TORONTO, Dec. 18, 2024 (GLOBE NEWSWIRE) -- Dundee Precious Metals Inc. (TSX: DPM) ("DPM” or "the Company”) is pleased to announce the results of a pre-feasibility study ("PFS”) for its Čoka Rakita project in Serbia. The robust PFS economics and continued exploration success around Čoka Rakita serve as DPM's basis for proceeding to a feasibility study ("FS”) immediately for an accelerated construction decision, with first concentrate production targeted for 2028.

PFS Highlights

^{(All dollar amounts in this news release are expressed in U.S. dollars, unless otherwise noted.)}

Improvements in the PFS include increased ounces in the initial years and decreased all-in sustaining costs. Project highlights include:

• Accelerated gold production in first 5 years, averaging 170,000 ounces of gold per year.
• Robust base case NPV_5% of $735 million (after-tax) and IRR of 41% at a $1,900 per ounce gold price assumption. Using a $2,500 gold price assumption, NPV_5% is $1.2 billion (after-tax) and IRR is 58%.
• First quartile all-in sustaining cost of $644 per ounce of gold (life of mine average).³
• Attractive initial capital of $379 million, well-within DPM's funding capacity.
• Mineral Reserves of 1.36 million ounces supporting a 10-year mine life with 8 years of processing.
• Project timeline further de-risked by utilizing existing processing equipment from the Ada Tepe mine and leveraging proximity to Chelopech mine to train and develop key personnel for operating roles.
• Advancing to feasibility study, expected to be completed by year-end 2025.
• Optimization and exploration activities ongoing to further unlock Čoka Rakita's value potential.

_{2. Current legislation in Serbia allows for tax relief for large investments for a maximum period of 10 years, subject to certain eligibility conditions being maintained through the 10-year period. The PFS assumes that the Čoka Rakita project is eligible for this tax relief and the effective income tax rate applied is 0% over the project's 10-year mine life.}

_{3. Cash cost per ounce of gold sold, all-in sustaining cost per ounce of gold sold and free cash flow are non-GAAP financial measures or ratios and have no standardized meaning under IFRS Accounting Standards ("IFRS”) and may not be comparable to similar measures used by other issuers. As the Čoka Rakita project is not in production, the Company does not have historical non-GAAP financial measures nor historical comparable measures under IFRS, and therefore the foregoing prospective non-GAAP financial measures or ratios may not be reconciled to the nearest comparable measures under IFRS. Refer to the "Non-GAAP Financial Measures” section of this news release for more information, including a detailed description of each of these measures.}

"We are very excited by the results of the pre-feasibility study. In less than 24 months since announcing the initial discovery of Čoka Rakita, we have outlined a very robust, highly value accretive project with the potential to add high-margin gold production growth to our portfolio,” said David Rae, President and Chief Executive Officer of Dundee Precious Metals.

"Given the project's excellent economics, including a 41% IRR at a gold price of $1,900 per ounce, we are immediately proceeding to a feasibility study while advancing permitting activities in parallel, with the goal of commencing construction in mid-2026 to support first production of concentrate in 2028.

"We have the financial and technical resources to advance this high-quality growth project and continue our exploration programs to further unlock the significant potential of Čoka Rakita and the surrounding licences. This includes the two new high-grade Frasen and Dumitru Potok discoveries we announced earlier this year, located within 1 kilometre of Čoka Rakita, which confirm our view of the significant potential for large-scale high-grade mineralization.”

Pre-feasibility Study Overview

Čoka Rakita is located approximately 35 kilometres by road northwest of the city of Bor in Serbia, and benefits from established infrastructure, including nearby roads and power lines. The project is a strong fit with the Company's underground mining and processing expertise and is approximately 320 kilometres northwest of DPM's Chelopech mine in Bulgaria, which will allow easy access to existing technical support functions.

The PFS is based on a Mineral Reserve Estimate of 6.6 million tonnes ("Mt”) at 6.38 grams per tonne ("g/t”) for 1.36 million contained gold ounces. The PFS contemplates underground mining of the Čoka Rakita deposit with a relatively standard comminution, gravity and flotation flowsheet to process 850,000 tonnes of ore per annum, producing saleable gravity and flotation gold concentrates. A portion of the gravity concentrate will be smelted and sold as a doré for improved sales terms.

The PFS assumes start of construction mid-2026 with first production of gold concentrate targeted for the second half of 2028.

The process flowsheet and project schedule allow DPM to leverage the use of existing processing equipment and infrastructure from the Ada Tepe operation in Bulgaria, which will be decommissioned and refurbished following the mine's closure in mid-2026. Several benefits of this approach were identified, including de-risking the project timeline in terms of long-lead items and supply chain risk, as well as the ability to leverage the Company's processing expertise, training and maintenance practices.

The following table summarizes key inputs, operating statistics and results of the Čoka Rakita PFS:

_{2. Closure costs include a non-recoverable VAT of approximately $2.3 million.}

_{3. Economics from construction forward, assumes no initial capital spent in advance of a construction decision, and are based on financial years.}

_{4. Current legislation in Serbia allows for tax relief for large investments for a maximum period of 10 years, subject to certain eligibility conditions being maintained through the 10-year period. The PFS assumes that the Čoka Rakita project is eligible for this tax relief and the effective income tax rate applied is 0% over the project's 10-year mine life.}

Mining and Processing

The PFS mine plan assumes access from surface via two declines and a spiral ramp to truck the mined material to surface. The anticipated mining method is conventional sublevel long-hole open stoping and utilizing paste backfill with cemented rock fill, and unconsolidated rock fill used where the mining sequence permits, leveraging DPM's experience and expertise from its underground Chelopech mine.

The PFS is based on a Probable Mineral Reserve of 6.6 million tonnes. The PFS mine plan and design has been optimized to access the high-grade core of mineralization in the initial years. Production in the first five full years is expected to average 170,000 ounces per year from an average gold head grade of 7.42 g/t. The average life of mine gold production is expected to be approximately 147,000 ounces per year from an average gold head grade of 6.38 g/t.

The PFS is based on a process flowsheet consisting of crushing and grinding to a particle size (P₈₀₎ of 53 µm, followed by gravity concentration and sulphide flotation. The gravity concentrate will be marketable directly to gold refineries, and the sulphide flotation concentrate will be suitable for processing by smelters in the region. Testwork results to date indicates that the final concentrates do not contain any deleterious elements above smelter penalty thresholds. A portion of the gravity concentrate will be smelted and sold as a doré. Average payability for the flotation concentrate is expected to be 97.5%, average payability for the gravity concentrate is expected to be 99.8% and average payability for the doré is expected to be 99.9%, with a combined life of mine weighted average of 98.5%.

The production schedule as outlined in the PFS is presented in the table below:

Capital Expenditures

The PFS estimates initial project capital costs of approximately $379 million includes development of the underground mine, construction of an 850,000 tonne per annum processing plant utilizing existing equipment from the Ada Tepe mine and processing facility, a 3.93 Mt fully lined dry tailings storage facility, and additional infrastructure, including haul and access roads, water treatment, power supply and site services.

The PFS includes several enhancements to the PEA design, resulting in improved economic benefits to the project. This included improved mine access layout to incorporate a second decline and portal, change of the SAG mill to an AG mill and pebble crusher, the addition of a secondary grinding mill, and the addition of a gravity gold circuit and gold room.

The following table breaks down the initial capital estimate: