TSX- and ASX-listed Dundee Precious Metals (DPM) generated a record $203-million of free cash flow in the first quarter of the year ended March 31.

The company produced 84 042 of gold equivalent ounces at an all-in sustaining cost of $1 686/oz, which reflected a $186/oz impact related to mark-to-market adjustments to share-based compensation as a result of DPM’s strong share price performance.

The group’s adjusted net earnings amounted to $168-million, or $0.76 apiece, with net earnings having reached a record $166-million, or $0.75 apiece, in the quarter under review.

DPM declared a $0.04 quarterly dividend.

CEO and president David Rae attributes the record free cash flow generation to a solid operating performance in the first quarter, as well as strong metals prices. “The high-grade, low-cost nature of our operations and our disciplined focus on cost management positions us well to continue delivering consistent margins in the midst of challenging global economic conditions.”

Notably, the company uses conversion ratios for calculating gold equivalent ounces for its silver, copper, zinc and lead production and sales, which are calculated by multiplying volumes of metals produced or sold by the respective average market metal prices, and dividing the resulting figure by the average market gold price.

DPM continues to make progress at its Vareš operation, in Bosnia and Herzegovina, with a ramp-up to full production being on track to reach 850 000 t/y by the end of the year.

The company also continues to advance permitting for the Čoka Rakita project, in Serbia, in support of targeted startup of mine construction early next year.

Concurrently DPM is also drilling on the Čoka Rakita licence following renewal of exploration permits. The company initiated a 20 000 m drill programme targeting the Dumitru Potok deposit, with nine drill rigs currently active.

DPM ended the quarter with $575-million of cash on hand and undrawn facilities of $400-million.

Notably, DPM returned $33.6-million to shareholders in the quarter, representing 17% of its free cash flow.