Dundee Precious Metals (DPM-T) came to terms with the Bulgarian government over the expansion of the Chelopech copper-gold mine.
The deal calls for Dundee to pay a higher royalty of between 2% and 8% at a profitability ratio of between 10% and 60%. Dundee will also provide a full environmental reclamation bond for the mine.
The deal will result in the Bulgarian government taking a 25% stake in a new metals processing facility which will be built at the site.
The new smelter is estimated to cost US$155 million to build and take close to 18 months to finish.
Chelopech is a producing gold and copper mine. The company also has the Krumovgrad Gold Project in Bulgaria.
Dundee’s shares have gained 12% since the news was released on March 10 and were trading for $7.48 in Toronto on March 11. The company has roughly 70 million shares outstanding.
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