"With solid performance at Chelopech and Ada Tepe and a continued focus on cost management, we achieved an all-in sustaining cost of US$684 per ounce of gold sold, which is below the low end of our guidance range, and continued to generate significant free cash flow," Dundee's president and CEO David Rae said.
Dundee's 2022 AISC guidance is $750-$890/oz. Chelopech is an underground gold-copper mine and Ade Tepe is an open pit gold mine.
BMO Capital Markets and Canaccord Genuity Capital Markets each had Dundee's AISC forecast much higher for the quarter, at $940/oz and $898/oz, respectively.
The two investment banks also said that Dundee's consolidated operating costs of $423/oz were below their respective forecasts of $674/oz and $611/oz.
"This is primarily a function of lower treatment charges of $15.5 million (vs BMO estimate of $30 million) at Chelopech following company's decision to sell a greater proportion of Chelopech concentrate to third-party smelters," BMO's Raj Ray said.
CG's Dalton Baretto noted that the lower-than-expected costs came despite industry-wide cost pressures—and caused Dundee's financial results to exceed estimates.
Dundee's Q1 revenue for the quarter was $154 million, adjusted EBITDA was $69 million, and adjusted earnings per share were $0.19.
Baretto said the revenue, adjusted EBITDA, and adjusted earnings beat CG's forecasts of $149 million, $63 million, and $0.17, respectively. The consensus estimate for adjusted earnings was, however, higher at $0.20.
Dundee also reduced AISC guidance for 2023 from $630-$760/oz to $590-$700 and for 2024 from $720-$860 to $690-$800.
Meanwhile, Dundee said that it continues to expect that it will see no disruption to power supply due to Russia's halting of gas deliveries to Bulgaria with the conflict in Ukraine's impact to performance limited to increase costs for energy, fuel and other direct materials.
It noted that 5% of Bulgaria's total energy supply is generated from gas and the company itself sources no supplies from Russia or Russian companies.
"Further escalation of the conflict, including an outbreak of and/or expansion of hospitalities into other countries or regions within Europe could have a material adverse effect on the company's operations," Dundee said.
Dundee's share price was C$7.74 (US$6.03) on May 6. The company has a market capitalization of C$1.48 billion.