Dundee Precious Metals Inc.

Dundee Precious Metals Inc.

November 05, 2007 05:45 ET

DPM Exploration Delivers Major New Molybdenum-Rhenium Project in Serbia; Scoping Study Underway

TORONTO, ONTARIO--(Marketwire - Nov. 5, 2007) - Dundee Precious Metals Inc. (TSX:DPM)(TSX:DPM.WT) (the "Company" or "DPM") announced that its exploration team in Serbia has confirmed a major zone of molybdenum-rhenium mineralization at its Surdulica exploration license area, located in southeast Serbia.

"I am very proud to inform our shareholders today of what we believe are only the initial achievements of our exploration team in Serbia", said Jonathan Goodman, President and Chief Executive Officer of DPM. "These compelling results confirm the excellence of our team in identifying opportunities and support our strategy of increasing shareholder value through aggressive exploration programs that in the shortest timeframe can dramatically increase our mineral resources and develop projects that will advance our growth into a mid cap producer," he added.


- Exploration program, including soil sampling, geological mapping and channel sampling, confirms zone with footprint of over 5km by 3km, identified by previous mining, exploration, rock chip sampling and diamond drilling.

- "Proof of concept" diamond drilling at the Mackatica and Borovik prospects also confirms tenor, thickness and geometry of historically identified mineralized zones, including the following cumulative drill hole intercepts from DPM diamond drilling:

-- MCD002 118m at 881ppm (0.088%) Mo

-- MCD003 198m at 748ppm (0.075%) Mo

-- BVD004 106m at 677ppm (0.068%) Mo

-- BVD005 125m at 665ppm (0.067%) Mo

- Historical resource estimate (B-C1-C2 categories) of 121 million tonnes at 0.06% Mo (not Canadian National Instrument 43-101 ("NI43-101") compliant) provides an encouraging exploration targeting tool along with the historical diamond drilling database.

- Aggressive exploration program underway within mineralized footprint includes 9 diamond and reverse circulation drill rigs.

- Detailed geological mapping indicates known mineralized zones within the "footprint" are contiguous.

- Preliminary metallurgical testwork indicates soft ore with encouraging Mo recoveries (12.5 BWI, 85% Mo recovery, 53% Mo in the concentrate).

- Project area with attractive logistics located within 10km of major highways, power and rail facilities in the centre of Europe and within 30km of an established commercial centre.

- DPM plans to complete the scoping study in Q2 2008 to define the parameters for and immediately initiate the pre-feasibility study.

The Surdulica exploration license, for a current total area of 81.75 sq km, was granted to DPM in 2005 and is located in southeast Serbia, approximately 330 km south of Belgrade, and about 50 km from the border with Bulgaria, as shown in Figure 1. The regional centre of Surdulica lies 30 km by road to the southeast of the project area. Access and logistics are excellent, with the main Belgrade-Skopje highway, the Serbian power grid and main rail system located 10 km from the centre of the project area, as shown in Figure 2. The project thus has direct and easy access into the European transport and power network.

The Surdulica project is located in the Tertiary age (Oligocene-Miocene) Besna Kobila-Osgovo metallogenic belt which is characterized by magmatism of granodioritic composition. Numerous occurrences of molybdenum, copper, tungsten, lead and zinc are known throughout the belt, some of which have been mined in the past. Figure 3 summarizes the geology of the Surdulica license area.

The central part of the Surdulica license is dominated by a dacite of Tertiary age that has been intruded into basement schists of predominantly Paleozoic age. The boundary of the dacite body is very irregular where it has intruded along the prevailing NNW-SSE fabric of the basement schists. Numerous apophyses of the dacite are present within the schists, and numerous xenoliths or pendants of schist are contained within the dacite. The northern part of the Surdulica granodiorite dominates the south of the license. This intrusive is also Tertiary but is slightly older than the dacite bodies to the north and east.

