Dundee Precious Metals Provides Update on Production Levels at Its Tsumeb Smelter in Namibia

TORONTO, ONTARIO--(Marketwire - July 11, 2012) - Dundee Precious Metals Inc. (TSX:DPM)(TSX:DPM.WT.A) ("DPM" or the "Company") has announced that, further to instructions issued by the Namibian Minister of Environment and Tourism (the "Minister") in April 2012 to implement a reduction in feed to the smelter, the Minister's Technical Committee (the "Committee"), with the approval of the Minister, has now authorized an immediate production increase to 75% of the smelters normal operating capacity. At this level, the smelter, owned and operated by Namibia Custom Smelters ("NCS"), a subsidiary of DPM, is capable of processing all current and future concentrate production by the Company's Chelopech mine in Bulgaria.

The agreed production increase will allow the Committee to independently measure emissions in the smelter aisle to confirm that NCS' fugitive dust management improvement projects, aimed at improving off-gas capture and workplace conditions to better comply with national standards, are performing as required. This action is consistent with the Cabinet directive.

This phase in the process of complying with the Cabinet directive is based on completion of a number of upgrades in the smelter aisle over the last two months as part of the ongoing Project 2012, which is designed to improve emissions controls in the smelter generally. The Company is itself monitoring, and will continue to monitor, the performance of the upgrades and workplace air quality to verify that improvements are operating as required by the Minister and the Company is satisfied with its own monitoring data. Dialogue regarding further phases or next steps will depend on verification that during this production increase NCS is continuing to provide for adequate protection of employee health. Further increases in production may be authorized by the Committee following such dialogue. The Company is confident that improvements in the workplace will continue as Project 2012 proceeds and looks forward to continuing discussions with the Committee.

In addition, the Committee acknowledged the newly developed schedule for the installation of a sulphuric acid plant, which provides for commissioning of the plant in the third quarter of 2014. The schedule for this project will be reviewed with the Committee and the Company's engineering contractors in August to ensure that any opportunities for acceleration are identified and managed, that risks to the schedule are identified and that processes are in place to manage those risks. This will include consideration of in-country infrastructural risks. Following this review, a process for formal approval and ongoing review and monitoring will be established.

"We are encouraged by the support of the Minister and her technical committee of our environmental initiatives as evidenced by their decision to allow us to start increasing production at the smelter", said Jonathan Goodman, President and CEO of DPM. "We look forward to completing the balance of Project 2012 as quickly as possible and resuming normal production levels. We would also like to acknowledge the support of the local community, the Union and our employees during this difficult time."

Dundee Precious Metals Inc. is a well-financed, 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 51.4% owned subsidiary, Avala Resources Ltd., its 47.3% interest in Dunav Resources Ltd. and its 10.7% interest in Sabina Gold & Silver Corp.

FORWARD LOOKING STATEMENTS

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.