Adriatic Metals Q2 2024 Update: Progress in Vares Silver Operation
ADT (ADT) Share Update July 2024 Monday 29th
Adriatic Metals Reports Significant Progress in Vares Silver Operation
Adriatic Metals PLC (ASX:ADT, LSE:ADT1, OTCQX:ADMLF) has provided an update on its development and construction activities at the Vares Silver Operation in Bosnia and Herzegovina for the second quarter of 2024.
Instant Summary:
- Production ramp-up continues with nameplate production expected in Q4 2024.
- 257 dry metric tonnes of silver-lead concentrate and 128 dmt of zinc concentrate produced in Q2 2024.
- Underground development increased by 31% compared to Q1 2024.
- Transition to owner-operator of Rupice Mine completed.
- Cash balance of $59.9 million as of 30 June 2024.
- Equity raising of $50 million and additional $25 million debt facility secured.
Operations & Production
Adriatic Metals has made significant strides in its Vares Silver Operation during Q2 2024. The production ramp-up is ongoing, with nameplate production expected by Q4 2024. The company produced 257 dry metric tonnes (dmt) of silver-lead concentrate and 128 dmt of zinc concentrate in Q2 2024. These concentrates have been sold and shipped to offtakers Trafigura and Transamine, respectively.
Underground development saw a 31% increase compared to Q1 2024. The company has successfully transitioned to being the owner-operator of the Rupice Mine, following an agreement with former mining contractor Nova Mining and Construction d.o.o. The operating license has been approved and transferred to Adriatic.
Financial Overview
As of 30 June 2024, Adriatic Metals held a cash balance of $59.9 million. An equity raising of $50 million took place on 28 May 2024, providing flexibility during the final stages of ramp-up to nameplate capacity and to finalize the termination payment payable to Nova. Additionally, an extra $25 million debt facility was secured from Orion Mine Finance, available to be drawn down between 1 September and 31 December 2024.
Post Q2 Developments
On 11 July 2024, a ruling by the Constitutional Court of Bosnia & Herzegovina delayed the felling of trees on the planned extended tailings storage facility at the Vares Processing Plant. However, no impact on production is anticipated as Adriatic will continue using the current tailings storage facility and is progressing alternative storage solutions.
Corporate Updates
Adriatic Metals welcomed two new members to its Board of Directors: Mr. Eric Rasmussen and Ms. Laura Tyler. Their expertise is expected to be invaluable as the company transitions to a mid-tier, polymetallic mining company.
The updates from Adriatic Metals indicate steady progress towards achieving nameplate production by Q4 2024. The successful production and sale of concentrates, along with the transition to owner-operator status, are positive signs for the company's operational stability. The financial moves, including equity raising and securing additional debt facility, provide a strong financial footing for the final stages of ramp-up. The ruling by the Constitutional Court poses a potential risk, but the company's proactive approach in identifying alternative tailings storage solutions mitigates immediate concerns.
Investor Reaction:
Analysts are likely to view the steady operational progress and strong financial position positively. However, the ruling by the Constitutional Court may cause some concern among investors regarding potential future regulatory hurdles. Overall, the company's proactive measures and continued progress towards nameplate production are expected to maintain investor confidence.
Conclusion:
Investors should keep an eye on Adriatic Metals' progress towards nameplate production in Q4 2024 and monitor any further developments regarding the tailings storage facility. The company's strong financial position and proactive measures to mitigate risks make it a promising investment in the mining sector.