TSX-listed Dundee Precious Metals will immediately proceed with a feasibility study at its Čoka Rakita gold project, in Serbia, after a prefeasibility study (PFS) demonstrated the project's "excellent economics", including a 41% internal rate of return.

While undertaking the feasibility study, the company will also advance permitting activities, with the aim of starting construction in mid-2026 to support first production of concentrate in 2028.

The PFS estimates initial project capital costs of about $379-million, which includes development of the underground mine; construction of an 850 000 t/y processing plant sing existing equipment from the Ada Tepe mine and processing facility, in Bulgaria; a 3.93-million-tonne 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 preliminary economic assessment 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 semi-autogenous grinding mill to an autogenous grinding mill and pebble crusher, the addition of a secondary grinding mill and the addition of a gravity gold circuit and gold room.

The PFS estimates gold production of 1.2-million ounces over the mine's ten-year life and average all-in sustaining costs of $644/oz over the mine life.

It further estimates a net present value of $735-million at a gold price of $1 900/oz.

“We have the financial and technical resources to advance this high-quality growth project and continue our exploration programmes 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 km of Čoka Rakita, which confirm our view of the significant potential for large-scale high-grade mineralisation,” says Dundee president and CEO David Rae.