Weather Delays Push Adriatic Metals’ Commercial Production to Q1 2025, Testing Ramp-Up Plans

Transition to Production Amid Weather Challenges

Adriatic Metals PLC has marked a significant milestone in its evolution from a development-stage miner to a metals producer, reporting a robust silver equivalent production of 934,000 ounces in the fourth quarter of 2024. This contributed to a total of 1.335 million ounces of silver equivalent produced for the full year, underscoring the operational progress at the Vares Silver Operation in Bosnia and Herzegovina.

However, the quarter was not without its challenges. Severe weather events, including devastating floods in October and heavy snowfall in late December, disrupted mining activities and delayed the commencement of commercial production. The company now anticipates achieving commercial production in the first quarter of 2025, a slight postponement from earlier expectations.

Operational Performance and Safety Improvements

During Q4, Adriatic milled 48,000 tonnes of ore with impressive grades of 234g/t silver, 2.6g/t gold, 7.5% zinc, and 4.8% lead. Despite the weather-induced interruptions, operations have stabilized and are running 24/7. The company also reported a notable improvement in safety metrics, with the Lost Time Injury Frequency Rate (LTIFR) dropping from 1.75 in Q3 to 0.45 in Q4, reflecting a strong commitment to workforce safety during ramp-up.

Strategic Expansion and Production Outlook

Looking ahead, Adriatic has set ambitious production guidance for 2025, targeting 625,000 to 675,000 tonnes of ore milled and 12 to 13 million ounces of silver equivalent produced. Production is expected to ramp up progressively, with a weighting towards the second half of the year as the operation approaches nameplate capacity.

Supporting this growth, a technical study by Ausenco has confirmed that the Vares Processing Plant can increase throughput from the current 0.8 million tonnes per annum to 1 million tonnes per annum without significant capital expenditure. Further expansion to 1.3 million tonnes per annum would require an estimated $25 million investment, a plan aligned with the recently updated Ore Reserve at Rupice Northwest of 13.8 million tonnes.

Financial Position and Capital Management

Financially, Adriatic Metals ended 2024 with a cash balance of $21 million and approximately $3 million in finished concentrate inventory. The company secured a $25 million concentrate prepayment facility with Trafigura, with funds received in January 2025, boosting the cash position to $46 million as of late January. The first debt repayment of approximately $19 million to Orion Mine Finance is scheduled for March 31, 2025, marking a key milestone in the company’s financial management.

Infrastructure and Development Progress

Infrastructure development continues apace, with construction advancing on the Veovaca Tailing Storage Facility, expected to be operational in Q1 2025. Despite regional transport disruptions caused by storm damage to the railway line, concentrate shipments have been maintained via road transport, with rail rehabilitation anticipated imminently.

Underground development totaled 675 meters in Q4, slightly below target due to weather and supply challenges, but the company completed 3 kilometers of development in 2024 overall. Grade control drilling has refined resource models, revealing promising fold thickening and higher-grade zones within the orebody, which bodes well for future resource upgrades.

Leadership and Corporate Governance

On the corporate front, Laura Tyler was confirmed as permanent Managing Director and CEO in October, bringing over 30 years of mining industry expertise. The board was also strengthened with new appointments, including Mirco Bardella as Non-Executive Director and Chair of the Audit and Risk Committee, and Sandra Bates as Senior Independent Director, reinforcing governance as the company scales operations.