DPM Metals' Čoka Rakita Project: A High-Conviction Gold Mining Opportunity with 36% IRR and Scalable Growth Potential

Junior miners operating in the gold sector often face a dual challenge: securing capital for high-impact projects while navigating the volatility of commodity prices. DPM Metals' Čoka Rakita Project in Serbia, however, stands out as a compelling case study in strategic capital allocation and gold price sensitivity. With a projected 36% internal rate of return (IRR) at a $1,900-per-ounce gold price and a net present value (NPV) of $782 million, the project exemplifies how disciplined financial planning and proximity to favorable market conditions can create scalable value.

Strategic Capital Allocation: Building a Foundation for Execution

DPM Metals has demonstrated a clear-eyed approach to capital deployment, allocating $40 million to $45 million in 2025 for the Čoka Rakita Project, with $25.1 million already earmarked for development activities. This phased spending aligns with the project's progression through its feasibility study, which is slated for completion by year-end 2025. The feasibility study is expected to refine capital expenditure estimates, which currently range between $379 million and $448 million, depending on the stage of analysis according to DPM Metals' latest results. By prioritizing near-term expenditures on engineering and permitting, DPM is mitigating risks while preserving flexibility to adjust to market dynamics.

The project's strategic importance is further underscored by its alignment with DPM's broader growth pipeline. As a high-grade underground operation with an average all-in sustaining cost of $644 per ounce, Čoka Rakita is positioned to generate robust cash flows once operational according to DPM's official development materials. With construction slated to begin in early 2027 and first production anticipated in mid-2029, the project's timeline reflects a balance between urgency and prudence as reported in DPM's Q3 2025 financial results.

Gold Price Sensitivity: A Tailwind for Upside Potential

The Čoka Rakita Project's financial metrics are highly responsive to gold price fluctuations, a critical factor for junior miners seeking to capitalize on cyclical commodity trends. At a $1,900-per-ounce gold price, the project's IRR of 36% and NPV of $782 million already signal strong returns. However, the sensitivity analysis reveals a compelling upside: at $3,500 per ounce, the IRR jumps to 68%, and the NPV soars to $2.2 billion. This elasticity highlights the project's potential to outperform in a rising gold environment, a scenario increasingly plausible given global macroeconomic uncertainties and central bank demand.

Importantly, the project's low all-in sustaining costs ($644 per ounce) provide a buffer against short-term price volatility. Even if gold prices dip below $1,900, the project's margins remain resilient, ensuring operational cash flows can sustain reinvestment. For investors, this dual advantage-high leverage to gold prices and cost discipline-creates a compelling risk-reward profile.

Strategic Positioning: Leveraging Geography and Infrastructure

The Čoka Rakita Project's location in Serbia adds another layer of strategic value. Proximity to DPM's existing operations in Bulgaria reduces logistical costs and enhances operational synergies. Additionally, Serbia's stable regulatory environment and existing infrastructure including road and rail networks accelerate project timelines and reduce execution risks. These factors, combined with the project's high-grade ore and long mine life, position it as a scalable asset capable of driving sustained growth.

Conclusion: A High-Conviction Play in a Volatile Sector

For junior miners, the interplay between capital allocation and commodity price sensitivity is often a make-or-break determinant of success. DPM Metals' Čoka Rakita Project exemplifies how a disciplined approach to both can unlock exceptional value. With a 36% IRR baseline, a gold price-sensitive NPV profile, and a strategic location, the project is not merely a growth opportunity-it is a blueprint for how to build resilience and scalability in the gold sector. As the feasibility study nears completion and construction timelines crystallize, investors are poised to benefit from a project that balances ambition with execution.