(All monetary figures are expressed in U.S dollars unless otherwise stated)
Dundee Precious Metals Inc. ("DPM" or the "Company")
(TSX:DPM)(TSX:DPM.WT)(TSX:DPM.WT.A) today announced its unaudited results for
the second quarter ended June 30, 2010. DPM reported second quarter 2010 net
earnings of $16.5 million (basic and diluted net earnings per share of $0.13).
This compares with second quarter 2009 net earnings of $2.8 million (basic and
diluted net earnings per share of $0.03).
"This has been an exciting quarter for the Company", said Jonathan Goodman,
President and CEO. "All of our sites are operating profitably, the Chelopech
mine/mill expansion is well underway and Deno Gold is on schedule to complete
its 50% mine/mill expansion in the third quarter. We are also pleased with the
operational results achieved at the smelter in Namibia since we took ownership
at the end of March and are actively engaged in a capital program to enhance the
operating and environmental performance of the smelter."
The following table summarizes the Company's financial and operating results
for the periods indicated:
----------------------------------------------------------------------------
$ millions, except per share
amounts Three Months Six Months
----------------------- ----------------------
Ended June 30, 2010 2009 2010 2009
----------------------------------------------------------------------------
Net Revenue $ 60.9 $ 27.8 $ 81.4 $ 49.5
Cost of Sales 42.8 19.8 64.7 38.6
----------------------------------------------------------------------------
Gross Profit 18.1 8.0 16.7 10.9
----------------------------------------------------------------------------
Investment and Other Income 9.9 0.9 13.2 0.5
Net Impairment Provisions - - (50.6) (0.2)
Exploration Expense (0.5) (1.0) (1.2) (2.3)
Administrative and Other
Expenses (4.2) (3.4) (7.0) (6.6)
Net Earnings (Loss) 16.5 2.8 (31.8) (2.1)
Basic Net Earnings (Loss) per
Share $ 0.13 $ 0.03 $ (0.28) $ (0.02)
Diluted Net Earnings (Loss)
per Share $ 0.13 $ 0.03 $ (0.28) $ (0.02)
Net Cash Provided by (Used in)
Operating Activities 11.8 (1.7) 16.8 (11.8)
Capital Expenditures (18.4) (6.6) (29.1) (13.4)
Proceeds on Sale/(Purchase) of
Short-term Investments (2.6) 30.2 26.9 25.8
Purchase of Namibia Custom
Smelters (Pty) Ltd. - - (17.0) -
Proceeds on Sale of
Exploration Property - 6.2 - 6.2
Other Investing Activities (1.1) (0.9) (4.0) (2.0)
Financing Activities (2.1) (1.4) 58.5 (2.2)
----------------------------------------------------------------------------
Net Increase (Decrease) in
Cash $ (12.4) $ 25.8 $ 52.1 $ 2.6
----------------------------------------------------------------------------
Concentrate Produced (mt)
Chelopech 18,005 18,902 35,707 35,207
Deno Gold 4,273 3,173 8,517 3,173
NCS - concentrate processed
(mt) 45,881 N/A 45,881 N/A
Cash Cost per tonne Ore
Processed ($/t)(1)
Chelopech (excluding
royalties) $ 47.04 $ 52.38 $ 51.55 $ 48.47
Deno Gold (excluding
royalties) $ 59.21 $ 66.66 $ 63.27 $ 66.66
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Second Quarter 2010 - Financial Highlights
-- In the second quarter of 2010, DPM reported net earnings of $16.5
million or $0.13 per share compared to net earnings of $2.8 million or
$0.03 per share in the second quarter of 2009.
-- DPM recorded a gross profit of $18.1 million in the second quarter of
2010 compared to a gross profit of $8.0 million in the corresponding
prior year period. The period over period increase in gross profit was
primarily due to higher gold, copper and zinc prices, higher deliveries
of concentrates due to an extra shipment from Chelopech and a full
quarter of operation at Deno Gold, higher copper in concentrate sold and
lower production costs partially offset by unfavourable mark-to-market
adjustments and final settlements on provisional sales and lower gold in
concentrate sold.
-- On May 26, 2010, DPM completed its previously announced agreement with
Louis Dreyfus Commodities Metals Suisse SA ("LDC") to settle
approximately $11.4 million of financial obligations owed by NCS to LDC,
through a cash payment of $2.0 million and the issuance of 2,903,525
common shares of DPM.
-- As at June 30, 2010, DPM had cash, cash equivalents and short-term
investments of $100.7 million compared to $75.6 million at December 31,
2009. Investments at fair value totalled $68.5 million at June 30, 2010
compared to $34.4 million at December 31, 2009.
A complete set of DPM's Consolidated Financial Statements, Notes to the
Consolidated Financial Statements and Management's Discussion and Analysis for
the three months ended June 30, 2010 will be posted on the Company's website at
www.dundeeprecious.com and will be filed on Sedar at www.sedar.com.
Conference Call
DPM will be holding an analyst call on Friday, July 30, 2010 at 8.30 a.m. (EST).
The call will be webcast live (audio only) at: http://www.gowebcasting.com/1813.
The audio webcast for this conference call will be archived and available on the
Company's website at www.dundeeprecious.com.
Overview
DPM is a Canadian-based, international mining company engaged in the
acquisition, exploration, development and mining of precious metal properties.
Its common shares and share purchase warrants (symbols: DPM; DPM.WT; DPM.WT.A)
are traded on the Toronto Stock Exchange ("TSX"). DPM's business objectives are
to identify, acquire, finance, develop and operate low-cost, long-life mining
properties.
The Company's operating interests include its 100% ownership of Chelopech Mining
EAD ("Chelopech"), its principal asset being the Chelopech mine, a gold, copper,
silver concentrates producer, located approximately 70 kilometres east of Sofia,
Bulgaria, 100% ownership of Namibia Custom Smelters (Pty) Ltd. ("NCS"), a copper
concentrate processing facility located in Tsumeb, Namibia, and a 95% interest
in Vatrin Investment Limited, a private entity which holds 100% of Deno Gold
Mining Company CJSC ("Deno Gold"), its principal asset being the Kapan mine, a
gold, copper, zinc, silver concentrates producer located about 320 kilometres
south east of the capital city of Yerevan in Southern Armenia. DPM's interests
also include a 100% interest in the Krumovgrad development stage gold property
located in south eastern Bulgaria, near the town of Krumovgrad, and numerous
exploration properties in one of the larger gold-copper-silver mining regions in
Serbia.
Summarized Financial Results
Net revenue
Net revenue of $60.9 million in the second quarter of 2010 was $33.1 million
higher than the corresponding prior year period net revenue of $27.8 million due
to a 30% increase in gold prices, a 50% increase in copper prices, a 37%
increase in zinc prices and a 47% increase in concentrate deliveries. Also
contributing to the period over period increase in net revenue was the inclusion
of NCS' revenue following its acquisition by DPM on March 24, 2010.
Deliveries of concentrates produced at Chelopech of 23,752 tonnes in the second
quarter of 2010 were 34% higher than second quarter of 2009 deliveries of 17,685
tonnes due to an additional shipment in the second quarter of 2010. Deliveries
of concentrates produced at Deno Gold of 3,559 tonnes in the second quarter of
2010 were significantly higher than second quarter of 2009 deliveries of 905
tonnes, reflecting a full quarter of operation in 2010. Deno Gold restarted its
operations in April 2009 after being on care and maintenance for five months.
Net unfavourable mark-to-market adjustments and final settlements of $1.0
million, related to the open positions of provisionally priced concentrate
sales, were recorded in the second quarter of 2010 compared to net favourable
mark-to-market adjustments and final settlements of $1.0 million in the second
quarter of 2009. In the second quarter of 2010, DPM recorded gains on its copper
derivatives of $0.01 million compared to net losses on copper derivatives of
$2.3 million in the second quarter of 2009.
Net revenue of $81.4 million in the first six months of 2010 was $31.9 million
higher than the corresponding prior year period net revenue of $49.5 million due
to a 26% increase in gold prices, a 77% increase in copper prices, a 63%
increase in zinc prices and a 19% increase in concentrate deliveries. Also
contributing to the period over period increase in revenue was the inclusion of
NCS's revenue following its acquisition by DPM on March 24, 2010.
