Adriatic Metals has secured full clarity on its mineral rights and royalty arrangements at the massive Vares polymetallic project in Bosnia & Herzegovina by successfully negotiating for the inclusion of gold, silver and copper in an update to its concession agreement. Whilst not entirely clear, the original concession agreement only referred to lead, zinc and barite. The requirement to commence mining by May 2020 has also been removed.
The company said that annexure four to the concession agreement has been executed between Adriatic’s 100% owned subsidiary, Eastern Mining d.o.o and the Ministry of Economy for the Zenica-Doboj Canton. This document will cover mineral rights and future royalty payments across the suite of minerals to be produced from the Veovaca and Rupice deposits. It also removes the legal ambiguity between the Federal Government and that of the local Canton Government.
Adriatic announced some outstanding precious metal resources within its mineral resource estimates published back in July 2019 and these have been further upgraded by recent drilling results in the north-eastern extension area of the Rupice deposit.
A drill hole result reported in the company’s December quarterly report showed an interval of 6m at an exciting 11.3 grams per tonne gold, 1,019 g/t silver, 13% zinc, 12.5% lead and 1.3% copper below 238m.
Adriatic Metals Managing Director and CEO, Paul Cronin said: “The amendments to the Concession Agreement negotiated by our team in Bosnia remove all potential doubt regarding mineral rights and royalty payments on precious metals and better aligns the permitting process in both levels of government, demonstrating a clear determination by Zenica-Doboj Canton to advance the Vares project to production”.
The company noted in its December 2019 quarterly report that scoping economics for the Vares project had indicated some stellar numbers including an extraordinary net present value of USD$917m at an equally impressive and somewhat rare internal rate of return of 107%. Capital to build the project is also not that frightening at just USD$178m.
Adriatic now says it is fully funded through to the completion of a bankable feasibility study for the Vares project which comprises the historic open cut mine at Veovaca and the brownfield exploration deposit at Rupice. The scoping study assumed an underground development with declines at Rupice to access the outstanding precious metal grades seen in the drill results announced to date.
Mr Cronin said: “The [December] Quarter has seen our deepest high-grade intercept to date at Rupice which clearly demonstrates that the high-grade mineralisation continues outside our current Mineral Resource and south towards our Jurasevac-Brestic prospect a further 500m to the southeast.”
It will be exciting to watch as this staggeringly good project marches towards start-up in the coming months.
The renegotiated concession agreement terms remove the air of uncertainty that was hanging around this project and will allow Adriatic to fully exploit all of the considerable mineral riches that are present at this remarkable project.
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By Matt Birney
