Dundee Precious Metals Inc.

Dundee Precious Metals Inc.

June 06, 2007 14:32 ET

Media Release: DPM Files Formal Complaint With the European Commission Against Bulgaria

Conduct of Minister of Environment and Waters Triggers Infringement Complaint

BRUSSELS, BELGIUM--(Marketwire - June 6, 2007) - Dundee Precious Metals Inc. (TSX:DPM) ("DPM" or "the Company") has, through its wholly-owned subsidiaries located in the Netherlands, filed a formal complaint with the European Commission against the Bulgarian Government. The complaint states that the Minister of Environment and Waters, Mr. Dzhevdet Chakarov, failed to perform his obligations and that his inaction is in direct violation of several provisions of community law, including:

- Freedom of Establishment and Free Movement of Services under Articles 43 and 49 of the EC Treaty;

- Free Movement of Capital under Article 56 of the EC Treaty;

- Breach of the functioning of the Internal Market under Article 37 of the 2005 Admission Protocol; and

- The Rule of Law, namely Articles 6 and 7 of the EU Treaty.

Specifically, the complaint references permits for two mining projects in Bulgaria -- the Krumovgrad Gold Deposit and Chelopech Copper/Gold Expansion Project -- both of which have pending permits dating back to November 2005. These permits remain pending despite the Company being awarded First Class Investor certificates for Chelopech and Krumovgrad from the Bulgarian Investment Agency in March 2005. These certificates entitle the holder to special "investor servicing," including expedited administrative approval time lines.

For Krumovgrad, the Minister for Environment and Waters failed to submit DPM's environmental impact assessment (EIA) to the Supreme Expert Environmental Council (SEEC) for review by a November 2005 legislative deadline. No reason has been offered for the Minister's refusal to initiate the review process. For Chelopech, the Minister disregarded the SEEC's two separate approvals, and failed to issue the permit by the March 2006 legislative deadline. The Chelopech EIA meets all Bulgarian and EU environmental standards and the technology being proposed has been approved for use in a mining project in Finland. Again, the Minister has offered no lawful reason for his failure to act.

On April 26, 2007, the five-member Bulgarian Supreme Administrative Court issued a final order to Minister Chakarov that he either reject or approve the Chelopech EIA. Despite the Court's clear directions, on May 28, 2007, in a request to the same Court, Minister Chakarov announced that he will most likely ask DPM to once again carry out an EIA at Chelopech. A final Court decision instructing the Minister to render a decision on the Krumovgrad EIA is also expected soon.

"We have made a significant investment in Bulgaria and plan to invest more. Despite following all governmental guidelines, we have been refused the necessary environmental permits to expand our operation at Chelopech and develop our project at Krumovgrad" said Mr. Jonathan Goodman, President and Chief Executive Officer, Dundee Precious Metals Inc.

DPM has requested that the European Commission exercise its full powers to investigate the ongoing failure of the Minister to perform his lawful obligations. The complaint will be assessed by the Commission who will then decide whether or not to open an infringement procedure against the State of Bulgaria for failing to comply with its obligations under the EU and EC Treaties.

"Minister Chakarov's conduct is clearly a significant concern to those who want to expand and invest in the EU's newest Member State. We hope the European Commission takes the necessary measures to remedy the situation so DPM can continue to play a positive role in Bulgaria's future," said Mr. Laurie Marsland, Executive Vice President and Chief Operating Officer of Dundee Precious Metals Inc.

Following an approved international auction process, the Company acquired the mining concession of the Chelopech deposit and the Krumovgrad exploration license out of receivership from Deutsche Bank in September 2003. The Bulgarian government supported the sale of Chelopech to DPM. As of March 31, 2007, at Chelopech, the Company has spent or made commitments of EUR 98.5 million (US$131.3 million). At Krumovgrad, the Company has spent EUR 37.6 million (US$50.2 million). Together, this represents a total investment of EUR 136.1 million (US$181.5 million) in these two projects, inclusive of acquisition costs. If it secures the necessary permits, DPM plans to invest an additional EUR 146.1 million (US$194.8 million) in both projects.

About Dundee Precious Metals Inc.

Dundee Precious Metals Inc. is a Canadian based, international mining company engaged in the acquisition, exploration, development and mining of precious metals. Its common shares (symbol DPM) are traded on the Toronto Stock Exchange. DPM 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, the Company owns the Back River gold exploration project in Nunavut, Canada and an 80% interest in the Kapan Mine in Armenia. DPM also holds a significant and strategic portfolio of investments in the precious metals and mineral related sector.

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