Annual Information Form (“AIF”) Means Dundee Precious Metals Inc
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Annual Date: March 30, 2020 Information Form 2019 For the Year Ended December 31, 2019 TABLE OF CONTENTS DESCRIPTION OF THE BUSINESS .................................................................................................... 5 CORPORATE STRUCTURE .............................................................................................................. 7 GENERAL DEVELOPMENT OF THE BUSINESS ................................................................................. 7 SUMMARY OF MINERAL RESERVE AND MINERAL RESOURCE ESTIMATES .................................... 9 THREE YEAR PRODUCTION AND DELIVERY HISTORY ................................................................... 11 2020‐2022 OUTLOOK .................................................................................................................. 12 MINING PROPERTIES ................................................................................................................... 13 CHELOPECH MINE, CHELOPECH, BULGARIA ....................................................................................................................... 13 ADA TEPE MINE, KRUMOVGRAD, BULGARIA ...................................................................................................................... 23 SMELTER OPERATIONS ................................................................................................................ 32 TSUMEB SMELTER, NAMIBIA .......................................................................................................................................... 32 DEVELOPMENT PROJECTS ........................................................................................................... 35 TIMOK GOLD PROJECT, SERBIA ....................................................................................................................................... 35 EXPLORATION PROJECTS ............................................................................................................. 38 STRATEGIC INVESTMENTS ........................................................................................................... 39 ENVIRONMENT, SOCIAL AND GOVERNANCE .............................................................................. 40 FURTHER INFORMATION ............................................................................................................ 44 RISK FACTORS ............................................................................................................................. 45 INTERNAL CONTROLS AND OPERATIONS IN EMERGING MARKETS ............................................. 57 DIVIDEND POLICY ........................................................................................................................ 59 DESCRIPTION OF CAPITAL STRUCTURE ....................................................................................... 59 MARKET FOR SECURITIES ............................................................................................................ 60 DIRECTORS AND OFFICERS .......................................................................................................... 61 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS ................................. 63 LEGAL PROCEEDINGS AND REGULATORY ACTIONS ..................................................................... 63 TRANSFER AGENT AND REGISTRAR ............................................................................................. 64 MATERIAL CONTRACTS ............................................................................................................... 64 NAMES OF EXPERTS .................................................................................................................... 64 INTEREST OF EXPERTS ................................................................................................................. 65 AUDIT COMMITTEE DISCLOSURE ................................................................................................ 65 ADDITIONAL INFORMATION ....................................................................................................... 67 APPENDIX “A” ‐ GLOSSARY OF MINING TERMS ........................................................................... 68 APPENDIX “B” ‐ MANDATE OF THE AUDIT COMMITTEE ............................................................. 71 PRELIMINARY NOTES Unless the context indicates otherwise, a reference to the “Company” and “DPM” in this Annual Information Form (“AIF”) means Dundee Precious Metals Inc. and its subsidiaries and other entities owned or controlled, directly or indirectly, by Dundee Precious Metals Inc. Defined terms used herein and not otherwise defined shall have the meanings ascribed to them elsewhere in this AIF. Response to Coronavirus (“COVID‐19”) On March 11, 2020, the World Health Organization expanded its classification of Coronavirus (“COVID‐19”) to a worldwide pandemic and governments across the globe have undertaken measures to combat the spread of COVID‐19. As a result, the Company may experience some short/medium term negative impacts due to COVID‐19. The Company is taking proactive measures to safeguard the health of its workforce and local communities, manage supply chains, and manage the risks posed by the pandemic. DPM has been closely following national safety instructions provided by authorities and has proactively introduced protocols to protect the health of its employees, including site access controls and work from home measures. As the situation evolves, DPM is considering ways that the Company can contribute to government and societal efforts to confine the spread of the virus and sustain economic activities. The Company has engaged with local communities and authorities to identify their needs and is assisting health care providers with financial support and materials, with a specific focus on the vulnerable groups within the communities in which DPM operates. DPM is proactively managing inventories, reviewing alternative supply options and developing contingency plans for inbound and outbound supply of materials. Most key supplies and consumables for DPM’s operations in Bulgaria are sourced locally, and to date the Company has not experienced any disruption to its inbound supply chain. In Namibia, Tsumeb currently has a sufficient supply of complex concentrate at site and at the local port facility, with additional supply scheduled to be shipped between now and the end of April. DPM is also focused on managing its outbound supply chains, including concentrate shipments from Bulgaria and sulfuric acid shipments from Namibia, by engaging with multiple sale and transportation outlets. DPM has established procedures and contingency plans to address potential business interruptions across its portfolio. These efforts are being overseen by a cross‐functional team that includes members of senior management and leaders at DPM’s operations with expertise in health and safety, operations, legal, human resources, supply chain, finance, and communications. The Board of Directors is being regularly updated on these measures. See “Risk Factors – Coronavirus (COVID‐19) and health crises” for additional details of some of the risks faced by the Company as it relates to COVID‐19. Cautionary Note Regarding Forward Looking Information This AIF contains “forward looking statements” or “forward looking information” (collectively, “Forward Looking Statements”) that involve a number of risks and uncertainties. Forward Looking Statements are statements that are not historical facts and are generally, but not always, identified by the use of forward looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “outlook”, “intends”, “anticipates”, “believes”, or variations of such words and phrases or that state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms or similar expressions. Statements that constitute Forward Looking Statements include, but are not limited to certain statements with respect to: measures the Company is undertaking in response to the COVID‐19 outbreak, including its impacts across the Company on demand, operations and its global supply chains; price of gold, copper, silver and acid, toll rates, metals exposure and stockpile interest deductions; the estimation of Mineral Reserves and Mineral Resources and the realization of such mineral estimates; the estimated capital costs, operating costs, key project operating costs and financial metrics and other project economics, including the three‐year outlook provided by the Company; currency fluctuations; the impact of any impairment charges; the processing of Chelopech concentrate; timing of further optimization work at Dundee Precious Metals Tsumeb (Proprietary) Limited; potential benefits of the planned rotary furnace installation at the Tsumeb smelter; results of economic studies; success of exploration activities; the commencement of a pre‐feasibility study for the Timok gold project; success of permitting activities; permitting timelines; success of investments, including potential acquisitions; requirements for additional capital; government regulation of mining and smelting operations; environmental risks; reclamation expenses; potential or anticipated outcome of title disputes or claims; Dundee Precious Metals ‐ Annual Information Form 2019 1 benefits of digital