Dundee Precious Metals Equity



Project number:


Business sector:

Natural resources

Notice type:


Environmental category:


Approval date:

14 Dec 2016



PSD disclosed:

23 Dec 2016

As permitted by paragraph 2.6 of Section III of the Access to Information Policy, disclosure of this PSD was deferred in accordance with paragraph 1.4.4 of the Directive on Access to Information.

Project Description

Equity investment to support the development of the Krumovgrad gold-silver project in south-eastern Bulgaria that involves construction of an open-pit mining and processing operation at the total project cost of USD 184 million (the "Project"). The Project is developed by Dundee Precious Metals, a Canadian publicly listed (TSX) gold and copper mining and processing company with operations and exploration prospects in Bulgaria, Serbia, Armenia and Namibia.


Project Objectives

Proceeds from the Bank's investment will be used to support the development of Krumovgrad gold-silver project. The Project will include a number of innovations that the Bank will contribute to finance, notably: (i) stage flotation reactors ("SFR") that will contribute to achieve high metal recoveries; (ii) an integrated mine waste facility ("IMWF"), that will economise the footprint of the project through co-disposal of mine waste and process tailings and yield considerable savings from dewatering and (iii) advanced telecommunications systems based on the "Internet of Things" and organisational practices that will enhance the operational efficiency and safety at the mine from the onset. Moreover, the mine will produce gold-silver concentrate thereby avoiding the use and disposal of cyanide on site.

Transition Impact

ETI score: 55

The proposed financing has the potential to generate positive transition impact through setting standards of business conduct - Economic Inclusion and Equal Opportunities ("EO").  The Project is expected to enhance economic inclusion of youth, gender and regions in Bulgaria. DPM will promote the development of skills through: a) local work-based learning and training opportunities and 2) its participation in a national industry working group to support the National Authority for Vocational Education and Training. It will also incorporate EO elements to its HR and social management policies, lessons learned to be replicated in other DPM operations. The EO component of the project is expected to enhance the opportunities for women accessing jobs.

Client Information


Dundee Precious Metals is a publicly-held Canadian company listed on the main board of Toronto Stock Exchange. The Company's has operating assets in Bulgaria and Namibia, and holds interests in a number of developing gold and exploration properties located in Bulgaria, Serbia and northern Canada.

EBRD Finance Summary

USD 40,000,000.00

 Equity investment in the amount of CAD 43.7 million (circa USD 32.7 million equivalent) subscription to 9.99% of the Company's shares.

Total Project Cost

USD 167,675,336.13

 Development cost of the Krumovgrad gold-silver project in south-eastern Bulgaria.

Environmental and Social Summary

Categorised B (2014 ESP). Through the proposed corporate equity investment, DPM is required to bring all of its operations and future projects in line with the EBRD's Performance Requirements (PRs), including those operations outside of the EBRD's countries of operation ("CoO"). Future category A projects, if any, will be subject to carrying out and disclosing an Environmental and Social Impact Assesment ("ESIA"). The proceeds of the investment will be used primarily to finance the planned Krumovgrad mine in Bulgaria, an EBRD project, which was subject to an ESIA, disclosure and consultation, and EBRD Board approval (21 April 2015). DPM has initiated earthworks activities and demonstrated satisfactory progress in implementing the Environmental and Social Action Plan ("ESAP") developed for the project. The Bank also provides debt financing to DPM through a revolving credit facility and term debt facility, the proceeds from which were primarily used to fund capital expenditures at DPM's Chelopech mine in Bulgaria. Regular monitoring has confirmed that DPM is satisfactorily implementing the Bank's requirements at Chelopech. EBRD will continue to monitor these projects. Through the equity investment the Bank is exposed to risks associated with all DPM operations and therefore the Bank focussed its due diligence ("ESDD") on DPM's third asset, its smelting facility in Tsumeb, Namibia. Namibia is not a CoO and the Bank's financing cannot be used in Namibia. The smelter is however a DPM operating asset and processes Chelopech and third party concentrate.  Therefore the associated environmental and social ("E&S") performance and risks needed to be assessed. DPM plans to expand the capacity of the smelter and is currently undertaking an ESIA to support this initiative.

