DPM to Acquire Shares and Warrants of Dunav Resources Ltd. on Exercise of Option

TORONTO, ONTARIO -- (Marketwire) -- 08/23/11 -- In accordance with regulatory requirements, Dundee Precious Metals Inc. ('DPM' or the 'Company') (TSX: DPM)(TSX: DPM.WT)(TSX: DPM.WT.A) announces that it has received notice from Dunav Resources Ltd. ('Dunav') of its decision to exercise its option to acquire from DPM a 100% interest in certain mineral projects in Serbia (the 'Projects'). In exchange for the Projects, DPM will acquire 47.5% of the issued and outstanding common shares of Dunav and warrants to purchase an additional 36,790,009 Dunav common shares (the 'Warrants').

On closing, on or about September 1, 2011, DPM will hold 47,257,922 common shares, representing a 47.5% interest in Dunav, on an undiluted basis, and 36,790,009 Warrants. The Warrants are exerciseable at a price of $0.42 each for a period of 24 months from the date of issuance, subject to acceleration under certain circumstances. Assuming the exercise of the Warrants, DPM would hold a 61.7% interest in Dunav, on a partially diluted basis. In accordance with the policies of the TSX Venture Exchange, the securities issued to DPM are expected to be subject to escrow.

On closing, the parties will also enter into certain other ancillary agreements, including: a standstill agreement relating to certain conduct of DPM, dependent upon its ownership position in Dunav, with respect to take-over bids; and the grant by Dunav to DPM of qualification rights pursuant to which DPM will be entitled to request the qualification for distribution by prospectus in all provinces of Canada (other than Quebec) of DPM's shares of Dunav, at DPM's expense, and as long as DPM holds more than 20% of the outstanding shares of Dunav. DPM also has a participation right to maintain its pro-rata ownership in Dunav.

The above noted securities held by DPM are held for investment purposes. These investments will be reviewed on a continuing basis and such holdings may be increased or decreased in the future.

Dundee Precious Metals Inc. is a well-financed, 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 gold, copper and silver concentrate, located east of Sofia, Bulgaria; the Kapan operation, which produces gold, copper, zinc and silver concentrates, 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 interests held through its 51.4% owned subsidiary, Avala Resources Ltd., and its 11.6% interest in Sabina Gold & Silver Corp.

FORWARD-LOOKING STATEMENTS

This news release may contain certain information that constitutes forward-looking statements. Forward-looking statements are frequently characterized by words such as 'plan,' 'expect,' 'project,' 'intend,' 'believe,' 'anticipate' and other similar words, or statements that certain events or conditions 'may' or 'will' occur. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made, and are subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices and other factors described above and in the Company's most recent annual information form under the heading 'Risk Factors' which has been filed electronically by means of the Canadian Securities Administrators' website located at www.sedar.com. The Company disclaims any obligation to update or revise any forward-looking statements if circumstances or management's estimates or opinions should change. The reader is cautioned not to place undue reliance on forward-looking statements.

Contacts:

Dundee Precious Metals Inc.

Jonathan Goodman

President & Chief Executive Officer

(416) 365-2408
jgoodman@dundeeprecious.com


Dundee Precious Metals Inc.

Lori Beak, Senior Vice President,

Investor & Regulatory Affairs and Corporate Secretary

(416) 365-5165
lbeak@dundeeprecious.com