Janet Reid - Manager of IR Rick Howes - President and CEO Hume Kyle - CFO David Rae - COO Nikolay Hristov - SVP, Sustainable Development John Lindsay - SVP Projects

Sam Crittenden - RBC Capital Markets

Good morning, everyone. I am Janet Reid, the Manager of Investor Relations.

Welcome to Dundee Precious Metals first quarter conference call. With me today are Rick Howes, President and CEO; and Hume Kyle, Chief Financial Officer, who will each comment on the quarter, as well as David Rae, Chief Operating Officer; Nikolay Hristov, SVP, Sustainable Development; and John Lindsay, SVP Projects who are here today to assist with answering questions following our formal remarks.

After close of business yesterday, we released our first quarter results and hope you had an opportunity to review our material. 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. 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 are based on management’s reasonable judgments 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 operational and financial information communicated during this call has generally been rounded and is in US dollars unless otherwise noted.

On this morning’s call, Rick will comment on our first quarter operating results as well as the progress being made on our capital projects and exploration programs for the quarter. Hume will then provide an overview of our first quarter financial results and our guidance for 2016.

With that, I will turn the call over to Rick.

Thanks, Janet. Hello everyone, and thanks for joining us today for our first quarter 2016 conference call.

I am pleased to provide you with an update of our first quarter 2016 results and progress on our key projects and initiatives. There are some encouraging signs with metal prices rebounding in the first quarter from a lows of last year.

Year-to-date gold is up 20% from year-end lows of $10.60 and copper is up 10% from its year-end low of $2.00. The recent gold strength appears to be driven by recent weakness in the US dollar, stronger EPS, and central bank buying and lower negative interest rates and lose monetary policy in most of the developed economies in response to weak global growth and rising debt.

This is yet to seen, whether or not this is a true turning point for gold, but certainly the signs are encouraging. Gold equities, which were severely sold off over the last few years have rebounded strongly year-to-date with the GDX up over 83%, and the GDXJ up 95% and our own shares up 110%.

US dollar strength continued in the first quarter against the currencies we work in and was particularly strong against the South African rand and the Canadian dollar. On April 28, we completed the transaction for the sale of our Kapan mine in Armenia to Polymetal and received consideration consisting of $10 million in cash, $15 million in ordinary shares of Polymetal, which was subsequently sold for net proceeds of $14.8 million and 2% net smelter royalty on future production from the Kapan property.

The sale of Kapan helps to strengthen the balance sheet and allow the company to focus attention on the core assets and strategic growth opportunities. On April 8, 2016, the company also acquired all the issued and outstanding shares of Avala, not already owned by DPM for consideration of 0.044 of a DPM common share for each Avala share outstanding.

With this transaction, we are able to consolidate our significant strategic exploration interest and successful discoveries in Serbia with our existing regional exploration interest, producing our overhead cost and merging the Avala and DPM resources under one umbrella, under the direction and control of our Senior Vice President Exploration, Richard Gosse. All technical review and integration of these assets are underway.

Our operations had solid performance in the first quarter tracking well against our 2016 guidance on production and cost. We had gold production of 52,000 ounces and copper production of 11.2 million pounds.

Our all-in sustaining cost from continuing operations was $695 per ounce, well below our guidance despite the significant impact of lower copper byproduct credit. Cost reduction efforts, lower capital expenditures and stronger operating performance have allowed us to generate positive free cash flow from continuing operations before changes in working capital of $21 million in Q1.

Our balance sheet remains in good shape and available liquidity of $174 million made up of cash and our undrawn revolving credit facility and our debt at the end of Q1 sits at $157 million and we remain compliant with all of our bank covenants. Chelopech successfully ramped up mine and mill production by 10% as planned in the quarter over full year of 2015 production levels of 2 million tonnes per annum.

Higher production along with good grades and recoveries resulted in Chelopech producing 33,000 ounces of gold and copper concentrate and 13,000 ounces of gold and pyrite concentrate along with 10.6 million pounds of copper. Gold and copper production in the first quarter of 2016 was slightly higher than expected benefiting from the higher grades and recoveries.

