Adriatic Metals has passed the halfway mark on construction of its high-grade Vares silver project in Bosnia & Herzegovina with its financial future secured following draw down of its first US$30m tranche from a $142.5m debt package.
The Balkans-focused, ASX-listed company opened its coffers to the $30m injection via senior secured debt with Orion Resource Partners on Friday as it pursues project completion and first concentrate production by September 2023.
A further $22.5m boost is also imminent pending final security documents and three more $30m tranches are expected be drawn down over the course of 2023.
The funding keeps Adriatic’s flagship Vares project on the straight-and-narrow and means a convertible bonds option will not be required, freeing up a further $20m for project development.
Aside from its debt funding deal Orion has also taken an 8.9 per cent interest in Adriatic via a $50m placement to the tune of some 24.2m shares.
Adriatic Metals Managing Director Paul Cronin said “this is another critical step towards de-risking the Project, and we remain on track to deliver first concentrates in Q3 2023.”
“Orion are aligned with our commitment to responsible mining and sustainability, via a $100,000 donation to the Adriatic Foundation, which will support valued community and environmental initiatives in Vares and Kakanj.”
The Adriatic Foundation was formed in 2021 to support legacy projects in education, health and environment for Vares, a once-thriving and picturesque inland mountain town whose largely-Bosnian population collapsed from 22,000 to fewer than 9000 in the 1990s during the collapse of Yugoslavia.
Funds are also allocated to nearby Kakanj, an industrial town home to some 37,000 people.
The Vares project is nestled near the two towns and boasts an ore reserve in its Rupice deposit of 7.3 million tonnes going 485 g/t silver and other metals equivalent.
Breaking that figure down sees a return of 202 g/t silver, 1.9 g/t gold, 5.7 per cent zinc, 3.6 per cent lead, 0.6 per cent copper and 0.23 per cent antimony, an alloy-hardening material.
The Vares processing plant is expected to churn out some 800,000tpa and Adriatic says it will have a sizeable high-grade stockpile to begin chewing through from the get-go.
Adriatic has mooted a 10-year mine life with potential to expand should the nearby Veovaca open pit mine where lead, zinc and barite extraction ceased in 1988 amid rising hostilities be revived.
Bosnia and Herzegovina and neighbouring Serbia where Adriatic also has interests are today considered favourable and stable mining jurisdictions.
Adriatic’s projects sit amid a host of major global players including Anglo-Australian Rio Tinto, China’s Zijin Mining Group, Brazilian giant Vale and the privately-owned Mineco.
With Vares fully-funded and expertise on tap in the local communities it appears to be all systems go for Adriatic in its pursuit to bring the project online in 2023.
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By Matt Birney
