Balkan Mineral and Mining EAD (“BMM”), a subsidiary of Dundee Precious Metals Inc., has been involved in exploration activities in Krumovgrad, Bulgaria since 2000.

Environmental Responsibility

In October 2010, BMM completed a revised Environmental Impact Statement (“EIS”) procedure with respect to an Investment Project Proposal for Mining and Processing of Auriferous Ores from the Ada Tepe Prospect of the Khan Krum Gold Deposit near Krumovgrad ("the Krumovgrad Project").

The revised proposal includes significant changes from the original 2005 proposal which were undertaken by BMM in order to address the concerns of the local communities and NGOs in the area and attempt to advance the Krumovgrad Project to the development stage.  After conducting extensive consultations with a wide variety of stakeholders, as well as detailed metallurgical and process studies and test work, the following changes took place:

• A significant reduction in the project area, from 300 to 145 hectares;
• Relocation of the tailings management facility (“TMF”) and integration with the mine waste management facility in order to significantly decrease the impact on the Protected Zone; and
• Change in process technology to conventional flotation from cyanidation, resulting in production of a gold-silver concentrate instead of metals.

These revisions to the project plan ensure:

• Minimum land disturbed throughout the Project life;
• Preservation and protection of valuable habitats;
• Minimum aesthetic landscape disturbance;
• Employment of local residents for the various Project stages;
• Training and increase of qualification of employees; Assist in the repopulation of the area; and
• Provide sufficient measures to secure safe environment and healthy work environment;

Social Responsibility

Recognizing its role as a responsible corporate citizen, BMM has been continuously working in the area to understand, acknowledge and meet community concerns and provide support, as needed.

Information Centre

Confident that business can thrive in developed communities where stakeholders participate in a discourse of understanding, continual trust building and cooperation, BMM established its Information center staffed with local people in 2005. The role of the Information center has changed with time not only to provide information about the Project but also to contribute directly to the local community.

Investment in Community Skills

The Information Centre also provides English language and computer literacy courses for long-term unemployed and low income members of the community. Over 60 people have participated in the Charity Education Programme since it was established by BMM which is aimed at improving the language and computer skills of local people.

Support of Local Culture and Traditions

BMM acknowledges the importance of preserving local culture as well as the colourful traditions of the Eastern Rhodopes. In this regard, the Company regularly supports the performances of the Krumovgrad folklore ensemble, Trakiiche, both regionally and internationally.

Educational Support

BMM also invests in the education of the young people in the town of Krumovgrad and the surrounding region through:

• an improved English language teaching environment which was created in Vasil Levski school enhancing the teaching process;
• the creation of eco clubs and equipping teachers to discuss important environmental topics;  providing opportunities for students to visit the Animal Rescue Center in Stara Zagora; encouraging students from local schools, together with experts, to take part in initiatives which provide an opportunity for young people of Krumovgrad to become familiar with the wild life characteristic for the area.

Local History

Ada Tepe is a place of religious and historical importance. Archeological exploration has uncovered early sites of religious rituals from which all artifacts of significance are now preserved and displayed at the Museum of History in the town of Kardzhali. There are currently archeological excavations underway related to the findings and hypothesis of early mining and metallurgical activities in the area. All these activities have been funded by the company.

Investment in Health

BMM has also donated medical equipment to the local hospital in Krumovgrad to help improve the medical care in the region.