Deliveries of concentrates produced at Chelopech of 35,583 tonnes in the first
six months of 2010 were 4% higher than the corresponding prior year period
deliveries of 34,258 tonnes. Deliveries of concentrates produced at Deno Gold of
6,199 tonnes in the first six months of 2010 were significantly higher than the
corresponding prior year period deliveries of 905 tonnes. Deno Gold was on care
and maintenance in the first quarter of 2009. Net unfavourable mark-to-market
adjustments and final settlements of $4.0 million, related to the open positions
of provisionally priced concentrate sales, were recorded in the first six months
of 2010 compared to net favourable mark-to-market adjustments and final
settlements of $4.7 million in the first six months of 2009. In the first six
months of 2010, DPM recorded gains on its copper derivatives of $0.02 million
compared to net losses on copper derivatives of $3.4 million in the first six
months of 2009.
The average London Bullion gold price(2) in the second quarter of 2010 of $1,195
per ounce was 30% higher than the second quarter of 2009 average price of $922
per ounce. The average London Metal Exchange ("LME") cash copper price(2) in the
second quarter of 2010 of $3.19 per pound was 50% higher than the second quarter
of 2009 average price of $2.12 per pound. The average LME cash zinc price(2) in
the second quarter of 2010 of $0.92 per pound was 37% higher than the second
quarter of 2009 average price of $0.67 per pound.
The average London Bullion gold price(2) in the first six months of 2010 of
$1,150 per ounce was 26% higher than the corresponding prior year period average
price of $915 per ounce. The average LME cash copper price(2) in the first six
months of 2010 of $3.23 per pound was 77% higher than the corresponding prior
year period average price of $1.83 per pound. The average LME cash zinc price(2)
in the first six months of 2010 of $0.98 per pound was 63% higher than the
corresponding prior year period average price of $0.60 per pound.
Cost of sales
Cost of sales of $42.8 million and $64.7 million in the second quarter and first
half of 2010 were, respectively, $23.0 million and $26.1 million higher than the
corresponding prior year periods cost of sales of $19.8 million and $38.6
million due to an increase in concentrate deliveries and the inclusion of
expenses related to the processing of concentrates at NCS.
Cash cost per tonne of ore processed(1), excluding royalties, at Chelopech in
the second quarter of 2010 of $47.04 was 10% lower than the corresponding prior
year period cash cost per tonne of ore processed(1), excluding royalties, of
$52.38 due to lower cement usage in backfill activities and the favourable
impact of a 6% depreciation of the Euro relative to the U.S. dollar partially
offset by higher maintenance and employment expenses. Cash cost per tonne of ore
processed(1), including royalties, at Chelopech in the second quarter of 2010 of
$51.27 was 18% lower than second quarter of 2009 cash cost per tonne of ore
processed(1), including royalties, of $62.34.
Cash cost per tonne of ore processed(1), excluding royalties, at Chelopech in
the first six months of 2010 of $51.55 was 6% higher than the corresponding
prior year period cash cost per tonne of ore processed(1), excluding royalties,
of $48.47 due primarily to higher spending on services, increased rates for and
consumption of power and fuels and higher employment expenses partially offset
by lower cement usage in backfill activities. Cash cost per tonne of ore
processed(1), including royalties, at Chelopech in the first six months of 2010
of $55.98 was comparable to the corresponding prior year period cash cost per
tonne of ore processed(1), including royalties, of $55.25.
Cash cost per tonne of ore processed(1), excluding royalties, at Deno Gold in
the second quarter of 2010 of $59.21 was 11% lower than the corresponding prior
year period cash cost per tonne of ore processed(1), excluding royalties, of
$66.66 due to higher volume of material processed partially offset by higher
maintenance costs and higher vein drive development costs to access additional
working spaces. Cash cost per tonne of ore processed(1), including royalties, at
Deno Gold in the second quarter of 2010 was $66.25. Deno Gold did not pay a
profit based royalty in the second quarter of 2009.
Gross profit (loss)
Chelopech recorded a gross profit of $15.1 million in the second quarter of 2010
compared to a gross profit of $10.1 million in the second quarter of 2009. The
period over period increase in gross profit was due to a 30% increase in gold
prices, a 50% increase in copper prices, a 34% increase in concentrate
deliveries and higher copper in concentrate sold partially offset by
unfavourable mark-to-market adjustments and final settlements on provisional
sales and lower gold in concentrate sold. Net unfavourable mark-to-market
adjustments and final settlements of $0.2 million, related to the open positions
of provisionally priced concentrate sales, were recorded in the second quarter
of 2010 compared to net favourable mark-to-market adjustments and final
settlements of $2.0 million in the second quarter of 2009. There were nil gains
or losses on copper derivatives in the second quarter of 2010 whereas, in the
second quarter of 2009, net losses on copper derivatives totalled $2.3 million.
