REG - Adriatic Metals - Final Results
31/03/2025 07:15
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RNS Number : 8662C Adriatic Metals PLC 31 March 2025
31 March 2025
Adriatic Metals PLC
("Adriatic Metals" or the "Company")
Annual Report and Audited Financial Statements
for the year ended 31 December 2024
Adriatic Metals PLC (ASX:ADT, LSE:ADT1, OTCQX:ADMLF) is pleased to announce
its Annual Report and Audited Financial Statements for the year ended 31
December 2024.
The Board advises all shareholders and interested stakeholders that the
Company's Annual Report including the audited results for the year ended 31
December 2024 is available on the Company's website:
https://www.adriaticmetals.com/downloads/adriatic-annual-report-2024.pdf
(https://gbr01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.adriaticmetals.com%2Fdownloads%2Fadriatic-annual-report-2024.pdf&data=05%7C02%7Cklara.kaczmarek%40adriaticmetals.com%7Cd10b5922779242bde86b08dd6fcda258%7Caf63d2579d14425387c8b751ddfef965%7C0%7C0%7C638789651160258273%7CUnknown%7CTWFpbGZsb3d8eyJFbXB0eU1hcGkiOnRydWUsIlYiOiIwLjAuMDAwMCIsIlAiOiJXaW4zMiIsIkFOIjoiTWFpbCIsIldUIjoyfQ%3D%3D%7C0%7C%7C%7C&sdata=Y%2BHFP%2FcE1ELh8tCK9ZtxzNojGtOBRVfrLzEfrz08iws%3D&reserved=0)
An abridged version of the results for the year ended 31 December 2024 is
included below. The results for 2024 are presented in United States Dollars.
A copy of the Annual Report 2024 will be submitted to the Financial Services
Authority's National Storage Mechanism and will be available for inspection
at https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
By order of the Board
Michael Rawlinson
Chairman of the Board
For further information please visit: www.adriaticmetals.com
(http://www.adriaticmetals.com/) ; email: info@adriaticmetals.com
(mailto:info@adriaticmetals.com) , @AdriaticMetals
(https://twitter.com/AdriaticMetals) on Twitter; or contact:
Adriatic Metals PLC
Klara Kaczmarek Tel: +44 (0) 7859 048228
GM - Corporate Development Klara.kaczmarek@adriaticmetals.com (mailto:Klara.kaczmarek@adriaticmetals.com)
Burson Buchanan Tel: +44 (0) 20 7466 5000
Bobby Morse / Oonagh Reidy adriatic@buchanan.uk.com (mailto:adriatic@buchanan.uk.com)
RBC Europe Limited
Farid Dadashev / James Agnew / Jamil Miah Tel: +44 (0) 20 7653 4000
Stifel Nicolaus Europe Limited
Ashton Clanfied / Callum Stewart / Varun Talwar Tel: +44 (0) 20 7710 7600
Sodali & Co
Cameron Gilenko Tel: +61 466 984 953
MARKET ABUSE REGULATION DISCLOSURE
The information contained within this announcement is deemed by the Company
(LEI: 549300OHAH2GL1DP0L61) to constitute inside information for the
purpose of Article 7 of EU Market Abuse Regulation (EU) No. 596/2014 as it
forms part of UK domestic law by virtue of the European Union (Withdrawal) Act
2018, as amended. The person responsible for arranging and authorising the
release of this announcement on behalf of the Company is Laura Tyler, CEO and
Managing Director.
CHAIRMAN'S STATEMENT
OVERVIEW
I am proud to have overseen the remarkable transformation of Adriatic Metals.
In just seven years, the Company has evolved from an exploration and
development stage entity to a revenue-generating European mining company. This
achievement is especially noteworthy given the challenges of establishing a
new mining operation in Bosnia and Herzegovina - a country with a rich mining
heritage but only a few small hard rock mines today. The Vareš Silver
Operation has brought significant foreign direct investment to the country,
created numerous employment opportunities, and revitalised the local economy
in a region that has long faced economic challenges. Adriatic has demonstrated
that it is not only possible to build a modern, sustainable, and efficient
mine in Europe, but that such projects can also bring substantial benefits to
all stakeholders involved.
2024 has been a year of profound global change, marked by an unprecedented
number of elections worldwide. The mining industry continues to face
significant challenges. Commodity prices have diverged sharply, with some,
like lithium, falling to historic lows, while others, such as gold and
antimony, have soared to new heights. As we approach 2025, industry sentiment
remains uncertain. Gold prices are projected to rise further, while the
strength of the US dollar will largely hinge on upcoming tariff decisions.
Political risk is also on the rise, as miners and investors grapple with a new
wave of resource nationalism spanning regions from Mali to Indonesia.
The start of operations at Vareš coincides with a period when mining in
Europe is under intense political scrutiny. This comes as the EU strives to
meet the ambitious goals set by its Critical Raw Materials Act 2023, driven by
the pressing need to establish a regional, critical minerals supply chain.
Collaboration across Europe is essential to achieving this objective. Zinc,
recently added to the UK's Critical Minerals list, underscores its pivotal
role in the global transition to Net Zero. Similarly, silver - renowned as the
world's most efficient energy conductor - is indispensable for manufacturing
solar panels, wind turbines, and batteries.
Meanwhile, the once-contentious role of mining in society is undergoing a
shift. Even former critics now acknowledge that the transition to green energy
relies heavily on an increased supply of minerals and metals. However, to meet
this surging demand, the extractive sector must navigate additional pressures;
advancing sustainable mining practices, maintaining capital discipline, and
fulfilling ever-growing stakeholder expectations.
Bringing the Vareš Silver Operation into production within seven years has
been an exceptional accomplishment. This remarkable achievement was further
celebrated during the mine's official opening in early March. The event was
attended by notable dignitaries, including Bosnia and Herzegovina's Prime
Minister, Nermin Nikšić, and the British Ambassador, Julian Reilly, who
joined us to commemorate the launch of Europe's newest metals mine. This
official event was followed by a celebratory 'Vareš Fest' in the town square,
with the local community, employees and key suppliers coming together to mark
the momentous occasion.
Firstly, I would like to extend my commendation and gratitude to outgoing CEO
Paul Cronin, whose bold vision turned the ambitious goal of building a
silver-zinc-lead mine in the emerging mining jurisdiction of Bosnia and
Herzegovina into a reality. I wish him every success in his future endeavours
and I am confident that, as a founder and shareholder, he will continue to
strongly support the business.
I would also like to warmly commend Laura Tyler for taking the role of
permanent CEO during a crucial inflection point for Adriatic as it transitions
to the next phase of growth. With her extensive experience, exceptional skill
set, and adaptability, I have every confidence in her ability to steer the
company forward and drive its continued success.
Throughout 2024, we further strengthened our Board to align with Adriatic's
corporate transition, welcoming several esteemed new members. Among them was
Eric Rasmussen, formerly with Rio Tinto and the EBRD as Global Head of Natural
Resources, who brings extensive expertise in financing European and global
mining projects. In October, we also appointed Mirco Bardella as a
Non-Executive Director. Mirco is an experienced specialist in assurance and
governance, predominantly in the natural resources sector, having previously
advised companies including Xstrata, Rio Tinto, Gold Fields and Hochschild
Mining in his capacity as Assurance Partner at professional services firm,
Ernst & Young. An expert in assurance and governance within the natural
resources sector, Mirco's skills have already proven to be invaluable to both
our Board and management team.
Additionally, our Non-Executive Director, Sandra Bates, was promoted to Senior
Independent Director, a milestone as the first such role on the Adriatic
Board. This appointment reflects the evolution of the Company's corporate
structure in line with its growth into a stronger and more dynamic entity.
Additionally, Sanela Karic was appointed as Executive Director for Corporate
Affairs at Adriatic and as a Director of Adriatic's operating subsidiary in
Bosnia and Herzegovina. A Bosnian native and practicing lawyer, Sanela has the
relevant experience for this key role, which involves engaging with all levels
of government and leveraging her deep expertise to support the Company's
strategic goals.
In May 2024, we completed a successful capital raising of $50m, which saw a
number of new institutional investors join our share register and was also
backed by our existing shareholders. This is not only a huge vote of
confidence in Adriatic, but also provided vital flexibility to the balance
sheet during the crucial stages of operational ramp up.
Throughout the year, the fourth and final tranche of $30m of senior secured
debt from Orion was drawn down and the first debt repayment of $19m was
rescheduled to 31 March 2025. Post-period, in January 2025, Adriatic completed
a $25m concentrate prepayment arrangement with our offtaker, Trafigura, at
competitive terms, and in February 2025, Adriatic raised $50m, through a
well-supported placement. The proceeds of this placement will be used to
fast-track the Vareš Processing Plant expansion to 1.3Mtpa, initiate studies
and workstreams at Rupice Mine to support this production growth and de-risk
the ramp-up to nameplate production. Our 2025 strategy will prioritise debt
repayment as ramp up continues to nameplate capacity in the second half of the
year.
In February 2025, we also announced that Adriatic is working with its advisors
regarding the transfer of the listing category of all of its ordinary shares
from the Equity Shares (Transition) category of the Official List to the
Equity Shares (Commercial Companies) category of the Official List on the
London Stock Exchange. Among other benefits, the Board believes the transfer
will enable the ordinary shares to be considered for inclusion in the FTSE UK
Index Series (subject to meeting certain other eligibility criteria), which
are widely utilised investment benchmarks for institutional investors, in due
course. We hope to update our stakeholders on this process in due course.
We are excited to share the success of Vareš with our loyal shareholders and
stakeholders who have supported us throughout this journey to production. Our
vision extends beyond current operations - we aim to leave a lasting legacy
for future generations in the country and community where we operate. By
fostering employment, driving sustainable economic growth, and supporting the
community through the Adriatic Foundation, we strive to enable this vibrant
region to thrive and prosper.
On behalf of the Board, I extend my heartfelt thanks to our management team,
employees, and stakeholders at all levels - local, regional, and national -
for their dedication, hard work, and unwavering support during this remarkable
period of success.
As we look ahead, we are filled with excitement as the Company begins to
execute its strategy for long-term sustainable growth. I would also like to
express my gratitude to our shareholders for their steadfast support during
what has been, at times, an unprecedented and challenging year. Thanks to your
confidence in us, we are now firmly on track to achieve nameplate production
in 2025.
Michael Rawlinson
Chairman of the Board
CEO STATEMENT
CEO Statement
I am delighted to deliver this message as the new CEO of Adriatic Metals. I
joined the Company as a Non-Executive Director on 1 July 2024 and was drawn in
by the immense potential of the Vareš Silver Operation based on the
world-class, high-grade orebody at Rupice. I was equally impressed by the
speed at which the project progressed, from the first drill hole in 2017 to
the commencement of concentrate production in February 2024.
Since assuming the CEO role in August and relocating to Sarajevo, I have
worked closely with the exceptional team in Bosnia and Herzegovina. Witnessing
their commitment and pride to deliver this project is inspiring; they fully
understand the transformative impact this investment will have. The Vareš
Silver Operation is the largest private foreign direct investment in the
country since the war in Bosnia and Herzegovina ended in 1995. This
world-class asset stands to bring substantial benefits, not only through local
employment and regeneration but also on a national scale. Once operating at
nameplate capacity of 0.8Mtpa, it is expected to make a significant
contribution to the economy of Bosnia and Herzegovina and future prosperity of
the nation.
Sustainability and Governance
Our people are the foundation of our business, and ensuring the health,
safety, and well-being of our team at the Vareš Silver Operation is my top
priority.
Sadly, in August we experienced the loss of a subcontractor in a fatal
incident onsite. This heartbreaking event meant we intensified our efforts to
enhance safety protocols for our team, contractors, and subcontractors. Our
commitment is unwavering: we strive to make sure every employee and contractor
returns home to their families safely at the end of each day.
Despite this tragic occurrence, our overall health and safety performance
continued to improve throughout the year. At the end of Q4 2024, the 12-month
rolling total recordable incident frequency rate (TRIFR) was 1.05, a marked
improvement compared to 1.40 in 2023. Hazard reporting continues to improve
and our critical control management program has matured through the year with
increased use of structured safety dialogue - Life Conversations. This
progress reflects our ongoing dedication to fostering a safer working
environment for all.
Sustainability is a cornerstone of our business model. Our primary commitment
is the health and safety of our employees and contractors, the protection and
preservation of the natural environment, and the adoption of sustainable
practices across all aspects of our operation.
The Company has long recognised the importance of maintaining our social
license to operate, by sustaining strong relationships with our local
communities, as well as with Bosnian governmental bodies and ministries; they
underpin our way of working.
Our commitment to responsible stewardship is embedded in our Environmental and
Social Management System to make sure responsible business practices are at
the heart of our operational design through the use of modern mining methods
and technology. Adriatic understands that our social and environmental
footprint is constantly evolving, and that the scope and impact of our
sustainability initiatives will grow in significance in the years ahead.
In 2024, we saw a significant increase in our employee headcount, growing from
under 300 employees in 2023 to over 500 by the end of the year. This exciting
growth reflects Adriatic's transition from contract mining to owner-operator
and from a project phase to operational status.
The expansion of our workforce also has underscored the importance of people
management and placed a strong emphasis on our corporate culture. We remain
dedicated to ongoing skills assessments and training to make sure our team is
equipped to meet the challenges of our evolving operations while continuing to
drive excellence in all areas.
Operations
2024 saw Adriatic transition from a mine developer into a fully functioning
mining and concentrate processing operation with the potential to be a leading
European producer of critical metals. Early in the year, first concentrates
were produced from the Vareš Silver Operation and since then operations have
been ramping up, with a total of 146,000 tonnes mined in 2024. Our team
achieved total underground development of 3km across 2024, doubling the
development totals in 2023. The Rupice Mine is now operating from two active
production levels and the Vareš Processing Plant is operating 24/7 with
recoveries improving as expected.
In May, Adriatic announced the first sale of on-specification grade
concentrates from Vareš with the first shipment leaving site for the port of
Ploče. Subsequently, all our concentrates have been sold and shipped to
European smelters and beyond.
We have faced our share of challenges throughout the year. In July, the
Constitutional Court ruled against previous permit issuances which impacted on
the original location of our proposed tailings facility. However, this setback
underscored the strength of our collaboration with local, regional, and
national stakeholders. Together with the relevant authorities, Adriatic worked
effectively to identify, fully permit, and construct the Veovača Tailings
Storage Facility, now expected to begin operations in Q1 2025. This
achievement highlights the power of cooperation, teamwork, and a shared vision
for the Vareš Silver Operation's contribution to Bosnian society.
Another significant challenge was the extreme weather that affected Bosnia and
Herzegovina at the end of 2024. In October, a severe storm and flooding caused
significant damage to a section of the railway line connecting Sarajevo to the
port of Ploče, a critical component of our transport infrastructure.
Fortunately, the country's robust transport network allowed us to pivot to a
road haulage solution, ensuring uninterrupted delivery of concentrates while
repairs to the railway were underway.
In late December, a severe snowstorm swept across the Balkan region,
disrupting operations as blocked roads and widespread power and communication
outages hampered the transportation of ore and concentrates. Throughout this
period, our priority was the safety of our employees. The team's response to
these challenges provided valuable winterisation experience and we have since
implemented additional procedures for winter production.
In the Q4 QAR announcement, we introduced an exciting opportunity to the
market: Ausenco had completed a comprehensive technical review to evaluate the
potential to increase throughput at the Vareš Processing Plant. The review
confirmed that throughput could be increased from the nameplate capacity of
0.8Mtpa to 1Mtpa without significant capital expenditure. Additionally,
achieving a throughput of up to 1.3Mtpa would require approximately $25m in
process plant growth capital.
This proposed expansion aligned with longer dated plans to increase mine
production, following the Ore Reserve expansion at Rupice Northwest to 13.8Mt
announced on 20 December 2023. After consulting key shareholders, Adriatic
successfully completed a $50m capital raise in February 2025 to fast-track
this debottlenecking and expansion project. Increasing capacity by 63% will
position the Vareš Silver Operation among the world's largest primary silver
producers, enabling the Company to produce over 20Moz AgEq annually.
Finances
During the reporting period, our balance sheet was significantly strengthened
by two key developments: the conversion of the $20m convertible bonds held by
Queens Road Capital in March and a $50m equity fundraise in May. These actions
were taken to cover the costs associated with transitioning to an
owner-operator mining model and to reinforce our financial position.
In Q4 2024, we reached an agreement with our debt provider, Orion Mine
Finance, to defer the first debt repayment to 31 March 2025. We also secured a
term sheet for a $25m prepayment facility with Trafigura, enhancing our
liquidity further. As of the end of the year, Adriatic held $21m in cash. With
increasing revenues, combined with efficiency initiatives implemented during
the period, we are well positioned financially, with sufficient contingency to
ensure a smooth path to sustainable commercial production.
In conclusion
All the progress made in 2024 could not have been possible without the
extraordinary determination of my predecessor, Paul Cronin. Paul worked
tirelessly to bring the Vareš Silver Operation into production over the past
seven years and I would like to thank him for his time and support. His
commitment to ensure the Company is a sustainable, modern mining operation
that will ensure prosperity to all stakeholders has been uncompromising.
Looking into 2025, the opportunity that lies ahead for Adriatic is immense and
we are excited about the future. However, I acknowledge that there is still
much work to be done. This includes a strengthened safety culture, consistency
of our operational performance, and making sure we seize strategic
opportunities to create value for all our stakeholders. We remain committed to
continuous improvement and to building on our successes as we progress toward
our long-term goal to be a multi-generational source of sustainable, critical
metal in the heart of Europe.
I would like to extend my sincere thanks to the Board, particularly Michael
Rawlinson, Chairman, for their invaluable counsel, guidance, and support
during this pivotal time. The strengthening of the Board is a crucial
development for the Company as we place increased emphasis on enhancing our
corporate governance. Their leadership will continue to be instrumental as we
navigate the next phase of our growth and success.
I would also like to extend my thanks to both our new and long-term investors
for their confidence and continued commitment. We look forward to delivering
significant returns over the years to come as we ramp up production in the
coming months and continue our corporate evolution.
In closing, I would like to express my deep gratitude to our dedicated
employees across the Company and to our stakeholders around the world. On
behalf of the entire team, thank you for your unwavering support. Your
commitment and partnership are vital to our continued success, and we look
forward to achieving even greater milestones together in the future.
Laura Tyler
Managing Director and Chief Executive Officer
Consolidated INCOME Statement
FOR THE YEAR ENDED 31 DECEMBER 2024
Restated(1)
(In USD '000) Note Year Ended Year Ended
31 December 2024
31 December 2023
Revenue 7 27,585 -
Cost of goods sold (25,661) -
Distribution and selling costs (947) -
Gross profit 977 -
Exploration costs 8 (5,192) (2,090)
Administrative expenses (39,933) (18,407)
Share-based payment expense 24 (1,408) (1,561)
Operating loss 8 (45,556) (22,058)
Finance income 10 451 949
Finance expense 10 (28,706) (5,462)
Revaluation of external derivative liability 19 6,457 (3,541)
Loss before taxation (67,354) (30,112)
income tax 11 4,863 -
Loss for the year attributable to owners of the parent (62,491) (30,112)
Net loss per share Basic and diluted (cents) 5 (19.83) (10.66)
¹Refer to note 4.3 for details of the restatement of prior year results.
