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- Adriatic Metals (ADT) entered a trading halt on October 13 ahead of a US$244.5 million (A$333.2 million) financing package to develop the Vares silver project in Bosnia
- The package is made up of US$142.5 million (A$194.2 million in debt financing through a term sheet with Orion Resource Partners
- The other portion is a US$102 million (A$139 million) equity raise which includes a placing and Orion subscribing for US$50 million (A$68.1 million) worth of shares
- The placement portion has now been completed and has raised US$52 million (£38 million)
- Fellow ASX-lister, Sandfire Resources (SFR) has also sold its 16 per cent shareholding in the company claiming it was an excellent investment but it is no longer a strategic one
- In its first day back in trade, ADT’s shares rounded off Thursday’s session 16.5 per cent in the red to close at $2.78
Adriatic Metals (ADT) entered a trading halt on Wednesday ahead of a financing package which also includes an equity raise.
In its trading halt announcement, the materials stock disclosed the US$244.5 million (A$333.2 million) package is for its wholly owned Vares silver project in Bosnia.
The project financing package is made up of US$142.5 million (A$194.2 million) in debt financing and a US$102 million (A$139 million) equity raise.
Adriatic entered a term sheet with Orion Resource Partners for the debt financing, which comprises a senior secured debt of US$120 million (A$163.5 million) and the copper stream of US$22.5 million (A$30.67 million).
Completing these remains conditional upon ongoing due diligence and the parties entering definitive legal documents which is expected in the current quarter. However the expected terms of the senior secured debt and copper stream may change as a result of negotiations and further due diligence.
The equity raise is made up of a conditional placing to raise up to US$52 million (A$70.2 million) which issued about 25.16 million new ordinary shares to institutional investors at 1.3355 pence (A$2.48).
The placing, which has now been completed, was done through an accelerated bookbuild process which will be launched immediately to eligible institutional investors.
The other US$50 million (A$68.1 million) will be raised through an equity subscription by Orion, which has agreed to subscribe for just shy of 24.2 million shares.
Adriatic CEO Paul Cronin was pleased with the financing and welcomed Orion as a new partner in the Vares silver project.
“The announcement of the proposed project finance package is a significant milestone, demonstrating the extent of support globally for new investments in mining in the Balkans, and Bosnia and Herzegovina in particular,” he said.
“This outcome is a positive reflection on the team we have built at Adriatic in its short history. Over the past 12 months they have delivered several critical outcomes that have culminated in the success we have today.”
The financing follows a definitive feasibility study (DFS) for the Vares silver project which outlined improved economics compared to the pre-feasibility study.
Specifically, around US$168.2 million (A$229.2 million) will cover initial construction costs for the Vares project, US$20 million (A$27.3 million) will cover exploration, and the remaining funds will cover working capital and other costs.
In addition to the placement, Sandfire Resources (SFR) has sold 34,600,780 existing CHESS Depositary Interests (CDIs) representing its entire 16 per cent holding in Adriatic Metals.
This sale will aggregate $97 million and Adriatic won’t receive any proceeds from the transaction.
Sandfire Managing Director and CEO Karl Simich said it was an excellent investment but the company is now focused on the MATSA operation in Spain and the growth assets in the Kalahari copper belt.
Mr Cronin has also sold three million existing CDIs representing ordinary shares in the capital of ADT at the placement price which represented 12.8 per cent of his fully diluted holding.
The company will continue to progress the Orion debt financing facility which is aimed to be completed this quarter.
In its first day back in trade, ADT’s shares rounded off Thursday’s session 16.5 per cent in the red to close at $2.78.
