Property Description and Location

The Chelopech Mine is located in central-western Bulgaria approximately 70 kilometres east of Sofia, the national capital, on the southern flank of the Balkan Ranges. The deposit lies in the northern part of the Panagyurishte mining district where a number of copper-bearing massive sulphide and porphyry copper deposits exist.  The Mining License covers an area of 266 hectares and includes the area of the Chelopech mining operation and the immediate surrounds.  The Company owns the land upon which the facilities are constructed and operates under a concession agreement that was granted by the Republic of Bulgaria in 1999 for a period of 30 years. 

Access to the Chelopech Mine is via major roads from Sofia.  The principal rail and road links between Sofia and the country’s largest port, Bourgas, which is located on the Black Sea, pass through the village of Chelopech and the Chelopech Mine site.  Chelopech has good infrastructure due to its proximity to major roads, power lines, communication facilities, water sources and the town of Pirdop.

History

Since the mine started in 1954, it has produced approximately 19.7 million tonnes of ore at just over 1.2% copper. Production as a state-owned company reached 100,000 tonnes per annum in 1971. It quadrupled in 1976 following an expansion program and the construction of a new concentrator, peaking at 512,000 tonnes per annum in 1988 before trailing off rapidly between 1990 and 1992.

Prior to 1990, the Pirdop smelter, located seven kilometres east of Chelopech, accepted the sulphide-rich concentrates from Chelopech and blended them with cupriferous concentrates from the nearby Elatsite Med and Assarel Medet mines. The relatively high content of arsenic in the Chelopech copper concentrates led to the Bulgarian Government decreeing on April 1, 1990 that Chelopech concentrate could no longer be treated at the Pirdop smelter. In February 1992, the mine was placed on care and maintenance and in 1993, Navan gained ownership and committed to the reopening of the mine.

Operations were restarted and continued with concentrate sale to smelters around the world. In 1999, the privatization agreement with the Bulgarian government was completed. Navan operated the Chelopech Mine until late 2002, when it went into bankruptcy. Mining operations continued during 2002 and 2003.

On September 30, 2003, DPM, through certain of its wholly-owned subsidiaries, completed the purchase of the Bulgarian mining assets from Navan and Deutsche Bank AG of London which included the Chelopech Mine.

The annual ore processed has increased from 523,810 tonnes in 2004 to 1,000,781 in 2010.

The table below sets out the ore processed and capital investments for the last three years: