The Bosnian Federal Ministry of Environment and Tourism (FMET) has issued a positive record of decision (RoD) for the Veovaca environmental permit, UK-based exploration and development company Adriatic Metals said on Thursday.

Adriatic is the owner of the Vareš mining concession in Bosnia and Herzegovina, comprising the Veovaca and Rupice areas. The Veovaca project is an historic operation mined between 1983 and 1987.

A scoping study for the development of the Vareš project outlined a robust, high-margin and low capital expenditure (capex) project producing zinc, lead, gold, silver, barite, copper and antimony in concentrates over a mine life of about 14.6 years.

The scoping study was released in November last year, and outlined an operation with a plant throughput of 800 000 t/y, producing multiple concentrates over the mine life. The project is expected to deliver a post-tax internal rate of return of 107.4% and a net present value of $916.6-million at a discount rate of 8%, for total capex of $178.4-million, including a 30% contingency.

Adriatic CEO and MD Paul Cronin said the receipt of the RoD was a “major step forward” in the permitting of the Vares project, and despite all the challenges being presented to government in the current Covid-19 crisis, demonstrated the Bosnian government’s willingness to advance the project as quickly as possible.

With the RoD received, FMET would issue the environmental permit as the decision was final and could not be challenged. The RoD was received following the submission of an environmental impact assessment, prepared by Adriatic in accordance with the federal mining code, and review by a five-member expert committee, and public hearing.

In addition to the RoD for the Veovaca mine, plant and tailings facility, Adriatic subsidiary Eastern Mining has also received a preliminary water permit and environmental permit for the demolition of the historic Veovaca plant site, and preliminary water permits covering the Veovaca mine, plant and tailings storage facility, including an accumulation pond for excess water capture.

The environmental permit is required to be issued within 30 days from the date of the RoD, at which point Adriatic will submit an application for an urban planning permit to the Federal Ministry for Spatial Planning. This application requires approvals from nine different utility and community service companies to be submitted, with these approvals being already obtained.

Upon receiving the urban planning permit, the application for exploitation will be made to the Federal Ministry for Energy, Mining and Industry (FMEMI). As part of the approval procedure, FMEMI will hold a public hearing in Vares, where members of the public can comment on the application, and if necessary, Adriatic will be given an opportunity to respond.