Adriatic tables stunning NPV for Bosnian multi-metals project

Adriatic Metals has tabled a lovely set of numbers for its poly-metallic Vareš project in Bosnia with the ASX listed company saying that its recently released scoping study shows a stunning, AUD$1.37b net present value for the zinc-silver-lead project.

Amazingly, payback of the AUD$260m CAPEX figure is expected to be just 8 months after commencement of processing with the project showing a very respectable post-tax internal rate of return of 107.4%.

The lower-level study assumes that production will kick off around Q2 in 2022 with production from an underground mine at the Rupice deposit followed by an open-pit mine at Veovača.

The Veovača prospect is an historical zinc-lead-barite-silver mine and Rupice is a high-grade zinc led polymetallic deposit. Adriatic is positively spoilt for choice in terms of what its key metal commodity might be.

The mining assumptions show an average of 715,000 tonnes per year of material will be pulled from Rupice over ten years and 679,000 tonnes per year will be excavated from Veovača over about seven years.

The processing plant will be capable of handling material from both mines and will deliver three metal concentrates – lead/copper, zinc and barite with some additional financial heavy lifting taking place courtesy of some solid gold and silver credits.

Conceptually, the production schedule allows for 800,000 tonnes per annum of material to be churned through the new processing plant, commencing with the underground Rupice ore, to exploit the higher metal grades early in the mine’s life.

Other payable metals identified in the scoping study, that will be potentially produced from the mine, total nearly 225,000 ounces of gold and 43,132,000 ounces of silver.

Paul Cronin, Adriatic’s Managing Director and co-founder said: “This Scoping Study is the result of months of work by CSA Global and the team at Adriatic, evaluating several possible options in sufficient detail to define a project path that maximises economics, minimises environmental and social impacts, and offers a lasting legacy to the people in our local Vareš community who are looking for a generational transformation to the local town and its inhabitants.”

“Whilst we are pleased with the outcomes of this study, we will continue to expand our resource and increase our footprint in this exciting, and yet under-explored region of Europe.”

The Rupice and Veovača projects are located approximately 9 kilometres west-north-west and 3.5 kilometres east respectively from the town of Vareš and 35 kilometres to the north-north-west of Bosnia’s capital city, Sarajevo.

Adriatic’s strategic objectives in Bosnia appear to be running smoothly now for this remarkable project. As the company now confidently moves into pre- and definitive feasibility study mode, it is well funded to make its next move, with an AUD$25 million capital raise completed in October.

No doubt Adriatic followers will be waiting with bated breath for the annual EBITDA and free cash numbers that should come in future studies and if this week’s numbers are anything to go by, they shouldn’t disappoint.

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