TIDMADT1
RNS Number : 3803X
Adriatic Metals PLC
20 December 2023
20 December 2023
Adriatic Metals PLC
("Adriatic Metals" or the "Company")
UPDATED ORE RESERVES ESTIMATE FOR RUPICE
HIGHLIGHTS
-- Updated ore reserve estimate for the 100%-owned Rupice
silver-zinc-lead-gold deposit in Bosnia and Herzegovina has grown
to: 13.8Mt at 187g/t Ag, 5.2% Zn, 3.3% Pb, 1.4g/t Au, 0.5% Cu and
0.2% Sb containing an estimated 83Moz of silver, 723Kt of zinc,
457Kt of lead, 640Koz of gold, 64Kt of copper and 24kt of
antimony.
-- Contained ore reserve tonnes have increased by 89% since the
previous Ore Reserve estimate stated as at July 2021.
-- The significant increase in ore reserves underpins an 18-year
mine life which now extends until 2041 based on nominal throughput
capacity of 800,000tpa.
-- The Indicated and Inferred Mineral Resource estimate ("MRE")
for Rupice as reported on 27 July 2023 is: 21.1 Mt at 156 g/t Ag,
1.2 g/t Au, 4.3% Zn, 2.8% Pb, 0.4% Cu, 27% BaSO(4) (reported above
a cut-off grade of 50 g/t AgEq) containing 105 Moz Ag, 789koz Au,
913kt Zn, 581kt Pb, 88kt Cu and 39kt Sb.
-- Exploration drilling continues to successfully identify
further high-grade mineralization at Rupice and Rupice Northwest, A
further MRE update is scheduled for H1 2024.
Paul Cronin, Adriatic's Managing Director and CEO,
commented,
"We are extremely pleased to announce the updated Ore Reserves
at our flagship Rupice mine have increased by 89%.
The Ore Reserves have been derived from the JORC Mineral
Resources statement announced on 27 July 2023 and demonstrate that
Rupice is a world class deposit. Exploration drilling has continued
this year, and we believe there is potential to add further
resources at Rupice, as well as at our adjacent targets.
The updated Ore Reserve was completed to a very high standard
using industry best practice and methodologies. It sets a solid
foundation for mine planning and future production growth with
mining now scheduled at Rupice Northwest.
The completion of updated Ore Reserves at Rupice is an important
step forward for Adriatic as we maximise the value of this asset
for all of our stakeholders over the next 18 years and beyond."
Adriatic Metals PLC (ASX:ADT, LSE:ADT1, OTCQX:ADMLF), is pleased
to announce the updated Rupice Mine Ore Reserves, as part of the
fully owned Vares Silver Project in Bosnia & Herzegovina
totalling 13.8Mt at 187g/t Ag, 5.2% Zn, 3.3% Pb, 1.4g/t Au, 0.5% Cu
and 0.2% Sb containing an estimated 83Moz of silver, 723Kt of zinc,
457Kt of lead, 640Koz of gold, 64Kt of copper and 24kt of
antimony.
Table 1 : Updated Rupice Ore Reserve
Classification Tonnes Zn Pb Au Ag Cu Sb
Mt % % g/t g/t % %
Proved - - - - - - -
------- ---- ---- ----- ----- ---- ----
Probable 13.8 5.2 3.3 1.4 187 0.5 0.2
------- ---- ---- ----- ----- ---- ----
Total 13.8 5.2 3.3 1.4 187 0.5 0.2
------- ---- ---- ----- ----- ---- ----
The updated ore reserve estimate was completed by AMC
Consultants (AMC) with the assistance of the Adriatic technical
services team using industry best practice. The final signed off
report from AMC was received on 12 December 2023. The Rupice Ore
Reserve has been updated based on the updated Mineral Resource (as
announced on 27 July 2023) and is shown in Table 2. The Mineral
Resource estimate has been reported in accordance with the JORC
Code. The Mineral Resource is reported inclusive of Ore
Reserves.
Table 2: Rupice Mineral Resource estimate by classification - 27
July 2023 (AMC, 2023) cut-off grade of 50 g/t AgEq applied
Classification Tonnes Zn Pb Au Ag Cu Ba Sb
Mt % % g/t g/t % % %
Indicated 18.3 4.6 2.9 1.3 168 0.4 30 0.2
------- ---- ---- ----- ----- ---- --- ----
Inferred 2.8 2.4 1.6 0.5 75 0.2 13 0.1
------- ---- ---- ----- ----- ---- --- ----
Total 21.1 4.3 2.8 1.2 156 0.4 27 0.2
------- ---- ---- ----- ----- ---- --- ----
Notes:
Mineral Resources are based on JORC Code 2012 definitions.
Metal prices, payabilities, and recoveries have been
applied.
The majority of the addition to reserves has come from the
Rupice Northwest Orebody, with some increase in the Rupice reserve
tonnage as shown in Figure 1. It is worth noting that infill and
exploration drilling after the July 2023 MRE are not incorporated
into these ore reserve estimates. The significant increase in ore
reserves underpins an 18-year mine life, which now extends until
2041. This is an increase of 8 years from the initial reserve
announced as part of the 2021 Definitive Feasibility Study ("DFS")
and shows that Rupice has outstanding potential for further
growth.
Figure 1: Rupice Ore Reserve tonnage variance
For further information please visit: www.adriaticmetals.com ;
email: info@adriaticmetals.com , @AdriaticMetals on Twitter; or
contact:
Adriatic Metals PLC
Paul Cronin / Klara Kaczmarek Via Buchanan
Buchanan Tel: +44 (0) 20 7466 5000
Bobby Morse / Oonagh Reidy adriatic@buchanan.uk.com
RBC Capital Markets (Joint Corporate Broker)
James Agnew / Jamil Miah Tel: +44 (0) 20 7653 4000
Stifel Nicolaus Europe Limited (Joint
Corporate Broker)
Ashton Clanfield / Callum Stewart Tel: +44 (0) 20 7710 7600
Citadel Magnus
Cameron Gilenko Tel: +61 2 8234 0100
ABOUT ADRIATIC METALS
Adriatic Metals PLC (ASX:ADT, LSE:ADT1, OTCQX:ADMLF) is a
precious and base metals developer that is advancing the
world-class Vares Silver Project in Bosnia & Herzegovina, as
well as the Raska Zinc-Silver Project in Serbia. The Vares Silver
Project is fully funded to production, which is expected in Q1
2024. Concurrent with ongoing construction activities, the Company
continues to explore across its highly prospective 44km(2)
concession package.
There have been no material changes to the assumptions
underpinning the forecast financial information derived from the
production target in the 19 August 2021 DFS announcement and these
assumptions continue to apply and have not materially changed.
Adriatic Metals is not aware of any new information or data that
materially affects the information included in the announcement of
the updated Mineral Resource Estimate announced on 1 September 2020
and all material assumptions and technical parameters underpinning
the Mineral Resource Estimate continue to apply and have not
materially changed.
MARKET ABUSE REGULATION DISCLOSURE
The information contained within this announcement is deemed by
the Company (LEI: 549300OHAH2GL1DP0L61) to constitute inside
information for the purpose of Article 7of EU Market Abuse
Regulation (EU) No. 596/2014 as it forms part of UK domestic law by
virtue of the European Union (Withdrawal) ACT 2018, as amended. The
person responsible for arranging and authorising the release of
this announcement on behalf of the Company is Paul Cronin, Managing
Director and CEO.
RUPICE ORE RESERVE
STATEMENT AND EXPLANATORY Notes
Location
The Rupice deposit is located near the mining town of Vares,
approximately 50 km north of the capital Sarajevo in Bosnia and
Herzegovina and approximately 60 minutes by car; first via the
Sarajevo - Tuzla freeway to Podlugovi, then a sealed road to Vares.
The town of Vares is the administrative centre for the Vares
District. The Rupice operation consists of an underground mine and
a surface mineral processing plant.
The Rupice deposit is located within a single concession
comprising three separate licence areas: one at Rupice in the west,
and two at Veova č a in the east (Figure 2.1). The initial
concession area in total was 280.54 ha: 83.05 ha at Rupice, and
197.49 ha at Veova č a, and this has since expanded to a total of
865.3 ha: 535.2 ha at Rupice and 330.1 ha at Veova č a (Figure
2.2).
Figure 2.1: Rupice Project location
Figure 2.2: Rupice Licence location
RUPICE Resource Details
The Rupice July 2023 Mineral Resources statement was made public
on 27 July 2023 via an ASX announcement titled: "Mineral Resource
Estimate Grows Indicated Tonnes by 93%" and a LSE announcement of
the same date and title. A summary of the information contained in
the release is outlined below.
For the 2023 MRE Rupice and Rupice Northwest ('RNW'), a total of
287 diamond drill holes for a total of 76,935m define the current
limits of the known mineralization. Up to mid-2022, the deposit was
drilled and sampled using diamond drill holes on a nominal 20m by
20m spacing. From mid-2022 to May 2023, the drill hole spacing was
widened to a 40m x 30m spacing across RNW reflecting the robust
continuity of the stratabound mineralization along and across
strike. Drilling has defined a combined Rupice and RNW mineralized
system having a strike length of >900m and an across-strike
width of >350m.
The geological controls on polymetallic mineralization at Rupice
and RNW were interpreted using lithological, alteration, structural
and geochemical data available from logging and assays. Separate
solids for each lithology from surface to below mineralization were
modelled. Massive and semi-massive visually logged sulphides where
combined to form coherent mineralized solids. The trends in
mineralization were matched to modelled stratigraphic units
controlling the distribution of mineralization.
A block model was constructed, constrained by the interpreted
mineralized envelopes. A parent cell size of 5m(E) x 5m(N) x 5m(RL)
was adopted with standard sub-celling to 1m(E) x 1m(N) x 1m(RL) to
maintain the volumetric resolution of the mineralized lenses.
Grades for all ten elements were interpolated into the empty
block model using the Ordinary Kriging method and a "parent block
estimation" technique, i.e., all sub-cells within a parent cell
were populated with the same grade. The ordinary kriging (OK)
process was performed at different search radii until all cells
were interpolated. The search radii were determined by means of the
evaluation of the semi-variogram parameters, which determined the
kriging weights to be applied to samples at specified distances.
Hard boundaries were honoured between each modelled lens and each
grade domain. Block grades were validated both visually and
statistically and all modelling was completed using Micromine
software. The Rupice deposit has reasonable prospects for eventual
economic extraction based on a number of factors. Metallurgical
test work by Wardell Armstrong International ("WAI") has confirmed
that Rupice mineralization is amenable to flotation processes. The
cut-off grade adopted for reporting (50 g/t Ag equivalent) is
considered reasonable given the Mineral Resource will be exploited
by underground mining methods and potentially processed using
flotation techniques to produce a concentrate or as a direct
shipping crushed product for massive ores. Concentrate off-take
agreements and transport logistics have all been negotiated and
Adriatic Metals has secured long-term tenure across all
tenements.
RUPICE REsERVE DETAILS
Estimation Methodology
The 2023 Ore Reserve is summarised in Table 1. As there is no
Measured Mineral Resource, no Proved Ore Reserves are estimated.
During the stope optimisation process, a maximum of 5% inferred
material is allowed to be included in individual stope shapes.
Overall, less than 1% of the Ore Reserve is in the inferred
category. Any inferred material was given a zero grade. No stoping
had taken place at the cut-off date of this report and while
development stockpiling has commenced, volumes are not sufficient
for any reasonable grade reconciliation to commence. The Ore
Reserve is reported on a 100% basis. A cut-off is applied using an
NSR of US$68/t ore. Adriatic has demonstrated the Vares Project has
a positive net present value (NPV) supporting the statement of Ore
Reserves. The previous Ore Reserve is summarised in Table 1.1 .
Table 1: New Rupice Ore Reserve
Classification Tonnes Mt Zn Pb Au Ag Cu Sb
% % g/t g/t % %
Proved - - - - - - -
----------- ----- ----- ------ ------ ----- -----
Probable 13.8 5.2 3.3 1.4 187 0.5 0.2
----------- ----- ----- ------ ------ ----- -----
Total 13.8 5.2 3.3 1.4 187 0.5 0.2
----------- ----- ----- ------ ------ ----- -----
Notes:
Mineral Resources are based on JORC code definitions. Metal
prices, payabilities, and recoveries have been applied.
Table 1.1: Previous Ore Reserve 19 August 2021
Classification Tonnes Mt Zn Pb Au Ag Cu Sb
% % g/t g/t % %
Proved - - - - - - -
----------- ----- ----- ------ ------ ----- -----
Probable 7.3 5.7 3.6 1.9 202 0.6 0.2
----------- ----- ----- ------ ------ ----- -----
Total 7.3 5.7 3.6 1.9 202 0.6 0.2
----------- ----- ----- ------ ------ ----- -----
The Mineral Resource estimate has been reported in accordance
with the JORC Code ( Table 3 ). The Mineral Resource is reported
inclusive of Ore Reserves.
