Dundee Precious Metals saw its third consecutive year of record annual gold production in 2021
TSX-listed Dundee Precious Metals saw its third consecutive year of record annual gold production in 2021. Its two gold mines in Bulgaria performed better-than-expected in Q4, while processing at the Namibian Tsumeb smelter fell behind guidance.
“Our mining operations continued to deliver impressive performance in the fourth quarter, driven by a new record for quarterly gold production at Ada Tepe, combined with strong results from Chelopech,” Dundee’s president and CEO David Rae said on January 10.
The Canada-based miner’s consolidated gold production was 310,000oz for 2021, which is at the higher end of the 271,000-317,000oz guidance. This came after production of 82,800oz in Q4.
Canaccord Genuity Capital Markets analyst Dalton Baretto said the consolidated Q4 production beat Canaccord’s forecast of 73,000oz by 13%.
Baretto said the result was due to higher throughput, grades and recoveries at the central-western Bulgarian Chelopech underground gold-copper mine.
Chelopech’s Q4 gold production was 49,000oz, which took the 2021 total for the operation to 177,000oz. This beat the 156,000-176,000oz guidance, but was down from the 179,000oz achieved in 2020.
Chelopech’s 2021 copper production was in line with guidance at 34,700 million pounds after production of 9.2Mlbs in Q4.
Dundee reported that the Southern Bulgarian Ada Tepe mine – which began commercial production in June 2019 – produced 133,000oz of gold in 2021, which compares with guidance of 115,000-141,000oz. Production was 119,000oz in 2020.
The 2021 total came after Ade Tepe produced 33,800oz in Q4, which was “slightly above plan due to higher grades”, Dundee said.
Ade Tepe’s Q4 gold production was in line with Baretto’s forecast.
“The Tsumeb smelter processed approximately 52,000 tonnes of complex concentrate during the fourth quarter, reflecting an 8-day maintenance shutdown to repair a water leak in the offgas system,” Dundee said.
The miner noted that this resulted in the smelter processing about 189,700 tonnes of complex concentrate in 2021, which was below revised guidance of 195,000-200,000t.
Meanwhile, Dundee announced in November that it would supplement its base US$0.03/share quarterly dividend with the repurchase of 152,000 shares at C$7.51/share.
In aggregate, Dundee repurchased 1,723,800 common shares in 2021 at an average price of C$7.64/share, for a total value of about C$13.2 million, the company said.
Baretto said the total value implies an incremental C$0.07/share, and together with the base dividend implies a total trailing 12-month yield of 2.9% at the current C$7.33 share price.
Velocity exercises option to acquire 70% stake in Makedontsi gold project in Bulgaria
Canadian gold exploration company Velocity Minerals said that it has delivered a notice of option exercise to Bulgarian metal ore mining company Gorubso-Kardzhali for the Nadezhda property which includes the Makedontsi gold project.
“Following delivery of the exercise notice, Velocity is deemed to have earned a 70% interest in the property and to be in joint venture with Gorubso for the further development of the property,” the gold exploration company said in a statement on Tuesday.
To fulfill the terms of the option agreement with Gorubso, Velocity was required to deliver an environment impact assessment prepared in accordance with the Bulgarian Environmental Protection Act. Velocity will sole-fund 2,000 m of future drilling and deliver a mineral resource estimate, the company added.
Mineralisation at Makedontsi is outcropping locally but elsewhere the prospective sediments are covered by a thin veneer of post-mineral limestone estimated to range from 10 to 30 m thickness, Velocity said.
“Exploration at Makedontsi to date, including eight diamond holes and 14 reverse circulation holes, was completed to test the grade and extents of historical drilling. Drilling intersected mineralisation, starting from surface, and the mineralisation remains open for expansion,” the company also said.
Future drilling will continue to test for extensions of mineralisation, Velocity added.
Dundee reports record gold production in second quarter in Bulgaria
Dundee Precious Metals (TSX: DPM) announced strong preliminary production results from both of its mines and the smelter, with consolidated gold production of 85,100 ounces for the three months ended June 30, 2021, which is 5% more than 81,400 ounces produced a year before.
According to a statement, the company’s flagship Chelopech mine in Bulgaria produced 52,600 ounces of gold and 10.0 million pounds of copper during the second quarter. Gold production, which increased significantly compared with the first quarter, was higher than expected as a result of mining higher grade zones and improved recoveries, the company said.
