Adriatic Metals’ Veovaca project in Bosnia received exploitation permit
The Veovaca project is located near Vares in Bosnia-Herzegovina, 50 km north of the capital, Sarajevo. Adriatic Metals has received an exploitation permit for this project and the permit, issued by the Federal Ministry for Energy, Mining and Industry, initiates the project’s formal exploitation period, valid for 30 years.
“This is a major permitting achievement that has been realised through close cooperation between Adriatic’s BiH [Bosnia-Herzegovina] team and the significant number of governmental and commercial stakeholders involved in the process, as well as the local community in Vares,” Paul Cronin, Adriatic’s managing director and CEO, stated in a press release.
The permit will allow Adriatic to complete detailed engineering work for the Veovaca open pit mine, flotation plant, and tailings management facility, and the company plans to start construction in the third quarter of 2021. The company is still waiting to submit an application for an exploitation permit for its Rupice underground project, 12 km northwest of Vares. It will submit that application once it receives its environmental and urban planning permits for the project, which it hopes will be approved in the second quarter.
Veovaca and Rupice are past-producing polymetallic deposits that form part of the company’s flagship Vares project, which it acquired out of bankruptcy proceedings in 2017 for US$760,000.
In October 2020, a prefeasibility study for Vares envisioned a mine producing 8,000 tonnes of mineralized materially annually with average production of 15.3 million oz. of silver equivalent per year for the first five years of a 14-year mine life at average all-in sustaining costs of US$120 per tonne of milled material. Initial pre-production capex was pegged at US$173 million, and the study estimated an after-tax payback period of just over one year. The PFS forecast an after-tax net present value of US$1.04 billion, at an 8% discount rate, and an after-tax internal rate of return of 113%. The study used metal prices of US$1,900 per oz. of gold, US$24 per oz. of silver, US$2,500 per tonne of zinc, US$2,000 per tonne of lead, US$6,500 per tonne of copper, US$150 per tonne of barium sulphate, and US$6,500 per tonne of antimony.
Alexander Pearce, a mining analyst at BMO Capital Markets, has a price target of A$2.40 per share. (At presstime the company was trading at A$2.18 per share.)
“Adriatic has got off to a strong start in 2021, delivering continued progress at its flagship Vares project as well as exploration success at Raska,” he wrote in a research note to clients. “With Veovaca receiving its exploitation permit, attention turns to Rupice with its equivalent exploitation permit expected in Q2 2021. Further, with the Vares project DFS [definitive feasibility study] also expected in `Q3, 2021 remains a significant year for catalysts for Adriatic as it transitions from explorer to developer.”
On Jan. 26, the company released drill results from a brownfield project it owns in southwestern Serbia’s Raska district: the Kizevak-Sastavci zinc-lead-silver project, which consists of two past-producing mines. The company picked up the project in May 2020 when it acquired Tethyan Resource for US$10 million in an all-share deal.
Sixteen of the holes were drilled at Kizevak and three holes at Sastavci, about 3.5 km away. Highlights from Kizevak included drill hole KZDD-030, which cut 38 metres of 2.7% zinc, 2.2% lead, 30 grams silver per tonne and 0.6 gram gold per tonne starting from 100 metres. Another hole, KZDD-025, discovered a new, mineralized sub-parallel structure from surface, about 100 metres northeast of the mineralized trend, and returned 29 metres of 2.6% zinc, 1.2% lead, 15 grams silver starting from 2 metres downhole, including 15 metres of 4.3% zinc, 1.9% lead, and 24 grams silver.
At Sastavci, drill hole SSDD-003 cut 27.7 metres of 3.1% zinc, 1.3% lead, 22 grams silver, 0.5 gram gold from 13 metres downhole, while SSDD-004 cut 45 metres of 3.3% zinc, 1.0% lead, 17 grams silver and 0.2 gram gold from 17 metres.
Portugal Parliament recommending strategic environmental assessment before exploration grants
Strategic environmental assessments are recommended by Portugal Parliament, to be carried out by the Government before granting mining exploration rights. The Portuguese Parliament has approved two draft CFP and NAP resolutions recommending strategic environmental assessments.
“Before launching tenders for new prospecting and exploration rights for mineral deposits, the Government promotes a Strategic Environmental Assessment associated with the identification of major constraints”, recommends the PCP.
