Adriatic Metal. Regulatory News (ADT1)

Adriatic Metals PLC 

('Adriatic Metals' or the 'Company')

UPDATED RUPICE MINERAL RESOURCE ESTIMATE AND DRILLING RESULTS 

To see the images referred to in the release, please click here 

http://www.rns-pdf.londonstockexchange.com/rns/5481X_1-2020-8-31.pdf

HIGHLIGHTS: 

• Indicated and Inferred Mineral Resource estimate ("MRE") for Adriatic Metals' 100%-owned Rupice silver-gold-zinc-lead deposit in Bosnia & Herzegovina, now stands at:

• 12.0Mt @ 149g/t Ag, 1.4g/t Au, 4.1% Zn, 2.6% Pb, 0.5% Cu, 25% BaSO4 (reported above a cut-off grade of 50g/t AgEq) containing 58Moz Ag, 527koz Au, 489kt Zn & 312kt Pb

• This represents a 32% increase in tonnes compared to the maiden 2019 Rupice MRE (using a 50g/t AgEq cut-off).

• 79% of the updated Mineral Resource is classified as Indicated.

• The updated MRE will provide the foundation to the PFS, which will incorporate ongoing metallurgical test work results and mining studies designed to optimise and improve the planned development configuration of the project compared with that outlined in the November 2019 Scoping Study.

• Recent drilling has also intersected high-grade massive sulphide mineralisation at Rupice - with the system remaining open towards the north and down-dip to the south.

Adriatic Metals Plc (ASX:ADT, LSE:ADT1) ("Adriatic" or the "Company") is pleased to announce the updated Mineral Resource estimate for the Rupice Silver Deposit in the Vares Silver Project, in Bosnia & Herzegovina, which has been completed by CSA Global Pty Ltd ("CSA Global").

Paul Cronin, Adriatic's Managing Director and CEO commented, "I am thrilled that we have substantially increased our resource base as we go into the next stage of project development. This updated MRE shows the world class nature of the deposit and positions the Company as one of the leading silver developers in the industry." He also added "During the COVID-19 pandemic, I have been impressed by the resolve of our Vares based team to deliver results in a timely and safe manner. Rupice is an exceptionally high-grade silver dominant deposit, and the increase in tonnes will expand on the results of our 2019 Scoping Study, as we seek to finalise a Pre-Feasibility Study in the coming weeks."

MRE UPDATE 

The updated Indicated and Inferred Mineral Resource estimate was prepared by CSA Global in Perth and comprises 12.0 Mt at 149 g/t Ag, 1.4g/t Au, 4.1% Zn and 2.6% Pb, as set out in Table 1.

Table 1 - Rupice updated MRE by Classification

Notes:

· Mineral Resources are based on JORC Code definitions.

· A cut-off grade of 50g/t silver equivalent has been applied.

· AgEq - Silver equivalent was calculated using conversion factors of 31.1 for Zn, 24.88 for Pb, 80.0 for Au, 1.87 for BaSO4, 80.87 for Cu and 80.87 for Sb, and recoveries of 90% for all elements. Metal prices used were US$2,500/t for Zn, US$2,000/t for Pb, $150/t for BaSO4, $2,000/oz for Au, $25/oz for Ag, $6500/t for Sb and $6,500 for Cu.

· The applied formula was: AgEq = Ag(g/t) * 90% + 31.1 * Zn(%) * 90% + 24.88 * Pb(%) * 90% + 1.87 * BaSO4% * 90% + 80 * Au(g/t) * 90% + 80.87 * Sb(%) * 90% + 80.87 * Cu(%)* 90%

· It is the opinion of Adriatic Metals and the Competent Persons that all elements and products included in the metal equivalent formula have a reasonable potential to be recovered and sold.

· Metallurgical recoveries of 90% have been applied in the metal equivalent formula based on recent and ongoing test work results.