Consolidated Statement of Comprehensive Income
FOR THE YEAR ENDED 31 DECEMBER 2024
Year Ended Restated(1)
31 December 2024
(In USD '000) Note
Year Ended
31 December 2023
Loss before taxation (62,491) (30,112)
Other comprehensive gain that might be reclassified to profit or loss in
subsequent years:
Exchange gain arising on translation of foreign operations 1,200 51
Total comprehensive expense for the year attributable to owners of the parent (61,291) (30,061)
¹Refer to note 4.3 for details of the restatement of prior year results
The above consolidated income statement and consolidated statement of
comprehensive income should be read in conjunction with the accompanying
notes.
Consolidated Statement of Financial Position
AT 31 DECEMBER 2024
(In USD '000) Note Restated¹ Restated¹
31 December 2024 31 December 2023 1 January 2023
ASSETS
Current assets
Cash and cash equivalents 20,697 44,856 60,585
Trade and other receivables 16 13,396 13,212 18,830
Inventory 15 16,770 1,553 -
Total current assets 50,863 59,621 79,415
Non-current assets
Property, plant and equipment 12 281,027 215,717 78,785
Right-of-use assets 13 4,897 8,320 8,954
Exploration and evaluation assets 14 8,500 8,500 8,500
Trade and other receivables 16 1,570 1,680 -
Deferred tax assets 11 4,863 - -
Total non-current assets 300,857 234,217 96,239
Total assets 351,720 293,838 175,654
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 17 37,343 22,903 7,331
Lease liabilities 13 3,567 1,495 2,379
Borrowings 19 79,989 47,373 -
Derivative Liability 19 - 9,910 -
Total current liabilities 120,899 81,681 9,710
Non-current liabilities
Lease liabilities 13 1,537 6,641 5,808
Provisions 18 5,396 3,674 4,431
Borrowings 19 105,514 93,427 42,498
Derivative liability - - 6,369
Total non-current liabilities 112,447 103,742 59,106
Total liabilities 233,346 185,423 68,816
Equity
Share capital 23 6,253 5,713 5,376
Share premium 243,449 174,146 143,830
Merger reserve 23,498 23,498 23,498
Warrants reserve - 2,743 2,743
Share-based payment reserve 24 4,802 3,591 4,943
Foreign currency translation reserve 2,511 1,311 1,260
Retained deficit (162,139) (102,587) (74,812)
Total equity 118,374 108,415 106,838
Total liabilities and equity 351,720 293,838 175,654
¹Refer to note 4.3 for details of the restatement of prior year results.
The above consolidated statement of financial position should be read in
conjunction with the accompanying notes.
The consolidated financial statements of Adriatic Metals PLC, registered
number 10599833, were approved and authorised for issue by the Board of
Directors on 30 March 2025 and were signed on its behalf by:
Laura Tyler Michael Horner
Managing Director and Chief Executive Officer Interim Chief Financial Officer
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 31 DECEMBER 2024
(In USD '000) Share Premium Merger Reserve(3) Share- Based Payment Reserve Warrants Reserve(3) Foreign Currency Translation Reserve(2) Retained Deficit¹ Total Equity
Share Capital (note 24.1)
1 January 2023 5,376 143,830 23,498 4,943 2,743 1,260 (73,747) 107,903
Correction of error (net of tax) - - - - - - (1,065) (1,065)
(Restated total equity at 1 January 2023 5,376 143,830 23,498 4,943 2,743 1,260 (74,812) 106,838
Loss for the year (restated) - - - - - - (30,112) (30,112)
Other comprehensive income - - - - - 51 - 51
Total comprehensive expense - - - - - 51 (30,112) (30,061)
Issue of share capital 251 31,428 - - - - - 31,679
Share issue costs - (2,111) - - - - - (2,111)
Exercise of options and performance rights 81 470 - (2,337) - - 2,337 551
Issue of options and performance rights - - - 1,645 - - - 1,645
2022 STIP awards 5 529 - (576) - - - (42)
Expiry/Cancellation of options and performance rights - - - (84) - - - (84)
31 December 2023 (restated) 5,713 174,146 23,498 3,591 2,743 1,311 (102,587) 108,415
Loss for the year - - - - - - (62,491) (62,491)
Other comprehensive income - - - - - 1,200 - 1,200
Total comprehensive expense - - - - - 1,200 (62,491) (61,291)
Issue of share capital 309 49,691 - - - - - 50,000
Share issue costs - (3,068) - - - - (3,068)
Exercise of options and performance rights 231 22,680 - (197) (2,498) - 2,694 22,910
Issue of options and performance rights - - - 1,599 - - 1,599
Expiry/Cancellation of options and performance rights - - - (191) (245) - 245 (191)
31 December 2024 6,253 243,449 23,498 4,802 - 2,511 (162,139) 118,374
¹ Retained deficit include all other net gains and losses and transactions
with owners, including dividends. No dividends paid to date. Refer to note 4.3
for details of the restatement of prior year results.
(2) Foreign currency reserve include gains or losses arising on retranslating
the net assets of entities from their functional currencies into the Group
presentation currency.
(3) The merger reserve was created and warrants issued as part of Tethyan
Resources Corp acquisition.
The above consolidated statement of changes in equity should be read in
conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 31 DECEMBER 2024
Year Ended
31 December 2024
Restated¹
(In USD '000) Note Year Ended
31 December 2023
Cash flows from operating activities:
Loss before tax for the year (67,354) (30,112)
Adjustments for:
Depreciation of property, plant and equipment 12 2,391 476
Depreciation of right-of-use assets 13 595 390
Share-based payment expense 24 1,408 1,561
Finance Income 10 (451) (949)
Finance expense 10 28,706 5,462
Fair value movements in derivative liabilities 19 (6,457) 3,541
Changes in working capital items:
(Increase) trade and other receivables (2,204) (4,816)
Increase in inventory (15,217) (1,553)
Increase in trade and other payables 5,254 3,113
Net cash used in operating activities (53,329) (22,887)
Cash flows from investing activities:
Purchase of property, plant and equipment 12 (40,842) (94,408)
Prepaid property, plant and equipment (4,559) (6,585)
Interest received on cash holdings 580 1,508
Net cash used in investing activities (44,821) (99,485)
Cash flows from financing activities:
Net proceeds from the issue of ordinary shares 46,932 30,656
Proceeds from drawdown of borrowings net of transaction costs 19 29,228 81,060
Interest paid on loans and borrowings 19 - (1,895)
Proceeds from exercise of warrants 2,498 -
Settlement of copper warrants 19 (629) -
Capital payments on leases 13 (2,750) (1,719)
Interest paid on leases 13 (607) (1,103)
Net cash generated from financing activities 74,672 106,999
Net decrease in cash and cash equivalents (23,478) (15,373)
Exchange losses on cash and cash equivalents (681) (356)
Cash and cash equivalents at beginning of the year 44,856 60,585
Cash and cash equivalents at end of the year 20,697 44,856
¹Refer to note 4.3 for details of the restatement of prior year results.
The above consolidated statement of cash flows should be read in conjunction
with the accompanying notes.
Notes to the Consolidated Financial Statements
1. Corporate information
The consolidated financial statements present the financial information of
Adriatic Metals PLC and its subsidiaries (collectively, the "Group") for the
year ended 31 December 2024. Adriatic Metals PLC (the Company or the parent)
is a public company limited by shares and incorporated in England and Wales.
The registered office is located at 4(th) Floor, 3 Hanover Square, London, W1S
1HD, United Kingdom.
The Group's principal activity is precious and base metals exploration and
development. During 2024 the Group has transitioned from a developer to a
producer and seller of precious metals. The Group owns the Vareš Silver
Operation in Bosnia and Herzegovina and the Raška Project in Serbia.
Bosnia and Herzegovina and Serbia are well-positioned in central Europe and
boast strong mining history, pro-mining environment, highly skilled workforce
as well as extensive existing infrastructure and logistics.
2. Basis of preparation
2.1 Statement of compliance
The consolidated financial statements have been prepared in accordance with
the recognition, measurement, presentation and disclosure requirements of UK
adopted International Accounting Standards in conformity with the requirements
of the Companies Act 2006 (the "Companies Act").
The consolidated financial statements were authorised for issue by the Board
of Directors on 30 March 2024.
2.2 Basis of preparation
The financial information set out herein does not constitute the Group's
statutory financial statements for the year ended 31 December 2024, but is
derived from the Group's audited financial statements.
The auditors have reported on the 2024 financial statements and their reports
were unqualified and did not contain statements under s498(2) or (3) Companies
Act 2006, nor did they contain a material uncertainty in relation to going
concern.
The 2024 Annual Report was approved by the Board of Directors on 30 March
2025. The financial information in this statement is audited but does not have
the status of statutory accounts within the meaning of Section 434 of the
Companies Act 2006.
The consolidated financial statements have been prepared under the
historical cost convention, as modified by the revaluation of certain
financial assets and liabilities (including derivative instruments), at fair
value through profit or loss. A summary of the Group's material accounting
policies is set out below in note 3.
The consolidated financial statements are presented in United States Dollars
("USD" or "$") which reflects the fact that the USD is a more widely
recognised currency for the mining sector in which the Group operates and that
its Project Finance Debt Package, offtake agreements and mining services
contracts are denominated in USD.
Unless otherwise stated, the Group financial statements are presented in US
dollars ($) and rounded to the nearest thousand.
2.3 Going concern
The Company's going concern assessment has been performed as part of the
Group's going concern assessment. The Group sells and distributes its
concentrate product through annual offtake arrangements with third parties,
which commit to purchasing 100% of the Vareš Silver Operation concentrate
production.
The Group has a $120m borrowing facility with Orion that is fully drawn as at
31 December 2024, with the first repayment due 31 March 2025, which will be
repaid from funds generated from concentrate sales. A Debt-Service Coverage
Ratio ("DSCR") covenant is included in the Orion Debt Finance Package, and is
required to be above 1.25x on a quarterly basis over each 6-month testing
period, with the first testing period covering October 2025 to March 2026.
Post year end, the Group is meeting its day-to-day working capital
requirements through its cash generating operations at Vareš. Expansionary
capital expenditure for 2025 has been funded through equity financing. Post
year end the Group raised $50m via an oversubscribed equity raise, and $25m
via a concentrate prepay, gross of costs, to support this.
The Board has reviewed forecasts for the period to December 2026 to assess the
Group's liquidity. The base case scenario demonstrates substantial headroom
and compliance with the DSCR covenant ratio. The Board has considered
additional sensitivity scenarios in terms of the Group's commodity price
forecasts, mining grades, expected throughput volumes, operating cost profile
and capital expenditure. The Board has assessed the key risks that could
impact the prospects of the Group over the going concern period, including;
commodity price outlook, cost inflation, negative grade reconciliation, and
softer production performance, with reverse stress testing of the forecasts
conducted in line with best practice.
Liquidity headroom and covenant compliance was demonstrated in each reasonably
possible scenario with application of mitigation measures that are within the
Group's control. Accordingly, the Directors continue to adopt the going
concern basis in preparing the consolidated financial statements.
3. Material accounting policies
The principal accounting policies adopted in the preparation of these
financial statements are set out below.
3.1 Basis of consolidation
The consolidated Group Financial Statements consist of the financial
statements of the ultimate Parent Company (Adriatic Metals plc, a company
registered in the UK), and all its subsidiary undertakings made up to the same
accounting date. Subsidiary undertakings are those entities controlled by
Adriatic Metals plc. Control exists where the Group is exposed to, or has the
rights to, variable returns from its involvement with the investee and has the
ability to use its power over the investee to affect its returns.
Subsidiaries are consolidated in the Group's financial statements from the
date on which control is obtained. Intragroup balances and any unrealised
gains and losses or income and expenses arising from intragroup transactions
are eliminated in preparing the consolidated financial statements. The
accounting policies of subsidiaries have been changed where necessary to
ensure consistency with accounting policies adopted by the Group.
3.2 New standards, amendments and interpretations
The following amended standards and interpretations were adopted by the Group
during the year ending 31 December 2024. These amended standards and
interpretations have not had a significant impact on the consolidated
Financial Statements.
· Lease Liability in a Sale and Leaseback - Amendments to IFRS 16
· Classification of Liabilities as Current or Non-current and
Non-current Liabilities with Covenants - Amendments to IAS 1
· Supplier Financing Arrangements - Amendments to IAS7 and IFRS 7
The following new and amended standards are effective for annual periods
beginning on or after 1 January 2025 and have not been adopted early. Except
for IFRS 18 - Presentation and Disclosure in the Financial Statements, which
is effective from 1 January 2027, these new standards, amendments and
interpretations are not expected to have a material impact on the Group in the
current or future reporting periods:
· Lack of exchangeability - Amendments to IAS 21
· Classification and Measurement of Financial Instruments -
Amendments to IFRS 9 and IFRS 7
· Annual Improvements to IFRS Accounting Standards - Volume 11
· Presentation and Disclosure in Financial Statements - IFRS 18
· Subsidiaries without Public Accountability: Disclosures - IFRS 19
3.3 Foreign currency transactions and translations
Items included in the Financial Statements of each of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the functional currency). The consolidated Financial
Statements are presented in United States Dollars ("USD"), which is the
Group's presentational currency.
I) Transactions and balances
Transactions in foreign currencies are initially recorded using the spot
exchange rates between the functional currency and the foreign currency, at
the date the transaction first qualifies for recognition.
Monetary assets and liabilities denominated in foreign currencies are
translated at the spot rates at the reporting date.
Foreign exchange differences arising on settlement or translation of monetary
items are recognised in profit or loss.
II) Group companies
On consolidation, the assets and liabilities of foreign operations are
translated into USD at the rate of exchange ruling at the reporting date and
their income statements are translated at average rate of exchange for the
year. The exchange differences arising on translation for consolidation are
recognised in other comprehensive income.
3.4 Receivables
All receivables are held at amortised cost less any provision for impairment.
A loss allowance for expected credit losses is made to reflect changes in
credit risk since the initial recognition.
3.5 Exploration and evaluation assets
Pre-licence costs
Pre-licence costs relate to costs incurred before the Group has obtained legal
rights to explore in a specific area. Such costs may include the acquisition
of exploration data and the associated costs of analysing that data. These
costs are expensed in the year in which they are incurred.
Exploration and evaluation expenditure
Exploration and evaluation activity involves the search for mineral resources,
the determination of technical feasibility and the assessment of commercial
viability of an identified resource.
Exploration and evaluation activity includes:
· licence costs paid in connection with a right to explore;
· researching and analysing historical exploration data;
· gathering exploration data through geophysical studies;
· exploratory drilling and sampling;
· determining and examining the volume and grade of the resource;
· surveying transportation and infrastructure requirements; and
· conducting market studies.
Exploration and evaluation costs include directly attributable employee
remuneration, materials and fuel used, surveying costs, drilling costs and
payments made to contractors.
In evaluating whether the expenditure meet the criteria to be capitalised,
several different sources of information are used. The information that is
used to determine the probability of future benefits depends on the extent of
exploration and evaluation that has been performed.
Exploration and evaluation expenditure in the year for activity on licences
where a JORC-compliant resource has not yet been established is expensed as
incurred until sufficient evaluation has occurred to establish a
JORC-compliant resource. Costs expensed during this phase are included in
exploration expenses and other operating expenses in the statement of profit
or loss and other comprehensive income.
Upon the establishment of a JORC-compliant resource (at which point, the Group
considers it probable that economic benefits will be realised), the Group
capitalises any further evaluation expenditure incurred for the licence as
exploration and evaluation assets up to the point when a JORC-compliant
reserve is established. Capitalised exploration and evaluation expenditure is
considered to be an intangible asset and measured at cost less accumulated
impairment.
Exploration and evaluation assets acquired in a business combination are
initially recognised at fair value, including resources and exploration
potential that is considered to represent value beyond proven and probable
reserves. Similarly, the costs associated with acquiring an exploration and
evaluation asset (that does not represent a business) are also capitalised and
subsequently measured at cost less accumulated impairment.
Once a JORC-compliant reserve is established and development is sanctioned,
exploration and evaluation assets are tested for impairment and transferred to
mine under construction. Exploration and evaluation assets are not amortised
during the exploration and evaluation phase and are considered to have an
indefinite life until determined to be part of a mine plan.
3.6 Property, plant and equipment
I) Land
Land is held at cost less accumulated impairment losses. Once a JORC-compliant
reserve is established and development is sanctioned, land is tested for
impairment and transferred to mine under construction and depreciated in line
with the useful economic life of the mine or on a unit of depletion basis.
Land is not depreciated during the exploration and evaluation phase and is
considered to have an indefinite life until determined to be part of a mine
plan.
II) Short lived property, plant and equipment
Short lived property, plant and equipment consists of buildings, plant and
machinery, office furniture and equipment, transportation assets and computer
equipment. Short lived property, plant and equipment are carried at cost less
accumulated depreciation and accumulated impairment losses. The cost of an
item of short lived property, plant and equipment consists of the purchase
price and any costs directly attributable to bringing the asset to the
location and condition necessary for its intended use. Short lived property,
plant and equipment depreciation is provided at rates calculated to expense
the cost, less estimated residual value, using the straight-line method over
the estimated useful life of the asset at the following rates:
Buildings and leasehold improvements Shorter of 10% or lease term
Plant and equipment and motor vehicles 15% - 33%
III) Mine under construction
Mine under construction includes construction costs as well as exploration and
evaluation and land balances transferred as noted above once a JORC-compliant
reserve is established and development is sanctioned. Expenditure which is
necessarily incurred whilst commissioning the mine is also capitalised as a
mine under construction cost. Development costs incurred after the
commencement of production are capitalised to the extent they are expected to
give rise to a future economic benefit.
Expenditure which is necessarily incurred whilst commissioning the mine under
construction, in the period prior to being capable of operating in the manner
intended by management, are capitalised. Development costs incurred after the
commencement of commercial production (as defined in Note 4.2 d), are
capitalised to the extent they are expected to give rise to a future economic
benefit.
IV) Depreciation and amortisation
The assets' residual values, useful lives and methods of depreciation and
amortisation are reviewed at each financial year-end and adjusted
prospectively if appropriate.
3.7 Leases
The Group has various lease arrangements for buildings. Lease terms are
negotiated on an individual basis locally and subject to domestic rules and
regulations. At the inception of the lease contract, the Group assesses
whether the contract conveys the right to control the use of an identified
asset for a certain period in exchange for consideration, in which case it is
identified as a lease. The Group recognises a right-of-use asset and a
corresponding lease liability with respect to all lease arrangements in which
it is the lessee, except for short-term leases (defined as leases with a lease
term of 12 months or less) and leases of low value assets. Low value leases
are those with an underlying asset value of USD 5,000 or less. For those
leases, the Group recognized the lease payments as an operating expense on a
straight-line basis over the term of the lease.
