TSX: DPM Investor Presentation June 2011
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, 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; 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
STRONG FINANCIAL POSITION Analyst Coverage At March 31, 2011 All monetary figures are expressed in U.S. dollars unless otherwise stated BMO John Hayes Cash and Short-Term Investments: $140.5M (includes $48.4M cash and cash equivalent for Avala Resources) Cormark Securities Mike Kozak Plus Restricted Cash: $30.2M Dundee Securities Paul Burchell RBC Capital Markets Stephen Walker Plus Strategic Investments (@ June 23, 2011): $~400M Stifel, Nicolaus & Co. Josh Wolfson Total Debt *: $86M Union Securities Brian Mok Debt to Total Capitalization: 9% Top 5 Institutional Shareholders: <50% * Includes $14.5M project financing through Raiffeisenbank DPM – TSX @ June 23, 2011 C$ 7.73 Shares Issued 125M 150M/C$78M Fully Diluted/Cash on Dilution Market Cap @ June 23, 2011 (fully diluted) C$1.1 B 3
PIPELINE TO GROWTH Gold production growth + 250,000 oz Deno Open Pit Potential Krumovgrad Deno Underground Chelopech ~125,000oz ~100,000oz 2010 2011 2014 (E)
DPM PROPERTIES 5
CHELOPECH MINING, Bulgaria DPM Ownership 100% Location Bulgaria Acquisition Date Sept. 2003 Resources Gold (oz) (4.1 g/t) 3,770,000 Measured & Indicated Copper (lbs) (1.4% Cu) 880,900,000 (at Sept. 2010) Gold (oz) (4.0 g/t) 2,600,000 Reserves (at Jan. 2011) Copper (lbs) (1.3% Cu) 590,000,000 Mine Type Underground High sulphidation Deposit Type epithermal deposit Estimated Mine Life @ expanded rate 10 + yrs Gold Production Copper Production 92.0 88.4 90 400 Cash Cost * (Gold $US/oz) 40,000 35.5M 71.4 35,000 $369 Pounds (000’s) 65.5 Ounces (000’s) 300 30,000 26.2M 27.5M 60 $309 25,000 19.9M 200 20,000 $210 15,000 30 10,000 100 5,000 0 0 0 2008 2009 2010 2011 (E) 2008 2009 2010 2011 (E) * Cash cost of sales/oz gold (net of by product credits). Reconciliation included in Appendices 6
CHELOPECH Steps to Mine & Mill Expansion Expansion of mine/mill Status production capacity from 1 MT ore/year to 2 MT includes: Construction 1. Paste fill plant Commissioning 2. Mill Upgrade - new SAG mill; modernization & upgrade of the Commissioning existing concentrator Hard Rock Tunneling 69% 3. Underground crushing and conveying system July Completion 2012 4. Taking the lid off the mine Ongoing 7
CHELOPECH Construction Momentum Step 3. Underground Crushing and Conveying Project Tunneling works in progress from 4 headings Vyara Portal Construction 69% of required 4,295 m of hard rock tunneling completed as of March 31, 2011 Engineering of ore passes, transfer stations, crushing station, mechanical, electrical and instrumentation is underway Completion – July 2012 735 m asl Hoisting Haulage to the dump Dump and wagon loading 100 m asl Crusher is located 585 m below surface Underground Crusher design 8
CHELOPECH Mine/Mill Expansion Cost Benefits Expansion cost/tonne Total ore processed in 2010 1,000,781 tonnes Cash cost/tonne (excl. 2,000 $60.00 $51.54 Tonnes ore processed per year royalties) in 2010 1,800 $50.00 1,600 (Excluding royalties) Cost/tonne ($US) Expanded ore production 2 million tonnes 1,400 1,300 $40.00 rate per year 1,200 981 1,001 913 901 1,000 $30.00 800 Savings from: $20.00 600 (000’s) 400 $10.00 Economies of Scale ~ $12.48 200 0 $0.00 2008 2011 Crushing and Conveying ~ $6.00 2007 2009 2010 (E) Ore Processed and Cost/Tonne Other (SAG mill etc.) ~ $3.13 Feasibility study cost/tonne $29.93* at 2 mtpy * Based on March 24, 2011 Technical report for the Chelopech Project. Exchange rate of US$1.35/Euro, US$900/oz Au, US$2.50/lb Cu and US$17/oz Ag. 9
CHELOPECH EXPLORATION Achievements Potential 245,965 m of drilling since Near mine August 2003 • +500kt high grade 149 style deposits; Introduction of strategy and confirmation of recent discoveries and advanced technology targets Discovery of Blocks 145 and Greenfields 147 in 2009 • +5MT low grade 151 style deposits Discovery of Targets 181 & 182 • Chelopech SW and Chelopech W and Block 152 in 2010 Discovery of Target 144 in early Vast Potential 2011 • Current deposit represents top of larger system • Structural similarities exist in the SW • Epithermal system located down and to the SW
CHELOPECH Exploration Strategy 2011 Priorities Green fields exploration T181 & 182 targets: • Chelopech SW – complete drilling & DHEM survey then 147 move west of 151 19 149 Near Mine Exploration Targets 18 145 16 • T181 & 182 and 152 – convert discoveries into reserves 150 • Chelopech North – discover 151 new orebodies (149 style, low tonnes, high grade) along strike 103 of Block 19 & 147/149 – Target 144 discovered in Q1 Plan view of ore bodies and structure 11
CHELOPECH – EBITDA $1,500 gold $1,000 gold $4.00 copper $3.00 copper In 2013 @ 2.0 mtpy Chelopech will produce 140,000 oz gold 50 million lbs copper EBITDA = $150 million EBITDA = $275 million 12
NAMIBIA CUSTOM SMELTER A UNIQUE STRATEGIC ASSET IN SOUTHERN AFRICA Secures Chelopech processing Provides strategic opportunity for growth • Presence in Southern Africa • Opportunities matched to the smelter
NAMIBIA CUSTOM SMELTER The Transaction Chelopech concentrate to NCS since 2007 Acquisition March 24, 2010 $33M cash and shares and settled $17M in third party obligations The Operation Ausmelt technology Off-gas cooling and capture of dust & particulates Arsenic trioxide by-product manufacturing plant; sold to third parties Blister copper product shipped to European refineries
2010 PRODUCTION FUNDAMENTALS (April – December) Long term agreement with Louis Dreyfus Commodities Arsenic trioxide produced – 7,900 T Principal tolling feed Total = ~120,000 T 13,000 T Other 50,000 T El Brocal Chelopech 56,000 T Moulds of blister copper Blister copper bars Casting blister
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