SOFIA (AFP)--Canadian mining group Dundee Precious Metals Inc. (Toronto:DPM) (DPMLF) has reached an agreement with Bulgaria to expand the Chelopech gold and copper mine, Prime Minister Sergey Stanishev said Monday.

DPM and the government have renegotiated the terms of the 30-year concession for the mine, with Sofia agreeing to increased production at Chelopech in return for a higher fee, Stanishev told a news conference here.

"The government and Dundee Precious Metals have agreed on the new parameters of the concession, where the planned increase in production of the mine at Chelopech is linked to an increase of the concession fee," the premier said.

Production would be more than doubled while Bulgaria would receive more than 51 million leva ($40.1 million) in fees compared with the 1.7 million leva previously, Stanishev said.

In addition, the government will take a 25% stake in a planned $155-million gold and copper processing facility at the mine.

The Canadian mining company acquired a 30-year concession to extract gold and copper near the town of Chelopech, 65 kilometers east of the capital Sofia, in 2003.

It has been planning to expand the mine for the past two years but was blocked by Sofia's refusal to issue environment permits.

Last year, DPM filed a complaint with the European Commission against Bulgaria but under the terms of the deal, this complaint will be dropped.

Parliamentary deputy Milen Velchev, who took part in the talks, told AFP that the two sides were expected to wrap up the remaining technical details and sign the new agreement within weeks.

    (END) Dow Jones Newswires   03-10-08 1254   Copyright (c) 2008 Dow Jones & Company, Inc.