Table 2: Rupice Mineral Resource estimate by classification - 27
July 2023 (AMC, 2023) cut-off grade of 50 g/t AgEq applied
Classification Tonnes Zn Pb Au Ag Cu Ba Sb
Mt % % g/t g/t % % %
Indicated 18.3 4.6 2.9 1.3 168 0.4 30 0.2
------- ----- ----- ------ ------ ----- ---- -----
Inferred 2.8 2.4 1.6 0.5 75 0.2 13 0.1
------- ----- ----- ------ ------ ----- ---- -----
Total 21.1 4.3 2.8 1.2 156 0.4 27 0.2
------- ----- ----- ------ ------ ----- ---- -----
The Ore Reserve estimate was completed internally by Adriatic
under the direction of the Competent Person ('CP') who was assisted
by key technical staff at Adriatic and AMC. Adriatic has used a LOM
approach, whereby all mining areas were re-evaluated using the new
NSR calculation to determine economic mining areas of which the
Rupice Northwest Zone was an extension to existing operation. AMC
considers this approach reasonable for the 2023 Ore Reserve.
AMC ran multiple scenarios, testing various mining and metal
prices within an offtake and flotation parameters. For the
reserves, metal prices of $23.00/oz Ag, 2,450/t Zn, $2,280/t Pb,
$8,335/t Cu, $1,912/oz Au and $11,525/t Sb USD were used. A mining
cost of $35/t US was used for the cost model, all other costs
remained as per the DFS.
Competent Person
The Competent Person for the 2023 Ore Reserves is Dominic
Claridge, Principal Mining Engineer, an employee of AMC. Dominic
satisfies the requirements to act as a Competent Person in that he
has the relevant experience, has visited site for the basis of a
sign-off and is a Fellow of the Australian Institute of Mining and
Metallurgy (FAusIMM).
Mining
At Rupice, mining occurs from two lenses (Rupice Main and Rupice
Northwest) with all ore hauled to a surface stockpile, before being
crushed and transferred via surface trucks to the Vares Processing
Plant.
The mining method is a combination of mechanized, trackless
underground mining using longitudinal longhole open-stoping (LLHOS)
and transverse longhole open-stoping (TLHOS) with footwall decline
access. Access to the underground workings is via two declines
developed from the surface. Orebody access is via capital
development of ramps, level access drives, and footwall drives.
Figure 3.1: Mine design looking west - longitudinal section view
(Adriatic Metals, 2023 Deswik Mine Planning Output)
Figure 3.2: Mine design looking east (Adriatic Metals, 2023
Deswik Output)
Global constraints are set up within mine planning software to
schedule mining physicals. The key parameters are listed in Table
6.
Table 6: Schedule parameters
Constant Unit Rate Comment
NSR Cut-off US$/t 68 Economic Stopes
------------------ ---------------- ------------------------------------
FW Dilution Factor m 1.0 Last Stope to FW Diluted
------------------ ---------------- ------------------------------------
HW Dilution Factor m 2.0 Last stope to HW Diluted
------------------ ---------------- ------------------------------------
Stope recovery % 95
------------------ ---------------- ------------------------------------
Table 7: LOM schedule resource rates and fleet number
Resource Unit Rate / Month Mining Fleet
Numbers
Jumbo m/month/heading 160 3
---------------------------- ------------------------ -------------------------------
Jumbo m/month/jumbo 160 3
---------------------------- ------------------------ -------------------------------
Production drill m/month 5,000 2
---------------------------- ------------------------ -------------------------------
Cablebolt m/month 2,000 1
---------------------------- ------------------------ -------------------------------
Stope loading t/day 1,200 4
---------------------------- ------------------------ -------------------------------
Backfill loading t/day 600 1
---------------------------- ------------------------ -------------------------------
Table 8: Dilution factors
Dilution Unit Dilution (%)
HW and FW Dilution % 8
----------------- ------------------------
Paste Overbreak
Dilution % 5
----------------- ------------------------
Total Dilution % 13
----------------- ------------------------
Processing
The Vares Processing Plant ('VPP') has a nominal capacity of
800,000tpa, and applies three-stage crushing, grinding, flotation
and filtration to produce two saleable concentrates (Ag/Pb and Zn).
Concentrates will be transported via rail to the Port of Plo č e
for shipment to smelters. The Ag/Pb concentrate contains payable
Ag, Pb, Zn, Cu, Sb and Au (Sb is payable if over 2% and if Ag is
over 2,500g/t and Zn is payable if over 10%). The Zn concentrate
contains payable Zn, Ag, and Au. Figure 4 shows the basic flowsheet
below.
Figure 4 : Vares Process Plant flowsheet (Ausenco, 2021)
The plant consists of the following circuits:
-- Three-stage crushing:
1. Primary jaw crusher, grizzly screen on feed, P80 of 121 mm.
2. Secondary cone crusher, open circuit, P80 of 51 mm.
3. Tertiary cone crusher, P80 of 12 mm, in closed circuit with triple-deck screen.
4. Final crushed ore (triple-deck screen undersize) with P80 of 7 mm.
5. Crushing plant has capacity to produce aggregate for underground backfill
-- Crushed ore handling and storage:
1. Coarse ore storage bins (two), 2,260 t each.
2. Each providing 23 hours of plant feed at the nominal plant
feed rate of 110 wtph (wet tonnes per hour).
-- Ball mill grinding circuit:
1. 4.3m by 7.5m mill with 2,400 kW motor.
2. Product P80 of 40 um.
-- Flotation:
Silver-lead flotation:
Roughers.
-- Concentrate regrind to P 80 of 10 um using 1500 kW
ISAMill.
-- Three-stage cleaners.
Zinc flotation:
Roughers.
-- Concentrate regrind to P 80 of 20 um using 500 kW
ISAMill.
-- Three-stage cleaners.
-- Concentrate handling by means of thickening, filtration,
container loading and truck transportation from site for
silver-lead and zinc concentrates.
-- Tailings handling by means of thickening, filtration to 9.3%
w/w, loading and transport by truck to backfill for the underground
backfill or to TSF.
Adriatic continued to work with Ausenco to upgrade the circuit
design upon completion of the DFS. Additional flotation capacity in
the form of Jameson Cells has been provided after the regrind mills
and ahead of the cleaner cells to improve recoveries and
concentrate grades. This additional cleaner capacity for both the
lead and zinc circuits reduces the risk of metal loss during
periods of high feed grade which can be expected at Rupice. Figure
5 shows the upgraded process flowsheet.
Figure 5: Rupice process plant - with Jameson cells (Ausenco,
2023)
Process plant throughput
Key design criteria for the Vares Processing Plant are shown in
Table 9. Designed throughput is 800,000 tpa with operating
availability of 91.3% (8,000 operating hours per year). Operating
availability for the crushing plant is 65% (5,694 operating hours
per year), and 82% for concentrate/tailings filtration and handling
(7,200 operating hours per year). Adriatic in the process of
conducting formal studies to confirm throughput can be increased to
over 1Mtpa, to align with anticipated mine production. Operating
availability figures are customary for the processing industry and
appropriate for the Vares Processing Plant.
Design of the comminution circuit was based on the nominal power
requirement of average ore. The nominal BWi (hardness) selected was
10 kWh/t. The range of BWi calculated for the variability samples
was 4.7 kWh/t to 13.9 kWh/t and the BWi for the Year 1 composite
sample was 8.4 kWh/t.
