ASX and London-listed aspiring Balkans polymetallic project developer, Adriatic Metals, has nailed down a US$20 million capital raise from the private placement of 8.5 per cent unsecured convertible debentures to TSX-V-listed Queen's Road Capital Investment, or “QRCI”.
Adriatic says QRCI, a resources-focused investment group, is backed by a number of significant investors including Australian entrepreneurs Andrew Forrest and Jack Cowin.
The convertible debentures QRCI has taken up have a four-year term and carry an 8.5 per cent per annum cash coupon payable quarterly. QRCI has the option to convert the debentures into ordinary Adriatic shares at a conversion price of A$2.79 per share.
London-based Adriatic has also topped up its coffers via a US$8 million equity placement to the European Bank for Reconstruction and Development or “EBRD”, a capital raise that was flagged in late October.
The total US$28 million cash injection is expected to go towards advancing the company’s definitive feasibility study, or “DFS” on the proposed US$173 million development of its Vares silver-lead-zinc project in Bosnia and Herzegovina.
Funds from QRCI’s convertible debenture investment and the EBRD share placement are also earmarked to pay deposits on long-lead capital cost items for the construction of the Vares mine, should it be given the green light, and for exploration activities at Adriatic’s Bosnian and Serbian projects.
In mid-October, Adriatic released bumper numbers in the Vares pre-feasibility study, or “PFS”. They included an EBITDA estimate of US$251 million per annum in the first five years of metal concentrate production, a net present value for the project of US$1.04 billion and an internal rate of return of 113 per cent.
Probable ore reserves for Vares – across the Rupice and Veovaca deposits – currently stand at 11.13 million tonnes grading 150 grams per tonne silver, 1.28 g/t gold, 4.22 per cent zinc, 2.67 per cent lead and 0.43 per cent copper. The PFS indicates the reserves will sustain mining and processing operations at Vares for an initial mine life of 14 years.
QRCI Chairman and Chief Executive Officer, Warren Gilman said: “Adriatic’s Vares project ranks among the highest return projects in the global mining industry. Its position in QRCI’s portfolio alongside NexGen’s Arrow project and ISO Energy’s Hurricane deposit (both in Canada) is well deserved.”
According to QRCI, Adriatic is looking to complete the DFS by April next year and is aiming to have all regulatory approvals in place to build the Vares mining and processing operations in approximately 12 months’ time.
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By Matt Birney
