Adriatic Metals is focused on polymetallic exploration in the highly prospective Tethyan mineral belt located in Bosnia and Herzegovina and was established through the acquisition of a company called Eastern Mining last year. Once the acquisition was completed, Adriatic went about conducting confirmation drilling at two projects – Veovaca and Rupice. These advanced stage exploration deposits form the company’s Vareš project in Bosnia and offer promising exposure to a range of base metals including zinc, lead, silver, gold, copper and barite as well as significant further exploration upside. In April this year, the firm debuted on the ASX in an over-subscribed IPO, which provides Adriatic with a solid financial base from which to launch its two-pronged development strategy in Bosnia. As of today, Adriatic is the best performing metals and Mining IPO on the ASX.
The Balkans region of Eastern Europe is one of the world’s premier emerging mining jurisdictions, and in recent years a number of major mining firms have set up operations in highly mineralised zones of Kosovo, Macedonia and Serbia to name a few.
However, establishing a foothold in Bosnia’s mineral exploration industry has proved difficult for foreign investors, even though a pro-mining attitude exists alongside a stable democracy which has prevailed since the end of the Bosnian War in 1995.
Paul Cronin, non-executive director at Adriatic, explains how Bosnia’s unusual mining code, which provides easy access to an exploration license but no real path for converting the license into a mining concession, has prohibited exploration firms from breaking into the industry – until Adriatic’s arrival.
“We did it the other way around and acquired the concession first through a tender and then we set about putting the exploration licenses over the top. Thanks to this strategy we now have a path through to production.”
First mover advantage
Adriatic is one of a very few publicly listed companies that holds a mining concession holder in Bosnia and this first mover advantage gives the company a great opportunity to establish itself in an auspicious mining jurisdiction that has effectively been in pause mode since the conflict of the 90s.
This hiatus in the development of mining projects as a result of the Bosnian war is evident in both of Adriatic’s projects, which are located near the town of Vareš, approximately 50 km North of the capital Sarajevo.
“Veovaca is a previously operating open pit that was run by the Yugoslav government back in the 1980s and has been left untouched since the Bosnian war, while Rupice is a reasonably advanced stage exploration project where we set up gathering as much historical information as we could.
“Our confirmation drilling was very successful as we were able to confirm pretty much all of the information we had,” reveals Cronin. In a quirk of luck, Adriatic stumbled across thousands of written reports while renovating an old building on one of the sites.
The reports detailed around two decades of work that had been carried out in the region between the early 1970s and the early 1990s, handing the company a significant early boost.
“We set about digitising that information, and coupled with the confirmation drilling, delivered a JORC resource for Veovaca and a series of very interesting drill hole logs at Rupice, which we then drilled out last year. From this we were able to confirm that the region is very heavily mineralised.”
Adriatic completed a 16-hole, 1,381 metres diamond drilling programme at Veovaca in 2017, which confirmed historical results and supported a JORC compliant resource of 4.4 million tonnes (Mt) with 80% classified in the indicated category.
A geologist’s dream
Meanwhile at Rupice, 17 km Northwest of Veovaca, the company completed an 8-hole, 1,458 metres diamond drilling programme, the results of which were deemed extraordinary by Adriatic’s board and management team.
“Every geologist dreams of drilling through $1,000 per tonne rock and we just drilled through $3,000 per tonne rock everywhere, it was quite extraordinary,” exclaims Cronin.
“Our first hole was 64 metres at 29% zinc equivalent. That was great and then we drilled another hole that was equally as mineralised. It was just a fantastic campaign for us. However, the geology at Rupice is complex so we needed to complete some geophysics and geochemical work before starting a new drill campaign.”
During the winter months Adriatic took the opportunity of poor drilling conditions to conduct geophysics and geochemical studies, which identified some fantastic anomalies over the entire concession, according to Cronin.
After a winter of geotechnical surveys, Adriatic moved into the summer months armed with a high degree of geophysical anomalies to support the historical information at Rupice. Consequently, the company was able to commence a 15,000 metres drill campaign.
The campaign was divided into three phases, with the first a continuation of the 2017 programme that was centred on the Northern end of the license. The second rig will move to the South of the license while the third phase will focus on a geophysical anomaly in a ‘connector zone’ between the North and South of the license.
“We have a very high grade but small resource at the North of Rupice and we believe that this continues to the North as well as to the South and connects up with those adits at the South of the license. Therefore, we think that the strike area could be over 1 km long.”
Encouraging drill results
In June, the company reported assay results from the first hole of the 15,000 metres programme, which included intercepts from 64 metres at 4.6 g/t gold, 537 g/t silver, 0.9% copper, 7.7% lead, 10.8% zinc and 46% barite.
These encouraging results confirm the consistency of the previously drilled Northern zone at Rupice and have been replicated in several ensuing drill holes including the fifth hole, which further extends the high-grade mineralisation approximately 110 metres down-dip from historical hole BR-79-8.
With the Rupice project continuing to return impressive drill results this year, Adriatic has had to reconsider its pathway to production within the Vareš project. Having previously operated between 1983 and 1987, and with visual mineralisation at surface, Veovaca is ready to be mined straight away.
However, the plant at Veovaca needs to be rebuilt and with Rupice looking so prospective, Adriatic will continue to work on the latter over the next six months, instead focusing on long-lead time work at the former, ahead of a scoping study later this year.
“Over the next 12 months, we are really focusing on Rupice. That’s where we see the key value being unlocked. We will also extend our land holding in the Vareš district and try and tie up as much of the mineral belt as we can in very targeted areas that extend our licenses.
“At corporate level, we will be looking at other similar types of acquisitions, whether they are in Serbia, Montenegro, Bosnia or anywhere in the Adriatic or Balkans region that we think is prospective. We will try and get our hands on this type of project using the knowledge and the team we’ve got to try and add value from those.”