Development of ASX-listed Adriatic Metals’ Vares high-grade silver project in Bosnia and Herzegovina is accelerating with construction starting on time as the company firmly eyes production by the second quarter of 2023.
As Adriatic muses over its “to-do” checklist in the lead up to production, management says operations have been focussed on clearing and constructing access roads from Rupice to the upper and lower portal pads where portal development will start at each of the declines into the planned underground mine in the coming months.
Interestingly, Adriatic says through modifications being made to the layout of the Rupice surface infrastructure site it has both lowered the construction costs and improved the efficiency of ore haulage truck movements at the site.
Turkish mining operation and underground construction contractor, Ciftay, has signed a letter of intent as the project’s sole underground mining contractor with a formal appointment due in the coming weeks. According to Adriatic, Ciftay expects initial mobilisation will take 45 days once the final contract is executed.
The company has also been undertaking further refinement and test work on backfill engineering.
The company says engineering contractors Ausenco Pty Ltd and Paterson and Cooke Ltd have been appointed after successfully delivering on the project’s definitive feasibility studies. By retaining the knowledge and experience of the pair, Adriatic says it is aiming for a swift transition to the detailed engineering phase.
Along with mining operations moving ahead at ground-breaking speeds, the construction of the processing plant is slated to commence in the second quarter of this year.
Many companies in the global mining community are experiencing long lead in times on receiving mechanical equipment not considered “off the shelf”. Adriatic reported it has selected the suppliers and placed orders for the ball mill, regrind mill, concentrate and tailing filter presses, concentrate and tailings thickeners, floatation cells and crushing plant with delivery anticipated to time in perfectly with construction of the processing plant.
In what is shaping up to be a busy 2022, Adriatic says exploration will continue in tandem with construction at the project with 22,000 metres of drilling due to be undertaken by newly appointed drilling contractor Drillex.
Drillex is set to mobilise three rigs targeting extensions of mineralisation at Rupice along with testing of high priority targets across the Vares concession, including the historically mined Droskovac target upon receiving governmental approval.
The Droskovac underground mine ceased production in the late 1980s and contains roughly 900,000 tonnes of polymetallic mineralisation in a back of the envelope, non-JORC compliant resource estimation. Up to 4,000m of drilling is expected to plumb the depths of known mineralisation and test its strike extents.
Adriatic Metals Managing Director and CEO, Paul Cronin said: “The Company is edging closer to becoming Europe’s next operating mine. Project development is accelerating, having recently commenced construction activities. We are also busy bulking out the owner’s team with excellent new hires, further improving designs and rationalising costs where possible to lower capital costs and improve operational flexibility.”
“Despite turbulent metal markets, we are in final negotiations with off-takers for the sale of our silver-lead and zinc concentrates and are confident of reaching agreement in the coming weeks.”
Adriatic recently released a cracking set of numbers from a definitive feasibility study, or “DFS” evaluating the potential of bringing Vares into production.
The study projected an average EBITDA of US$281.1 million per year in the first five years of concentrate production.
A sensational net present value after tax of US$1.06 billion was estimated in the study, with an extraordinary internal rate of return of 134 per cent after tax.
The DFS envisaged capital costs of US$168 million to bring the project to life, with a pay-back period of only 0.7 years.
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