High-grade ore with a BWi range of 6-7 kWh/t will be treated in
the early years. Adriatic and Ausenco have used a maximum feed rate
of 130 tph in the LOM production schedule resulting in throughputs
greater than 1.0 Mtpa from Year 6 to Year 10 and greater than the
nominal design of 0.8 Mtpa for all years from Year 4 to Year 15.
Adriatic and Ausenco are confident that the 30% increase above the
nominal throughput capacity in early years will be achieved due to
the preferential treatment of soft, high-grade ore in early years
of the Vares Project, and state that the throughput capacity - ore
hardness relationship will be confirmed by modelling. AMC concurs
with this assessment.
Metal recoveries and concentrate grades were derived using LOM
average grades and the Ausenco/Libertas models.
Table 9: Vares Processing Plant design criteria
Criteria Unit Value
Annual Throughput (Design) kt/a 800
====================== ===================================
Operating Days per Year D 365
====================== ===================================
Operating Availability - Crushing h/a 5694
====================== ===================================
Operating Availability - Grinding and
Flotation h/a 8,000
====================== ===================================
Operating Availability - Concentrate
and Tailings Handling h/a 7,200
====================== ===================================
Design Throughput - Crushing t/h (dry) 290
====================== ===================================
Design Throughput - Grinding and Flotation t/h (dry) 100
====================== ===================================
Design Throughput - Silver-Lead Concentrate
Filtration t/h (dry) 10
====================== ===================================
Design Throughput - Zinc Concentrate
Filtration t/h (dry) 12
====================== ===================================
Crushing Feed Size, 100% Passing mm 600
====================== ===================================
Crushing Product Size, 80% Passing -
Crushed Ore mm 7.12
====================== ===================================
Crushing Product Size, 100% Passing
- Paste Aggregate Fill mm 12
====================== ===================================
Crushing Product Size, 100% Passing
- Cemented Aggregate Fill mm 75
====================== ===================================
Grinding Product Size, 80% Passing um 40
====================== ===================================
Ball Mill Circulating Load % 250
====================== ===================================
Bond Ball Mill Work Index - Design kWh/t 9.5
====================== ===================================
Bond Abrasion Index - Design g 0.168
====================== ===================================
ROM Head Grade, Lead - Average % 2.9
====================== ===================================
ROM Head Grade, Copper - Average % 0.5
====================== ===================================
ROM Head Grade, Zinc - Average % 4.6
====================== ===================================
ROM Head Grade, Gold - Average g/t 1.37
====================== ===================================
ROM Head Grade, Silver - Average g/t 159
====================== ===================================
Metal Recovery Method - polymetallic sequential
flotation
====================== ===================================
Copper Recovery to Silver-Lead Concentrate % 81.2
====================== ===================================
Silver-Lead Concentrate Grade, Copper % Cu 7.4
====================== ===================================
Lead Recovery to Silver-Lead Concentrate % 87.4
====================== ===================================
Silver-lead Concentrate Grade, Lead % Pb 47.4
====================== ===================================
Silver Recovery to Silver-Lead Concentrate % 75.0
====================== ===================================
Silver-lead Concentrate Grade, Silver g/t 2266
====================== ===================================
Zinc Recovery to Zinc Concentrate % 80.2
====================== ===================================
Zinc Concentrate Grade % Zn 57.9
====================== ===================================
Source: Ausenco, 2021.
Permitting
Adriatic has committed to ensuring that the Vares Project will
comply with international best practice regarding environmental and
social standards. Environmental and groundwater management plans
have been submitted, approved and permitted. All major permits for
operations have been granted by the various competent authorities
within Bosnia & Herzegovina, however some more routine permits
and permits that would not ordinarily be issued until after the
commencement of production are outstanding and are expected to be
issued in due course.
Infrastructure
The Vares Municipality offers general trade services and
suppliers, and a considerable amount of 1980s mining
infrastructure, including a rail line which connects to the
national rail grid and inter alia, the Port of Plo č e in the
Republic of Croatia, where bulk commodities, including metal
concentrates are shipped. The capital of Bosnia and Herzegovina,
Sarajevo and its international airport is 60-minutes away.
The Vares Processing Plant is located on a brownfield site that
was previously used for mineral processing. It is located
approximately 25 km south-east of the town of Vares. A newly
constructed, sealed, all-weather road was completed in 2023 and is
available for inbound freight. Concentrates will be trucked 5 km
from the Plant to an existing rail siding where it will be
transloaded and then railed to the Port of Plo č e.
Power
A national electricity grid is operated and maintained by the
State company Electroprivreda d.o.o. Additionally, several power
lines run to the Veovaca open pit and abandoned processing facility
at Tisovci, and thereafter to a number of nearby villages. Most of
these lines deliver a 10 KVA service.
Power supply for the Rupice Surface Infrastructure is provided
from a new, buried 35 kV powerline which will run from Vares Majdan
regional sub-station, following the route of the new road between
Rupice Underground Mine and Vares Processing Plant, and
terminate/connect at the 35 kV incomer switchgear at the Rupice
main sub-station. From the new sub-station at Rupice, power is
reticulated at 10 kV on buried powerlines to the Rupice Surface
Infrastructure.
Water supply
Local water is supplied to all surrounding villages and is
provided by a public company owned and operated by the Vares
council. Raw water supply the Project mine is from a dedicated
utility source provided by the local water company JKP d.o.o. Vares
(JKP).
Underground services
Services namely service water, potable water, compressed air,
and dewatering are reticulated underground via adequately sized and
rated polyethylene piping routed up or down decline ramps or up or
down service holes to or from the production levels.
Underground power distribution
The electrical power to underground mining consumers via the
underground reticulation is supplied at 10 kV and stepped down via
secondary distribution transformers which feed 1 kV underground
power distribution centers.
Maximum power demand for the underground mine operation at site
supply voltage to support full development and production
activities is required to appropriately size and select the
electrical infrastructure for the underground mine. A provision of
emergency power has been made for the critical underground
loads.
Appendix
2023 RUPICE MRE UPDATE
The updated Indicated and Inferred Mineral Resource estimate was
prepared by AMC as set out in Table 1. The effective date is 21
July 2023.