Right-of-use assets
At the commencement date of the lease right-of-use assets are measured at cost
which comprises the following:
· The initial measurement of the lease liability;
· Prepayments before commencement date of the lease
· Initial direct costs; and
· Costs to restore.
Subsequent to initial recognition, right-of-use assets depreciated on a
straight-line basis over the duration of the contract. The right-of-use assets
are assessed for impairment where indicators of impairment are present.
Lease liabilities
At the commencement date of the lease, lease liabilities are measured at the
present value of lease payments to be made over the lease term. The lease
payments include fixed payments (including in-substance fixed payments) less
any lease incentives receivable, variable lease payments that depend on an
index or a rate, and amounts expected to be paid under residual value
guarantees. The lease payments also include the exercise price of a purchase
option reasonably certain to be exercised by the Group and payments of
penalties for terminating the lease, if the lease term reflects the Group
exercising the option to terminate. Variable lease payments that do not depend
on an index or a rate are recognised as expenses (unless they are incurred to
produce inventories) in the period in which the event or condition that
triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its
incremental borrowing rate at the lease commencement date because the interest
rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of
interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the lease payments (e.g., changes to future
payments resulting from a change in an index or rate used to determine such
lease payments) or a change in the assessment of an option to purchase the
underlying asset.
II) Revision of lease term
When the Group revises its estimate of the term of any lease (because, for
example, it re-assesses the probability of a lessee extension or termination
option being exercised), it adjusts the carrying amount of the lease liability
to reflect the payments to make over the revised term, which are discounted
using a revised discount rate. The carrying amount of lease liabilities is
similarly revised when the variable element of future lease payments dependent
on a rate or index is revised, except the discount rate remains unchanged. In
both cases an equivalent adjustment is made to the carrying amount of the
right-of-use asset, with the revised carrying amount being amortised over the
remaining (revised) lease term. If the carrying amount of the right-of-use
asset is adjusted to zero, any further reduction is recognised in profit or
loss.
3.8 Rehabilitation provision
The Group recognises provisions for contractual, constructive or legal
obligations, including those associated with the reclamation of mineral
interests and property, plant and equipment, when those obligations result
from the acquisition, construction, development or normal operation of the
assets. Initially, a provision for rehabilitation is recognised at its present
value in the period in which it is incurred. Upon initial recognition of the
liability, an amount equal to the corresponding provision is added to the
carrying amount of the related asset and the cost is amortised as an expense
over the economic life of the asset. Following the initial recognition of the
rehabilitation provision, the carrying amount of the liability is increased
for the passage of time as the discount is unwound, and adjusted for changes
to the current market-based discount rate and amount or timing of the
underlying cash flows needed to settle the obligation. The increase in the
provision due to the passage of time is recognised as interest expense.
3.9 Financial instruments
Financial assets and liabilities are recognised when the Group becomes a party
to the contractual provisions of the financial instrument. Financial assets
are derecognised when the contractual rights to the cash flows from the
financial asset expire, or when the financial asset and all substantial risks
and rewards are transferred. A financial liability is derecognised when it is
extinguished, discharged, cancelled or expired.
Financial assets and financial liabilities are measured initially at fair
value plus or minus, in the case of a financial asset or financial liability
not at fair value through profit or loss, transactions costs that are directly
attributable to the acquisition or issue of the financial instrument. Trade
receivables which do not contain a significant financing component are
recognised at their transaction price. Financial assets and financial
liabilities are subsequently measured as described below.
i) Financial assets
A financial asset is subsequently recognised at amortised cost under IFRS 9 if
it meets both the hold to collect and contractual cash flow characteristics
tests. A financial asset is measured at fair value through other comprehensive
income if the financial asset is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling financial
assets and the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
If neither of the above classifications are met the asset is classified as
fair value through the profit and loss, with changes in fair value recognised
in the income statement. Even if an asset meets the above two requirements
to be measured at fair value through other comprehensive income, IFRS 9
contains an option to designate, at initial recognition, a financial asset as
measured at fair value through the profit and loss provided the classification
eliminates or significantly reduces a measurement or recognition
inconsistency.
Cash and cash equivalents and trade and other receivables are non-derivative
financial assets with fixed or determinable payments that are not quoted in an
active market. After initial recognition these are measured at amortised cost
using the effective interest method, less provision for impairment, if any.
ii) Financial liabilities
Financial liabilities are subsequently measured at amortised cost using the
effective interest method, except for financial liabilities designated at fair
value through profit or loss, that are carried subsequently at fair value with
gains and losses recognised in the income statement.
The effective interest method is a method of calculating the amortised cost of
a financial liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts
estimated future cash payments through the expected life of the financial
liability, or, where appropriate, a shorter period. Where the movement in fair
value is due to a change in the entity's credit risk, such gain or loss is
recognised in other comprehensive income.
Any gain or loss on modification of a financial liability held at amortised
cost is recognised in the income statement.
iii) Convertible debt
The proceeds received on issue of the Group's convertible debt are allocated
to their debt and derivative liability components. The amount initially
attributed to the debt component equals the discounted cash flows using a
market rate of interest that would be payable on a similar debt instrument
that does not include an option to convert. Subsequently, the debt component
is accounted for as a financial liability measured at amortised cost until
extinguished on conversion or maturity of the debt. The remainder of the
proceeds is allocated to the conversion option and is recognised as a
derivative liability.
3.10 Impairment of assets
I) Financial assets
A financial asset that is not carried at fair value through profit or loss is
assessed at each reporting date to determine a loss allowance for expected
credit losses. If the credit risk on a financial instrument has increased
significantly since initial recognition, the loss allowance is equal to the
lifetime expected credit losses. If the credit risk has not increased
significantly, the loss allowance is equal to the twelve month expected credit
losses.
The expected credit losses are measured in a way that reflects the unbiased
and probability weighted amount that is determined by evaluating a range of
possible outcomes, the time value of money and reasonable and supportable
information that is available about past events, current conditions and
forecasts of future economic conditions.
II) Non-financial assets
The carrying amounts of capitalised exploration and evaluation expenditure for
undeveloped mining projects (projects for which the decision to mine has been
not yet been deemed commercially viable and development has not yet been
authorised) are reviewed at each reporting date for indicators of impairment
in accordance with IFRS 6, and when indicators are identified, are tested in
accordance with IAS 36 Impairment of Assets.
Property, plant and equipment and intangible assets with finite lives are
reviewed for impairment if there is an indication that the carrying amount may
not be recoverable.
At the end of each reporting period, the Group reviews the carrying amounts of
its tangible and intangible assets to determine whether there is an indication
that the assets are impaired. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the
impairment, if any. Where the asset does not generate largely independent cash
inflows, the Group estimates the recoverable amount of the cash-generating
unit to which the asset belongs. A cash-generating unit is the smallest
identifiable group of assets that generates cash inflows that are largely
independent of the cash inflows from other assets or groups of assets.
The recoverable amount is the higher of fair value less costs to sell, and
value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects
current market assessment of the time value of money and the risks specific to
the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than the carrying amount, the carrying amount of the asset (or
cash-generating unit) is reduced to its recoverable amount. An impairment loss
is recognised in the income statement. All assets are subsequently reassessed
for indications that an impairment loss previously recognised may no longer
exist. Where an impairment loss is subsequently reversed, the carrying amount
of the asset (or cash-generating unit) is increased to the revised estimate of
its recoverable amount, but to an amount that does not exceed the carrying
amount that would have been determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior periods. A reversal of an
impairment loss is recognised in the income statement.
3.11 Income taxes
Current income tax is the expected tax payable or receivable on the taxable
income or loss for the year, using tax rates enacted or substantively enacted
at the reporting date, and any adjustment to tax payable or receivable in
respect of previous years.
Deferred income taxes are calculated based on temporary differences between
the carrying amounts of assets and liabilities and their tax bases. However,
deferred tax is not recognised on the initial recognition of goodwill, on the
initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or
loss at the time of the transaction, or on temporary differences relating to
investments in subsidiaries and jointly controlled entities where the reversal
of these temporary differences can be controlled by the Group and it is
probable that reversal will not occur in the foreseeable future.
Deferred income tax assets and liabilities are measured, without discounting,
at the tax rates that are expected to apply when the assets are recovered, and
the liabilities settled, based on tax rates that have been enacted or
substantively enacted by the reporting date.
A deferred tax asset is recognised for unused tax losses, tax credits and
deductible temporary differences, to the extent that it is probable that
future taxable profits will be available against which they can be utilised.
Deferred tax assets are reviewed at each reporting date and are reduced to the
extent that it is no longer probable that sufficient taxable profit will be
available to allow the related tax benefit to be utilised.
Deferred tax assets and liabilities are offset if there is a legally
enforceable right to set off current tax assets against current tax
liabilities, and they relate to income taxes levied by the same tax authority
on the same taxable entity, or on different taxable entities which intend
either to settle current tax liabilities and assets on a net basis, or to
realise the assets and settle the liabilities simultaneously, in each future
period in which significant amounts of deferred tax liabilities and assets are
expected to be settled or recovered.
3.12 Share capital
Ordinary shares issued by the parent are classified as share capital and share
premium and recorded at the proceeds received, net of direct issue costs.
3.13 Share-based payments and warrants payments
I) Share-based payment transactions
The Company grants share options and performance rights to Directors,
officers, consultants and employees ("equity-settled transactions"). The
Company may grant warrants to institutions in relation to an equity raise or
other transaction. The Board of Directors determines the specific grant terms
within the limits set by the Company's share option plans.
II) Equity-settled transactions
The costs of equity-settled transactions are measured by reference to the fair
value at the grant date and are recognised, together with a corresponding
increase in equity, over the period in which the performance and/or service
conditions are fulfilled, ending on the date on which the relevant persons
become fully entitled to the award (the "vesting date"). The cumulative
expense recognised for equity-settled transactions at each reporting date
until the vesting date reflects the Company's best estimate of the number of
equity instruments that will ultimately vest. The profit or loss charge or
credit for a period represents the movement in cumulative expense recognised
at the beginning and end of that period and the corresponding amount is
represented in share option reserve. No expense is recognised for awards that
do not ultimately vest.
Where the terms of an equity-settled award are modified, the minimum expense
recognised is the expense as if the terms had not been modified. An additional
expense is recognised for any modification which increases the total fair
value of the share-based payment arrangement or is otherwise beneficial to the
employee as measured at the date of modification.
Where equity-settled transactions are awarded to employees, the fair value of
the options at the date of grant is charged to the income statement over the
vesting period. Non-market performance vesting conditions are taken into
account by adjusting the number of equity instruments expected to vest at each
reporting date so that, ultimately, the cumulative amount recognised over the
vesting period is based on the number of the options that will eventually
vest. Market performance vesting conditions are incorporated into the fair
value of the equity instrument at the grant date.
Where equity-settled transactions are entered into with non-employees and some
or all of the goods or services received by the entity as consideration cannot
be specifically identified, they are measured at the fair value of the equity
instruments issued. Otherwise equity-settled transactions with non-employees
are measured at the fair value of the goods or services received.
Upon exercise of share options or warrants, the proceeds received are
allocated to share capital, and share premium if applicable, and any
associated balance in share-based payments reserve is transferred to retained
earnings. The dilutive effect of outstanding options is reflected as
additional dilution in the computation of diluted earnings per share.
The Group utilises the Black-Scholes option pricing model to estimate the fair
value of share options and performance rights granted to Directors, officers
and employees. The use of this model requires management to make various
estimates and assumptions that impact the value assigned to the share options
and performance rights including the forecast future volatility of the share
price, the risk-free interest rate, dividend yield, the expected life of the
share options and performance rights and the expected number of options and
performance rights which will vest. See note 24.2 (#_bookmark22) for further
details regarding these inputs.
III) STIP equity scheme
The Group operates an STIP scheme which runs on a calendar year basis, with
employees receiving cash or (exceptionally) shares subsequent to year end
based on to their performance during the year. An option pricing model is used
to measure the Group's liability at each reporting date, taking into account
the terms and conditions on which the bonus is awarded and the extent to which
employees have rendered their service. Movements in the liability (other than
cash payments) are recognised in the consolidated statement of comprehensive
income.
3.14 Segmental reporting
The reportable segments represent all the Group's activities. The reportable
segments are an aggregation of the operating segments within the Group as
prescribed by IFRS 8. The reportable segments are based on the Group's
management structures and the consequent reporting to the chief operating
decision maker, the Board of Directors. These reportable segments also
correspond to geographical locations such that each reportable segment is in a
separate geographic location. Income and expenses included in profit or loss
for the period are allocated directly or indirectly to the reportable
segments.
The Group's operating segments are as follows:
· Bosnia and Herzegovina (principally the Vareš Silver Operation);
· Serbia (principally the Raška Project); and
· Corporate (which supports the activities of the other two
segments, principally the UK).
Segment assets are those used directly for segment operations. Inter-company
balances comprise transactions between operating segments making up the
reportable segments. These balances are eliminated to arrive at the figures in
the Consolidated Financial Statements.
3.15 Inventory
Inventories are stated at the lower of cost and net realisable value. Cost is
determined using the weighed average method.
The cost of finished goods and work in progress comprises raw materials,
direct labour and all other direct costs associated with mining the ore and
processing it to a saleable product.
Assay data is used to verify the amount of metal contained within ore
stockpiles, adjusted for expected recovery rates. Monthly surveys are used to
verify the volumes of material.
Net realisable value is the estimated selling price in the ordinary course of
business, less any further costs expected to be incurred to completion.
Provision is made, if necessary, for slow-moving, obsolete and defective
inventory.
3.16 Revenue
The Group sells metal concentrate product to smelters through offtake
agreements with the customer. The agreements provide for provisional pricing,
i.e. the selling price is subject to final adjustment at the end of the
quotation period based on the average price for the month, two months, three
months, or four months following delivery to the buyer and subject to final
adjustment for assaying results. At each reporting date, if any sales are
provisionally priced, the provisionally priced sales are marked to market
using forward prices, with any significant adjustments being recorded in
revenue in the income statement and in deferred revenue in the statement of
financial position.
All revenue is measured at a point in time, being that point at which the
Group meets its promise to transfer control of a quantity of metal concentrate
to a customer. Control is transferred in accordance with the Incoterms
specified in the contract, which are normally CIP. Adjustments to sales prices
arising from settlement of provisional pricing arrangements are recognised as
a debit or credit to revenue and are not separated or treated as an embedded
derivative.
Revenue is measured at the fair value of consideration received or receivable
from sales of metal to an end user, net of any buyers' discount, treatment
charges and value added tax. Revenue is net of treatment charges, as the cost
of smelting and refining is borne by the customer and the transaction price is
agreed to be net of these charges.
4. Critical accounting estimates and judgements
In preparing these consolidated financial statements, management has made
certain judgements, estimates, and assumptions about recognition and
measurement of assets, liabilities, income and expenses. The actual amounts
and results may differ from these estimates. The significant judgements,
estimates, and assumptions that have the most significant effect on the
recognition and measurement of assets, liabilities, income and expenses are
highlighted below.
4.1 Estimates
a) Copper Stream
The Group entered into an agreement with Orion Partners under which it
received a prepayment of $22.5m on 13 February 2023 in respect of future
deliveries of copper warrants under the Copper Stream. Consideration as to the
substance of the agreement and the value of the Copper Stream has been made in
line with the requirements of IFRS.
Regarding the accounting treatment, reference has been made to IFRS9 and
IFRS15 as to the nature and substance of the agreement, with the conclusion
that IFRS9 is the most appropriate treatment of financial liability because
the liability can be settled by cash or delivery of another financial
instrument. The agreement was not intended to be a sales and purchase
agreement, implied by the nature of the transactions in that concentrate is
sold to an offtaker and not directly to the holder of the stream.
Regarding the split of current and non-current liability, management use
forecasts to estimate the volume of copper production in the next 12 months
after the balance sheet date compared with volumes produced after this period.
The fair value of the Copper Stream obligation was valued by management on a
nominal basis. The significant assumptions included the nominal future copper
curve prices, the latest mine plan and nominal weighted average cost of
capital which was calculated by the company's nominated experts. See note 19
for further details.
b) Rehabilitation provision
The Group recognises provisions for contractual, constructive or legal
obligations, including those associated with the reclamation of mineral
interests and property, plant and equipment, when those obligations result
from the acquisition, construction, development or normal operation of the
assets. Initially, a provision for the rehabilitation is recognised at its
present value in the period in which it is incurred. Upon initial recognition
of the liability, an amount equal to the liability is added to the carrying
amount of the related asset and this amount is amortised as an expense over
the economic life of the asset. Following the initial recognition of the
rehabilitation provision, the carrying amount of the liability is increased
for the passage of time by unwinding the discount, and adjusted for changes to
the current market-based discount rate and to the amount or timing of the
underlying cash flows needed to settle the obligation.
Management uses its judgement and experience to determine the potential scope
of closure rehabilitation work required to meet the Group's legal, statutory
and constructive obligations, and any other commitments made to stakeholders,
and the options and techniques available to meet those obligations and
estimate the associated costs and the likely timing of those costs.
Significant estimates are also required to determine both the costs associated
with that work and the other assumptions used to calculate the provision,
including timing of future expenditure, and discount and inflation rates.
External experts support the cost estimation process where appropriate but
there remains significant estimation uncertainty.
See note 18 for further details.
4.2 Judgements
a) Capitalisation of exploration costs
The Group uses its judgement to determine whether costs meet the
capitalisation requirements in accordance with IFRS 6 and its accounting
policy on exploration and evaluation assets, including whether the activities
performed are directly attributable to increasing the value of the project.
Upon the establishment of a JORC-compliant resource (at which point, the Group
considers it probable that economic benefits will be realised), the Group
capitalises any further evaluation expenditure incurred for the licence as
exploration and evaluation assets. There is an element of judgement involved
by management as to which costs are directly attributable to increasing the
value of the project. Broadly, activities in relation to scoping, exploration
and development are deemed directly attributable, whilst activities in
relation to supporting and administrative duties are deemed not to be directly
attributable.
b) Indicators of impairment
The Group uses its judgement in assessing whether indicators of impairment
have occurred.
The Group reviews and tests the carrying amount of exploration and evaluation
assets when events or changes in circumstances suggest that the carrying
amount may not be recoverable in accordance with IFRS 6. Indicators of
impairment are as follows:
· the period for which the entity has the right to explore in the
specific area has expired or will expire in the near future, and is not
expected to be renewed;
· substantive expenditure on further exploration for, and
evaluation of, mineral resources in the specific area is neither budgeted nor
planned;
· exploration for and evaluation of mineral resources in the
specific area have not led to the discovery of commercially viable quantities
of mineral resources and the entity has decided to discontinue such activities
in the specific area; and
· sufficient data exists to indicate that, although a development
in the specific area is likely to proceed, the carrying amount of the
exploration and evaluation asset is unlikely to be recovered in full from
successful development or by sale.