The Surdulica dacite appears to be a complex polyphase intrusion, with at least one phase apparently post-dating mineralization. Intensive silicification, sericitisation and K-feldspar alteration is associated with the dacite intrusion and the contact zone with the basement schists, and the alteration zones are host to the molybdenum mineralization. The molybdenum mineralization occurs as vein, stockwork and disseminated styles. Initial structural analysis has indicated that there are several phases of quartz veining associated with molybdenum mineralization and it is evident that molybdenum mineralization has been a protracted event. Molybdenum and rhenium mineralization are hosted by a paragenetically late set of veins and fracture infillings that are spatially associated with pre-existing alteration and quartz-dominated veins. At both Mackatica and Borovik, vein arrays have approximately E-W strikes and steep dips to the north. Detailed geological mapping suggests that Mackatica and Borovik are part of a contiguous mineralized body.

The first recorded work at Mackatica was completed between 1928 and1930 and included the completion of one 94m long exploration adit and a few shorter exploration adits. No data is available from this period. In 1938 a German company, Jugomontan, began exploring the Mackatica prospect, extended the underground adits and the first molybdenite was produced in 1942. Mining was completed from underground and open pit, with the ore being transported along a cable-car system to a flotation plant at Belo Polje, 14 km from Mackatica. Records indicate that processing rates began at 400 tonnes per hour and increased to 2,400 tonnes per hour. The operation was closed down in 1947 due to non-profitability. Records suggest that approximately 440,000 tonnes of ore were processed for 113 tonnes of molybdenum metal. In 1954 several adits were re-opened, cleaned and sampled in order to complete tungsten exploration by a company in partnership with the Geoinstitute of Belgrade during the period 1954 to 1956. Between 1960 and 1962 the adits were opened once again for the purpose of exploring Mackatica for molybdenum mineralization. The adits were cleaned, mapped and sampled and the data was used to calculate the contained resources of molybdenum at Mackatica. A new phase of exploration began in the early 1970's with 50 metre spaced ridge and spur soil and rock chip sampling being completed around the Mackatica area and the collection of heavy mineral panned concentrate samples. Detailed geological and alteration mapping was also completed. This rock sampling led to the discovery of the Borovik deposit approximately 1 km northeast of Mackatica, and several other occurrences including Pavlovoj Dolina, located approximately 1km south of Mackatica. A program of 4,597 metres of diamond drilling in 25 angled drill holes was then completed to assess the various anomalies, in particular Borovik, where the deposit was assessed by 18 holes drilled on a 100 metre by 100 metre spacing and the remainder were drilled on other prospects in the area such as Pavlovoj Dolini and Groznatova Dolini.

Figure 4 displays a plan, prepared during previous exploration by Serbian government geologists, showing the extent of molybdenum occurrences in 'panned' concentrate samples in the Mackatica - Borovik area, indicating a +5km by +3km 'mineralized footprint'. Ridge and spur soil sampling by DPM has confirmed the extent of this 'footprint', as shown in Figure 5.

Figure 6 shows a cross section through Mackatica. DPM's 'proof of concept' drilling has confirmed the geometry of the mineralized zones that comprise the historic Mackatica resource estimate.

DPM has compiled the available historical drilling data into spatial database for comparative purposes. The historical data does not comply with the standards of NI43-101, however, comparison between the available DPM drilling data and the historical data indicates that the historical data has very similar mineralization characteristics (average intersection thickness per hole and average grade) thus forming an extremely useful exploration vectoring tool. Table 1 summarizes the molybdenum intersection data from the historical drilling database and Figure 7 displays the historic drill hole locations. In summary, 24 holes contain an average cumulative intersection of 70 metres per hole at 524ppm Mo at a 250ppm Mo cut off. The information is considered particularly encouraging given the wide geographic distribution of the drilling. For example, holes M20 and M23 are located over 200m east and north of Borovik respectively, hole M01 is located 200m east of Mackatica and holes M4 and M25 are located at Pavlovoj Dolini, approximately 1.5km south of Mackatica.

Serbian government geologists compiled resource estimates under the Soviet system which are summarised in Table 2. These resources do not form part of the Serbian register of economic state resources. DPM is unaware of the precise method of calculating the resources but understands that a classical polygonal method was used. These Soviet era 'resources' do not conform to NI43-101 and date back to the period 1983 to 1988 and, accordingly, should not be relied upon by investors. DPM is using this information as an exploration targeting tool.