· A bulk density was calculated for each model cell using regression formula BD = 2.745 + BaSO4 * 0.01793 + Pb * 0.06728 - Zn * 0.01317 + Cu * 0.1105 for the halo domain, BD = 2.7341 + BaSO4 * 0.01823 + Pb * 0.04801 + Zn * 0.03941 - Cu * 0.01051 for the fault zones and BD = 2.7949 + BaSO4 * 0.01599 + Pb * 0.05419 + Zn * 0.01169 + Cu * 0.06303 for the low grade domain. Bulk density values were interpolated to the combined high-grade domain from 631 BD measurements.

· Rows and columns may not add up exactly due to rounding.

RUPICE DRILLING AND SAMPLING 

For the Mineral Resource estimate, a total of 167 diamond drill holes (46 historical drill holes and 121 drill holes from the Company's drilling programmes in 2017 (8 holes), 2018 (39 holes), 2019 (52 holes) and 2020 (22 holes)) for 38,135m define the current limits of the known mineralisation. The deposit was drilled and sampled using diamond drill holes at a nominal 20m by 20m spacing.

Drill holes drilled by the Company were generally angled -50° to -80° mostly towards the southwest with dip angles set to optimally intersect the mineralised bodies. Additional drill holes were drilled from the opposite direction, and perpendicular to the mineralised trend. All the historical holes were vertical and focussed on the up-dip portion of the Rupice mineralisation.

The drill core was sampled for assay; whole core for the historical drilling and half core (HQ and PQ) for the recent drilling. Recent assays were sent to ALS in Bor, Serbia for multi-element analyses.

RUPICE GEOLOGY AND MINERALISATION

The host rocks at Rupice comprises Middle Triassic limestone, dolostone, calcareous and dolomitic marl, and a range of mostly fine-grained siliciclastic rocks including cherty mudstone, mudstone, siltstone and fine-grained sandstone. The main mineralised horizon is a brecciated dolomitic unit that dips at around 50o to the northeast and has been preferentially mineralised with base, precious and transitional metals. The Triassic sequence has been intensely deformed both by early stage ductile shearing and late stage brittle faulting.

The Rupice polymetallic mineralisation consists of sphalerite, galena, barite and chalcopyrite with silver, gold, tetrahedrite, boulangerite and bournonite, with pyrite. The majority of the high-grade mineralisation is hosted within the brecciated dolomitic unit, which is offset and cut by northwest striking, westerly dipping syn-post mineral faulting. This faulting displaces the mineralised body up to 20 metres in places. Thickening of the central portion of the orebody occurs where these faults flexure and deform. Mineralised widths up to 65 metres true thickness are seen in the central portion of the orebody.

To date, the massive sulphide mineralisation at Rupice has a defined strike length of 650 metres, with an average true-width thickness of around 20 metres. However, mineralisation at Rupice still remains open towards the north and down-dip to the south.

RUPICE MODELLING AND GRADE INTERPOLATION

The main geological features that control the polymetallic mineralisation at Rupice were interpreted using geological and structural data collected. Three main domains were interpreted and wireframed individually; the main mineralised brecciated dolomitic units, that hosts the high-grade mineralisation; the fault zones that off-set and displace these main mineralised bodies; and a lower-grade halos peripheral and in the footwall of the main mineralised bodies.

Statistical analysis of modelled domains showed that the main mineralised brecciated dolomite has a bimodal population for the majority of the elements being modelled. The higher-grade populations clustered spatially and were subsequently individually interpreted and wireframed.

Ten elements were modelled; Ag, Zn, Pb, BaSO4, Cu, Au, Sb, Hg, As and S, and the higher-grade populations were interpreted and wireframed for all elements except Hg, As and Sb.

All the domains were interpreted on a section by section basis and were used to generate 3D 'solid' wireframes. The same methodology was applied for the individual high-grade populations.

Once mineralisation for each element was interpreted and wireframed, classical statistical analysis was repeated for the samples within the interpreted domains. Drill data was composited to 2m down hole intervals. Boundary statistical analyses and top cuts were determined and applied.

