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- Precious and base metals explorer Adriatic Metals (ADT) has reported some solid results from a feasibility study (PFS) of its Vares silver project today
- Some of the key metrics outlined in the study include a probable ore reserve of 11.1 million tonnes over a 14-year mine life
- Adriatic also highlighted a net present value (NPV) of just over US$1 billion (roughly A$1.45 billion) for the project
- The company is expecting Vares to have all-in sustaining costs (AISC) of US$120 per tonne (around A$168 per tonne) and revenue of US$296.3 per tonne (around A$415 per tonne)
- Adriatic says the results are so positive it will immediately begin work on a definitive feasibility study for the project
- Interestingly, however, it seems the market was expecting more, with Adriatic shares down over seven per cent this afternoon and worth $2.20 each
Precious and base metals explorer Adriatic Metals (ADT) has reported some solid results from a feasibility study (PFS) of its Vares silver project today.
The project, which is in Bosnia and Herzegovina, now has a probable ore reserve of 11.1 million tonnes of ore over a 14-year mine life. On top of this, Adriatic has highlighted a post-tax net present value (NPV) of just over US$1 billion (around A$1.45 billion) for the project, with an internal rate of return of 113 per cent.
Moreover, Vares has pre-production capital of US$173 million (around A$242 million) and average earnings before interest, tax, depreciation, and amortisation (EBITDA) of US$251 million (roughly A$352 million) for the first five years of the project’s life. With this in mind, Adriatic is predicting it will only take 1.2 years from the first production to pay back the cost of development.
Adriatic Managing Director Paul Cronin said today’s PFS results are the culmination of hard work by the Adriatic team in the face of a difficult year.
“Despite COVID-19 hampering efforts of mining companies around the globe, I am pleased that we are able to deliver a hugely positive PFS, with improved economics in comparison to our 2019 Scoping Study, thus showing that Vares is indeed a world-class project,” Paul said.
Other important metrics outlined in the PFS include all-in sustaining costs (AISC) of US$120 per tonne (around A$168 per tonne) and revenue of US$296.3 per tonne (around A$415 per tonne).
Adriatic said based on the positive results from today’s PFS, the company plans to immediately begin working on a definitive feasibility study (DFS) for Vares.
The Vares project
The project is centred around the namesake town of Vares in Bosnia and Herzegovina.
The project comprises two main prospects dubbed the Veovaca and Rupice deposits, which have had varying degrees of historical exploration and exploitation completed.
Adriatic, however, is the first company to take on any exploration work in the area since the 1980s.
The Vares project is prospective for several metals including gold, silver, zinc, and pyrite.
Interestingly, despite Adriatic’s confidence in today’s PFS results, it seems perhaps the market was expecting more.
Shares in Adriatic are currently down by 7.56 per cent and worth $2.20 each at 1:23 pm AEDT. The company has a market cap of $447.44 million.
