Dundee Precious Metals Inc.
TSX : DPM
TSX : DPM.WT

Dundee Precious Metals Inc.

November 07, 2007 21:31 ET

DPM Third Quarter 2007 Financial Results

TORONTO, ONTARIO--(Marketwire - Nov. 7, 2007) -

(All amounts have been expressed in Canadian dollars except where indicated.)

Dundee Precious Metals Inc. (TSX:DPM)(TSX:DPM.WT) (the "Company" or "DPM") reported its third quarter financial results for 2007.

"We remain committed to build a world class mining enterprise," said Jonathan Goodman, President and CEO of Dundee Precious Metals Inc., "Our aggressive exploration programs in Serbia have started to provide excellent results while we expect to initiate drilling in Armenia. Also, our operations group is moving forward towards improved production and standards in Kapan while at Chelopech preparations for the expansion are underway as we continue to proactively work with the Bulgarian Government to resolve the permitting situation," he added.

FINANCIAL HIGHLIGHTS

- DPM had a net loss of $9.7 million or $0.14 per share, on both a basic and diluted basis, and net earnings of $24.9 million or $0.43 per share ($0.42 per share on a diluted basis) for the three and nine months ended September 30, 2007, respectively, compared with net earnings of $13.4 million or $0.25 per share ($0.24 per share on a diluted basis) and $51.3 million or $0.95 per share ($0.92 per share on a diluted basis) for the three and nine months ended September 30, 2006, respectively.

- As at September 30, 2007, the Company had working capital of $76.5 million and an investment portfolio with a market value of $98.4 million, which in the aggregate amounted to $174.9 million.

- Chelopech reported revenues of $24.2 million and $89.1 million on sales of 14,095 tonnes and 51,839 tonnes of gold/copper concentrate for the three and nine months ended September 30, 2007, respectively, compared to revenues of $15.8 million and $76.7 million for the three and nine months ended September 30, 2006, respectively.

- Kapan Mine, the Company's redevelopment project in Armenia, reported gross losses of $2.3 million and $6.2 million on revenues of $2.6 million and $11.1 million for the three and nine months ended September 30, 2007, respectively, compared to a gross profit of $0.4 million for the month of September in 2006.

- Investment activities generated an investment loss of $1.9 million and investment income of $34.9 million for the three and nine months ended September 30, 2007, respectively, a notable decline from the prior year's investment income of $19.9 million and $45.6 million for the three and nine months ended September 30, 2006, respectively.

- The Company incurred exploration expenditures of $9.7 million and $22.0 million for the three and nine months ended September 30, 2007, respectively, representing a significant increase in exploration in Serbia compared to overall exploration expenditures of $3.5 million and $8.8 million for the three and nine months ended September 30, 2006, respectively.

SIGNIFICANT EVENTS

- DPM's exploration team has confirmed a major zone of molybdenum-rhenium mineralization at its Surdulica exploration license area, located in southeast Serbia. An exploration program, including soil sampling, geological mapping and channel sampling, confirms a zone with a footprint of over 5km by 3km, identified by previous mining, exploration, rock chip sampling and diamond drilling.

- On October 17, 2007, DPM entered into a lock-up agreement with Wega Mining ASA and Wega Mining Inc. (collectively "Wega") pursuant to which DPM has agreed to tender its shares of Goldbelt Resources Ltd. ("Goldbelt") under an offer by Wega to acquire all outstanding Goldbelt common shares at a price of $1.55 per share.

- The study assessing alternative jurisdictions in which to build the autoclave and the metals processing facility currently planned to be built in Bulgaria is due to be completed during the fourth quarter.

- Proof of concept drilling is expected to commence in Armenia in the fourth quarter to initially focus on defining two starter pits previously identified by the Russian historical drilling; the results of which will help validate the Company's strategy to develop the Kapan mine, and provide additional sources of future production.

- DPM announced the appointment of Stephanie E. Anderson as Executive Vice President and Chief Financial Officer of the Company, effective December 3, 2007.

During the three months ended June 30, 2007, the Company incorrectly expensed the costs associated with the equity financing completed at the end of the second quarter. The correct accounting treatment is to record the transaction costs, net of related income tax recoveries, as a capital transaction within share capital. The impact of recording this adjustment is an increase to net earnings and a decrease to capital stock of $2.6 million, comprised of a reduction to expenses of $3.9 million offset by an increase in future tax expense of $1.3 million. As this amount should have been recorded in the second quarter of 2007, the Company has restated and re-filed its second quarter financial statements and Management's Discussion and Analysis.

A complete set of DPM's unaudited consolidated financial statements and Management's Discussion and Analysis for the third quarter ended September 30, 2007 are posted on its website at www.dundeeprecious.com and have been filed on Sedar at www.sedar.com.

An analyst conference call is scheduled for Thursday, November 8, 2007 at 8:30 a.m. (EST), to present these results and will be webcast live at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=69218&eventID=1672046. The audio webcast for this conference call will be archived and available on the Company's website.

Dundee Precious Metals Inc. is a Canadian based, international mining company engaged in the acquisition, exploration, development and mining of precious metals. It currently owns the Chelopech Mine, a producing gold/copper mine and the Krumovgrad Gold Project, a mining development project, both located in Bulgaria, and is engaged in mineral exploration activities in Serbia. In addition, Dundee Precious owns a 100% interest in the Back River gold exploration project in Nunavut, Canada and an 80% interest in the Kapan Mine in Armenia. The Company also holds a significant and strategic portfolio of investments in the precious metals and mineral related sector.

Contact Information