Adriatic Metals reckons its silver projects are in prime position next-door to EU market
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The Eastern-European-based silver player Adriatic Metals (ASX:ADT) reckons that Bosnia and Herzegovina and Serbia are the perfect jurisdictions to get a foot in the EU market.
And with silver demand for EVs set to jump they’re certainly well placed to get their product to market.
Plus, it doesn’t hurt that the Tethyan Belt hosts several Tier-1 deposits which have attracted significant investment from majors like Rio Tinto (ASX:RIO), Canada’s Dundee Precious Metals, and China’s Zijin Mining.
As another bonus, the company’s Vares project (Bosnia) and Raska project (Serbia) are both brownfields so they already have solid infrastructure and supply chains connecting to European smelters and the Adriatic ports.
Adriatic managing director and CEO Paul Cronin said the attraction of the project was its location and exploration upside.
“[We] looked at some of the changes that have been happening in raw materials supply globally over the last few years where we’ve seen policies of governments and in particular the European Union looking to bolster their own supply chain,” he said.
“So, we started looking around for projects that were in Europe, but not necessarily within the EU boundaries that we could potentially bring into production.
“And the first asset that we found was here in Bosnia which was a brownfield asset that had been in production previously, but it also has some exploration upside.
“And it’s the exploration upside that’s really given rise to the success of the project in that we’ve identified a very high-grade resource at Rupice which has been the focus of our definitive feasibility study.”
Cronin said the recently released DFS for Vares improved economics from the PFS in 2020, with the capital cost at US$168 million with a payback period of 0.7 years and an all-in-sustaining-cost of US$7.3/silver equivalent ounces.
“The DFS highlights that this is a pretty substantial project,” he said.
“Not only is it incredibly profitable, but it really is able to be built and have the debt paid off in a in a very, very short period of time – in less than a year.
“That creates a great platform for us, in that it’ll mean that our free cash flow from 2024 can be utilised to development of our assets in Serbia, as well as potentially looking at other acquisitions, both in the Balkans and in other areas of Europe.
“But Adriatic is very much European focused.”
The company is now pushing forward with detailed engineering and financing and looking to start construction around mid-October.
Plus, Adriatic has drilling underway at its Serbian project, aiming to increase tonnage.
Cronin emphasised that what sets the company apart from its silver peers is the approach it’s taken to the environment and community around the project.
“We’ve always taken the view that to be successful in Europe, you’ve got to recognise that Europe is a continent that’s full of small communities,” he said.
“You never have to go more than 20km to find another village or a town – and you’ve got to really understand the aspirations of those communities in trying to design your project to integrate into those aspirations.
“And I think the work that we’ve done here in Bosnia in particular has been exemplary, in that we’ve looked at a whole variety of environmental issues, whether they relate to future operations, or whether they relate to historical operations that were here back in the 1980s.”
Adriatic is kicking off a 60-day public consultation period with the local community shortly and is particularly looking at providing economic opportunities, and ancillary industries it can create around the project to provide ongoing economic stability.