Adriatic Metals PLC (LSE:ADT1, ASX:ADT, FRA:3FNA, OTCQX:ADMLF) (LSE:ADT1)’s Vares silver project in Bosnia and Herzegovina (BiH) has been valued at US$1.06bn in a final definitive feasibility study.
Compiled by a number of international consultants overseen by Ausenco, the DFS value compares to US$1.04bn in the initial feasibility study in 2020, but cuts the payback period on the capital cost to just under nine months from 14.
Construction costs also come down to US$168mln from US$173mln, but the big gain is in the sustaining costs, which fall to US$7.3 per silver ounce equivalent from US$9.7/oz.
Removing the Veovaca open pit from the study and a reduction in the number of concentrate products produced to two from four helped with this, said Adriatic.
Around 48% of revenues will come from payable silver and gold, it added.
Metallurgical and test work is ongoing, it said, with concentrate offtake and finance discussions well advanced and the company is now on track to become the first publicly listed miner in BiH.
Paul Cronin, Adriatic's managing director and chief executive said the study clearly demonstrated the exceptional potential of the Vares Silver Project.
“Project delivery and execution risks have been substantially reduced through the simplification of the process flowsheet and Initial Capital Costs lowered against the backdrop of inflationary construction costs, whilst improving the overall project economics.
"In the design of this project, environmental and economic sustainability have been at the core of our thinking,” he added.
Our focus from this point is to finalise the Project financing, which is well advanced, and concurrently commence construction whilst continuing to look for marginal improvements in metallurgical recovery, capital and operating costs.
“Additionally, we have commenced a study to expand the renewable energy production we have at the Vares Processing Plant, and augment that capacity to ensure that the Vares Silver Project reduces its carbon emissions significantly, soon after the commencement of commercial production.”