UK-based Adriatic Metals (ASX:ADT) has sold its first shipment of concentrate from the Vares silver operation in Bosnia & Herzegovina.
The Vares plant is now fully commissioned and producing concentrates at grades of over 2,500 grams per tonne (g/t) and nearly 50% zinc.
Adriatic says it has agreed a sale of on-specification grade concentrates and the first shipment has departed for the Port of Plocê in Croatia.
The first concentrate was produced in February.
The plant will continue to process higher grade feed material and ramp-up production over the coming months.
Adriatic says initial metal recovery rates have exceeded expectations, based on grades recorded in the stock tanks, and the processing team is working on further improvements and optimisation of the plant.
Underground development rates are on track to reach nearly 300m, with 256m completed in April.
With increasing feed tonnage of development ore available, the processing plant will now transition to 24-hour operations. The Vares Silver Operation is expected to reach nameplate capacity in Q4.
Managing Director Paul Cronin says 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.
Adriatic has also launched a US$50 million ($75.3 million) equity raising to bolster its balance sheet and provide flexibility during the final stages of ramp-up as well as settle a US$11 million termination payment to the previous mining contractor.
The company, which is transitioning to owner-operator mining, is undertaking an institutional placement offering 18.3 million chess depositary interests to new and existing investors at $4.15 each.
The offer price is a 5.7% discount to the last closing price and an 11.5% discount to the five-day volume weighted average price of shares on the Australian Securities Exchange on 24 May.
At the same time, existing shareholder Orion intends to sell 8 million existing CDIs at the offer price, reducing its stake in Adriatic to 4.99%.
“The placement will position the company well to address near-term working capital commitments and provide additional flexibility as it continues hitting milestones in this critical period,” Cronin says.
Write to Angela East at Mining.com.au
Images: Adriatic Metals
