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(Alliance News) - Adriatic Metals PLC said on Monday its Vares project will begin production later this year and drew down the second tranche of senior secure debt.
Adriatic Metals is a Cheltenham, England-based precious and base metals exploration and development company. The firm owns the Vares project in Bosnia and Herzegovina, as well as the Raska project in Serbia.
The company said in an update for the first quarter of 2023 that the construction of the Vares silver project is over 70% complete and expects first concentrate production to begin in November this year, five weeks later than originally planned.
Delays have been caused by recent weather conditions at Rupice, which is part of the Vares project, increasing the company's cost estimate by GBP6 million to USD189 million. Adriatic Metals said it retains an unutilised contingency of USD10 million and remains "fully funded."
Extension and infill drilling of Rupice Northwest has continued to expand the new mineralised zone and its growth has added to the already expected increase in the Vares' life-of-mine.
Rupice NW's gap zone has already successfully intercepted base and precious metal mineralisation in three holes, Adriatic metals said.
The company also said it has been awarded 87% of capital expenditure, and has drawn down on the second USD30 million tranche of senior secure debt and the USD22.5 million copper stream from Orion Mine Finance.
On January 10, Adriatic completed a USD142.5 million debt financing package with Orion, comprising USD120 million of senior secured debt and a USD22.5 million copper stream. The first drawdown of USD30 million of the Orion debt package was received on December 30. The third and fourth tranches of the remaining USD60 million of senior secured debt will be drawn down in 2023 when required, Adriatic Metals said.
The company also announced that the State of Bosnia and Herzegovina awarded the Vares project the status of "Special Importance."
Director & Chief Executive Officer Paul Cronin said: "Over the quarter the exploration team have continued to exceed our expectations in drilling success at Rupice and I look forward to providing more drill results in the coming weeks.
"I am also extremely proud that the Vares Project has been awarded the status of Project of Special Importance by the State of Bosnia and Herzegovina. This demonstrates the significance of the Project to the country in terms of its contribution to gross domestic product, foreign direct investment, employment and education."
Shares in Adriatic Metals were up 0.6% to 193.94 pence each in London on Monday morning.
By Sabrina Penty; Alliance News reporter
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