TIDMADT1
RNS Number : 6872A
Adriatic Metals PLC
24 January 2024
24 January 2024
Adriatic Metals PLC
("Adriatic Metals" or the "Company")
VARES PROJECT PRODUCTION GUIDANCE & UPDATE
Adriatic Metals PLC (ASX:ADT, LSE:ADT1, OTCQX:ADMLF), is pleased
to publish its initial production guidance and provide an update to
the commissioning of the Vares Silver Project in Bosnia and
Herzegovina.
-- Initial production guidance targets have been provided based
on a revised mine plan following the updated Ore Reserves statement
announced on 20 December 2023:
2024 2025 2026 2027-2040
(average)
-------- -------- ------- -------------
Ore Mined
(kt) 240-300 750-850 800-900 800-900
----------- -------- -------- ------- -------------
.
-- First concentrate production is expected in Q1 2024.
- The commissioning of the Vares Processing Plant is progressing
well, however there are a few weeks delay due to limited
availability of instrumentation technicians and equipment delays
due to shipping being rerouted from the Suez Canal. Additional
staff have been appointed and all equipment is now on site and
being commissioned.
- All project-related infrastructure, such as road, railway,
electricity, water treatment and additional support services have
been completed and are being prepared for operations.
-- The fourth and final US$30m tranche of senior secured debt
("Senior Secured Debt") from Orion Mine Finance ("Orion") has been
drawn down.
-- The first quarterly debt repayment to Orion has been
rescheduled from 30 June 2024 to 31 December 2024, with quarterly
repayments thereafter.
-- Adriatic remains fully funded for plant completion and ramp up.
Paul Cronin, Adriatic's Managing Director and CEO,
commented:
"I am delighted to announce the first production guidance for
the Vares Project. A new comprehensive mine plan has been developed
that will give greater understanding of production over the next
few years of operations. Despite some minor but unpredictable
delays, we expect 2024 to be a solid year of initial production,
and facilitate the underground development required to consistently
produce at or above nameplate from Q4 2024 onwards.
I wish to extend my appreciation to Orion for their continued
financial and operational support as we navigate the Vares Project
through the final stages of completion."
Adriatic Metals PLC (ASX:ADT, LSE:ADT1, OTCQX:ADMLF) ("Adriatic"
or the "Company") is pleased to provide an update on the Vares
Silver Project in Bosnia and Herzegovina.
PRODUCTION GUIDANCE
Following the updated Ore Reserves announcement on 20 December
2023, Adriatic has completed an updated Mine Plan at Rupice and
Rupice Northwest. Successful extension and exploration drilling at
Rupice and Rupice Northwest, mine design improvements and
optimisation of the mine scheduling work has resulted in
significant improvements to the latest Mine Plan compared to the
2021 Definitive Feasibility Study.
The guidance for the 2024 ramp-up year and future life of mine
averages are based on the most recently updated Mine Plan
incorporating updated mine designs and the latest cost information.
The guidance is based on the additional drilling, mineral resource
estimation and advancing higher grade development at Rupice and
Rupice Northwest, but down blending of ore is planned during the
initial months of plant feed from lower grade stockpiles to
facilitate plant performance optimisation.
2024 2025 2026 2027-2040
(average)
-------- --------- -------- -------------
Ore Mined
(kt) 240-300 750-850 800-900 800-900
------------ -------- --------- -------- -------------
Zinc (%) 4.5-5.9 5.8-7.8 6.1-8.1 4.6-6.1
------------ -------- --------- -------- -------------
Silver
(g/t) 261-348 259-345 211-281 160-214
------------ -------- --------- -------- -------------
Lead (%) 3.2-4.2 3.6-4.9 3.5-4.7 2.9-3.9
------------ -------- --------- -------- -------------
Copper 0.5-0.6 0.5-0.7 0.5-0.7 0.4-0.5
(%)
------------ -------- --------- -------- -------------
Gold (g/t) 2.1-2.8 2.4-3.2 2.1-2.8 1.2-1.6
------------ -------- --------- -------- -------------
An achievable ramp-up profile has been adopted for 2024 prior to
reaching steady state production which is anticipated to occur in
Q4 2024. The slower than anticipated ramp-up has been driven
by:
-- Underground Structural Geology - The planned 900m structural
geo-technical drilling programme was completed in Q4 2023,
delineating the poor rock mass zone running parallel to the orebody
along-strike and down-dip. Following a technical workshop and
completed studies, it has been established that there is a
requirement for upgraded ground support standards to safely
establish and maintain footwall infrastructure. Once installed, the
additional ground support will improve ore drive access and
therefore production rates will subsequently increase in the second
half of 2024 .
-- Processing Plant Optimisation - The mine plan delivers life
of mine average head grade throughout 2024 to ensure plant
operating parameters and product specifications are achieved prior
to delivery of high-grade feed in 2025, 2026 and 2027 onwards. Upon
sustaining nameplate parameters, the Company's strategy will be to
maximise high NSR material in accordance with future metal price
expectations.
The grade control contractor has been mobilised with the
drilling programme expected to identify opportunities for further
optimisation of the mine plan and reduce development costs.
Adriatic is in the process of conducting formal studies to confirm
plant throughput can be increased to over 1Mtpa, to align with
anticipated mine production.
The production targets referred to in this announcement are
underpinned by Ore Reserves, prepared in accordance with the
requirements of the JORC Code (2012 edition).
