Balkan Mineral and Mining EAD is a 100% owned subsidiary of Dundee Precious Metals Inc. Since 1997 the Company has been prospecting, exploring and evaluating natural resources on the territory of Bulgaria. Currently the Company is exploring on 10 license areas located throughout Bulgaria.

Balkan Mineral and Mining EAD holds the legal right to explore the Krumovgrad license area in the Kardjali District, Eastern Rhodopes. The exploration license covers an area of 113 square kilometres and was extended for a further two year term in June 2003. In 2001 the Company registered a geological discovery No. 001 under the name of "Khan Krum Deposit". The feasibility study show good opportunities for open-pit mining with annual production in the range of 130 - 150 thousand ounces of gold.

The Company has completed exploration of the main portion of the deposit on the exploration licence, the Ada Tepe ore body, and has submitted an application for registration of a Commercial Discovery to the Ministry of Environment and Waters. Upon receipt of the Certificate of Commercial Discovery the company intends to submit an application for a Mining License to the Ministry of Economy. In support of the application for a mining license an Environmental Impact Assessment and a Definitive Feasibility Study are completed.

The US $67 million capital investment required to develop the project will commence upon the granting of a mining license and all the permits necessary to construct and operate the mine. It is the company's desire to place the Krumovgrad Gold Project into production by early 2007.

Balkan Mineral and Mining EAD applies the most sophisticated and up-to-date exploration technologies and methods in Bulgaria such as:

• Compilation and analysis of geological, geophysical and geochemical data in text format and map materials
• Regional methods of preliminary prospecting - primarily stream sediment sampling
• Preliminary local-scale research in conjunction with detailed geological mapping
• Additional detailed research - petrography, XRD analysis
• Local-scale geophysical research
• Diamond and RC drilling
• Processing, qualitative and quantitative analysis of samples
• Computer processing and development of GIS models utilising specific geological computer software.

Balkan Mineral and Mining EAD has made a large commitment in Bulgaria within the last eight years, not only in monetary terms, but in the continued training of our Bulgarian geological staff in implementing modern and effective exploration techniques, the further understanding of the metallogeny of the Bulgarian landmass and the delineation of metallic resources and reserves (Krumovgrad). The Company has a good record of investment in exploration and is committed to identifying economically exploitable orebodies within Bulgaria and bringing them to the production stage in the most rapid and cost effective manner while responsibly adhering to, and exceeding, international best practice in environmental management.

The Company is also keenly aware, at all stages of the exploration process, of the local community’s interests and concerns and strives to maintain a good working relationship with the community at all times. The philosophy of the Company is at all times to employ members of the local community as often as possible during the exploration process such that the local community receives a direct benefit from exploration activity as well as continued understanding of the exploration process.