Earnings call transcript: DPM Metals Q3 2025 sees revenue surge and stock uptick

DPM Metals Inc. (DPM) reported strong financial results for the third quarter of 2025, with revenue reaching $267 million, up $120 million from the previous year. The company’s adjusted net earnings stood at $129 million, or $0.73 per share, surpassing expectations and contributing to a 1.44% rise in stock price during the open market. This performance underscores DPM’s robust growth trajectory and operational efficiency, despite higher sustaining costs. According to InvestingPro data, DPM has achieved a perfect Piotroski Score of 9, indicating exceptional financial strength, and has delivered an impressive 263.64% return over the past year.

Key Takeaways

• Revenue increased by $120 million year-over-year, hitting $267 million.
• Adjusted net earnings were $129 million, or $0.73 per share.
• Free cash flow improved significantly to $148 million.
• Stock price rose by 1.44% post-earnings announcement.
• Exploration and acquisition activities are driving future growth.

Company Performance

DPM Metals demonstrated a strong quarter with substantial growth in revenue and earnings compared to the previous year. The company’s strategic acquisitions and operational improvements have bolstered its position as a low-cost, high-growth producer in the precious metals sector. The favorable gold price environment and successful exploration activities, particularly in Serbia, are expected to continue supporting the company’s growth.

Financial Highlights

• Revenue: $267 million, an increase of $120 million year-over-year.
• Earnings per share: $0.73, significantly up from the previous year.
• Free cash flow: $148 million, a $77 million increase.
• Cash flow from operations: $185 million.
• Cash position: $414 million post-Adriatic acquisition.

Earnings vs. Forecast

DPM Metals exceeded its earnings expectations with an EPS of $0.73 compared to the forecasted $0.6086, marking a substantial beat. This positive surprise reflects the company’s strong operational performance and effective cost management, despite a 32% increase in all-in sustaining costs.

Market Reaction

Following the earnings announcement, DPM’s stock price increased by 1.44%, closing at $30.24. This movement reflects investor confidence in the company’s strong quarterly performance and future growth prospects. The stock remains within its 52-week range, indicating steady investor interest and market stability.

Outlook & Guidance

Looking ahead, DPM Metals has set ambitious goals with the Barish operation expected to reach 850,000 tons per year by the end of 2026. The company is also progressing with the Choka Rakita project, with first production targeted for the first half of 2029. Exploration budgets have been increased to support these initiatives, highlighting DPM’s commitment to growth and innovation.

Executive Commentary

CEO David Rae emphasized the company’s strong cash flow generation and shareholder returns, stating, "We are generating strong free cash flow and delivering peer-leading returns to shareholders." CFO Navin Dyal highlighted the company’s financial strength, noting, "We continue to maintain a strong balance sheet and cash position."

Risks and Challenges

• Rising all-in sustaining costs could impact profitability.
• Delays in the Choka Rakita project’s permitting process may affect timelines.
• Fluctuations in gold and copper prices could influence revenue.
• The revocation of the Loma Larga environmental license remains under review.
• Potential geopolitical risks in exploration regions like Serbia.

Q&A

During the earnings call, analysts inquired about the production improvements at Barish and the timeline for Choka Rakita. Management confirmed that operational efficiencies are expected to enhance Barish’s output, while permitting for Choka Rakita has experienced slight delays. There were no changes to the planned closure of the Ada Tepe mine, and the company maintains a minimal foreign exchange hedging strategy.

Full transcript - DPM Metals Inc (DPM) Q3 2025:

Conference Operator: Good day, and thank you for standing by. Welcome to the DPM Metals Third Quarter 2025 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Jennifer Cameron. Please go ahead.

Jennifer Cameron, Director of Investor Relations, DPM Metals: Thank you, and good morning. I’m Jennifer Cameron, Director of Investor Relations, and I’d like to welcome you to the DPM Metals Third Quarter conference call. Joining us today are members of our senior management team, including David Rae, President and CEO, and Navin Dyal, Chief Financial Officer. Before we begin, I’d like to remind you that all forward-looking information provided during this call is subject to the forward-looking qualification, which is detailed in our news release and incorporated in full for the purposes of today’s call. Certain financial measures referred to during this call are not measures recognized under IFRS and are referred to as non-GAAP measures or ratios. These measures have no standardized meanings under IFRS and may not be comparable to similar measures presented by other companies. The definitions established and calculations performed by DPM Metals are based on management’s reasonable judgment and are consistently applied.

These measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures prepared in accordance with IFRS. Please refer to the non-GAAP financial measures section of our most recent MD&A for reconciliations of these non-GAAP measures. Please note that unless otherwise stated, operational and financial information communicated during this call are related to continuing operations and have generally been rounded. References to 2024 pertain to the comparable periods in 2024, and references to averages are based on midpoints and outlook or guidance. I’ll now turn the call over to David Rae.

David Rae, President and CEO, DPM Metals: Good morning, and thank you all for joining us. I’m proud to report that DPM delivered record financial results during the quarter, including record revenue, earnings, and free cash flows. Results that reflect reliable high-margin production from our portfolio and the strength of the current gold price environment. Highlights from the third quarter include solid production of 64,000 gold ounces and 7.8 million pounds of copper, continued strong margins with an all-in sustaining cost of $1,168 per ounce of gold sold, compared to an average realized gold price of $3,635 an ounce, record free cash flow generation of $148 million, which further strengthens our financial capacity to fund growth. During the quarter, we achieved a major milestone with the closing of the Adriatic acquisition, successfully bringing the high-grade Barish operation into our portfolio and transforming our long-term production profile. I’m pleased to report that integration activities are progressing very well.

From day one, we’ve focused on embedding DPM’s health and safety practices at Barish, including the well-being of our people, and this remains our top priority. We’ve also begun to transform training programs for local personnel and engaging with stakeholders. Important steps as we build a strong foundation for long-term success. Looking ahead, we’re advancing our priorities at Barish, including driving the decline to the bottom of the ore body and advancing construction of the Pasteback full plant. We’re on target to achieve a ramp-up to an 850,000-ton per annum rate by the end of next year. I’m also pleased to note that we’re now expecting higher production at Barish in 2026 than previously anticipated as a result of higher tons, gold, and silver grades compared to the Barish PFS. We will provide a detailed update on our expectations for 2026, along with our three-year outlook in February.

Turning now to review our operations in more detail, and starting with Chelopech. Chelopech produced 44,000 ounces of gold and 7.8 million pounds of copper, with an all-in sustaining cost of $671 per ounce of gold sold. Cash costs of $63 per ton of ore processed were on target for the quarter, reflecting Chelopech’s track record of solid, efficient operations, and the mine is on track to meet its 2025 guidance targets for 2025, subject to market dynamics. We continue to prioritize in-mine and brownfields exploration work to further extend mine life at Chelopech, targeting a 10-year-plus reserve life. During the quarter, underground drilling was primarily focused on the wedge zone deep target, which is located on the northern flank of the Chelopech mine concession, approximately 300 meters below existing mineral reserves.

This newly discovered zone of high sulfidation mineralization is presented as a zone of continuous high-grade mineralization over an interval of approximately 150 meters downhole and has been outlined in two close-spaced drill holes to date. Further drilling is in progress from multiple locations to better understand the extent of the mineralization. Production at Ada Tepe increased in the third quarter as anticipated, producing approximately 19,400 ounces of gold, with an all-in sustaining cost of $1,030 per ounce of gold sold. Ada Tepe is on track to achieve its guidance for the year. Turning now to the Loma Larga project in Ecuador, I want to provide an update on recent developments and our path forward. At the end of September, we released the results of an updated feasibility study, which highlighted the potential for the project to deliver attractive returns.

During the second quarter, we achieved a significant milestone with the issuance of the environmental license. This was the result of a rigorous process to ensure high Ecuadorian standards were applied to the development of the project. We’re confident that our environmental management plan and robust environmental protection measures not only complied with those standards but also reflect DPM’s proven track record of responsible development and our commitment to international best practices. However, in October, we received notification from the Ministry of Environment and Energy that the environmental license for Loma Larga was revoked. We are evaluating all available options to preserve value and optionality for our shareholders, including assessing legal avenues. In line with our capital discipline, we’re planning to minimize further spending on the project until this issue is resolved and have reverted back to our original guidance for 2025.

We continue to focus on developing quality growth assets such as Choka Rakita. The feasibility study is advancing on schedule and on track for completion by year-end. We successfully completed all surface and underground geotechnical and hydrogeological drilling, and we’re now moving the design forward to the basic engineering level. Planning for project execution and operational readiness is proceeding as planned, ensuring that we are well-positioned for the next phase of development. As we noted in our news release last night, most of the baseline studies required for the environmental and social impact assessment have been completed. The certificate of resources and reserves has been approved by the technical committee, and we look forward to initiating the special first spatial plan once approved to do so.

