28th May 2024 11:56
(Alliance News) - Adriatic Metals PLC on Tuesday said it completed a USD50.0 million fundraise ahead of plans to scale up production at the Vares operation in Bosnia.
The Cheltenham, England-based exploration and development company possesses a portfolio of licences in Bosnia & Herzegovina and Serbia.
A placement worth approximately USD50.0 million was carried out via the issue of 18.3 million Chess depositary interests priced at AUD4.15 each, approximately 216.29 pence.
Adriatic shares were down 4.6% to 218.50p each in London on Tuesday morning. They were quoted in Sydney at AUD4.40.
The newly issued CDI's are expected to commence trading on the Australian Securities Exchange from Tuesday next week, and the funds received will be used to improve the company's balance sheet as it continues to advance the Vares operation in Bosnia.
Adriatic said USD39 million will be used to bolster the company's balance sheet to provide it with flexibility as it prepares to ramp up production. The remaining USD11 million will be used to finalise a payment owed to a mining contractor.
An undrawn debt facility provided by Orion Resource Partners (UK) LLP, worth USD25 million remains available, although Adriatic said it does not expect this to be required.
Coinciding with the fundraise, OMF Fund II (F) Ltd, an affiliate of Orion, sold 12.1 million existing CDI's of Adriatic Metals at the same price, half of its total holding.
On completion, Orion will retain 12.1 million CDI's representing approximately 3.7% of Adriatic.
The equity raise comes as initial sales of concentrates from the Vares operation in Bosnia commence, with the plant now fully commissioned and operating as expected, Adriatic said.
The facility is producing silver concentrates at grades exceeding 2,500 grams per tonne, and close to 50% zinc.
In the coming months the company expects to process higher grade feed material further optimise the facility.
Chief Executive Officer Paul Cronin said: "High silver, gold and zinc prices and low treatment charges due to a tight concentrate market are providing positive tailwinds for Adriatic's free cash flow generation, as we progress towards full production capacity in quarter 4 of this year."
By Elijah Dale, Alliance News reporter
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