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DPM Revolver



Project number:


Business sector:

Natural resources

Notice type:


Environmental category:


Approval date:

12 Dec 2012



PSD disclosed:

12 Nov 2012

Project Description

The original revolving credit facility (DTM 44080) was approved by the EBRD’s Board of Directors on 12 December 2012.   The Krumovgrad Gold Mine Project has been presented to and approved by the Board on 21 April 2015.

A revolving corporate debt facility to Dundee Precious Metals of up to US$ 275 million (€ 236.2 million) to support the on-going development and expansion of the company’s activities and acquisitions in the Bank’s countries of operation.

Transition Impact

The proposed financing has the potential to generate positive transition impact through:
 (i) Setting higher standards in terms of transparency and environmental, social and health and safety (ESH&S) practices. In particular:
  • Dundee’s Deno Gold operations in Armenia will adopt and implement Environmental and Social Action Plan agreed with the Bank to bring Deno Gold in compliance with the Bank’s Performance Requirements.
  • Deno Gold will adhere to “publish what you pay” principles further contributing to a greater transparency in the mining sector in the country.
(ii) Demonstration effect of successful restructuring. Through the adoption of modern mining technology, Dundee is expected to substantially increase recovery rates and resource and cost efficiencies at the Chelopech Mine in Bulgaria. This could have a positive demonstration effect to other gold producers in the EBRD region of operations.
In addition, the development of Krumovgrad greenfield gold project in Bulgaria may promote additional positive transition impact: the project will demonstrate replicable behaviours and application of a new innovative integrated mining waste management system. This may be a test case for similar mines in the region.

The Client

Dundee Precious Metals is a publicly-held Canadian mineral resource exploration, development and mining company listed on the main board of Toronto Stock Exchange with operations and development projects in Bulgaria, Armenia, Serbia, Namibia and Canada.

EBRD Finance

Up to US$ 45 million.

Project Cost

Total facility amount of up to US$ 275 million.