Dundee added that the Ada Tepe mine in Bulgaria continued to deliver strong gold production, producing 32,500 gold ounces in the second quarter, which was in line with the mine plan.
The Tsumeb smelter in Namibia delivered solid performance during the second quarter, the company noted, processing 59,600 tonnes of complex concentrate, an increase compared with the first quarter following the completion of the planned Ausmelt furnace maintenance in March.
With strong performance in the first half of the year, the company said it is on track to meet its previously issued guidance for 2021 at each of its operations.
“We achieved a new record for gold production in the second quarter as a result of strong performance from our mining operations,” said president and CEO David Rae. “Our strong gold production, combined with solid smelter performance in Q2, positions us well to achieve our 2021 guidance at each of our operations”.
Additionally, the company said that, as previously announced in May 2021, and in line with its disciplined capital allocation framework, DPM will pay a quarterly dividend of US$0.03 per share on July 15, 2021 to shareholders of record as at 5:00 p.m. Toronto local time on June 30, 2021.
Dundee Precious Metals is a Canadian-based international gold mining company with operations and projects located in Bulgaria, Namibia and Serbia.
Raiden Resources extends licence at Kalabak Bulgaria
Kalbak mining project is located within ten kilometres of Canadian mining company, Dundee Precious Metal’s, Ada Tepe Mine in south-east Bulgaria.
Raiden Resources’ (RDN) licence for its Bulgarian Kalabak project has been extended for a two-year exclusive term. The licence has been extended by the Ministry of Energy and gives Raiden the ability to earn into a 75 per cent position at the project level. Managing Director of Raiden Dusko Ljubojevic said that the company plans to start fieldwork at the project with the extension.
“Kalabak is a large permit, 195 square kilometres, and is located within one of the
most exciting epithermal gold districts in Eastern Europe,” he commented.
To get the fieldwork underway, Raiden is legally required to complete the statutory administrative action which it hopes to have finished in the following weeks. Once the paperwork is complete, the company plans to restart targeting across the licence.
Exploration campaigns in 2019 and 2020 defined several copper-gold prospects, including porphyry prospects and epithermal gold prospects.
However, only one prospect, titled Sbor, has been drill tested to date.
Raiden said drilling on the Sbor prospect defined a large zone of alteration, which the company hopes is indicative of a porphyry system.
Consequently, the company plans to determine the next steps in targeting copper mineralisation on the Sbor copper-gold porphyry prospects and also, the Belopoltsi epithermal prospect.
Further, work is planned to follow up on prospects that haven’t been advanced since initial exploration campaigns.
This will include evaluating the Chal gold prospect, which is a geochemical prospect and was defined by the company in previous sampling campaigns and a permit-wide reconnaissance program to define new targets.
Extension of Lucky Invest’ lead-zinc deposit concession
The concession agreement for the Govedarnika deposit, located in the Plovdiv region, was signed in 2000. Lucky Invest is a unit of local mining company KCM 2000.
Bulgaria’s government said that it will extend by ten years its concession agreement with Lucky Invest for the lead-zinc ore deposit Govedarnika.
The extension was requested by the company in view of the significant resources remaining at the deposit, the government said in a statement following its weekly meeting.
Dundee Precious Metals’ technical report on its Bulgarian mine
In order to support the updated Mineral Resource and Mineral Reserve Estimate and improved life of mine plan for Ada Tepe as previously disclosed in the Company’s news release dated October 16, 2020, Dundee Precious Metals Inc. announced that the Company has filed a technical report for its Ada Tepe gold mine in Bulgaria.
The technical report has been prepared pursuant to the Canadian Securities Administrator’s National Instrument 43-101. The technical report and the October 16, 2020 news release are both available for review on SEDAR and on the Company’s website.
Dundee Precious Metals enters investment agreement with Velocity Minerals Bulgaria
Velocity Minerals Ltd. is a gold exploration and development company focused on southeastern Bulgaria. Velocity has a 70% interest in the Tintyava prospecting licence, which includes the Rozino gold project, located approximately 40 kilometres by road from DPM’s Ada Tepe mine.