Historic metallurgical work was completed that showed that the Mackatica and Borovik mineralization was amenable to flotation, producing a concentrate of between 30 and 50% molybdenum metal. The concentrate was also shown to contain values of between 150 and 185 g/t of Rhenium.

DPM initiated exploration on the Surdulica exploration license in 2005 and duplicate stream sediment samples were collected from a total of 95 sites throughout the license area, which were then submitted for BLEG analysis for gold, silver and copper and for ICP/AAS analysis for a suite of 50 elements. The stream sediment programme produced a strong molybdenum-tungsten anomaly in the Mackatica-Borovik area. In addition gold-copper anomalies exist external to the molybdenum-tungsten anomalous zone. Rock chip samples were also collected during 2005 and 2006 and returned anomalous molybdenum, copper and gold results.

A total of 1,340 ridge and spur soil samples were collected at approximately 100m intervals along ridges during 2006 and 2007 and were analyzed by ICP/AAS analysis for a suite of 50 elements. Figure 5 displays the available molybdenum results, 'draped' on a QuickBird satellite image, which show a significant 4km by 2km anomalous 'footprint'. Follow up soil sampling on a 200m by 50m grid has been completed and infill sampling on a 100m by 50m grid is underway. Results are awaited for the follow up soil sampling program of approximately 2,700 samples.

DPM is carrying out a programme of detailed geological mapping (1:1000 and 1:2500 scale) and ground magnetic surveying over the anomalous 'footprint'. Geological mapping has shown that the Mackatica and Borovik areas form parts of a contiguous mineralized zone.

Channel sampling is being undertaken on access roads as they are developed. A one metre sampling interval has been used and, to date, a total of 2,426 samples have been collected at Mackatica and 899 samples from Borovik. Available results show that the mineralization is exposed at surface throughout the areas sampled. Table 3 shows selected channel sampling intersections, based on a 250 ppm Mo cut off, 3 metres minimum width and a maximum of 3 metres internal dilution and a minimum 'Mo accumulation' of 8,000 (Mo grade multiplied by intersection width). At Mackatica some 406m of channel samples report above 250ppm Mo with an average grade of 487ppm Mo, while at Borovik 243m of channel samples return an average grade of 528ppm Mo.

DPM has begun an aggressive programme of diamond and reverse circulation drilling based on an initial planned four phase programme as follows:

- Phase 1: 'Proof of concept' drilling at Mackatica and Borovik; 8 holes at Mackatica for 1,701m (MCDD001 to MCDD008) and 9 holes at Borovik for 2,140m (BVDD001 to BVDD009). The 'proof of concept' drilling has been completed. At Mackatica a 'fence' of angled drill holes was completed approximately parallel with the long axis of the known deposit and normal to the dip and strike of the mineralized zones; whilst at Borovik the programme has approximately 'twinned' previous drilling.

- Phase 2: Second Phase Mackatica; 44 holes for 12,700m to test a 400m by 700m area on an 80m x 80m hole spacing with an approximate 300m average hole depth. This phase is currently underway.

- Phase 3: Third Phase Mackatica; extension drilling on an 80m x 80m spacing to extend coverage to the east, southeast and northeast; 26 holes for 7,325m.

- Phase 4: Second Phase Borovik; 38 holes for 10,990m to test a 500m by 500m area at an 80m by 80m spacing.

DPM currently has 9 drill rigs at Surdulica. To date 42 holes have been completed at Mackatica (MCDD001 to MCDD037 and MCRC001 to MCRC004 for a total of 9,062m of diamond drilling and 838m of RC drilling) and 9 holes at Borovik (as part of the "proof of concept" drilling). Figure 8 shows the location of DPM drill holes at Mackatica and Borovik, with a QuickBird satellite image as a background.

