DPM forecasts higher output at Serbia gold project

[Ben Graham]

Canadian miner DPM Metals (TSX: DPM; ASX: DPM) said a feasibility study for the Čoka Rakita project in Serbia shows increased output and higher value generation compared with an earlier estimate.

Assuming average gold prices of $1,900 an oz. and a 5% discount rate, Čoka Rakita would have a net present value (NPV) of $782 million while generating a 36% internal rate of return (IRR), Toronto-based DPM said Wednesday. That’s up from an NPV of $735 million in the December 2024 prefeasibility study, which calculated an IRR of 41%.

When using $3,500 as a gold price assumption, the projected NPV rises to $2.2 billion and the IRR to 68%, DPM said.

“Overall project economics remain robust with strong leverage to gold prices,” Scotia Capital mining analyst Eric Winmill said in a note to clients.

Čoka Rakita is now expected to produce 1.32 million oz. gold over its estimated 10-year life, up from the 1.2 million oz. that the pre-feasibility study estimated. The payback period is projected to be 1.8 years, compared with a previous estimate of 1.7 years.

2027 construction

DPM’s new study outlines average annual production of 148,000 oz. gold, including 189,000 oz. in each of the first five years. Construction would start in early 2027, with production of gold concentrate beginning in the first half of 2029.

Initial capital costs would be $448 million, “well within DPM’s funding capacity,” the company said. That’s up from an estimate of $379 million in the pre-feasibility study. All-in sustaining costs would average $644 per oz., unchanged from last year’s study.

Located about 160 km southeast of the capital Belgrade, Čoka Rakita is estimated to hold 7.34 million tonnes grading 6.44 grams per tonne for 1.52 million contained gold ounces.

The project has stoked concern among residents and environmental groups over possible soil and water contamination. Non-governmental organizations have filed a complaint with the Council of Europe regarding Čoka Rakita’s environmental impact.

Resource estimates

Underground mining of the Čoka Rakita deposit would take place via long hole open stoping with cemented paste backfill and a relatively standard comminution, gravity and flotation flowsheet to process 850,000 tonnes of ore annually.

Saleable products include gravity and flotation gold concentrates, with a portion of the gravity concentrate to be smelted and sold as a doré for improved sales terms.

Čoka Rakita is “a pivotal stepping stone that unlocks the broader potential of the Rakita camp, where our exploration activities continue to confirm the presence of a large copper-gold system” CEO David Rae said in the statement.

DPM expects to complete mineral resource estimates for the Dumitru Potok, Rakita North and Frasen targets by year-end, all of which are within 1-2 km of planned Čoka Rakita infrastructure, Rae said. Other “high-potential areas” within the 6-km trend will also be targeted, he added.

DPM shares were unchanged at C$38.29 Thursday morning in Toronto, having risen 4.6% Wednesday following the study’s release. The stock has traded between C$12.76 and C$38.60 in the past year.

Previously known as Dundee Precious Metals, DPM officially adopted its new name in September. Its market value now stands at about C$8.5 billion ($6 billion).