Dundee Precious Metals Inc. announced that it has entered into an investment agreement with Velocity to invest up to C$7 million in Velocity on a private placement basis. DPM is expected to purchase up to 14 million common shares of Velocity at a price of C$0.50 per share. Upon closing the transaction, DPM is expected to own approximately 9.99% of Velocity’s issued and outstanding common shares on a non-diluted basis.
Velocity’s 70% interest in Rozino is held through a joint venture arrangement with a local third party. On October 15, 2020, Velocity filed a pre-feasibility technical report on Rozino which contained a probable mineral reserve estimate at a 0.5 g/t gold cut-off grade of 11.8 Mt at 1.22 g/t gold for 465,000 ounces.1 Velocity also has option agreements to earn a 70% interest in the Obichnik and Makedontsi gold projects; and an option agreement to earn a 100% interest in the Iglika project.
“We are pleased to be investing in further gold exploration in southeastern Bulgaria through our equity financing in Velocity,” said David Rae, President and CEO of Dundee Precious Metals. “Given our strong presence and capabilities in the region, we believe that we are uniquely positioned to support Velocity as a strategic shareholder.”
The Agreement contains certain rights and restrictions customary for these types of transactions. Subject to approval of the TSX Venture Exchange and other closing conditions, the transaction is expected to close on or about November 24, 2020. All securities issued in connection with the transaction will be subject to a hold period of four months and one day in Canada.
Dundee Precious Metals’ Ada Tepe mine in Bulgaria – updated reserves and optimized mining plan
“We are very pleased with the updated mineral reserves and the optimized mine plan for Ada Tepe gold mine in Bulgaria,” said David Rae, President and CEO of Dundee Precious Metals. “We are proud of our operating team at Ada Tepe, which has continued to exceed our expectations since the start of operations last year. The optimized mine plan further supports Ada Tepe’s potential to drive strong operating results within our portfolio.”
Total proven and probable mineral reserves are 4.26 million tonnes (Mt) at 4.8 g/t gold and 3.0 g/t silver, for 658,000 ounces of gold and 414,000 ounces of silver, respectively.
The optimized life-of-mine – LOM plan has a higher grade and recovered gold ounce profile, compared with the original 2014 LOM plan.
There is an improved estimate based on detailed reconciliation data that supports previously issued 2020 guidance and three-year outlook for Ada Tepe.
The mineral resource and mineral reserve update for the Ada Tepe mine was initiated to account for detailed reconciliation studies conducted since the start-up of operations, grade control drilling and mining depletion to July 31, 2020.
Based on the final pit design, a strategic mine planning study was conducted to optimize net present value of mine cash flows, balanced against operational constraints that include mine production, process plant throughput rates, stockpiling capacity and mine life.
The chosen optimal scenario maintains production until 2026 and assumes a plant throughput of approximately 750,000 tonnes per annum. This scenario generated an improved and optimized recovered gold ounce profile when compared with the previous 2014 LOM plan.
On the Ada Tepe mine concession, approximately 8,000 metres of drilling are planned at the Surnak prospect and two other satellite deposits for the fourth quarter of 2020, with the goal of establishing mineral resources and extending Ada Tepe’s mine life.
Additional exploration activities in 2020 have focused on target delineation and resource definition drilling of epithermal veins on the Chiirite licence, located approximately 25 kilometres northeast of Ada Tepe, with approximately 6,000 metres of drilling completed this year.
For 2021, Dundee is planning approximately 32,000 metres of drilling at Ada Tepe, with a focus on delineation of additional resources within the mine licence and advancing other prospective targets on regional licences.
Velocity’s Rozino Gold Project in Bulgaria – Prefeasibility Study
The Velocity Minerals’ Rozino Gold Project, Pre-feasibility Technical Report and was prepared by CSA Global, an international mining consultancy with experience in Bulgaria, in accordance with National Instrument 43-101 Standards of Disclosure for Mineral Projects. Rozino is Velocity’s gold project located in southeast Bulgaria. Velocity Minerals Ltd. announces it has filed on SEDAR an independent PFS report.
The report is dated October 14, 2020. The PFS results were previously disclosed in the Company’s news release dated August 31, 2020.
The PFS establishes the Rozino deposit as supporting an economic open pit mine operation with gold recovery by a combination of on-site concentration in a flotation plant and further processing to produce a gold-silver doré in the existing and operating processing plant located in Kardzhali, 85 km by road from Rozino, where doré would be produced.
