Dundee Precious Metals, Bulgaria in mine talks

Mon Mar 3, 2008 1:23pm EST
 
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TORONTO (Reuters) - Dundee Precious Metals Inc confirmed on Monday that it is in talks with the Bulgarian government on the planned expansion of its Chelopech copper and gold mine 65 kilometers (40.4 miles) east of Sofia.

Canada's Dundee, which explores and develops precious metal properties, said it would report the results of the discussions "in due course." The Bulgarian Minister of Economy and Energy had said on Friday that the government was negotiating with the company over the project.

"It is a step forward in the sense that we are discussing, we're sitting at a table right now with representatives from the coalition government, so that's a big improvement," vice president of investor relations Gabriela Sanchez told Reuters.

Sanchez said the company had agreed with the government not to disclose the issues being discussed.

A media report in Bulgaria over the weekend said the government had engaged in talks in a bid to increase its state fee by 10 percent.

Economy Minister Petar Dimitrov said in parliament on Friday "that the new share and fees could be put down in a new concession contract with ... Dundee Precious Metals, with respect to its proposal for the expansion of the mine," according to a report on the Sofia News Agency's Web site.

Last summer, the Canadian mining company lodged a complaint with the European Commission against Bulgaria after the environment minister refused to issue permits for its two gold mines for more than two years.

Shares of Dundee fell 4 Canadian cents, or 0.7 percent, to C$5.95 in afternoon trading on the Toronto Stock Exchange. This compares with a jump of about 3 percent on the gold producers subindex.

($1=$0.99 Canadian)

(Reporting by Leah Schnurr; Editing by Bernadette Baum)