DPM Metals (TSX: DPM) expects to finish 2026 at the higher end of its production guidance, though its third quarter results fell well short of the record set in the second quarter after Ada Tepe wound down and costs climbed.
Revenue came in at US$311.6 million for the quarter, down from US$361.5 million in the second quarter. Net earnings fell to US$133.8 million, or US$0.61 per share, from US$230.1 million, or US$1.04 per share. Adjusted net earnings came in at US$144.2 million, or US$0.66 per share, compared with US$0.95 in the prior quarter.
Adjusted EBITDA declined to US$192.1 million from US$257.8 million. Free cash flow of US$179.5 million was below the second quarter’s US$227.3 million but still lifted cash to US$839.2 million, up from US$761.2 million.
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DPM returned US$81 million to shareholders in the quarter, or 45% of free cash flow, mostly through buybacks.
Production totalled 95,917 gold equivalent ounces, down 7% from 102,690 ounces in the second quarter. Vareš increased its output to 44,500 ounces from 35,200, nearly matching Chelopech’s 49,700 ounces, while Ada Tepe added only 1,700 ounces before mining concluded on July 15. Sales trailed production at 76,928 ounces.
The jump in costs stands out more than the drop in output. All-in sustaining costs rose to US$1,580 per gold equivalent ounce sold from US$1,214 in the second quarter, above the full-year guidance range of US$1,300 to US$1,450. At Chelopech, AISC rose to US$1,460 from US$1,174. Vareš came in at US$767, up from US$563, an increase the company had flagged for when pre-commercial costs were no longer capitalized.
DPM reconfirmed its cost guidance even though its nine-month AISC of US$1,472 already sits above the top of that range.
Vareš declared commercial production ahead of schedule on August 10 and is targeting a rate of 850,000 tonnes per year by year end. President and CEO David Rae said that progress leaves the company “well-positioned to achieve the higher end of our production guidance” of 305,000 to 365,000 gold equivalent ounces.
That progress comes with a legal question attached. On September 30, the Constitutional Court of Bosnia and Herzegovina ruled that certain acts, including the Vareš concession agreement, did not conform to the constitution. The decision is final and can’t be appealed.
Operations are continuing while the court’s six-month review period runs.
DPM Metals last traded at $50.56 on the TSX.