The Group also reviews property, plant and equipment and intangible assets
with finite lives for impairment if there is an indication that the carrying
amount may not be recoverable.
In assessing whether an indicator of impairment has occurred, the Group
considers external sources of information including observable indications of
decline in market value, actual or expected negative changes in the
technological, market, economic or legal environment, changes in market
interest rates or other market rates of return on investments, and whether the
carrying amount of its net assets is greater than its market capitalisation.
As external sources of information will typically be broader and less clearly
linked to a specific asset or cash generating unit, for example, a decline in
market capitalisation below the carrying value of the entity's net assets.
This may then require the use of judgement to determine which assets or cash
generating unit should be tested in response to an external source of
information.
The Group also considers internal sources of information including changes in
planned development of the assets, evidence of obsolescence or damage, changes
in the expected use or life of an asset, and evidence from internal reporting
that an asset's economic performance is, or will be, worse than expected.
No changes in circumstances or other indicators of impairment occurred during
the year in respect of the Raška Project exploration and evaluation asset.
No changes in circumstances or other indicators of impairment occurred during
the year in respect of the Vareš Silver Operation.
c) Entities not consolidated
Adriatic Foundation
The Adriatic Foundation (the "Foundation") is a not-for-profit trust which was
created in Bosnia and Herzegovina with the objective of supporting the
communities around the Vareš Silver Operation. The Company provided the
initial funding required for the formation of the Foundation.
The Company has the ability to appoint the Board of Trustees of the Foundation
and hence transactions between the Company and the Foundation have been
classified as related party on the basis of the company yielding significant
influence.
An assessment has been carried out to determine whether the Company controls
the Adriatic Foundation in accordance with IFRS 10. The conclusion of this
assessment is that whilst the Company is able to yield significant
administrative influence over the Foundation, it is not able to affect returns
to the Company. The Foundation statute prevents the Company as the founder,
and any other person associated with the Foundation, from directly or
indirectly deriving profit, or any other material or financial benefit, from
the activities of the Foundation. For the purposes of IFRS 10, the Directors
have therefore concluded that the Company does not control the Foundation and
as a result the Foundation is not included in the consolidated financial
statements of the Group.
d) Commercial Production
Commercial production is deemed to have commenced when a mining interest is
capable of operating at levels intended by management. This is achieved when
management determines that the operational commissioning of a major mine and
plant components is complete, operating results are being achieved
consistently for a period of time, and that there are indications that these
operating results will continue.
After this point, depreciation of the mining assets commences.
The Group determines commencement of commercial production based on the
following factors:
· All major capital expenditures to bring the mine to the condition
necessary for it to be capable of operating in the manager intended by
management have been completed;
· Key major necessary permits in place;
· Key personnel required to maintain commercial production in
place;
· First concentrate shipments achieved;
· The completion of a reasonable period of testing of the mine
plant and equipment;
· The mine or mill has reached a pre-determined percentage of
design capacity; and,
· The ability to sustain ongoing production of commercial levels of
metal concentrate.
The list is not exhaustive and each specific circumstance is taken into
consideration before making the decision. Based on a review of the above
factors, management determined that the Vareš Silver Operation did not
commence commercial production during 2024.
Any concentrate produced before commercial production has been reached is
recognised in line with IFRS 15 as pre-production income earned and the cost
of the output generated is recognised in the statement of comprehensive income
in accordance with the principles of IAS 2.
e) Capitalisation of Borrowing Costs
The Group capitalises borrowing costs that are directly attributable to the
construction of a mining asset and included in the cost of that asset. Accrued
interest expense on the Orion Senior Debt Finance Package is capitalised as
part of the mine under construction asset in property, plant and equipment.
The Group ceases the capitalisation of borrowing costs attributable to a part
of the construction of a mining asset when it completes substantially all the
activities necessary to prepare that part of the project, and where that part
is capable of being used while construction continues on other parts of the
mining asset.
Management considers the processing plant a distinct part of the construction
of the Vareš Silver Operation asset. Management uses judgement to determine
the element of borrowing costs attributable to that part that should cease to
be capitalised.
The Group ceases the capitalisation of borrowing costs when substantially all
the activities necessary to prepare the mining asset for its intended use are
completed. The mining asset is judged to be ready for its intended use when
physical construction is complete, but before commercial production has been
reached.
f) Inventories
Stock is valued at the lower of cost or net realisable value. Costs that are
incurred in or benefit the production process are accumulated as ore
stockpiles, concentrate in circuit, and finished metal concentrate. Although
the quantities of recoverable metal are reconciled by comparing the grades of
ore to the quantities of metal actually recovered (metallurgical balancing),
the nature of the process inherently limits the ability to precisely monitor
recoverability levels.
Where proceeds are not expected to be earned based on the mineral content
being below what is considered economically viable, the stockpile ore is
considered to be waste material generated. No costs are allocated to this
waste material because proceeds are not expected to be earned from the sale of
output.
Net realisable value tests are performed at each reporting date and represent
the estimated future sales value less estimated costs to complete production
and bring the product to sale.
These net realisable tests take into account management's estimate of the
maximum values to be realised from ore stockpiles, in some instances through
the blending of different ore stockpile grades, prior to these being added to
future processing plant feeds. The carrying value of inventory is disclosed
within note 15.
g) Deferred Tax
Judgement is applied in making assumptions about recognition of deferred tax
assets in respect of the timing and value of estimated future taxable income
and available tax losses.
Management has made assumptions in the recognition of deferred tax assets,
including the timing and value of estimated future taxable income and
available tax losses. The recognised and unrecognised deferred tax balances
reflect amounts based on the actual submitted tax returns.
Where the realisation of deferred tax assets is dependent on future profits,
the Group recognises losses carried forward and other deferred tax assets only
to the extent that the realisation of the related tax benefit through future
taxable profits is probable and losses are still available for use after
expiry dates are considered.
4.3 Restatement of prior year financial statements
An error was identified in the prior year results (31 December 2023), whereby
accruals for employment taxes and social security contributions owed were
understated by $5.2m, mine under construction additions understated by $3.0m,
administrative expenses understated by $1.2m, and retained deficit understated
by $1.2m.
Basic and diluted loss per share was understated by 0.42 cents per share.
No other previous financial years are materially impacted by this restatement.
The error has been corrected by restating each of the affected financial
statement line items for the prior periods as follows:
Statement of financial position
(In USD '000) 31 December 2023 (Restated) 31 December 2022 (Restated)
Increase 31 December 2023 Increase 31 December 2022
Property, plant and equipment 212,731 2,986 215,717 77,861 924 78,785
Trade and other payables 17,673 5,230 22,903 5,342 1,989 7,331
Retained deficit 100,343 2,244 102,587 73,747 1,065 74,812
Income Statement and Statement of Comprehensive Income (extract)
(In USD '000) Increase (Restated)
2023 2023
Administrative expenses (17,228) (1,179) (18,407)
Loss for the year (28,933) (1,179) (30,112)
Other comprehensive loss for the year 51 - 51
Total comprehensive loss for the year (28,882) (1,179) (30,061)
Basic loss per share (cents) (10.24) (0.42) (10.66)
Diluted loss per share (cents) (10.24) (0.42) (10.66)
5. Loss per share ("EPS")
Year ended (Restated) Year ended
31 December 2024
31 December 2023
Loss for the year attributable to owners of the parent equity (In USD '000) (62,491) (30,112)
Weighted average number of common shares for the purposes of basic loss per 315,064 282,505
share (in number '000)
Weighted average number of common shares for the purposes of diluted loss per 315,064 282,505
share (in number '000)
Basic loss per share (cents) (19.83) (10.66)
Diluted loss per share (cents) (19.83) (10.66)
Basic loss per share is calculated by dividing the net loss attributable to
owners of the parent (2024: $62.5m loss, 2023: $30.1m loss) by the weighted
average number of common shares in issue during the year (2024: 315,063,816;
2023: 282,504,794).
Diluted loss per share is calculated by adjusting the weighted average number
of common shares outstanding to assume conversion of all potentially dilutive
ordinary shares. The company has share options and performance rights as
categories of potentially dilutive ordinary shares.
The options and performance rights only dilute earnings when they result in
the issue of shares at a value below the market price of the share and when
all performance criteria (if applicable) have been met. As at 31 December
2024, there are 3,195,866 potentially dilutive share options and performance
rights (2023: 2,062,071 potentially dilutive share options and performance
rights) which were not included in the calculation of diluted earnings/loss
per share as their conversion to ordinary shares would have decreased the loss
per share and because their exercise was contingent on the satisfaction of
certain criteria that had not been met at the end of the respective year.
6. Segmental information
The segmental analysis of the Group's loss after tax and movement in
non-current assets is as follows:
Year ended 31 December 2024 (Restated) Year ended 31 December 2023
(In USD '000) Bosnia Serbia Corporate Total Bosnia Serbia Corporate Total
Revenue 27,585 - - 27,585 - - - -
Cost of goods sold (25,661) - - (25,661) - - - -
Distribution and selling costs (947) - - (947) - - - -
Exploration costs (1,042) (4,150) - (5,192) - (2,090) - (2,090)
Share-based payment expense - - (1,408) (1,408) - - (1,561) (1,561)
Administrative expenses excluding depreciation (25,171) (1,738) (10,011) (36,920) (9,903) (1,911) (5,727) (17,541)
Depreciation of property, plant and equipment (2,353) (27) (24) (2,404) (403) (50) (23) (476)
Depreciation of right-of-use assets (126) (96) (387) (609) (183) (97) (110) (390)
Operating Loss (27,715) (6,011) (11,830) (45,556) (10,489) (4,148) (7,421) (22,058)
Finance income - - 451 451 - - 949 949
Finance expense (919) (59) (27,728) (28,706) (1,056) (28) (4,378) (5,462)
Revaluation of external derivative liability - - 6,457 6,457 - - (3,541) (3,541)
Loss before taxation (28,634) (6,070) (32,650) (67,354) (11,545) (4,176) (14,391) (30,112)
Tax credit 4,863 - - 4,863 - - - -
Loss for the year (23,771) (6,070) (32,650) (62,491) (11,545) (4,176) (14,391) (30,112)
Additions to mining under construction assets 40,183 - - 40,183 111,624 - - 111,624
¹Refer to note 4.3 for details of the restatement of prior year results.
7. Revenue
(In USD '000) 31 December 2024 31 December 2023
Lead-silver concentrate 18,375 -
Zinc concentrate 11,268 -
Less:
Treatment charges (1,545) -
Offtake penalties (254) -
Offtake buyers' fees (259) -
Revenue 27,585 -
The Group sells zinc, silver, and lead concentrate product to smelters through
offtake agreements with third parties. Agreements are in place with four
international commodities trading and smelting companies ("Offtakers") for the
purchase of concentrate production from the Vareš Silver Operation. The
concentrates have been allocated to the Offtakers as follows:
· Zinc concentrate to Bolliden AB, Trafigura Pte Ltd, Transamine
SA; and
· Lead-silver concentrate to Glencore International AG and
Transamine SA.
During 2024, three customers contributed more than 20% of the Group's revenue
each (2022: none), contributing $11.6m, $10.2m and $5.8m each.
The Offtakers had been allocated 82% of the total projected concentrate
production over the first 24 months. The remaining 18% of concentrate
production was intentionally reserved either for advantageous spot sales or
additional long-term offtake agreements. Post period, the 18% was allocated to
Trafigura Pte Ltd in line with the prepayment agreement outlined in note 27.
The agreements with the smelters provide for provisional pricing, i.e. the
selling price is subject to final adjustment at the end of the quotation
period based on the average price for the month, two months, or three months
following delivery to the buyer and subject to final adjustment for assaying
results.
8. Operating loss
Operating loss is stated after charging:
(In USD '000) Year ended (Restated) Year ended
31 December 2024
31 December 2023
Note
Wages and salaries 24,441 6,459
Consultancy fees 1,699 1,129
Cash remuneration in respect of qualifying services 26,140 7,588
Exploration activities expensed 5,192 2,090
Termination payment to mining contractor 3,681 -
Depreciation of property, plant and equipment 12 2,391 476
Depreciation of right-of-use assets 13 595 390
Auditors' remuneration 573 330
Non audit services for interim review 122 39
The majority of exploration activities expensed during the year represent
costs incurred at the Raška Project, for which a JORC-compliant resource has
not yet been established.
Wages and salaries constitutes net payments made to employees together with
social security and other contributions.
9. Wages and salaries
Wages and salaries comprise all employees of the Group including Directors,
key management personnel and personnel in management positions engaged under
management services contracts. The table below shows total costs for all
employees, including costs capitalised during the year.
(In USD '000) Year ended (Restated) Year ended
31 December 2024
31 December 2023
Wages and salaries 26,438 8,219
Consultancy fees 1,917 4,484
Cash remuneration in respect of qualifying services 28,355 12,703
Social security costs 13,912 4,759
Defined contribution pension cost 24 13
Share-based payments expense 1,408 1,561
Total 43,699 19,036
Average number of employees (number) 549 296
Share-based payments expense is stated at fair value at the time of grant
using the Black-Scholes option pricing model. Further details are available in
note 24.2 of the accounts.
The average monthly number of employees during the year increased to 549 in
the year (2023: 296 employees). This is due to the ramp up of the Vareš
Silver Operation from construction phase to test production phase.
Year ended 31 December 2024 Year ended 31 December 2023
Serbia Bosnia UK (Parent) Total Serbia Bosnia UK (Parent) Total
Exploration 15 57 - 72 23 39 - 62
Operations - 305 - 305 - 156 - 156
Administration 5 155 12 172 8 60 10 78
Total 20 517 12 549 31 255 10 296
Directors' remuneration is set out below:
(In USD '000) Year ended Year ended
31 December 2024
31 December 2023
Board fees 594 442
Consultancy fees 823 445
Accrued cash bonus 360 330
Benefits 50 60
Cash remuneration in respect of qualifying services 1,827 1,277
Average number of Directors 8 6
There were no directors' share awards that vested in the year (2023: Nil).
The highest paid Director in the year ended 31 December 2024 received cash
remuneration, excluding notional gains on share options or performance rights,
of $0.6m (2023: $0.9m).
10. Finance income and expense
(In USD '000) Note
Year ended Year ended
31 December 2024
31 December 2023
Interest income 580 1,567
Foreign exchange gain - 209
Interest income capitalised within property, plant and equipment 12 (129) (827)
Finance income 451 949
Interest income of $0.1m (2023: $0.8m) and accrued interest expense of $7.8m
(2023: $13.0m) on the Orion Senior Debt Finance Package has been capitalised
within additions to the mine under construction asset, a net capitalised
amount of $7.7m (2023: $12.2m) as shown in note 13.
Interest income relates to interest earned on cash holdings.
(In USD '000) Note Year ended Year ended
31 December 2024
31 December 2023
Interest expense 19 12,651 1,718
Fair value of copper stream liability 19 12,142 2,549
Interest expense on lease liabilities 13 607 1,103
Amortisation of day one fair value gain on Copper Stream 17 105 92
Unwinding of the discount on the rehabilitation provision 18 62 -
Foreign exchange loss 3,139 -
Finance expense 28,706 5,462
$12.4m of interest expense comprises accrued interest on the Orion Senior Debt
Finance Package (2023: $1.7m wholly relates to the QRC convertible bond). See
note 19 for further details.
11. Taxation
a) Current Taxation
(In USD '000) Year ended Year ended
31 December 2024
31 December 2023
Current tax expense - -
Prior year tax expense - -
Overseas tax - -
Deferred tax credit (note b) 4,863 -
Income tax credit 4,863 -
The table below reconciles the tax credit on the Group's loss for the year
with the standard rate of corporation tax in the United Kingdom:
(In USD '000) Year ended (Restated) Year ended
31 December 2024
31 December 2023
Loss before tax 67,354 30,112
Tax credit on loss at standard UK rate of 25% (2023: 23.52%) 16,839 7,082
Effects of:
Income not taxable 1,896 59
Expenses not deductible for tax purposes (1,093) (1,465)
Effect of overseas tax rates (10,911) (2,166)
Amounts not recognised (1,868) (3,510)
Total tax credit 4,863 -
Corporate income tax is calculated at 25% (2023: 23.52%) of the assessable
profit for the year for the UK parent company, 15% (2023: 15%) for the
operating subsidiaries in Serbia, and 10% (2023: 10%) for the operating
subsidiaries in Bosnia and Herzegovina.
Expenses not deductible for tax purposes include share-based payment charges,
impairment and depreciation and amortisation charges.
b) Deferred income tax asset
The deferred tax asset comprises:
(In USD '000) Year ended Year ended
31 December 2024
31 December 2023
Deferred tax asset recoverable within 12 months 4,493 -
Deferred tax asset recoverable after 12 months 370 -
Deferred tax asset 4,863 -
A $4.9m (2023: Nil) deferred tax asset has been recognised in respect of
$48.6m (2023: Nil) tax losses at the main operating subsidiary in Bosnia and
Herzegovina. The total tax losses carried forward were $49.3m (2023: $17.1m)
however $0.7m (2023: Nil) have been excluded from the deferred tax asset
calculation as they expire within twelve months.
(In USD '000) Year ended Year ended
31 December 2024
31 December 2024
Recognised Unrecognised
Tax Losses 4,863 16,948
Deferred taxation asset 4,863 16,948
(In USD '000) Year ended Year ended
31 December 2023
31 December 2023
Recognised Unrecognised
Tax Losses - 14,313
Deferred taxation asset - 14,313
At year-end, potential deferred tax assets of $17.1m (2023: $14.3m) relating
to tax losses of $75.3m (2023: $75.6m) were not recognised as it is not
probable that future taxable profits will be available against which the
associated unused tax losses can be utilised.
$16.1m of these losses relate to the Serbia operating subsidiaries and have
the below expiry dates:
· <1 year: $1.7m
· 1-2 years: $5.2m
· 2-5 years: $9.2m
The remaining losses relate to the UK parent company and have no expiry date.
12. Property, plant and equipment
Note
Cost (In USD '000) Land & Buildings Plant & Machinery Restated¹ Restated¹
Mine under Construction Total
31 December 2022 4,781 2,026 71,804 78,611
Additions 828 2,062 122,021 124,911
Capitalised net interest 12, 19 - - 12,172 12,172
Capitalised depreciation 12 - - 2,006 2,006
Reassessment of rehabilitation provision 18 - - (757) (757)
31 December 2023 5,609 4,088 207,246 216,943
Additions 1,111 4,892 49,686 55,689
Capitalised net interest 12, 19 - - 7,687 7,687
Capitalised depreciation 12 - - 2,665 2,665
Reassessment of rehabilitation provision 18 - - 1,660 1,660
Transfer 2,442 10,520 (12,962) -
31 December 2024 9,162 19,500 255,982 284,644
Depreciation (in USD '000)
31 December 2022 61 497 192 750
Charge for the year 24 452 - 476
31 December 2023 85 949 192 1,226
Charge for the year 517 1,874 - 2,391
31 December 2024 602 2,823 192 3,617
Net Book Value (in USD '000)
31 December 2023 5,524 3,139 207,054 215,717
31 December 2024 8,560 16,677 255,790 281,027
¹Refer to note 4.3 for details of the restatement of prior year results.
Capitalised interest consists of accrued interest expense in the year of $7.8m
(2023: $13.0m) on the Orion Senior Debt Finance Package as set out in note 19,
less $0.1m (2023: $0.1m) interest income, as set out in note 10.
Mine under construction amounts relate to the Vareš Silver Operation, located
in Bosnia and Herzegovina.
13. Right-of-use assets and lease liabilities
Set out below are the carrying amounts of right-of-use assets accounted for in
accordance with IFRS 16 and the movements during the year:
(In USD '000) Land & Buildings Plant & Machinery Total
31 December 2022 794 8,160 8,954
Additions 1,097 600 1,697
Depreciation (346) (2,051) (2,397)
Foreign exchange difference 64 2 66
31 December 2023 1,609 6,711 8,320
Additions 133 6,431 6,564
Termination (432) (5,950) (6,382)
Modification (335) - (335)
Depreciation (501) (2,759) (3,260)
Foreign exchange difference (10) - (10)
31 December 2024 464 4,433 4,897
In June 2022, Adriatic and Nova Mining & Construction d.o.o, entered into
a five-year mining services contract. On 20 April 2024, Adriatic and Nova
agreed to terminate the Mining Services Contract, and enter into a settlement
and termination agreement effective on 20 April 2024. Under the terms of the
settlement and termination agreement, Adriatic assumed financial liabilities
with Sandvik Mining and Construction amounting to $6.4m for underground mining
equipment to be used by Adriatic.
This has been treated as a termination of the previous lease agreement with
Nova Mining and a new lease addition under IFRS 16 with Sandvik Mining and
Construction.
Depreciation relating to right-of-use assets taken to mine under construction
includes capitalised depreciation of $2.7m (2023: $2.0m), as set out in note
12. The corresponding charge in the income statement is $0.6m (2023: $0.4m).
Set out below are the carrying amounts of lease liabilities and the movements
during the year:
(In USD '000) Land & Buildings Plant & Machinery Total
31 December 2022 884 7,302 8,186
Additions 982 600 1,582
Interest expense 105 999 1,104
Payments (466) (2,357) (2,823)
Foreign exchange difference 85 2 87
31 December 2023 1,590 6,546 8,136
Additions 132 6,454 6,586
Termination (447) (6,005) (6,452)
Modification (377) - (377)
Interest expense 72 535 607
Payments (496) (2,861) (3,357)
Foreign exchange difference (39) - (39)
31 December 2024 435 4,669 5,104
Of the total lease liabilities amount, $3.6m (2023: $1.5m) is recognised as a
current liability and the remainder $1.5m (2023: $6.6m) is shown within
non-current liabilities. The maturity analysis of contractual undiscounted
cash-flows is in note 22b.
The following are the amounts recognised in the statement of comprehensive
income:
Cost (In USD '000) Note 12 months to December 2024 12 months to December 2023
Depreciation expense of right-of-use assets 13 3,260 2,397
Less: right-of-use asset depreciation capitalised to mine under construction 12 (2,665) (2,007)
Total depreciation 595 390
Interest expense on lease liabilities 10 607 1,103
Total amount recognised in profit or loss 1,202 1,493
The following are the amounts recognised in the statement of cashflow:
Cost (In USD '000) 12 months to December 2024 12 months to December 2023
Capital payments on leases (2,750) (1,719)
Interest paid on leases (607) (1,103)
Total amount paid in respect of lease liabilities (3,357) (2,822)
14. Exploration and evaluation assets
Cost (In USD '000) Raška Project in Serbia Total Exploration & Evaluation Assets
31 December 2022 8,500 8,500
31 December 2023 8,500 8,500
Net Book Value (In USD '000)
31 December 2023 8,500 8,500
31 December 2024 8,500 8,500
Exploration and evaluation assets relate to the Raška Project in Serbia.
Exploration activities are ongoing in order to progress towards a JORC mineral
resource.
The Raška Project is managed as a single project and if advanced to the
production stage, it is anticipated that there would be a single processing
plant. The project is therefore treated as a single cash generating unit, with
the post-impairment value of $8.5m attributed to the Raška Project as a whole
instead of to specific tenements.
No further indicators of impairment or reversal of previous impairment have
been identified in the year to 31 December 2024, the carrying value of $8.5m
remains unchanged from prior year.
15. Inventory
(In USD) 31 December 2024 31 December 2023
Ore stockpiles 10,826 121
Spares and consumables 4,058 1,432
Finished goods 1,886 -
Total inventories 16,770 1,553
The Group recognises all inventory at the lower of cost and net realisable
value, and did not have any slow-moving, obsolete, or defective inventory as
at 31 December 2024, and therefore there were no write-offs to the income
statement during the year (2023: Nil).
The total inventory recognised through the income statement was $11.9m (2023:
Nil).
All ore stockpiles are expected to be processed in 12 months and are therefore
current.
16. Trade and other receivables
(In USD '000) 31 December 2024 31 December 2023
Current
Contract asset 1,401 -
Prepayments and deposits 6,559 6,585
Unamortised deferral of Copper Stream fair value at initial recognition 105 99
VAT receivables 4,788 6,364
Other receivables 543 164
13,396 13,212
Non-Current
Unamortised deferral of Copper Stream fair value at initial recognition 1,570 1,680
Total 14,966 14,892
Trade and other receivables are accounted for under IFRS 9 using the expected
credit loss model and are initially recognised at fair value and subsequently
measured at amortised cost less any allowance for expected credit losses. Due
to the nature of its sales model and credit terms of 3-30 days, expected
credit loss exposure to the Group is insignificant.
$4.6m (2023: $6.1m) of total prepayments relates to the Vareš Silver
Operation prepayments and deposits which represent advance payments in respect
of equipment purchases.
At 31 December 2023, Copper Stream deposit was subject to a day 1 fair value
adjustment of $1.9m with a corresponding day one deferral in other debtors,
which will be amortised over the life of the stream. Amortisation at 31
December 2024 amounts to $0.1m (2023: $0.1m), resulting in an unamortised
balance of $1.7m of which $0.1m (2023: $0.1m) is current and $1.6m (2023:
$1.7m) is non-current.
17. Trade and other payables
(In USD '000) Restated¹
31 December 2024 31 December 2023
Trade payables 14,629 13,720
Accrued liabilities 19,520 8,646
Deferred revenue 1,929 -
Other payables 1,265 537
37,343 22,903
¹Refer to note 4.3 for details of the restatement of prior year results.
The carrying value of all the above payables is equivalent to fair value. All
trade and other payables are payable within less than one year for both
reporting periods.
Accrued liabilities were higher at year-end due to an increase in employees
and contractors causing an uplift in global employment taxes and social
security contributions owed.
18. Rehabilitation provision
(In USD '000) Note 31 December 2024 31 December 2023
At 1 January 3,674 4,431
Change in estimate 12 1,660 (757)
Unwinding of discount 10 62 -
At 31 December 5,396 3,674
The Group provision for the asset retirement obligation associated with mining
activities at Vareš Silver Operation at 31 December 2024 was $5.4m (2023:
$3.7m).
The provision represents the net present value of the Company's best estimate
of the Vareš Silver Operation's future closure, restoration and environmental
obligations, based on the extent of land and other disturbance caused by
construction and other activities.
The increase in estimate in relation to the asset retirement obligation is
primarily due to additional estimated costs due to development in 2024 as well
as an update to the discount rate to 4.9% (2023: 4.2%) and inflation rate to
2.0% (2023: 2.5%) using latest estimates.
The present value of the above provision is measured by unwinding the discount
on expected future cash flows over the period up to closure, using a discount
rate of 4.9% (2024: 4.3%) that reflects the risk-free rate of interest. The
yield of US Treasury bonds with a maturity profile commensurate with the
anticipated rehabilitation schedule has been used to determine the discount
factor applied to anticipated future rehabilitation costs.
The sensitivity of the provision to a 1% change in the discount factor is
shown below:
· a decrease from 4.9% to 3.9% would increase the provision by
$0.95m with a corresponding increase in Property, plant and equipment; and
· an increase from 4.9% to 5.9% would decrease the provision by
$0.8m with a corresponding decrease in Property, plant and equipment.
Future climate change risks could impact the rehabilitation provision both in
terms of the nature of decommissioning and rehabilitation required, as well as
the cost of these activities given its long-term nature. Climate change risks
and mitigations have been considered in the TCFD Climate Disclosure within the
Directors report.
19. Borrowings and Derivative Liability
a) Total borrowings and derivative liability
(In USD '000) Orion Senior Secured Debt Copper Stream QRC Total Derivative Liability on QRC Convertible Debt
Convertible Debt Borrowings
At 31 December 2022 (26,212) - (16,286) (42,498) (6,369)
Additions (58,560) (22,500) - (81,060) -
Interest expense (13,000) - (1,718) (14,718) -
Payment of Interest - - 1,895 1,895 -
Day one fair value adjustment - (1,871) - (1,871) -
Fair value adjustment (2,548) (2,548)
Revaluation of fair value embedded option - - - - (3,541)
At 31 December 2023 (97,772) (26,919) (16,109) (140,800) (9,910)
Additions (29,228) - (29,228) -
Interest expense (18,479) (305) (18,784) -
Loan modification (1,592) - (1,592) -
QRC conversion - - 16,414 16,414 3,453
Fair value adjustment - (12,142) - (12,142) 6,457
Payments - 629 - 629 -
At 31 December 2024 (147,071) (38,432) - (185,503) -
Year end balances are analysed below:
At 31 December 2024 Orion Senior Secured Debt Copper Stream QRC Total Derivative Liability on QRC Convertible Debt
Convertible Borrowings
Debt
Current liability (75,917) (4,072) - (79,989) -
Non-current liability (71,154) (34,360) - (105,514) -
(147,071) (38,432) - (185,503) -
At 31 December 2023 Orion Senior Secured Debt Copper Stream QRC Total Derivative Liability on QRC Convertible Debt
Convertible Debt Borrowings
Current liability (30,177) (1,087) (16,109) (47,373) (9,910)
Non-current liability (67,595) (25,832) - (93,427) --
(97,772) (26,919) (16,109) (140,800) (9,910)
b) Orion Senior Secured Debt
On 10 January 2022, the Group announced the completion of a $142.5m debt
financing package ("Orion Debt Finance Package"), with Orion Resource Partners
(UK) LLP ("Orion") comprising:
• $120m Senior Secured Debt; and
• $22.5m Copper Stream
Under the terms of this agreement, the Senior Secured Debt maturity date is 30
June 2027. Interest accrues daily at an annual rate equal to a margin of 7.5%
plus the greater of (i) a floor of 0.26161% plus the CME Term SOFR for a
period equal to three months and (ii) the floor of 0.26161%. Interest is
payable on each interest repayment date, on the final maturity date, and on
any earlier date on which a loan is prepaid in full or in part.
The First Repayment Date was the earlier of the Project Completion Longstop
Date of 30 June 2024 and the last business day of the quarter following the
quarter in which the Project Completion Date falls. The repayment schedule
provides for the repayment of the loan in 10 equal quarterly instalments in
each of the 10 successive quarters, with the first such quarterly repayment
occurring on the First Repayment Date and the repayment in each successive
quarter occurring on the last Business Day of the relevant quarter.
The Orion Debt Finance Package contains covenants and restrictive covenants
typical for a project financing, including in relation to financial reporting.
It also contains security customary for a project financing, principally
security over the assets of Adriatic Metals BH d.o.o. and material
project-related contracts held by the Adriatic Group. A DSCR covenant of above
1.25x is included in the Orion Debt Finance Package.
Secured Overnight Financing Rate ("SOFR") is a secured interbank overnight
interest rate used as a reference rate by parties in commercial contracts, as
an alternative to LIBOR which was discontinued in 2021. The CME SOFR is
administered by the CME Group.
In January 2024, the Orion Senior Secured Debt fourth tranche of $30m was
drawn net of a 2% fee of $0.6m and associated legal and other fees of $0.2m,
with a net amount received of $29.2m. At 31 December 2024, these Orion fees
and a further amount of transaction fees incurred by the Group totalling $0.8m
were recognised as a deduction from the value of borrowings in accordance with
IFRS 9, on the basis that they represented transaction costs directly
attributable to the acquisition of the borrowings.
First Modification of Facility
On 22 January 2024, the Group amended the terms of the original Senior Secured
Debt agreement as below:
· The Project Completion Longstop Date of 30 June 2024 was extended
to 31 December 2024 and became the First Repayment Date;
· A fee applicable to the amendment ("the Front End Fee") of $0.8m
was payable immediately following the utilisation date for the fourth draw
down and added to the principal amount of the loans then outstanding;
· The Company was required to ensure that prior to 31 July 2024,
the QRC Convertible Debt was finally, fully and irrevocably discharged or
converted into equity without incurring financial indebtedness in relation to
the same.
Additional Facility
On 21 April 2024, the Group negotiated an additional debt facility of $25m
with an arrangement fee payable of $0.2m. These funds were to be made
available in a single tranche during the period 1 September 2024 - 31 December
2024.
The tranche had to be repaid within six months of utilisation in cash or, at
Orion's option, in silver credits. The amount of any silver credits used to
repay the additional tranche was to be calculated by reference to market price
discounted by 2%.
This facility was undrawn during 2024.
Second Modification of Facility
On 6 December 2024, the Group made further amendments to the terms of the
original Senior Secured Debt agreement as below:
· The Project Completion Longstop Date of 31 December 2024 was
extended to 31 March 2025 and became the First Repayment Date;
· The additional commitment of $25m made available under the terms
of the Deed of Amendment was cancelled;
· A fee applicable to the amendment ("the Amendment Fee") of $0.5m
became payable on the Amendment Date and was added to the principal amount of
the loan then outstanding.
· Orion may elect to have the first repayment instalment paid in
silver credits. If so, the amount of any silver credits used to repay the
first repayment instalment is to be calculated by reference to market price
discounted by 2%.
During 2024 the applicable CME Term SOFR has fluctuated between 4.60367% and
5.33156%, meaning that the total interest rate applicable has fluctuated
between 12.36528% and 13.15643%. The first DSCR testing period is expected to
be late-2025, and six monthly thereafter. The Company's forecasts show
headroom above the requirement of 1.25x.
The Group is entitled to deduct the amount of any payment it makes to the
Adriatic Foundation on behalf of the Lenders from any interest accrued in the
last quarter of each year.
Post period on 28 March the Group made its first debt repayment of $19.5m to
Orion Mine Finance.
c) Copper Stream
On 13 February 2023 the Company announced that all conditions precedent for
the $22.5m Copper Stream had been satisfied and that the Copper Stream deposit
funds had been received as a prepayment for the Copper Stream agreement with
OMF Fund III.
During the year, Gold Royalty Corp announced that it had entered into a
binding purchase and sale agreement with OMF Fund III to acquire the Copper
Stream on the Vareš Silver Operation. The Company was not impacted by the
transaction nor a party to it, and the terms of the Copper Stream have not
changed.
In accordance with the Copper Stream agreement, the Group will deliver copper
warrants purchased on the London Metal Exchange with a value equal to 24.5% of
the payable copper in concentrates sold at the official LME copper cash price.
Gold Royalty will pay 30% of the value of copper warrants with the remaining
70% being credited to the prepayment. Copper warrants are delivered monthly
when the Group exceeds the threshold of 25 tonnes of payable copper contained
in produced concentrates.
The agreement will be effective for an initial term of 40 years from the
signing date and thereafter will automatically be extended for any successive
20 year additional periods unless there have been no active mining operations
during the last 20 years of the initial term or throughout such additional
periods, in which case the agreement will terminate at the end of the initial
term or such additional period, as applicable. The agreement may also be
terminated by the parties on mutual written consent or in the event of
default.
The Group's obligations under the Copper Stream agreement are accounted for as
a financial liability at fair value through profit or loss and comprise the
following at 31 December 2024:
(In USD '000) 31 December 2024
At 1 January 2024 26,919
Fair value adjustment at 31 December 2024 12,142
Copper warrant deliveries (629)
At 31 December 2024 38,432
As the fair value of copper warrants depends on copper price volatilities and
a risk-adjusted discount rate which are unobservable inputs, the financial
liability above is classified within Level 3 of the fair value hierarchy.
The valuation of the Copper Stream financial liability was prepared by
management on a nominal basis. The finance department performs the valuation,
with support from external experts. The assumptions used were the life of mine
based on latest mineral reserves, copper production, the nominal copper
forward price curve and the nominal discount rate based on an adjusted Group
weighted average cost of capital.
The following table contains sensitivities showing the impact of a 10%, 15%
and 20% discount factor compared with the discount rate used by the Group of
14.65% (2023: 18.94%).
10% 15% 20%
Valuation at 31 December 2024 48,899 37,798 30,385
The following table contains sensitivity analysis showing the impact of a plus
or minus percentage applied to the forecast nominal copper prices used in the
Copper Stream valuation compared with those used by the Group.
+5% +10% +15%
Valuation at 31 December 2024 40,354 42,276 44,198
-5% -10% -15%
Valuation at 31 December 2024 36,511 34,589 32,668
d) QRC convertible debt
The Group issued $20m 8.5% convertible debt through a deed of covenant dated
30 November 2020. The debt was convertible into fully paid equity securities
in the share capital of the issuer, subject to the conditions of the debt
issue.
The debt was converted into shares on 4 March 2024 whereby the Group allotted
10,981,770 new ordinary shares of £0.013355 each which were issued to Queens
Road Capital Investment Ltd following their decision to exercise their right
to convert the bonds into equity. Following this conversion the Company's
issued share capital increased to 306,222,045 ordinary shares of £0.013355
each.
e) Derivative liability on QRC convertible debt
Management have revalued QRC's option to convert the debt into equity at 4
March 2024. For valuations of non-property items required for financial
reporting, including level 3 fair values, the finance department performs the
valuation, with support from external experts.
It was concluded that the call option in the hands of the bondholder satisfied
the conditions stipulated by IFRS 9 Financial Instrument - Recognition and
Measurement for the recognition of a derivative liability in the Group
accounts and require a separate fair valuation.
The redemption options in the hands of the Company were concluded to fall
outside the exemptions of IFRS 9 and to be closely related to the debt host
contract. Therefore, the redemption options need not be separated from the
debt host contract and hence need not be valued separately. The Group has
accounted for both the embedded option and liability at fair value through
profit and loss and at amortised cost respectively.
The Black Scholes model was chosen as the most appropriate pricing model to
value QRC's option to convert the debt into equity and the valuation was
updated at 4 March 2024. The main assumptions and inputs used in the options
pricing model were as follows:
· Dividend yield - assumed to be nil because the Group has not
declared or paid any dividends in prior years on ordinary shares.
