Resource World Magazine

J U N E / J U L Y 2 0 1 6 www.resourceworld.com 47 miNiNg DUNDEE PRECIOUS METALS — a growing producer by Laura Barker DUNDEE PRECIOUS METALS INC. [DPM-TSX] is a Canadian based exploration and mining company. Formerly an investment company, they became a mine producer in 2003 when they obtained 100% ownership of the Chelopech gold mine and Krumovgrad gold exploration property, both in Bulgaria. Their plans for develop- ment include taking the resource at Krumovgrad into production in 2018, and continuing investment in their specialized copper smelter in Namibia and exploration projects in Canada and Serbia. They are establishing themselves as a responsible global miner, while grow- ing their diversified assets. DPM's primary objective is to begin mining at Ada Tepe, a high level epithermal gold-silver deposit 3 km south of Krumovgrad, southeast Bulgaria. They hope to obtain a construction permit, the only outstanding permit, and begin mine construction in 2016 in order to produce in 2018. Open pit extraction and crush- ing, grinding and flotation operations are planned for a mine life of eight years. Average annual ore production is 775,000 tonnes with average annual gold and silver production of 85,000 oz and 40,000 oz, respectively. The project is the first mining project in Europe to be built in a designated 'Natura 2000' protected area, an ecologically sensi- tive area with high environmental standards. They designed accordingly, President and CEO, Richard Howes explains, "If we discharge any water it will be discharged as drinking water qual- ity, we will not use cyanide for gold extraction, and we developed a methodology to use integrated waste management for mine waste disposal." The waste disposal plan employs the use of co- disposal of paste tailings with waste rock. Co-disposal reduces the project footprint, and the use of paste tailings eliminates liabilities associated with water retaining tailings dams. DPM's current producing mine, accounting for about 60% of its revenue, is the Chelopech Mine, a gold, copper and silver-bear- ing cupriferous massive pyrite deposit in central-west Bulgaria, 70 km east of the capital of Sofia. The mine originally opened in 1954 and production currently averages about 2 Mtpy (an increase of 10% from 2012). DPM is targeting 2.25 Mtpy for 2016. Howe's attributes increased efficiency with production through the progressive use of technology. "As we have scaled up, we haven't had to purchase more equipment, we've become more efficient with the equipment and the people we have through wi-fi enabled underground operations." Mine site wireless Internet and the use of sensors on equipment allows equipment to be tracked and information to be collected on vehicle health and performance, thereby enabling monitoring and optimization of plans in real time. According to Howes, "This is the first step, we plan on getting into the use of 'smart devices' that communicate to each other, and big data analytics to optimize performance. That is the direc- tion the industry needs to move in general and we are leading the charge right now." The current expected end of mine life is 2025, but according to Howes, "The life of mine has been about 10 years for the past 10 years, we continue to expand the resource and life of mine as we continue to explore." Expansion in 2015 included a 15% increase in resources, predominantly due to reclassification of 4.2 Mt of resources from inferred to indicated. DPM's other major project (100% owned), and second high- est revenue generator, is a copper smelter in Tsumeb, Namibia. Over the past five years DPM has invested about $360 million to upgrade and expand the smelter (including adding an acid plant) and to bring it up to an international environmental standard. Originally built in the early 1960s to process copper locally, it now serves as a specialty tolling smelter that treats complex cop- per concentrates, arsenic and lead-bearing concentrates that pose difficulties for conventional smelters. About half of the treated concentrates are sourced from Chelopech. Howes predicts, "The market for complex concentrates is growing, so we want to continue to upgrade the smelter to cap- ture that market." DPM has also targeted markets in exploration. They hold 12.1% ownership of Sabina Gold & Silver, which explores pri- marily in Nunavut with assets comprising the Hackett River (silver) and Back River (gold) projects; and 100% of shares of Avala Resources which is focused on early-stage exploration and pre-development projects in Serbia (including their Timok gold project). With the company employing some 2,600 people directly and contracting another 400-500 and objectives to take their explora- tion projects to production, Dundee Precious Metals is growing on the international front. Their goal, according to Howesis, is to be "world leading" in terms of corporate social and environmen- tal responsibilities. n The Chelopech underground crushing and conveying facility in Bulgaria. Photo courtesy Dundee Precious Metals Inc.

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