Based on an updated permitting timeline, we now expect mine construction to commence in early 2027, with first production of concentrates targeted for the first half of 2029. We are maintaining close and proactive engagements with the relevant authorities to support this permitting process, and we remain confident in the overall progress at Choka Rakita. Key technical work streams are advancing as planned, and our proactive stakeholder engagement continues to support our path forward, sorry, our path toward receiving the necessary approvals and advancing development activities on schedule. We’re closely monitoring permitting timelines and implementing mitigation measures to ensure that we’re ready to move forward with construction as soon as approvals are in place.

In terms of our exploration activities at the Rakita camp, we continue to be excited by the impressive drill results, which are clearly demonstrating the existence of a large copper-gold system analogous to other large porphyry skarn systems globally. Results from Dimitra Potoc are continuing to confirm the presence of a large high-grade gold-silver skarn system, copper-gold-silver skarn system, with mineralization concentrated along both the eastern and western sides of an intrusion. In September, we released results from one of the most significant intercepts at Dimitra Potoc to date, with 132 meters grading over 3.9% copper. Down the same hole, there was a 20-meter gap and then another 76 meters of 2.47% copper equivalent.

On the western side of the intrusion, we extended the widest extent of mineralization by approximately 200 meters to the south, and drilling to date has outlined about 600 meters of strike length of high-grade skarn contact mineralization. We also continue to see strong results in the Rakita North, Frasen, and Vayasaka prospects, all located within 1-2 kilometers from Choka Rakita. Located adjacent to planned Choka Rakita infrastructure, Dimitra Potoc has the potential to unlock additional value and growth potential for an already high-margin, high-return organic project. We are targeting resource estimates for Dimitra Potoc, Rakita North, and Frasen targets by year-end and have increased our exploration budget as we continue to target high-potential areas within the 6-kilometer trend that we have identified to date.

Based on drilling to date, mineralization has been detected over a 1-kilometer strike length up to 300 meters vertically and up to 500 meters away from the intrusion. I want to pause for a moment in order to acknowledge the significant contribution of Paul Ivascanu, our Vice President of Exploration, who tragically and unexpectedly passed away in October. Paul was more than a leader at DPM. His passion, mentorship, which developed an impressive exploration team, and his unwavering commitment to our values has left a deep impression on all of those who worked with him. Under his leadership, our exploration team’s efforts have significantly transformed the future of DPM, driving the discovery of Choka Rakita, Dimitra Potoc, and identifying many other opportunities. On behalf of all of us at DPM, I extend our deepest sympathies to his family and friends, who we are keeping in our thoughts.

I’ll now turn the call over to Navin for a review of the financial results.

Navin Dyal, Chief Financial Officer, DPM Metals: Thanks, Dave. I would also like to acknowledge Paul’s contribution and our condolences to his family and his friends. Returning to our quarter results, I’ll be touching briefly on the financial highlights for the quarter, provide an update on our guidance for the year, and conclude with some commentary on our balance sheet. All of my remarks will focus on results from continuing operations unless otherwise noted. Looking at our financial results, third quarter highlights include revenue of $267 million, adjusted net earnings of $129 million or $0.73 per share, cash flow provided from operating activities of $185 million, and free cash flow of $148 million.

Overall, we saw record financial results during the quarter, which reflected our strong operating performance, the low-cost nature of our operation, a favorable commodity price environment, and the initial contributions from Barish following the closing of the acquisition of Adriatic Metals on September 3rd of this year. Looking at our earnings and cash flow in more detail, revenue was $267 million in the third quarter, an increase of $120 million compared to 2024 due to higher realized metal prices and higher volumes of gold sold, as well as the inclusion of $42 million of post-acquisition revenue from Barish. Adjusted net earnings in the third quarter of $129 million or $0.73 per share, increased by $83 million compared to the prior year, due primarily to higher revenue, partially offset by higher mark-to-market adjustments to share-based compensation expenses, higher depreciation expense, and a stronger euro relative to the US dollar.

