REG - Adriatic Metals - QUARTERLY ACTIVITIES REPORT
Wed 07:00
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RNS Number : 7010G Adriatic Metals PLC 30 April 2025
4 January 2025
4 January 2025
4 January 2025
30 April 2025
Adriatic Metals PLC
QUARTERLY ACTIVITIES REPORT
For the three months ended 31 March 2025
("Q1" or "Quarter")
Q1 HIGHLIGHTS
• Production increased 46% to 1.4Moz AgEq(1) in Q1 2025 vs 0.9Moz AgEq
in Q4 2024
• 66kt ore milled in Q1 2025 vs 47kt in Q4 2024, a 40% improvement as
processing throughput continues to ramp up
• Quarterly sales of $34m in Q1 2025, an increase of 26% vs Q4 2024
• Veovača Tailings Storage Facility ('TSF') construction was completed
in March and first tailings deposited on 2 April
• First debt repayment of $20m made to Orion Mine Finance ('Orion') on
28 March 2025
• Cash balance as at 31 March 2025 of $76m.
POST-PERIOD HIGHLIGHTS
• Significant progress made in April, with key metrics hitting monthly
records:
o 35kt milled (+60% vs Q1 average)
o 0.8Moz AgEq(1) produced (+76% vs Q1 average)
o 315m mine development (+30% vs Q1 average)
o ~$21m of shipment value
• With throughput rates increasing, commercial production is on track
for Q2 2025.
Laura Tyler, Managing Director & CEO of Adriatic, commented:
"As highlighted in the operations update on 31 March, the first quarter marked
a period of progress at the Vares Silver Operation. Despite a slower than
expected ramp-up, production increased by over 40% quarter-on-quarter and
operations were cash generative. Additionally, the successful commissioning of
the Veovača TSF represents a critical milestone, significantly reducing risk
as we advance toward steady-state operations.
"While production fell short of expectations in Q1 - by approximately 40kt, or
6% of mid-point 2025 guidance - this was primarily due to adverse weather
conditions and tailings management challenges. Nevertheless, we are pleased
with advancements made in April as progress is made towards commercial
production. We look forward to hosting analysts and investors at site in May
and we remain confident in our strategy to drive long-term value for
shareholders through sustained production growth and strong cash flow
generation."
Adriatic Metals PLC (ASX:ADT, LSE:ADT1, OTCQX:ADMLF) ("Adriatic" or the
"Company") is pleased to provide an update on mining and processing activities
at the Vareš Silver Operation in Bosnia and Herzegovina over Q1 2025.
1. OPERATIONS
Health & Safety
At the end of Q1 2025, the 12-month rolling Lost Time Injury Frequency
('LTIF') and Total Recordable Injury Frequency ('TRIF') were 2.86 and 5.00
respectively compared to Q4 2024 where LTIF and TRIF were 2.26 and 5.27
respectively (frequency = (LTI or RI) * 1,000,000 / total hours worked). Note
that previous quarterly reports used a numerator of 200,000 hours.
Q1 2025 Production
Q2 2024 Q3 2024 Q4 2024 FY 2024 Q1 2025
Ore mined (t) 8,284 63,053 73,215 145,755 67,390
Ore milled (t) 9,211 19,308 47,233 76,402 65,991
Head grade - Ag (g/t) 96 239 234 217 296
Head grade - Au (g/t) 0.6 2.6 2.6 2.3 2.6
Head grade - Zn (%) 2.2 8.6 7.5 7.1 6.4
Head grade - Pb (%) 1.6 5.6 4.8 4.6 4.5
Recoveries - Ag (%) 76 85 94 90 95
Recoveries - Au (%) 45 65 74 71 71
Recoveries - Zn (%) 29 56 63 60 57
Recoveries - Pb (%) 59 55 68 64 74
Ag/Pb concentrate (kt) 0.3 1.4 3.8 5.5 5.3
Grade - Ag (g/t) 2,322 2,131 2,185 2,177 2,889
Grade - Au (g/t) 7.2 13.6 14.1 13.7 15.1
Grade - Pb (%) 32.9 41.3 41.1 40.8 41.4
Zn concentrate (kt) 0.1 2.1 4.8 7.1 5.3
Grade - Ag (g/t) 602 411 427 425 590
Grade - Au (g/t) 5.1 5.8 7.3 6.8 8.3
Grade - Zn (%) 44.9 44.4 46.2 45.7 45.8
Contained - Ag (oz) 21,722 126,376 333,148 481,245 595,993
Contained - Au (oz) 81 1,021 2,859 3,961 3,998
Contained - Zn (t) 58 931 2,238 3,226 2,419
Contained - Pb (t) 85 594 1,561 2,240 2,211
* Recoveries and contained metal are only into payable concentrates
Figure 1: Silver equivalent produced (koz)
In Q1 2025, 67kt of ore was mined, 8% lower than 73kt ore mined in Q4 2024 to
align with processing rates and manage ore stockpile capacity. There was a
total of 730m of underground development in Q1 2025, an 8% increase compared
to Q4 2024 at 675m.
