DPM Metals (TSX: DPM) has completed a feasibility study on their Coka Rakita gold project in Serbia, outlining a net present value for the operation of US$782 million and an internal rate of return of 36%, based on a discount rate of 5% and a gold price of just US$1,900 an ounce.
At $3,500 an ounce gold, that net present value figure is said to raise to $2.2 billion, while the internal rate of return jumps to 68%.
The feasibility study, which comes just three years after the initial discovery was made in 2023, outlines an underground mining operation that plans to use long hole open stoping to extract on average 148,000 ounces of gold a year over a ten year initial life of mine. Production is skewed towards the first five years of operation, when average annual production is expected to come in at 189,000 ounces.
That production estimate is based on average annual throughput of 850,000 tonnes per year, with average grades of 6.44 g/t gold and recoveries of 87.9%. Processing is set to consist of a gravity and flotation flowsheet, creating gold concentrates, a portion of which will be smelted and sold as dore to improve sale terms.
Initial capital under the scenariuo is estimated at $448 million, with sustaining costs expected to average $3.2 million, and further closure costs of $30 million. Cash costs on a per ounce basis are estimated at just $538, while all in sustaining costs are pegged at $644, placing the project in the first quartile of projects.
“Based on the project’s excellent economics, including a 36% IRR at a gold price of $1,900 per ounce, we are proceeding to execution readiness and continue to advance permitting to support start-up of mine construction in early 2027, with first concentrate production anticipated in the first half of 2029,” commented David Rae, CEO of DPM Metals.
“We believe 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. We expect to complete mineral resource estimates for Dumitru Potok, Rakita North and Frasen by year-end, all of which are within one to two kilometres of planned Čoka Rakita infrastructure, and to target additional high-potential areas within the six-kilometre trend.”
DPM Metals last traded at $36.59 on the TSX.
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