Bulgaria and DPM Agree-in-Principle to New Royalty and Public Private Partnership for New Chelopech Smelter

    TORONTO, March 10 /CNW/ - Dundee Precious Metals Inc. (TSX: DPM; DPM.WT)
(the "Company" or "DPM") announced that Officials from the Bulgarian
Government and the Company have entered into an agreement-in-principle
concerning the proposed expansion of the Chelopech copper-gold mine.
    Under the terms of this agreement-in-principle, DPM will pay a higher
royalty for all the metals that can be mined economically at the Chelopech
site. This new royalty will be calculated in accordance with the existing
Ordinance on Royalty Computation on a sliding scale. It will be between 2% and
8% at a profitability ratio of between 10% and 60%. This new royalty will
replace the one entered into in good faith by DPM in 2004 and that was set to
expire in 2010. As well, DPM will provide a full environmental reclamation
bond covering the Chelopech mine, which will be one of the first of its kind
in Europe.
    In addition to a higher royalty, Bulgaria and DPM have
agreed-in-principle to enter into a public private partnership (PPP) for the
state-of-the-art metals processing facility to be built at the Chelopech mine
site. Under the terms of this PPP, Bulgaria's Silver Fund will own 25% of this
new facility. The new smelter will cost approximately US$155 million to build
and take close to 18 months to complete, from receipt of all permits. Once it
is complete, the new smelter is expected to add - directly and indirectly -
150 new jobs to the Bulgarian economy. The operation of this new smelter will
be in compliance with all local and international requirements. DPM's proven
track record of management and financial success will mean Bulgaria's
pensioners will receive a direct financial benefit from this new smelter for
many years to come.
    "On our part, we will do everything necessary, while abiding by all
environmental standards and procedures, to make sure that the state provides
full support to DPM for the implementation of this investment and for the
functioning of the mining operation," said Bulgarian Prime Minister Sergey
Stanishev during a special press-conference given in Sofia today. "Both the
state and the investor will do everything possible to have the plant
commissioned in the fastest possible manner, ideally within 18 months."
    "We have stated all along that we want to be good partners with the
Bulgarian people," confirmed Jonathan Goodman, President & CEO of DPM. "With
the resolution of this issue, both the Company and the Bulgarian people will
share in the value created from our mining and metals processing activities at
Chelopech, now and in the future."
    In accordance with the Bulgarian constitution, the Bulgarian Council of
Ministers will still have to approve any and all agreements reached between
DPM and the government concerning the new royalty and the PPP. Once all of
these agreements are finalized and approved, the Minister of Environment and
Waters will finalize the Environmental Impact Assessment (EIA) permit for the
Chelopech expansion project. In addition, DPM and the Bulgarian government
have commenced negotiations with a view to implementing the Krumovgrad Gold
Project, including initiating the next stage in the EIA approval process.
    A conference call is scheduled for this afternoon at 1:30 pm (EST) and
will be webcast live at
http://events.onlinebroadcasting.com/dundee/031008/index.php Those wishing to
participate in this call may dial in numbers (416) 695-6120 or 1 800 952 4972
five minutes prior to the indicated time. This conference call will be
archived and available on our website at www.dundeeprecious.com.

    Dundee Precious Metals Inc. is a Canadian based, international mining
company engaged in the acquisition, exploration, development and mining of
precious metals. It currently owns the Chelopech Mine, a producing gold/copper
mine, and the Krumovgrad Gold Project, a mining development project, both
located in Bulgaria, and is engaged in mineral exploration activities in
Serbia. In addition, DPM owns the Back River gold exploration project in
Nunavut, Canada and a 95% interest in the Kapan Mine in Armenia. The Company
also holds a significant and strategic portfolio of investments in the
precious metals and mineral related sector.


    This news release may contain certain information that constitutes
forward-looking statements. Forward-looking statements are frequently
characterized by words such as "plan," "expect," "project," "intend,"
"believe," "anticipate" and other similar words, or statements that certain
events or conditions "may" or "will" occur. Forward-looking statements are
based on the opinions and estimates of management at the date the statements
are made, and are subject to a variety of risks and uncertainties and other
factors that could cause actual events or results to differ materially from
those projected in the forward-looking statements. These factors include the
inherent risks involved in the exploration and development of mineral
properties, the uncertainties involved in interpreting drilling results and
other geological data, fluctuating metal prices and other factors described
above and in the Company's most recent annual information form under the
heading "Risk Factors" which has been filed electronically by means of the
Canadian Securities Administrators' website located at www.sedar.com. The
Company disclaims any obligation to update or revise any forward-looking
statements if circumstances or management's estimates or opinions should
change. The reader is cautioned not to place undue reliance on forward-looking

For further information:

For further information: DUNDEE PRECIOUS METALS INC., Jonathan Goodman,
President & Chief Executive Officer, Tel: (416) 365-2408, Email:
jgoodman@dundeeprecious.com; Gabriela M. Sanchez, Vice President Investor
Relations, Tel: (416) 365-2549, Email: gsanchez@dundeeprecious.com

Organization Profile


More on this organization

Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890