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Balkan Gold: Intrigue, Enrichment and Danger (Part 1)

September 20, 2004


By Christopher Deliso

A long term Canadian investment in Bulgaria’s gold excavation industry was threatened this week by local outcry over perceived environmental hazards. This controversy is far from the only one to have affected those hunting for hidden gold in the Balkans, though.

“I believe in an old superstition,” said one Macedonian man in Skopje, “that if you dig in the ground and find old treasures, and remove them, it will be followed by a huge amount of bad luck. So I am not interested in searching for them.”

However, this has not stopped Macedonia’s would-be conquistadors of the alluring ore. In recent months, Skopje papers have been full of classified ads from individual selling metal detectors – and promising “certain” results for their new owners.

The area said to hold most promise lies between Kratovo, Kriva Palanka and the Bulgarian border, in the rocky Osogovski Mountains. In ancient times and up through the Ottoman period, the Kratovo area was the fabled center of gold and silver mining in Macedonia.

Yet despite the popularity of panning or electronic detection of gold among the people, as well as the unfortunate penchant for antiquities theft from Macedonia’s many unexplored archaeological sites, critics say that most metal detectors on the market are of limited use, as they detect from too wide a geographical range and cannot detect metals hidden far beneath the surface.

That’s why the professionals use more sophisticated methods. According to a Kumanovo man whose family hails from a Kratovo-area village, a mysterious helicopter was spotted circling a remote area in the mountains. Kratovo locals recently backed up the claim, telling that a large area has been declared off-limits following positive tests for metals using high-tech airborne equipment.

However, there was some confusion among the sources on whether the company involved was Canadian, German or from somewhere else – and on whether the area of interest was indeed a gold mine, or perhaps an unknown archaeological site.

In any case, there was agreement that something is going on in the wilds of eastern Macedonia- and that those involved are doing their best to keep it quiet.

Who could be interested in Macedonia’s subterranean riches, if anyone? The answer to this little mystery will be unearthed, so to speak, in time. For now, we can concentrate on the known, that is, what is going on in Bulgaria. The scheme and scenario at work there are no doubt bound to be analogous to whatever is going to happen in Macedonia – indeed the rumors are true.

Reacting to widespread protests from Bulgarians in the southern city of Krumovgrad, Canadian gold mining company Dundee Precious Metals promised that its excavation of local mines will be done “under the European ecological standards.” The company has been exploring the Eastern Rhodope area of Bulgaria for the past four years.

The public outcry over possible pollution has led Jonathan Goodman, the company’s President and CEO, to announce the writing of a special report on “the influence of the company’s work on the environment in the region.”

Whether this mollifying tactic will work remains to be seen. It will largely depend on whether the Bulgarian people will trust this foreign investor- which is itself doubtful. The mining and smelting industries are among the world’s most reviled in terms of safety and public health concerns. Last week, some 4,000 Peruvian workers went on strike to protest pollution and water shortages caused by Latin America’s biggest gold mine.

The story of Dundee’s involvement in Krumovgrad begins in 2000, when subsidiary Balkan Mineral & Mining AD was awarded an operating license for the area.

According to the company’s projections, the Bulgarian operation will begin in 2006. Dundee plans to invest $45 million, and will hire almost 300 people.
Dundee also owns the Bulgarian Chelopech gold and copper mine and Ada Tepe, where exploration for gold is underway. A total of $150 million is to be invested in these central and southern Bulgarian sites, says

A detailed explanation of the state of mining affairs in Bulgaria reveals that “…in recent years there has been a drive to privatise the industry and now virtually all mining operations are in private hands.” This has been expedited by 1990’s legislation that replaced long-antiquated Soviet rules governing mining. Bulgaria has for thousands of years been an important Balkan center for not just gold but copper, iron, steel, lead, silver and zinc, as well as coal.

Since “there are no restraints on foreign investment” in the mining sector, foreign companies have been able to make strong inroads into the gold mining industry.

According to the report, the necessary prospecting permit is awarded directly or by tender or auction, and is valid for 3 years, “…with a maximum of two further extensions of two years each possible.” If a deposit is found, the necessary  extraction concession is then granted to the permit holder. Extraction concessions “…are valid for a period of up to 35 years, with an extension of 15 years possible.”

In late June, Dundee issued a press release on the results of its large drilling project at the site of Ada Tepe, Krumovgrad. CEO Goodman stated that “…we are extremely excited with the results of the infill drilling programme at the Ada Tepe Project to date. The deposit is holding together very well and the high grade zones appear to be stronger than we had originally thought.”

However, despite the president’s optimism the Bulgarians seem justified in their fears of potential environmental mayhem – as we will see in part 2 of this article tomorrow.

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