable refers to the total amount due and is considered in calculating the value of a business or the business' problems in paying . Non-cash working capital will continue to fluctuate with the timing of concentrate sales and the level of development activities in the period. Capital & Other Expenditures During the three and six month period ended June 30, 2005, the Company invested $14.8 million and $39.4 million, respectively, in projects and capital expenditures.
Cdn$ millions
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Current Project from date
Project Expenditures to date Quarter YTD (1) of acquisition(1)
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Back River Exploration
(Nunavut, Canada) $ 3.8 $ 4.3 $ 4.3
Chelopech (Bulgaria) 8.8 13.7 40.7
Krumovgrad (Bulgaria) 1.7 3.7 15.3
Corporate 0.5 0.8 0.8
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Total $ 14.8 $ 22.5 $ 61.1
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(1) Excludes $7.8 million and $9.1 million relating to acquisition
costs of Krumovgrad and Back River, respectively.
At Chelopech, $8.8 million (US$7.1 million) and $13.7 million (US$11.1 million) was spent during the three and six months ended June 30, 2005, respectively, and $40.7 million (US$32.3 million) has been spent from the date of acquisition as follows:
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US$ millions
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Current Project from date
Project Quarter YTD of acquisition
---------------------------------------------------------------------
Establishing Reserves $ 0.1 $ 0.3 $ 2.4
Decline 0.4 0.9 5.1
Mine development 3.1 4.1 15.5
Mill development 0.5 0.6 1.4
Autoclave Definitive
Feasibility Study 2.7 4.7 5.6
Other 0.3 0.5 2.3
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Total $ 7.1 $ 11.1 $ 32.3
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At Krumovgrad, $1.7 million (US$1.4 million) and $3.7 million (US$3.0 million) was spent during the three and six months ended June 30, 2005, respectively, and $15.3 million (US$11.8 million) has been spent from the date of acquisition as follows:
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US$ millions
---------------------------------------------------------------------
Current YTD Project from date
Project Period of acquisition
---------------------------------------------------------------------
Reserve definition drilling $ 0.2 $ 0.4 $ 4.5
Definitive feasibility study 0.6 1.3 3.2
Other 0.6 1.3 4.1
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Total $ 1.4 $ 3.0 $ 11.8
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Investments During the three and six month period ended June 30, 2005, the Company realized $0.2 million and $2.5 million in pre-tax gains on the disposition of $3.0 million and $6.0 million of marketable securities Marketable Securities Very liquid securities that can be converted into cash quickly at a reasonable price. Notes: Marketable securities are very liquid as they tend to have maturities less than one year, and the rate at which these securities can be bought or sold has , respectively. During the three and five month period ended June 30, 2004, the Company realized net gains totaling $16.1 million and $41.1 million on sales which provided proceeds of $34.6 million and $64.2 million, respectively. Financing Activities During the current quarter, the Company completed a US$10.0 million financing with the European Bank for Reconstruction and Development. The US$10.0 million loan includes US$3.0 million to be used for environmental remediation Generally, remediation means providing a remedy, so environmental remediation deals with the removal of pollution or contaminants from environmental media such as soil, groundwater, sediment, or surface water for the general protection of human health and the environment or from a purposes and the remainder is to be used for Chelopech mine redevelopment. The loan bears interest at Libor plus 1.9% and is repayable in eight semi-annual installments commencing in June 2007. FORWARD LOOKING STATEMENTS This news release may contain certain information that constitutes forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. . Forward-looking statements are frequently characterized char·ac·ter·ize tr.v. character·ized, character·iz·ing, character·iz·es 1. To describe the qualities or peculiarities of: characterized the warden as ruthless. 2. by words such as "plan," "expect," "project," "intend," "believe," "anticipate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other geological ge·ol·o·gy n. pl. ge·ol·o·gies 1. The scientific study of the origin, history, and structure of the earth. 2. The structure of a specific region of the earth's crust. 3. A book on geology. data, fluctuating fluc·tu·ate v. fluc·tu·at·ed, fluc·tu·at·ing, fluc·tu·ates v.intr. 1. To vary irregularly. See Synonyms at swing. 2. To rise and fall in or as if in waves; undulate. v. metal prices and other factors described above and in the Company's most recent annual information form under the heading "Risks Factors" which has been filed electronically by means of the Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. Securities Administrators' website located at www.sedar.com. The Company disclaims any obligation to update or revise any forward-looking statements if circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements. Dundee Precious is a Canadian operating mining company engaged in the acquisition, exploration, development and mining of precious metals. It currently owns the Chelopech Mine, a producing gold/copper mine and the Krumovgrad Gold Project, a development project, both located in Bulgaria and is engaged in mineral exploration activities in the region. In addition, Dundee Precious has the option to earn a 60% interest in the Back River gold project in Nunavut, Canada. The Company also holds a significant and strategic portfolio of investments in the precious metals and mineral related sector. A complete set of DPM's consolidated financial statements Consolidated Financial Statements The combined financial statements of a parent company and its subsidiaries. Notes: Because consolidated financial statements present an aggregated look at the financial position of a parent and its subsidiaries, they enable you to gauge and Management's Discussion and Analysis Management's discussion and analysis (MD&A) A report from management to shareholders that accompanies the firm's financial statements in the annual report. It explains the period's financial results and enables management to discuss topics that may not be apparent in the financial are posted on our website at www.dundeeprecious.com. An analyst conference call will be webcast live at http://www.corporate-ir.net/ireye/ir_site.zhtml?ticker ticker An automated quotation system on which security transactions are reported after they occur on an exchange floor. Even though the newer systems are electronic and no longer actually tick, the name of the old mechanical device has stuck. =DPM.TO&script=1 010&item_id=1107730 on Monday, August 8 at 8:30 a.m. Dundee Precious Metals Inc. (TSX:DPM) |
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