Adriatic Metals, an ASX-listed Balkan polymetallic project developer, has successfully passed the last major hurdle to regulatory approval which now allows it to begin construction on its silver mining and processing project -zinc-lead Vares in Bosnia and Herzegovina later in the year. The London-based company, which is also listed on the London Stock Exchange, said it had obtained the all-important mining license for the Rupice underground deposit, the cornerstone of the project, from the Federal Department of Energy, Mines and Industry following a public inquiry hearing in Vares earlier this month.
It crowns Adriatic’s remarkable turnaround time of just over four years between the “discovery” of Vares and full approval of the project.
Rupice is the basis of the Vares development project, which is currently estimated to have a capital cost of US $ 173 million.
The latest probable ore reserves declared for the Rupice underground and Vares open pit deposits amount to 11.12 million tonnes at an average grade of 149.6 grams per tonne of silver, 1.28 g / t d ‘gold, 4.22 percent zinc, 2.67 percent lead and 0.43 percent copper.
Of the overall reserves, the Rupice deposit represents 8.41 Mt grading on average 179 g / t silver, 1.66 g / t gold, 5.04% zinc, 3.18% lead and 0.55 % of copper.
This equates to 48.4 million ounces of contained silver, 450,000 ounces of gold, 420,000 tonnes of zinc, 270,000 t of lead and 50,000 t of copper – on the Vares reserves, the metal grade totals 53.5 million ounces of silver, 460,000 ounces of gold, 470,000 t of zinc, 300,000 t of lead and 50,000 t of copper.
The Adriatic or “PFS” pre-feasibility study on Vares released last year shows that reserves maintain production for an initial 14-year mine life, with concentrate production for the first five years. ‘Mining an average of 15.3 million ounces of silver equivalent per year based on a mill ore throughput of 800,000 tonnes per year.
In order for the main construction phase of Vares to proceed, Adriatic needed the operating permits for the Rupice underground and Veovaca open pit deposits, the latter including a permit covering the proposed processing plant of Vares.
Rupice is located approximately 12 km west-northwest of Veovaca.
The $ 540 million market-capitalization company, which received the Veovaca operating license about six months ago, says Rupice’s license represents the latest of major regulatory approvals.
The timing of permit approvals for the two deposits varied due to the fact that Rupice was a pristine deposit and Veovaca a brownfield site.
Management plans to begin construction in earnest at Vares in the December quarter of this year after delivery of a final feasibility study and environmental and social impact assessment in the coming weeks.
Rupice’s operating permit marks the end of a complex and multifaceted authorization process. I am extremely proud of our team in Bosnia and Herzegovina for their diligence, coordination and cooperation with the many different stakeholders in the licensing process to make this happen. Without the continued support of all levels of government and our local community, we would not have been able to take this extremely important step in such a short time frame.
Vares, centered around the town of Vares about a 50-minute drive from the capital of Bosnia and Herzegovina, Sarajevo, is perched in a mountainous area of vast forests and meadows.
Veovaca is a historic open pit mine that produced lead, zinc and barite concentrates and ceased operations 33 years ago.
Adriatic plans to build most of the processing plant and associated infrastructure at the Veovaca brownfield mining site and to proceed with underground mining and partial backfilling of tailings at Rupice.
The PFS economic estimates showed an average EBITDA in pounds sterling of approximately US $ 251 million per year for the first five years of metal concentrate production, a net present value for the project of US $ 1.04 billion and an internal rate of return of 113%.
All-inclusive sustaining costs for Vares throughout the initial mine life have been extrapolated to an average of US $ 120 per tonne milled and the payback period for capital costs since the start of production has been set. at 1.2 years.
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