Dundee Precious Metals Announces Mine Life Extension and Update to Mineral Resource and Mineral Reserve Estimates for Chelopech (All monetary figures in this news release are expressed in U.S. dollars
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Dundee Precious Metals Announces Mine Life Extension and Update to
Mineral Resource and Mineral Reserve Estimates for Chelopech
(All monetary figures in this news release are expressed in U.S. dollars unless otherwise stated)
Toronto, March 31, 2022 – 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.
• Optimized 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 maximizes
net present value. Production increased by a pproximately 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 optimized 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 R eserves, 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.
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Updated Mineral Reserve and Resource Estimate
The updated Mineral Reserves estimate is shown below and is effective as of December 31, 2021:
Chelopech Proven and Probable Mineral Reserve Estimate
(As at December 31, 2021)
Ore Type
Classification
Tonnes
(Mt)
Grade Metal Content
Au (g/t) Ag (g/t) Cu (%) Au (Moz.) Ag (Moz.) Cu (Mlbs.)
General Proven 5.8 2.72 6.8 0.85 0.51 1.27 108.9
Probable 13.1 2.67 7.5 0.80 1.12 3.17 230.8
Block 700 Probable 0.1 3.89 57.5 0.02 0.02 0.22 0.1
Block 152 Probable 0.4 4.19 4.6 0.23 0.05 0.06 2.1
All Proven 5.8 2.72 6.8 0.85 0.51 1.27 108.9
Probable 13.6 2.72 7.9 0.78 1.19 3.45 233.0
Total 19.3 2.72 7.6 0.80 1.70 4.72 341.9
Footnotes:
1. The Mineral Reserves disclosed herein have been estimated in accordance with the CIM Definition Standards for Mineral Resourc es and
Mineral Reserves (the “CIM Definition Standards”, adopted by CIM Council on May 10, 2014).
2. Mineral Resources are reported exclusive of Mineral Reserves.
3. Mineral Reserves have been depleted for mining as of December 31, 2021.
4. The Inferred Mineral Resources do not contribute to the financial performance of the project and are treated in the same way as waste.
5. The reference point at which the Mineral Reserves are defined is where the ore is delivered to the crusher.
6. Long term metal prices assumed for the evaluation of the Mineral Reserves and Mineral Resources are $1,400/oz. for gold, $17.00/oz. for silver,
and $2.75/lb. for copper.
7. Mineral Reserves are based on a net smelter return-less-costs cut-off value of $0/t. The total cost applied was approximately $45/t, which is a
sum of the operational cost of approximately $40/t (variable by stope location) and sustaining capital of $5/t.
8. All blocks include a complex net smelter return (“ NSR”) formula that differs for the three ore types within the Mineral Reserve and Mineral
Resource. The NSR formula utilizes long -term metal price s, metallurgical recoveries, payability terms , treatment charges, refining charges,
penalty charges (deleterious arsenic), concentrate transport costs, and royalties. For clarity of understanding of ore value, a simplified formula
is presented here that correlates to the complex formula to within 1%. The simplified formulas per ore type are:
a. Block 700 NSR $/t = 0.00 x Cu% + 0.00 x Ag_g//t + 14.24 x Au_g/t
b. Block 152 NSR $/t = 21.08 x Cu% + 0.32 x Ag_g/t + 33.96 x Au_g/t
c. General NSR $/t = 16.72 x Cu% + 0.23 x Ag_g/t + 29.18 x Au_g/t
9. Mineral Reserves account for unplanned mining dilution and ore loss that varies by orebody dimension and experience per mining block area,
which on average were 10.0% for unplanned ore loss and 9.7% for unplanned dilution.
10. Mineral Reserves account for planned mining dilution and mining recovery through stope optimi zation and stope design. The stopes are
optimized to maximize net cash flow within the constraints of dilution and orebody extractable geometry. The planned dilution and recovery
depend on geotechnical, mineralization continuity controls and ore zone dimensions.
11. All stopes have been verified that they are profitable after considering the cost of capital development.
12. There is no known likely value of mining, metallurgical, infrastructure, permitting or other relevant factors that could materially affect the estimate.
