Dundee Precious Metals Reports on Progress of Acid Plant at Smelter in Namibia

TORONTO, ONTARIO--(Marketwire - July 24, 2012) -

(All amounts in US Dollars)

Dundee Precious Metals Inc. (TSX:DPM)(TSX:DPM.WT.A) ("DPM" or the "Company") has announced the completion of a feasibility study by SNC-Lavalin, Johannesburg, SA on the installation of a sulphuric acid plant (the "Project") at its Tsumeb smelter in Namibia, owned and operated by Namibia Custom Smelters (Pty) Ltd. ("NCS"), a wholly-owned subsidiary of DPM.

The proposed construction of an acid plant is the currently preferred option to capture sulphur from emissions at the smelter. DPM's board of directors has approved proceeding with the Project, subject to final costs estimates and commercial arrangements that provide for acceptable economics and the long-term marketing of the acid produced. The first phase of the Project, comprising basic engineering, site preparation, final costing and detailed scheduling, has been awarded to Outotec, the global leader in sulphuric acid plant design and delivery. Once complete, NCS anticipates entering into a definitive EPCM contract, including a turnkey contract relating to the construction of the acid plant. This is expected to occur during the fourth quarter of 2012.

The capital cost estimate for the Project, based on the Outotec tender, is $167 million, which includes a 30% contingency and excludes offsite infrastructure costs, which the Company is working to mitigate through various third parties. Based on expected annual smelter production capacity of 240,000 - 310,000 tonnes of concentrate, the acid plant will produce in the range of 270,000 - 340,000 tonnes of sulphuric acid. This Project is expected to be financed from DPM's current cash position and free cash flow generation which, even at significantly weaker commodity prices, is sufficient to satisfy its existing operating and capital requirements. Commissioning is currently expected to take place during the third quarter of 2014.

This Project is consistent with the directives issued to NCS by the Namibian government in April 2012 aimed at improving off-gas capture and workplace conditions at the smelter. The sulphuric acid plant will process off-gas from the smelter and the acid produced will be sold into the market through off-take agreements. NCS has entered into a memorandum of understanding with Protea Chemicals Namibia (Pty) Limited, a subsidiary of Omnia Group (Pty) Limited and a leading industrial chemicals company with significant presence in Sub-Saharan Africa, to assist with the marketing and sale of the acid.

"The construction of an acid plant is the final step in converting our smelter in Namibia to a facility that will operate at international environmental standards", said Jonathan Goodman, President and CEO of DPM. "We look forward to working with Outotec and utilizing their vast experience in acid plant design and construction."

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.