Čoka Rakita Project Faces Permitting and Execution Challenges Despite Strong Economics
DPM Metals has released a robust feasibility study for its Čoka Rakita gold project in Serbia, confirming strong economics with a $782 million net present value and a 36% internal rate of return at $1,900 per ounce gold. The study highlights increased reserves, low costs, and a clear path to production by 2029.
- 11% increase in contained gold ounces and 10% rise in mineral reserves
- First five years average production of 189,000 ounces of gold annually
- All-in sustaining cost of $644 per ounce, placing project in first cost quartile
- Initial capital expenditure of $448 million within company’s funding capacity
- Permitting milestones achieved with construction targeted for early 2027
Robust Economics Confirmed
DPM Metals Inc. has announced the results of its feasibility study for the Čoka Rakita gold project in Serbia, delivering a compelling economic outlook. The study reveals a net present value (NPV) of $782 million at a 5% discount rate and an internal rate of return (IRR) of 36%, assuming a gold price of $1,900 per ounce. These figures underscore the project's potential as a high-margin, low-cost underground mining operation.
Significantly, the feasibility study updates the mineral reserves, showing a 10% increase in tonnage to 7.34 million tonnes and an 11% rise in contained gold ounces to approximately 1.52 million ounces. This improvement over the previous pre-feasibility study reflects optimized mine design and refined engineering parameters.
Production and Cost Efficiency
The project is expected to produce an average of 148,000 ounces of gold annually over its life, with a notable front-loaded production averaging 189,000 ounces per year in the first five years. This production profile benefits from accessing the high-grade core early in the mine life, with an average gold grade of 6.44 grams per tonne.
Cost control is a standout feature, with an all-in sustaining cost (AISC) of $644 per ounce, placing Čoka Rakita in the first quartile of global gold producers. The initial capital requirement is estimated at $448 million, comfortably within DPM Metals' funding capacity given its strong cash position and revolving credit facilities.
Strategic Infrastructure and Execution Readiness
Čoka Rakita benefits from proximity to existing infrastructure and DPM’s operational expertise, including access to processing equipment from the Ada Tepe mine in Bulgaria, which will be refurbished for use. The project’s location near the Chelopech mine also allows for leveraging established technical support.
Permitting progress is advancing well, with the recent approval to initiate the Special Purpose Spatial Plan marking a key milestone. Construction is targeted to commence in early 2027, with first ore expected on surface in 2028 and concentrate production anticipated in the first half of 2029.
Exploration Upside and Community Engagement
DPM Metals is optimistic about the broader Rakita camp, where ongoing exploration is confirming a large copper-gold system. Mineral resource estimates for nearby targets such as Dumitru Potok, Rakita North, and Frasen are expected by year-end, potentially extending the project’s value and mine life.
The company emphasizes its commitment to local communities, planning to create over 500 jobs and implement robust training programs. DPM aims to maximize local workforce participation and supplier engagement, aligning with international best practices for environmental and social responsibility.
Looking Ahead
DPM Metals will host an investor day in early December to discuss the feasibility study in detail and provide updates on exploration and other operations. The company’s disciplined approach and strong financial position position Čoka Rakita as a cornerstone asset in its strategy to become a mid-tier precious metals producer.
Bottom Line?
With strong economics and clear execution plans, Čoka Rakita is poised to be a transformative asset for DPM Metals, though investors will watch closely for permitting progress and exploration results.
Questions in the middle?
- How will fluctuating gold prices impact the project's long-term viability and investment returns?
- What are the key risks in the permitting process and local stakeholder engagement that could affect the project timeline?
- To what extent can exploration success at nearby targets extend the mine life or increase resource estimates?