Table 1 - Rupice updated 2023 MRE by Classification - Total
(using AgEq cut-off of 50 g/t)
Rupice Mineral Resource estimate, 21 July 2023
Deposit(s) Resource Tonnes Grades Contained metal
Classification (Mt)
------------ ---------------- ------- ------------------------------------------------- --------------------------------------------
Domains Ag Zn Pb Au Cu Sb BaSO(4) Ag Zn Pb Au Cu Sb BaSO(4)
------------ ---------------- -------
g/t % % g/t % % % Moz Kt Kt Koz Kt kt Kt
------------ --------- ---------------- ------- ---- ----- ----- ----- ----- -------- ------ ---- ---- --- --- --------
Rupice + All Indicated 18.3 168 4.6 2.9 1.3 0.4 0.2 30 98.6 844 535 742 81 36 5,426
RNW Inferred 2.8 75 2.4 1.6 0.5 0.2 0.1 13 6.8 69 46 47 7 4 353
--------------- ------- ---- ----- ----- ----- ----- -------- ------ ---- ---- --- --- --------
Total Indicated + Inferred 21.1 156 4.3 2.8 1.2 0.4 0.2 27 105.4 913 581 789 88 39 5,779
--------- ----------------------------- ------- ---- ----- ----- ----- ----- -------- ------ ---- ---- --- --- --------
Table 2 - Rupice updated MRE by Classification and Deposit
(using AgEq cut-off of 50 g/t)
Rupice Mineral Resource estimates, 21 July 2023
Deposit(s) Resource Tonnes Grades Contained metal
Classification (Mt)
------------ ---------------- ------- -------------------------------------------------------- -------------------------------------------------------
Domains Ag Zn Pb Au Cu Sb BaSO(4) Ag Zn Pb Au Cu Sb BaSO(4)
------------ ---------------- -------
g/t % % g/t % % % Moz Kt Kt Koz Kt kt Kt
------------ --------- ---------------- ------- ------ ------ ------ ------ ------ -------- ------- ------ ------ ----- ----- --------
Rupice All Indicated 11.0 169 4.0 2.6 1.4 0.4 0.2 27 60.1 443 285 503 46 25 3,020
Inferred 1.7 52 1.1 0.8 0.3 0.2 0.1 9 2.9 19 13 17 3 2 154
Total 12.8 153 3.6 2.3 1.3 0.4 0.2 25 62.9 462 298 520 48 27 3,174
--------------------------------------- ------- ------ ------ ------ ------ ------ -------- ------- ------ ------ ----- ----- --------
RNW All Indicated 7.2 166 5.6 3.5 1.0 0.5 0.2 33 38.5 401 250 239 35 11 2,406
Inferred 1.1 111 4.6 3.0 0.9 0.4 0.1 18 3.9 50 32 30 4 1 199
Total 8.3 159 5.4 3.4 1.0 0.5 0.2 31 42.5 452 283 269 39 13 2,605
--------------------------------------- ------- ------ ------ ------ ------ ------ -------- ------- ------ ------ ----- ----- --------
Total Indicated 18.3 168 4.6 2.9 1.3 0.4 0.2 30 98.6 844 535 742 81 36 5,426
Inferred 2.8 75 2.4 1.6 0.5 0.2 0.1 13 6.8 69 46 47 7 4 353
--------------------------------------- ------- ------ ------ ------ ------ ------ -------- ------- ------ ------ ----- ----- --------
Table 3 - Rupice updated MRE by Classification, and Deposit by
Domain (using AgEq cut-off of 50 g/t)
Rupice Mineral Resource estimates, 21 July 2023
Deposit(s) Resource Tonnes Grades Contained metal
Classification (Mt)
------------ ---------------- ------- --------------------------------------------------------- -------------------------------------------------------
Domains Ag Zn Pb Au Cu Sb BaSO(4) Ag Zn Pb Au Cu Sb BaSO(4)
------------ ---------------- -------
g/t % % g/t % % % Moz Kt Kt Koz Kt kt Kt
------------ --------- ---------------- ------- ------ ------ ------ ------ ------- -------- ------- ------ ------ ----- ----- --------
Rupice Upper Indicated 0.4 55 1.0 1.0 0.4 0.2 0.1 6 0.7 4 4 5 1 1 21
Inferred 0.2 74 1.3 1.0 0.3 0.2 0.2 10 0.6 3 2 2 0.5 0 24
Total 0.6 62 1.1 1.0 0.3 0.2 0.1 7 1.3 7 6 7 1 1 46
--------------------------------------- ------- ------ ------ ------ ------ ------- -------- ------- ------ ------ ----- ----- --------
Rupice Main Indicated 10.2 180 4.3 2.7 1.5 0.4 0.2 29 58.8 436 278 495 44 23 2,984
Inferred 1.0 50 1.1 0.7 0.3 0.1 0.1 11 1.7 12 8 12 2 1 112
Total 11.2 168 4.0 2.6 1.4 0.4 0.2 28 60.5 448 286 506 46 25 3,097
--------------------------------------- ------- ------ ------ ------ ------ ------- -------- ------- ------ ------ ----- ----- --------
Rupice Lower Indicated 0.5 35 0.7 0.5 0.2 0.1 0.1 3 0.6 3 2 4 1 1 14
Inferred 0.4 44 0.9 0.8 0.2 0.1 0.1 4 0.6 4 3 3 0.4 0 17
Total 0.9 39 0.8 0.6 0.2 0.1 0.1 3 1.2 7 6 7 1 1 31
--------------------------------------- ------- ------ ------ ------ ------ ------- -------- ------- ------ ------ ----- ----- --------
RNW Upper Indicated 1.3 75 1.5 0.8 0.2 0.1 0.2 13 3.1 19 11 9 1 3 161
Inferred 0.2 65 1.0 1.4 0.2 0.2 0.1 10 0.5 2 3 2 0.4 0.3 23
Total 1.5 74 1.4 0.9 0.2 0.1 0.2 12 3.6 21 14 11 2 3 184
--------------------------------------- ------- ------ ------ ------ ------ ------- -------- ------- ------ ------ ----- ----- --------
RNW Main Indicated 4.5 214 7.4 4.7 1.4 0.6 0.20.1 47 30.8 332 211 199 26 7 2,113
Inferred 0.4 145 7.9 4.9 1.5 0.5 0.1 36 1.9 33 20 20 2 0.5 148
Total 4.9 209 7.5 4.7 1.4 0.6 46 32.7 365 231 219 29 7 2,261
--------------------------------------- ------- ------ ------ ------ ------ ------- -------- ------- ------ ------ ----- ----- --------
RNW Lower Indicated 1.5 98 3.4 1.9 0.7 0.5 0.1 9 4.7 55 29 31 7 2 2,406
Inferred 0.4 105 3.4 2.1 0.5 0.4 0.1 6 1.5 15 9 8 1.6 1 199
Total 1.9 100 3.4 2.0 0.6 0.4 0.1 8 6.2 66 38 39 9 2 2,605
--------------------------------------- ------- ------ ------ ------ ------ ------- -------- ------- ------ ------ ----- ----- --------
Indicated +
Total Inferred 21.1 156 4.3 2.8 1.2 0.4 0.2 27 105.4 913 581 789 88 39 5,779
--------- ----------------------------- ------- ------ ------ ------ ------ ------- -------- ------- ------ ------ ----- ----- --------
Notes:
-- The Mineral Resource estimate has been reported in accordance
with the requirements of ASX Listing Rule 5.8 and the JORC
Code.
