Dundee Precious Metals Announces Updated Mineral Resource and Mineral Reserve Estimate for the Ada Tepe Gold Mine and Improved Life of Mine Plan

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TORONTO, Oct. 16, 2020 (GLOBE NEWSWIRE) — Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or “the Company”) is pleased to announce an updated Mineral Resource and Mineral Reserve Estimate and improved life of mine (“LOM”) plan for its Ada Tepe gold mine in Bulgaria.

Highlights

  • Total Proven and Probable Mineral Reserves of 4.26 million tonnes (“Mt”) at 4.8 grams per tonne (“g/t”) of gold and 3.0 g/t of silver for 658 thousand ounces of gold and 414 thousand ounces (“K oz.”) of silver, respectively;
  • Optimized LOM plan with a higher grade and recovered gold ounce profile, compared to the original 2014 LOM plan;
  • Improved estimate based on detailed reconciliation data; and
  • Supports previously issued 2020 guidance and three-year outlook for Ada Tepe.

“We are very pleased with the updated Mineral Reserves and the optimized mine plan for Ada Tepe,” said David Rae, President and CEO. “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.”  

Updated Mineral Resource and Mineral Reserves Estimate

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.

The Mineral Reserves statement is shown below and is effective as of July 31, 2020.

Ada Tepe Mineral Reserve Estimates
(As at July 31, 2020)
Category
Tonnes (Mt)
Grade (g/t)Metal content (M oz.)
AuAgAuAg
Proven     
Upper Zone1.103.672.120.1300.075
Wall Zone1.696.614.170.3580.226
Stockpile     
Subtotal Proven2.795.453.360.4880.301
Probable     
Upper Zone1.323.542.360.1510.100
Wall Zone0.034.462.850.0050.003
Stockpile0.123.772.550.0140.010
Subtotal Probable1.483.582.380.1700.113
Proven and Probable     
Upper Zone2.423.602.250.2800.175
Wall Zone1.726.574.150.3630.229
Stockpile0.123.772.550.0140.010
Total4.264.803.020.6580.414

Footnotes:

  1. Mineral Reserves have been estimated using a gold cut-off of 0.6 g/t for the Upper Zone, and 0.8 g/t for the Wall Zone.
  2. Long-term metal prices assumed for the evaluation of the Mineral Reserves are $1,250/oz. for gold and $17/oz. for silver.
  3. Mineral Reserves include mining depletion as of July 31, 2020.
  4. Probable ore includes stockpile inventory as of July 31, 2020.

The Mineral Resource statement is shown below and is effective as of July 31, 2020.   Mineral Resources for the Upper Zone and overburden material are reported exclusive of Mineral Reserves and within the Reserve pit design. No Mineral Resources are reported for the Wall Zone material, as this has been converted to Mineral Reserves.

Ada Tepe Mineral Resource Estimate, exclusive of Mineral Reserves
(As at July 31, 2020)
Resource category
Tonnes (Mt)
Grade (g/t)Metal content (M oz.)
AuAgAuAg
    Measured0.000.000.000.0000.000
    Indicated0.000.000.000.0000.000
Total Measured and Indicated0.000.000.000.0000.000
    Inferred0.322.091.510.0210.015

Footnote:

  1. Figures have been rounded to reflect that this is an estimate.
  2. Measured, Indicated and Inferred Mineral Resources have been reported in accordance with National Instrument 43‐101 (“NI 43-101”) and the classification adopted by the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”).
  3. Estimates of Measured and Indicated Mineral Resources are reported exclusive of those Mineral Resources modified to produce Mineral Reserves.
  4. Mineral Reserves and Resources may be subject to legal, political, environmental and other risks and uncertainties.
  5. Mineral Resources are based on a gold cut-off grade of 0.6 g/t for the Upper Zone and overburden and 0.8 g/t for the Wall Zone; have been calculated using metal prices of US$1,400/oz. for gold and US$17/oz. for silver; and are effective as at July 31, 2020.
  6. Mineral Resources are constrained to material within the Reserve shell because it has reasonable prospects for eventual economic extraction and therefore fulfils the criteria for Mineral Resources.

A technical report for the Ada Tepe mine, prepared in accordance with NI 43-101, will be filed under the Company’s profile on SEDAR at www.sedar.com within 45 days of this news release.

Mineral Resource and Mineral Reserves Estimation Approach

The previous Mineral Resource estimate, effective at December 31, 2013, employed a multiple indicator kriging (“MIK”) approach for the Upper Zone Resource domain.

The current estimate was undertaken using mineralization volumes created using a single Indicator Kriged contour (“IK”), followed by Ordinary Kriged (“OK”) block estimates. This approach, which uses information gathered during mining to align with operational grade control estimation procedures, is more suitable for detailed mine planning and reconciliation studies. The new model has resulted in a higher grade Mineral Resource inventory for the Upper Zone relative to the previous Mineral Resource Estimate, with lower tonnage and more gold ounces (not accounting for depletion). This change in approach and the resultant grade-tonnage relationship is well-supported by detailed reconciliation studies that have been conducted from the start of operations.

