Dundee raises $74 million

Vancouver – Dundee Precious Metals (DPM-T) has $74 million in the bank after closing a bought deal financing.

The brokered deal involved the sale of 4.8 million units at $10.50 apiece, which raised $50.4 million, and almost 2 million flow-through shares at $12.25 per share for proceeds of $24 million. Units are comprised of a share plus a half-warrant with each full warrant exercisable at $15 for five years.

Dundee has earmarked funds from the units offering for general corporate purposes while proceeds from the flow-through offering will be allocated to its Back River gold project in Nunavut.

Dundee acquired 60% of Back River in February 2005 and boosted its interest to 100% in mid-2006. The 390-sq. km Back River project contains an indicated resource of 4.3 million tonnes grading 9.8 grams gold per tonne and 9.9 grams silver per tonne.

Dundee also owns two properties in Bulgaria. In 2003 it acquired the producing Chelopech gold-copper mine, 70 km east of the capital city Sofia. At the time Chelopech was running with recurring financial losses. Dundee was able to boost metal production by increasing tonnage throughput and recoveries. The underground mine had initially employed sub-level caving with Dundee changing over to long-hole open stoping, which contributed to better grade control. Dundee also invested much-needed capital into equipment and workforce training, and continues to do so in advance of a planned ramp-up of production to 2 million tonnes annually, from a current level of just below 1 million tonnes. In 2006 the mine produced 25.4 million lbs. copper and 70,781 oz. gold.

Dundees other Bulgarian property is Krumovgrad, which holds proven and probable reserves of 4.9 million tonnes grading 5.08 grams gold and 2.66 grams silver. The company completed a feasibility study and is ramping up to mine construction.

Dundees stumbling block in Bulgaria, however, is Dzhevdet Chakarov, the Minister of Environment and Waters, who has refused to sign two separate permits. One is needed for the expansion of Dundee’s Chelopech gold-copper mine, the other, for the construction of a mine at its Krumovgrad gold project.

In Armenia Dundee holds an 80% interest in the producing Kapan copper-gold-zinc mine, which the company acquired in August 2006 for US$22 million, plus transaction costs of US$1.2 million and a US$10 million investment commitment for mine expansion.

In Serbia, Dundee holds a dozen concessions or licenses with plans to invest up to $17.8 million this year in exploration.