John Chadwick is currently in Bulgaria visiting Dundee Precious Metals (DPM)’ Chelopech copper mine. On May 10, DPM and its wholly-owned subsidiary, Chelopech Mining signed a $14.5 million long-term loan agreement with Raiffeisenbank (Bulgaria) EAD. This loan will be used to further assist in the financing of the Chelopech $150 million mine and mill expansion in Bulgaria, which is currently underway and will double mine and mill output to 2 Mt/y of ore.
Jonathan Goodman, President and CEO of DPM explains: “This completes $81.25 million in long term debt financing that was originally anticipated when we started the debt raising process. Although higher metal prices may preclude the need for the monies, we believe that conservative planning in these volatile markets, in addition to the flexibility gained from a syndicate of three institutions, is in the best interests of the company.”
The Chelopech mine is located in central-western Bulgaria approximately 70 km east of Sofia, 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 ha 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.
Chelopech has good infrastructure due to its proximity to major roads, power lines, communication facilities, water sources and the town of Pirdop.
Since the mine started in 1954, it has produced approximately 19.7 Mt of ore at just over 1.2% Cu. Production as a state-owned company reached 100,000 t/y in 1971. It quadrupled in 1976 following an expansion program and the construction of a new concentrator, peaking at 512,000 t/y in 1988 before trailing off rapidly between 1990 and 1992.
Prior to 1990, the Pirdop smelter, located 7 km 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 privatisation agreement with the Bulgarian government was completed. Navan operated the 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. Annual ore processed has increased from 523,810 t in 2004 to 1,000,781 t in 2010.