Record quarter of processing throughput of 66kt ore milled in Q1 2025 vs 47kt
ore milled in Q4 2024, an increase of 40% as production continues to ramp up.
This resulted in production of 1.4Moz AgEq(1) in Q1 2025 vs 0.9Moz AgEq in Q4
2024.
Milled tonnage was approximately 40kt lower than budget due to several
factors:
· Weather impacts and power outages in January (~15kt loss) - now
resolved.
· Delay in start of Veovača TSF operation (~20kt loss) - now
resolved.
· Tailings filtration cycle time issues (~20kt loss) - currently
being resolved with debottlenecking modifications in Q2, and additional filter
plates (+10% capacity) from Metso in Q3.
As the ramp-up continues, commercial production is expected to be reached
during Q2 2025, with April achieving 20 days averaging 70% throughput after 5
days of planned maintenance.
Tailings
Construction of the Veovača TSF was completed in March, with necessary
regulatory permits secured, and initial tails deposition took place on 2
April. Construction is currently underway on the direct access road linking
the Vareš Processing Plant to the Veovača TSF. In the interim, an
alternative route with limited capacity is being used. The main route is on
track for completion by the end of May. The paste backfill plant is expected
to be completed in Q4 2025.
2. FINANCE
Quarterly sales totalled $34m in Q1 2025, an increase of 26% vs Q4 2024.
Importantly, Q1 2025 marked the first quarter since operations commenced that
the Company was cash generative.
Cash reserves were bolstered by a $25m concentrate prepayment arrangement
agreed with Trafigura, with funds drawn down in January.
An equity raising of $50m took place on 18 February to support expansionary
capital expenditure. The funds were raised to secure long-lead items to
fast-track the Vareš Processing Plant expansion to 1.3Mtpa, initiate studies
and workstreams at Rupice Mine to support production and provide spare
capacity to de-risk ramp-up to nameplate production.
The first debt quarterly repayment to Orion Mine Finance of $20m was made at
the end of March.
The cash balance as at 31 March 2025 was $76m (Q4 2024: $21m).
Summary of Cash flow
A summary of operating, investing and financing cash flows during the Quarter,
before movements in exchange rates, as reported in the Appendix 5B Cash Flow
Report, is as follows:
USD'000
Net cash from operating activities 7,498
Net cash used in investing activities (5,054)
Net cash from financing activities 52,977
Effects of movement in exchange rates (201)
Net increase in cash and cash equivalents 55,220
3. TENEMENT HOLDINGS
In accordance with ASX Listing Rule 5.3.3, the Company's tenements as at 31
March 2025 are set out below. The Company holds a 100% interest in all
concession agreements and licences via its wholly owned subsidiaries with the
exception of the Raska (Suva Ruda) licence held by Deep Research d.o.o. which
is subject to changes that occurred during 2024.
Adriatic Metals PLC has entered into a sale and purchase agreement with Deep
Research d.o.o. and its shareholders which provides for the transfer of the
Raska (Suva Ruda) licence to a newly established company owned 100% by
Adriatic Metals PLC. It has also been agreed that the previous option
agreement over Deep Research d.o.o. will be terminated as part of the licence
transfer.
*Request for 1(st) extension submitted on time. Pending approval.
**Pending Ministry decision on a two-year extension for preparation of
reserves elaborate which excludes any geological exploration work. Upon
approval, plan is to split the exploration area into two new areas and
continue exploration work.