The final one and a half years of operation occurs after the termination of the mining concession contract ends. It is the opinion of DPM that the
mining permit will be extended.
13. The Proven Mineral Reserve includes broken stocks of 28 kt at 3.30 g /t Au, 5.2 g/t Ag and 0.91% Cu as well as stockpiles of 13 kt at 3.05 g /t
Au, 6.7 g/t Ag and 0.96% Cu.
14. Sum of individual table values may not equal due to rounding.
The updated Proven and Probable Mineral Reserves at Chelopech of 1.7 Moz. of gold and 341.9 Mlbs.
of copper support a nine-year mine life that extends to 2030, excluding expected further conversions of
existing Mineral Resources and potential additional exploration success.
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The Mineral Resource estimate has been depleted by all mining and development work completed as
of December 31, 2021 and is reported using a NSR calculation based on assumed long-term metal
prices, current operating costs and metal revenue to meet the “reasonable prospects for eventual
economic extraction” criteria.
Measured and Indicated Mineral Resources , exclusive of Mineral Reserves , decreased by 3.6Mt
compared with 2020, as a resul t of conversion to Mineral Reserve s, changes to classification, grade
estimation and NSR parameters.
The Mineral Resource estimate is shown below and is effective as at December 31, 2021:
Chelopech Mineral Resource Estimate, exclusive of Mineral Reserves
(As at December 31, 2021)
Classification Tonnes Gold Silver Copper
(Mt) Grade (g/t) Moz. Grade (g/t) Moz. Grade (%) Mlbs.
Measured 7.0 2.95 0.665 9.30 2.098 0.96 148
Indicated 6.8 2.73 0.593 11.88 2.581 0.82 122
Total
Measured &
Indicated
13.8 2.84 1.258 10.56 4.679 0.89 270
Inferred 2.9 2.36 0.223 9.20 0.869 0.82 53
Footnotes:
1. The Mineral Resources disclosed herein have been estimated in accordance with the CIM Definition Standards for Mineral Resour ces and
Mineral Reserves (CIM, 2014).
2. Mineral Resources have been estimated using an operating net profit cut-off of US$0/t in support of reasonable prospects of eventual economic
extraction.
3. Tonnages are rounded to the nearest 0.1 Mt to reflect that this is an estimate.
4. Metal content is rounded to the nearest 1 thousand ounces (K oz.) or 1 Mlbs. to reflect that this is an estimate.
5. The Mineral Resources are reported exclusive of Mineral Reserves.
6. Mineral Resources are based on a NSR -less-costs cut-off value of $ 0/t. The total cost applied was approximately $45/t, which is a sum of
operational costs of approximately $40/t (variable by stope location) and sustaining capital of $5/t.
7. All blocks include a complex NSR formula that differs for the three ore types within the Mineral Reserve and Mineral Resource . The NSR
formula utilizes long term metal price s, metallurgical recoveries, payability terms , treatment charges, refining charges, penalty charges,
concentrate transport costs, and royalties. For clarity of unders tanding of ore value, a simplified formula is presented here that correlates to
the complex formula to within 1%. The simplified formulas per ore type are:
a. Block 700 NSR $/t = 0.00 x Cu% + 0.00 x Ag_g/t + 14.24 x Au_g/t
b. Block 152 NSR $/t = 21.08 x Cu% + 0.32 x Ag_g/t + 33.96 x Au_g/t
c. General NSR $/t = 16.72 x Cu% + 0.23 x Ag_g/t + 29.18 x Au_g/t
Life of Mine Plan
The table below shows the optimized 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 202 2 and 20 30, 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 optimize the mine plan (the “Strategic
Optimization”) completed with Whittle Consulting in the second half of 2021.
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The tables below show the current LOM plan compared to the previous 2021 LOM plan.
