CANADIANS WILL BUY BULGARIAN GOLD MINES
Dundee Precious Acquisition Ink, Canada, has been granted exclusive rights for negotiating the purchase of the Bulgarian companies of Navan Mining in Chelopech and Krumovgrad. The deal should be completed within three months. The sale of Navan Mining's Bulgarian assets is necessary as the Irish company was declared insolvent last year. Deutsche Bank also participates in the negotiations in its capacity of the bankrupt company's biggest creditor.The eventual buyer is under the umbrella of Dundee Precious Metals Ink, and the parent company is within Dundee Bancorp Group of Companies, whose business is connected with the development of gold mines. The Canadian company exploits a number of mines, among which International Corona Corporation and Kinros Golf Gold Corporation.Navan Mining's Bulgarian assets include the copper and gold mine in Chelopech and projects for the development of new deposits in the Rhodopes mountain. They are in the hands of the three Irish subsidiaries in Bulgaria - Navan Chelopech, Bimak - Chelopech, and Balkan Mineral and Mining, which manages the deposit in Krumovgrad.Navan Chelopech - the successor of the state-run Chelopech EAD - was exploiting copper-pyrites and gold mines. Bimak, registered in 1993, undertook the processing and marketing of the extracted concentrates and metals. The two companies were in the red in 2001. Bimak alone posted losses of BGN13MN that year. In the three months during which the Canadian company has exclusive rights for the purchase of the Chelopech-based units, it is obliged to carry out preliminary research for improving their operation. The economic effect resulting from an eventual change of the production equipment, that would allow production of copper and gold on the spot, is being studied. About 609,185 t of copper ore and 48,000 ounces of gold were extracted from the mine last year. The Canadian investor preestimates the necessary funds for expanding the mines' operation over the next year and a half at USD15MN. Investments should reach USD40MN within three years.According to the Executive Director of Dundee Precious Metals Ink Johnathan Goodman, the gold deposit in Chelopech is of a world class and lack of the necessary capital and managerial talent is the only reason for its unprofitability. The other subsidiary of the Irish company - Balkan Mineral and Mining - is prospecting the deposits in Krumovgrad, Nedelino and Djebel. It has currently concentrated its activities in the Ada Tepe area near Krumovgrad. The implementation of that project will be undertaken by the future buyer. According to the Canadians, the complete prospecting of the deposits in Ada Tepe will cost USD5.5MN, but they will be returned many times. The deposit near is expected to produce about 150,000 ounces of gold annually for a period of five-six year. The life of the future mine may be extended.