Bulking in the Balkans

Research evidence excerpt

Bulking in the Balkans

DPM Metals Inc (DPM CN)

Equity Research

June 19, 2026

Vares Optimization

We outline some of the changes that DPM has and is implementing at Vares since acquiring the

mine from Adriatic Metals in 2025. At a high level, management is implementing best practices from

Chelopech and then ultimately, taking the learnings from Vares to Coka Rakita when that development

begins. Overall, Vares appears to be on track to achieve 850ktpa run rate by year-end, with gradual

throughput improvement each quarter. Development rates are tracking to plan. 2026 represents a

transition year, with 2027 expected to be significantly higher production. We model 124k GEO in 2026

(vs. 105-130k GEO guidance) and 176k GEO in 2027 (+42% y/y and vs. 165-190k GEO guidance).

The Vares employees we met noted they have seen a marked improvement in mining method, hiring

of locals into managerial roles, and employee training since the acquisition. A key advantage for DPM

is being able to transfer employees and best practices from Chelopech and Ada Tepe to Vares.

With Ada Tepe three weeks away from completing processing of remaining ore, Chelopech and Vares

are currently DPM's two operating mines, until Coka Rakita comes online in 1H29. Vares represents

~28% of our modeled company NAV.

Mining and processing changes. Management has prioritized UG development and changed the

mining sequence from top-down to bottom-up, which allows for additional production flexibility. To

improve ground integrity, DPM reduced the sublevel interval from 25–30m to 20m. The drill spacing in

the stopes was reduced (i.e., greater density) to improve fragmentation. The UG ventilation program

was changed to avoid previous issues that Adriatic ran into with freezing decline and burst water pipes.