Adriatic secures penultimate Vares development approval

Aspiring Balkans polymetallic project developer, Adriatic Metals has locked in another of the key regulatory approvals for its significant new Vares silver-zinc-lead project in Bosnia and Herzegovina that puts it on the verge of a mining permit all-clear. The dual ASX and London-listed company says it has just been granted an urban planning permit for the cornerstone Rupice underground deposit from Bosnia and Herzegovina’s Federal Ministry of Spatial Planning.

According to Adriatic, the urban planning permit or “UPP” approval reflects the strong support for its flagship Vares project from government and local authorities and stakeholders, who were actively engaged during the application process.

Adriatic Metals Managing Director, Paul Cronin said: “The award of the UPP represents the last major step before obtaining the Rupice exploitation permit, which I remain confident will be received within the coming weeks.”

“Since Adriatic’s incorporation in March 2017, the company has worked very hard with the local community and the various levels of government to work through the project permitting process. This award demonstrates the level of expertise in our team, as well as the support and co-operation from the local community and government in building the Vares project.”

A definitive feasibility study on the proposed Vares mining and processing operation is scheduled to be released in the September quarter this year.

The UK-based, $545 million market-cap company says receiving the UPP for the Rupice deposit represents the penultimate milestone on its way to completing all the Vares project’s permitting requirements.

Latest published probable ore reserves for Vares, which incorporates the Rupice underground and Veovaca open-pit deposits, stand at 11.12 million tonnes at average grades of 149.6 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.

Veovaca lies about 12km east-south-east of Rupice as the crow flies.

Contained metal content totals corresponding to the Vares reserves come in at 53.5 million ounces of silver, 460,000 ounces of gold, 470,000t of zinc, 300,000t of lead and 50,000t of copper.

Rupice speaks for most of Vares’ combined probable ore reserves, with 8.41 million tonnes at average grades of 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 for 48.4 million ounces of silver, 450,000 ounces of gold, 420,000t of zinc, 270,000t of lead and 50,000t of copper.

Adriatic has already secured the UPP and exploitation or mining permit for the Veovaca deposit, leaving only the Rupice exploitation permit before it can kick off the main construction phase of the proposed US$173 million project development – slated for the second half of this year.

The speed of permitting for the two deposits varied due to Veovaca being a brownfields open-pit deposit and Rupice a greenfields underground deposit.

Forecasts in Adriatic’s pre-feasibility study on Vares last year included a cracking EBITDA averaging about US$251 million per annum for the first five years of metal concentrate production, a net present value for the project of US$1.04 billion and an internal rate of return of 113 per cent.

According to the PFS, the reserves support an initial 14-year mine life for Vares.

Annual concentrate output for the first five years of operations is expected to average 15.3 million ounces silver-equivalent based on plant ore throughput of 800,000 tonnes per annum.

Average all-in sustaining costs for Vares have been estimated at $US120 per tonne milled and capital cost payback from production start-up at an impressive 1.2 years.

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