TORONTO, ONTARIO--(Marketwired - March 1, 2016) - Dundee Precious Metals Inc. (TSX:DPM) ("DPM" or "the Company") is pleased to announce that it has entered into a definitive agreement with Polymetal International Plc (LSE:POLY)(MOEX:POLY)(ADR:AUCOY) ("Polymetal") for the sale of its interest in the Kapan mine located in Armenia through the disposition of all of the issued and outstanding shares of Dundee Precious Metals Kapan CJSC ("DPMK") (the "Proposed Transaction").

"We are pleased to announce the sale of Kapan to Polymetal," stated Rick Howes, President and CEO. "The proceeds from the sale will serve to strengthen our balance sheet and reduce future capital requirements, which can be utilized to support the future growth of our business, and allows us to focus on our remaining core assets. We would also like to thank the community of Kapan and our employees for their support since we acquired the asset in 2006 and will do our utmost to ensure a smooth transition to the new owner," added Mr. Howes.

"Polymetal believes that the acquisition of the Kapan mine will result in the development of a profitable regional processing hub with sizable production which will provide a strong operating platform to pursue further opportunities in Armenia," said Vitaly Nesis, Group CEO of Polymetal.

Under the Proposed Transaction, DPM, or a subsidiary thereof, will receive consideration consisting of (i) US$10 million in cash from the buyer (subject to a working capital adjustment following closing), (ii) US$15 million in Polymetal ordinary shares, and (iii) a 2% net smelter royalty on future production from the Kapan property capped at US$25 million. DPM will continue to maintain a presence in Armenia through joint venture arrangements in respect of certain exploration assets in the central part of the country. The number of ordinary shares of Polymetal to be issued in the Proposed Transaction will be determined based on the average market price for such shares on the London Stock Exchange for the five trading days ending two trading days prior to closing of the Proposed Transaction.

The definitive agreement is subject to various representations, warranties, covenants and indemnities as are expected for a transaction of this nature. The Proposed Transaction is also subject to, among other conditions, (i) the Company obtaining its lenders' consent, release and discharge in respect of their security interest over the shares of DPMK under the Company's senior secured credit facilities, and (ii) the parties obtaining all regulatory approvals, including the approval of the State Commission for the Protection of Economic Competition of the Republic of Armenia to transfer the DPMK shares. Closing of the Proposed Transaction is expected to occur in the second quarter of 2016, but in any event, must occur prior to June 30, 2016.

About Dundee Precious Metals

Dundee Precious Metals Inc. is a Canadian-based, international gold mining company engaged in the acquisition, exploration, development, mining and processing of precious metals. The Company's principal operating assets include the Chelopech operation, which produces a copper concentrate containing gold and silver, located east of Sofia, Bulgaria; the Kapan operation, which produces a copper concentrate and a zinc concentrate, both containing gold and silver, located in southern Armenia; and the Tsumeb smelter, a concentrate processing facility located in Namibia. DPM also holds interests in a number of developing gold properties located in Bulgaria, Serbia, and northern Canada, including the Krumovgrad project and interests held through its 50.1% owned subsidiary, Avala Resources Ltd., and its 12.0% interest in Sabina Gold & Silver Corp.

Cautionary Note Regarding Forward Looking Statements

This press release contains "forward looking statements" that involve a number of risks and uncertainties. Forward looking statements include, but are not limited to, statements with respect to the timing and potential benefits of the Proposed Transaction, future price of gold, copper, zinc and silver, the estimation of mineral reserves and resources, the realization of such mineral estimates, the timing and amount of estimated future production and output, life of mine, costs of production, capital expenditures, costs and timing of the development of new deposits, success of exploration activities, success of permitting activities, permitting time lines, currency fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks, reclamation expenses, the potential or anticipated outcome of title disputes or claims and timing and possible outcome of pending litigation. Often, but not always, forward looking statements can be identified by the use of words such as "plans", "expects", or "does not expect", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "does not anticipate", or "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. Forward looking statements are based on the opinions and estimates of management as of the date such statements are made and they involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any other future results, performance or achievements expressed or implied by the forward looking statements.
Such factors include, among others: uncertainties with respect to obtaining all required approvals for the Proposed Transaction; the actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of gold, copper, zinc and silver; possible variations in ore grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in obtaining governmental approvals or financing or in the completion of development or construction activities, uncertainties inherent with conducting business in foreign jurisdictions where corruption, civil unrest, political instability and uncertainties with the rule of law may impact the Company's activities; fluctuations in metal prices; unanticipated title disputes; claims or litigation; limitation on insurance coverage; as well as those risk factors discussed or referred to in the Company's continuous disclosure documents filed from time to time with the securities regulatory authorities in all provinces and territories of Canada and available on SEDAR at There can be no assurance that forward looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Unless required by securities laws, the Company undertakes no obligation to update forward looking statements if circumstances or management's estimates or opinions should change. Accordingly, readers are cautioned not to place undue reliance on forward looking statements.

Contact Information:

Dundee Precious Metals Inc.
Rick Howes
President and Chief Executive Officer
(416) 365-2836

Dundee Precious Metals Inc.
Lori Beak
Senior Vice President, Governance, and Corporate Secretary
(416) 365-5165