-- A cut-off grade of 50 g/t silver equivalent has been applied.
-- Silver equivalent (AgEq) -was calculated using conversion
factors of 31.1 for Zn, 24.88 for Pb, 80.0 for Au, 1.87 for BaSO(4)
, 80.87 for Cu, 80.87 for Sb, and recoveries of 90% for all
elements. Metal prices used were US$2,500/t for Zn, US$2,000/t for
Pb, US$150/t for BaSO(4) , US$2,000/oz for Au, US$25/oz for Ag,
US$6,500/t for Sb and US$6,500 for Cu.
-- The applied formula was: AgEq = Ag(g/t) x 90% + 31.1 x Zn(%)
x 90% + 24.88 x Pb(%) * 90% + 1.87 x BaSO(4) % x 90% + 80 x Au(g/t)
x 90% + 80.87 x Sb(%) x 90% + 80.87 x Cu(%) x 90%
-- It is the opinion of Adriatic Metals and the Competent
Persons that all elements and products included in the metal
equivalent formula have a reasonable potential to be recovered and
sold.
-- Metallurgical recoveries of 90% have been applied in the
metal equivalent formula based on recent and ongoing test work
results.
-- A bulk density (BD) was calculated for each model cell based
on its domain, using regression formulas. For the Main zone: BD =
2.66612 + BaSO(4) x 0.01832 + Pb x 0.03655 - Zn x 0.02206 + Cu x
0.09279 for the barite high-grade domain, BD = 2.72748 + BaSO(4) x
0.02116 + Pb * 0.04472 + Zn x 0.01643 - Cu x 0.08299 for the barite
low-grade domain; and for the NW zone: BD = 2.92581 + BaSO(4) x
0.01509 + Pb x 0.04377 - Zn x 0.02123 + Cu x 0.10089 for the barite
high-grade domain, BD = 2.74383 + BaSO(4) x 0.01731 + Pb x 0.04573
+ Zn x 0.02023 - Cu x 0.06041 for the barite low-grade-domain (the
barite domains were interpreted using 30% BaSO(4) cut-off).
-- Rows and columns may not add up due to rounding.
APPIX 1: RUPICE MRE JORC TABLES
Section 1 Sampling Techniques and Data
(Criteria in this section apply to all succeeding sections.)
----------------------------------------------------------------------------------------------------------------------
Criteria JORC Code Explanation Commentary
-------------------------------------- --------------------------------------
Sampling techniques Nature and quality of sampling (e.g. Drill core samples were collected from
cut channels, random chips, or half cut PQ3 and HQ3 diameter core,
specific specialised where the core
industry standard measurement tools was sawn exactly in half along a
appropriate to the minerals under pre-defined cutting line.
investigation, such The half core samples, typically
as down hole gamma sondes, or handheld weighing between 4-12kg, were placed
XRF instruments, etc). These examples into labelled and tagged
should not be sample bags prior to dispatch to the
taken as limiting the broad meaning of SGS Ankara laboratory in Turkey.
sampling. Sample intervals were determined by
the geologist, routinely at nominal 1m
intervals unless
selectively sampled on narrower
intervals where geological boundaries
exist to a minimum length
of 0.2 m. A maximum sample size of 1.2
m is used when sampling to geological
contacts.
Portable XRF is used to confirm
sulphides and barite quantities in
core. pXRF results are
used for indicative purposes only and
not as final assay.
-------------------------------------- --------------------------------------
Include reference to measures taken to Sample intervals were selected by the
ensure sample representivity and the logging geologist based on geological
appropriate calibration criteria or using
of any measurement tools or systems a nominal 1m sample length in
used. homogenous massive sulphide ore. A
minimum sample length of
0.2 m is employed where necessary.
Sampling is based on visually
mineralized intervals, with
a calibrated portable XRF device used
only as a guide. pXRF is calibrated
using standards
daily when in use.
-------------------------------------- --------------------------------------
Aspects of the determination of For drill hole analyses, diamond
mineralisation that are Material to drilling was used to obtain 4 to 12kg
the Public Report. In samples, crushed, pulverized
cases where 'industry standard' work and split for Fire Assay (30g charge),
has been done this would be relatively ICP-AES and ICP-MS, AAS, XRF and
simple (e.g., 4-acid digest using
'reverse circulation drilling was used external laboratories and certified
to obtain 1 m samples from which 3 kg laboratory methods.
was pulverised Prior to October 2022, samples were
to produce a 30 g charge for fire dispatched by dedicated road transport
assay'). In other cases, more to ALS Bor in Serbia
explanation may be required, for sample prep, splitting and
such as where there is coarse gold analysis across several ALS labs
that has inherent sampling problems. (Ireland and Romania).
Unusual commodities From October 2022 core samples were
or mineralisation types (e.g. sent to SGS Ankara, Turkey by truck
submarine nodules) may warrant for sample preparation
disclosure of detailed information. (SGS Code PRP89), gold analysis by
30-gram fire assay with AA finish (SGS
code FAA303), base
and precious metal as well as
multi-element analyses using a 4-Acid
Digest with ICP-AES finish
(code ICM40B). AAS was used for
over-detection limit analysis of base
metals.
Barite was assayed using lithium
borate fusion prior to acid
dissolution and ICP-MS analysis
(SGS code ICP95A). Overlimit Barium
(>10%) results were analysed using
portable pXRF (SGS
code pXRF73C27) and the results above
detection limit (50%) sent to SGS
Lakefield, Canada
by air freight for whole-rock XRF
analysis (SGS Code GC_XR76V).
-------------------------------------- --------------------------------------
Drilling techniques Drill type (e.g. core, reverse All drill holes were drilled using PQ3
circulation, open-hole hammer, rotary and HQ3 diameter core.
air blast, auger, Bangka, All drill holes were drilled by
sonic, etc) and details (e.g. core drilling contractor Drillex BH d.o.o.,
diameter, triple or standard tube, a division of Drillex
depth of diamond tails, International.
face-sampling bit or other type, PQ3 and HQ3 core was held in a core
whether core is oriented and if so, by barrel by a stainless steel "split"
what method, etc). inner tube. The use
of the inner tube ensured that all
core maintained its orientation prior
to removal into the
core trays. Drill core was stored in
suitable core boxes and stacked on the
premises of the
secure exploration facility in Vares.
All drill holes were surveyed at 9 m
and every 30 m thereafter by a Reflex
"Ezy-Track" digital
down-hole survey tool to end of 2022.
As of 2023, all holes have been
surveyed using the Reflex
'Sprint IQ' and 'Omni' on the fly
north seeking non-magnetic gyroscopic
tools at 5 m intervals
in and 10 m out of holes. No
significant deviation or drilling
problems have been identified.
Representatives from Reflex have been
to drill rigs to calibrate, check and
train on correct
usage of tools.