Notes:
Note 1: Formula for Silver Equivalent (AgEq) = ((Ag Produced x Ag $/oz) + (Au
Produced x Au $/oz) + (Zn Produced x Zn $/t) + (Pb Produced x Pb $/t) + (Cu
Produced x Cu $/t) + (Sb Produced x Sb $/t)) / (Ag $/oz). Produced quantities
are after recovery. Commodity prices: $25/oz Ag, $2,000/oz Au, $2,500/t Zn,
$2,000/t Pb, $2,000/t Cu, $2,000/t Sb.
Note 2: Unless otherwise stated, all dollar figures are United States dollars
($).
Note 3: There is some slight variance in numbers announced on 31 March and 29
April due to reconciliation.
- ends -
Authorised by Laura Tyler, CEO and Managing Director 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)
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
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.
Appendix 5B
Mining exploration entity or oil and gas exploration entity
quarterly cash flow report
Name of entity
ADRIATIC METALS PLC
ABN Quarter ended ("current quarter")
624 403 163 31 MARCH 2025
Consolidated statement of cash flows Current quarter Year to date
USD'000
(3 months)
USD'000
1. Cash flows from operating activities
1.1 Receipts from customers 33,971 33,971
1.2 Payments for
a) exploration & evaluation (if expensed) (932) (932)
b) development (3,049) (3,049)
c) production (11,440) (11,440)
d) staff costs (9,175) (9,175)
e) administration and corporate costs (5,865) (5,865)
1.3 Dividends received (see note 3) - -
1.4 Interest received 150 150
1.5 Interest and other costs of finance paid (690) (690)
1.6 Income taxes paid - -
1.7 Government grants and tax incentives - -
1.8 Other - VAT refund 4,528 4,528
1.9 Net cash from operating activities 7,498 7,498
2. Cash flows from investing activities
2.1 Payments to acquire:
a) entities - -
b) tenements - -
c) property, plant and equipment (5,054) (5,054)
d) exploration & evaluation (if capitalised) - -
e) investments - -
f) other non-current assets - -
2.2 Proceeds from the disposal of:
a) entities - -
b) tenements - -
c) property, plant and equipment - -
d) investments - -
e) other non-current assets - -
2.3 Cash flows from loans to other entities - -
2.4 Dividends received (see note 3) - -
2.5 Other - -
2.6 Net cash used in investing activities (5,054) (5,054)
3. Cash flows from financing activities
3.1 Proceeds from issues of equity securities (excluding convertible debt 50,000 50,000
securities)
3.2 Proceeds from issue of convertible debt securities - -
3.3 Proceeds from exercise of options and warrants - -
3.4 Transaction costs related to issues of equity securities or convertible debt (1,796) (1,796)
securities
3.5 Proceeds from borrowings - -
3.6 Repayment of borrowings (20,227) (20,227)
3.7 Transaction costs related to loans and borrowings - -
3.8 Dividends paid - -
3.9 Other - concentrate prepayment net of fees 25,000 25,000
3.10 Net cash from financing activities 52,977 52,977
4. Net increase / (decrease) in cash and cash equivalents for the period
4.1 Cash and cash equivalents at beginning of period 20,698 20,698
4.2 Net cash from / (used in) operating activities (item 1.9 above) 7,498 7,498
4.3 Net cash from / (used in) investing activities (item 2.6 above) (5,054) (5,054)
4.4 Net cash from / (used in) financing activities (item 3.10 above) 52,977 52,977
4.5 Effect of movement in exchange rates on cash held (201) (201)
4.6 Cash and cash equivalents at end of period 75,918 75,918
5. Reconciliation of cash and cash equivalents Current quarter Previous quarter
at the end of the quarter (as shown in the consolidated statement of cash
USD'000
USD'000
flows) to the related items in the accounts
5.1 Bank balances 75,144 75,144
5.2 Call deposits - -
5.3 Bank overdrafts - -
5.4 Other - brokerage cash 774 774
5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) 75,918 75,918
6. Payments to related parties of the entity and their associates Current quarter
USD'000
6.1 Aggregate amount of payments to related parties and their associates included (357)
in item 1
6.2 Aggregate amount of payments to related parties and their associates included -
in item 2
During the Quarter, Adriatic paid an aggregate total of $357k to Directors, or
companies controlled by them, consisting of salaries and fees.
7. Financing facilities Total facility amount at quarter end Amount drawn at quarter end
Note: the term "facility' includes all forms of financing arrangements USD'000 USD'000
available to the entity.
Add notes as necessary for an understanding of the sources of finance
available to the entity.
7.1 Loan facilities 142,500 142,500
7.2 Credit standby arrangements - -
7.3 Other (please specify) 25,000 25,000
7.4 Total financing facilities 167,500 167,500
7.5 Unused financing facilities available at quarter end -
7.6 Include in the box below a description of each facility above, including the
lender, interest rate, maturity date and whether it is secured or unsecured.
If any additional financing facilities have been entered into or are proposed
to be entered into after quarter end, include a note providing details of
those facilities as well.
The $142.5m Orion Debt Financing package consists of $120m Senior Secured Debt
and $22.5m Copper Stream arrangement. The first two tranches of $30m of the
$120m Senior Secured Debt were drawn down in December 2022 and February 2023
and the third tranche was drawn down in April 2023. The $22.5m Copper Stream
deposit was received in February 2023. The remaining fourth $30m tranche of
the Senior Secured Debt was drawn down in January 2024.
In January 2025 the Company completed a $25m concentrate prepayment agreement
with Trafigura with funds drawn down in the same
month.
8. Estimated cash available for future operating activities USD'000
8.1 Net cash from operating activities (Item 1.9) 7,498
8.2 Net cash (used in) investing activities (Item 2.6) (5,054)
8.3 Total relevant earnings (Item 8.1 + Item 8.2) 2,444
8.4 Cash and cash equivalents at quarter end (Item 4.6) 75,918
8.5 Unused finance facilities available at quarter end (Item 7.5) -
8.6 Total available funding (Item 8.4 + Item 8.5) 75,918
8.7 Estimated quarters of funding available (Item 8.6 divided by Item 8.3) 31.1
8.8 If Item 8.7 is less than 2 quarters, please provide answers to the following
questions:
1. Does the entity expect that it will continue to have the
current level of net operating cash flows for the time being and, if not, why
not?
Answer: N/A
2. Has the entity taken any steps, or does it propose to take
any steps, to raise further cash to fund its operations and, if so, what are
those steps and how likely does it believe that they will be successful?
Answer: N/A
3. Does the entity expect to be able to continue its
operations and to meet its business objectives and, if so, on what basis?
Answer: N/A
Compliance statement
1 This statement has been prepared in accordance with accounting
standards and policies which comply with Listing Rule 19.11A.
2 This statement gives a true and fair view of the matters
disclosed.
Date: 30 April 2025
Authorised by: Audit and Risk Committee
(Name of body or officer authorising release - see note 4)
Notes
1. This quarterly cash flow report and the accompanying activity
report provide a basis for informing the market about the entity's activities
for the past quarter, how they have been financed and the effect this has had
on its cash position. An entity that wishes to disclose additional information
over and above the minimum required under the Listing Rules is encouraged to
do so.
2. If this quarterly cash flow report has been prepared in
accordance with Australian Accounting Standards, the definitions in, and
provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and
AASB 107: Statement of Cash Flows apply to this report. If this quarterly cash
flow report has been prepared in accordance with other accounting standards
agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent
standards apply to this report.
3. Dividends received may be classified either as cash flows
from operating activities or cash flows from investing activities, depending
on the accounting policy of the entity.
4. If this report has been authorised for release to the market
by your board of directors, you can insert here: "By the board". If it has
been authorised for release to the market by a committee of your board of
directors, you can insert here: "By the [name of board committee - e.g. Audit
and Risk Committee]". If it has been authorised for release to the market by a
disclosure committee, you can insert here: "By the Disclosure Committee".
5. If this report has been authorised for release to the market
by your board of directors and you wish to hold yourself out as complying with
recommendation 4.2 of the ASX Corporate Governance Council's Corporate
Governance Principles and Recommendations, the board should have received a
declaration from its CEO and CFO that, in their opinion, the financial records
of the entity have been properly maintained, that this report complies with
the appropriate accounting standards and gives a true and fair view of the
cash flows of the entity, and that their opinion has been formed on the basis
of a sound system of risk management and internal control which is operating
effectively.
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