Prefeasibility Study Highlights
After-Tax Financials: After-tax NPV5% of CAD$163 ($123) million and after-tax IRR of 27.4% using a base case gold price of $1,500 per ounce.
Life of Mine Earnings: $293 million before interest, taxes, and depreciation.
Cash Cost: All-in sustaining cost2 of $755 per ounce of gold and cash cost3 of $699 per ounce of gold.
Capital Costs: Total estimated capital costs of $94.8 million and pre-production capital costs of $87.1 million (including an 11% contingency).
Mineral Resource: Indicated Mineral Resource at a 0.3 g/t gold cut-off grade of 20.5 Mt at 0.87 g/t gold, for contained gold of 573,000 ounces and an Inferred Mineral Resource at a 0.3 g/t cut-off of 0.38 Mt at 0.8 g/t gold for 10,000 ounces4.
Initial Mineral Reserve: Probable Mineral Reserve at a 0.5 g/t gold cut-off grade of 11.8 Mt at 1.22 g/t gold for 465,000 ounces.
Mining: Open pit with 0.5 g/t gold cut-off grade (COG), low strip ratio of 2.2 and 1.22 g/t life of mine (“LOM”) gold grade.
Conventional Process Flow Sheet: Returns 79.3% gold recovery to doré at the operating Processing Plant.
Processing: On-site flotation producing gold-bearing pyrite concentrate assaying from 15 to 40 g/t and transportation to the Processing Plant (located 85 km from the Project) for processing to produce doré.
Low Environmental Risk: Small project footprint with benign, non-acid generating and non-hazardous waste and tailings material.
Opportunities for Project Enhancement: The Rozino gold deposit is open to the southeast and exploration is ongoing. Additional pit tailings storage capacity exists to accommodate potential increases in ore production.
Velocity’s gold project in Bulgaria gets positive prefeasibility results
The results of the prefeasibility study further de-risks the project and provide opportunities for additional project enhancements as Velocity advances the project towards production, said Keith Henderson, Velocity president and CEO.
Canadian mineral exploration company Velocity Minerals said that it has received positive prefeasibility study results for the Rozino gold project located in southern Bulgaria. The study establishes the Rozino deposit as supporting an economic open pit mine operation with gold recovery by a combination of on-site concentration in a flotation plant and further processing to produce a gold-silver doré in the existing processing plant located in the Bulgarian town of Kardzhali, 85 km away from Rozino, where doré would be produced, Velocity said in a statement earlier.
The prefeasibility study financial model base case returns an after-tax net present value at a 5% discount rate of 163 million Canadian dollars ($124.3 million/105.2 million euro) and an after-tax internal rate of return of 27.4%, the mineral exploration company noted.
In addition to returning positive economic results, the study also outlines significant benefits, including shortened permitting timelines and capital cost efficiencies, as the existing processing plant in Kardzhali is currently operational, it has sufficient capacity to process concentrate from Rozino and its use reduces total capital cost requirements for the gold project.
Furthermore, on-site development at Rozino only requires permitting for mining, flotation concentration, and disposal of relatively benign waste rock and tailings. The area of disturbance has been kept relatively compact to facilitate reclamation and closure, Velocity noted.
“The prefeasibility study presents financial results for the Rozino gold deposit as currently defined. Exploration work is ongoing aiming to discover and define additional mineralization within the 145 sq m exploration licence and at Velocity’s other option properties in the region, which could potentially fit into a Hub and Spoke development model,” said Keith Henderson.
Velocity’s strategy envisages the development of a low cost “Hub and Spoke” operation in southeast Bulgaria whereby multiple gold projects produce gold concentrates for trucking to an existing, central processing plant for the production of doré. Other than Rozino, the projects referred to in the “Hub and Spoke” development model do not have defined resources nor is there is any guarantee that resources will be defined, the company’s statement read.
Over the next 12 months, Velocity will continue to aggressively explore the exploration properties in the surrounding area, aiming to discover and define mineral resources as part of its strategy, the CEO said.
Velocity Minerals completed the acquisition of 70% interest in Bulgaria’s Tintyava Property, which holds the Rozino gold deposit, from local company Gorubso-Kardzhali in 2019, through delivery of a PEA.