Canada's Dundee Precious Metals, running the Chelopech gold mine in Bulgaria on concession, declined to comment on the Cabinet's plans to become a shareholder in the mine, company officials were quoted by Dnevnik daily as saying on March 5 2008.

A week earlier, Bulgarian Economy and Energy Minister Petar Dimitrov said that the government has requested with Dundee to recover a portion of the mine and to raise the concession fee to 10 per cent of total gold output.

Company officials only confirmed that the Government and Dundee were in talks and that the proposal of the government came as a surprise to them.

The ongoing talks were started at the initiative of Environment and Waters Minister Djevdet Chakurov, who insisted that the state recovered a stake in the mine and use the dividend to finance environmental projects.

The state and Dundee Precious Metals, which bought the Chelopech concession from the Irish Navan Mining, have been at loggerheads over plans by the Canadian company to expand extraction and processing works at the mine. Chakurov has blocked the 300 million leva investment with his silent refusal, despite the fact that the investment got the approval of the Supreme Expert Environmental Council and despite the Supreme Administrative Court urging the minister to either approve or give reasons for his refusal for the project.

The company filed a complaint with the European Commission, arguing Chakurov defaulted on his duties. “The EC sent an inquiry to the Bulgarian state in December last year and we expect the EC's answer before we clarify our position on the issue,” Oliver Drewes, spokesperson for European commissioner for internal market Charlie McCreevy, said. The EC has to pronounce on the Dundee case by April, Drewes said, as quoted by Dnevnik.