The geostatistical analysis generated a series of semi-variograms that were used during grade estimation using Ordinary Kriging ("OK"). The semi-variogram ranges determined from the analysis contribute heavily to the determination of the search neighbourhood dimensions. All variograms were calculated and modelled for the composited sample file, constrained by the corresponding mineralised envelopes for each element. Where low-grade and high-grade domains were modelled, samples were combined for both domains to make sure that the number of samples was sufficient for robust geostatistical analysis. It was found that absolute semi-variograms were difficult to model for most of elements, and therefore, relative semi-variograms were modelled for Pb, BaSO4, Ag, Au, Sb, Hg, As and Cu. Absolute variograms were modelled for Zn and S.

The density values were calculated for each model cell using a regression formula for all the domains except the combined high-grade domain. The formula was calculated using scattergrams for density versus BaSO4, Pb, Cu and Zn grades. Density values were interpolated within the limits of the combined high-grade domain.

A block model was constructed, constrained by the interpreted mineralised envelopes. A parent cell size of 5 m(E) x 5 m(N) x 5 m(RL) was adopted with standard sub-celling to 1 m(E) x 1 m(N) x 1 m(RL) to maintain the volumetric resolution of the mineralised lenses.

Grades for all ten elements were interpolated into the empty block model using the Ordinary Kriging method and a "parent block estimation" technique, i.e. all sub-cells within a parent cell were populated with the same grade. The OK process was performed at different search radii until all cells were interpolated. The search radii were determined by means of the evaluation of the semi-variogram parameters, which determined the kriging weights to be applied to samples at specified distances.

Block grades were validated both visually and statistically and all modelling was completed using Micromine software.

RUPICE CLASSIFICATION AND REPORTING

Clause 20 of the JORC (2012) Code requires that all reports of Mineral Resources must have reasonable prospects for eventual economic extraction, regardless of the classification of the resource. The Rupice deposit has reasonable prospects for eventual economic extraction on the following basis:

· Metallurgical test work by WAI has confirmed that the Rupice mineralisation is amenable to flotation processes;

· Preliminary metallurgical test work has confirmed that a barite concentrate should meet API specifications;

· A marketing study by a leading consultant in the field of barite confirmed that there is an opportunity to enter the market as a niche player levering any logistical advantages for a supplier in Bosnia & Herzegovina;

· The cut-off grade adopted for reporting (50g/t Ag equivalent) is considered reasonable given the Mineral Resource will most likely be exploited by underground mining methods and processed using flotation techniques.

The Scoping Study demonstrated that the deposit potentially has a positive net present value (NPV), and that the mineralised zone is potentially mineable using underground methods under the given economic scenario and parameters. CSA Global did not estimate Ore Reserves for the deposit. The deposit appears to have reasonable prospects of eventual economic extraction under a realistic set of criteria.

The Rupice Mineral Resource has been classified based on the guidelines specified in the JORC Code. The classification level is based upon an assessment of geological understanding of the deposit, geological and mineralisation continuity, drill hole spacing, QC results, search and interpolation parameters and an analysis of available density information. The MRE is reported by classification in Table 1, above a cut-off grade of 50g/t silver equivalent.

RECENT DRILL RESULTS

The Company is pleased to announce that it has received assay results from BR-10-20, BR-11-20, BR-12-20, BR-13-20, BR-17-20, BR-18-20, BR-20-20, BR-22-20 and BR-23-20, which have been incorporated into the recent Mineral Resource estimate.

Drillhole BR-20-20 (Figure 7) is the most southern drill hole drilled at Rupice to date. It was designed to test the extension of the Rupice orebody along strike to the southeast. The results from this hole have shown that the massive sulphide mineralisation continues southwards. Follow up drilling will test the continuity of mineralisation to the south, up-dip and down-dip from this intercept.

Drillholes BR-11-20, BR-12-20 (Figure 5) and BR-13-20 (Figure 5) successfully intersected mineralisation. They were designed to test the shallower part of the deposit to the south-west, and to confirm historic drilling results.

