British explorer Adriatic Metals is looking to Australian investors for cash as it steps up its hunt for zinc and other minerals in Bosnia.

The explorer has launched an initial public offer to raise between $8 million and $10 million ahead of an ASX listing scheduled for late April.

Adriatic is exploring its Veovaca and Rupice zinc polymetallic projects in Bosnia, where recent drilling has delivered zinc equivalent grades of as high as 30 per cent.

“The recent drilling campaign has confirmed exceptionally high grades,” said Adam Santa Maria, managing director of Discovery Capital Partners and lead manager for the IPO.

Adriatic’s short-term goal is to expand the current resource of 4.4 million tonnes at 4.8 per cent zinc equivalent at Veovaca and complete an infill drilling program at the Rupice deposit.

There have been very few zinc IPOs in the past few years, with those making their debut on the Australian bourse mostly in the gold or battery metals sectors.

However, analysts are bullish on zinc following the closure of a number of mines in Australia and Ireland and the cutting of production at others.

Zinc, copper and gold explorer Tando Resources (ASX:TNO) launched a successful IPO in November, doubling its issue price after listing on the ASX.

The metal, which is used to galvanise steel, is also emerging as a potential commodity of interest in the energy storage thematic that is tipped to drive demand.

Sydney University researchers have come up with a process to make a zinc air battery that could store solar power and discharge it at peak times.


Adriatic decided to pursue an ASX listing over an AIM listing for two reasons.

“There’s been some changes to the financial services regulations here in the UK, which means that AIM IPOs have suddenly become very expensive,” non-executive director Paul Cronin told Stockhead from Gloucestershire.

“The other [reason] is London as a market still isn’t really embracing exploration stage companies. It tends to prefer things that are either in production or in development and going into production.

“When we went around Australia and spoke to some of the brokers, the level of enthusiasm for the company and the projects was very good. So it was a bit of a no brainer really.”

Zinc plays pique investor interest

Adriatic has been the most “well-supported” IPO that Discovery Capital has ever run, with the offer receiving an “overwhelming level” of institutional and corporate interest in Adriatic’s projects, even before officially launching, Mr Santa Maria told Stockhead.

“The institutional support has been fantastic with some of the more traditional funds on the East Coast coming on board even without having the benefit of looking at the prospectus because they reckon it is such a good opportunity,” he said.

Adriatic’s projects are near Vareš, 50km north from Sarajevo, the capital of Bosnia and Herzegovina

“Similarly, in Asia as well we’ve had a really good response out of Hong Kong and Singapore. We’ve had a strategic corporate come in for a pretty sizeable chunk of the bookbuild, which is a good validation of the company’s prospects.”

Bosnia opening up to foreign investment

The previously war torn European country is now looking to attract greater foreign investment and become part of the European Union.

However, since the end of the civil war in the early 1990s and the signing of the Dayton peace agreement in 1995 there has been very little modern exploration undertaken.

“I think the government of Bosnia is very keen to see more companies come in and do mineral exploration as well as other investments,” Mr Cronin said.

“We’re seeing a lot of companies, particularly central European economies – Germany, France, Austria – starting to make significant investments in Bosnia because the labour rates are significantly lower than the rest of Europe.”

Adriatic has budgeted around $700,000 to pick up more ground in Bosnia this year.

Adriatic’s IPO opens March 15.


This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.