Adriatic Valued at $1.32B as DPM Offers 0.159 Shares Plus 93p Cash Per Share

A Strategic Acquisition in Precious Metals

Dundee Precious Metals Inc. (DPM), a Canadian-based mid-tier precious metals producer, has announced a recommended acquisition of Adriatic Metals Plc (Adriatic), a UK-listed company with a significant presence in Bosnia and Herzegovina. The transaction, structured as a scheme of arrangement, values Adriatic at approximately USD 1.322 billion, reflecting a premium of more than 50% to recent share prices on both the London Stock Exchange (LSE) and the Australian Securities Exchange (ASX).

The offer to Adriatic shareholders consists of 0.1590 new DPM shares plus 93 pence in cash for each Adriatic share held. This mix of cash and equity consideration provides shareholders with immediate value while allowing participation in the future growth of the combined group.

Vareš Silver Operation, The Crown Jewel

Central to the acquisition is Adriatic’s flagship asset, the Vareš Silver Operation in Bosnia and Herzegovina. This underground mine, which recently achieved commercial production, has been independently valued by SRK Consulting. Their technical valuation report, prepared under Canadian NI 43-101 standards, estimates a midpoint net present value (NPV) of USD 1.44 billion for the life of mine plan, underscoring the asset’s significant economic potential.

The Vareš operation is noted for its high-grade silver, zinc, lead, gold, and copper mineralization, with a projected 15-year mine life. DPM’s expertise in the Balkan region and its complementary asset portfolio in Bulgaria, Serbia, and Ecuador position it well to optimize and expand the value of Vareš.

Shareholder and Regulatory Pathway

The acquisition remains subject to customary conditions, including approval by Adriatic shareholders at a Court Meeting and General Meeting scheduled for 13 August 2025, as well as approval by DPM shareholders and regulatory clearances. Notably, clearance from the Bosnian Competition Council is required, with timing currently uncertain and potentially extending into late 2025.

Adriatic’s directors and significant shareholders, representing over 37% of the company’s issued capital, have provided irrevocable undertakings to vote in favor of the scheme. This strong support underpins the transaction’s likelihood of completion.

Post-Acquisition Integration and Outlook

Following completion, Adriatic will be delisted from the LSE and ASX, with DPM shares continuing to trade on the Toronto Stock Exchange (TSX). DPM intends to apply for a Foreign Exempt Listing on the ASX to facilitate trading of DPM CHESS Depositary Interests (CDIs) for former Adriatic CDI holders, although this approval is not guaranteed.

Operational integration plans include some executive departures and office consolidations, with a focus on retaining key talent and leveraging DPM’s regional expertise. The combined entity is expected to benefit from enhanced financial strength, operational synergies, and a diversified asset base, with accretive cash flow per share anticipated from the first year post-completion.

Optional Mix and Match Facility

Adriatic shareholders are offered a Mix and Match Facility allowing them to elect varying proportions of cash and shares in the consideration mix, subject to overall limits and offsetting elections by other shareholders. This flexibility caters to different investor preferences for liquidity and growth participation.