Dundee Precious Metals Eyes 2028 Growth Boost From High-Grade Chelopech Discoveries

Key Points

• Chelopech discoveries could eliminate Dundee Precious Metals’ expected 2028 production decline. The high-grade Wedge Zone is expected to begin contributing late in 2028, while a deeper porphyry target returned long, high-grade mineralized intervals and could support further growth in 2029.
• Growth projects in Serbia and Bosnia are advancing. Čoka Rakita is expected to enter construction in 2027 and begin production in 2029, while Vareš has reached commercial production and is targeting full metallurgical throughput in the fourth quarter as cost-reduction measures take effect.
• The company is increasing exploration spending while maintaining shareholder returns. Dundee expects to spend at least $70 million on exploration next year, after returning $146 million to shareholders last year through dividends and buybacks and rebuilding its cash balance following a $1.3 billion transaction.

Dundee Precious Metals TSE: DPM outlined plans to expand production, advance a growing exploration pipeline and maintain capital returns, highlighting recent drilling success at its Chelopech operation in Bulgaria, development progress in Bosnia and Serbia, and efforts to lower costs at the Vareš mine.

During the presentation, David said the company has met production guidance for 11 consecutive years and has built a regional operating base spanning Bulgaria, Bosnia and Serbia. He pointed to the former Ada Tepe operation, which produced roughly 100,000 ounces annually over seven years at all-in sustaining costs of about $500 per ounce, as an important source of free cash flow.

The company expects gold-equivalent-ounce production to increase through 2027 before a previously anticipated decline in 2028. David said discoveries below the existing Chelopech mine could eliminate that expected reduction and add high-grade production in 2028, while supporting growth in 2029 alongside the planned Čoka Rakita project in Serbia.

Chelopech discoveries expand growth outlook

David said Dundee Precious Metals has made four discoveries in recent years, including Čoka Rakita, Dumitru Potok, the Wedge Zone at Chelopech and a deeper porphyry target beneath the Bulgarian operation. He said the company’s exploration team has identified four of the world’s top six discoveries since 2024, based on the company’s assessment.

At Chelopech, the Wedge Zone is expected to provide production stopes toward the end of 2028. David said its average grade is expected to be more than three times the grade in the mine’s life-of-mine plan at that point, potentially helping offset lower-grade material. The company expects the zone to reach a more normalized production position in 2029.

Chelopech has operated since 1932 and currently processes about 2.2 million tonnes annually, with potential to increase capacity to 2.5 million tonnes with relatively limited capital spending, according to the presentation. The operation currently produces between 185,000 and 215,000 gold-equivalent ounces annually, though production had been expected to fall to about 160,000 ounces in 2028 before the newer discoveries.

David cited drill results from the Wedge Zone including:

• 68 meters grading 7 grams per tonne;
• 81 meters grading 8 grams per tonne; and
• 58 meters grading 15 grams per tonne in upper portions of the target.

The company also reported significant results from the deeper porphyry discovery. One hole returned 1,054 meters grading 2.49 grams per tonne, while another returned 760 meters grading 3.3 grams per tonne, including the final 138 meters grading 5.7 grams per tonne. David said both holes ended because of drill limitations rather than because they reached the end of mineralization.

Dundee Precious Metals plans to deploy higher-capacity drills to test depth extensions toward a magnetic core below the currently drilled area. The porphyry could represent a separate source of conventional concentrates without deleterious elements, while existing Chelopech material produces arsenic-containing gold-copper concentrate, he said.

Serbia pipeline advances

In Serbia, the company expects Čoka Rakita to enter construction next year and begin operations in 2029. David said the project is expected to have all-in sustaining costs of $644 per ounce. He added that the company’s exploration work in the Rakita camp has translated from discovery costs of about $20 per ounce into substantially higher attributable enterprise value per ounce as assets advance.

Dumitru Potok, located near Čoka Rakita, is expected to receive an updated resource estimate in the first quarter of 2027, followed by a preliminary economic assessment near the end of that year. David said drilling 300 meters from the current Dumitru Potok extent intersected 50 meters grading 3.68% copper at roughly 1 kilometer below surface.

Elsewhere in the Rakita camp, the company reported a 76-meter intercept grading 2.66% combined copper equivalent at the Rakita North target. David said the camp still includes several targets up to 5 kilometers north of the planned Čoka Rakita development. The company’s most recent resource estimate contained 84 million tonnes, including 64 million tonnes at Dumitru Potok.

Vareš reaches commercial production phase

At Vareš in Bosnia, David said the operation has reached commercial production and is targeting full production at its metallurgical facility in the fourth quarter. Mining operations are already at that level, he said.

The company is pursuing lower unit costs through greater throughput and operational changes. David said Vareš plans to transition from cemented aggregate fill to paste fill, which is expected to reduce cement consumption. Dundee Precious Metals also expects costs to decline as it expands the local workforce and reduces reliance on expatriate personnel.

David said a shift to bottom-up mining from top-down mining has reduced dilution and contributed to grades meeting or exceeding expectations. Reconciliation work has only recently begun, but initial indications point to positive reconciliation against reserves and resources, he said.

Capital allocation and exploration spending

The company said it has rebuilt its cash balance following a September transaction valued at $1.3 billion that included $430 million in cash and the retirement of roughly $200 million in debt. David said Dundee Precious Metals also returned $146 million to shareholders through dividends and buybacks last year.

Year-to-date shareholder returns included $17 million in dividends, with the balance through buybacks. David said buybacks had reached $121 million excluding dividends through the end of the prior week.

The company expects to spend $70 million on exploration this year. While its three-year outlook had projected exploration spending to decline to $40 million next year, David said the company now expects spending to remain at $70 million or more as it advances resource estimates and preliminary economic assessments across its pipeline.

About Dundee Precious Metals (TSE:DPM)

DPM Metals Inc is a Canadian-based international gold mining company with operations and projects located in Bulgaria, Bosnia and Herzegovina, Serbia and Ecuador. The Company's purpose is to unlock resources and generate value to thrive and grow together. Our strategic objective is to become a mid-tier precious metals company, which is based on sustainable, responsible and efficient gold production from our portfolio, the development of quality assets, and maintaining a strong financial position to support growth in mineral reserves and production through disciplined strategic transactions.

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