· Strike price - The initial conversion price of AUD 2.7976 per
ordinary share.
· Expected term - Judgement applied to assign probability to the
various redemption and put options in the contract. Expected term of
redemption calculated as 0.01 years from the valuation date.
· Expected volatility - Weekly volatility over the 0.01 years
(<1 weeks) was calculated as 60.3% prevailing on ASX as of the valuation
date.
· Risk-free rate - Risk free yield obtained from Australian
Treasury bond issues converted into continuous compound yields.
· Value of underlying common stock price - The closing price of
ordinary shares AUD 3.280 on the valuation date on the ASX.
Using the assumptions set out above, the Black Scholes value of the call
option in the hands of the debt holder at the date of conversion was $3.5m.
20. Net debt and borrowings
An analysis of net debt and borrowings, including lease liabilities, and
movements in each year is shown below.
(In USD '000) Note 31 December 2024 31 December 2023
Cash and cash equivalents 20,697 44,856
Borrowings 19 (185,503) (140,800)
Lease liabilities 13 (5,104) (8,136)
(169,910) (104,080)
Borrowings Lease liabilities Cash and cash equivalents Total
Net cash at 1 January 2023 (42,498) (8,187) 60,585 9,900
Net cash used in operating activities - - (22,886) (22,886)
Net cash used in investing activities - - (99,485) (99,485)
Net proceeds from loans and borrowings (81,060) - 81,060 -
Lease additions - (1,581) - (1,581)
Foreign exchange movements - (87) (356) (443)
Changes in fair value (4,420) - - (4,420)
Interest expense (14,718) (1,103) - (15,821)
Net interest payments 1,896 844 (2,740) -
Capital payments on leases - 1,978 (1,978) -
Net cash arising from issue of equity - - 30,656 30,656
Net debt at 31 December 2023 (140,800) (8,136) 44,856 (104,080)
Net cash used in operating activities - - (53,329) (53,329)
Net cash used in investing activities - - (44,821) (44,821)
Net proceeds from loans and borrowings (29,228) - 29,228 -
Proceeds from exercise of warrants - - 2,498 2,498
Lease additions - (6,586) - (6,586)
Lease terminations - 6,452 - 6,452
Lease modification - 377 - 377
Foreign exchange movements - 39 (681) (642)
Debt conversion into equity 16,414 - - 16,414
Changes in fair value (10,818) - - (10,818)
Interest expense (21,700) (607) - (22,307)
Net interest payments - 607 (607) -
Capital payments on stream liability 629 - (629) -
Capital payments on leases - 2,750 (2,750) -
Net cash arising from issue of equity - - 46,932 46,932
Net debt at 31 December 2024 (185,503) (5,104) 20,697 (169,910)
21. Financial instruments
IFRS 13 requires disclosure of fair value measurements by level of the
following fair value measurement hierarchy, depending on whether the fair
value measurements are derived from:
· quoted prices (unadjusted) in active markets for identical assets
or liabilities (level 1);
· inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (that is, as prices) or
indirectly (that is, derived from prices) (level 2); or
· inputs for the asset or liability that are not based on observable
market data (that is, unobservable inputs) (level 3).
Fair value is the amount at which a financial instrument could be exchanged in
an arm's length transaction. Set out below are the financial instruments held
at amortised cost and fair value through profit or loss and their fair value
measurement hierarchy.
See note referenced for further detail on inputs to fair value for each
financial instrument.
Note At fair value Fair Value
Hierarchy
At 31 December 2024 At amortised cost through profit or loss Total
(In USD '000)
Financial assets
Cash and cash equivalents 20,697 - 20,697 N/A
Trade and other receivables 16 647 - 647 N/A
Total financial assets 21,344 - 21,344
Financial liabilities
Trade and other payables 17 19,952 - 19,952 N/A
Borrowings 19 147,071 38,432 185,503 Level 3*
Total financial liabilities 167,023 38,432 205,455
Net financial (liabilities) (145,679) (38,432) (184,111)
*copper stream only
At 31 December 2023 Note At amortised cost At fair value Total Fair Value
Hierarchy
(In USD '000) through profit or loss
Financial assets
Cash and cash equivalents 44,856 - 44,856 N/A
Trade and other receivables 16 223 - 223 N/A
Total financial assets 44,915 - 44,915
Financial liabilities
Trade and other payables 17 17,672 - 17,672 N/A
Borrowings 19 113,881 26,919 140,800 Level 3*
Derivative liability 19 - 9,910 9,910 Level 3
Total financial liabilities 131,553 36,829 168,382
Net financial (liabilities) (86,638) (36,829) (123,467)
*copper stream only
22. Financial risk management
a. Credit risk
The Group has no significant concentrations of credit risk. Credit risk arises
from the risk that a counterparty will fail to perform its obligations. Credit
risk arises from cash and cash equivalents, deposits with banks and financial
institutions, as well as credit exposures to customers.
Due to the nature of the business, the Group's exposure to credit risk arising
from its operating activities is currently inherently low. However, the Audit
& Risk Committee considers the risks associated with new material
counterparties where applicable to ensure the associated credit risk is of an
acceptable level.
The total carrying amount of cash and cash equivalents and trade and other
receivables represents the Group's maximum credit exposure.
The Group's cash is held in major UK, Jersey, Australian, Serbian and Bosnian
financial institutions, and as such the Group is exposed to credit risks of
those financial institutions. Of the Group's year end cash holdings, 76%
(2023: 72%) are located in UK and Jersey A1 or A2 rated institutions and as
such are considered to have low credit risk.
Credit risk related to trade receivables is managed by the Group's commercial
team. The expected credit loss on trade receivables is insignificant.
The Group's tax receivables primarily relate to value added taxes due from
governments in the UK and Bosnia and Herzegovina. These amounts are excluded
from the definition of financial instruments in the accounts and in any event
are considered to have low credit risk.
The Board of Directors, with input from the Audit & Risk Committee, is
ultimately responsible for monitoring exposure to credit risk on an ongoing
basis and does not consider such risk to be significant at this time. As such,
the Group considers all its financial assets to be fully collectible.
b. Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they become due. The Group's approach to managing
liquidity risk is to ensure, as far as possible, that it will have sufficient
liquidity to meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses.
The following table analyses the Group's financial liabilities and derivatives
into the relevant maturity groupings based on the remaining period at the
balance sheet date to the contractual maturity date. The contractual gross
financial liabilities shown below are undiscounted estimated cash outflows
which, where applicable, include estimated future interest payments, and
certain amounts therefore differ from the amounts presented in the
consolidated financial statements and elsewhere in the accompanying notes.
1-6 months 6-12 months >12 months
At 31 December 2024 (In USD '000) <1 month
Trade and other payables 7,520 12,400 26,227 -
Borrowings 245 40,448 39,629 190,664
Lease liabilities 318 1,763 1,736 1,563
8,083 54,611 67,592 192,227
At 31 December 2023 (In USD '000) 1-6 months 6-12 months >12 months
<1 month
Trade and other payables 17,673 - - -
Borrowings - 13,951 27,630 163,062
Derivative liability - - 9,910 -
Lease liabilities 124 623 748 7,946
17,797 14,574 38,288 171,008
c. Market risk
Foreign exchange risk
The Group conducts operations and exploration projects in Bosnia and
Herzegovina and in Serbia. As a result, a portion of the Group's expenditures,
receivables, cash and cash equivalents, accounts payable and accrued
liabilities are denominated in Bosnian Marks, Serbian Dinar, Pound Sterling,
Australian Dollars, and Euros and are therefore subject to fluctuation in
exchange rates.
The Group manages foreign exchange risk by engaging with banking and treasury
advisers to understand macroeconomic forces that could expose the business to
foreign exchange losses. For operating working capital flows, the Group seek
to, where possible, have Group entities settle liabilities denominated in
their local currency with the cash generated from converting USD concentrate
revenues to local currencies.
At 31 December 2024, a 10% change in the exchange rate between USD and the
Euro, Bosnian Mark and Serbian Dinar, which is a reasonable estimation of
volatility in exchange rates, would have an impact of approximately $3.7m
(2023: $1.4m) on the Group's total comprehensive loss, and approximately $0.5m
(2023: $1.6m) on the balance of cash and cash equivalents.
Interest rate risk
The Group's interest rate risk arises from long-term borrowings issued at
variable rates (see note 19) which includes a margin of 7.5%.
Management regularly monitors the impact of a change in the variable interest
rate to the Group's financial results. In the current year, the impact of a
10% increase/decrease in the reference rate would result in a financial
loss/gain of $1.3m (2023: $0.4m).
d. Fair values
The fair value of cash, receivables, accounts payable and accrued liabilities
approximate their carrying amounts due to the short term nature of the
instruments.
As set out in note 21, fair value measurements recognised in the consolidated
statement of financial position subsequent to their initial fair value
recognition can be classified into Levels 1 to 3 based on the degree to which
fair value is observable.
There were no transfers between any levels of the fair value hierarchy in the
current or prior years.
e. Capital management
The Group's objectives in managing capital are to safeguard its ability to
operate as a going concern while pursuing exploration and development, and
opportunities for growth through identifying and evaluating potential
acquisitions of assets or businesses. The Group defines capital as the equity
attributable to equity shareholders of the Group which at 31 December 2024 was
$118.8m (31 December 2023: $108.4m).
The Group sets the amount of capital in proportion to its risk and corporate
growth objectives. The Group manages its capital structure and adjusts it in
light of changes in economic conditions and the risk characteristics of the
underlying assets.
23. Share capital
23.1 Authorised share capital
The authorised share capital of the Company consists of an unlimited number of
voting ordinary shares with a nominal value of £0.013355.
23.2 Common shares issued and fully paid
Ordinary Shares (Number)
31 December 2022 272,746,292
Issue of share capital 14,807,632
Shares issued on exercise of options and performance rights 5,180,495
31 December 2023 292,734,419
Issue of share capital 18,254,838
QRC Bond Conversion 10,981,770
Shares issued on exercise of warrants and performance rights 2,505,856
31 December 2024 324,476,883
The average price paid for shares issued in the year was $2.40 per share (31
December 2023: $1.64 per share).
24. Share options and performance rights
All share options and performance rights are issued under the Group's share
option plan.
The following table summarises movements of the Company's share option plan:
Weighted average exercise price of options (USD)
Number of options Number of performance rights Total options and performance rights
31 December 2022 0.46 5,174,300 941,594 6,115,894
Granted N/A - 1,811,174 1,811,174
Exercised 0.13 (5,018,260) (588,194) (5,606,454)
Expired 1.47 (14,940) (102,503) (117,443)
31 December 2023 2.25 141,100 2,062,071 2,203,171
Granted N/A - 1,527,196 1,527,196
Exercised N/A - (91,386) (91,386)
Expired 2.21 (141,100) (302,015) (443,115)
31 December 2024 N/A - 3,195,866 3,195,866
On exercise, holders of performance rights are required to pay £0.013355 for
each performance right exercised, being the nominal value of one ordinary
share.
No options were granted during the year or prior year. Performance rights
granted in the year were valued using the Black-Scholes method (see note 24.2
below).
Options outstanding and exercisable:
2024 Options (number) 2023 Options (number)
Option exercise
Grant date Expiry date price
8 October 2020 28 February 2024 £1.80 - 91,300
8 October 2020 7 March 2024 £2.22 - 24,900
8 October 2020 19 August 2024 £1.20 - 24,900
- 141,100
Performance rights outstanding and exercisable:
Weighted average remaining contractual life (Years)
At 31 December 2024 Performance rights Number exercisable
outstanding Expiry date
Grant date
17 February 2022 8,557 1.0 31 December 2025 8,557
5 April 2022 25,000 - 31 December 2024 -
23 February 2023 146,996 2.0 31 December 2026 78,193
24 May 2023 142,778 3.4 1 January 2028 -
24 May 2023 434,272 3.4 24 May 2028 -
18 September 2023 911,067 3.4 24 May 2028 -
12 June 2024 499,240 4.2 22 May 2029 499,240
12 December 2024 1,027,956 4.9 12 December 2029 1,027,956
3,195,866 1,613,946
Performance rights outstanding and exercisable:
Weighted average remaining contractual life (Years)
At 31 December 2023 Performance rights Number exercisable
outstanding Expiry date
Grant date
17 February 2022 100,000 0.0 31 December 2023 100,000
17 February 2022 100,000 0.5 30 June 2024 100,000
17 February 2022 23,765 2.0 31 December 2025 14,537
5 April 2022 100,000 0.0 31 December 2023 100,000
5 April 2022 25,000 1.0 31 December 2024 -
23 February 2023 225,189 3.0 31 December 2026 78,193
24 May 2023 142,778 4.0 1 January 2028 -
24 May 2023 434,272 4.4 24 May 2028 -
18 September 2023 911,067 4.4 24 May 2028 -
2,062,071 392,730
24.1 Share-based payment reserve
The following table presents changes in the Group's share-based payment
reserve during the year ended 31 December 2024:
(In USD '000) Share-based payment reserve
31 December 2022 4,943
Exercise of share options and performance rights (2,337)
Issue of performance rights 1,645
Short term incentive plan awards (576)
Expiry/cancellation of share options and performance rights (84)
31 December 2023 3,591
Exercise of share options and performance rights (197)
Issue of performance rights 1,599
Expiry/cancellation of share options and performance rights (191)
31 December 2024 4,802
24.2 Share-based payment expense
During the year ended 31 December 2024; the Group recognised share-based
payment expenses of $1.4m (31 December 2023: $1.6m).
The fair value of the share-based compensation was estimated on the dates of
grant using the Black-Scholes option pricing model with the following weighted
average assumptions:
Year ended Year ended
31 December 2024 31 December 2023
Risk-free interest rate 3.65% - 4.05% 3.01% - 3.93%
Expected volatility (1) 48% - 55% 39% - 56%
Expected life (years) 4.78 - 5.00 3.85-5.01
Fair value per performance right $1.62 - $2.64 $1.03 - $2.23
((1)) Expected volatility is derived from the Company's historical share price
volatility.
All options and performance rights have both market and non-market vesting
conditions with the exception of those issued to Non-Executive Directors in
prior periods. Non-market vesting conditions include Group and individual
performance targets such as permitting milestones, exploration drilling rates
or completion of business improvement projects. Details of the vesting
condition relating to options and performance rights issued to Executive
Directors are included in the Remuneration & Nomination Committee Report.
25. Related party disclosures
25.1 Related party transactions
The Group's related parties include key management personnel, companies which
have directors in common and their subsidiaries and any entities over which
the Company may exert significant influence. The Company has identified the
following other related parties:
· Black Dragon Gold Corp (until 9 August 2024), an entity of which
Paul Cronin is the Non-Executive Chairman and substantial
shareholder;
· Legal Solutions d.o.o. (until 31 August 2024), an entity of which
Sanela Karic is Chief Executive Officer and substantial shareholder;
· The Adriatic Foundation is a not-for-profit trust which was
created in Bosnia and Herzegovina with the objective of supporting the
communities around the Vareš Silver Operation. Adriatic Metals PLC provided
the initial funding required for the formation of the Foundation. The Company
has the ability to appoint the Board of Trustees of the Foundation and the
Foundation has therefore been classified as a related party on the basis that
the Company is in a position to yield significant influence over it.
There were no material transactions with related parties during 2024 or
material balances owed to or from related parties as at year-end (2023: Nil).
The Company announced on 9 June 2021 its intention to donate 0.25% of the
future profits from its operations in Bosnia and Herzegovina to the
Foundation. No amendment to this intention has been made during 2024.
Transactions with key management personnel are disclosed below.
25.2 Key management personnel compensation
Compensation for key management personnel is shown in the table below. Key
management personnel are those persons having authority and responsibility for
planning, directing and controlling the activities of the Group. Key
management personnel are considered to be the Non-Executive Directors and the
Managing Director and Chief Executive Officer.
Year ended Year ended
31 December 2024
31 December 2023
(In USD '000)
Board fees 594 441
Consultancy fees 823 445
Short term incentive plan bonus 360 330
Other 50 -
Cash remuneration in respect of qualifying services 1,827 1,216
Share-based payments expense 531 290
Social security costs 25 29
2,383 1,535
Share-based payments expense is stated at fair value at the time of grant
using the Black-Scholes option pricing model. Further details are available in
note 24.2 of the accounts.
Consultancy fees above include amounts paid to related party companies
controlled by key management personnel.
The balances owed at 31 December 2024 in respect of STIP bonuses were $0.4m in
respect of the Managing Director and Chief Executive Officer (2023: $0.3m).
There were no other balances outstanding with related parties at 31 December
2024 (2023: Nil)
26. Capital commitments and contingencies
At 31 December 2024, the Group had total capital commitments contracted for by
not yet incurred of $9.1m (2023: $11.0m).
The Directors are not aware of any contingent liabilities or contingent assets
that are likely to have a material effect on the results of the Group.
27. Subsequent events
On 16 January 2025, the Company announced that the binding agreement for
the $25m concentrate prepayment arrangement with Trafigura, previously
announced on 12 December 2024, had been executed and closed with funds drawn
down.
The prepayment includes the delivery of zinc and lead-silver concentrates at
market prices over a 12-month period. The prepaid amount is unsecured,
includes a 3-month grace period and will be paid down in line with deliveries
over the final nine months of the arrangement.
The transaction includes extended offtake agreements for approximately 100kt
of zinc and lead-silver concentrates into 2027, with increased payabilities
and lower treatment charges compared to existing offtakes.
Due to the rescheduled debt repayments and prepayment arrangement with
Trafigura, Orion and the Company have cancelled the additional Orion loan
facility of $25m that was previously announced on 22 April 2024.
On 18 February 2025, the Company announced the successful completion of its
capital raise of approximately A$80.0m (approximately US$50.0m) via the
issue of 20,512,821 CHESS Depositary Interests ("New CDIs") over new fully
paid ordinary shares in the Company ("New Ordinary Shares") at A$3.90 per
New CDI (the "Offer Price").
Parent Company Statement of Financial Position
AT 31 DECEMBER 2024
(In USD) Note
31 December 2024 31 December 2023
$'000 $'000
ASSETS
Current assets
Cash and cash equivalents 2,712 29,676
Trade and other receivables 5 47,730 33,158
Total current assets 50,442 62,834
Non-current assets
Investment in subsidiaries 11 36,546 34,929
Trade and other receivables 5 106,798 67,653
Property, plant and equipment 6 35 29
Right-of-use asset 7 - 216
Total non-current assets 143,379 102,827
Total assets 193,821 165,661
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 9 2,649 1,677
Lease liabilities 8 - 49
Borrowings 10 - 16,109
Derivative liability 10 - 9,910
Total current liabilities 2,649 27,745
Non-current liabilities
Lease liabilities 8 - 206
Total non-current liabilities - 206
Total liabilities 2,649 27,951
Equity
Share capital 6,253 5,713
Share premium 243,449 174,146
Merger reserve 23,498 23,498
Warrants reserve - 2,743
Share-based payment reserve 4,802 3,591
Foreign currency translation reserve 2,514 2,514
Retained deficit (89,344) (74,495)
Total equity 191,172 137,710
Total liabilities and equity 193,821 165,661
The above Parent Company statement of financial position should be read in
conjunction with the accompanying notes.
