Europe-focused Adriatic Metals (ASX: ADT) (LON: ADT1) announced on Monday the sale of the first shipment of concentrate from its Vares silver mine in central Bosnia and the launch of a $50 million capital raising.
Currently in the final phases of increasing production at Vares, the company aims to optimize its balance sheet during this ramp-up period through the equity raising. Adriatic has incurred $120 million in debt, with the first repayment due by the end of the year.
Chief executive Paul Cronin stated that Adriatic expects to reach full production capacity by the fourth quarter of the year, supported by favorable market conditions, including high prices for silver, gold, and zinc, as well as low treatment charges.
The Vares processing plant is currently producing saleable grades exceeding 2,500 grams per tonne of silver and nearly 50% zinc. Adriatic plans to scale up processing to reach a nameplate capacity of 800,000 tonnes by the fourth quarter.
The Vares mine is a result of Adriatic’s efforts to revive a former silver operation abandoned during the civil unrest in the early 1990s.
Instead, the company invested in exploration and identified its flagship silver-zinc asset, which has been designated a “project of special importance” by the Bosnian government.
Before achieving commercial production in March, the project accounted for 25% of Bosnia’s foreign direct investment in 2022 and is projected to contribute 2% to the country’s GDP during its operations.
Since transitioning to an owner-operator model in April, Adriatic has invested $250 million to revive Vares, making it the first new mine to open in Europe in over a decade.