Production for the balance of 2016 is expected to come from zones with grades closer to the reserve average grades in keeping with 2016 guidance, and gold and copper production in 2016 is expected to be in line with guidance. The metal sold in Q1 were negatively affected by the timing of concentrate deliveries.

Chelopech cash costs per ounce of gold and copper concentrate was $330 in Q1. Cash cost per tonne of ore mill has also improved as a result of higher productions over the fixed cost.

In December, we announced 4.2 million increase in measured and indicated mineral resources at Chelopech from additional mineralization surrounding the old sub-level cave zone in the upper part of the mine. The exploration drilled program to extend and better define this rescore began in 2015.

Drill results in the first quarter continued to confirm economic grades and continuity as well as some extensions of this resource. One sufficient drill definition is completed, a study will be undertaken to determine technical and economic viability for extraction and a full mine time will be developed.

Further exploration drilling is planned for 2016 and ‘17 and a possible expansion to 2.5 million tonnes per annum will be elevated as part of this study. At Ausmelt, complex concentrate smelted of 57,422 tonnes in the first quarter was a mine of expectation.

The Ausmelt plant commenced commercial production in the fourth quarter of 2015 and operated as planned in the first-quarter producing 48,809 tonnes of assets. The two new large copper converters together with associated off-gas system and tie-ins to the asset plant which for in part of the scope of the asset plant project were commissioned in the first quarter of 2016 as planned and are now in operation.

While some expected operational instability was experienced, the impact on complex concentrate throughput was limited and the ramp up is progressing towards nameplate capacity. Production is expected to be in line with 2016 guidance.

The annual maintenance shutdown is expected to occur in Q2 as planned. With third-party pulling rates continuing to improve and unit cost declining as the throughput ramps up, we are expecting to see a strong increase in margins and EBITDA as the throughput ramps up.

With the completion of commissioning of the new converters, this completes the asset plant project offering us off-gases that contains sulfur dioxide are now captured and routed to the asset plant resulting in significant reduction in SO2 emissions being recorded in the smelter and surrounding areas. Our environment and health monitoring results indicate we are seeing a significant improvement as a result of this transformative investment program.

This completes the last and final requirement of the cabinet directive issued by the Namibian government to DPM back in 2012. Final closeout assessment by the technical committee is expected to be completed in due course.

After that the smelter will return to normal government regulatory oversight. Final cost for the project are expected to be on budget and the project will be closed out in Q2.

The official opening of the asset plant took place on April 6. The President of Namibia along with the Deputy Prime Minister, several key ministers and the Canadian High Commissioner were all in attendance for this ceremony.

We are considering further optimization of smelter operation including the installation of a holding furnace which would provide search capacity between Ausmelt furnace and converters to potentially increase the throughput of complex concentrate to as much as 370,000 tonnes per annum. A full feasibility study is underway and expected being completed in Q4 2016.

Discussions are underway to securing sufficiently feed to fill the expanded capacity and environmental and other remaining work has begun. We continue to explore potential partners to assist in the funding of this expansion.

At Krumovgrad, permitting progress is continuing on plan, approval for land use re-designation was received in February and land purchase is expected to be completed in May. We anticipate receiving the final construction permit by the end of Q2 at which time the project will be ready to go to construction.

The updated execution plan and schedule and update capital cost estimate is currently under review and will be released in Q2. Subject to completing our financing plan, we expect to be in a position to seek board approval for full project release in Q3.

This would mean project construction beginning in the second half of 2016 with commencement of production expected in the second half of 2018. Our exploration program around Krumovgrad is looking to expand the resource base for the Krumovgrad project.

In Q1, as a result from exploration drill at the [indiscernible] located around 2 kilometers east of [indiscernible] we received and confirmed the presence of a large high-level epithermal gold mineralization footprint including a significant intersection of 8 meters with an average grade of 12.8 grams gold and 4.9 grams silver at a depth of 277 meters. Follow-up drilling on this and two other prospects are planned for this year.

