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  • Writer's pictureMark Watson-Mitchell

Adriatic Metals - $50m Institutional Placing To Speed Into Silver Production, With Analysts Looking For 50% Share Price Uplift

Just four weeks ago the shares of Adriatic Metals (LON:ADT1) were trading at 253p, by the middle of last week they had fallen back to 196p, before closing on Friday night at a slightly improved 203p.

From this level, market analysts are said to be looking for a recovery back to and then above the 253.50p at which they peaked on 21st May.

The £658m-capitalised Cheltenham-based precious and base metals mining group is the owner of the Vares Silver Operation, which covers a area in Bosnia and Herzegovinia.

It also owns the Raska Zinc-Silver Project in Serbia.

Vares Silver Operation

The world-class Vares site is gaining most investor attention, it contains two advanced exploration deposits, Veovaca and Rupice, which have previously been mined for Lead, Zinc and Barite.   

The company’s exploration programme is focused on the northern and southern extremities of Rupice. 

At the end of May, the company announced that it had agreed a sale of on-specification grade concentrates from Vares.

Currently, it produces high-quality concentrates, with silver content exceeding 2,500g/t and nearly 50% zinc.

It dispatched the first shipment of ore concentrate from the Vares processing plant to the port of Ploče, officially initiating the first sales contract for the concentrate and securing the first million-dollar payment from international buyers.

The company has rapidly achieved significant success with the first shipment of concentrate from the Vareš mine, less than three months after starting production.

Noteworthy too was that it has also reconstructed the railway line connecting Vares with the port of Ploče, enabling ore transport to smelters in Belgium, Norway, Sweden, Spain, and Italy.

With increasing feed tonnage of development ore available, the processing plant will now transition to 24-hour operations in anticipation of first stopes in July.

The company is continuing to ramp up production, with nameplate capacity expected in the final quarter of this year.

CEO Paul Cronin stated that:

"The production of saleable concentrates from the Vares Silver Operation represents a major milestone for the Company and I am very pleased with the progress made by the processing team with the plant producing concentrates with recoveries as expected.

High silver, gold and zinc prices and low treatment charges due to a tight concentrate market are providing positive tailwinds for Adriatic's free cash flow generation, as we progress towards full production capacity in Q4 of this year."

Recent $50m Placing

At the same time in late May, Adriatic announced a $50m institutional placement of stock, with the fresh funds expected to boost the company's balance sheet as it continues to progress the ramp-up and building upon of recent milestones, such as the production of the first saleable concentrate, and then further towards delivering on its mine plan.

Market analysts have Price Objectives of around 300p on the group’s shares.



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