Dundee Precious Metals Inc (TSX:DPM) could see meaningful resource growth at its Chelopech operation following the company's announcement of a new high-grade gold-copper porphyry discovery, according to Jefferies analysts.
The firm wrote that the discovery at the Brevene South Porphyry (BSP) target, located adjacent to the Chelopech mine concession in Bulgaria, may represent the deeper source system that geologists have long speculated exists beneath the operation.
Initial drilling at the target intersected 713 metres grading 2.52 grams per tonne gold equivalent, including 398 metres grading 3.00 grams per tonne, with the drill hole remaining in mineralization at depth.
Jefferies noted that the scale and continuity of the intercept stood out, while additional follow-up holes, although lower grade, helped confirm the presence of a broader porphyry-style system.
The firm added that geological indicators, including a transition into phyllic-potassic alteration and widespread sulphide mineralization, support the possibility of a larger mineralized system extending beyond the current Chelopech mine boundaries.
Jefferies also pointed to Dundee Precious Metals' recent positive drill results from the Wedge Zone Deep target at Chelopech, suggesting that the combination of exploration successes could make the company's 2026 resource update significant and potentially extend the mine's life beyond the roughly 10 years currently reflected in its model.
According to the analysts, the company plans to deploy five high-capacity drill rigs at BSP for approximately 15,000 metres of drilling through 2026, while another seven rigs will operate across the broader Brevene licence area.
In parallel with exploration efforts, Dundee Precious Metals is advancing permitting activities and expects to receive a Commercial Discovery Certificate by September 2026, a step Jefferies views as important in reducing development risk.
They wrote that the company has historically traded somewhat under the radar but believes continued exploration success, combined with its strong free cash flow generation, could create potential for a valuation re-rating.
Dundee Precious Metals’ Canadian-listed shares were up 4% at about $48 on Wednesday afternoon.