Adriatic Metals Plc announced on October 12 a proposed project financing of approximately $ 244.5 million before expenses for the construction of the underground mine of the Vares Silver Project, including a proposal to raise funds of 102 million dollars, the company said in a statement.
British media report that this is the biggest sale of shares this year by a mining company listed in London. Adriatic Metals Plc (ASX: ADT, LSE: ADT1, OTCQX: ADMLF) is a precious and base metals explorer and developer who owns the world-class Vares silver project in Bosnia and Herzegovina and the Raska zinc deposit in Serbia. Vares is a small town in Bosnia, located about 50 kilometers north of the capital Sarajevo, where there was a working iron ore mine before the 1992-1995 war in the country.
âThe announcement of the proposed project finance package is an important milestone, demonstrating the extent of global support for new investments in mining in the Balkans, and in Bosnia and Herzegovina in particular. At Adriatic, we have strived to move through the development phases of the project, at a pace and with professionalism, in order to deliver value to our shareholders and to align the delivery of the project with the aspirations of our local community in Vares. . This result is a positive reflection of the team we have assembled at Adriatic over its short history, which over the past 12 months has achieved several critical results that have resulted in the success we enjoy today. We look forward to continued success in the future as we move from developer to producer, âsaid Paul Cronin, CEO of Adriatic Metals Plc, in a statement.
Adriatic Metals is working closely on this project with private equity group Orion Mine Finance, which is also investing $ 120 million in senior debt and $ 22.5 million for a stream of future royalty payments. At the same time, the company’s bankers will seek to place $ 80 million in shares held by Sandfire Resources, an Australian-listed copper producer that has acquired a 16% stake in Adriatic.
The Bosnian authorities want to attract new foreign direct investment to the country and offer a low tax rate of 10%. Adriatic Metals aims to bring the new mine into production within the next four years. âWe welcome Adriatic Metals’ commitment to rebuilding Bosnia’s mining industry with the impending funding of the Vares Silver Project, which will be the largest one-time investment in the history of metal mining. of the country to this day, âsaid Fadil Novalic, Prime Minister of the Bosnian Federation, one of the country’s two entities.
At the end of January, Adriatic Metals received an operating permit from the Ministry of Industry, Energy and Mines of the Federation of Bosnia for the Vares project. These are the unused Veovac mine and the Rupica underground deposit. These two silver-zinc-lead deposits constitute the Vares Silver Project, Cronin told local media when the mining license was granted.
“This is, I must point out, only the second operating permit issued by the Bosnian authorities in the last 30 years. So, not only is it important for us but also for Bosnia and Herzegovina. With a permit issued by the Federal Ministry of Energy, Mines and Industry, the official operating period of the project, which is valid for 30 years, begins. The permit will allow the company to complete the detailed engineering plans for the Veovac surface mine, flotation and tailings management plant, and construction is expected to begin in the third quarter of 2021, âCronin said.
The Veovac and Rupica mines are early polymetallic deposits that had already undergone varying degrees of exploration and exploitation before the war in Bosnia, when everything was stopped. Exploration of the Vares district began in the 1940s, when the great engineering and energy giant Energoinvest of Sarajevo discovered several deposits of iron ore and polymetals (lead, zinc, barite, silver and gold) which extend from Rupice in the northwest to the forest of Smail in the southeast.
From the late 1960s to the early 1970s, there were several small exploration projects in the area, including exploration wells and an open pit mine at Veovac and the development of a processing plant, which led to significant exploration drilling in the late 1970s and early 1980s. Discovery began at the site in 1983 and approximately 1.2 million tonnes of mineralized material was mined out of four. years. However, the 1992-1995 war brought all mining projects to a halt.
In 2017, Adriatic completed a 16-hole, 1,379-meter drill program at Veovac to confirm these historic results. That same year, the company drilled eight wells at Rupice totaling 1,458 meters, targeting mineralization to confirm historical results and analyzing other metals, including copper, gold and silver.