At our now 100% owned Avala exploration project in Serbia, we are conducting a full technical review in all projects and integrating Avala back into our exploration group. With the success that Avala has had with the Tulare copper gold discoveries in southern Serbia and the Timok sediment-hosted gold discoveries in Eastern Serbia, we are in a good position to build out our pipeline of organic growth opportunities in Eastern Europe.

In addition, Avala has carried our early exploration works on its 100% power Lenovac license which is strategically located immediately south of the Reservoir Minerals/Freeport-McMoran Cukaru Peki discovery. Following the completion in November 2015 of the earn-in and joint venture agreement with Rio Tinto, Avala proceeded with drilling an initial single deep hole in the north portion of the project area to a depth of 852 meters and is currently conducting ground magnetics and gravity surveys of this license.

At Timok, sediment hosted gold project, Avala completed 1500 meters of drill program on the Bigar Istok license which host part of the Timok Gold Project. The drill holes intersect a gold and base metal mineralization including 8 meters of 1.86 grams gold and 1.68% copper from 348 meters.

Current plans are focused on expanding these existing resource base in Timok with additional new geo-chemical methods and geo-physical work along over 24 kilometers of anomalous soil reserves. In summary, we are pleased to see the recent strength in our share price performance which we think moves us closer to properly reflecting the underlying value of our assets, particularly our smelter.

With the smelter upgrade projects finally coming to an end after five years of hard work, we expect to start realizing the true benefits of this work in 2016 through increased concentrate throughput and earnings. With the sale of Kapan strengthening our balance sheet and allowing us to focus on more strategic assets we're ready to embark on our first greenfields growth project at Krumovgrad.

We will continue to advance our Krumovgrad project construction ready status and evaluate our position to move it forward at that point based on market conditions and our ability to finance. Thank you.

I will now turn the call over to Hume who will review the financial results and 2016 guidance following which we will open the floor to questions.

Thanks, Rick. Good morning, everybody.

With the completion of our sales of Kapan, I am going to restrict my comments today to the continuing operations of the business unless otherwise noted. So for the quarter I would just note that Kapan lost a $0.01 per share.

And with respect to our continuing operations, adjusted net loss of $0.01 per share compared to breakeven in Q1 2015, adjusted EBITDA of $22 million compared to $20 million and funds from operation of $31 million compared to $18 million. The increases in EBITDA and funds from operation were driven by a 33% increase in volumes in concentrates smelted, higher toll rates at Tsumeb, lower freight rates and treatment charges and a stronger US dollar.

These were partially offset by a 29% decrease in realized copper prices reflecting lower market and hedge prices and lower volumes of metals sold as a result of timing of shipments which served to mask the strong quarter of production at Chelopech. The adjusted loss also reflects higher depreciation following the commission of the acid plant in the third quarter 2015.

From a cost perspective, cash costs per ton of ore processed in Q1 was $34, 7% lower than Q1 2015 primarily due to higher volumes of ore mined and processed at Chelopech and a weaker euro partially offset by higher electricity rates and costs for certain consumables as well as increased [indiscernible] activities. The all-in sustaining cost per ounces for the quarter was $695 up from $497 in Q1 2015, reflecting lower realized copper prices and higher cash outlays for sustaining capital, primarily as a result of timing of payments.

Our cash cost per ton net of byproduct credits assume that with $337, 32% lower than Q1 2015 due to higher volumes of complex con smelted, byproduct revenue generated from the sale of sulfuric acid and a weaker ZAR partially offset by higher electricity rates and operating expenses relating to the acid plant. Total sustained and growth capital expenses during the quarter were $4 million and $7 million respectively for an aggregate spend of $11 million, down from $16 million in the quarter’s buying period in 2015.

This decrease reflects the lower spending on the acid plant and on the copper convertor at Tsumeb. Looking forward we have revised our 2016 production guidance for Kapan to reflect four months of operation.

Guidance for Chelopech and Tsumeb remains unchanged from the guidance provided in February. All guidance pertaining to consolidated cash cost and capital expenditures was updated to reflect cash cost and now reflects CapEx from continuing operations.