The Company's loss after tax for the year ended 31 December 2024 was $17.8m
(year ended 31 December 2023: $12.6m).
The Parent Company Financial Statements of Adriatic Metals PLC, registered
number 10599833, were approved and authorised for issue by the Board of
Directors on 30 March 2025 and were signed on its behalf by:
Laura Tyler Michael Horner
Managing Director and Chief Executive Officer Interim Chief Financial Officer
Parent Company Statement of Changes in Equity
FOR THE YEAR ENDED 31 DECEMBER 2024
Merger reserve(3) Share-based Warrants Reserve(3) Foreign Currency Translation Reserve(2)
Share premium payment reserve Total equity
(In USD '000) Note Share capital Retained deficit¹
31 December 2022 5,376 143,830 23,498 4,943 2,743 2,514 (64,257) 118,649
Comprehensive expense for the year
Loss for the year - - - - - - (12,575) (12,575)
- - - - - - (12,575) (12,575)
Issue of share capital 251 31,428 - - - 31,679
Share issue costs - (2,111) - - - - - (2,111)
Exercise of options 81 470 - (2,337) - - 2,337 551
Issue of options - - - 1,645 - - - 1,645
2022 STIP awards 5 529 - (576) - - - (42)
Expiry/cancellation of options/warrants - - - (84) - - - (84)
31 December 2023 5,713 174,146 23,498 3,591 2,743 2,514 (74,495) 137,710
Comprehensive expense for the year
Loss for the year - - - - - - (17,789) (17,789)
- - - - - (17,789) (17,789)
Issue of share capital 309 49,691 - - - - 50,000
Share issue costs (3,068) - - - - (3,068)
Exercise of options 231 22,680 (197) (2,498) - 2,695 22,911
Issue of options - - - 1,599 - - - 1,599
Expiry/cancellation of options/warrants - - - (191) (245) - 245 (191)
31 December 2024 6,253 243,449 23,498 4,802 - 2,514 (89,344) 191,172
¹ Retained deficit include all other net gains and losses and transactions
with owners, including dividends. No dividends paid to date.
(2) Foreign currency reserve arose in FY22, on change to functional currency
from GBP to USD.
(3) The merger reserve was created and warrants issued as part of Tethyan
Resources Corp acquisition.
The above Parent Company statement of changes in equity should be read in
conjunction with the accompanying notes.
Notes to the Parent Company Financial Statements
1. Corporate information
These Financial Statements represent the individual financial statements of
Adriatic Metals Plc (the "Parent Company") for the year ended 31 December
2024. The Company is the parent of the Adriatic Metals Plc Group and its
principal activity is to act as a holding company for the Group.
The Company is a public company limited by shares and incorporated in England
and Wales. The registered office is located at 4(th) Floor 3 Hanover Square,
London, W1S 1HD.
The Parent Company Financial Statements were authorised for issue by the Board
of Directors on 30 March 2025.
2. Basis of preparation
I) Statement of compliance
In preparing these financial statements, the Company applies Financial
Reporting Standards 101, 'Reduced Disclosure Framework' (FRS 101 'Reduced
Disclosure Framework'), and applicable law.
In these financial statements, the Company has applied the exemptions
available under FRS 101 in respect of the following disclosures:
· Cash Flow Statement and related notes;
· Disclosures in respect of transactions with wholly owned Group
companies;
· Comparative year reconciliations for share capital, and
intangible assets;
· Disclosures in respect of capital management;
· The effects of new but not yet effective IFRSs; a statement of
compliance with FRS 101 is provided instead.
· Disclosures in respect of the compensation of key management
personnel.
As the consolidated financial statements of the Group include the equivalent
disclosures, the Parent Company has also taken the exemptions under FRS 101
available in respect of the following disclosures:
· Certain disclosures required by IFRS 13 Fair Value Measurement
and the disclosures required by IFRS 7 Financial Instrument Disclosures
II) Basis of preparation
These Financial Statements have been prepared on a historical cost basis,
except for certain financial instruments that have been measured at fair
value.
As permitted section 408 (3) of the Companies Act 2006, a Statement of
Comprehensive Income is not presented for the Parent Company. The Parent
Company's loss after tax for the year ended 31 December 2024 is $17.8m (year
ended 31 December 2023: $12.6m).
These Parent Company Financial Statements are presented in USD. Unless
otherwise stated, all amounts indicated by "$" represent USD.
III) Going concern
Refer to accounting policies in note 2.3 of the Group consolidated financial
statements.
3. Material accounting policies
In addition to the material accounting policies in note 3 of the Group
consolidated financial statements, the following accounting policies are
relevant only to the Parent Company Financial Statements.
I) Investments in subsidiaries
Unlisted investments are carried at cost, being the purchase price, less
provisions for impairment. Additional consideration paid when subscribing for
new shares, is made via capital contributions and recorded as additions to
investments in subsidiaries.
II) Intercompany loans
All intercompany borrowings and loans are initially recognised at the fair
value of consideration received or paid after deduction of costs and are
subsequently measured at amortised cost.
III) Impairment
The Company recognises an allowance for expected credit losses ("ECL") for all
receivables held at amortised cost where there is objective evidence that the
receivable is irrecoverable. ECLs are based on the difference between the
contractual cash flows due in accordance with the contract and all the cash
flows that the Company expects to receive.
4. Critical accounting estimates and judgements
The preparation of the Parent Company's Financial Statements requires
management to make certain judgements, estimates, and assumptions about
recognition and measurement of assets, liabilities, income and expenses. The
actual results are likely to differ from these estimates. In addition to the
critical accounting estimates and judgements in note 4 to the consolidated
financial statements, the following information about the material judgements,
estimates, and assumptions that have the most significant effect on the
recognition and measurement of assets, liabilities, income and expenses that
are relevant only to the Parent Company Financial Statements are discussed
below.
I) Value of investments in subsidiaries
The Parent Company's investments in subsidiaries, which are made via capital
contributions or arise upon acquisition, are reviewed for impairment if events
or changes indicate that the carrying amount may not be recoverable. When a
review for impairment is conducted, the recoverable amount is assessed by
reference to the net present value of expected future cash flows of the
relevant generating unit or disposal value if higher.
As set out in note 11, no indicators of impairment have been identified during
the year ended 31 December 2024.
II) Intercompany loans
As set out in note 5, judgement has been made to establish a provision of
$16.0m (2023: $11.9m) against foreign exchange adjusted receivables on the
basis that the Serbian entity is in a net liability position. The provision
represents 100% receivable with the Serbian entity. The value of investment is
unchanged.
5. Trade and other receivables
All current receivables due within one year as follows:
(In USD '000) 31 December 2024 31 December 2023
Current
Accrued interest income - 59
Prepayments and deposits 342 215
Taxes recoverable 219 95
Amounts receivable from subsidiaries 47,169 32,789
47,730 33,158
Non-current
Amounts receivable from subsidiaries 106,798 67,653
106,798 67,653
Receivables contain amounts receivable for VAT, prepaid expenses and deposits
paid. All receivables are held at cost less any provision for impairment.
During the year, a provision of $4.1m was recognized against the Serbian
entity receivables, representing current year funding to the Serbian entity.
The total provision is $16.0m (2023: $11.9m), reducing the non-current amounts
receivable from $119.2m to a net receivable $106.8m (2023: from $79.6m to net
receivable $67.6m).
6. Property, plant and equipment
(In USD '000) Land and Buildings Plant and Machinery Total
Cost
31 December 2022 23 92 115
Additions - 2 2
31 December 2023 23 94 117
Additions - 16 16
31 December 2024 23 133
110
Depreciation
31 December 2022 7 73 80
Charge for the year 2 6 8
31 December 2023 9 79 88
Charge for the year 2 8 10
31 December 2024 11 87 98
Net Book Value
31 December 2023 14 15 29
31 December 2024 12 23 35
7. Right-of-use asset
The carrying amounts of right-of-use assets and the movements during the year
are set out below:
(In USD '000) Land & buildings
31 December 2022 250
Depreciation (34)
31 December 2023 216
Modification (183)
Depreciation (33)
31 December 2024 -
8. Lease liabilities
Set out below are the carrying amounts of lease liabilities and the movements
during the year:
(In USD '000)
31 December 2022 287
Interest expense 19
Payments (51)
31 December 2023 255
Modification (225)
Interest expense 9
Payments (39)
31 December 2024 -
During the year, the scope of the lease was modified and as a result there are
no current or non-current liabilities relating to leases at 31 December 2024
(31 December 2023: $49k and $0.2m respectively).
9. Trade and other payables
The breakdown of current accounts payable and accrued liabilities is as
follows:
(In USD '000) 31 December 2024 31 December 2023
Current
Trade payables 895 338
Accrued liabilities 1,637 1,284
Other payables 117 55
2,649 1,677
10. Borrowings and derivative
liability
The movements in the QRC convertible debt and its embedded derivative
liability are as detailed in note 19 of the Group consolidated financial
statements.
The Orion Senior Secured Debt referred to in note 19 of the consolidated
financial statements is held in a Jersey based Group subsidiary, Adriatic
Metals Trading and Finance Limited, and is therefore not included in the
Parent Company Financial Statements.
11. Investments in subsidiaries
The breakdown of the investments in subsidiaries is as follows:
(In USD '000) Adriatic Metals Holdings BIH Limited AM Projects d.o.o. Adriatic Metals d.o.o. Total
31 December 2023 26,426 3 8,500 34,929
Additions - 1,617 - 1,617
31 December 2024 26,426 1,620 8,500 36,546
During the year ended 31 December 2022, impairment indicators were noted in
relation to the Raška Project, see note 14 of the Consolidated Finance
Statements for further information. This resulted in an impairment against the
investment in Adriatic Metals d.o.o., down to a carrying amount of $8,500,000
on the basis that the recoverable amount of the investment value is equal to
the fair value less cost of disposal of the exploration and evaluation asset
in line with the requirements of IAS 36.
No further indicators of impairment or reversal of previous impairment have
been identified in the year to 31 December 2024, the carrying value of $8.5m
remains unchanged from prior year.
The list of subsidiaries of the Parent Company are presented below:
Country of incorporation Shareholding at 31 December 2024 Shareholding at 31 December 2023 Nature of business
Name of subsidiary
Registered Address
Adriatic Metals BH d.o.o.(formerly Eastern Mining d.o.o.) Bosnia and Herzegovina Tisovci bb, Vareš, 71 330, Bosnia and Herzegovina 100% 100% Mineral producer, developer, and explorer
AM Projects d.o.o. (formerly (Adriatic Metals Services d.o.o. and Adriatik Bosnia and Herzegovina Bulevar Meše Selimovića 81A, Sarajevo, 71 000, Bosnia and Herzegovina 100% 100% Mineral exploration and development
Metali d.o.o.)
Adriatic Metals Jersey Ltd (formerly Tethyan Resource Corp) Jersey (formerly Canada) 35-37 New Street, St. Helier, Jersey, Channel Islands, JE2 3RA 100% 100% Holding company - financing mining exploration of subsidiary
Adriatic Metals Services (UK) Limited (formerly Tethyan Resources Limited) England and Wales 4(th) Floor, 3 Hanover Square, London W1S 1HD, UK 100% 100% Holding company and management services company - financing mining exploration
of subsidiary and providing services to other group companies.
Adriatic Metals Trading and Finance Ltd Jersey 35-37 New Street, St. Helier, Jersey, Channel Islands, JE2 3RA 100% 100% Trading and finance company
Adriatic Metals Holdings BIH Limited England and Wales 4(th) Floor, 3 Hanover Square, London W1S 1HD, UK 100% 100% Holding company - financing mining exploration of subsidiary
Tethyan Resources Jersey Ltd Jersey 35-37 New Street, St. Helier, Jersey, Channel Islands, JE2 3RA 100% 100% Holding company - financing mining exploration of subsidiary
Taor d.o.o.* Serbia Kneza Milosa 93(street) /4 floor, Belgrade, Serbia N.A. 100% Mineral exploration and development
Tethyan Resources d.o.o.* Serbia Kneza Milosa 93(street) /4 floor, Belgrade, Serbia N.A. 100% Mineral exploration and development
Global Mineral Resources d.o.o.* Serbia Kneza Milosa 93(street) /4 floor, Belgrade, Serbia N.A. 100% Mineral exploration and development
Adriatic Metals d.o.o. (formerly RAS Metals d.o.o.) Serbia Kneza Milosa 93(street) /4 floor, Belgrade, Serbia 100% 100% Mineral exploration and development
* Effective, 4 July 2024, these entities merged with Adriatic Metals d.o.o.
12. Commitments
Commitments relating to the Parent Company have been disclosed in note 26 of
the Group consolidated financial statements.
The Parent Company has provided a Letter of Support to its subsidiaries
Adriatic Metals Services (UK) Ltd and Adriatic Metals Holdings BIH Limited
("BIH"), confirming that it does not intend to recall intragroup payables
should they not have the financial capability to settle them. The Parent
Company will continue to support both in meeting its liabilities as they fall
due, for a period of not less than 12 months from the date of signing of these
financial statements.
13. Subsequent events
Subsequent events relating to the Parent Company have been disclosed in note
27 of the Group consolidated financial statements.
ASX ADDITIONAL INFORMATION
ADDITIONAL ASX INFORMATION (UNAUDITED)
The Company's corporate governance statement is available on the Company's
website at
https://www.adriaticmetals.com/downloads/corp-governance-files-/adt-2020-06-05-cgp-v03.pdf
(https://www.adriaticmetals.com/downloads/corp-governance-files-/adt-2020-06-05-cgp-v03.pdf)
("Corporate Governance Manual").
This statement is current as at 30 March 2025 and has been approved by the
Company's Board of Directors. To the extent applicable, the Company has
adopted The Corporate Governance Principles and Recommendations (4th Edition)
as published by the ASX Corporate Governance Council (Principles and
Recommendations).
The Company is not established in Australia but it is subject in its home
jurisdiction to an equivalent law to sections 299 and 299A of the Corporations
Act requiring the preparation of a directors' report that includes operations,
business and financial review for the reporting period which is included in
the main body of this Annual Report.
Principles of Best Practice Recommendations
In accordance with ASX Listing Rule 4.10, Adriatic Metals PLC is required to
disclose the extent to which it has followed the Principles of Recommendations
during the financial year. Where Adriatic Metals PLC has not followed a
recommendation, this has been identified and an explanation for the departure
has been given.
Principles and recommendations Comment
1. Lay solid foundations for management and oversight
1.1 A listed entity should disclose: (a) the respective roles and responsibilities The Board is ultimately accountable for the performance of the Company and
of its board and management; and (b) those matters expressly reserved to the provides leadership and sets the strategic objectives of the Company. It is
board and those delegated to management. responsible for overseeing all corporate reporting systems, remuneration
frameworks, governance issues, and stakeholder communications. Decisions
reserved for the Board relate to those that have a fundamental impact on the
Company, such as material acquisitions and takeovers, dividends and buy backs,
material profits upgrades and downgrades, and significant closures.
Management is responsible for implementing Board strategy, day-to-day
operational aspects, and ensuring that all risks and performance issues are
brought to the Board's attention. They must operate within the risk and
authorisation parameters set by the Board.
1.2 A listed entity should: (a) undertake appropriate checks before appointing a The Company undertakes comprehensive reference checks prior to appointing a
person, or putting forward to security holders a candidate for election, as a director, or putting that person forward as a candidate to ensure that person
director; and (b) provide securityholders with all material information in its is competent, experienced, and would not be impaired in any way from
possession relevant to a decision on whether or not to elect or re-elect a undertaking the duties of a director. The Company provides relevant
director. information to shareholders for their consideration about the attributes of
candidates together with whether the Board supports the appointment or
re-election.
1.3 A listed entity should have a written agreement with each director and senior The terms of the appointment of a Non-Executive Director, or Executive
executive setting out the terms of their appointment. Directors and senior executives are agreed upon and set out in writing at the
time of appointment.
1.4 The company secretary of a listed entity should be accountable directly to the The Joint Company Secretaries report directly to the Board through the
board, through the Chair, on all matters to do with the proper functioning of Chairman and are accessible to all directors.
the board.
1.5 A listed entity should (a) have a diversity policy which includes requirements The Company's Corporate Governance Plan includes a 'Diversity Policy', which
for the board or a relevant committee of the board lo set measurable provides a framework for establishing measurable objectives for achieving
objectives for achieving gender diversity and to assess annually both the gender diversity and for the Board to assess annually both the objectives and
objectives and the entity's progress in achieving them; (b) disclose that progress in achieving them.
policy or a summary of it; and (c) disclose at the end of each reporting
period the measurable objectives for achieving gender diversity set by the The Board set formal diversity objectives for 2021 onwards which are included
board or a relevant committee of the board in accordance with the entity's as a KPI in the Company's Short Term Incentive Plan in both 2023 and 2024.
diversity policy and its progress towards achieving them, and either: (1) the
respective proportions of men and women on the Board, in senior executive Further detail on the Diversity Policy is included in the Strategic Report of
positions and across the whole organisation (including how the entity has the Directors.
defined "senior executive" for these purposes); or (2) if the entity is a
"relevant employer" under the Workplace Gender Equality Act, the entity's most
recent "Gender Equality Indicators", as defined in and published under that
Act.
1.6 A listed entity should (a) have and disclose a process for periodically The Chairman reviews the performance of the Board, its Committees and
evaluating the performance of the Board, its Committees and individual individual directors to ensure that the Company continues to have a mix of
directors; and (b) disclose, in relation to each reporting period, whether a skills and experience necessary for the conduct of its activities.
performance evaluation was undertaken in the reporting period in accordance
with that process. The Company's Corporate Governance Plan includes a section The most recent performance evaluation of the board was performed during
on performance evaluation practices adopted by the Company. December 2024.
The Company's Corporate Governance Manual includes a section on performance
evaluation practices adopted by the Company.
1.7 A listed entity should (a) have and disclose a process for periodically The Company's Corporate Governance Plan includes a section on performance
evaluating the performance of its senior executives: and (b) disclose, in evaluation practices adopted by the Company.
relation to each reporting period, whether a performance evaluation was
undertaken in the reporting period in accordance with that process. The Chairman monitors the Board and the Board monitors the performance of any
senior executives who are not Directors, including measuring actual
performance against planned performance.
The most recent performance evaluation of the Managing Director and CEO was
performed during January 2025.
2. Structure of the board to add value
2.1 The board of a listed entity should: The Company's Corporate Governance Manual includes a Nomination Committee
Charter, which discloses the specific responsibilities of the committee.
