Adriatic Metals raises US$102mln in equity fundraising to start construction at Vares silver project

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Adriatic Metals PLC (LSE:ADT1, ASX:ADT, OTCQX:ADMLF) said it raised US$102mln through equity fundraising, enabling it to start construction at its flagship Vares silver project in Bosnia & Herzegovina.


It raised gross proceeds of about US$52mln (GBP38mln) through a placing with institutional investors and US$50mln from a conditional equity subscription by Orion Resource Partners (UK) LLP.


Yesterday, Adriatic announced a proposed project finance package of about US$244.5mln before expenses for the construction of Vares. The finance package comprised of a US$142.5mln debt financing package from Orion in addition to the equity fundraising.


The Orion debt financing is subject to ongoing due diligence and definitive legally binding documentation, which is expected to be completed during the fourth quarter of 2021.


Around 25.16 million shares were placed at a price of GBP1.5174 per share, representing a 10.7% discount to the 10-day volume weighted average price yesterday on the Australian Securities Exchange.


The net proceeds of the equity fundraise are expected to be GBP72.2mln and will be used to start construction of the Vares project.


In addition to the placing, Sandfire Resources Ltd also sold its entire holding of 34.6 million existing CHESS Depositary Interests (representing ordinary shares) in Adriatic at the placing price. While Adriatic’s chief executive and managing director Paul Cronin also sold 3 million shares, due to strong demand, at the placing price.


“We are delighted to welcome Orion as a new partner in the Vares silver project and we thank Sandfire for their support of the company since its IPO in 2018,” said Cronin in a statement late yesterday.


“The announcement of the proposed project finance package is a significant milestone, demonstrating the extent of support globally for new investments in mining in the Balkans, and Bosnia & Herzegovina in particular.”

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