The updated Mineral Resource estimate also includes approximately 91,000 metres of close-spaced grade control drilling within the LOM pit design and detailed in-pit mapping, which was used to prepare 3D geologic interpretations. Grade control reverse circulation drilling, completed on a 5 metre by 5 metre spacing, has identified additional mineralization within the Upper Zone, which has been captured within the updated models.

Mineral Reserves were constrained within a pit design, based on a selected pit scenario derived from a Whittle pit optimization study. Relative to the previous 2014 Reserve pit design, the strip ratio increased slightly due to the changes in the estimation approach. However, the new design incorporates additional geotechnical recommendations, which has offset much of the additional waste.

Life of Mine Plan

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 thousand tonnes per annum. This scenario generated an improved and optimized recovered gold ounce profile when compared with the previous 2014 LOM plan.

The tables below show the current LOM plan, including actual operating results up until July 31, 2020, compared to the original 2014 LOM plan.

2020 Life of Mine Plan
 UnitTotal / Average2019120202202120222023202420252026
Total Ore ProcessedKt5,316471891882749749679617279
Grade          
    Aug/t4.804.564.765.295.076.224.093.543.74
    Agg/t2.932.622.602.902.953.802.792.762.95
Contained Metal          
    AuK oz.82069136150122150897034
    AgK oz.5014074827192615526
Recovered Metal          
    AuK oz.70057115128106129766029
    AgK oz.2932343504458332814
Strip Ratiot:t2.912.702.221.943.633.194.883.851.40

Footnotes:
1. Figures for 2019 include actual operating results for the year.
2. Figures for 2020 include actual operating results up until July 31, 2020, with the remaining portion of the year derived from the LOM plan.

2014 Life of Mine Plan
 UnitTotal / Average20192020202120222023202420252026
Total Ore ProcessedKt6,204809803813837773785789595
Grade          
    Aug/t4.043.425.015.593.406.063.292.832.37
    Agg/t2.221.922.602.841.913.161.931.721.53
Contained Metal          
    AuK oz.8078912914691151837245
    AgK oz.4435067745179494429
Recovered Metal          
    AuK oz.6867611012478128716139
    AgK oz.3103547523655343120
Strip Ratiot:t2.622.090.901.323.313.604.673.733.85

Three-Year Outlook

The revised LOM plan supports the Company’s previously issued 2020 guidance and three-year outlook for Ada Tepe as shown below.

 2020 Guidance2021 Outlook2022 Outlook
Gold contained in concentrate produced
(K oz.)
94 – 115105 – 130105 – 130
Cash cost per tonne of ore processed
($/t)
50 – 60N/AN/A
Sustaining capital expenditures
(US$ millions)
9 – 114 – 54 – 5

For more information regarding the Company’s 2020 guidance and three-year outlook, refer to the Management’s Discussion and Analysis for the period ended June 30, 2020, issued on July 30, 2020, which can be found on the Company’s website at www.dundeeprecious.com and is available at www.sedar.com

Exploration

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 license, located approximately 25 kilometres north-east of Ada Tepe, with approximately 6,000 metres of drilling completed this year.

For 2021, DPM is planning approximately 32,000 metres of drilling at Ada Tepe, with a focus on delineation of additional resources within the mine license and advancing other prospective targets on regional licences.

Technical Information

The Mineral Resource and Mineral Reserve estimates for Ada Tepe and other scientific and technical information which supports this news release was prepared by CSA Global (UK) Ltd. (“CSA Global”), in accordance with Canadian regulatory requirements set out in National Instrument 43-101 Standards of Disclosure for Mineral Projects, as relates to Mineral Resources, Maria O’Connor, BSc, MAusIMM, MAIG, Manager Resources – EMEA of CSA Global and as relates to Mineral Reserves, under the supervision of Karl van Olden, BSc (Eng), GDE, MBA, FAusIMM, Mining Manager of CSA Global. Both are Qualified Persons (“QP”), as defined under NI 43-101. Maria O’Connor and Karl van Olden 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.

About Dundee Precious Metals Inc.

Dundee Precious Metals Inc. is a Canadian based, international gold mining company engaged in the acquisition of mineral properties, exploration, development, mining and processing of precious metals. The Company’s operating assets include the Chelopech operation, which produces a gold-copper concentrate containing gold, copper and silver and a pyrite concentrate containing gold, located east of Sofia, Bulgaria; the Ada Tepe operation, which produces a gold concentrate containing gold and silver, located in southern Bulgaria; and the Tsumeb smelter, a complex copper concentrate processing facility located in Namibia. DPM also holds interests in a number of developing gold and exploration properties located in Canada, Serbia and Ecuador, including its 9.4% interest in Sabina Gold & Silver Corp. and its 19.4% interest in INV Metals Inc.

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