Chelopech recorded a gross profit of $13.2 million in the first six months of
2010 compared to a gross profit of $15.9 million in the first six months of
2009. The period over period decrease in gross profit was due to unfavourable
mark-to-market adjustments and final settlements on provisional sales and lower
gold in concentrate sold partially offset by a 26% increase in gold prices and a
77% increase in copper prices. Net unfavourable mark-to-market adjustments and
final settlements of $2.8 million, related to the open positions of
provisionally priced concentrate sales, were recorded in the first six months of
2010 compared to net favourable mark-to-market adjustments and final settlements
of $5.1 million in the first six months of 2009. There were nil gains or losses
on copper derivatives in the first half of 2010 whereas, in the first six months
of 2009, net losses on copper derivatives totalled $3.4 million.
Deno Gold recorded a gross profit of $1.4 million in the second quarter of 2010
compared to a gross loss of $2.1 million in the corresponding prior year period.
Deliveries of concentrates in the second quarter of 2010 totalled 3,559 tonnes
compared to 905 tonnes in the second quarter of 2009 as a result of a full
quarter of operation in 2010. Deno Gold restarted its operations in April 2009
after being on care and maintenance for five months. Net unfavourable
mark-to-market adjustments and final settlements of $0.8 million, related to the
open positions of provisionally priced concentrate sales, were recorded in the
second quarter of 2010 compared to net unfavourable mark-to-market adjustments
and final settlements of $1.0 million in the second quarter of 2009.
Deno Gold recorded a gross profit of $1.9 million in the first six months of
2010 compared to a gross loss of $5.0 million in the corresponding prior year
period. Deno Gold was on care and maintenance in the first quarter of 2009.
NCS recorded a gross profit of $1.6 million in the second quarter of 2010. NCS
was acquired by DPM on March 24, 2010. Concentrates processed in the quarter
totalled 45,881 tonnes, supported by the introduction of oxygen into the
smelting process. Although not fully optimized, smelting rates improved during
the second quarter of 2010. Production was negatively impacted by problems in
the downstream process, contributing to an increase in secondary stocks.
Investment and other income
Investment and other income were $9.9 million and $13.2 million in the second
quarter and first half of 2010, respectively, compared to investment and other
income of $0.9 million and $0.5 million in the corresponding prior year periods.
Included in the second quarter and first half of 2010 were unrealized favourable
mark-to-market adjustments related to the Sabina Gold & Silver Corp. ("Sabina")
Special Warrant units of $11.0 million and $14.0 million, respectively.
On May 26, 2010, DPM completed the previously announced settlement with LDC of
approximately $11.4 million of financial obligations owed by NCS to LDC, through
a cash payment of $2.0 million and the issuance of 2,903,525 common shares of
DPM, a value of $9.4 million based on a deemed price of Cdn$3.50 per share. On
the date of the settlement, the common shares issued were recorded at fair value
based on the closing price of Cdn$4.04, resulting in a non-cash loss on
settlement of $1.6 million.
Administrative and other expenses
Administrative and other expenses were $4.2 million and $7.0 million in the
second quarter and first half of 2010, respectively, compared to $3.4 million
and $6.6 million in the corresponding prior year periods. The increase in
administrative expenses relative to 2009 was primarily due to the expenses
related to the acquisition of NCS and the announced disposition of the Serbian
assets.
Income tax expense
In the second quarter of 2010, DPM's effective tax rate of 10% was lower than
the Canadian statutory rate of 31.0% due primarily to a lower tax rate on
foreign earnings and the non-taxable portion of unrealized gains on warrants
partially offset by an unrecognized tax benefit relating to foreign and Canadian
losses.
In the first half of 2010, the tax recovery rate of 10% was lower than the
Canadian statutory rate of 31.0% due primarily to an unrecognized tax benefit
relating to foreign and Canadian losses and a lower tax rate on foreign losses
partially offset by the non-taxable portion of unrealized gains on warrants.
