Adriatic clinches key Vares project mining approval

Dual ASX and London-listed aspiring Balkans polymetallic project developer, Adriatic Metals has cleared one of the final major regulatory approval hurdles taking it a step closer to starting construction at its advancing Vares silver-zinc-lead project in Bosnia and Herzegovina.

The UK-based company was granted the all-important exploitation permit for its Veovaca open-cut mining, processing plant and associated infrastructure areas from the country’s Federal Ministry for Energy, Mining and Industry.

Receipt of the permit now paves the way for Adriatic to put the finishing touches on the detailed engineering work in relation to the project’s Veovaca open-pit mine, flotation plant and tailings storage facility ahead of the planned commencement of construction in the September quarter this year.

Adriatic is also currently progressing a definitive feasibility study on the Vares project.

It says an exploitation or mining permit is still required for the area covering the proposed development of the Rupice underground mine as part of the overall Vares development.

The company’s pre-feasibility study, or “PFS” completed last year ascribed a total pre-production CAPEX estimate of US$173 million to the development of Vares.

Adriatic hopes to secure the Rupice environmental and exploitation ticks of approval before the end of the June quarter this year, possibly earlier.

Navigating the regulatory process and reaching the Veovaca exploitation permit milestone was no mean feat by Adriatic during a global pandemic.

Adriatic Metals Managing Director, Paul Cronin said: “This is a major permitting achievement that has been realised through close co-operation between Adriatic’s Bosnia and Herzegovina team and the significant number of governmental and commercial stakeholders involved in the process, as well as the local community in Vares. The team worked tirelessly to compile all the required information for these submissions under difficult circumstances.”

Adriatic’s Vares PFS contained a head-turning EBITDA prediction of US$251 million per annum for the first five years of forecast metal concentrate production. It also included a post-tax net present value for the project of US$1.04 billion and an internal rate of return of 113 per cent.

Probable ore reserves for Vares – across the Rupice and Veovaca deposits – currently stand at 11.13 million tonnes at an average grade of 150 grams per tonne silver, 1.28 g/t gold, 4.22 per cent zinc, 2.67 per cent lead and 0.43 per cent copper. Of the combined reserves, Rupice accounts for 8.41 million tonnes going 179 g/t silver, 1.66 g/t gold, 5.04 per cent zinc, 3.18 per cent lead and 0.55 per cent copper.

According to the PFS, project development capital payback period has been estimated at a little over a year and the total reserves are expected to support mining and processing operations at Vares for an initial life of mine of 14 years.

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