2016 mine production is expected therefore to be $2.2 million to $2.4 million tons. Gold contained in copper and zinc concentrate produce is expected to be 101,000 to 115,000 ounces.

Payable gold in pyrite sold remains unchanged between 26,000 and 40,000 ounces and copper production is expected to be between 34 million and 39 million pounds. Our all-in sustaining cost per ounce net of byproduct credit is expected to be between $800 and $950 per ounce down from the February guidance at $940 to $1,070.

Total capital expenditures for 2016 are expected to be between $49 million of $59 million with roughly 45% pertaining to sustaining capital and the balance related primarily to the completion of the Tsumeb acid plant and converters and the development of the Krumovgrad project. Based on the current market environment and our updated 2016 guidance, we expect to deliver positive free cash flow from our operations to reduce our borrowings under the revolving credit facility and have increased overall available liquidity and to achieve a debt to EBITDA ratio of closer to 1 times for the year.

This positions us well to move forward later this year, with our Krumovgrad Gold Project, which in the current market environment, can largely be funded internally from cash flow from operations, supplemented with our revolving credit facility. Bearing this in mind, our financing plan for Krumovgrad envisions taking steps to manage the potential risk of commodity prices declining during the construction period in 17 and ‘18, which we would envision acting on prior to commencing construction later this year.

With that, I will turn the call back to the operator for questions.

Thanks, good morning. Just a question on Krumovgrad.

If metal prices were to stay around the current levels, do you think you could fund this project with existing liquidity or would you still look to bolster the balance sheet to provide you funding for that construction?

Yes. Like I tried to highlight at current prices, we wouldn't actually need to go out and raise additional funds and we would stay well within all of our credit metrics, but I think the reality is, we would still be exposed to weaker commodity prices, so we do intend to take steps to reduce that risk and that would include doing some hedging.

Okay. And then at Tsumeb, with the new converters now operational for a little while, just wondering if you can comment on what you’ve seen in terms of how those are helping the stability of the operation.

Are you seeing less stops and starts? I think that was part of the plan with installing those, as that become a reality?

Hi, Sam. This is Dave.

When you first start up these converters, it's an either or, although new. So initially, of course, there were a number of interruptions.

What we are finding now is that these are starting to get into an old sequence. Just as an example, the old converters could do 30 to 40 tonnes of products per converter.

We’ve had up to 110 tonnes out of the new unit. So basically it's just finding the right sort of pace of operation and I would say that we largely got through that during March and we are fine tuning at the moment.

So we are expecting to see a significant reduction in the, let’s say, the ups and downs with the old converters, but the second part, which is really important is it is allows us to in process recycles directly in the converter. So we’ll start to see that having an impact in the second quarter as well.

Okay. Thanks, David.

And then one last one for me. Maybe you can provide me an update on the possibility to extract the crown pillar at Chelopech, when do you think you get start mining from there and does that give you a boost to grades or is it just trying to extend the mine life?

Sam, we’ve been mining that for the last two years. It’s still another 2.5 to 3 years of activity planned for that crown pillar.

So we mine that incrementally and we’ve had good success in terms of that extraction being exactly as planned. As you remember, the session that we had earlier in the year where we had the Investor Day, we illustrated some of the numbers we have seen continuous performance along those lines.

So to you question, another 2.5 years or so of production from that.

The crown pillar, Sam, it’s Rick here. The crown pillar is somewhat different than the material we referred to as the materials surrounding the cave zones, which we - as being significant, about 15% of the, I would say, mineral resources that we have.

Right. So was that the one that you are still trying to convert reserves?

Yes. That's yet to be converted.

We're drilling it and we will continue to drill through this year and even into next year and we will start the steady work or the evaluation technical, economic, on the mining of that material and we would expect some of that to be converted even this year into reserves and we wouldn't start looking at a mine plan scheduled for that material.

Okay. Well, thank you very much for attending our call today and wish everyone a good day and a good week.

Thank you.