Adjusting items for the quarter, not reflective of the underlying operations of the company, include a $25 million non-cash fair value adjustment on inventory that Barish recognized in cost of sales and Adriatic acquisition-related costs incurred by DPM, totaling $10 million. Cash flow provided from operating activities of $185 million for the quarter was higher than the prior year, mainly due to higher earnings generated during the period and the timing of sales and payments to suppliers. Free cash flow, which is calculated before changes in working capital, was $148 million for the quarter, an increase of $77 million compared to 2024, due primarily to higher adjusted net earnings generated in the quarter.

Taking a look at our cost metrics, all-in sustaining costs per ounce of gold sold for the first nine months of 2025 of $1,136 were 32% higher than 2024, due primarily to higher mark-to-market adjustments to share-based compensation expenses, lower volumes of gold sold, and a stronger euro relative to the US dollar, partially offset by lower freight charges. Mark-to-market adjustments to share-based compensation expenses resulted in an increase of $193 per ounce of gold sold compared to an increase of $43 per ounce of gold sold in 2024. We continue to expect our 2025 all-in sustaining costs to be between $780-$900 per ounce of gold sold, keeping in mind that our all-in sustaining cost guidance remains subject to external factors such as mark-to-market impact of DPM’s share price, as well as metal prices and foreign exchange movements relative to our guidance assumptions.

In terms of our capital spending, sustaining capital expenditures of $9 million for the quarter were lower than 2024, due primarily to lower expenditures on mobile equipment at Chelopech, as expected, and lower deferred stripping costs as a result of lower stripping ratios at Ada Tepe in line with the mine plan. Growth capital expenditures of $10 million for the quarter, excluding $2 million of capital spending at Barish, were higher than 2024 as a result of costs related to the Choka Rakita project being capitalized from the beginning of this year. Last night, we provided updated guidance for 2025, reflecting our success year-to-date with our exploration activities in Serbia. Based on positive results, exploration expenses are now expected to be between $49 million-$54 million, up $5 million. In July, we had increased our growth capital expenditures related to Loma Larga.

However, following the revocation of the environmental license, we now expect 2025 growth capital expenditures for the project to remain at the original guidance range of $12 million-$14 million in 2025, and we plan to minimize spending at the Loma Larga project until the issue with the environmental license is resolved. Our three-year outlook does not reflect the operating and financial results of Barish, as we expect minimal production for the balance of 2025, consistent with the Barish technical report that we filed in June of this year. As the Barish mine ramps up to achieving commercial production by the end of 2026, the mine’s 2026 production is now expected to be better than previously anticipated, with higher ore process and higher gold and silver grades when compared to the Barish technical report.

We will provide an updated three-year outlook for Barish along with our corporate guidance in February 2026. We continue to maintain a strong balance sheet and cash position. At the end of the quarter, after spending $400 million in cash for the Adriatic transaction, $136 million to retire Adriatic debt, and a total of $137 million returned to shareholders through dividends and share buybacks under the company’s normal course issuer bid, or NCIB, our consolidated cash position was $414 million. With our strong free cash flow generation, balance sheet, no debt, and a $150 million undrawn revolving credit facility, we are in unique positions with the financial strength to fund our peer-leading growth pipeline, invest in compelling exploration prospects, while continuing to return a portion of our free cash flow to our shareholders.

In closing, we continue to deliver strong performance from our mining operations and continue our track record of generating significant free cash flow. We remain in a strong cash position and are focused on our growth. I will now turn the call back to Dave for his concluding remarks.

David Rae, President and CEO, DPM Metals: Thanks, Navin. This is an exciting time for DPM and our shareholders as we look to our future as a growing precious metals producer, offering a peer-leading development pipeline, a strong balance sheet, and capital returns, all of which are underpinned by our exceptional operational track record. Our portfolio is generating solid, consistent results, and we are very well positioned as one of the lowest-cost, highest-growth producers. We are generating strong free cash flow and delivering peer-leading returns to shareholders. We’re focused on executing a safe, efficient ramp-up at Barish. We’re nearing completion on the Choka Rakita feasibility study. We have substantial financial strength to fund growth opportunities and exploration, and we are focused on executing our strategy to deliver above-average returns for our shareholders as a mid-tier precious metals company. DPM is a clear path forward, and we’re very excited about our future.

I’d now like to open the call for any questions.

Conference Operator: Thank you. As a reminder, to ask a question, please press star 11 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again. Please stand by while we compile the Q&A roster. Our first question comes from Fahad Tariq of Jefferies. Your line is open.

