Dundee Precious Metals (DPM) reported a staggering N$536 million in earnings in the third quarter, an improvement from the N$1.14 billion net loss in the same period last year on the back of higher gold sales and copper prices.
The income brings the total earnings recorded for the last nine months to N$2.7 billion at the company’s Tsumeb smelter, also signifying an increase from the N$51 million reported last period.
DPM Chief Executive Officer David Rae said the improvement was attributed to the absence of the Tsumeb impairment charge of N$1.7 billion, taken in the third quarter of 2022, as well as higher volumes of gold sold and increased realised gold and copper prices.
“These positive factors were partially offset by lower complex concentrate smelting volumes and higher planned exploration and evaluation expenses,” Rae said.
The company also reported a low 22,000 tonnes in processed complex concentrate in the third quarter due to the shutdown of its Ausmelt furnace.
According to a report released by Dundee, the maintenance shutdown took place during the third quarter of 2023, as opposed to the second quarter of the previous year.
The timing resulted in a substantial decrease in complex concentrate smelted in the third quarter, with a shortfall of 42,208 tonnes compared to 2022.
“However, the situation is a bit different for Tsumeb, which is predicted to fall below its 2023 production guidance range while operating at the higher end of its cash cost per tonne guidance range,” Rae said.
The report states that the first nine months of 2023 saw a dip in production, with a difference of 11,375 tonnes compared to the same period in 2022.
The drop was primarily attributed to unplanned downtime earlier in the year caused by water leaks in the off-gas system. However, Tsumeb swiftly resumed operations and was back at full production by the end of September.
“While there is an expectation of increased complex concentrate smelting in the fourth quarter due to improved operating performance following maintenance work, it is projected to remain below the guidance range for the year,” Rae said.
Similarly, Tsumeb also faced cost challenges, with the cash cost per tonne of complex concentrate smelted in the third quarter of 2023 amounting to N$18,389.95 ($921).
The cost was N$12,468 ($624) higher than the corresponding period in 2022, largely due to lower volumes of complex concentrate smelted during the Ausmelt furnace maintenance shutdown.
Rae further explained that for the first nine months of 2023, the cash cost per tonne was N$9,316.65 ($467), comparable to 2022.
The stability in cost can be attributed to lower volumes of complex concentrate smelted, offset by a weaker South African Rand relative to the U.S. dollar. Despite these challenges, Tsumeb is approaching the high end of its 2023 cash cost guidance range.
Rae explained that despite facing challenges in meeting its 2023 production guidance and contending with higher cash costs, Tsumeb is demonstrating resilience and delivering improved financial results compared to the previous year.
