TSX: DPM WELCOME TO THE 2012 ANNUAL & SPECIAL MEETING May 9, 2012
CHAIRMAN’S AGENDA WILLIAM WILSON – CHAIRMAN OF THE BOARD Opening Remarks • Introduction of head table • Introduction of the Board of Directors Appointment of Secretary and Scrutineer Constitution of the Meeting
BUSINESS OF THE MEETING Presentation of Financial Statements and Auditor’s Report Nomination and Election of Directors (ballot) • William Wilson • Derek Buntain • Peter Gillin • Jonathan Goodman • Ned Goodman • Murray John • Jeremy Kinsman • Garth MacRae • Peter Nixon • Ronald Singer • Donald Young Amendment to Stock Option Plan (ballot) Appointment of Auditor Termination of the Meeting
TSX: DPM MESSAGE FROM JONATHAN GOODMAN PRESIDENT & CHIEF EXECUTIVE OFFICER
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. 5
FORMAT FOR TODAY’S MEETING Jonathan Goodman – Introduction and Opening Remarks Hume Kyle - Financial Summary Rick Howes - Mining Operations Jonathan Goodman - Smelting and Development, Exploration Assets, Strategy & Closing Question and Answer Period
TSX: DPM FINANCIAL UPDATE HUME KYLE – EVP & CFO
MARKET PRICES Gold (US$/oz) Copper (US$/lb) 1,800 1,691 5.0 1,569 4.8 1,600 1,386 4.6 1,400 4.38 1,224 4.4 1,200 4.2 4.00 1,000 4.0 800 3.77 3.8 600 3.6 3.42 400 3.4 200 3.2 0 3.0 2010 2011 Q1 2011 Q1 2012 2010 2011 Q1 2011 Q1 2012 Silver (US$/oz) Zinc (US$/lb) 35.12 1.09 1.1 32.62 31.71 33 0.99 0.98 1.0 28 0.92 0.9 23 20.16 0.8 18 0.7 13 0.6 8 3 0.5 2010 2011 Q1 2011 Q1 2012 2010 2011 Q1 2011 Q1 2012 8
PRODUCTION & CASH COSTS Mine Concentrate Production Smelter Concentrate Production (tonnes) (tonnes) 140,000 125,253 120,000 200,000 180,403 96,035 100,000 180,000 160,000 80,000 140,000 119,557 120,000 60,000 100,000 36,978 80,000 40,000 60,000 19,135 41,924 38,532 20,000 40,000 20,000 0 0 2010 2011 Q1 2011 Q1 2012 2010* 2011 Q1 2011 Q1 2012 Smelter Cash Cost Gold Cash Cost, net of by-product credits (US$/tonne) 400 (US$/oz) 337 350 323 280 238 295 300 230 268 250 180 130 200 80 150 34 30 100 -20 2010 2011 Q1 2011 Q1 2012 50 -70 -57 -120 0 -110 2010* 2011 Q1 2011 Q1 2012 9 *DPM acquired NCS on March 24, 2010
METALS IN CONCENTRATE PRODUCED Gold (oz) Copper (M/lbs) 128,000- 40.9- 140,000 45 143,000 46.2 39.8 120,757 40 120,000 35 94,728 30.4 100,000 30 80,000 25 20 60,000 41,910 15 12.2 40,000 10 19,585 5.8 20,000 5 0 0 2010 2011 2012 Est Q1 2011 Q1 2012 2010 2011 2012 Est Q1 2011 Q1 2012 Silver (oz) Zinc (M/lbs) 659,000- 25 800,000 18.00- 732,000 670,819 20.0 700,000 640,454 19.6 19.1 20 600,000 500,000 15 400,000 10 300,000 187,526 157,666 4.8 200,000 4.4 5 100,000 0 0 2010 2011 2012 Est Q1 2011 Q1 2012 2010 2011 2012 Est Q1 2011 Q1 2012 10
FINANCIAL RESULTS Adjusted Earnings Adjusted EBITDA ($/share) (US$/M) 117.5 115 0.71 0.64 95 0.61 0.51 75 0.41 0.31 55 0.25 45.3 40.8 0.19 0.21 35 0.08 0.11 19.2 0.01 15 2010 2011 Q1 2011 Q1 2012 2010 2011 Q1 2011 Q1 2012 Funds from Operations Free Cash Flow (US$/M) (US$/M) 140 90 82.3 123.6 80 120 70 100 60 80 50 40.6 53.9 40 60 48.1 30 40 17.3 20 14.7 21.9 20 10 0 0 2010 2011 Q1 2011 Q1 2012 2010 2011 Q1 2011 Q1 2012 11
FINANCIAL POSITION AND DEBT SERVICE COVERAGE AT MARCH 31, 2012 Solid Balance Sheet Strong Debt Service Coverage Ample Liquidity (US$M) (Ratio) (US$M) Debt Capitalization 10% 800 84 20 Funds from Debt 700 18 operations 17.8 16 600 14 500 Publicly traded $ 183 12 11.7 investments 400 10 722 Equity 300 8 6.5 6 200 $144 Corporate Cash Targeted Minimum 1.5X 4 100 2 0 0 2010 2011 Q1 2012 12
GROWTH CAPITAL Growth Capital Growth Capital by Business (US$/M) 150-175 160 140 120 100 NCS Chelopech 85.3 80 60 51.6 Deno Krumovgrad 40 20.5 18.1 20 0 2010 2011 Q1 2011 Q1 2012 2012 Est. 13
POTENTIAL GROWTH CAPITAL & EBITDA Potential Growth Capital Growth Capital by Business Potential Future Annual EBITDA (1) 2013-2015 2013-2015 (US$/M) (US$/M) 500 300 450 400 250 Chelopech 350 NCS 200 300 250 Krumovgrad 150 Deno 200 150 100 100 50 50 0 0 (1) Based on current market prices and the completion of capital program 14
FINANCIAL STRATEGY Invest in projects that exceed our cost of capital • Assess based on risks of each investment Maintain a strong balance sheet to support requirements of business and provide financial flexibility to grow throughout commodity cycles • Utilize modest amounts of long term debt • Adhere to conservative credit metrics • Maintain sufficient liquidity to meet unforeseen market downturns and operating disruptions Periodically hedge exposures to reduce risk • Provisional product pricing • Project capital costs • Future metal production 15
TSX: DPM OPERATIONS UPDATE CHELOPECH MINE RICK HOWES – EVP & COO
DPM PROPERTIES 17
CHELOPECH MINE Operating and Financial Highlights Gold Production (000s ounces) Copper Production (pounds in millions) 103- 38 - 43 115 $369 120 $400 Cash Cost * (Gold $US/oz) $309 Ounces (000’s) 37 94 80 $210 88 28 26 $200 71 20 40 65 12 36 ($112) 0 $0 2008 2009 2010 2011 Q1' 2012E 2008 2009 2010 2011 Q1' 2012E 2012 2012 Ore Processed and Cost/Tonne Adjusted EBITDA (US$MM) Tonnes ore processed per year (000’s) 1,700 – Cost/tonne ($US) (Excluding royalties) 1,850 2,000 $60 133 1,354 $40 981 1,001 59 57 901 51 1,000 28 $20 2008 2009 2010 2011 Q1' 436 2012 0 $0 2008 2009 2010 2011 Q1' 2012E 2012 18
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