Canadian-based Dundee Precious Metals (DPM) has secured a major supply contract with China’s Xiangguang Copper (XGC), for up to 200,000 tonnes of pyrite concentrate annually from its Chelopech mine in Bulgaria.
The company says the pyrite concentrate will be produced during stage 1 of its gold-in-pyrite recovery project which is expected to result in up to 30,000 ounces of payable gold being produced each year.
“We are extremely pleased with this arrangement with XGC which secures a sales outlet for our clean Chelopech pyrite concentrate,” says DPM’s president Jonathan Goodman. “This not only generates cash flow on previously unrecovered gold ounces for relatively low capital while we continue the evaluation and execution of stage 2 of our project, it also establishes that there is an expanding market for our pyrite products.”
XGC’s chairman Liu Xuejing says XGC is very happy to provide solutions to DPM with its unique technologies and skills. “The cooperation between the two companies will be mutually beneficial and complementary.”
Chelopech is an underground gold, copper and silver mine, east of capital Sofia, which produces a copper concentrate with metal recoveries averaging 55%, 85% and 42%, respectively. DPM has confirmed there is potential to recover most of the unrecovered gold, silver and copper in pyrite, which is currently rejected in the flotation process to ensure a saleable copper concentrate.
Once Bulgarian regulatory approval is received, reconfiguration of the Chelopech mill will consist of the installation of a new flotation, thickening and filtration system, creating a pyrite concentrate circuit. This US$23 million reconfiguration is expected to be completed by the end of 2013.
The agreement provides for XGC to purchase up to 200,000 tonnes of pyrite concentrate annually from DPM subsidiary Chelopech Mining EAD, from 2014 to 2016. There is also the possibility of a further sale of up to 50,000 tonnes of pyrite concentrate during 2013, subject to confirming the capability of the existing mill process equipment to produce moderate amounts of pyrite concentrates in batch runs. XGC has also agreed to purchase a minimum of 24,000 tonnes of Chelopech copper concentrates in 2013.
The sale of the pyrite concentrate to XGC will generate initial cash flow while the remaining phases of stage 2 of the project are being designed, permitted and constructed.
XGC is one of the world’s largest modern copper smelting companies in China. Its smelter plant, in Yanggu, Shandong province, employs the advanced double flash smelting technology and is operated with high cost efficiency and superior environmental standards.