-------------------------------------- --------------------------------------
Drill sample recovery Method of recording and assessing core All core was geotechnically logged to
and chip sample recoveries and results verify drillers blocks, record run
assessed. length, recovered
length, core recovery (%) and RQD.
There is no observed relationship
between sample recovery and grade, and
no significant loss
of core. No sample bias has been
identified. Core recoveries are
generally >90%
-------------------------------------- --------------------------------------
Measures taken to maximise sample
recovery and ensure representative
nature of the samples.
-------------------------------------- --------------------------------------
Whether a relationship exists between
sample recovery and grade and whether
sample bias may
have occurred due to preferential
loss/gain of fine/coarse material.
-------------------------------------- --------------------------------------
Logging Whether core and chip samples have Diamond drill core samples have been
been geologically and geotechnically geologically and geotechnically logged
logged to a level to a level of
of detail to support appropriate detail to support appropriate Mineral
Mineral Resource estimation, mining Resource estimation, mining studies
studies and metallurgical and metallurgical
studies. studies. Not all drill holes
penetrated the massive sulphide
mineralization, but all were
used to guide the geological
interpretations supporting the Mineral
Resource estimates.
-------------------------------------- --------------------------------------
Whether logging is qualitative or All core is photographed. Core logging
quantitative in nature. Core (or is both qualitative and quantitative.
costean, channel, etc) Logging records
photography. lithology, alteration, structures,
veining, sulphide minerals and
percentages.
-------------------------------------- --------------------------------------
The total length and percentage of the 100% of drill core is logged.
relevant intersections logged.
-------------------------------------- --------------------------------------
Sub-sampling techniques and sample If core, whether cut or sawn and Drill core was cut in half using an
preparation whether quarter, half or all core Almonte automatic diamond core saw.
taken. Nominally 1 in 30
samples were cut in quarters, and both
halves analysed (for purposes of field
duplicates).
-------------------------------------- --------------------------------------
If non-core, whether riffled, tube Not applicable, as all samples are
sampled, rotary split, etc and whether core.
sampled wet or
dry.
-------------------------------------- --------------------------------------
For all sample types, the nature, Collection of around 4-12kg of HQ and
quality, and appropriateness of the PQ half core material with subsequent
sample preparation pulverisation
technique. of the total charge provided an
appropriate and representative sample
for analysis. Generally
4-6kg for HQ core and 6-12kg for PQ.
Prior to October 2022, sample
preparation was undertaken at the ALS
laboratory in Bor, Serbia
to industry best practice.
From October 2022, sample preparation
was undertaken at the SGS Laboratory
in Ankara, Turkey
to industry best practice.
-------------------------------------- --------------------------------------
Quality control procedures adopted for Whole rock blanks and certified
all sub-sampling stages to maximise standards (1 in 15) were introduced
representivity to the sample stream
of samples. as a QAQC check on laboratory
processes. Industry best practice was
adopted by ALS and SGS
for laboratory sub-sampling and the
avoidance of any cross contamination.
ALS + SGS inserted
internal controls and cleaned all
sampling equipment with a barren
quartz rock every 20 samples.
All sample preparation stations and
equipment were compressed air cleaned
after every sample.
A QAQC inspection of ALS (Bor) and SGS
(Ankara) facilities was completed in
October 2022 by
Adriatic Metals (S. Smolonogov) with
practices found to be in line with
industry best practice.
-------------------------------------- --------------------------------------
Measures taken to ensure that the The half-core sampling is considered a
sampling is representative of the reasonable representation of the
in-situ material collected, in-situ material.
including for instance results for Nominally 1 in 30 samples were cut in
field duplicate/second-half sampling. quarters, and both halves analysed
(for purposes of
field duplicates). All field
duplicate, coarse duplicate and pulp
duplicates are reviewed
and compared. Standards and Blanks are
investigated if over 2SD (2 Standard
Deviations) from
certified mean and re-assay initiated
if over 3SD or as required when over
2SD to validate
materials either side of poorly
performing blanks or standards. QAQC
outcomes are checked
on assay receipt by Adriatic Metals
and before acceptance into the
Database. A dedicated Data
Geologist with support from
consultants gDAT monitor all received
QAQC data as it arrives.
-------------------------------------- --------------------------------------
Whether sample sizes are appropriate Sample size of around 4-12kg is
to the grain size of the material appropriate and found to reasonably
being sampled. represent the material
being tested. There is acceptable
repeatability of multiple economic
elements. 4-6kg for HQ
and 6-12kg for PQ.
-------------------------------------- --------------------------------------
Quality of assay data and laboratory The nature, quality and Prior to October 2022, primary
tests appropriateness of the assaying and analysis was completed through ALS
laboratory procedures used and Laboratories. With Sample
whether the technique is considered preparation as ALS Bor, Serbia with
partial or total. splitting and sending pulps to
Loughrea, Ireland and Rosa
Montana, Romania.
From October 2022, primary sample
preparation and analysis was completed
by SGS Laboratory
in Ankara, Turkey
All facilities are industry best
practice and ISO certified. Multi
elements were assayed by
an ICP-AES technique following a
four-acid digest. Gold was determined
using a fire assay
on nominal 30g charges. Barite was
determined from a lithium meta-borate
fusion followed by
dissolution and ICP-AES analysis.
Total carbon and sulphur were
determined by a Leco analyser.
All techniques were appropriate for
the elements being determined. Use of
a 4-Acid digest
is a near-total digestion of all
minerals present.
Additional pXRF and whole rock XRF
analysis is required to determine
accurate concentrations
of barium as part of reported assays.
Whole rock XRF analysis is completed
at Lakefield Canada.
Initiation of a gravimetric finish was
initiated at start of Q2 2023. Gold
results >3.00 g/t
are re-assayed by fire assay with
gravimetric finish at SGS Ankara
laboratory.
-------------------------------------- --------------------------------------
For geophysical tools, spectrometers, There was no reliance on determination
handheld XRF instruments, etc, the of analysis by geophysical tools. All
parameters used analyses as reported
in determining the analysis including and used in any calculations are by
instrument make and model, reading ISO certified laboratories, (ALS -
times, calibrations Bor, Loughrea, Rosa
factors applied and their derivation, Montana; SGS Ankara), using
etc. calibrated, industry standard and
recognized methods, QAQC and
equipment.
A Hitachi X-Met 8000 hand-held pXRF
analyser is used to rapidly define
metal and barite abundance
during logging, field mapping and
sampling. Results are not used in
resource estimates or
publicly reported.