(a) have a nomination committee which: (1) has at least three members, a
majority of whom are independent directors: and (2) is chaired by an The Company has established a formal Remuneration & Nomination committee.
independent director, and disclose: (3) the charter of the committee; (4) the
members of the committee; and (5) at the end of each reporting period, the Refer to the Company's Annual Report for further details regarding the
number of times the committee met throughout the period and the individual Remuneration & Nomination committee.
attendances of the members at those meetings: or
(b) if it does not have a nomination committee, disclose that fact and the
processes it employs to address board succession issues and to ensure that the
board has the appropriate balance of skills, knowledge, experience,
independence and diversity to enable it to discharge its duties and
responsibilities effectively.
2.2 A listed entity should have and disclose a board skills matrix setting out the The Board's skills matrix is set out below.
mix of skills and diversity that the board currently has or is looking to
achieve in its membership. The matrix reflects the Board's objective to have an appropriate mix of
industry and professional experience including skills such as leadership,
governance, strategy, finance, risk, IT, HR. policy development, international
business and customer relationship.
Additionally, external consultants may be brought it with specialist knowledge
to complement the board's matrix of skills in the event that a deficiency were
to exist in required areas.
2.3 A listed entity should disclose: (a) the names of the directors considered by Those directors who are considered to be independent are specified in the
the board to be independent directors; (b) if a director has an interest. Directors Report.
position, association or relationship of the type described in Box 2.3 but the
board is of the opinion that it does not compromise the independence of the The length of service of each of the Company's directors is included in the
director, the nature of the interest, position. association or relationship in Directors Report.
question and an explanation of why the board is of that opinion; and (c) the
length of service of each director.
2.4 A majority of the board of a listed entity should be independent directors. The majority of the Company's directors are independent.
2.5 The Chair of the board of a listed entity should be an independent director Mr. Rawlinson, who was the Chairman through the reporting year, is
and, in particular, should not be the same person as the CEO of the entity. independent.
2.6 A listed entity should have a program for inducting new directors and provide The Chairman and Company Secretaries brief and inform New Directors on all
appropriate professional development opportunities for directors to develop relevant aspects of the Company's operations and background. A director
and maintain the skills and knowledge needed to perform their role as development program is also available to ensure that directors can enhance
directors effectively. their skills and remain abreast of important developments.
3. Act ethically and responsibly
3.1 A listed entity should: (a) have a code of conduct for its directors, senior The Company's Corporate Governance Manual includes a 'Corporate Code of
executives and employees; and (b) disclose that code or a summary of it. Conduct', which provides a framework for decisions and actions in relation to
ethical conduct in employment.
4. Safeguard Integrity In financial reporting
4.1 The board of a listed entity should: (a) have an Audit Committee which: (1) The Company has established an Audit & Risk Committee.
has at least three members, all of whom are Non-Executive Directors and a
majority of whom are independent directors; and (2) is chaired by an Refer to the Company's Annual Report for further details regarding the Audit
independent director, who is not the Chair of the board, and disclose: (3) the & Risk Committee.
charter of the committee; (4) the relevant qualifications and experience of
the members of the committee; and (5) in relation to each reporting period,
the number of times the committee met throughout the period and the individual
attendances of the members at those meetings; or (b) if it does not have an
audit committee, disclose that fact and the processes it employs that
independently verify and safeguard the integrity of ifs corporate reporting,
including the processes for the appointment and removal of the external
auditor and the rotation of the audit engagement partner.
4.2 The board of a listed entity should, before it approves the entity's financial A declaration in accordance with these requirements has been provided by the
statements for a financial period, receive from its CEO and CFO a declaration CEO and CFO.
that, in their opinion, the financial records of the entity have been properly
maintained and that the financial statements comply with the appropriate
accounting standards and give a true and fair view of the financial position
and performance of the entity and that the opinion has been formed on the
basis of a sound system of risk management and internal control which is
operating effectively.
4.3 A listed entity that has an AGM should ensure that its external Auditor The Company seeks to ensure that its external auditors attend its AGM and are
attends its AGM and is available to answer questions from security holders available to answer questions from security holders relevant to the audit.
relevant to the audit.
5. Make timely and balanced disclosure
5.1 A listed entity should (a) have a written policy for complying with its The Company has a continuous disclosure program in place designed to ensure
continuous disclosure obligations under the Listing Rules; and (b) disclose the compliance with ASX Listing Rule disclosure and to ensure accountability
that policy or a summary of it. at a senior executive level for compliance and factual presentation of the
Company's financial position.
New and substantive investor or analyst presentations materials are released
on the ASX Market Announcements Platform ahead of presentation.
See Schedule 7 of the Corporate Governance Manual for further details.
6. Respect the rights of shareholders
6.1 A listed entity should provide information about itself and its governance to The Company maintains information in relation to governance documents,
investors via its website. directors and senior executives, Board and committee charters, annual reports,
ASX announcements and contact details on the company's website.
6.2 A listed entity should design and implement an investor relations program to The Company encourages shareholders to attend its AGM and to send in questions
facilitate effective two-way communication with investors. prior to the AGM so that they may be responded to during the meeting. It also
encourages ad hoc enquiry via email which are responded to and actively uses
social media to engage with shareholders.
6.3 A listed entity should disclose the policies and processes it has in place to Refer to commentary at Recommendation 6.2
facilitate and encourage participation at meetings of security holders.
6.4 A listed entity should give security holders the option to receive The Company engages its share registry to manage the majority of
communications from, and send communications to, the entity and its security communications with shareholders. Shareholders are encouraged to receive
registry electronically. correspondence from the company electronically, thereby facilitating a more
effective, efficient and environmentally friendly communication mechanism with
shareholders. Shareholders not already receiving information electronically
can elect to do so through the share registry, Computershare Australia at
www.computershare.com/au (http://www.computershare.com/au) .
7. Recognise and manage risk
7.1 The board of a listed entity should: (a) have a committee or Committees to The Company has established an Audit & Risk Committee. The Company's
oversee risk, each of which: (1) has at least three members, a majority of Corporate Governance Plan includes an Audit & Risk Committee Charter,
whom are independent directors; and (2) is chaired by an independent director, which discloses the specific responsibilities of the committee.
and disclose: (3) the charter of the committee; (4) the members of the
committee; and (5) at the end of each reporting period, the number of times Refer to the Company's Annual Report for further details regarding the Audit
the committee met throughout the period and the individual attendances of the & Risk Committee.
members at those meetings; or (b) if it does not have a Risk Committee or
Committees that satisfy (a) above, disclose that fact and the processes it
employs for overseeing the entity's risk management framework.
7.2 The board or a committee of the board should: (a) review the entity's risk The Company's Corporate Governance Manual includes a risk management policy.
management framework at least annually to satisfy itself that it continues to
be sound; and (b) disclose, in relation to each reporting period, whether such The Company maintains a risk register as part of its risk management strategy
a review has taken place. which is periodically updated and subject to scrutiny by the Audit & Risk
Committee, this was updated in the current reporting period.
Where appropriate, the Audit & Risk Committee makes recommendations to the
Board in respect of key operational risks and their management. Risks and the
management thereof is a recurring item for deliberation at Board Meetings.
Procedures are in place to ensure the Board is informed of any material
breaches of the Corporate Code of Conduct.
7.3 A listed entity should disclose: (a) if it has an internal audit function, how The Company is currently not in compliance with this recommendation as it does
the function is structured and what role it performs; or (b) if it does not not maintain a separate internal audit function as the Board considers the
have an internal audit function, that fact and the processes it employs for Company is not currently of the relevant size or complexity to warrant the
evaluating and continually improving the effectiveness of its risk management formation of a formal internal audit function.
and internal control processes.
The Board, as a whole, evaluates and continually strives for improvement in
the effectiveness of risk management and internal control processes.
The Audit & Risk Committee receives the report from the Company's external
auditors which includes an assessment of internal controls. In the event that
weaknesses in internal control processes are identified these matters are
brought to the attention of and dealt with by the Board.
7.4 A listed entity should disclose whether it has any material exposure to Refer to the Company's Annual Report for disclosures relating to the company's
economic, environmental and social sustainability risks and, if it does, how material business risks, in particular the Principal Risks and Uncertainties
it manages or intends to manage those risks. section. . Refer to commentary at Recommendations 7.1 and 7.2 for information
on the company's risk management framework.
8. Remunerate fairly and responsibly
8.1 The board of a listed entity should: (a) have a Remuneration & Nomination The Company has established a Remuneration & Nomination Committee.
Committee which: (1) has at least three members, a majority of whom are
independent directors; and (2) is chaired by an independent director, and The Company's Corporate Governance Plan includes a Remuneration &
disclose: (3) the charter of the committee; (4) the members of the committee; Nomination Committee Charter, which discloses the specific responsibilities of
and (5) at the end of each reporting period, the number of times the committee the Remuneration Committee.
met throughout the period and the individual attendances of the members at
those meetings; or (b) if it does not have a remuneration committee, disclose Refer to the Company's Annual Report for further details regarding the
that fact and the processes it employs for setting the level and composition Remuneration & Nomination Committee.
of remuneration for directors and senior executives and ensuring that such
remuneration is appropriate and not excessive.
8.2 A listed entity should separately disclose its policies and practices Refer to the Remuneration & Nomination Committee Report in the Company's
regarding the remuneration of Non-Executive Directors and the remuneration of Annual Report.
executive directors and other senior executives.
8.3 A listed entity which has an equity-based remuneration scheme should: (a) have The Company does not have formal policy on whether participants in the
a policy on whether participants are permitted to enter into transactions equity-based remuneration scheme are permitted to enter into transactions
(whether through the use of derivatives or otherwise) which limit the economic which limit the economic risk of participating in the scheme. However, no such
risk of participating in the scheme; and (b) disclose that policy or a summary transactions have been entered into by scheme participants and such
of it. transactions may only be enter into with the prior approval of the Company as
noted in Schedule 4 Remuneration Committee Charter of the Corporate Governance
Manual.
Board skills matrix
Michael Rawlinson Peter Bilbe Sandra Bates
B. Economics. Master of Science B. Engineering Mining B.Com & LLB
Investment banking Mining Engineer Corporate Law
Resources Gold, Base Metals Corporate Finance
Mining Finance Operational experience M&A
NED - LSE, ASX NED - ASX Resources focus
NED - ASX, LSE, AIM
Laura Tyler - CEO Sanela Karic Mirco Bardella
B.Sc. (Hons) Geology; M.Sc. Mining Engineering LLB B. Accounting
Base metals, gold, diamonds Bosnian Law Chartered Accountant
Operational and asset leadership Corporate affairs Financial Reporting
Technical and technology leadership M&A Resources Governance
M&A Human Resources NED LSE, AIM
NED - LSE
Eric Rasmussen
Master of Law and Finance
Road Military Engineer; Explosives Military Engineer
Certified Teacher
Certified Sustainability Officer
Natural Resource Finance
NED - LSE, TSX
Shareholdings
At the time of publishing this Annual Report there is no on-market buy-back.
Substantial shareholdings
The following table lists the 20 largest shareholders of Adriatic Metals plc
in accordance with the ASX listing rules, together with the number of shares
and the percentage of issued capital each holds, as at 17 March 2025.
Rank Name Number of ordinary shares Percentage of issued share capital
1 CITICORP NOMINEES PTY LIMITED 47,357,828 14.01
2 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 39,181,122 11.67
3 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 31,574,162 9.40
4 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 21,448,819 6.39
5 BNP PARIBAS NOMS PTY LTD 18,611,718 5.54
6 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA 17,485,868 5.21
7 MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED 15,541,419 4.63
8 BNP PARIBAS NOMINEES PTY LTD 15,501,418 4.62
9 WARBONT NOMINEES PTY LTD 13,931,991 4.15
10 MR MILOS BOSNJAKOVIC 10,385,000 3.09
11 BNP PARIBAS NOMINEES PTY LTD 9,020,839 2.69
12 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 8,136,976 2.42
13 GLAMOUR DIVISION PTY LTD 5,600,000 1.67
14 WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED 5,312,748 1.58
15 BNP PARIBAS NOMS PTY LTD 5,278,714 1.57
16 EUROCLEAR NOMINEES LIMITED 4,865,635 1.45
17 BNY (OCS) NOMINEES LIMITED 4,153,972 1.24
18 MR ERIC DE MORI 4,000,000 1.19
19 NORTRUST NOMINEES LIMITED 2,529,239 0.75
20 BNY (OCS) NOMINEES LIMITED 2,346,305 0.70
Totals: Top 20 holders 282,263,773 84.04
Total Remaining Holders Balance 53,612,076 15.96
At 17 March 2025 the Directors are aware of three shareholders who held a
substantial shareholding within the meaning of the Australian Corporations Act
as outlined in the top 20 listing above. A person has a substantial holding if
the total votes that they or their associates have relevant interests in is
five per cent of more of the total number of votes.
Distribution of Ordinary Shares at 17 March 2025
Range Number of shareholders Number of ordinary shares Percentage of issued
share capital
1 - 1,000 1,284 534,187 0.16
1,001 - 5,000 854 2,161,085 0.64
5,001 - 10,000 265 2,044,014 0.61
10,001 - 100,000 321 9,961,467 2.97
100,001 Over 99 3211,74,096 95.62
Total 2,823 335,874,849 100
Unmarketable Parcel
Minimum Parcel Size Shares Number of shareholders
Total Shares
Minimum $ 500.00 parcel at $ 4.4600 per unit 113 188 4,196
Restricted securities
There were no restricted securities or securities subject to voluntary escrow
at 31 December 2024.
Tenement holdings
The Company's tenements at 21 March 2025 are set out in the table below. The
Company holds a 100% interest in all concession agreements and licences.
Concession document Registration number Licence holder Concession name Area (km(2)) Date granted Expiry date
Bosnia and Herzegovina Concession Agreement No.:04-18-21389-1/13 Eastern Mining d.o.o. Veovaca1 1.08 12-Mar-13 12-Mar-38
Veovaca 2 0.91 12-Mar-13 12-Mar-38
Rupice-Jurasevac, Brestic 0.83 12-Mar-13 12-Mar-38
Annex 3 & 6 Area No.: 04-18-21389-3/18 Eastern Mining d.o.o. Rupice - Borovica 4.52 14-Nov-18 12-Mar-33
Extension Veovaca - Orti - Seliste - Mekuse 1.32 14-Nov-18 12-Mar-33
Annex 5 - Area No: 04-18-14461-1/20 Eastern Mining d.o.o. Orti-Selište-Mekuše- Barice- Smajlova Suma-Macak 19.33 3-Dec-20 3-Dec-50
Extension Droškovac - Brezik 2.88 3-Dec-20 3-Dec-50
Extension Borovica - Semizova Ponikva 9.91 3-Dec-20 3-Dec-50
Concession Agreement No: 04-14-5359-3/22 Eastern Mining d.o.o. Saski Do 1.28 19-Jul-22 19-Jul-25
Serbia Exploration Licence 310-02-1721/2018-02 Adriatic Metals d.o.o. Kizevak 1.84 3-Oct-19 29-May-26
Exploration Licence 310-02-1722/2018-02 Adriatic Metals d.o.o. Sastavci 1.44 7-Oct-19 29-May-26
Exploration Licence 310-02-1114/2015-02 Adriatic Metals d.o.o. Kremice 8.54 21-Apr-16 07-Jul-25
Exploration Licence 310-02-01670/2021-02 Adriatic Metals d.o.o. Kaznovice 37.1 22-Nov-21 22-Nov-24*
* the licence is still valid under the original decision from 22 November
2021 and the Company can continue to operate in accordance with that decision.
The Company has had verbal confirmation of renewal from the Serbian Government
and is awaiting issue of official renewal which is imminent
Chapters 6, 6A, 6B and 6C of the Corporations Act
As the Company is incorporated in England and Wales, chapters 6, 6A, 6B and 6C
of the Corporations Act dealing with the acquisition of shares (i.e.
substantial holdings and takeovers) do not apply to the Company. In the United
Kingdom, the City Code on Takeovers and Mergers (City Code) regulates
takeovers and substantial shareholders and the Company is subject to the City
Code.
Voting rights
The Company is incorporated under the legal jurisdiction of England and Wales.
To enable the Company to have their securities cleared and settled
electronically through CHESS, Depositary Instruments called CHESS Depositary
Interests (CDIs) are issued. Each CDI represents one underlying ordinary share
in the Company (Share). The main difference between holding CDIs and Shares is
that CDI holders hold the beneficial ownership in the Shares instead of legal
title. CHESS Depositary Nominees Pty Limited (CDN), a subsidiary of ASX, holds
the legal title to the underlying Shares.
Pursuant to the ASX Settlement Operating Rules, CDI holders receive all of the
economic benefits of actual ownership of the underlying Shares. CDIs are
traded in a manner similar to shares of Australian companies listed on ASX.
CDIs will be held in uncertificated form and settled/transferred through
CHESS. No share certificates will be issued to CDI holders. Each CDI is
entitled to one vote when a poll is called, otherwise each member present at a
meeting or by proxy has one vote on a show of hands.
All substantive resolutions at a meeting of security holders are decided by
poll rather than by a show of hands.
If holders of CDIs wish to attend and vote at the Company's general meetings,
they will be able to do so. Under the ASX Listing Rules and the ASX Settlement
Operating Rules, the Company as an issuer of CDIs must allow CDI holders to
attend any meeting of the holders of Shares unless relevant English law at the
time of the meeting prevents CDI holders from attending those meetings.
In order to vote at such meetings, CDI holders have the following options:
a) instructing CDN, as the legal owner, to vote the Shares underlying
their CDIs in a particular manner. A voting instruction form will be sent to
CDI holders with the notice of meeting or proxy statement for the meeting and
this must be completed and returned to the Company's Share Registry prior to
the meeting; or
b) informing the Company that they wish to nominate themselves or
another person to be appointed as CDN's proxy with respect to their Shares
underlying the CDIs for the purposes of attending and voting at the general
meeting; or
c) converting their CDIs into a holding of Shares and voting these at
the meeting (however, if thereafter the former CDI holder wishes to sell their
investment on ASX it would be necessary to convert the Shares back to CDIs).
In order to vote in person, the conversion must be completed prior to the
record date for the meeting. See above for further information regarding the
conversion process.
As holders of CDls will not appear on the Company's share register as the
legal holders of the Shares, they will not be entitled to vote at Shareholder
meetings unless one of the above steps is undertaken.
As each CDI represents one Share, a CDI Holder will be entitled to one vote
for every CDI they hold.
Proxy forms, CDI voting instruction forms, and details of these alternatives
will be included in each notice of meeting sent to CDI holders by the Company.
These voting rights exist only under the ASX Settlement Operating Rules,
rather than under British Columbia Law. Since CDN is the legal holder of the
applicable Shares and the holders of CDIs are not themselves the legal holder
of their applicable Shares, the holders of CDIs do not have any directly
enforceable rights under the Company's articles of association.
As holders of CDIs will not appear on our share register as the legal holders
of shares of ordinary shares, they will not be entitled to vote at our
shareholder meetings unless one of the above steps is undertaken.
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