Janet Reid - Investor Relations Rick Howes - President and CEO Hume Kyle - EVP and CFO David Rae - EVP and COO Nikolay Hristov - SVP, Sustainable Development John Lindsay - SVP, Projects

Daniel Gavin - CIBC World Markets

Good morning, everyone. I am Janet Reid, the Manager of Investor Relations and 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 the 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 U.S. 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 2017.

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

Thanks Janet and hello everyone and thanks for joining us today for our first quarter 2017 conference call. I'm pleased to provide you with an update on our first quarter 2017 results and progress on our key projects and initiatives.

In the first quarter spot gold price was up 8% year-to-date at the end of March following gold price weakness immediately after the Trump election. Gold prices have been volatile but ranged between $1120 and $1300 since the election.

Based primarily on the downward pressure from U.S. economic strength and monetary tightening through interest rate increases from the Federal Reserve countered by spurts of safe haven buying interest related to numerous geopolitical events and uncertainties.

The stock price continued to increase for copper and was up 7% year-to-date to the end of March. After the sharp increase in price in November following the U.S.

election. Softness [ph] saw further price increases in the first quarter primarily because of supply disruptions which have mostly been resolved now and subsequently the price has fallen back somewhat.

Gold and base metal equities are benefiting from the increased metal prices as evidenced by the global gold index and global base mineral index which were up 6% and 7% respectively year-to-date to the end of March. We continue to execute our strategy to optimize operating performance, strengthen our balance sheet, and advance our organic growth projects.

We have strong first quarter performance from Chelopech, however, Tsumeb was affected by the annual maintenance shutdown in February causing much lower volume to concentrate be smelted in the quarter resulting in adjusted loss per share of $0.04. With no further shutdown plans for the rest of the year we expect much stronger earnings performance in the remaining three quarters of the year.

We see solid gold production in the first quarter of 46,371 ounces and copper production of 8.2 million pounds in line with our 2017 guidance. The all in sustaining cost per ounce of gold in the first quarter was $710 which is below our full year guidance range of $840 to $965.

We smelted 41,635 tons of copper concentrate in the first quarter which is in line with target smelting rates taking into account the 24 day annual maintenance outage in February. We are forecasting to achieve our full year guidance.

At the end of March we had cash of 35 million and an investment portfolio of 30 million and under on credit facility of 275 million and no net debt. For this and as well for Krumovgrad build base.

The smelter performance continues to improve as we reduce variation and increase capability of the hot metal section. Smelter performance following the shutdown is demonstrating a new throughput capability of the plant and with matte holding furnace now being commissioned we expect further improvements to be achieved starting in May.

Throughput for 2017 is expected to range between 210,000 and 240,000. Production in excess of this level will be limited due to the accumulation of above normal volumes of secondary material that appeared during the construction and commissioning of the acid plant and copper converters , which, until reduced, is currently consuming approximately 10% to 20% of Tsumeb’s existing smelting capacity.

As operating performance improves secondary material levels are expected to decline through 2017 resulting in reduced variability and lower stockpiling. We completed the shutdown in the arsenic plant in February and we continue to advance the smelter expansion project to increase the throughput of complex concentrates through as much as 370,000 tons per annum.

The feasibility study was completed in the fourth quarter of 2016 and confirmed the robust project economics with an estimated implementation capital cost of approximately $52 million. The scope of the project includes the rotary holding furnace, additional cooling, and other upgrades to the Ausmelt furnace as well as upgrades to the slag mill area.

The environmental and social impact assessment is underway for the project and is expected to be submitted to the Namibian authorities for review and approval during the third quarter of 2017. We anticipate moving forward with this project subject to necessary permits and adequate commercial arrangements and funding being in place.

Commercial discussions are underway to secure sufficient complex concentrate fees to fill the expanded capacity. We continue to explore potential partnerships to assist in the funding of this expansion.

Chelopech continues to perform well. Gold and copper production in the first quarter of 2017 was in line with the mine plan.

Over the balance of 2017 quarterly gold production is expected to be similar to the first quarter and copper production is expected to be higher as a result of mining higher grade zones in the plan mining sequence. Based on the current forecast Chelopech is expected to be at the upper end of gold production guidance and the lower end of cash cost guidance for 2017.

Cash cost in the quarter was $33 per ton. We're continuing with our improvement focus in the mine and the mill with the mine folks being on improvement sales cycle tag in particular stock market rates and the mill focus on getting a better understanding of the mineralogical variation of the ore field and the mill controller response to achieve optimum recoveries.

In December 2016 we announced the discovery of our new high grade mineralized zone called Zone 153. The new zone is located near existing infrastructure in the upper level of the mines western area and was discovered as part of the ongoing upper level resource development drill program.