Fahad Tariq, Analyst, Jefferies: Hi. Thanks for taking my question. First, on Barish, you mentioned that you expect 2026 production to be higher than previously anticipated. I appreciate we’ll get the guidance in the first quarter, but maybe just talk about where the higher tonnage is coming from. The higher gold grades and silver grades, I believe that’s a function of probably resequencing and maybe ore sorting, but where’s the higher tonnage coming from? What process improvement is leading to that? Thanks.

David Rae, President and CEO, DPM Metals: Yeah, there’s nothing on ore sorting, just to be clear, in terms of our outlook. What it’s coming from is we’ve brought in our teams to work with the Barish team that we’ve acquired, and we worked on what we can do during the course of next year. That primarily focused on development initially, and then as we open up the different ore bodies, what that then means in terms of our access to those ore bodies, translating to tonnages, grades, but also including things like mine recovery, dilution, and so on. As we’ve done that, we’ve recognized an ability to do more than was in the original plan in terms of copper and gold grades, silver grades, and also tonnages. A lot of that will come down to the efficiency.

This is based on progress that was made ahead of acquisition and in month one after acquisition, as well as our assessment with the capital investments that we’ve been making that can increase the reliability, throughput rates, and sort of online times that we can anticipate. Basically, it’s relatively early still, but based on what we’ve seen so far, we are optimistic that the PFS has been conservative in terms of its outlook. Just a last comment. It doesn’t mean that on day one in January that we start off out of the gate at the tonnage that we’ve described, and you just divide by 365. Of course, I know you realize that, but we’ll give some indication of what that ramp is going to be during 2026, but you’ll notice we’ve been quite deliberate about meeting the 850,000 tons rate in the last quarter of next year.

Fahad Tariq, Analyst, Jefferies: Okay, that’s clear. Maybe switching gears to Choka Rakita and the permitting, can you just provide any additional color on the level of dialogue with the government? Maybe what led to the—it’s a slight delay—but what led to the slight delay in the timeline? Yeah, just anything else you’re keeping an eye on.

David Rae, President and CEO, DPM Metals: As you’ll understand, we’re actually busy completing the next phase of reporting with the technical report. There’s obviously a revision that comes in as part of that. We’ve looked at the overall situation. Our ongoing discussions with the government are very fruitful. We’re very happy with that. Our ongoing discussions with our stakeholders are the same. We’ve just taken the view of where are we at this point and what do we anticipate and recognize that we needed to revise that guidance. What we’ve done, we’ve added four- to six months to that guidance at the moment. Basically, if we look specifically at what’s going on, there was an activity in mid-year where a number of the different ministries were involved with some technical experts, what we call the technical committee.

They looked at the certificate of resource and reserves, where we provide some fulsome disclosure and information, which allowed that technical group to be able to come to a conclusion. They supported the project, and that decision then triggers looking towards a spatial plan, and we were just waiting for a confirmation that we could actually start to proceed with that. In the meantime, none of these things happen as a start-stop sequence. We must do preparation while we’re waiting for these triggers to occur so that we’re ready to engage fully in terms of we’re not waiting for these things to happen before we get ready with all the information. It is one of these situations where we continue to work with the authorities. We continue to provide the information provided and answer any questions that come up.

I would say that I’m very happy with those relationships that we have ongoing, and we’re confident that we’ll be receiving the SPSP within the near future, which will allow us to move this project forward. There’s a number of different activities that have got to happen, but really we’re focusing on the ESIA baseline studies and the release of the EIA and the exploitation permit, which would then trigger the construction for Choka Rakita. Where we previously said that timeline would be mid-2026, we’re now saying early 2027.

Fahad Tariq, Analyst, Jefferies: Got it. Maybe just a quick one for Navin. I think in the MD&A and in the comments, there was a discussion about the strengthening of the euro. Is there an FX strategy, a hedging strategy at the company?

Navin Dyal, Chief Financial Officer, DPM Metals: We do have the ability to put on hedges. We’ve actually utilized, if you recall, we used to hedge maybe a dollar when we had the smelter. We look at that periodically in terms of whether or not we should be hedging. Typically, what we’ve done is, though, is that when we have significant capital expenditures that, for example, in the upcoming capital spend for Choka Rakita, we might look to otherwise hedge the FX exposure related to that. For ongoing business, especially when it comes to euro, you’re looking at historically, I’ve tended to look at gold and euro kind of moving in the same direction. As the strengthening of the euro happens, you typically have the gold market kind of improving as well. It acts as a bit of a natural hedge.