BR-17-20 and BR-18-20 (Figure 6) were designed to test the up-dip continuation of the known massive sulphide mineralisation in the central part of the deposit. They were also designed to test potential massive sulphide mineralisation in the footwall of the main mineralised body. Higher grade mineralisation was intercepted in two shorter intervals up-dip from the main mineralised body in BR-17-20, followed by a wider low-grade halo in the footwall of the deposit.

For BR-18-20, massive sulphide mineralisation was encountered up-dip from the main mineralised body, confirming continuity of the known mineralised zone.

Drill hole BR-14-20 in the northern part Rupice, and BR-15-20 in the south-western part of Rupice were also drilled. These were designed as investigate continuity of mineralised zone. Mineralisation was encountered, however of a weaker tenor.

Mineralisation still remains open down-dip and to the south and north, into previously untested ground outside of the current ore block model.

The mineralised intervals of the drill holes are shown in Table 2 with further information in Appendix 1. 

Table 2 - Drill Hole Results for the Reported Holes; Lead or Zinc greater than 1%,

Drilling at Jurasevac-Brestic was also conducted, designed to test the gravity anomaly defined after data reprocessing in March this year. Five diamond drill holes targeted the main gravity high, and massive and patchy pyrite, and weak lead, zinc and barite mineralisation was encountered. Drilling proved the validity of the gravity anomaly, however, economic mineralisation has not been encountered so far.

Exploration and hydrological drilling works continue on the Vares Silver Project with two rigs testing the mineralisation further southward at Rupice, and one at Veovaca drilling geotechnical and hydrological holes. More drillholes are planned for testing the extensions of Rupice deposit to the south and down-dip.

Authorised by, and for further information please contact: Paul CroninManaging Director & CEOinfo@adriaticmetals.com

** ENDS **

Market Abuse Regulation Disclosure

The information contained within this announcement is deemed by Adriatic (LEI: 549300OHAH2GL1DP0L61) to constitute inside ‎information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. The person ‎responsible for arranging and authorising the release of this announcement on behalf of Adriatic is Paul Cronin, Managing Director and CEO.

For further information please visit www.adriaticmetals.com; @AdriaticMetals on Twitter; or contact:

About Adriatic Metals

Adriatic Metals Plc (ASX:ADT, LON:ADT1) is a precious and base metals explorer and developer that owns the world-class advanced polymetallic Vares project in Bosnia & Herzegovina.

The Vares project consists of two high-grade polymetallic deposits, located at Rupice and Veovaca. Bosnia & Herzegovina is well-positioned in central Europe and boasts a strong mining history, pro-mining environment, highly-skilled workforce as well as extensive existing infrastructure and logistics.

The Vares project's captivating economics and impressive resource inventory have attracted Adriatic's highly experienced team, which is expediting exploration efforts to expand the current JORC resource. Results of a recent scoping study indicate an NPV8 of US$917 million and IRR of 107%. Leveraging its first-mover advantage, Adriatic is rapidly advancing the project into the development phase and through to production.

There have been no material adverse changes in the assumptions underpinning the forecast financial information or material assumptions and technical parameters underpinning the Maiden Resource Estimate since the original relevant market announcements which continue to apply.

COMPETENT PERSONS REPORT

The information in this report that relates to the Mineral Resources is based on and fairly represents information and supporting information compiled by Dmitry Pertel. Dmitry Pertel is a full-time employee of CSA Global and is a Member of the Australian Institute of Geoscientists. Dmitry Pertel has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). Dmitry Pertel consents to the disclosure of information in this report in the form and context in which it appears.

The information in this report which relates to Exploration Results is based on and fairly represents information and supporting information compiled by Mr Phillip Fox, who is a member of the Australian Institute of Geoscientists (AIG). Mr Fox is a consultant to Adriatic Metals Plc, and has sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Fox consents to the inclusion in this report of the matters based on that information in the form and context in which it appears.

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 of 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 price and foreign 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 prospects, properties and business strategy. Our audience is cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof, and we do 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.

Table 3 - Collar Information for reported drill holes (MGI Balkans Z6)

Table 4 - Assay Results for reported drill holes