Canadian Co to Concession Bulgaria's Krumovgrad Gold Mine

Dundee plans to invest USD 100 M in the development of the Ada Tepe gold deposit near Krumovgrad. Photo by dpm-group.com

The Bulgarian cabinet gave on a 30-year concession the gold mine near the town of Krumovgrad to the Toronto-based mining company Dundee Precious Metals.

The final decision to offer the concession to "Balkan Minerals and Mining," a subsidiary of Dundee, was made during the Wednesday meeting of the Council of Ministers.

The gold mine is located in the Krumovgrad municipality on lands of the villages of Guliya, Dazhdovnik, Zvanarka, Kaklitsa, Malko Kamnyane, Ovchari and Sarnak.

In exchange for the 30-year concession, the company is making the commitment to invest over BGN 114 M and extract an average of 850 tons a year of ore. The Krumovgrad municipality is to receive 30% of the concession payments.

The project to extract gold from the Krumovgrad mine suffered many setbacks and underwent a number of court battles.

In 2010, the Canadian company had to abandon plans for a gold mine near Bulgaria's Krumovgrad using cyanide technology after a Bulgarian court ruled against the cyanide gold extraction at the other mine operated by one Dundee's subsidiaries in the country, Chelopech Mining. The ruling came about after locals and environmentalists expressed concerns over the technology.

The company plans to process the gold concentrate extracted in Bulgaria outside the country. At the beginning of 2010, the Toronto-based company acquired a smelter in Namibia, which could be used for the purpose.

Dundee's new project about the Krumovgrad mine does not provide for the previously planned facility for extraction using cyanide, and will occupy a smaller area of the Ada Tepe deposit near the southern Bulgarian town.

According to statements made in 2010 by Dundee officials, the project provides for a USD 100 M investment, which is less than the previous plans for investing USD 120-150 M including a cyanide installation. The Krumovgrad mine is expected to produce about 800 000-1 million tons of gold concentrate per year.

Dundee Precious Metals Inc. is a Canadian based, international mining company engaged in the acquisition, exploration, development, mining and processing of precious metals properties.

The Company's operating interests include its 100% ownership of Chelopech Mining EAD, its principal asset being the Chelopech mine, a gold, copper, silver concentrates producer located east of Sofia, Bulgaria, a 100% ownership of Namibia Custom Smelters (Pty) Ltd., a concentrate processing facility located in Tsumeb, Namibia, and a 100% interest in Deno Gold Mining Company CJSC, its principal asset being the Kapan mine, a gold, copper, zinc, silver concentrates producer located in southern Armenia.

DPM's interests also include a 100% interest in the Krumovgrad development stage gold property located in south eastern Bulgaria, near the town of Krumovgrad and certain exploration and exploitation properties in Serbia.

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