Dundee Precious Metals Inc. [DPM-TSX] announced results of a pre-feasibility study (PFS) for its Timok Gold Project in Serbia. The PFS is focused on the development of the oxide and transitional portions of the project and confirms Timok’s potential as an attractive organic growth opportunity within the Company’s portfolio. Based on the results of the PFS, the company has received Board approval to proceed with a feasibility study (FS). All figures are US$.
Highlights of the positive pre-feasibility study results, including after-tax NPV (5%) of $135 million and Internal Rate of Return of 21% (based on a $1,500/oz gold price assumption). There would be 547,000 gold ounces recovered over an 8-year mine life with annual gold production estimated to average approximately 80,000 ounces in years 1 to 6, and approximately 70,000 ounces per year over the life of mine. Life-of-mine average all-in sustaining cost of $69/oz. Initial capital cost estimate is $211 million.
Dundee has identified a number of initiatives to reduce the initial capital estimate and optimize overall economics including the potential for contractor mining, which will be evaluated as part of the FS.
While the FS will continue to focus on the oxide portion of the deposit, there is potential to incorporate additional existing Mineral Resources into the mine plan by processing the sulphide portion of the ore body, which will be evaluated in parallel with the FS. Timok contains an additional 1.3 million ounces in Indicated Resources, contained within 32.3 million tonnes (Mt) at 1.27 g/t gold.
There are encouraging new results from exploration activities, which were focused on adding resources to extend the project life, including 40.5 metres at 2.83 g/t gold from drill hole BIDD125 at the Chocolate South oxide prospect. Drill hole RADD013 at the new Čoka Rakita sulphide prospect returned 36 metres at 5.26 g/t gold, including 7 metres at 14.45 g/t gold.
“The Timok Project continues to advance as a potential future growth opportunity for DPM,” said David Rae, President and CEO. “With additional optimization opportunities to enhance the project and very encouraging exploration results, we believe Timok represents an attractive opportunity to provide organic growth in a region where we have had a presence for many years.”