• March 31, 2022

Mine Life Extension and updated Mineral Resource and Mineral Reserve for Chelopech Mine

Published on March 31st, 2022

(All monetary figures in this news release are expressed in U.S. dollars unless otherwise stated)

TORONTO, March 31, 2022 (GLOBE NEWSWIRE) —  Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or “the Company”) is pleased to announce a mine life extension, optimized life of mine (“LOM”) plan and updated Mineral Resource and Mineral Reserve estimates for the Chelopech mine in Bulgaria.

Highlights

  • Mine life extension to 2030: Proven and Probable Mineral Reserves of 1.7 million ounces (“Moz.”) of gold and 341.9 million pounds (“Mlbs.”) of copper supports a mine life that now extends to 2030.1 In 2021, DPM successfully added 3.0 million tonnes (“Mt”) to Mineral Reserves, which more than offset 2021 production depletion of 2.2 Mt for a net addition of 0.8 Mt.
  • Optimised life of mine plan with improved recoveries and higher gold and copper production: The updated LOM plan reflects changes, relative to the previous mine plan, that includes improved metallurgical recoveries, concentrate terms and a reduction in the cut-off value, which maximises net present value. Production increased by approximately 286,000 ounces (“oz.”) of gold and 47 Mlbs. of copper between 2022 and 20301, reflecting higher recoveries for gold and copper.
  • Strong Measured and Indicated Mineral Resource base: Total Measured and Indicated Mineral Resources, exclusive of Mineral Reserves, of 1.26 Moz. of gold and 270 Mlbs. of copper add further potential to extend mine life.
  • Additional potential with in-mine and brownfield exploration: Significant drilling program planned for 2022, including 44,000 metres of in-mine drilling and 50,000 metres of brownfield drilling largely focused on Sveta Petka to support a commercial discovery application.

“The optimised life of mine plan at Chelopech results in higher gold and copper production and allows us to extend mine life to 2030,” said David Rae, President and Chief Executive Officer of Dundee Precious Metals.

“Our updated Mineral Reserve estimate is an indication of Chelopech’s consistent track record of replacing Mineral Reserves, and we believe there is strong potential to continue this trend going forward.”

1 Subject to the extension of the current concession contract, which expires in July 2029. DPM intends to submit an extension application when appropriate and expects that the application will be successful based on previous regulatory processes.


Life of Mine Plan

The table below shows the optimised LOM plan, reflecting the updated Mineral Reserve estimate. The updated LOM plan adds approximately 286,000 oz. of gold production and 50 Mlbs. of copper production between 2022 and 2030, relative to the previous mine plan outlined in the news release “Dundee Precious Metals Announces Mine Life Extension and Updated to Mineral Resource and Mineral Reserve Estimates for the Chelopech Mine” dated March 30, 2021. The updated LOM plan reflects the additional tonnage and higher gold recoveries following a strategic review to optimise the mine plan (the “Strategic Optimization”) completed with Whittle Consulting in the second half of 2021.


Strategic Optimisation

The updated Mineral Resource and Mineral Reserve estimates for the Chelopech mine reflect the conversion of Mineral Resources to Mineral Reserves and the opportunities identified from the Strategic Optimization completed in the second half of 2021.

One of the opportunities DPM identified is continuing to sell Chelopech concentrate to third-party global smelters going forward due to strong demand. DPM evaluated the impact of this trend on the Mineral Reserves and LOM for Chelopech and conducted extensive metallurgical test work during the third quarter of 2021, which demonstrated the technical and commercial viability of producing a lower grade concentrate to meet market specifications. While the concentrate contains lower average gold and copper grades and is expected to have lower payable metal rates as well as increased offsite costs associated with higher tonnage, this is more than offset by improved overall gold recoveries and commercial terms, resulting in higher expected free cash flow for DPM as a whole.

While this is expected to reduce the proportion of Chelopech concentrate that is treated at DPM’s Tsumeb smelter, the Company is confident sufficient third-party concentrate is available to fill existing capacity going forward.

The Strategic Optimisation also evaluated multiple mine schedules and commercial scenarios at various cut-off values, with the primary objectives of optimising net present value (“NPV”) and mine life.

From the analysis of cut-off values, it was determined that a NSR-less-costs cut-off value of $0 per tonne resulted in the maximum NPV, whereas the prior Mineral Reserve estimate used a NSR-less-costs cut-off value of $10 per tonne. Chelopech Mineral Reserves continue to be based on a NSR-less-costs cut-off value methodology using long-term metal prices of $1,400 per oz. for gold, $17 per oz. for silver, and $2.75 per lb. for copper.

Read full Announcement

DATE: March 31, 2022
SOURCE: Dundee Precious Metals

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