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Adriatic Metals PLC Developing A New Base And Precious Metals Project

Jordan Baird

Jordan Baird is the head ASR Wealth Advisers client services desk and has been with the organisation since 2017. He first started investing in his early years. While he believes that investors should leave no stone unturned he has a particular interest in trading based on broad macroeconomic trends along with specific analysis of innovative up-and-coming companies.

Adriatic Metals PLC (ASX: ADT) is an ASX-listed precious and base metals explorer and is developing the Vareš Project (100% interest) located in Bosnia & Herzegovina. The project comprises a historic open cut mine at Veovača and brownfield exploration at Rupice, an advanced proximal deposit which exhibits exceptionally high grades of base and precious metals. Adriatic Metals was listed on the ASX in May 2018 and has a market capitalisation of around $A290 million.

Adriatic Metals PLC -

What is Adriatic Metals project?

The Exploration Concession covers two main advanced polymetallic projects located near the town of Vareš, which is approximately 50km north by sealed road from Sarajevo, the capital city of Bosnia & Herzegovina. Both the Veovaca and Rupice Projects have had varying degrees of historical exploration and exploitation, and several prospects within the existing Exploration Concession and in the nearby region also indicate encouraging signs warranting further exploration.

Adriatic Metals released a scoping study assessing the potential viability of running an underground mining operation at Rupice followed by an open pit operation at Veovaca, with all mined material being centrally processed on the site of the derelict processing plant at Veovaca, which will be cleared for construction of a new processing plant. The project produces gold, silver, zinc, lead, copper and barite.

This results of this scoping study were released on 19 November 2019. The key findings are as follows:

  • Post tax net present value (using a discount rate of 8 per cent) of $US916.5 million. This produces a post-tax internal rate of return of 107.4 per cent.
  • Capital expenditure to develop the project is estimated at $US178.4 million. The post construction payback period is 8 months.
  • The life of the project is about 12 years with the expected cash flow heavily weighted in the early years of the project.

What did Adriatic Metals announce on 5 December 2019?

Adriatic Metals made two announcements on 5 December 2019. First, Adriatic Metals announced that Sandfire Resources Ltd (ASX: SFR), which owns a copper mine in Western Australia, has a 15.8% shareholding in Adriatic Metals. This shareholding has increased from 7.7% since at the time of Adriatic Metals listing on the ASX in May 2018. Market speculation is that Sandfire Resources may seek to takeover Adriatic Metals in time.

Second, Adriatic Metals announced positive exploration results which extends known mineralisation at Rupice towards the south. Paul Cronin, Adriatic’s Managing Director and CEO commented:

The latest drill results in the southern extensions of the Rupice deposit clearly demonstrate that the high-grade mineralisation continues outside our current Mineral Resource and south towards our Jurasevac-Brestic prospect a further 500m to the southeast. This is our deepest high-grade intercept to date at Rupice and given its location to the east of the current mineralisation, opens the deposit to re-interpretation of the structural controls that have led to the thickest and highest grade results on the eastern down dip extent.

This is a positive for the project discussed above.

What was the market’s reaction to these announcements?

Adriatic Metals’ share price increased by over 20% to around $1.60 on 5 November 2019. The share price has remained steady at around $1.60 on 6 November 2019. This compares with the Initial Public Offer price in May 2018 of $0.20.




This article has been prepared by the Australian Stock Report Pty Ltd (AFSL: 301 682. ABN: 94 106 863 978)

(“ASR”). ASR is part of Amalgamated Australian Investment Group Limited (AAIG) (ABN: 81 140 208 288 Level 13, 130 Pitt Street, Sydney NSW 2000).

This article is provided for informational purpose only and does not purport to contain all matters relevant to any particular investment or financial instrument. Any market commentary in this communication is not intended to constitute “research” as defined by applicable regulations. Whilst information published on or accessed via this website is believed to be reliable, as far as permitted by law we make no representations as to its ongoing availability, accuracy or completeness. Any quotes or prices used herein are current at the time of preparation. This document and its contents are proprietary information and products of our firm and may not be reproduced or otherwise disseminated in whole or in part without our written consent unless required to by judicial or administrative proceeding. The ultimate decision to proceed with any transaction rests solely with you. We are not acting as your advisor in relation to any information contained herein. Any projections are estimates only and may not be realised in the future.

ASR has no position in any of the stocks mentioned.


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