Adriatic Metals to raise $50m as Vares project ramps up

The UK and Australia-listed firm, which also has assets in Serbia, said on Tuesday it is issuing 18.3m CHESS Depositary Interests (CDIs) at AU$4.15 each, a 5.7% discount to the five-day average.

Some $39m of the proceeds will be used to bolster the balance sheet and provide flexibility as Vares progresses to commercial production, while $11m will go towards finalising a termination payment payable to the previous mining contractor.

The news came as Adriatic announced the maiden sale of concentrates at Vares, where it is processing plant is producing concentrates at saleable grades of over 2,500g/t Ag and close to 50% Zn, "confirming the company's ability to produce commercial spec products".

"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," said managing director and chief executive Paul Cronin.

"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," he said.