Further drilling on this horizon has been limited to the lateral boundaries however the zone is still open to the Northeast and above the 440 level. It is hosted within a broad silica-envelope alteration zone defined between the 230 meter level and 560 meter levels which is considered to have a high potential for hosting further mineralization.

The drills have now moved up to the next level to protect the upward extension from the 505 level which is 60 meters above the previous drilling horizon. During the first quarter of 2017 Brownfield regional exploration activities were focused on the continuation of the underground drill program at the Southeast Breccia Pipe Zone as well as developing plans for follow-up drilling at the Sharlo Dere prospect, which is 500 meters Northeast of the Central Area of the Chelopech mine.

Three underground diamond drill holes with a total of 1,830 meters were completed in the Southeast Breccia Pipe Zone on both the Chelopech mining concession and the Brevene exploration license in the first quarter. Results from this drilling demonstrate that breccias hosting zones of high sulphidation alteration and mineralization continuing East and Southeast beneath the Chelopech thrust fault.

The drill hole at the Eastern end of the Southeast Breccia Pipe Zone, intersected 30.9 meters of breccia with advanced argillic alteration and associated sulfides. Three more holes are planned to test the Southeast Breccia Pipe Zone in the second quarter of 2017.

At Sharlo Dere, additional drilling is being planned to follow-up on encouraging results from two holes that were drilled in 2016. In addition, surface exploration on the Brevene exploration license, including gravity, magnetotelluric geophysical surveys, geological mapping, and soil sampling is in progress and the plan is to continue in second quarter of 2017.

In Bulgaria the election for a new government took place on March 26th after the centralized GERB party stepped down following the election of a socialist presidential candidate in November. GERB won the election over the socialist, became a close second and GERB was granted the right to form a third government.

GERB and United Patriots, and Nationalist Coalition made up a three party, signed a coalition agreement of joint governance on the 27th of April. And Boyko Borissov of the GERB party has been nominated as prime minister for a third mandate.

With GERB once again ruling coalition we don't anticipate significant change to occur in support of policies for business and in particular mining and foreign investment in Bulgaria. With elections now over, a new coalition government and cabinet now being formed we expect things to settle back down and the government to function normally again.

Progress on the Krumovgrad project is continuing on plan. The main activity during the first quarter of 2017 was the ongoing execution of earthworks scope, which is proceeding in accordance with the project plan.

Site activities remain on-track for the first concrete pour in the second quarter of 2017. At the end of the first quarter of 2017, construction of the project was approximately 16% complete.

Project completion remains on track for first concentrate production in the first quarter of 2018 and final estimated cost of $178 million, of which $21.7 million has been incurred to the end of March. Approvals for the final permanent access road and discharge water pipeline are up delayed due to the recent parliamentary elections which then resumed to normal now that the elections are over and the new government is being formed.

We continue with our exploration program around [indiscernible] looking for satellite deposits to expand the resources and extend the life of the Krumovgrad project. Drilling of Kupel North target, 2 kilometers East of the Ada Tepe gold deposit, first intersection low sulphidation epithermal mineralization with gold rates between 280 and 325 meters below surface.

In January of 2017 a total of 592 meters of diamond drilling was completed in the last four holes of the 3950 meter drill program to test drill targets on the Kupel North prospect. The results confirm the presence of a zoned, shallow level hydrothermal system over a 1 to 2 kilometer area.

Exploration plans for the second quarter of 2017 include a five hole drill program of approximately 2000 meters to test new targets identified near Kupel North. Our application for a geological discovery at Kupel North was approved by the Ministry of Energy in April 2017.

At the Timok Gold Project in Serbia exploration activities in the first quarter of 2017 included limited follow-up drilling on our Korkan West discovery located one kilometer Northwest of our Bigar Hill discovery. In January, a total of 446 meters was drilled in four short diamond drill holes around the initial discovery hole to better understand the geometry and true width of the mineralization and any structural or stratigraphic controls.

Two scissor holes were drilled 60 meters to the Southwest at dips of minus 45 and minus 70 degrees Northwest. The other two holes were drilled to the Southwest on parallel sections, 50 meters to the Southeast and 60 meters to the Northwest.

In contrast to the mineralization at the nearby resources of Bigar Hill and Korkan, almost all the mineralized intervals are completely oxidized. Further drilling is planned in the second quarter to test the lateral extent of this oxidized zone.

In the summary our two main focuses are number one, the biomarking [ph] and stabilizing smelter performance and reducing secondary inventory levels at our Tsumeb Smelter. And two continuing to advance construction at our long anticipated low cost open pit global project in Krumovgrad which will significantly contribute the company's built in earnings and profile as it will produce.

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.

