Adriatic advances with Euro silver-zinc mine
Adriatic Metals has a foothold in the construction of its Vares high-grade zinc-silver project in Bosnia and Herzegovina as it prepares to open its namesake mine and processing plant next year.
The company says a newly appointed drilling contractor has enabled a dramatic increase in productivity as it seeks to increase its current ore reserves on the project’s Ruprice ore body.
Underground mining equipment is mobilized by contractor Ciftay and construction of the lower ramp of the Rupice underground mine is expected to begin soon. Excavation of the upper portal continues and the installation of the support should begin in the coming weeks.
The imminent construction of the lower ramp kicks off all three phases of mining at Rupice – the first phase being the simultaneous construction of both ramps from the upper and lower portals to the two parallel production levels of the ore body of Rupice. . This should be completed in the last quarter of this year.
Construction of the upper ramp is expected to begin by the end of June.
The company sees no major changes in budget estimates despite high oil prices affecting the cost of diesel in Bosnia.
Adriatic recently funded the opening of the first private healthcare facility in Vares through a local Bosnia-based healthcare provider to provide private medical services to all its staff, family members and residents premises, in addition to existing primary health care facilities in the city, which has a population of 9,000.
We are very pleased with the progress made in construction activities so far, with the project progressing on schedule. Site preparation activities for the surface infrastructure at Rupice have progressed well and with the recent mobilization of Ciftay, the first phase of underground construction is expected to start imminently. At the same time, we have recently started work on the site of the transport road linking Rupice to the site of the Vares processing plant.
Cronin says he is excited about the northwest extension of the Rupice deposit. Although assays are pending, the log analysis completed to date has significantly improved Adriatic’s understanding of the continuity and grade of the main Rupice deposit.
A definitive feasibility study released in August last year projected an average EBITDA of US$281.1 million per year over the first five years of concentrate production.
An after-tax net present value of US$1.06 billion was estimated in the study, with an extraordinary after-tax internal rate of return of 134%.
The feasibility study also projected capital costs of US$168 million to bring the project to life, with a payback period of just 0.7 years.
Adriatic has secured off-take agreements for 82% of its total concentrate production expected in the first 24 months of production, with the balance intentionally withheld for the spot market.
The zinc concentrate will be sold to Trafigura, Transamine and a major European smelter while the lead-silver concentrate will be sold to Glencore International and Transamine.
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