Dundee drilling near Čoka Rakita suggests camp-style copper-gold potential

“These results are highly encouraging as it demonstrates the potential for a camp-style stratabound skarn mineralizing system,” Raj Ray, a mining analyst at BMO Capital Markets, wrote in a research note to clients.

At the Fransen target, 1 km northwest of Čoka Rakita, drill hole BIDD236A intersected 21 metres of 1.77% copper, 1.2 grams gold and 43.47 grams silver from 112 metres downhole, and drill hole BIDD229 returned 17 metres of 1.39% copper, 1.35 grams gold and 6.68 grams silver from 700 metres, including 9.2 metres of 2.04% copper, 1.45 grams gold and 9.6 grams silver.

“Assuming continued exploration success,” noted Ray, the discoveries “could add scale to the Čoka Rakita project and significantly enhance the economics.”

$381 million capex

A preliminary economic assessment in May proposing a 10-year mine producing 129,000 oz. gold per year (164,000 oz. annually in the first five years) at an all-in sustaining cost (AISC) of $715 per oz., estimated an after-tax net present value of $588 million at a 5% discount rate and an internal rate of return of 33%. The mine could cost $381 million to build.

A prefeasibility study (PFS) is due in the first quarter of next year with construction starting as early as mid-2026 and commissioning in 2028.

“It’s exciting because it offers near-term production,” Dundee CEO David Rae said in an interview on Wednesday.

The project is about 160 km southeast of the capital Belgrade, and just 320 km from Dundee’s Chelopech mine, which is forecast to produce 155,000 to 175,000 oz. gold and 29 to 34 million lb. copper this year at AISCs of $650 to $790 per ounce.

“The really compelling opportunity here for me is this is something in our backyard and just five hours by road away from our primary asset Chelopech, and we can use that opportunity to access our skills and regional support for things like exploration, technical services, supply chains, legal and permitting,” Rae said. “We can leverage the expertise and credibility we have in the area.”

Local contacts

Dundee has been operating in Serbia since 2004 and has developed strong local contacts.

“We’ve been there a long time, and we’ve got good relations, most importantly with local stakeholders but also the government,” Rae said. “We know the government well and are on very good terms. We have been working closely with them to understand what we need to do to permit. We’re confident we can develop this project over time.”

Čoka Rakita holds 9.8 million inferred tonnes grading 5.7 grams gold and 1.21 grams silver for 1.8 million oz. gold and 382 million oz. silver, according to an initial resource issued in December.

Dundee, with16 drill rigs at the project, has completed 22,000 metres of drilling since January and aims to drill another 35,000 metres before the end of the year. Much of that will focus on Dumitru Potok, Frasen and other regional targets as it has almost completed the infill drilling it needs to do at Čoka Rakita in support of the PFS.

Results from drilling at Dumitru Potok earlier this year included hole DPDD012, which cut 26 metres of 3.54% copper and 3.03 grams gold from 1,155 metres downhole.

“It’s very early days yet but there’s lots more to come and obviously lots of real estate to do exploration,” Rae says.

Survey

Exploration work will also follow up on a recent magneto-telluric survey that highlighted conductivity targets on the Potaj Čuka exploration licence, which extends for several kilometres along strike north of Dumitru Potok.

The targets at Potaj Čuka have the same characteristics and geological setting as Dumitru Potok and Frasen because of their prospective stratabound and porphyry style mineralization, the company says.

Dundee’s Čoka Rakita topped the charts of a Northern Miner survey of the top 10 drill results in the first seven months of the year. In February drill hole RIDD052A cut 81 metres grading 50.57 grams gold from 122 metres depth.

“The region was historically explored for porphyry and high-sulphidation epithermal systems but since the discovery of Čoka Rakita, the exploration model has been updated to target skarns,” BMO’s Ray noted.

Infrastructure

The 109-sq.-km project has easy access to roads, power lines and technical support, leveraging the region’s rich mining history and the company’s experience in underground mining.

Dundee also owns the Timok gold project in the Balkan country. It has budgeted between $20 million and $22 million for exploration activity in Serbia this year.

Ray has an outperform rating and a target price of C$18 per share on the company’s stock, well above the stock’s 52-week high of C$13.62.

In mid-afternoon trading in Toronto, Dundee was trading at C$12.92 per share, down C$0.06 on the day. The company has a market capitalization of C$2.3 billion.