Current 2022 Life of Mine Plan
Unit Total /
Average 2022 2023 2024 2025 2026 2027 2028 2029 2030
Total Ore Processed Mt 19.3 2.2 2.2 2.2 2.2 2.2 2.2 2.2 2.2 1.71
Grade
Au g/t 2.72 2.97 2.73 2.94 2.94 2.63 2.71 2.56 2.53 2.47
Cu % 0.80 0.88 0.90 0.82 0.78 0.76 0.74 0.81 0.91 0.62
Recoveries –
Copper Concentrate
Au % 54.7 57.1 55.8 57.8 58.3 55.6 56.5 50.9 55.3 40.4
Cu % 84.8 84.1 84.0 84.3 85.5 84.7 84.8 85.3 87.2 82.6
Recoveries – Pyrite
concentrate
Au % 24.9 24.3 25.3 25.0 24.8 25.1 24.1 25.6 25.9 24.2
Total Au Production K oz. 1,349 171 157 172 173 150 155 138 145 88
Total Cu Production Mlbs. 290 34 37 33 32 31 30 34 39 19
Previous 2021 Life of Mine Plan
Unit Total /
Average 2022 2023 2024 2025 2026 2027 2028 2029
Total Ore Processed Mt 16.4 2.2 2.2 2.2 2.2 2.2 2.2 2.1 1.1
Grade
Au g/t 2.87 2.96 3.01 3.19 3.04 2.84 2.92 2.45 2.12
Cu % 0.83 0.89 0.92 0.82 0.90 0.84 0.86 0.68 0.61
Recoveries –
Copper Concentrate
Au % 47.7 51.3 49.9 52.0 48.1 41.9 42.0 47.3 43.3
Cu % 81.2 81.9 81.8 82.5 81.1 79.5 80.6 81.4 79.5
Recoveries – Pyrite
concentrate
Au % 23.4 24.3 24.8 23.9 24.3 24.4 24.2 17.1 15.2
Total Au Production K oz. 1,063 158 159 172 156 133 135 108 42
Total Cu Production Mlbs. 243 35 36 33 36 33 33 26 11
Strategic Optimization
The updated Mineral Resource and Mineral Reserve estimate s 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.
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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 Optimization also evaluated multiple mine schedules and commercial scenarios at various
cut-off values, with the primary objectives of optimizing 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 $2.75 per lb. for copper.
Three-Year Outlook
The updated Mineral Reserve estimate is in-line with the Company’s previously issued 2021 guidance
and three-year outlook for Chelopech, as shown below, with all-in sustaining cost (“AISC”) per ounce of
gold sold for 2023 and 2024 expected to trend toward the lower end of the range as increased volumes
of Chelopech concentrate are processed by third-party smelters.
2021
Results
2022
Guidance
2023
Outlook
2024
Outlook
Metals contained in concentrate produced
Gold (K oz.)
Copper (Mlbs.)
177
35
169 – 191
32 – 37
150 – 170
32 – 39
161 – 182
30 – 35
Cost of sales per tonne of ore processed(1)
($/t)
$59.48 N/A N/A N/A
Cash cost per tonne of ore processed(1)
($/t)
$47.12 48 – 53 N/A N/A
Cost of sales per ounce of gold sold(1)
($/oz.)
$876 N/A N/A N/A
AISC per ounce of gold sold(1)
($/oz.)
$722 750 – 890 630 – 760 720 – 850
Sustaining capital expenditures
($ millions) $19.2 24 – 27 20 – 22 16 – 17
1. Cost of sales per tonne of ore processed and cost of sales per ounce of gold sold are supplementary financial measures, representing Chelopech
cost of sales divided by the volume of ore processed and the payable gold in concentrate sold, respectively. Cash cost per tonne of ore processed
and AISC per ounce of gold sold are Non-GAAP ratios. These cash cost and AISC measures have no standardized meanings under International
Financial Reporting Standards (“IFRS”) and may not be comparable to similar measures presented by other companies. Refer to the “Non-GAAP
Financial Measures” section contained in the Company’s Management’s Discussion and Analysis (the “ MD&A”) for the year ended December
31, 2021 commencing at page 55, which is available on the Company’s website at www.dundeeprecious.com and has been filed on the SEDAR
site at www.sedar.com, for a detailed description, and in the case of historical measures, a reconciliation of each of these measures to the most
directly comparable measure under IFRS.
