Adriatic Metals Launches A$80 Million Placement to Accelerate Vares Expansion

Adriatic Metals Accelerates Growth Strategy

Adriatic Metals PLC (ASX:ADT) has unveiled plans to raise approximately A$80 million (US$50 million) through a two-tranche institutional placement. The capital raise is designed to fast-track the expansion of its Vares Processing Plant in Bosnia and Herzegovina and enhance the company’s financial flexibility as it approaches commercial production.

The placement will issue around 20.5 million new CHESS Depositary Interests (CDIs) at an offer price of A$3.90 per CDI, representing a modest discount to recent trading prices. The first tranche, raising A$43.3 million, will be completed under existing placement capacity, while the second tranche, targeting A$36.7 million, awaits shareholder approval at a general meeting scheduled for March 2025.

Significant Capacity Expansion at Vares

The capital injection will primarily fund a 63% increase in the Vares Processing Plant’s nameplate capacity, from 0.8 million tonnes per annum (Mtpa) to 1.3 Mtpa. This expansion, supported by a recent Ausenco technical study, requires an estimated US$25 million in capital expenditure and involves securing critical long-lead items for milling and filtration circuits.

Coupled with increased mine production, the expansion is expected to enable Adriatic Metals to produce over 20 million ounces of silver equivalent annually. This output would place the Vares Silver Operation among the world’s largest primary silver producers, a significant milestone for the company and its investors.

Strategic Use of Proceeds and Shareholder Support

Beyond the plant expansion, the remaining proceeds will bolster the company’s balance sheet and provide working capital to support the ramp-up to nameplate production, anticipated in the second half of 2025. Adriatic currently holds A$73.6 million in cash, and the new funds will provide additional financial headroom during this critical growth phase.

Notably, major shareholders such as Helikon Investments, L1 Capital, and Paul Cronin, co-founder and former CEO, have expressed their intention to participate in the placement, signaling strong insider confidence in the company’s growth trajectory.

Market Positioning and Regulatory Developments

Adriatic is also pursuing a transfer of its ordinary shares on the London Stock Exchange from the Equity Shares (Transition) category to the Equity Shares (Commercial Companies) category. This move is expected to facilitate inclusion in the FTSE UK Index Series, potentially increasing visibility and attracting institutional investors.

The placement shares will rank pari passu with existing shares and are expected to commence trading on the ASX and the London Stock Exchange shortly after issuance, subject to regulatory approvals and shareholder consent for the second tranche.

Looking Ahead

With commercial production targeted for early 2025 and the plant expansion set to be completed by 2027, Adriatic Metals is positioning itself for a significant leap in production scale. The successful execution of this placement and subsequent expansion will be critical to realizing the company’s ambition to become a leading global silver producer.