In its initiative, the PAN also proposes to the Government to “promote, as a matter of urgency”, the “carrying out of a Strategic Environmental Assessment that will describe the various hypotheses of location of mining operations, excluding all those located in protected areas”. The Assembly of the Republic also approved a final text of the Environment, Energy and Spatial Planning Commission, based on draft resolutions of CDS-PP, Chega and the unregistered MP Joacine Katar Moreira, who recommends the government “to establish 25 September as National Sustainability Day.
A final text of the Committee on Constitutional Affairs, Rights, Freedoms and Guarantees was also approved, based on resolutions by PAN, BE and MP Joacine Katar Moreira, who recommends to the Government that “the evaluation of the possibility of travelling for the purpose of family reunion for unmarried binational couples be made at a time prior to the applicant’s arrival in Portugal, with sufficient time for the acquisition of flights and respective family life planning”. MEPs also want it to be ensured that “authorisation to travel for the purpose of family reunion sets a precedent for these rights to be automatically reapplied in the event of new restrictions on movement between borders” and that it is possible for “unmarried bi-national couples, as well as dependent children or dependants, to meet again in Portugal”.
Another final text was also approved by the Education, Science, Youth and Sport Commission, which brings together recommendations from the CFP and the ENP and asks the Government to “promote, as a matter of urgency, a wide consultation of national bodies of sports associations and adapted sports, at various levels, in order to work, together with the Directorate General of Health, standards and conditions for the practice of sport, with those who best know the territory and the sports reality”. The text also recommends that “the gradual return of the public to all sporting events, in accordance with the epidemiological situation and safeguarding health standards” be made possible, that there should be a “gradual normalisation of competitions” and support for the sports association movement for the “gradual and safe resumption of its activities”, and that the practice of sport be encouraged. On the other hand, the Parliament rejected, with PS, PSD and BE voting against, a draft ENP recommendation for “an overall scientific assessment of the effects of the implementation of the 1990 spelling agreement”.
Greenland’s Malmberg project on public hearing
The mining project is located in mountainous terrain where the nearest town is Ittoqqortoormitt, some 185 kilometers southeast of Malmberget. The nearest place with any infrastructure is the Danish defense station at Mestersvik, some 30 kilometers northeast of the deposit. The Canadian company Greenland Resources plans to break 12.8 million tons of ore annually and from that, extract molybdenum concentrate.
The Malmberg mining project in Eastern Greenland, where molybdenum concentrate is to be extracted, is currently subject to a public hearing round with input deadline on 22 February, according to Sermitsiaq. The hearing is part of a process leading to two different impact assessments, which if approved may lead to the company’s receiving an exploitation license.
Adriatic received one of the key approvals required for Exploitation Permit in Bosnia
Adriatic has already received approval from a total of nine different utility and community service companies for its project, which should expedite the approval of the Urban Planning Permit. After navigating a plethora of Bosnian statutory approval labyrinths, Adriatic Metals is nearing the end of the maze after receiving a coveted and positive “record of decision”, or “RoD” from the Federal Ministry of Environment and Tourism for its Veovaca Environmental Permit which is one of the key approvals required for an Exploitation Permit to be finally issued. The company said the RoD is final and cannot be challenged, which means that the Exploitation Permit theoretically should be forthcoming soon.
Whilst keeping its foot on the gas amid operational delays felt as a consequence of the Coronavirus, Adriatic said it has received a Preliminary Water Permit and Environmental Permit for the demolition of the historic Veovaca Plant site and Preliminary Water Permits covering the Veovaca Mine, Plant and Tailings Storage Facility, including a pond for capturing excess water.
The Federal Ministry of Environment and Tourism now has 30 days to issue the Environmental Permit for Veoveca and Adriatic can then contionue along the statutory process route and make a submission for an Urban Planning Permit of the Federal Ministry for Spatial Planning.
The Urban Planning permit is the final application for Exploitation and can be made to the Federal Ministry for Energy, Mining and Industry.
With another binder of paperwork stamped and a significant milestone passed, Adriatic is now moving at pace towards mining its extraordinary multi-metals play in Bosnia.
Adriatic CEO and Managing Director, Paul Cronin said: “The receipt of the RoD is a major step forward in the permitting of Vares Project, and despite all the challenges being presented to the government in the current COVID-19 crisis, demonstrates the Bosnian Government’s willingness to advance the project as quickly as possible. We continue to appreciate the consultative and cooperative approach of the various branches of government in Bosnia and look forward to the continual advancement of the Vares Project”.
“As part of the approval procedure, the Ministry will hold a public hearing in Vares, where members of the public can comment on the application, and if necessary, the Company is given and opportunity to respond”.