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For more information regarding the Company’s 202 2 guidance and three -year outlook, including key
assumptions, qualifications and risks associated thereto, refer to the MD&A for the year ended
December 31, 202 1, issued on February 1 7, 202 2, available on the Company’s website at
www.dundeeprecious.com and on SEDAR at www.sedar.com.
Further extending mine life through additional in-mine and brownfield exploration
DPM continues to focus on extending Chelopech’s mine life through its successful in-mine exploration
program and a growing brownfield exploration program, which for 2022 includes:
• Approximately 44,000 metres of in-mine drilling for Mineral Resource development; and
• Approximately 50,000 metres of brownfield exploration , primarily concentrated on near mine
exploration drilling related to the Sveta Petka commercial discovery application, as well as
drilling at Sharlo Dere and other near-mine targets in the mining concession area.
The Company’s application for a one -year extension to the Sveta Petka exploration licence, which
surrounds the Chelopech mine, was approved in November 2021, allowing DPM to commence work
related to the commercial discovery phase. Permitting for a 50,000-metre drilling campaign with a focus
on Sveta Petka has been completed. Drilling has commenced and is expected to be completed in 2022.
In line with the Company’s 2022 guidance, exploration spending is expected to be $16 to $19 million, of
which approximately 65% has been allocated to support the brownfield exploration program at
Chelopech.
Additional Updates to DPM’s Mineral Reserve and Mineral Resource Estimates
The Mineral Resource and Mineral Reserve estimates for DPM’s Ada Tepe mine in Bulgaria, disclosed
in DPM’s 2021 Annual Information Form (“AIF”) dated March 31, 2022, have been depleted to account
for production up until December 31, 2021. An updated Mineral Reserve and Mineral Resource estimate
for Ada Tepe is scheduled to be completed in the second half of 2022.
The Mineral Resource and Mineral Reserve estimates for the Timok gold project in Serbia and the Loma
Larga gold project in Ecuador remain unchanged from the estimates previously reported in the technical
reports with effective dates of February 23, 2021, and April 8, 2020 (reissued by DPM on November 29,
2021), respectively.
For more information, r efer to DPM’s AIF which is available on the Company’s website at
www.dundeeprecious.com and SEDAR at www.sedar.com.
Technical Information and Technical Report Filing
The Mineral Resource and Mineral Reserve estimates for the Chelopech mine and other scientific and
technical information which supports this news release was prepared by DPM with review and guidance
at various stages provided by CSA Global (UK) Ltd. (“CSA Global”). The Qualified Persons (“QP”) are
satisfied as to the appropriateness and quality of the technical work completed and accept responsibility
for the disclosure, in accordance with Canadian regulatory requirements set out in National Instrument
43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). The QP for the Mineral Resource
estimate is Galen White, BSc, FAusIMM, Partner and Principal Consultant of CSA Global (UK) Limited,
and the QP for the Mineral Reserve estimate is Andrew Sharp, B.Eng. (Mining), P.Eng. (BC), FAusIMM,
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Director Mining Engineering of CSA Global. Both Galen White and Andrew Sharp are Qualified Persons
as defined under NI 43-101, and are independent of the Company.
Ross Overall, Corporate Mineral Resource Manager, of the Company, who is a QP, as defined under
NI 43-101, has reviewed and approved the contents of this news release.
Concurrently with this news release, DPM has filed a technical report entitled “NI 43 -101 Technical
Report and Mineral Reserve Update, Chelopech Mine – Chelopech, Bulgaria” with an effective date of
March 31, 2022 (the “Chelopech Technical Report”).
The C helopech Technical Report was prepared in accordance with NI 4 3-101 and is available on
SEDAR at www.sedar.com. Readers are encouraged to read the Chelopech Technical Report in its
entirety, including all qualifications , assumptions, exclusions and risks that relate to the Mineral
Resource, Mineral Reserve and LOM. The Chelopech Technical Report is intended to be read as a
whole and sections should not be read or relied upon out of context.
About Dundee Precious Metals Inc.
