How DPM’s $1.3B Adriatic Buyout Unlocks $1.6B Vareš Mine Value

Deal Closure and Consideration

Dundee Precious Metals Inc. (DPM) has officially completed its recommended acquisition of Adriatic Metals Plc (Adriatic) following the effective date of a UK scheme of arrangement on September 3, 2025. Under the terms of the transaction, DPM acquired all issued securities of Adriatic, with Adriatic shareholders receiving 0.1590 new DPM shares and 93 pence in cash for each Adriatic share held.

The acquisition values Adriatic at approximately USD 1.3 billion, reflecting a significant premium to its prior trading prices on the London and Australian stock exchanges. The transaction was supported by irrevocable undertakings representing roughly 37.36% of Adriatic’s issued share capital, underscoring strong shareholder backing.

Vareš Silver Operation – The Crown Jewel

Central to the deal is the Vareš Silver Operation in Bosnia and Herzegovina, Adriatic’s flagship asset. A comprehensive technical valuation conducted by SRK Consulting places the net present value (NPV) of the mine at USD 1.6 billion using a 5% discount rate. The mine boasts a 15-year life with robust production forecasts averaging 168,000 ounces of gold equivalent annually at competitive all-in sustaining costs.

The valuation reflects detailed assessments of mineral resources and reserves, mining plans, processing capabilities, and environmental considerations. SRK’s report highlights both the opportunities and risks associated with the operation, including permitting challenges and infrastructure upgrades, which DPM plans to address as part of its integration strategy.

Strategic Integration and Market Listings

Post-acquisition, DPM intends to integrate Adriatic’s operations into its existing portfolio, which includes producing mines and development projects across Bulgaria, Serbia, and Ecuador. The combined entity is expected to benefit from enhanced scale, diversified production, and improved financial flexibility.

In addition to the Toronto Stock Exchange listing of the enlarged group, DPM is pursuing a Foreign Exempt Listing on the Australian Securities Exchange (ASX) for its CHESS Depositary Interests (CDIs), which would facilitate trading for former Adriatic shareholders in Australia. However, this ASX approval is not guaranteed and remains a key milestone to watch.

Regulatory and Shareholder Approvals

The acquisition was subject to multiple regulatory approvals, including clearance from the Bosnian Competition Council, as well as shareholder approvals in the UK, Canada, and Australia. Adriatic’s shares will be delisted from the London Stock Exchange and ASX following the scheme’s effectiveness, marking the end of Adriatic as a standalone listed entity.

Shareholder meetings held in August 2025 saw overwhelming support for the scheme, with proxy votes and irrevocable undertakings playing a critical role in securing the necessary majorities.

Financial and Legal Considerations

The transaction is financed from DPM’s existing cash resources, with no new debt expected. Both parties engaged leading financial and legal advisors to ensure fairness and regulatory compliance. The deal includes provisions for a Mix and Match Facility, allowing shareholders to elect varying proportions of cash and shares as consideration, subject to scaling based on overall elections.

Tax implications vary by jurisdiction, with detailed guidance provided for UK, Australian, Canadian, and US shareholders. Investors are advised to seek independent professional advice tailored to their circumstances.