Operating cash flow (shortfall)
The following table summarizes the Company's cash flow (shortfall) from
operating activities for the periods indicated:
----------------------------------------------------------------------------
$ thousands Three Months Six Months
------------------------ ------------------------
Ended June 30, 2010 2009 2010 2009
----------------------------------------------------------------------------
Net earnings (loss) $ 16,449 $ 2,765 $ (31,805) $ (2,117)
Non-cash charges (credits)
to earnings:
Amortization of property,
plant and equipment 5,796 4,075 9,944 7,747
Property impairment
provisions 14 - 54,063 248
Other (8,221) (2,019) (16,107) (745)
----------------------------------------------------------------------------
Total non-cash charges
(credits) to earnings (2,411) 2,056 47,900 7,250
Decrease (increase) in non-
cash working capital (2,251) (6,471) 687 (16,956)
----------------------------------------------------------------------------
Net cash provided by (used
in) operating activities $ 11,787 $ (1,650) $ 16,782 $ (11,823)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash provided by operating activities in the second quarter of 2010 was $11.8
million compared with cash used in operating activities of $1.7 million in the
second quarter of 2009. The increase in cash provided by operating activities
was primarily due to higher gross profit and lower working capital requirements
in the second quarter of 2010 relative to the corresponding prior year period.
The increase in working capital requirements in the second quarter of 2010 of
$2.3 million was primarily due to a decrease in deferred revenue and the
settlement of financial obligations with LDC partially offset by a decrease in
inventories and an increase in accounts payable.
On May 26, 2010, DPM completed the previously announced settlement with LDC of
approximately $11.4 million of financial obligations owed by NCS to LDC, through
a cash payment of $2.0 million and the issuance of 2,903,525 common shares of
DPM, a value of $9.4 million based on a deemed price of Cdn$3.50 per share.
Cash provided by operating activities in the first half of 2010 was $16.8
million compared with cash used in operating activities of $11.8 million in the
corresponding prior year period. The increase in cash provided by operating
activities was primarily due to a decrease in working capital and higher gross
profit.
The following table summarizes the Company's investing activities for the
periods indicated:
----------------------------------------------------------------------------
$ thousands Three Months Six Months
----------------------- -----------------------
Ended June 30, 2010 2009 2010 2009
----------------------------------------------------------------------------
Proceeds on sale of
exploration property $ - $ 6,211 $ - $ 6,211
Proceeds on sale of
investments at fair value 593 - 593 1,873
Purchases of investments at
fair value (1,666) - (1,666) -
Acquisition of NCS, net of
cash acquired of $1,013 - - (16,987) -
Proceeds on sale/(Purchase)
of short-term investments (2,600) 30,219 26,928 25,819
Loan advances - (972) (3,000) (4,000)
Capital expenditures (18,440) (6,615) (29,090) (13,431)
Other - 36 - 111
----------------------------------------------------------------------------
Net cash provided by (used
in) investing activities $ (22,113) $ 28,879 $ (23,222) $ 16,583
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Capital expenditures at Chelopech in the second quarter and first half of 2010
of $9.2 million and $17.5 million were, respectively, 80% and 76% higher than
the corresponding prior year periods due to the ramp-up of the mine and mill
expansion project in 2010. Capital expenditures at Deno Gold in the second
quarter and first half of 2010 were, respectively, $7.4 million and $9.2 million
compared to $1.2 million and $3.1 million in the corresponding prior year
periods. The significant increase in 2010 relative to 2009 was due primarily to
the mine and mill expansion and land acquisition.
On March 24, 2010, the Company completed the acquisition of NCS from Weatherly
International plc ("WTI") by way of the purchase of 100% of the shares of NCS.
The cash consideration provided to WTI by DPM was $17.0 million, net of cash
acquired of $1.0 million.
In the first six months of 2010, DPM advanced $3.0 million to NCS in accordance
with the binding letter of intent signed in January 2010 with WTI for the
purchase of NCS.
In June 2009, DPM completed the sale of its Back River exploration project in
Nunavut to Sabina for a cash payment of $6.2 million (Cdn $7.0 million), 17
million Sabina common shares and 10 million Special Warrants.
In the first six months of 2009, DPM advanced $4.0 million to NCS in accordance
with the agreement DPM signed with NCS in December 2008 to advance up to $7.0
million of loans to NCS.
Financing Activities
The following table summarizes the Company's financing activities for the
periods indicated:
----------------------------------------------------------------------------
$ thousands Three Months Six Months
---------------------- ----------------------
Ended June 30, 2010 2009 2010 2009
----------------------------------------------------------------------------
Net proceeds of equity
financing $ - $ - $ 61,981 $ -
Repayment of leases (920) (179) (1,716) (345)
Repayment of debt (1,250) (1,250) (1,813) (1,813)
Other 51 - 51 -
----------------------------------------------------------------------------
Net cash provided by (used in)
financing activities $ (2,119) $ (1,429) $ 58,503 $ (2,158)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Average Metal Prices
The following table, summarizing the average metal prices for the London
Bullion Market Association ("LBM") gold, LME copper Grade A, LME special
high grade ("SHG") zinc and LBM silver prices, is used to illustrate the
Company's average metal price exposures based on its key reference prices
for the periods indicated.
