REG - Adriatic Metals - Operations & Financing Update

Adriatic MetalsAnnouncement

12/12/2024 07:00

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RNS Number : 7667P  Adriatic Metals PLC  12 December 2024

12 December 2024

Adriatic Metals PLC

("Adriatic Metals" or the "Company")

OPERATIONS & FINANCING UPDATE

Highlights:

 

·      Rupice Mine is operating from two active stopes, with the second
stoping level entering production in early December.

·       Vares Processing Plant is operating 24/7 and recoveries are
steadily improving.

·      Total ore mined in 2024 to the end of November reached 129,194
tonnes ('t'), with approximately 40,000t expected in December.

·      Guidance for 2025 remains unchanged at 750,000 - 800,000t of ore
mined.

·      Commercial production expected to be achieved in December and
continue into January 2025.

·      Construction of the Veovaca Tailings Storage Facility ('Veovaca
TSF') is progressing well, with first tailings disposal to take place in
January 2025 with no impact on production.

·      OMF Fund III  F  Ltd ('Orion') has agreed to reschedule the first
quarterly debt repayment of approximately $19m from 31 December 2024 to 31
March 2025.

·      Adriatic has signed a term sheet for a $25m concentrate prepayment
arrangement with Trafigura at competitive terms and expects to close the
transaction by year end.

·      As at 30 November 2024, Adriatic held a cash balance of $23m and
approximately $8m in receivables and concentrate inventory.

 

 

Laura Tyler, Managing Director & CEO of Adriatic, commented:

 

"I am pleased to announce that we are now mining a second stope underground at
Rupice Mine and that the Vares Processing Plant is operating 24/7. Q4 2024
will be a record quarter of production at the Vares Silver Operation and we
are confident commercial production levels will be reached in the coming
weeks.

 

We are also pleased to have bolstered our cash position through a concentrate
prepayment arrangement with Trafigura. Additionally, we would like to express
our gratitude to our long-term partner, Orion Mine Finance, who have agreed to
reschedule our first quarterly debt repayment to the end of March 2025."

 

Adriatic Metals PLC (ASX:ADT, LSE:ADT1, OTCQX:ADMLF) ("Adriatic" or the
"Company") is pleased to provide an update on production activities at the
Vares Silver Operation in Bosnia and Herzegovina.

 

Mining

In October, development rates at Rupice Mine were temporarily impacted by
significant rainfall following the severe storm on 3 October, which led to
increased pumping requirements. Additionally, mining operations were hindered
by a temporary shortage of ground support bolts which has since been resolved,
with development rates exceeding 300m in November.

Total ore mined in 2024 to the end of November was 129,194t. In December,
mining commenced on two active stopes on the 1075-1050 and on the 950-925
levels, with approximately 40,000t expected to be mined in the month.

 

 

Figure 1: YTD Ore Mined and Development Metres by Quarter

 

 

Processing

The stockpile at Rupice currently contains approximately 64,000 tonnes at
259g/t Ag, 2.4g/t Au, 6.2% Zn, 4.2% Pb, which will allow for blended plant
feed closer to design head grades.

 

In December the Vares Processing Plant moved from operating five days a week
to 24/7 operations and recoveries are steadily improving. The Company expects
to be operating above 75% of nominal plant throughput in the coming weeks,
with commercial production being declared when this level has been sustained
over a 21-day continuous period.

 

 

Production, grades and recoveries year-to-date:

 

                        Q2     Q3      Oct-Nov
 Ore milled (t)         9,211  19,308  35,012
 Head grade - Ag (g/t)  96     239     257
 Head grade - Au (g/t)  0.3    2.6     2.7
 Head grade - Zn (%)    2.2    8.6     7.8
 Head grade - Pb (%)    1.6    5.6     5.0
 Recoveries - Ag (%)    73     85      95
 Recoveries - Au (%)    57     62      73
 Recoveries - Zn (%)    32     56      64
 Recoveries - Pb (%)    57     55      69
 Ag/Pb concentrate (t)  246    1,440   2,943
 Grade - Ag (g/t)       2,292  2,131   2,317
 Grade - Au (g/t)       4.0    13.6    13.8
 Grade - Pb (%)         33.3   41.3    41.4
 Payability - Ag (%)    95     95      95
 Payability - Au (%)    70     70      70
 Payability - Pb (%)    95     95      95
 Zn concentrate (t)     139    2,095   3,793
 Grade - Ag (g/t)       593    411     446
 Grade - Au (g/t)       5.0    5.8     7.3
 Grade - Zn (%)         45.6   44.4    46.4
 Payability - Ag (%)    70     70      70
 Payability - Au (%)    70     70      70
 Payability - Zn (%)    85     85      85

* Recoveries included are only into payable concentrates

 

 

 

Figure 2: YTD Silver Equivalent Contained Metal Production by Quarter

 

* Silver equivalent (AgEq) assumes $25/oz Ag, $2,000/oz Au, $2,500/t Zn,
$2,000/t Pb, $6,500/t Cu, $6,500/t Sb as per the July 2023 Mineral Resource
estimate

 

Tailings

On 24 October all permits for Phase I of the Veovaca Tailings Storage Facility
('Veovaca TSF') were received from the Federal Ministry of Energy, Mining, and
Industry ('FMERI') of Bosnia and Herzegovina. These permits include
Environmental, Water, Full Design and Construction Permits. Construction is
underway and the first tailings disposal at the Veovaca TSF is planned for
early January 2024, after some minor delays caused by winter conditions. The
Veovaca TSF will be constructed under GISTM ('Global Industry Standard on
Tailings Management') standards and will be constructed in two phases. Phase I
will have the capacity to receive tailings for approximately 4-5 years of
production and in total the Veovaca TSF will be operational for over 10 years
of production.

 

The current operating temporary TSF at the Vares Processing Plant has a
maximum capacity of approximately 133,000 tonnes, which will allow tailings
deposition into mid-Q1 2025 and will ensure no impact on production.

 

 

Finance

The Company ended November with $23m cash and approximately $8m in receivables
and concentrate inventory.

 

Orion has agreed to reschedule the first quarterly debt repayment of
approximately $19m from 31 December 2024 to 31 March 2025, with nine quarterly
repayments thereafter.

 

Adriatic has also signed a term sheet for a $25m concentrate prepayment
arrangement with Trafigura, an existing offtaker, at competitive terms and a
lower interest rate than the Orion facility. 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. The Company expects
to close the transaction by year end, providing additional liquidity during
ramp-up.

 

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.

 

-ends-

 

 

Authorised by Laura Tyler, Managing Director & CEO of Adriatic Metals

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 / Christopher Jones                   adriatic@buchanan.uk.com (mailto:adriatic@buchanan.uk.com)
 Morgans Corporate Limited
 Rob Douglas / Sam Warriner / Mitch Duffy          Tel: +61 7 3334 4888

 RBC Capital Markets
 Farid Dadashev / James Agnew / Jamil Miah         Tel: +44 (0) 20 7653 4000

 Stifel Nicolaus Europe Limited
 Ashton Clanfield / Callum Stewart / Varun Talwar  Tel: +44 (0) 20 7710 7600

 Morrow Sodali
 Cameron Gilenko                                   Tel: +61 466 984 953

 

 

ABOUT ADRIATIC METALS

Adriatic Metals Plc (ASX:ADT, LSE:ADT1, OTCQX:ADMLF) is a precious and base
metals developer that is advancing the world-class Vares Silver Operation in
Bosnia & Herzegovina, as well as the Raska Zinc-Silver Project in Serbia.
First concentrate production took place in February 2024 and the Vares Silver
Operation is fully funded to nameplate production, which is expected in Q4
2024. Concurrent with ongoing operational activities, the Company continues to
explore across its highly prospective 44km(2) concession package.

 

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, Managing
Director & CEO.

 

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