Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or “the Company”) today announced that it has entered into an investment agreement (the “Agreement”) with Velocity Minerals Ltd. (TSXV: VLC) (“Velocity”) to invest up to C$7 million in Velocity on a private placement basis. DPM is expected to purchase up to 14 million common shares of Velocity at a price of C$0.50 per share. Upon closing the transaction, DPM is expected to own approximately 9.99% of Velocity’s issued and outstanding common shares on a non-diluted basis.
Velocity is a gold exploration and development company focused on southeastern Bulgaria. Velocity has a 70% interest in the Tintyava prospecting licence, which includes the Rozino gold project (“Rozino”), located approximately 40 kilometres by road from DPM’s Ada Tepe mine. Velocity’s 70% interest in Rozino is held through a joint venture arrangement with a local third party. On October 15, 2020, Velocity filed a pre-feasibility technical report on Rozino which contained a probable mineral reserve estimate (effective as at August 30, 2020) at a 0.5 g/t gold cut-off grade of 11.8 Mt at 1.22 g/t gold for 465,000 ounces.1 Velocity also has option agreements to earn a 70% interest in the Obichnik and Makedontsi gold projects; and an option agreement to earn a 100% interest in the Iglika project.
“We are pleased to be investing in further gold exploration in southeastern Bulgaria through our equity financing in Velocity,” said David Rae, President and CEO of Dundee Precious Metals. “Given our strong presence and capabilities in the region, we believe that we are uniquely positioned to support Velocity as a strategic shareholder.”
The Agreement contains certain rights and restrictions customary for these types of transactions. Subject to approval of the TSX Venture Exchange and other closing conditions, the transaction is expected to close on or about November 24, 2020. All securities issued in connection with the transaction will be subject to a hold period of four months and one day in Canada.
About Dundee Precious Metals Inc.
Dundee Precious Metals Inc. is a Canadian based, international gold mining company engaged in the acquisition of mineral properties, exploration, development, mining and processing of precious metals. The Company’s operating assets include the Chelopech operation, which produces a gold-copper concentrate containing gold, copper and silver and a pyrite concentrate containing gold, located east of Sofia, Bulgaria; the Ada Tepe operation, which produces a gold concentrate containing gold and silver, located in southern Bulgaria; and the Tsumeb smelter, a complex copper concentrate processing facility located in Namibia. DPM also holds interests in a number of developing gold and exploration properties located in Canada, Serbia and Ecuador, including its 9.4% interest in Sabina Gold & Silver Corp. and its 19.4% interest in INV Metals Inc.
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