Encouraging results have been returned from both the Mackatica and Borovik 'proof of concept' drilling as shown in Table 4. In addition, the sensitivity of 'contained metal' in drill intersections to cut off grade at Mackatica has also been assessed, using the first 10 diamond drill holes, which has shown the intersections are robust. A change from a 150ppm Mo cut off to a 300ppm Mo cut results in less than 6% change in 'contained metal' (intersection width multiplied by molybdenum grade). Table 5 displays intersection details at 250ppm Mo cut off for the available DPM drilling at Mackatica while Table 6 displays intersection details for Borovik.

A stringent quality assurance programme has been instituted throughout all DPM sampling programmes, including the following; full duplicate and replicate sampling, replicate analyses by different methods at the SGS Lakefield Laboratories ("SGS") managed laboratory at Chelopech (multi-acid digest/AAS and ICP/AAS); use of internationally accredited analytical standards, referee analysis at SGS in Canada, including low level analysis for rhenium by ICP/MS. Routine low level analysis for rhenium by ICP/MS has been instituted. Results to date indicate a 98% correlation between molybdenum and rhenium grades in core and 89% correlation from channel samples (which are subject to variable levels of oxidation).

A programme of preliminary metallurgical testwork has been initiated, using drill core from the first 5 diamond core holes from Mackatica. NQ and HQ quarter core was used to provide a series of samples which were carefully selected to cover a range of depths (surface to 250m vertical), molybdenum grades (high grade to waste), rock types (dacite, schist and amphibolite), rock weathering and hardness. Some 186kg (184m) of ore grade intercepts and 44kg of waste (45m), a range of sulphur content (+6% to less than 1%, averaging 1% to 3%) were selected. The samples were dispatched, along with all available analytical data to SGS. SGS prepared three key composites; high grade (0.11% Mo, 0.3ppm Re), medium grade (0.07% Mo, 0.2ppm Re) and low grade (0.04% Mo, less than 0.1ppm Re), using a total of 46kg of samples. Preliminary results have been received to date from this initial testwork and include the following information: soft to medium ore (SAG power index - 50th percentile at 50 minutes, 12.5 to 12.7 kw/hr Bond Ball Mill Index), encouraging recoveries (85% on the medium and high grade composites) with 53% Mo in the concentrate. To date, no deleterious elements have been detected in any of the samples assessed. DPM is very encouraged with this initial testwork, which will form part of a routine appraisal of mineralization at Surdulica, as part of DPM's standard project assessment procedures.

DPM has also initiated a scoping study at Surdulica encompassing all aspects of a typical programme, from environmental and social sustainability aspects through to logistics, economics and all technical aspects. The scoping study will be used to define the parameters for a pre-feasibility study. DPM plans to complete the scoping study in Q1 2008 and will immediately initiate the pre-feasibility study.

Dr Julian F. H. Barnes, a qualified person under 43-101 and Executive Vice President of DPM, has supervised the preparation of the technical data included in this press release.

An analyst conference call is scheduled for today, Monday, November 5, 2007 at 8:30 a.m. (EST), to discuss these exploration results and will be webcast live, audio only, at http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=69218&eventID=1686003. The audio webcast for this conference call and the corresponding slides will be archived and available on the Company's website at www.dundeeprecious.com

Dundee Precious Metals Inc. is a Canadian based, international mining company engaged in the acquisition, exploration, development and mining of precious metals. It currently owns the Chelopech Mine, a producing gold/copper mine, and the Krumovgrad Gold Project, a mining development project, both located in Bulgaria, and is engaged in mineral exploration activities in Serbia. In addition, Dundee Precious owns the Back River gold exploration project in Nunavut, Canada and an 80% interest in the Kapan Mine in Armenia. The Company also holds a significant and strategic portfolio of investments in the precious metals and mineral related sector.


This news release may contain certain information that constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as "plan," "expect," "project," "intend," "believe," "anticipate" and other similar words, or statements that certain events or conditions "may" or "will" occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices and other factors described above and in the Company's most recent annual information form under the heading "Risk Factors" which has been filed electronically by means of the Canadian Securities Administrators' website located at www.sedar.com. The Company disclaims any obligation to update or revise any forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

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