Barry FitzGerald: How Strickland can be the next Balkan multi-bagger

“Garimpeiro” columnist Barry FitzGerald has covered the resources industry for 35 years. Now he’s sharing the benefits of his experience with Stockhead readers.

Western Balkans specialist Adriatic Metals is no longer on the ASX after the conclusion of the $US1.25 billion takeover of the company by Canada’s Dundee Precious Metals.

But local exposure to Adriatic’s Vares silver-rich mine in Bosnia will still be possible when Dundee begins to trade on the ASX under its new name of DPM Metals later this month.

Adriatic was a real success story.

The London-listed company joined the ASX in 2018 and started out with a market cap of about $25m. So at its $US1.25 billion ($A1.91 billion) take-out, it was a 76-bagger in the space of seven years.

Vares is being ramped up to be a 20Moz silver equivalent producer. The silver price has been on a tear recently and now sits at more than $US40/oz, or 24% higher than its average for the June half of $US33/oz.

That means DPM’s takeover of Adriatic and its Vares mine has been as sweetly timed as these things can be.

Vares sits on the western end of the fabled Tethyan belt which has a long history of yielding major base and precious metals deposits. It’s why after the Western Balkan troubles of the 1990s, all of the major mining companies – and a once little thing called Adriatic – have been active in the region.

The next Balkan bagger

All that is by way of background to Garimpeiro’s main interest today in another Western Balkans specialist – Strickland Metals (ASX:STK). It was trading mid-week at 14c for a market cap of $316 million.

Strickland wants to be the next Adriatic. Its launchpad is its Rogozna gold and base metals project in Bosnia’s neighbour Serbia, which it acquired in April 2024 for the knockdown price of $37 million (satisfied mainly in shares) from private equity interests.

Rogozna had a 5.4Moz gold equivalent resource (it comes with copper, silver, lead and zinc) on acquisition which has since grown to 7.4Moz gold equivalent across a number of deposits, the main one at this stage being the 5.3Moz gold equivalent Shanac.

The company is now about mid-way through a 25,000m drilling program of the skarn-style deposits as well as testing some potentially very big porphyry copper-gold targets. Newsflow from this one will be as good as it gets in coming months.

Apart from anything else, a resource update for Shanac is planned for late this year, as is a maiden resource estimate for the gold-dominant Gradina deposit. Drilling will also scope out the potential of the recent Kotlovi discovery (277.3m at 1.3g/t gold equivalent from 337.4m).

Garimpeiro reckons Rogozna is shaping up as a multi-decade mining proposition with the multiple deposits discovered to date and those to come giving Strickland lots of optionality when it comes to getting Rogozna into production.

Big brother

The question is will Strickland have to take in a partner to fund a large-scale development … or will it be taken over first?

Strickland boss Paul L’Herpiniere was asked on a recent investor webinar just what the end game could be.

“I do get asked a lot if Strickland is ever going to mine in Serbia and the answer to that is we are doing everything we can to end up on that path,” he said.

“We’re trying to emulate what Adriatic Metals has done, but I would be very surprised if someone doesn’t come along in the meantime and either acquire Strickland, or at the very least, partner with us to develop this project to its ultimate potential.”

As it is, China’s fast-growing Zijin – now the fourth biggest miner in  the world – has already flagged it could well be the partner for Rogozna, or the outright owner of Strickland for that matter.

That’s because it took a placement of shares in April to give it 2.4% of Strickland and has since increased the stake to 3.3%.

Zijin knows all about mining in Serbia as its global portfolio includes two copper/gold operations in the country that produced about 300,000t of copper and 250,000oz of gold in 2024.

Asked why the placement was made to Zijin at a time when Strickland was cashed up from the sale of its WA gold assets, L’Herpiniere said investors had to think about the pathway for Rogozna to maximise its value.

“It involves a partner at some stage. And what better partner to have than the world’s fourth largest mining company, which is the biggest mining company in the country.”

The views, information, or opinions expressed in this article are solely those of the columnist and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.