Dundee Precious Metals Announces First Underground Mineral Resource Estimate for the Shahumyan Polymetallic - Gold Deposit in Armenia

TORONTO, ONTARIO--(Marketwired - Aug. 29, 2013) - Dundee Precious Metals Inc. (TSX:DPM) (TSX:DPM.WT.A) (the "Company" or "DPM") today announced the results of its initial National Instrument 43-101 ("NI 43-101") underground Mineral Resource estimate for the Shahumyan deposit at its Kapan Mine in Armenia ("Kapan").

The Kapan polymetallic-gold underground mine is currently producing two saleable concentrates, namely a copper-gold-silver and a zinc-silver-gold concentrate, which are transported by road and rail to the Black Sea for export. In 2012, Kapan produced approximately 22,000 ounces of gold, 2.5 million pounds of copper, 15.5 million pounds of zinc and 450,000 ounces of silver.

Highlights:

• Indicated Mineral Resource of 2.8 million tonnes at an average gold grade of 5.2 grams per tonne gold equivalent ("AuEq"); containing approximately 237,000 ounces of gold and 467,000 ounces of AuEq at a AuEq cut-off of 2.24 g/t
  
  
• Inferred Mineral Resource of 10.6 million tonnes at an average gold grade of 4.5 grams per tonne AuEq; containing approximately 790,000 ounces of gold and 1,543,000 ounces of AuEq at a AuEq cut-off of 2.24 g/t
  
  
• Internal study on underground expansion to be completed in the first quarter of 2014
  
  

"A core component of our strategy is to maximize the potential of our current assets," said Rick Howes, President and CEO. "We have reached a major milestone in defining the potential for the Kapan Mine following the significant exploration drill program that began in 2007 and this initial resource estimate, which indicates the possibility for Kapan to become a more significant long term producer for Dundee Precious Metals."

Following completion of the Mineral Resource estimate prepared from both underground and surface drilling data, DPM believes that an expansion of the existing underground mine is the most likely option for the Kapan operation. An internal study will be conducted to further evaluate this project, which is expected to be completed in the first quarter of 2014.

The Mineral Resource estimate for the Shahumyan deposit at Kapan is set out below:

Dundee Precious Metals Kapan Shahumyan Deposit Mineral Resource Estimate as at January 31, 2013 Reported at a gold equivalent cut-off 2.24 Au g/t
Classification		Tonnes Mt		Au g/t		Contained Koz		Gold Equiv g/t		Ag g/t		Cu %		Zn %		Pb %		S %		Density
Indicated		2.8		2.6		237		5.2		50		0.4		2.1		0.2		2.4		2.73
Inferred		10.6		2.3		790		4.5		41		0.4		1.7		0.1		3.2		2.73

AuEq was calculated using the formula Au + (Cux1.34) + (Agx0.023) + (Znx0.42) and assumes metal prices of USD 1,250/oz Au, USD 25/oz Ag, USD 2.75/lb Cu and USD 0.85/lb Zn. The Mineral Resource estimate consists of DPM and historical drilling data. DPM has carried out significant additional surface diamond drilling ("DD") and reverse circulation ("RC") drilling since July 2007, contributing 41% of the data used for the Mineral Resource estimate.

The data used in the Mineral Resource estimate (mineralization and non-mineralized intervals) is presented below:

Drill Hole Type		Number of Holes		Total Meters
Reverse Circulation (RC)		102		9,962
Surface Diamond (SD)		598		170,192
Underground Diamond (UD)		92		33,211
Underground Historical Channel (UHC)		6,211		23,058
Surface and Underground Historical Diamond (UHD)		1,482		275,920
Total		8,485		512,343

DPM acquired Kapan in 2006 and has since conducted over 230,000 metres of surface and underground drilling. The completion of a Canadian Institute of Mining, Metallurgy and Petroleum compliant Mineral Resource for the Shahumyan deposit represents a significant milestone for DPM and is a compilation of data from more than 50 years of historic state-managed exploration activity as well as seven years of exploration by DPM.

The Shahumyan Deposit is an intermediate sulphidation epithermal vein-breccia system consisting of more than 80 steeply-dipping polymetallic quartz carbonate veins ranging between 0.2 to 3.5 metres in thickness. The veins have an approximate east-west strike of up to 500 metres and a known vertical extent of approximately 300 metres however most veins remain open at depth.

