Bosnia and Herzegovina, Adriatic taps funding deal to progress Vares silver mine

Adriatic Metals has passed the halfway mark on construction of its high-grade Vares silver project in Bosnia & Herzegovina with its financial future secured following draw down of its first US$30m tranche from a $142.5m debt package.

The Balkans-focused, ASX-listed company opened its coffers to the $30m injection via senior secured debt with Orion Resource Partners on Friday as it pursues project completion and first concentrate production by September 2023.

A further $22.5m boost is also imminent pending final security documents and three more $30m tranches are expected be drawn down over the course of 2023.

The funding keeps Adriatic’s flagship Vares project on the straight-and-narrow and means a convertible bonds option will not be required, freeing up a further $20m for project development.

Aside from its debt funding deal Orion has also taken an 8.9 per cent interest in Adriatic via a $50m placement to the tune of some 24.2m shares.

This is another critical step towards de-risking the Project, and we remain on track to deliver first concentrates in Q3 2023.

Orion are aligned with our commitment to responsible mining and sustainability, via a $100,000 donation to the Adriatic Foundation, which will support valued community and environmental initiatives in Vares and Kakanj

The Adriatic Foundation was formed in 2021 to support legacy projects in education, health and environment for Vares, a once-thriving and picturesque inland mountain town whose largely-Bosnian population collapsed from 22,000 to fewer than 9000 in the 1990s during the collapse of Yugoslavia.

Funds are also allocated to nearby Kakanj, an industrial town home to some 37,000 people.

The Vares project is nestled near the two towns and boasts an ore reserve in its Rupice deposit of 7.3 million tonnes going 485 g/t silver and other metals equivalent.

Breaking that figure down sees a return of 202 g/t silver, 1.9 g/t gold, 5.7 per cent zinc, 3.6 per cent lead, 0.6 per cent copper and 0.23 per cent antimony, an alloy-hardening material.

The Vares processing plant is expected to churn out some 800,000tpa and Adriatic says it will have a sizeable high-grade stockpile to begin chewing through from the get-go.

Adriatic has mooted a 10-year mine life with potential to expand should the nearby Veovaca open pit mine where lead, zinc and barite extraction ceased in 1988 amid rising hostilities be revived.

Bosnia and Herzegovina and neighbouring Serbia where Adriatic also has interests are today considered favourable and stable mining jurisdictions.

Adriatic’s projects sit amid a host of major global players including Anglo-Australian Rio Tinto, China’s Zijin Mining Group, Brazilian giant Vale and the privately-owned Mineco.

With Vares fully-funded and expertise on tap in the local communities it appears to be all systems go for Adriatic in its pursuit to bring the project online in 2023, The West writes.

Construction at Adriatic Metals’ Vares high-grade silver project in Bosnia and Herzegovina is picking up speed

Construction at Adriatic Metals’ Vares high-grade silver project in Bosnia and Herzegovina is picking up speed as the company prepares to bring the project’s namesake underground mine and processing facility online next year. Adriatic says the project is now at the mid-way point and importantly remains on schedule and budget to deliver the first concentrate around September 2023.

The company says the past six months have been a whirlwind of activity with construction around the site’s surface infrastructure gathering pace.

Management states earthworks associated with the project’s Rupice mine are progressing as planned and are at around 56 per cent complete. The backfill pad is about 85 per cent finalised and 45 per cent of the work needed on the stockpile pad excavation has been done. Additionally, all geotechnical drilling for the backfill pad has been wrapped up.

In addition, the lower and upper decline of the underground mine is currently sitting at depths of 277m and 177m respectively for a total distance of 454m as of November 21.

A pair of diesel generators have been installed to give the operation a source of power. The devices will supply interim power to the Rupice mine ahead of the fitting of an underground cable grid link.

The operation’s 24.5km haul road is also said to be on track for first ore delivery early next year.

Along with the company’s construction efforts, it is also closing the loop on a year-long confirmation and definition drilling program at Rupice.

Recent exploratory programs have focussed on the Rupice’s northwest extension and intercepted a package of massive and semi-massive sulphide mineralisation that Adriatic believes could bolster the mine’s projected 10-year shelf life. The recent efforts confirmed an extension of mineralisation up to 250m north-west of the resource.

Notable intercepts from recent work include 0.9m at 846 grams per tonne silver equivalent and 27.2 per cent zinc equivalent from 207m including a 6.5m interval going 1861 g/t silver equivalent and 59.8 per cent zinc equivalent.

Another 32.5m hit was returned about 155m north-west of Rupice going 657 g/t silver equivalent and 21.1 per cent zinc equivalent from 285.5m. The wide strike also enclosed a richer 2m hit at 1331 g/t silver equivalent and 42.8 per cent zinc equivalent.

Adriatic began building the infrastructure for its Rupice mine in November last year after securing a financial facility a month prior.

The work follows a study by mining consultancy group CSA Global which suggested the project could hold a 12 million tonne resource grading 149 grams per tonne silver, 1.4 g/t gold, 4.1 per cent zinc, 2.6 per cent lead, 0.5 per cent copper and 25 per cent barite.

A subsequent definitive feasibility study released late last year says the operation could deliver an average EBITDA of US$281.1 million a year in its first five years of concentrate production, The West Australian reports.

Adriatic Metals builds underground mining fleet at Vares silver project

As Adriatic Metals gears up for first concentrate production at its Vares silver project in Bosnia & Herzegovina, it has revealed details of the mining fleet set to carry out work at the underground Rupice mine.

In its latest update, the company said project construction was 45% complete, with decline development progressing well – the lower decline currently being at at 210 m and upper decline at 100 m.

The majority of long-lead items and equipment orders were expected to come in on schedule, however global supply chain disruption has pushed first concentrate production from the end of the June quarter of 2023 into the September quarter, it said.

In the company’s 2021 definitive feasibility study, it shifted focus from a combined open pit and underground operation to an underground-only operation focused on Rupice, highlighting plans to mine 730,000 t/y of ore over a 10-year mine life.

In Adriatic’s most recent update, it highlighted that the fleet of vehicles required for Phase One (decline development) was on site, with delivery of Phase Two and Three vehicles commencing.

Among the fleet on site at Rupice is a Sandvik LH514i LHD, two Sandvik LH517i LHDs, a Cat 950L wheel loader, a Sandvik TH545i truck (second unit arriving in December), an Epiroc Boomer 282 jumbo drill, two Sandvik DD320 jumbos, two Sandvik DS311 rock bolters, two Titan IS26 shotcrete sprayers, three Titan BYM 6.0 underground mixer trucks and a Titan EC2 explosive charger.

Adriatic said the final project cost estimate had increased marginally from $170 million to $173 million, due to increases in engineering costs, plant and electrical equipment, including adjustments based on recent contract awards.

Anglo Asian Mining expects to produce 54,000-58,000 gold equivalent ounces in 2022

Anglo Asian Mining PLC expects to produce 54,000 to 58,000 gold equivalent ounces (GEOs) in 2022, the Azerbaijan-focused company said alongside its first-half results.

The copper, gold, and silver miner produced 28,772 GEOs in the first half, down from 32,171 ounces in the year-earlier period, due to lower gold grades from its Gedabek operation.

Anglo Asian said it has made good progress at its Vejnaly and Gosha licences and that production from these areas should result in output at the upper end of the guidance range.

Total costs were steady as higher electricity and material costs were offset by lower cyanide usage, but lower output resulted in a 16% year-on-year increase in the all-in-sustaining cost of gold production to US$983 an ounce.

Pretax profit for the six months to end-June 2022 dipped to US$5.7mln from US$5.9mln as revenue fell 27.6% to US$31.5mln on lower gold doré sales.

The group said it achieved encouraging progress amid a difficult external environment.

“We made significant progress in the development of our portfolio with excellent progress made at Zafar, Vejnaly and Hasan, all of which will enter production in the next 3 to 12 months,” said Anglo Asian chief executive Reza Vaziri in the results statement. “This will ease our reliance on production from Gedabek as they are set to produce meaningful quantities of ore next year.”

The AIM-traded company said it plans to pay an interim dividend of 4 US cents per share.

Since the period end, the company’s revised production sharing agreement became law in Azerbaijan, granting the group three new contract areas.

“This is an exciting time for Anglo Asian Mining, with the acquisition of our three new contract areas,” said Vaziri “These will transform our business and are substantial drivers for growth”, Pro Active Investors writes.

Mongolian Government threatens to terminate investment deal for Oyu Tolgoi mine

Mongolia’s Oyu Tolgoi the world’s largest copper-gold-silver mine is expected to produce 480,000 tonnes of copper per year on average from 2028 to 2036 from the open pit and underground, compared with 146,300 tonnes of copper per year in 2019 from the open pit.

Recently, the Mongolian government has threatened to declare the 2009 Oyu Tolgoi mine investment agreement void if an international tax arbitration is not dismissed. The dispute relates to taxes paid by Oyu Tolgoi LLC, Rio Tinto’s unit, between 2013 and 2015.

The miner says Oyu Tolgoi received a tax assessment for about $155 million on January 16, 2018, from the local tax authority, relating to an audit on taxes already imposed and paid by the unit between 2013 and 2015.

Oyu Tolgoi was already at the center of a protracted dispute between Turquoise and its top shareholder, Rio Tinto, over funding for the underground expansion of the mine. Rio claims Oyu Tolgoi paid $4.8 million in January 2018 to settle the unpaid taxes, fines and penalties for items it accepted. The government has now filed its statement of defence together with a counterclaim.

“The company understands that the principal thrust of the Mongolian government claim is to seek the rejection of Oyu Tolgoi’s tax claims in their entirety,” said Turquoise Hill, the Rio-controlled company that operates the mine.

Although it is not a party to that arbitration, Turquoise Hill said on Monday that it understood that the defence and counterclaim included a request that the arbitral tribunal add both the company and a member of the Rio Tinto Group as parties to the arbitration.

Turquoise Hill said it would oppose the request that it be added to the tax arbitration and that it would defend itself against the counterclaim. The capital Ulaanbaatar also threatened in early January to halt the expansion of the mine, arguing that delays and higher-than-expected costs had eroded the economic benefits the country had hoped for. Turquoise Hill resumed shipments to China last month after the Canadian miner declared force majeure on some Chinese contracts last month due to covid-19-led curbs.



Anglo Asian gets 5-year extension approval for Gedabek location, Azerbaijan

Anglo Asian Mining developed Azerbaijan’s first operating gold-copper-silver mine at Gedabek and started to produce gold there in 2009.

The company said the government of Azerbaijan has approved the first of two five-year extensions of the production sharing agreement for its Gedabek contract area.

“I am very pleased to announce that the company has obtained the first of the five-year extensions of the production sharing agreement for the Gedabek contract area, especially as we continue with our exploration programme which has already identified a number of new mineral occurrences including Zafer and Avshancli,” said chief executive Reza Vaziri.

The AIM-listed gold, copper and silver producer said it was also in talks with the government to obtain an extension of the territory of its existing contract areas and for new contract areas in Azerbaijan.

“It is expected these negotiations will be concluded shortly,” Vaziri added.

The company’s main operating location is the Gedabek contract area, a 300 square kilometre area in the Lesser Caucasus mountains of western Azerbaijan.  The Gedabek mine produced 69,000 gold equivalent ounces in 2020.




Talas Gold Mining Complex in Kyrgyzstan launched

The Jerooy deposit located in Talas Region in northwestern Kyrgyzstan has estimated reserves of nearly 90 tonnes of gold and about 25 tonnes of silver.

Russia’s President Vladimir Putin and President of the Kyrgyz Republic Sadyr Japarov took part, via videoconference, in a ceremony to launch the Talas Gold Mining Complex at the Jerooy deposit.

The project, which is being implemented by Russia’s Alliance Group with support from VTB Bank, is among the largest in the history of Russian-Kyrgyzstani economic cooperation in terms of investment volume. The potential level of production at the enterprise is five tonnes of gold a year.

The ceremony to launch the Talas Gold Mining Complex was also attended by President of Alliance Group and President and Chairman of the Board of Directors of Russian Platinum Musa Bazhayev, and President and Chairman of VTB Bank Management Board Andrei Kostin.

“The launch of the Talas Gold Mining Complex at the Jerooy deposit is indeed an important project for Russian-Kyrgyzstani economic cooperation and, in general, for the strengthening of partner and allied relations between our nations,” Putin said, who added that “The Talas Gold Mining Complex will employ cutting-edge technology and state-of-the-art equipment, including those compliant with all nature conservation regulations and standards. This will allow the production of up to five tonnes of gold per year, efficiently and with no environmental damage.”

According to Putin, the mining complex is creating more than a thousand jobs offering new employment opportunities to the local population. Small and medium-sized enterprises in Talas Region will be able to secure lucrative deals to supply goods and services required by the complex.

“Russian investors intend to provide significant financial support for the social development of Talas Region. The company director already said that a designated foundation was established that will receive up to $2 million every year. Almost half of these funds will be spent on socially significant projects in the region while the rest of the money will be used for subsidised lending to businesses,” Putin said.



Group Eleven Resources gets good results from copper-silver mine in Ireland

Gortdrum is part of the group’s wholly-owned PG West project and two holes were sunk 1 kilometer (km) and 2.2km away from the former mine (mined between 1967 and 1975), along the main mineralizing structure – the “Gortdrum Fault Zone”. Group Eleven Resources Corp has been encouraged by its first exploration drilling at its Gortdrum copper-silver prospect – Ireland’s only modern, commercial-scale, copper mine.

One hole, from a depth of 46.2 metres (m) hit 14.4m of 0.221% copper and 2.1 g/t silver, including 0.80m of 0.620% copper and 4.4 g/t silver. The other, from 32.35m downhole, hit assays including 1.6m of 0.532% copper and 22.3 g/t silver, and 2.9m of 0.151% copper and 0.5 g/t silver.

Bart Jaworski, CEO at Group Eleven, told investors the company had been “pleasantly surprised” at just how extensive and continuous the zone of shallow copper mineralization appears to be.

“We see a lot of scope for a step-change at Gortdrum, given most historic holes were drilled vertically (on very steep structures), very few historic intercepts were assayed for silver and prospective NW-trending splay faults do not appear to have yet been explored,” he said.

This results represent the first drilling at Gortdrum since 1975 and show potentially a series of parallel faults across several hundred metres and a strike of 3km.

“Gortdrum was the first asset acquired by the company and, after being effectively off-the-market for over 40 years previously, it is great to see this prospect finally get the attention it deserves,” said the CEO.

“Gortdrum is integral to our flagship PG West zinc project in the Limerick Basin and is thought to represent the copper-rich ‘roots’ of the zinc prospects in the area.”

The site was mined, via open pit, from late-1967 to mid-1975, producing 38, 000 tonnes of copper and 2.9 million ounces of silver. Around 500,000 tonnes of high-grade copper remain un-mined on the east-end of open pit, at about 100m depth. Exploration drilling ceased in 1975 and the prospect lay dormant for over four decades as a prospecting licence was not reinstated after the mining lease (SML89) expired in 1986. This oversight was identified by Group Eleven in 2014 and the Gortdrum prospecting licenses were awarded in February 2015, the company said.



Adriatic Metals’ silver project in Bosnia got the key approval

Adriatic Metals is focused on the development of the 100%-owned, Vares high-grade silver project in Bosnia and Herzegovina.

Federal Ministry of Environment and Tourism of Bosnia and Herzegovina has issued a positive Record of Decision for the Rupice Environmental Permit (RoD), one of the key approvals required for the issue of the Exploitation Permit, Adriatic Metals announced. The company said that the RoD was received following the submission of an Environmental Impact Assessment, prepared by Adriatic in accordance with the Federal Mining Code, reviewed by a five-member expert committee and presented to a public hearing in August 2020.

CEO and Managing Director Paul Cronin commented, “The receipt of the RoD is another major step forward in the permitting of the Vares project, and when coupled with the recent issuance of the Veovaca Exploitation Permit, clearly demonstrates the team’s ability to permit a mine in BiH. We continue to enjoy the strong support of both our local community in Vares and the government of BiH. We look forward to building this highly profitable mine in Q3-2021, whilst continuing to grow our resources around Vares, and advance our exciting project at Raska. This will be a defining year for our young and ambitious company”.