Vares Silver Operation to Boost Capacity by 63% with A$80M Equity Raise

Equity Raising to Accelerate Growth

Adriatic Metals PLC (ASX: ADT) has unveiled plans for a significant A$80 million equity raising designed to expedite the expansion of its flagship Vares Silver Operation in Bosnia and Herzegovina. The raising, structured as a two-tranche institutional placement, aims to bolster the company’s balance sheet flexibility and fund critical capital expenditures for the processing plant expansion.

The placement comprises an initial tranche of approximately A$43.3 million, to be issued under the company’s existing placement capacity, and a second tranche of A$36.7 million subject to shareholder approval expected in March 2025. The offer price of A$3.90 per CHESS Depositary Interest (CDI) represents a 3.7% discount to the last traded price and a 7.3% discount to the five-day volume weighted average price, reflecting a balanced approach to attract institutional investors while minimizing dilution.

Operational Progress and Expansion Plans

The Vares Silver Operation is currently ramping up, having produced 1,335,000 ounces of silver equivalent (AgEq) in 2024. Commercial production is anticipated in the first quarter of 2025, with a nameplate capacity of 0.8 million tonnes per annum (Mtpa) expected in the second half of the year. Full-year guidance for 2025 forecasts ore milling between 625,000 and 675,000 tonnes and silver equivalent production of 12 to 13 million ounces.

Building on this momentum, Adriatic Metals has completed a technical study with Ausenco that outlines a pathway to increase processing capacity by 63% to 1.3Mtpa, requiring an estimated US$25 million in capital expenditure. The company plans to fast-track this expansion by ordering long-lead items for milling and filtration circuits in the first quarter of 2025, alongside ongoing studies to define the necessary mine production infrastructure upgrades.

Financial Position and Use of Proceeds

Proceeds from the equity raising, combined with the company’s existing cash reserves of approximately A$73.6 million, will provide a pro forma cash position of around A$153.6 million. These funds will primarily finance the processing plant expansion, support mine production expansion studies, and provide working capital to ensure a smooth transition to commercial production.

Adriatic Metals has also recently completed a US$25 million concentrate prepayment arrangement with Trafigura, further enhancing liquidity. Additionally, the company has rescheduled its first quarterly debt repayment to Orion from December 2024 to March 2025, providing additional financial flexibility during the ramp-up phase.

Strategic Positioning and Market Outlook

The Vares Silver Operation is positioned as one of Europe’s most significant primary silver mines, with a high-grade reserve base underpinning an 18-year mine life. The operation benefits from a supportive macro environment for silver and zinc, robust economics, and a strategic location with access to existing infrastructure in a historical mining district.

Adriatic Metals’ expansion plans aim to elevate Vares among the world’s largest primary silver producers, targeting over 20 million ounces of silver equivalent annual production by 2027. The company’s low-cost profile and multi-commodity exposure, including zinc, lead, gold, and copper by-products, provide a strong foundation amid rising demand for strategic metals.

Governance and Regional Significance

Operating in Bosnia and Herzegovina, Adriatic Metals enjoys strong local and governmental support, positioning the Vares project as one of the largest investments in the country. The company emphasizes sustainable mining practices aligned with international standards, reinforcing its social license to operate.

Leadership under CEO Laura Tyler and a board with deep mining and financial expertise further supports the company’s strategic execution and investor confidence.