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(Alliance News) - Adriatic Metals PLC on Wednesday said it expects to commence production within the first quarter, and gave updated production targets for its flagship metals project.
Adriatic is a precious and base metals explorer and developer, with a 100% stake of the Vares silver project in Bosnia & Herzegovina and the Raska zinc deposit in Serbia.
Last week, Adriatic updated its ore reserve estimates for Vares to 13.8 megatonnes at 187 grams of gold per tonne of ore, 5.2% zinc, 3.3% lead, 1.4 grams per tonne silver, 0.5% copper and 0.2% antimony. The increase in ore reserves underpins an 18-year mine life which now extends until 2041 based on a nominal throughput capacity of 800,000 tonnes per annum.
As a result of these estimates, Adriatic has increased production targets for Vares. The company now expects between 240,000 and 300,000 tonnes of mined ore in 2024, between 750,000 and 850,000 tonnes by 2025, and an average of between 800,000 and 900,000 tonnes between 2026 and 2040.
While first concentrate production is still expected in the first quarter of 2024, commissioning delays have been caused by a limited availability of instrument technicians. Adriatic also suffered equipment delivery delays as ships were rerouted away from the Suez Canal, due to the security situation in the Red Sea, amid attacks on ships by Houthi rebels in Yemen.
However, Adriatic said that additional staff have since been appointed and all equipment is on site and being commissioned. All project-related infrastructure has been completed and is currently being prepared for operation.
A final, USD30 million tranche has been received from Orion Mine Finance, an alternative investment management firm specialising in metals and mining investments. In January 2022, Adriatic and Orion signed a USD142.5 million debt financing package with Orion. The company will begin its quarterly debt repayments to Orion from June 30 2024 to December 31 2024, and confirmed that it remains "fully funded for plant completion and ramp-up".
Commenting on the update, Chief Executive Officer Paul Cronin said: "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 the fourth quarter of 2024 onwards."
Shares in Adriatic were down 6.5% at 167.00 pence each in London on Wednesday morning.
By Hugh Cameron, Alliance News reporter
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