By The Canadian Press

TORONTO - Plans by Dundee Precious Metals Inc. (TSX:DPM) for a metals processing facility at its gold and copper mine in Chelopech, Bulgaria, have suffered a setback in court.

The Toronto-based company disclosed Thursday that a Bulgarian court has revoked a 2008 environmental impact assessment resolution allowing the project to go ahead.

In its ruling, the court said the EIA file had to be returned to the Bulgarian Ministry of Environment and Waters for another review.

"While we are extremely disappointed with the court's decision, we believe the court's reasons to be unsubstantiated and without merit," said Jonathan Goodman, Dundee's president and chief executive.

Dundee plans to appeal the decision before a a five-member court panel, Goodman added.

Meanwhile, he said the decision does not impact ongoing operations at Chelopech, including mine construction and mill expansion currently being implemented.

The mine is in central-western Bulgaria, approximately 70 kilometres east of Sofia, the capital.

Among reasons cited by the court for rejecting the review was the 2 1/2 period between the date of the actual review and the issuance of the resolution, Dundee said in a news release.

The court also questioned the justification for limiting the geographic area of the review and found that the proposed pressure oxidation leach processing technology "cannot be considered best available technology if it has not been used on similar types of copper-arsenic concentrates and at the same scale of the proposed operation," the Dundee release said.

Toronto-based Dundee is an international mining company engaged in the acquisition, exploration, development and mining of precious metals in Bulgaria and Armenia, with exploration activities in Serbia.

Dundee shares were down 35 cents or more than nine per cent at $3.40 in midday trading Thursday on the Toronto Stock Exchange.