Dundee gold production beats estimates in Bulgaria

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Dundee’s Chelopech gold mine in central-western Bulgaria. Source: Dundee Precious Metals Inc.

Dundee Precious Metals Inc. [DPM-TSX] on Friday April 13 announced its mine and smelter production results for the three months ended March 31, 2018.

Highlights included better than expected production from the Chelopech Mine which is located in central-western Bulgaria approximately 70 km east of Sofia, the national capital on the southern flank of the Balkan Range.

The deposit is situated in the northern part of the Panagyurishte mining district where a number of copper-bearing massive sulphide and porphyry copper deposits are located.

First quarter 2018 production of 57,300 ounces of gold and 9.3 million pounds of copper beat Scotiabank estimates by 20% and 3% respectively.

“The production beat is attributable to higher than expected grades during the quarter as well as a 5% beat on throughput,” said Scotiabank in an investment newsletter.

Concentrate shipments lagged for the quarter but are expected to increase over the coming quarters. At the Tsumeb smelter in Namibia, the 54,100 tonnes smelted came in below Scotiabank’s 61,900 tonne estimate and below the company’s budget but is expected to increase over the coming quarters.

Chelopech mine concentrates are shipped to the Tsumeb smelter in Namibia because the Bulgarian government degreed that concentrates could no longer be treated at the nearby MDK-Pirdop copper smelter. This was due to the high arsenic content.

Smelting rates in the first quarter were impacted due to the need to replace the furnace roof, off-gas repairs, and adverse summer weather conditions.

The annual maintenance shutdown has been deferred from March to May 2018 due to improved refractory performance in the Ausmelt furnace. The oxygen plant performance was much improved relative to the previous quarters and other optimization efforts continue.

“We had another strong quarter at Chelopech and continue to make good progress on smelter optimizing initiatives,” said Dundee President and CEO Rick Howes.  “We remain on budget with construction at our Krumovgrad gold project [also in Bulgaria] with production of first concentrate on track for the fourth quarter of 2018,” he said.

Earthworks for the integrate mine waste facility have been completed. Installation of major foundations and structural steel work progressed on plan in the first quarter of 2018.

The forecast capital cost remains at $162 million to $168 million, compared with the original estimate of $178 million.

Ore milled and metals production at Chelopech and concentrate smelted at Tsumeb in the first quarter of 2018 are tracking in line with the company’s guidance, Dundee said in a press release Friday.

Meanwhile, Dundee said its first quarter 2018 operating and financial results are expected to be released after the close of trading on Wednesday, May 2, 2018.

On Friday, Dundee shares rose 2.5% or $0.08 to $3.31. The shares are trading in a 52-week range of $3.38 and $2.13.

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