We kind of just watch that, and then if there’s any change to that assumption, then we might take some positions there, but typically not in the past when it comes to euro.

Fahad Tariq, Analyst, Jefferies: Okay. Thank you very much.

Conference Operator: Thank you. Our next question comes from Wayne Lamb of TD Securities. Your line is open.

Wayne Lamb, Analyst, TD Securities: Yeah, thanks. Morning, guys. Maybe just a follow-up at Choka Rakita. Just wondering if there’s any read-throughs or knock-on impact from Rio Tinto’s mine being deferred in terms of permitting implications, or do you guys see the two projects as fairly mutually exclusive?

David Rae, President and CEO, DPM Metals: Yeah, we see them as mutually exclusive.

Wayne Lamb, Analyst, TD Securities: Okay, great. Thanks. Maybe at Ada Tepe, can you give us an update on the expected timing in terms of the wind-down operations? Is that still slated for mid-year next year, or is there any ability to extend out the operations incrementally given the higher gold price?

David Rae, President and CEO, DPM Metals: Yeah, thanks, Wayne. We’re still planning that we’ll wind down mining and process operations in Q2 next year. No change to that. Sorry, I didn’t hear.

Wayne Lamb, Analyst, TD Securities: Sorry.

David Rae, President and CEO, DPM Metals: Changing in gold price environment, does that mean that that opens up the opportunity for other material to be brought in? No.

Wayne Lamb, Analyst, TD Securities: Yeah, exactly.

David Rae, President and CEO, DPM Metals: In terms of infrastructure, sorry. Thank you for your question, though. We still plan to obviously disassemble the main infrastructure, which is primarily around the process plants, so crushers, mills, other pumping, piping, buildings, this type of thing. The plan will be that we’ll start to disassemble that at the end of that period where we close the mine operations, close the process operations, and then we’ll disassemble that and we’ll refurbish it. A good part of that’s still at Ada Tepe and some part of that in Chelopech, and then it’ll be stored ready for movement to Choka Rakita. Basically, as we get the infrastructure in place and we have the civils ready to receive the equipment, it’ll be moved to time with that.

Wayne Lamb, Analyst, TD Securities: Okay, but with the higher gold price, there’s no potential for further extension even with the higher gold price?

David Rae, President and CEO, DPM Metals: No.

Wayne Lamb, Analyst, TD Securities: Okay. And then maybe just last one at Chelopech. Can you talk a bit about the cost pressures you’re seeing there on the labor side? If we think about the levy that was paid in Bulgaria in Q1, should we be thinking about something similar as we think about the year-end here, particularly with the stronger metals price environment, or was that a one-off event?

Navin Dyal, Chief Financial Officer, DPM Metals: Hi, Wayne. Yeah, we consider that, starting with the last question first, that levy we’re considering a one-off event. We’ve got no indications that would suggest that this would be repeated for next year. When it comes to pressures on labor, we have our every two years, we have renegotiated agreements with our workforce, and we just completed one this year, and hence why we’re seeing that kind of translated to this year’s cost. We plan for this as well, and we take an appropriate amount in consideration to our budget. I think that’s just something that we’re seeing not just in Bulgaria, but elsewhere globally. I mean, I think labor is sticky when it comes to increases, and whereas we’re seeing benefits elsewhere, such as our freight costs, which have been reduced significantly over the past year, labor certainly is one that we continue to see increases there.

Our workforce is extremely skilled, as you would appreciate, in Bulgaria, and we consider that in the negotiations as well.

Wayne Lamb, Analyst, TD Securities: Okay, great. Thanks for taking my questions.

Navin Dyal, Chief Financial Officer, DPM Metals: Thank you.

Conference Operator: Thank you. As a reminder, if you have a question, please press star 11. Our next question comes from Raj Ray of BMO. Your line is open.

Raj Ray, Analyst, BMO: Thank you, Alfred, and good morning with the event team. First of all, I’m deeply saddened to hear about the news on Paul. My sincere condolences to the entire DPM team. I’ve got a couple of questions. First up on Choka Rakita, with the feasibility study expected, Dave, is there any change of scope or anything you can highlight that we should be looking forward to? Also, in terms of the resource update, what is expected to be included in that? Secondly, on capital returns, it’s probably for Navin, is there potential for a boost up in capital returns? I see in Q3 there wasn’t any buybacks. As they go into Q4, is there potential for the boosting of capital returns?

David Rae, President and CEO, DPM Metals: Okay, yeah, thanks, Raj. In terms of changes of scope, we’ve got the feasibility study coming out in the fairly near future. I would suggest let’s wait for that to come out. It gives you an awful lot more detail. What I would say is we’re very happy with the way that’s progressing. No sort of nasty surprises with that. I’m looking forward to really getting on with that construction. I think the one thing that we’ve seen sort of touched on, but perhaps maybe some still missed, I’ll make this comment for everybody here, that we alluded to the fact that having Vares puts us in a very good position in terms of our operational readiness.

One of the things to keep in mind is we’re testing things that we’ve developed at Chelopech, at Vares at the moment, which feeds into what is going on for 2026 in order to bring us to the production numbers that we have and the efficient numbers that we have, which we’ll put out in February next year. That then translates into readiness for Choka Rakita. There’s also that dynamic. Earlier, Wayne asked about what’s happening with the equipment and are we still going to move it. There’s that dynamic coming in as well, which was not there when we did the pre-feasibility study. Our confidence is obviously increasing as we do more engineering, and you’ll see that reflected in the pre-fees.

Keep in mind, any significant changes we typically do ahead of pre-feas, and really all we’re doing is we’re working through the sort of dynamics of the costing and increasing confidence between the pre-feas and the feasibility study. At this point, no scope changes.

Navin Dyal, Chief Financial Officer, DPM Metals: Raj, I’ll just address your second question on capital returns. In the third quarter, as you can appreciate, we were pretty busy wrapping up the acquisition of Adriatic Metals for much of the quarter. We also ran into some upcoming disclosures that occurred at the end of the quarter as it related to Loma Larga’s technical report. As you can appreciate, also in the fourth quarter, we have a significant amount of news flow up and coming with the Choka Rakita technical report, the initial resources for the three deposits that will carry us through. I would say that from a fourth quarter expectation around buybacks and the like, I think it would continue to be minimal. However, it remains considerable implementing our toolbox here, and we definitely consider a healthy return of capital to shareholders important.

While you may not see a significant amount for the remainder of this year, I think you can expect to see that we revisit that next year.

Raj Ray, Analyst, BMO: Okay, that’s great. Thank you very much. That’s it from me.

Wayne Lamb, Analyst, TD Securities: Thanks, Raj.

David Rae, President and CEO, DPM Metals: Thank you.

Conference Operator: Thank you. Our next question comes from Jeremy Hoy of Canaccord. Your line is open.

Jeremy Hoy, Analyst, Canaccord: Hi, thanks for taking my questions. Just a quick one for me. It’s on Loma Larga. A lot of momentum building in Eastern Europe there, and clearly Loma Larga becomes, I think, less critical overall to the story. Has there been any dialogue since the revocation of the environmental permit with the government or stakeholders, or are you essentially at an impasse there?

David Rae, President and CEO, DPM Metals: What we’ve said is that we are engaging with stakeholders, and there’ll be a necessity to engage with the government. You’ll understand that at the time, there was a number of things that were going on, and the revocation came about at a time which was most disappointing given what happened with the EIA issue. The clear demonstration from the Environmental Ministry that our standards were robust and in line with what was required for this project and would stand the test globally in any place that we operate. Somewhat disappointing that that happened, and there were a lot of things that were going on at the time. It will be necessary for us to consider what our options are, but basically, we’re assessing all of our available options to preserve the value and maintain optionality for our shareholders. That includes evaluating legal avenues.

I think more than that at this point, I’m not really able to discuss.

Jeremy Hoy, Analyst, Canaccord: Yeah, that’s fair. Thank you very much. I appreciate you taking the question.

Raj Ray, Analyst, BMO: Thank you, Jeremy.

Conference Operator: Thank you. I’m showing no further questions at this time. I’d like to turn it back to Jennifer Cameron for closing remarks.

David Rae, President and CEO, DPM Metals: Thanks everyone for joining us, and we look forward to speaking over the coming months and look forward to sharing some of our upcoming news flow with you all. If you have any further questions, please feel free to reach out, and thank you.

Conference Operator: This concludes today’s conference call. Thank you for participating, and you may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.