Following a thorough review of all the assumptions, proposals, and community concerns, DPM embarked on the work required to undertake the preparation of a revised application procedure. This included revision of the key aspects of the proposed open pit development, the process technology, and tailings deposition methodology and waste disposal facilities to ensure acceptance by the local community. The technological changes include:
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Investigation of flotation as the primary recovery process, thereby removing cyanide as originally proposed; and
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Investigation and development of high density “paste” for tailings disposal, thereby eliminating the requirement of a conventional tailings pond.
Incorporating these developments has enabled DPM to prepare a revised project comprising;
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Significantly reduced operating “footprint”, with one major land owner (state owned forestry within the green outline in the figure below);
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One single integrated tailings and mine waste facility, with no tailings dam;
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One significant approval required the Environmental Assessment Impact ("EIA") permit;
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Compatibility with “Natura 2000” the European Union legislative requirement to protect habitats and species; and
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A longer operating life than previously considered.
DPM believes that the removal of cyanide as the method of recovering the gold will result in a simpler permitting process, lower capital and operating costs, with the additional benefit of a shorter implementation schedule. The new project addresses all of the community and non-governmental organizations (“NGO”) concerns related to the original 2005 project proposal. Stakeholder dialogue is providing positive feedback to date on the approaches being proposed.
On August 9, 2010, BMM entered into an agreement with the Institute of Archaeology and Museum at the Bulgarian Academy of Sciences to carry out archaeological work required for clearing the Krumovgrad project site in order for development to proceed. The first stage of the agreed work is the rescue fieldwork required for project implementation. The second stage includes dissemination of the results through scientific publications and the development of museum exhibitions. The second stage can be carried out concurrently with project implementation. It is currently expected that the first stage will be completed by the end of 2012.
On February 9, 2011, the Council of Ministers (“CoM”) of the Republic of Bulgaria approved the granting of a 30 year concession to BMM to develop the Khan Krum deposit (the Krumovgrad Project). On March 22, 2011, the Company received notification of two appeals against the CoM decision. The appeals had been filed jointly by: i) the Municipality of Krumovgrad; and ii) a group of three environmental non-governmental organizations. Both appeals were procedural and related to law changes which occurred between 2005 (when BMM commenced the concession process) and 2011 when the concession was granted. On October 28, 2011, the Supreme Administrative Court issued a ruling terminating the court proceedings on the grounds of inadmissibility of the appeals due to a lack of legal interest in the proceedings as neither party was a participant in the concession granting procedure. This ruling is not final and is subject to appeal.
On January 5, 2011, the Ministry of Environment and Waters (“MoEW”) issued a positive assessment of the quality of the Krumovgrad project environmetal impact assessment ("EIA") documentation which had been submitted in October 2010. Following this response, BMM sent the EIA to the Municipality of Krumovgrad and the villages of Zvanarka, Dazdovnik and Ovchari as stakeholders affected by the investment proposal. The EIA documentation was also submitted to the Regional Inspectorate of Environment and Water in Haskovo. DPM has published all EIA documentation in Bulgarian and English on its website in order to ensure that all stakeholders have access to the information.
The Krumovgrad Municipality made the EIA documentation accessible to the public in early June 2011. Four public hearings were held in July 2011 with the last hearing taking place on July 22 in the town of Krumovgrad. All documentation related to the hearings was filed with the MoEW and on September 19, 2011, the Supreme Expert Environmental Council (“SEEC”) reviewed the EIA documentation and recommended that the MoEW approve the EIA and implementation of the project with a provision for preemptive execution.
On October 5, 2011, the Company received notification from the MoEW that the Minister requested a second review of the EIA documentation by the SEEC related to a procedural objection filed by the Mayor of Ovchari. In order to protect its legal rights as a result of the MoEW not issuing its decision within the statutory 45 day period, BMM filed an appeal against the MoEW for “silent refusal” on October 5, 2011. BMM believes that the process will continue and has no reason to doubt that the SEEC will reconsider the EIA documentation in early November and make the same recommendation to the Minister allowing the process to proceed to its conclusion.
The definitive feasibility study for the project is undergoing final revisions and is expected to be released in the fourth quarter of 2011.