Environmental Impact

Krumovgrad Gold Mine
Categorised A. The Project involves the construction and operation of a greenfield gold mine in southern Bulgaria.  The proposed mine site is located on ‘Ada Tepe’ hill overlooking the town of Krumovgrad.  Greenfield mining projects may be associated with potentially significant and diverse environmental and social impacts and therefore the Project has been categorised as ‘A’ requiring a formalised and participatory environmental and social impact assessment process.
Exploration activities commenced on the site in 2001 and an initial Project design was proposed in 2005.  Following stakeholder feedback, the Project design was modified to avoid and reduce environmental and social impacts associated with the Project.  This included a reduction in Project footprint (to 85ha), a change to the process (cyanide will no longer be used) as well as the use of an integrated mine waste facility rather than separate facilities for waste rock and tailings.  The new design was subject to a local EIA process in 2010 and an environmental permit was issued in 2013.  The Company is currently awaiting approval of its detailed design plan from the local municipality.
EBRD’s due diligence of the Project included a gap analysis of the local EIA and the development of additional environmental and social documentation to supplement the local EIA (together the ‘ESIA package’) and meet the Performance Requirements.  The gap analysis, as well as the review of supplementary documentation, was undertaken by an independent consultant.  The ESIA package developed by the Company is regarded as fit for purpose and has been disclosed (9 December 2014) for a sixty day period in line with EBRD disclosure requirements.  In addition to the ESIA package, an Environmental and Social Action Plan has been agreed with the Company to structure the Project to meet the PRs during Project construction, operation and closure. 
Key environmental and social issues considered by the ESIA include impacts to biodiversity, impacts to land users and people living near the mine, air quality and noise issues, cultural heritage, water use, waste management as well as mine closure issues.  The life of mine is short (8 years) and while the Project is expected to bring benefits to Krumovgrad, these benefits will need to be careful managed to ensure that they are sustainable and benefit the area in the long term.  The Project is located within a Natura 2000 area and 4 km from another Natura 2000 area (Birds).  The site is forested with black pine and locust trees planted ~40 years ago.  As required under the EU Habitats Directive, the Project has undertaken an Appropriate Assessment, which has been approved by the relevant authorities.  Further part of the site has been classified as Critical Habitat, as per PR 6 of the Bank’s policy, for two tortoise species.  The environmental authorities required, as part of the permit, that all tortoises are relocated from the site and the site fenced.  This has been undertaken.  The Project has also developed a Biodiversity Action Plan to achieve no net loss of critical habitat and the two tortoise species.  This together with additional mitigation measures as well as a commitment to progressive rehabilitation of the mine site will significantly reduce impacts to biodiversity. Tortoise monitoring takes place annually and will continue for the life of the Project.   The Project has undertaken a Social Impact Assessment (SIA), which considered impacts to villages near the mine site and Krumovgrad.  The SIA concluded that social impacts are expected to be limited following mitigation. The mine site is located on state land and no resettlement is required although the SIA did consider impacts to occasional and informal users of the mine site (gathering of mushrooms and firewood, etc.).  The Company has committed to high local employment targets and will further agree a social benefits package with the local municipality.  The Project does not involve a workers camp.   Air quality and noise issues have been sufficiently addressed in the ESIA and the necessary management measures developed.  Some of the earliest known gold mining activities took place on the Project site and during 2011 and 2012 the Project together with the Museum of the National Institute of Archaeology undertook investigations and excavations on site to remove and preserve various artefacts.  Mine waste and tailings will be stored in an integrated facility (IMWF), which will be progressively rehabilitated.  No impacts to groundwater are expected. The Project will recycle water as much as possible.  Water recovered from the IMWF will be collected, treated and re-used in the process.  The Project will be operate with a zero discharge approach and will only draw water from a permitted well during the drier months.  Various management plans have been prepared to address all environmental and social issues associated with the Project.  This includes a mine closure and rehabilitation plan.  All plans will be updated and revised as the Project progresses.
The Project regularly engages with local stakeholders and runs an information centre in Krumovgrad.  As part of the ESIA, the project has prepared a Stakeholder Engagement Plan to guide the disclosure of the ESIA package.  This is further supported with a Non-Technical Summary.  The ESIA package is available in Bulgarian and English and its availability was announced through local newspaper adverts in December 2014, when it was widely circulated in electronic and paper format to a variety of stakeholders  including local authorities and rural communities. The ESIA package is further available in the information centre in Krumovgrad and has been published on the Project and EBRD websites.  Consultation meetings took place during January 2015 and about half of them have been carried out to date. The meetings showed broad support in the municipality and the local communities, as well as high expectations regarding employment and other local economic development opportunities. Concerns during consultation meetings attended by EBRD related mainly to water quality and availability, potential adverse impacts on demand for local agricultural products, as well as effects on residential housing from blasting at the mine site. These and other questions were addressed adequately by the Company.  Meetings with local and national NGOs, as well as Krumovgrad’s mayor took place in February 2015. The ESAP was finalised post disclosure.  The Company will be required to submit environmental and social reports to the Bank quarterly during construction and annually during operation.
Q3 2017 Update
Construction works at the Krumovgrad mine site are in progress. DPM environmental and social reporting to the Bank and a monitoring visit by the EBRD in late 2017 has confirmed that good progress has been made on the implementation of the ESAP, a robust approach to E&S management is being implemented and good E&S performance has been demonstrated on site.  EBRD will continue to monitor the Project on a quarterly basis during construction.  
Chelopech and Deno Gold
The Project has been categorised B under the Bank’s Environmental and Social Policy. Due diligence has been carried out on the client’s corporate level Environmental, Health and Safety, and Social Risk Management procedures and the operational risk management at Chelopech. the mining operations at Deno, Armenia and the smelter operations in Namibia.
The information reviewed as part of due diligence has included previous corporate assessments; existing independent audit reports covering the Chelopech operations; Environmental and Social risk monitoring reports submitted to the Bank by DPM; publically available reports issued by DPM; and questionnaires completed by DPM corporate management and management from the operational facilities. In addition, an Independent Consultant was engaged as part of the due diligence process to visit the Chelopech and Namibian facilities and report back to the Bank on the findings of the audits carried out at these locations. . Bank staff visited the Deno operations during November 2012 with a full Independent audit completed during early 2013. It should be understood that the Namibian facility will not be the subject of Bank investment as it lies outside the Countries of Operation. The purpose of the visit to the smelter was to view environmental and social conditions at the smelter and to determine the robustness of management at that facility.
Due diligence has shown that DPM Environmental and Social Risk Management at the corporate level is robust and has improved during the time of the Bank’s relationship with the Company. Similarly, management capabilities at Chelopech in Bulgaria have improved and continue to improve. Management at the Deno facility was found to have the capabilities of managing the facility in line with the PRs.

An Environmental and Social Action Plan (ESAP) has been drafted and agreed in principle with the Company to update the previously agreed actions at the Chelopech facility, and to address issues identified during due diligence that are additional requirements requiring action to bring the operations into compliance with the Bank’s policy. The ESAP also included those actions identified during the due diligence visit to Deno as requiring implementation to bring the operations into compliance with the PRs. A key feature of the ESAP is that the Company has agreed to a due diligence structure associated with the Revolver facility whereby requests for disbursement are to be accompanied with a due diligence package for the use of proceeds which meets the requirements of the Bank’s Policy, specifically those outlined in Performance Requirement 1.

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation


Company contact

Dundee Precious Metals Inc.
1 Adelaide Street East
Suite 500, P.O. Box 195
Toronto, Ontario
M5C 2V9


Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

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