I am going to keep this pretty short. For the first quarter we reported an adjusted net loss of $0.04 per share compared to a loss of $0.01 during the corresponding period in 2016.

Adjusted EBITDA of 14 million compared to 22 million and funds from operations of 17 million compared to 31 million. These decreases were primarily due to lower volumes of complex concentrate smelters due to 24 days of down time to realign the Ausmelt furnace.

Higher Chelopech treatment and transportation charge is due to greater proportion of concentrated delivery to Tsumeb and higher cost per ton in copper concentrate sold as a result of lower grade which were partially offset by higher volume in concentrate sold in the quarter and higher realized metal prices. The adjusted loss from the quarter also reflected lower Tsumeb depreciation as a result of the impairment charge we took in the fourth quarter of 2016 and change with an estimated useful lives of certain assets.

From the process first quarter cash cost per ton of ore mine and process is $33, 2% lower than the corresponding period in 2016. Are all-in sustaining cost per ounce of gold in the quarter was $710, down from $726 in the corresponding period in 2016.

This decrease was driven primarily by higher volumes of payable gold in concentrate sold, higher by-product prices, partially offset by higher treatment charges and transportation cost and higher cost per ton copper concentrate sold. At Tsumeb cash cost per ton for the quarter was $552 up 64% corresponding to 2016 due principally to the timing of the furnace maintenance shutdown and higher operating costs.

Total sustaining growth capital expenditures during the quarter was 6 million and 16 million respectively for an aggregate of 22 million, this was up 11 million from 2016 primarily due to the construction of Krumovgrad project that started in the fourth quarter of 2016. Looking forward as Rick already noted 2017 production cost guidance remains unchanged from what we issued in February of [indiscernible] production to come in at the higher end of the range of our guidance from mining -- expected to be in the lower end of the range.

On the CAPEX front, capital expenditures remain in line with our guidance with the vast majority related to Krumovgrad which is progressing quite well to $22 million spent today, approximately 120 million expected to be incurred over the course of 2017. At March 31st we exited the quarter with about 311 million of cash resources, 26 million which was comprised of cash, and the balance are undrawn long-term committed revolving credit facility.

And with that I think we are positioned quite well to advance our projects and are in good financial shape. And with that I will turn the call back over to the operator.

Hi guys, good morning. Just over the smelter then with the shutdown now complete.

During Q2 can we think of this now as a benchmark quarter for the smelter on a go forward basis or are there further upgrades or work required in Q2? And also just in the past you may be noted that potentially EBITDA rate of between 30 million to 40 million I think it was, a year from the smelter.

And is this a risk that we can think of as a go forward now that the shutdown is now behind us in Q1?

To your question of whether the work is done and any further changes we did indicate our belief that the first half would be a bit of a work in progress. What I mean by that is that we just, as Rick mentioned commissioned the matte holding furnace which we see is making a significant difference to debottlenecking consistently for hot metal operations.

So we just commissioned that, you can see that as probably as I expect in Q2 and being fully effective in the second half of the year. So you will see Q2 as a transition quarter.

In terms of the guidance on EBITDA, I think [indiscernible] this should be hanging out as you indicated 30 million to 40 million - consistent with what we would consider.

I would say that we're not expecting to see that in 2017. I think it is risk that we want to optimize and we brought the secondary material down to a normal level.

We could see those kinds of numbers being achieved.

Okay, got it, thanks. And then just move a little more high level.

In the past twelve months you've done a good job strengthening the balance sheet and liquidity north of 300 million and Krumovgrad CAPEX run to 180 million. So do you think -- just how do you think of that excess, 100 million or so in CAPEX, is that a buffer that you guys like to keep until Krumovgrad is up and running or there are pond uses that you can use that extra excess CAPEX or extra capital?

Yeah, so I guess from our standpoint for sure we want to keep our balance sheet strong and we sort of put out kind of a metric in the past on what that means. And I guess like from debt to EBITDA perspective I would expect that we would probably be somewhere around one times on a normal basis.

We would try to not to see that going about to two times. Our covenants currently is four, it dropped down to 2.5 after Krumovgrad is up and running.

And as for good liquidity we are always going to have something like 75 minimum million excess or available liquidity to just bridge the unforeseen or to help deal with just timing of cash flows and what not. So at a high level that's what I would expect.

The 275 million that we have in terms of the facility is not a lateral facility that I expect would meet our longer term basis after Krumovgrad is built. And I expect that after working on another growth project post Krumovgrad which is possible but absent that I would say that the -- facility is more likely to drop down to somewhere in the 150 million to 200 million range.

Okay, that's good. Hume, thanks for that.

Okay, thank you very much everyone for joining us today and we wish you a good week. Thank you.