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Adriatic returns to London roots as it continues exploration in Bosnia

12th December 2019

By: Simone Liedtke

Creamer Media Social Media Editor & Senior Writer

     

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JOHANNESBURG (miningweekly.com) – Over 177-million ordinary shares of UK-based exploration and development company Adriatic Metals were admitted to trade on the LSE on Thursday.

The company was initially listed on only the ASX to allow for early-stage exploration to be absorbed into the investor community that is more familiar with the Bosnia region.

CEO Paul Cronin tells Mining Weekly Online, however, that it was always the company’s intention to return to its roots in London.

Commenting on the milestone, Cronin says the company’s Vareš project is “shaping up” to be one of Europe’s “most exciting new mining development stories”.

The project was only bought in early 2017, Cronin tells Mining Weekly Online, adding that it was largely an old openpit operation where the plant had been heavily damaged during the war in Bosnia.

Once the previous owners had gone through a bankruptcy process, it presented Adriatic with the opportunity to relook at the historic data and buy the project after the company had discovered “quite a significant deposit”.

Commenting on the company’s plans to advance the project, Cronin says Adriatic has recently concluded the first round of metallurgical work and the scoping study at the project.

The company is preparing for a bankable feasibility study (BFS), which should be ready by the end of 2020. To do that, the company still has to complete technical and engineering work at the project.

Knowing that the project “still has a lot to give”, Adriatic has allocated a budget of A$12-million specifically for exploration and drilling of 20 000 m, as well as extensive airborne surveys within the region.

According to Cronin, the new LSE listing is expected to foster interest from the company’s existing European investor base and enable participation in the Adriatic story from new investors to “support the company in the next phase of its growth as it advances the Vareš project to production” and continue its exploration campaigns.

Construction on the project is set to start in the second quarter of 2021, with first production to be achieved in 2022.

“Bosnia is not a familiar jurisdiction to most investors and we’re trying to . . . take that impression off the table,” Cronin says, adding that the project’s data and prospects attracted the company to the region, alongside the ease of doing business in the country, and its cooperative government, besides other aspects.

Adriatic is a precious and base metals explorer and developer through its 100% interest in the Vareš project, in Bosnia and Herzegovina, which comprises a historic opencut mine at Veovača and brownfield exploration at Rupice, a proximal deposit exhibiting high grades of base and precious metals.

The maiden mineral resource at Rupice totals 9.4-million tonnes at a zinc equivalent grade of 16.4%, while the mineral resource at Veovača totals 7.4-million tonnes at a zinc equivalent grade of 3.7%.

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, 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.

Additionally, Adriatic confirmed on Thursday that it was “well-funded” to complete the feasibility study for the Vareš project, while continuing its “aggressive” exploration programme.

The company has a strong balance sheet with cash of about £3.7-million, as at September 30, and having completed a successful equity placement in November, which raised A$25-million before expenses.

This ensures Adriatic is fully funded through to the making of a construction decision for the Vareš project in early 2021, including the completion of a feasibility study, as well as an environmental- and social-impact assessment and required permitting activities, while continuing the exploration programmes at Veovača and Rupice and other regional exploration targets, such as Jurasevac-Brestic, over the same period.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online

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