The Tsumeb smelter is one of only a few smelters in the world able to treat complex copper concentrates that contain arsenic. Concentrates from Chelopech, as well as third party mines, are shipped to Tsumeb for processing. ESDD of the smelter was undertaken by an independent

consultant, and the EBRD, and included a site visit in August 2016. The smelter was commissioned in 1963 and has had various owners prior to DPM acquiring it in 2010. Since 2010, DPM has made significant investments to address occupational health and safety ("OHS"), including industrial hygiene, and environmental legacy issues associated with historic and current operations. Key investments include a sulphuric acid plant, which has significantly reduced SO2 emissions to the atmosphere and improved local air quality; engineering improvements to reduce fugitive emissions, including the installation of new bag houses to capture process dust; construction of a secure hazardous waste disposal facility for arsenic containing waste disposal; as well as improved monitoring and medical surveillance. The ESDD has, however, shown that despite these investments, additional improvements are required to bring the facility in line with the PRs. These required improvements are generally aligned with DPM's long term investment plan for Tsumeb.

A risk associated with the smelting of concentrate containing arsenic is how the arsenic, a by-product of the smelting process, is handled.  Arsenic is released during the smelting process and is captured by bag filters. Thereafter it is deposited in a hazardous waste disposal facility or it is directed to an onsite arsenic plant where it is converted into diarsenic trioxide (As2O3) and sold to producers of wood preservatives and pesticides. Since acquiring the smelter, DPM has implemented various engineering and administrative controls, a biomonitoring programme, and the use of Personal Protective Equipment ("PPE") to manage and monitor arsenic exposure levels. Through these measures, worker arsenic exposure, as indicated by arsenic in urine monitoring, has decreased on average across the facility but has not achieved the levels targeted by DPM. 

DPM recently announced that it would discontinue production of diarsenic trioxide and intends to close the plant on or about December 31st 2016, while continuing to take measures to reduce worker exposure and health risks in the interim. This, together with improvements in the industrial hygiene programme, will contribute to bringing conditions on site in line with international standards and also enable DPM to focus its management resources on continuing to optimise the smelter operation. Following closure of the arsenic plant, all arsenic containing materials will be disposed of to the onsite hazardous waste facility with offsite disposal options to be considered to address the longer term requirements of the facility. DPM is also evaluating alternative options to handle the arsenic containing materials in consultation with its stakeholders. These measures are also expected to reduce potential negative impacts from the smelter beyond the fence line. Biomonitoring and air quality monitoring activities will be enhanced to monitor the positive impacts of such measures.

The area has been actively mined for many decades and the smelter has been operating since the 1960's resulting in significant legacy impacts. Despite agreement from the authorities that DPM will not be responsible for legacy issues prior to DPM's acquisition in 2010, these legacy impacts present current and future risks to air quality, groundwater, land use and human health, which could be perceived to be associated with DPM as the current operator of the smelter. DPM intends to continue to monitor these legacy issues, and to the extent it is able, will assist the authorities with the implementation of measures to avoid or reduce potential impacts on the community and surrounding land users. This will include maintaining community air quality monitoring and community health initiatives. DPM is currently undertaking a community health assessment as part of its facility expansion ESIA. The results of this assessment will form part of the expansion ESIA and will be disclosed for consultation locally by DPM.

The ESDD included a review of the Tsumeb facility against EU Best Available Techniques ("BAT") for the sector. While improvements have been made, further measures are required to bring operations in line with EU BAT over time including the need for enhanced emission control and monitoring. OHS provisions are also to be improved including rigorous implementation of safe working procedures and contractor OHS performance and monitoring. DPM will review the facility against the EU Seveso III Directive to ensure that the necessary emergency scenarios have been considered, mitigation is implemented and that emergency response provisions are in place.

DPM is the main employer in Tsumeb and its human resources management is generally in line with PR 2. In the Tsumeb community, DPM maintains an information centre and regularly engages with stakeholders, discloses E&S information and maintains a grievance mechanism. DPM also delivers a community investment programme supporting local infrastructure and initiatives. DPM will also undertake to enhance its approach to information disclosure, including online disclosure of ESIAs and other relevant E&S information.

An ESAP has been agreed with DPM to bring the smelter in line with the PRs. Key actions are described above. The EBRD will monitor E&S performance and ESAP implementation at Tsumeb and undertake site visits as necessary.

Technical Cooperation and Grant Financing

 Non applicable.

Company Contact Information

Dundee Precious Metals Inc.
(416) 365 5191
(416) 365 9080
1 Adelaide Street East Suite 500, P.O. Box 195 Toronto, Ontario M5C 2V9 Canada

Implementation summary

The EBRD financing supported the development of the Krumovgrad gold-silver project in south-eastern Bulgaria that involved the construction of an open-pit mining and processing operation at the total project cost of USD 164 million (the "Project"). The Project was developed by Dundee Precious Metals, a Canadian publicly listed (TSX) gold and copper mining and processing company with operations and exploration prospects in Bulgaria, Namibia, Serbia and Ecuador.