Dundee Precious Metals Inc. is a Canadian -based international gold mining company with operations
and projects located in Bulgaria, Namibia , Ecuador and Serbia. The Company’s purpose is to unlock
resources and generate value to thrive and growth together. This overall purpose is supported by a
foundation of core values, which guides how the Company conducts its business and informs a set of
complementary strategic pillars and objectives related to ESG, innovation, optimizing our existing
portfolio, and growth. The Company’s resources are allocated in -line with its strategy to ensure that
DPM delivers value for all of its stakeholders. DPM’s shares are traded on the Toronto Stock Exchange
(symbol: DPM).
For further information please contact:
David Rae
President and Chief Executive Officer
Tel: (416) 365-5092
Jennifer Cameron
Director, Investor Relations
Tel: (416) 219-6177
Cautionary Note Regarding Forward-Looking Statements
This news release contains “forward looking statements” or “forward looking information” (collectively,
“Forward Looking Statements”) that involve a number of risks and uncertainties. Forward Looking
Statements are statements that are not historical facts and are generally, but not always, identified by
the use of forward looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”,
“estimates”, “forecasts”, “outlook”, “intends”, “anticipates”, “believes”, or variations of such words and
phrases or that state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be
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taken, occur or be achieved, or the negative of any of these terms or similar expressions. The Forward
Looking Statements in this news release relate to, among other things; the estimation of Mineral
Reserves and Mineral Resources and the realization of such mineral estimates; the LOM; production,
processing and recoveries forecasts; financial metrics, including those set out in the three-year outlook
provided by the Company; and success of exploration a ctivities, the price of gold, copper, and silver,
and other commodities; and the Strategic Optimization. Forward Looking Statements are based on
certain key assumptions and the opinions and estimates of management and the QPs, as of the date
such statements are made, and they involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements of the Company to be materially
different from any other future results, performance or achievements expre ssed or implied by the
Forward Looking Statements. In addition to factors already discussed in this news release, such factors
include, among others, risks relating to the Company’s business, including possible variations in ore
grade and recovery rates; u ncertainties inherent to the conclusions of economic evaluations and
economic studies; changes in project parameters, including schedule and budget, as plans continue to
be refined; uncertainties with respect to actual results of current exploration activities; uncertainties and
risks inherent to developing and commissioning new mines into production, which may be subject to
unforeseen delays; uncertainties inherent to the estimation of Mineral Reserves and Mineral Resources,
which may not be fully realized; uncertainties inherent with conducting business in foreign jurisdictions
where corruption, civil unrest, political instability and uncertainties with the rule of law may impact the
Company’s activities; the impact of the conflict in Ukraine and COVID-19, including resulting changes
to the Company’s supply chain and costs of supplies; product shortages; delivery and shipping issues;
closures and/or failure of plant, equipment or processes to operate as anticipated; employees and
contractors become infected with COVID -19 or being affected by the conflict; lost work hours; labour
force shortages; fluctuations in metal and acid prices, toll rates and foreign exchange rates; limitation
on insurance coverage; accidents, labour disputes and other risks of the mining industry; delays in
obtaining governmental approvals or financing or in the completion of development or construction
activities; actual results of current and planned reclamation activities; opposition by social and non -
government organizations to mining projects and smelting operations; unanticipated title disputes;
claims or litigation; cyber attacks and other cybersecurity risks; as well as those risk factors discussed
or referred to in any other documents (including without limitation the Chelopech Technical Report and
the Company’s most recent Annual Information Form) filed from time to time with the securities
regulatory authorities in all provinces and territories of Canada and available on SEDAR at
www.sedar.com. The reader has been cautioned that the foregoing list is not exhaustive of all factors
which may have been used. Although the Company has attempted to identify important factors that
could cause actual actions, events or results to differ materially from those described in Forward Looking
Statements, there may be other factors that cause actions, events or results not to be anticipated,
estimated or intended. There can be no assurance that Forward Looking Statements will prove to be
accurate, as ac tual results and future events could differ materially from those anticipated in such
statements. The Company’s Forward Looking Statements reflect current expectations regarding future
events and speak only as of the date hereof. Unless required by securit ies laws, the Company
undertakes no obligation to update Forward Looking Statements if circumstances or management’s
estimates or opinions should change. Accordingly, readers are cautioned not to place undue reliance
on Forward Looking Statements.