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DPM and its subsidiaries are committed to sustainable business practices through ensuring that:

• The business is economically sustainable and able to provide long term benefits to all stakeholders whether shareholders, employees, the communities that support our operations, and others;
• Both immediate and long term sustainable community benefits are provided through targeted projects that anticipate an economic future for communities after the cessation of our mining or processing operations;
• Safe and healthy environment is provided for our employees, their families, and our adjacent communities.  We believe that every employee has the right to go home safe from our operations at the end of every shift;
• Our operations interact with the natural physical and biotic environment in a way that allows for the long term capacity of the environment to support and sustain life to be unchanged after our operations cease and to ensure that while we are in operation environmental effects are minimized;
• Risks to people and environment associated with our operations are properly identified and mitigated;
• Product stewardship ensures that our vision and values are applied where they are used or processed downstream; and
• Critical and non-renewable resources are used effectively.

At all its operations and facilities DPM continues to work towards meeting its commitment of achieving and maintaining recognized best practice mining, processing, environmental and health and safety standards. The protection of employees, communities and the environment, from exploration and mining through to rehabilitation and closure, remains key to successful project development and sustainable operations.

The business, commercial and socio-political environment in which DPM operates is dynamic and continuously evolving along with the projects and production schedules moving forward. To assist the Company in meeting its commitments in different country contexts, DPM has outlined the following sustainable development goals:

• Advance sites further toward full compliance with international best practice in environmental management;
• Improvement in facility performance, design and operational safety;
• Continued alignment of community grants with key sustainability projects;
• Continued integration of community sustainability projects into normal mining operations;
• Further development of a company-wide standardized management system; and
• Move towards international standards for reporting in the HSE and CSR areas of business.

Sustainability Principles

Dundee Precious Metals and its subsidiaries are committed to developing and operating business that is financially sustainable in the long term, consistent with the goals of the communities and countries in which it is hosted and operates. DPM recognizes that its goals and those of the communities in which it operates can be aligned to create mutual and lasting benefits.

Bulgaria

Over the last three years the Chelopech mine has undergone significant changes to meet the targets of increased mine and process plant production. An expansion project is currently being implemented to equip the underground mine and mill to a capacity of 2 million tonnes of ore per year (“Mtpa”). The upgrade consists of a new ore handling system to replace the existing system, which is limited to a maximum capacity of 1 Mtpa of ore production, as well as introduction of a semi-autogenous (“SAG”) mill and new flotation cells to efficiently manage the increase in mine throughput. These changes have been taking place following a period of extensive legislation and stakeholder engagement procedures and are in line with the community interests. The Chelopech expansion project will, in an overall sense, have the effect of improving job security and securing increase certainty of the economic contribution of the mine to the local community by lowering production costs and making Chelopech Mine less vulnerable to cyclical downturns, which are typical for the mining industry. Increasing production will result in the direct payment of higher royalties to the State and the municipalities of Chelopech and Chavdar. A corresponding sound social program. developed in conjunction with the municipalities, will continue to be implemented with the mine adjacent municipalities.

Armenia

In 2008, the Shahumyan operation in the Republic of Armenia was placed on temporary care and maintenance, and the strong community and government relationships established via mutual programs with the Armenian government assisted in easing the transition and managing the impacts of the temporary closure.  While the mine was on temporary care and maintenance some ongoing employment was offered, based on an agreement reached with the Armenian government. The mine returned to operation in April 2009. During the care and maintenance period the Company contributed, through ongoing reduced wage payments, to the social well being of the Kapan community in recognition of the mine’s status as a significant employer in and contributor to the economy of the Kapan area.

Risk Assessment

Operational, environment and permitting risks at all development and operating locations are continuously assessed and programs implemented to manage and/or mitigate these risks. The process of risk assessment and management is well established at Chelopech mine and underway at the Krumovgrad Project. Although still in the process of being formalized, the risk assessment has become a routine part of operations and all identified risks have programs in place to address and mitigate them. With respect to the Deno Gold operation in Armenia, the process of risk assessment and management is well underway but has not yet reached the same level as that of Chelopech. Although the most significant risks have been identified, they have not all been quantified, and there may be other less significant risks to the operation which have yet to be identified.

During 2009, the risks to the Company of doing business with and providing funding to Namibia Custom Smelter (“NCS”) was assessed and a number of additional programs were implemented and additional funding provided to mitigate environmental, human health and business reputational risks.  With the completion of the purchase of the smelter on March 24, 2010, the Company’s program has been extended and DPM, in addition to its shorter term plan to address certain key issues, is developing a longer term plan to bring the NCS operation into compliance with international good practice in the HSE and CSR areas.

Dundee Precious Metals is committed to ensure employment and health and safety practices provide for the long term well being of its employees and their families.

The safety and health of our workforce and community is a key component of our sustainability policy. It is DPM’s philosophy that sound safety and health management practices are in the best interest of all our stakeholders in the communities in which we operate. To this end, HS reporting is used across all of its sites to both analyze and mitigate the risks to health and safety. A five point safety system has been in use at the Chelopech mine for over five years which provides daily safety awareness and contributes to significant risk reduction.

In addition, among the Chelopech mine workforce and workplace, issues are a matter of discussion between the management and the Trade Unions representing the workforce.

Dundee Precious Metals is committed to follow a formal process of engagement and dialogue with local communities and NGOs.

Consultations with stakeholders at projects in the early stages ensure all stakeholders’ interests are taken into consideration and mutually beneficial options considered. Feedback from dialogue with stakeholders has been included in much of the decision-making associated with the Chelopech mine/mill expansion project as well as the Krumovgrad Gold Project. A similar approach is being adopted in both Armenia and Namibia, where a Trust, comprising community and company representatives, was established at the end of 2010. A formal Grievance procedure is in place with respect to the Chelopech operation providing stakeholders with the opportunity to make contributions toward improved management of the operation. Transparency is the leading principle in the engagement process with the involved communities across DPM sites. In October 2010, the first joint Stakeholder Assessment and Conflict Resolution exercise was held in Bulgaria for all operations teams to help improve skills and engagement abilities.

Dundee Precious Metals Supports EITI

Dundee Precious Metals Inc. has confirmed its support for the Extractive Industries Transparency Initiative ("EITI"), by becoming the 51st EITI supporting company, at the international level, in March of 2011.

DPM endorses the principles and criteria as a way to improve the transparency around payments and revenues in the extractives sector in developing countries.  Supporting the EITI is consistent with DPM's governance principles and the manner in which we seek to develop relationships with communities and governments.

The EITI is a coalition of governments, companies, civil society groups, investors and international organizations that supports improved governance in resource-rich countries through a globally developed standard that promotes revenue transparency at the local level.

Click here to visit the EITI website:  www.eiti.org