TSX - DPM Investor Presentation November 2010 www.dundeeprecious.com
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
PRODUCTION MOMENTUM 400,000 oz of gold per year in 2015 400,000 Gold Production (oz) 300,000 Exploration & Development 200,000 Expanded Production 100,000 Current Production 2010 2011 2012 2013 2014 2015 3
STRONG FINANCIAL POSITION All monetary figures are expressed in U.S. dollars unless otherwise stated At September 30, 2010 Analyst Coverage BMO John Hayes Cash and Short-Term Investments: $97.3M Cormark Securities Mike Kozak Plus Restricted Cash: $24.0M Dundee Securities Paul Burchell Plus Strategic Investments (@ Nov 12, 2010): $246M Union Securities Brian Mok Total Debt: $21M Debt to Total Capitalization: 3.0% Top 5 Institutional Shareholders: <50% DPM – TSX @ November 12, 2010 C$7.66 Shares Issued @ September 30, 2010 125M Fully Diluted/Cash on Dilution 145M/C$66M Market Cap @ November 12, 2010 C$958 M 4
Our Pipeline of Growth Strategic Investments Development Exploration Mining & Processing
DPM PROPERTIES 6
Strategic Investments Development Exploration Mining & Processing
CHELOPECH MINING, BULGARIA DPM Ownership 100 % Location Bulgaria Gold (oz) (3.8 g/t) 4,230,000 Resources Measured & Indicated (at Sept. 08) Copper (lbs) (1.3% Cu) 971,500,000 Gold (oz) (3.6 g/t) 2,700,000 Reserves (at Oct. 09) Copper (lbs) (1.2% Cu) 640,000,000 Gold (oz) 71,472 2008 Copper (lbs) 19,909,524 Gold (oz) 88,433 Production 2009 Copper (lbs) 26,155,662 Gold (oz) 47,516 9 mos 2010 Copper (lbs) 20,065,702 2008 Gold ($US/oz) $309 2009 Gold ($US/oz) Cash Cost * $369 9 mos 2010 Gold ($US/oz) $292 Mine Type Underground Estimated Mine Life 10 + yrs * Cash cost of sales/oz gold (net of by product credits). Reconciliation included in Appendices 8
CHELOPECH – Steps to Mine & Mill Expansion Expansion of mine/mill production capacity Status to 2 MT ore/year include: Construction 1. Construction of paste fill plant Commissioning 2. Installation of new SAG mill; modernization & Completion Q1 2011 upgrade of the existing concentrator Commissioning Hard Rock Tunneling 46% 3. Installation of an underground crushing and conveying system Completion End 2011 4. Training of workforce to achieve increased Ongoing production rate 9
CHELOPECH – Construction Momentum Step 1. Paste Plant Complete Early Stages of construction for the paste plant Q3 2010 Q3 2010 Q2 2010 Paste plant commissioning Paste pour at block 19 level 380 10
CHELOPECH – Construction Momentum Step 2. SAG Mill Assembly Early stage construction Q3 2010 Installed head chute SAG Mill construction SAG Mill Assembly SAG mill foundation SAG Mill in progress 11
CHELOPECH – Construction Momentum Step 3. Underground Crushing and Conveying Project Vyara Portal Construction Tunneling works in progress from 4 headings Q3 2010 46% of required 4,295 m of hard rock tunneling completed Works on engineering of ore passes, transfer stations, crushing station, mechanical, electrical and instrumentation is on schedule 12
CHELOPECH – Mine/Mill Expansion 2009 2012 Mine/Mill Expansion Total ore processed 980,928 tonnes 1.8 million tonnes per year Capital cost to complete ~$78.8M (at September 30, 2010) Cash cost/tonne (excl. royalties) $55.23 $29.40 * Concentrate production rate 71,657 tonnes 150,000 tonnes Gold production 88,433 oz 148,000 oz Copper production 26 million lbs 50 million lbs Physical completion date Q4 2011 * Based on January 2010 NI 43-101 Technical report for the Chelopech Project. Exchange rate of US$1.35/Euro, US$800/oz gold, US$1.75/lb copper and US$11/oz silver 2,000 $60.00 1,800 Tonnes ore processed per year 1,800 $50.00 1,600 (Excluding royalties) Cost/tonne ($US) 1,400 $40.00 1,200 981 913 1,000 901 $30.00 800 $20.00 600 400 (000’s) $10.00 200 0 $0.00 2007 2008 2009 H2 2012 Ore Processed and Cost/Tonne 13
CHELOPECH EXPLORATION STRATEGY Near Mine Exploration Strategy Sever fan +500kt discoveries close to infrastructure to replace annual production Deeps Exploration Strategy Extend known mineralization at depth Greenfields Exploration Strategy +5Mt discoveries based on geological model Progress Underground drill programs continue to define Blocks 145 & 147 Extension of Block 149 will proceed in Q4 2010 3,000 metre surface drill program north of Chelopech commenced during Q3 2010 First phase of the exploration drive accessing the south west region was completed during Q3 2010 with additional drilling scheduled 14
TSUMEB SMELTER, NAMIBIA Acquired March 24, 2010 for $33M cash and shares and settled $17M in third party obligations STRATEGY Secures downstream processing of Chelopech concentrate Increased profitability Broadens scope for future acquisitions Long term development potential: Further expansion of smelter (70% fixed costs) Sulphuric acid plant to supply uranium industry Smelter Capacity 250,000 200,000 Chelopech concentrate Tonnes 150,000 Third party concentrates 100,000 50,000 0 H2 + O 2 2009 2010E 2011E 2012E 15
Tsumeb Smelter – A Boutique Complex Concentrate Smelter 2010 DELIVERABLES Improved recoveries and costs Complete key environmental improvements Oxygen plant expansion Hazardous waste disposal site underway construction 16
Driving Chelopech Mine/Mill Expansion Forward Permits Funded Smelter Build it Underway In 2012 @ 1.8 mtpy Chelopech will produce: 140,000 oz of gold 50 million lbs of copper @ $1,000 gold and $3.00 copper Result = EBITDA of approx. $150 million 17
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