DPM completed Ada Tepe mine (the new name for Krumovgrad project) construction three months later than projected but under budget and achieved a record high gold production in 2019. The company de-risked and diversified its production base as it successfully moved from a single asset to a multi-asset gold producer.

As part of Transition Impact, the Company made good progress on both economic inclusion and skills transfer benchmarks. Regarding inclusion, an internship program has been implemented in 2019 and since then it takes place every year. The Company participates regularly in a number of career events.

On skills transfers and local development, several benchmarks have been achieved. Prior the operations launch, together with the Vocational School of Transport in the Municipality of Krumovgrad the Company established programme focused on maintenance skills which was open for enrolment to the citizens of the municipality. Upgrades have been made to the Vocational School of Transport in the Municipality of Krumovgrad. Equal Opportunities governance has been strengthened and best HR practices have been promoted, and the company is reporting in line with GRI standards.

Company developed and established Micro, Small and Medium Enterprises Fund (MSME) in July 2019. The MSME objective is to create jobs for local community which are not related to Company business needs. Until today 95 new working places are created successfully in Krumovgrad municipality.

PSD last updated

23 Jun 2022

Understanding Transition

Further information regarding the EBRD’s approach to measuring transition impact is available here.

Business opportunities

For business opportunities or procurement, contact the client company.

For business opportunities with EBRD (not related to procurement) contact:

Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

For state-sector projects, visit EBRD Procurement:

Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

Specific enquiries can be made using the EBRD Enquiries form.

Environmental and Social Policy (ESP)

The ESP and the associated Performance Requirements (PRs) set out the ways in which the EBRD implements its commitment to promoting “environmentally sound and sustainable development”.  The ESP and the PRs include specific provisions for clients to comply with the applicable requirements of national laws on public information and consultation as well as to establish a grievance mechanism to receive and facilitate resolution of stakeholders’ concerns and grievances, in particular, about environmental and social performance of the client and the project. Proportionate to the nature and scale of a project’s environmental and social risks and impacts, the EBRD additionally requires its clients to disclose information, as appropriate, about the risks and impacts arising from projects or to undertake meaningful consultation with stakeholders and consider and respond to their feedback.

More information on the EBRD’s practices in this regard is set out in the ESP.

Integrity and Compliance

The EBRD's Office of the Chief Compliance Officer (OCCO) promotes good governance and ensures that the highest standards of integrity are applied to all activities of the Bank in accordance with international best practice. Integrity due diligence is conducted on all Bank clients to ensure that projects do not present unacceptable integrity or reputational risks to the Bank. The Bank believes that identifying and resolving issues at the project assessment approval stages is the most effective means of ensuring the integrity of Bank transactions. OCCO plays a key role in these protective efforts, and also helps to monitor integrity risks in projects post-investment.

OCCO is also responsible for investigating allegations of fraud, corruption and misconduct in EBRD-financed projects. Anyone, both within or outside the Bank, who suspects fraud or corruption should submit a written report to the Chief Compliance Officer by email to compliance@ebrd.com. All matters reported will be handled by OCCO for follow-up. All reports, including anonymous ones, will be reviewed. Reports can be made in any language of the Bank or of the Bank's countries of operation. The information provided must be made in good faith.

Access to Information Policy (AIP)

The AIP 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 following its entry into force on 1 January 2020. Please visit the Access to Information Policy page to find out what information is available from the EBRD website.

Specific requests for information can be made using the EBRD Enquiries form.

Independent Project Accountability Mechanism (IPAM)

If efforts to address environmental, social or public disclosure concerns with the Client or the Bank are unsuccessful (e.g. through the Client’s Project-level grievance mechanism or through direct engagement with Bank management), individuals and organisations may seek to address their concerns through the EBRD’s Independent Project Accountability Mechanism (IPAM).

IPAM independently reviews Project issues that are believed to have caused (or to be likely to cause) harm. The purpose of the Mechanism is: to support dialogue between Project stakeholders to resolve environmental, social and public disclosure issues; to determine whether the Bank has complied with its Environmental and Social Policy or Project-specific provisions of its Access to Information Policy; and where applicable, to address any existing non-compliance with these policies, while preventing future non-compliance by the Bank.

Please visit the Independent Project Accountability Mechanism webpage to find out more about IPAM and its mandate; how to submit a Request for review; or contact IPAM  via email ipam@ebrd.com to get guidance and more information on IPAM and how to submit a request.


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