UPDATE ON FIRST CONCENTRATE PRODUCTION
The commissioning of the Vares Processing Plant is progressing
well, however due to unexpected delays first concentrate production
has been delayed by a few weeks. This is mainly due to the limited
availability of instrumentation technicians for commissioning and
implementation, following the unanticipated delays in equipment
shipping. Electrical & instrumentation contractors are now on
site and all key positions have been filled, with final plant
control system testing and commissioning underway. There was a
further delay in the delivery of the dust collectors and associated
ducting, which had been on a vessel outside the Suez Canal. The
ship was rerouted around the Cape of Good Hope and arrived in
Rijeka on 16 January 2024. The dust collectors are now onsite and
are undergoing installation.
All other project-related infrastructure to support initial
operations, such as road, railway, electricity, water treatment and
additional support services have been completed.
FINANCING UPDATE
Adriatic is pleased to announce that it has drawn down the
fourth and final US$30m tranche of Senior Secured Debt from Orion.
All conditions precedent for the fourth US$30m tranche of Senior
Secured Debt have been satisfied or waived and funds have been
received.
On 10 January 2022, Adriatic announced the completion of a
US$142.5m debt financing package with Orion ("Orion Debt Package")
comprising:
-- US$120m Senior Secured Debt; and
-- US$22.5m Copper Stream.
The first draw down of US$30m of Senior Secured Debt from Orion
was received on 30 December 2022. The second US$30m of Senior
Secured Debt and the US$22.5m Copper Stream were received on 13
February 2023. The third tranche of US$30m of Senior Secured Debt
was drawn down on 25 April 2023 .
The first quarterly debt repayment to Orion has been rescheduled
from 30 June 2024 to 31 December 2024, with 10 quarterly repayments
of accrued interest, fees and the senior facility in even
instalments thereafter.
The estimated final capital cost for the Project has increased
from US$182m to US$188.9m, including US$28.1m in scope changes as a
result of design enhancements implemented during construction. This
increase primarily relates to increased owner's costs due to the
delays described above. Adriatic remains fully funded for plant
completion and ramp up.
- ends -
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 Paul Cronin, Managing
Director and CEO.
Authorised by Paul Cronin, Managing Director & CEO
For further information please visit: www.adriaticmetals.com ;
email: info@adriaticmetals.com , @AdriaticMetals on Twitter; or
contact:
Adriatic Metals PLC
Paul Cronin / Klara Kaczmarek Via Buchanan
Buchanan Tel: +44 (0) 20 7466
5000
Bobby Morse / Oonagh Reidy adriatic@buchanan.uk.com
Morgans Corporate Limited
Rob Douglas / Sam Warriner / Mitch Duffy Tel: +61 7 3334 4888
RBC Capital Markets
James Agnew / Jamil Miah Tel: +44 (0) 20 7653
4000
Stifel Nicolaus Europe Limited
Ashton Clanfield / Callum Stewart / Varun Tel: +44 (0) 20 7710
Talwar 7600
Citadel Magnus
Cameron Gilenko Tel: +61 2 8234 0100
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 Project in Bosnia & Herzegovina, as
well as the Raska Zinc-Silver Project in Serbia. The Vares Silver
Project is fully funded to production, which is expected in Q1
2024. Concurrent with ongoing construction activities, the Company
continues to explore across its highly prospective 44km(2)
concession package.
The Mineral Resource estimate for the Rupice underground deposit
comprising part of the Vares Silver Project was updated in
accordance with ASX Listing Rule 5.8 on 27 July 2023. The Company
confirms that it is not aware of any new information or data that
materially affects the information included in the previous
announcement and that all material assumptions and technical
parameters underpinning the estimate in the previous announcement
continue to apply and have not materially changed.
The Ore Reserve estimate for the Rupice deposit comprising part
of the Vares Silver Project was announced in accordance with ASX
Listing Rule 5.9 on 20 December 2023. The Company confirms that it
is not aware of any new information or data that materially affects
the information included in the previous announcement and that all
material assumptions and technical parameters underpinning the
estimate in the previous announcement continue to apply and have
not materially changed.
DISCLAIMER
Forward-looking statements are statements that are not
historical facts. Words such as "expect(s)", "feel(s)",
"believe(s)", "will", "may", "anticipate(s)", "potential(s)"and
similar expressions are intended to identify forward-looking
statements. These statements include, but are not limited to
statements regarding future production, resources or reserves and
exploration results. All such statements are subject to certain
risks and uncertainties, many of which are difficult to predict and
generally beyond the control of the Company, that could cause
actual results to differ materially from those expressed in, or
implied or projected by, the forward-looking information and
statements. These risks and uncertainties include, but are not
limited to: (i) those relating to the interpretation of drill
results, the geology, grade and continuity of mineral deposits and
conclusions of economic evaluations, (ii) risks relating to
possible variations in reserves, grade, planned mining dilution and
ore loss, or recovery rates and changes in project parameters as
plans continue to be refined, (iii) the potential for delays in
exploration or development activities or the completion of
feasibility studies, (iv) risks related to commodity prices and
exchange rate fluctuations, (v) risks related to failure to obtain
adequate financing on a timely basis and on acceptable terms or
delays in obtaining governmental approvals or in the completion of
development or construction activities, and (vi) other risks and
uncertainties related to the Company's projects, prospects,
properties and business strategy. Investors cautioned not to place
undue reliance on these forward-looking statements that speak only
as of the date hereof, and the Company does not undertake any
obligation to revise and disseminate forward-looking statements to
reflect events or circumstances after the date hereof, or to
reflect the occurrence of or non-occurrence of any events.
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END
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