DPMLF - Dundee Releases PEA Results for Timok Gold Project
Dundee Precious Metals (DPM) (TSX:DPM,OTC Pink:DPMLF) rose close to 4 percent on Monday (July 15) after the miner announced the results of a preliminary economic assessment (PEA) for its Timok gold project located in Serbia.
The miner said that the PEA will act as a catalyst for providing a foundation upon which the project will now be optimized.
“With further optimization, Timok has the potential to provide significant accretive organic growth for relatively low initial capital in a region where we have had a presence for many years,” said Rick Howes, president and CEO.
“DPM discovered Timok in 2008 and the team has advanced the project while developing strong relations with local communities and the government,” he added.
The PEA is based on Timok producing 132,000 ounces a year at its peak, at an all-in sustaining cost of US$717 per ounce over the span of a nine-year mine life. Initial capital costs of the asset will be approximately US$136 million.
The study also estimates an after-tax net present value of US$105 million and an after-tax internal rate of return of 18.6 percent for the project, with has a payback period of 4.1 years.
Moving forward DPM plans to explore potential optimization opportunities for Timok, with additional metallurgical test work to be done in order to provide opportunities for improvements of the processing methods, costs and recoveries for all gold bearing material types.
Additionally, ongoing exploration will result in targeting additional shallow oxide material in the area — which could also generate further value to Timok. Finally, the miner noted that further flotation test work on what is now classified as sulfide material, excluding the oxide and transitional materials, could also result in improved performance.
The asset itself comprises of several sediment hosted gold deposits, including Bigar Hill, Korkan and Korkan East. In 2014, mineral resource estimates were completed for all four deposits.
Last week, DPM released its Q2 production results, reporting that its Chelopech and Tsumeb assets are on track to achieve annual guidance, while at Ada Tepe (formerly referred to as the Krumovgrad project) guidance has been reduced due to longer than expected construction of subsequent cells for the integrated mine waste facility. Despite the set back, the miner ensures that construction is progressing well and this initial constraint is expected to be released sometime in August of this year.
“Chelopech and Tsumeb production are in line with 2019 guidance,” stated Howes. “Following our achievement of commercial production at Ada Tepe during the quarter, we are currently ramping-up to design capacity.”
Late last month, the miner announced that Ada Tepe, which is located in Bulgaria, achieved commercial production and was fully operational.
“Commercial production at Ada Tepe marks the beginning of a new chapter for DPM, delivering significant growth in gold production and free cash flow,” Howes said. “I would like to congratulate all of our employees for achieving this key milestone safely and under budget as well as our local stakeholders for their many years of cooperation and support for this project.”
DPM’s total guidance for 2019 is 210,000 to 262,000 ounces of gold in concentrate and 33 to 39 million pounds of copper in concentrate, plus 225,000 to 250,000 tonnes of complex concentrate smelted.
As of 11:02 p.m. EDT on Tuesday (July 16), DPM was trading at C$4.47.
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Securities Disclosure: I, Nicole Rashotte, hold no direct investment interest in any company mentioned in this article.