Looking Positive11 May 2020 17:49
Price continues to build nicely (up over 8% today). Very good recent drill results. Proposed deal with Tethyan looks logical.
‘The deal will add Tethyan's Serbian brownfield development projects, Sastavci and Kizevak, as well as a "large prospective landholding on the Tethyan mineral belt", which Adriatic believes will position the firm "as the leading Balkan base and precious metals developer".
The deal requires approval from two thirds of Tethyan shareholders - voting support agreements have already been obtained from 54% of shareholders - and includes a CAD700,000 break fee plus up to CAD150,000 of costs and expended for Adriatic payable by Tethyan "under certain circumstances" and a CAD350,000 break fee payable by Adriatic to Tethyan "under limited circumstances".
Tethyan has also entered a deal with Serbian firm EFPP d.o.o, which holds two exploration licences which comprise "the central parts of the Kizevak and Sastavci deposits", to acquire EFPP in a two-stage acquisition.
The first stage involves Tethyan paying EUR525,000 in cash to EFPP's sellers in return for a 10% stake while the second allows for Tethyan to pay EUR1.4 million in cash and grant a 2% net smelter return for the other 90% stake. Obtaining the other 90% stake also requires the issue of 664,000 Adriatic shares in four tranches to EFPP and the payment of a EUR500,000 deferred cash payment on the second anniversary of the first half of the deal.’