----------------------------------------------------------------------------
Average Three Months Six Months
---------------------- -----------------------
Ended June 30, 2010 2009 2010 2009
----------------------------------------------------------------------------
London Bullion gold ($/oz) $ 1,195 $ 922 $ 1,150 $ 915
LME settlement copper ($/lb) 3.19 2.12 3.23 1.83
LME settlement SHG zinc ($/lb) 0.92 0.67 0.98 0.60
LBM spot silver ($/oz) $ 18.32 $ 13.73 $ 17.62 $ 13.17
----------------------------------------------------------------------------
Non-GAAP Financial Measures
We have referred to cash cost per tonne of ore processed because we understand
that certain investors use this information to assess the Company's performance
and also determine the Company's ability to generate cash flow for investing
activities. This measurement captures all of the important components of the
Company's production and related costs. In addition, management utilizes this
metric as an important management tool to monitor cost performance of the
Company's operations. This measurement, which is a non-GAAP measure, has no
standardized meaning under Canadian GAAP and is therefore unlikely to be
comparable to similar measures presented by other companies. This measurement is
intended to provide additional information and should not be considered in
isolation or as a substitute for measures of performance prepared in accordance
with Canadian GAAP.
The following table provides, for the periods indicated, a reconciliation of
the Company's cash cost measure and Canadian GAAP cost of sales:
----------------------------------------------------------------------------
$ thousands, unless
otherwise indicated
For the quarter ended June
30, 2010 Chelopech Deno Gold Other Total
----------------------------------------------------------------------------
Ore processed (mt) 244,070 101,178
Cost of sales $ 22,242 $ 6,530 $ 14,054 $ 42,826
Add (deduct):
Amortization (3,178) (1,052)
Reclamation costs and
other (238) (246)
Change in concentrate
inventory (6,312) 1,471
----------------------------------------------------------------------------
Total cash cost of
production $ 12,514 $ 6,703
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash cost per tonne of ore
processed, including
royalties $ 51.27 $ 66.25
Cash cost per tonne of ore
processed, excluding
royalties $ 47.04 $ 59.21
----------------------------------------------------------------------------
----------------------------------------------------------------------------
$ thousands, unless otherwise
indicated
For the quarter ended June 30, 2009 Chelopech Deno Gold Total
----------------------------------------------------------------------------
Ore processed (mt) 257,721 67,787
Cost of sales $ 18,282 $ 1,503 $ 19,785
Add/(Deduct):
Amortization and other (2,991) (661)
Reclamation costs and other (497) (128)
Change in concentrate inventory 1,720 3,772
Foreign exchange (448) 33
----------------------------------------------------------------------------
Total cash cost of production $ 16,066 $ 4,519
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Cash cost per tonne of ore
processed, including royalties $ 62.34 $ N/A
Cash cost per tonne of ore
processed, excluding royalties $ 52.38 $ 66.66
----------------------------------------------------------------------------
1. Cash cost per tonne ore processed is a non-GAAP measure. A
reconciliation of the Company's cash cost per tonne ore processed to
cost of sales under Canadian GAAP for the second quarters of 2010 and
2009 is shown in the table entitled "Non-GAAP Financial Measures."
2. Refer to the Average Metal Prices section for the average metal prices
used to illustrate the Company's average metal price exposure based on
its key reference prices.
To view the Financial Statements, please click the following link:
http://media3.marketwire.com/docs/DPM729.pdf
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" that involve a number
of risks and uncertainties. Forward-looking statements include, but are not
limited to, statements with respect to the future price of gold, copper, zinc
and silver the estimation of mineral reserves and resources, the realization of
mineral estimates, the timing and amount of estimated future production, 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, copper, zinc and silver;
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 Management's Discussion and Analysis under the heading "Risks and
Uncertainties" 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. Unless required by securities laws, the
Company undertakes no obligation to update forward-looking statements if
circumstances or management's estimates or opinions should change. Accordingly,
readers are cautioned not to place undue reliance on forward-looking statements.
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