The Company continues to develop and upgrade Inferred Mineral Resources using three underground diamond drill rigs. Since the Mineral Resource estimate cut-off date of January 31, 2013, DPM has completed an additional 21,500 metres of underground drilling and 14,000 metres of surface drilling. Preliminary analysis shows a clear plunge component within high grade portions of the deposit which provides a firm basis for targeting high grade gold shoots. A program to test these high priority targets is expected to commence in September 2013. Drilling since the cut-off date was primarily infill drilling and based on the initial review of results is unlikely to have a material effect on the reported resource estimate.

DPM is actively exploring the surrounding 176.3km² Kapan Exploration License. The Company carried out a VTEM (versatile time domain electromagnetic) airborne geophysical survey over the entire license area in 2008. In addition, regional stream sediment geochemistry sampling and historic data are being used to identify target areas for mapping and trenching. Diamond drilling of priority targets is currently in progress.

Technical Information

The Mineral Resource estimate and other scientific and technical information contained in this news release was prepared by CSA Global (UK) Ltd. ("CSA"), in accordance with Canadian regulatory requirements set out in NI 43-101 Standards of Disclosure for Mineral Projects, and has been reviewed and approved by Malcolm Titley, B.Sc, MAIG, Director and Principal Consultant of CSA, an independent Qualified Person ("QP"), as defined under NI 43-101. The NI 43-101 technical report (the "Technical Report") entitled "NI 43-101 Technical Report, Shahumyan Project, Kapan, Republic of Armenia" dated July 29, 2013, in respect of the Mineral Resource Estimate disclosed herein, is being filed today on SEDAR at www.sedar.com. Richard Gosse, Senior Vice President, Exploration, and Edgar Urbaez, Corporate Director, Technical Services, both of DPM, who are QPs and not independent of the Company, have also reviewed and approved the contents of this release.

The Mineral Resource estimate contained herein may be subject to legal, political, environmental or other risks that could materially affect the potential development of such Mineral Resources. See the Technical Report for more information with respect to the key assumptions, parameters, methods and risks of determination associated with the foregoing Mineral Resource estimates.

Cautionary note to U.S. Investors concerning estimates of Mineral Resources. These estimates have been prepared in accordance with the requirements of Canadian securities laws, which differ from the requirements of U.S. securities laws. The terms "mineral resource", "measured mineral resource", "indicated mineral resource" and "inferred mineral resource" are defined in NI 43-101 and recognized by Canadian securities laws but are not defined terms under the U.S. Securities and Exchange Commission ("SEC") Guide 7 ("SEC Guide 7") or recognized under U.S. securities laws. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be upgraded to mineral reserves. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an "inferred mineral resource" will ever by upgraded to a higher category. Under Canadian securities laws, estimates of "inferred mineral resources" may not form the basis of feasibility or pre-feasibility studies. U.S. investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Accordingly, these mineral resource estimates and related information may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the U.S. federal securities laws and the rules and regulations thereunder, including SEC Guide 7.

ABOUT DPM

Dundee Precious Metals Inc. is a Canadian based, international gold mining company engaged in the acquisition, exploration, development, mining and processing of precious metals. The Company's principal operating assets include the Chelopech operation, which produces a gold, copper and silver concentrate, located east of Sofia, Bulgaria; the Kapan operation, which produces gold, copper, zinc and silver concentrate, located in southern Armenia; and the Tsumeb smelter, a concentrate processing facility located in Namibia. DPM also holds interests in a number of developing gold properties located in Bulgaria, Serbia, and northern Canada, including interests held through its 53.1% owned subsidiary, Avala Resources Ltd., its 45.5% interest in Dunav Resources Ltd. and its 9.9% interest in Sabina Gold & Silver Corp.

FORWARD-LOOKING STATEMENTS

This news release contains "forward-looking statements" that involve a number of risks and uncertainties. Forward-looking statements include, but are not limited to, statements with respect to future growth opportunities, the future price of gold and silver, the estimation of mineral reserves and resources, the realization of mineral estimates, the timing and amount of estimated future production and output, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending litigation. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved.
Forward-looking statements are based on the opinions and estimates of management and certain professionals as of the date such statements are made, and on certain assumptions, and they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any other future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among others: the availability of future growth opportunities, the actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold, copper, zinc and silver; possible variations in ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, fluctuations in metal prices, as well as those risk factors discussed or referred to in the Technical Report and other documents filed from time to time with the securities regulatory authorities in all provinces and territories of Canada and available at www.sedar.com. Although the Corporation has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Unless required by securities laws, the Corporation undertakes no obligation to update forward-looking statements if circumstances or management's estimates or opinions should change. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements.