We are setting up a new sustainable business model

Dundee Precious Metals shall be disbursing grants worth USD 5 million for micro, small and medium enterprises in the Krumovgrad region

Irena Tsakova, Eng.:

We are setting up a new sustainable business model

Снимка: EconomyMagazine/Krassimir Svrakov

Автор: Tatyana Yavasheva
Irena Tsakova, Eng. is Permitting and Legal Director of Dundee’s operations in Bulgaria. As a manager, Irena has vast experience in the field of environmental protection. She started working for the Chelopech Mine back in 1999. In 2013 she was appointed to be in charge of planning and development operations for the Krumovgrad Gold Project. In 2015 Irena was recognized by Mines and Money as one of the 100 Global Inspirational Women in Mining, as part of the biggest international forum of investments in the mining industry.

Mrs. Tsakova, the Ada Tepe open pit near Krumovgrad is a greenfield project, i.e. the first new minesite in Bulgaria in 40 years. Is this a huge event?

I wouldn’t like to see it as an event, since this is a business enterprise and business is what we should be doing every day. I would be happy to see more new minesites and more mining operations.
The open pit was officially opened on August 23. What’s the background?

This minesite is the result of 15 years of active efforts to convince all stakeholders that the Ada Tepe open pit shall really prove to be beneficial to all. The pit had not yet been commissioned and we were already drafting its closure and rehabilitation plan. In 2015 we signed a Memorandum of Understanding with the Municipality of Krumovgrad, with the commitment to set up a special Fund to support micro, small and medium local enterprises. The overall objective was to promote local entrepreneurship and new job opportunities. We believe that business profits should go not only to the operator but to the local community, too, long-term speaking.  We’ve recruited about 250 qualified people, almost all of them local residents.
Tell us more about this funding mechanism...

Dundee Precious Metals strives to be an innovative company not only technologically but in terms of sustainable development. Our Fund is the first private fund for community benefit which shall operate entirely with Company money.  We provide USD 5 million as grants and Raiffeisenbank, our partner, shall double this amount in the form of a credit facility.  Our Company shall also act as guarantor for people with good business ideas who lack respective financing to fulfill them.
How would you describe your approach?

After we agreed on the financial mechanism, we established an Association called “Krumovgrad micro, small and medium enterprise support fund”. Its Board of Directors participates in evaluating project proposals. The Fund provides financial support, as follows: 45% as a grant, 45% as a bank credit and 10% equity funding.  The Fund can disburse a maximum grant of EUR 200 000. The funding mechanism is designed to ensure that beneficiaries show maximum discipline when carrying out their projects. We’ve learned from experience that grants with no commitments attached are no motivation for recipients to give their best and meet set targets.
Who is the Fund for?

It is for all Krumovgrad Municipality residents. Companies must be registered in Krumovgrad and be able to demonstrate long-term commitment to stay and operate in this region. The main criterion is the opening of new jobs, in a sustainable manner, i.e. jobs that the beneficiary shall keep operational over the next 5 years. The Fund shall continue receiving project applications in the next 3 years, to maintain local business activity high.
Did you have any preliminary expectations as to the type of business activities that you would support?

We encourage any legal business activity. The only condition is that it shouldn’t be mining related.  We believe that business initiatives should be created and developed by entrepreneurs. Hence, we’ve made no preliminary survey regarding their attitudes.
What does the first call for project proposals show?

Applicants had a month to submit their projects. The call for proposals was preceded by a training, which we organized to present application guidelines and selection criteria to potential project beneficiaries.  The company we chose for the technical assistance of the grant scheme is SmartA Ltd. It advises applicants how to prepare their project documentation, verifies the eligibility of submitted project proposals and performs project monitoring after contract sign-off.   After the first call for proposals we received eight projects for the total amount of approx. BGN 800 000. Grant funding for 2019 is USD 1 million. Project approval is organized in three stages - first the technical assistance company checks if the project proposal meets eligibility criteria. Then the bank makes a financial assessment. The final approval comes from the Associations’ Board of Directors. The first two project proposals that made it to final sign-off are for current business upgrades. One is for aluminum and PVC joinery workshop and the other is for establishing a production unit for frozen fruit and vegetables.  Other proposals that are currently being revised are for setting up a shoe workshop, a farm, a slaughterhouse, as well as expansion of current transport operations. We expect and remain hopeful that start-ups shall also apply.  We are currently setting up a webpage of the Fund, to publish information on the application procedure, the progress of already funded projects, etc.
Many people came back after spending time abroad, to start a job at the new open pit.  What made them do that?

Nearly 50 people returned from abroad to work for us. We established a well-functioning training system for our personnel. We also offered on-the-job training in Chelopech, our other mining operation.
Dundee has demonstrated its strong commitment to local communities and cultural heritage preservation. Is it all worth it?

It is, without any doubt.  In the future, successful business enterprises shall be those with a social license to operate. Our Company managed to win people’s trust over the years by showing consistency in the way we meet our obligations and commitments. Our corporate values, namely ensuring health and safety at work, environmental protection and preservation of cultural heritage, dignity and respect are also values shared by our local communities. We consistently follow through every commitment we’ve made. Prior to commissioning the Ada Tepe open pit, we financed a long-term program of the National Archaeological Institute with Museum of the Bulgarian Academy of Sciences for the study and preservation of any artifacts related to ancient mining on Ada Tepe. We set up a monitoring network for ambient air quality, seismic activity and water quality, so that Krumovgrad residents have no environmental concerns. Ada Tepe is among the few pits in Europe (but not the only one) that fall within the footprint of the NATURA 2000 eco-network. There should be balance and equilibrium of all interests. After all, a business goes where it’s worth it and where all stakeholders have an opportunity for mutual benefits.
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