Vares study lives up to the hype

ADRIATIC Metals is living up to its billing as one of the most hyped junior mining stocks in recent memory, having delivered a prefeasibility study for its Vares project in Bosnia & Herzegovina.
Vares study lives up to the hype Vares study lives up to the hype Vares study lives up to the hype Vares study lives up to the hype Vares study lives up to the hype

Adriatic Metals' Vares project in Bosnia & Herzegovina

Staff reporter

The study highlighted a post-tax net present value of over US$1 billion against an initial capex of $173 million, with payback in just 1.2 years.

The ASX and LSE miner announced an internal rate of return of 113% and annual EBITDA of $251 million over the first five years of the project's 14-year mine life.

Revenue from the polymetallic project, which consists of two main deposits - Rupice and Veovaca - will come mainly from silver and zinc. The company said revenue would be split 31% silver, 25% zinc, 14% gold, 14% lead and the rest from copper and barium sulphate.

Adriatic's price assumptions include silver at $24/oz and gold at $1900/oz, which Canaccord Genuity described as conservative.

"Despite COVID-19 hampering efforts of mining companies around the globe, I am pleased that we are able to deliver a hugely positive PFS, with improved economics in comparison to our 2019 scoping study, thus showing that Vares is indeed a world class project," said Adriatic managing director Paul Cronin.

Canaccord said the study was mostly in line with its expectations, aside from a 30% rise in operating costs to $117 per tonne.

Canaccord maintained a speculative buy recommendation. Its previous price target was A$3.05.

Adriatic closed 7% lower at $2.21 yesterday.