DPM Metals (TSX:DPM) - Fully Funded Pipeline to Advance Balkan Discoveries

David Rae (0:00)

My name is David Rae. I'm the CEO of DPM Metals.

We're a story that's changed dramatically in the last number of years. We're now focused on high margin growth in the areas of our current operations, and have been particularly successful with exploration, where we've identified four high value projects in the areas where we already work, and intent on bringing those into production over the course of the next five to 10 years.

Crux Investor (0:24)

David, good to see you. We're back on the bench. It's wonderful to see you.

So we're here obviously in Colorado Springs, big conference for producers. What's the point of companies like you coming here?

David Rae (0:37)

I think it's a great opportunity for us to meet with a large number of investors and interested parties, do that all in one space, and where we can in a relatively short period of time, give a consistent, concise outlook in terms of what we're doing, and why we believe that we're the right place to invest.

Crux Investor (0:53)

Okay, well, you've had a good couple of years, share price has anyway. What are the gains been there? Just remind us, where were you two years ago?

David Rae (1:03)

Well, primarily, we've been an organization that's been replacing whatever we've consumed, high margin production, reputation for innovation, working in the Balkans, particularly Bulgaria. And this has continued to be the focus of our intent, but what the change has been over that time is that we've transitioned from an organization that had a number of different assets, which were not necessarily core, to the point where we now core and focused on our Gold, Silver, Copper production business, we've identified four new assets, which have the potential for a 300% increase in growth over the next few years, and all of that at high margins in the areas that we're already in, and building on the experience that we have.

Crux Investor (1:43)

Right. Market cap around 10 billion USD, so it's up there, yet the kind of price earnings ratio, you're probably about 36% less than your peers. It's a real opportunity there.

They're trading PE anyway. What is the market discounting you for them?

David Rae (2:04)

Traditionally, it's been people not quite sure of what to make about a company being in the Balkans, particularly Bulgaria. But what I would say to that is that if you stand back and look, we've had a track record of consistent production in the Balkans. We've got 11 years of meeting guidance and we're well on our way to 12

The environment is one where it's fairly consistent and you can look forward with confidence in terms of what you can produce. It also has a great wealth of expertise in some areas where it can be quite difficult to find people. So when you're talking about mining, metallurgical, other engineering, there's a proud history of that and it's still live and dynamic in terms of what's going on in the Balkans. So you've got a combination of good assets, consistency and continuity. Politically, you've got good people and we've been able to convert that.

Crux Investor (2:52)

Okay, so let's look at what you have done because I think past performance is an indicator of future performance. In this case, management team, who you have, deliberate. Ada Tepe ran it. It's now closed down now, right?

David Rae (3:03)

It has, yeah.

Crux Investor (3:04)

And so, how have you replaced those ounces? Where does that come from?

David Rae (3:07)

So, Ada Tepe, we started in 2019, roughly 100,000 ounces per year, at about $500 an ounce hold in sustaining costs. Fabulous, but a small asset. Last mining in April, last processing in July, and we're now busy shutting the asset down, and we're busy recovering, particularly the metallurgical process assets for our next key project, which is going to be in Serbia. So, how have we done what we've done? We acquired Adriatic basically just over a year ago, 3rd of September last year, and we've managed to take that asset now to its full production capability, and we've demonstrated at the same time our ability to take the challenges that other companies have and resolve things like development rates, appropriate mining practices, be able to see that realized into high margins. We've also, and we're very proud of this, been able to take local employees and our leadership now is largely dominated by Bosnians, which certainly wasn't the case a year ago.

So that overall sort of thesis in terms of what we've done is we've replaced Ada Tepe, and now with the exploration in both, initially in Serbia, but now adding to that in Bulgaria is really setting the stage for the future.