-------------------------------------- --------------------------------------
Nature of quality control procedures Certified Reference Materials
adopted (e.g. standards, blanks, ("CRM's"), certified blanks, quarter
duplicates, external core replicates were used
laboratory checks) and whether and considered to be appropriate for
acceptable levels of accuracy (i.e. the elements being analysed. CRM's,
lack of bias) and precision blanks, and replicates
have been established. were added at a rate better than 1 in
15. All results reported by SGS on the
CRMs and blanks
were within 3 standard deviations
(3SD). Where deviations greater than
2SD where noted, investigations
were completed and where necessary
samples above and below queried
Standards and Blanks were
re-assayed. To date returned results
are considered to be representative of
material sampled.
A program of 5% of assay pulps are
submitted for Umpire lab re-assay. The
program is continuous
and ongoing as part of QAQC controls
in addition to measures already in
place.
ACME Laboratory (Bureau Veritas) in
Ankara, Turkey is used as the current
independent Umpire
Laboratory replicating 5% of pulp
duplicate results for QAQC. ACME
commenced QAQC work on
exploration drilling samples as of
2023. Prior to 2023, the SGS Bor,
Serbia assay laboratory
has been used as the independent
Umpire laboratory for primary samples
returned from ALS Bor,
Serbia. ALS previously completed
primary analysis using multiple
facilities with sample preparation
at ALS Bor, Serbia; base metals
analysis at ALS Loughrea Ireland; gold
at ALS Rosa Montana
Romania.
-------------------------------------- --------------------------------------
Verification of sampling and assaying The verification of significant Significant mineralization is reviewed
intersections by either independent or internally by multiple Senior
alternative company geological staff, the
personnel. Vares Project Exploration Manager, and
Head of Exploration. Significant
intercepts are visually
verified daily as core is brought in
for logging, included in summary logs,
and then cross-checked
during detailed logging. Tenor and
confirmation of mineralization and
barite content is checked
by portable XRF (Hitachi X-Met 8000).
Mineralized intervals are regularly
viewed and verified by geosciences
qualified and certified
investors and analysts. Recent drill
core is presented in fully marked-out
core boxes and
with full assay data provided for
correlation with drilled intercepts.
Independent relogging of select
mineralized and non-mineralized drill
core has been completed
by multiple consultants involved in
technical studies including Elizabeth
Thompson (Structural
Consultant - Transition Elements), Joe
Crummy (ARD Consultant - JC
Consulting), Joe Burke
(Geotechnical Consultant - Avoca
Geotechnical) and others.
-------------------------------------- --------------------------------------
The use of twinned holes. Several twinned holes have been
completed, with separation between
holes reduced to within
15 m.
Several cross-holes have also been
drilled from adjacent drill platforms,
passing through
the trace of previous holes and at
near right angle cutting previously
intercepted mineralization.
Confirming position, grade, and
thickness.
In general, holes completed are part
of tight 'drill fans' with separation
of holes between
fans of 25 m to 30 m with respect to
targeted ore zones. Separation
distances are <25 m between
holes closer to surface and the
collars of fan holes drilled from the
same drill platform.
In 2023 in areas referred to as the
Rupice Northwest Western Zone, and
Rupice Northwest Lower
Zone, hole spacings have been reduced
to nominally <20 m between mineralized
intercepts. This
is due to the increased folding and
faulting seen in these areas requiring
closer spaced drilling
to resolve geology.
-------------------------------------- --------------------------------------
Documentation of primary data, data Data are stored in a Cloud Server with
entry procedures, data verification, server back-ups at various locations
data storage (physical including Vares,
and electronic) protocols. Bosnia & Herzegovina and Cheltenham,
UK. The data and databases are managed
by consultants
gDat Data Solutions in an acQuire
database. The acQuire database is
regularly backed-up. There
is a dedicated Data Geologist and a
Junior Data Geologist within
Exploration managing and
ensuring the QAQC of all daily
geological inputs and outputs from the
database and various
software (downhole survey, surface
survey, audits, drilling data,
logging, sampling, sample
dispatch, assaying and assay QAQC).
gDat interfaces daily with the site
Data Geologists.
-------------------------------------- --------------------------------------
Discuss any adjustment to assay data. No adjustments were necessary.
-------------------------------------- --------------------------------------
Location of data points Accuracy and quality of surveys used Sampling sites were surveyed using
to locate drill holes (collar and Total Station to better than 0.05 m
down-hole surveys), accuracy in the local
trenches, mine workings and other BiH coordinate system.
locations used in Mineral Resource A Reflex TN4 north seeking, gyroscopic
estimation. rig alignment tool was used as of 2023
for precision
alignment of holes at the collar. The
TN14 is mounted on the rod string with
preset mast dip
and hole azimuth referenced to grid
north converted from UTM. Mast and rig
are moved till
TN14 reads that the rod string is
aligned to set dip and direction. The
TN14 can also be used
in place of the Total Station or as a
check of the Total Station collar
set-up survey accuracy.
-------------------------------------- --------------------------------------
Specification of the grid system used. The grid system used MGI 1901 /
Balkans Zone 6.
-------------------------------------- --------------------------------------
Quality and adequacy of topographic The topographic surface of the
control. immediate area was generated from a
LiDAR survey to an accuracy
of approximately 0.05 m. It is
considered sufficiently accurate for
the Company's current
activities. All drill collars have
been compared to the LiDAR surface and
physically validated
where discrepancies in elevation or
position where noted. Validation has
been periodically
required in mountainous terrain where
holes post-date LiDAR and earthworks
have been completed
to establish drill pads.
-------------------------------------- --------------------------------------
Data spacing and distribution Data spacing for reporting of Drill hole spacing does not exceed 50
Exploration Results. m which is considered acceptable for
reporting exploration
results. The nominal drill spacing is
on 40 m spaced sections. The primary
method of drilling
is to complete holes from a single
drill platform in mountainous terrain.
Holes are drilled
as part of a 'fan' of holes. Design of
holes aims to achieve a nominal 25 m
to 30 m separation
between mineralized zones to achieve
either an Inferred or Indicated level
of exploration
confidence.
-------------------------------------- --------------------------------------
Whether the data spacing and Drill hole spacing is deemed
distribution is sufficient to sufficient to establish the degree of
establish the degree of geological geological and grade continuity
and grade continuity appropriate for appropriate for the Mineral Resource
the Mineral Resource and Ore Reserve classification to be applied. The data
estimation procedure(s) spacing is suitable
and classifications applied. for a stratabound, continuous style of
polymetallic mineralization with
minimal structural
disturbance or remobilisation.
Where structural complexity is noted
(RNW Western and Lower Zones), drill
hole spacing is
reduced to <20 m.
-------------------------------------- --------------------------------------
Whether sample compositing has been Sample compositing was not applied.
applied. Currently reported results are on a
nominal 1m spacing
unless samples have been character
sampled or extended to visual
contacts. Minimum sample
size is 0.2 m and maximum is 1.2 m
unless there has been low sample
recovery.
-------------------------------------- --------------------------------------
Orientation of data in relation to Whether the orientation of sampling Drill holes have been drilled at dips
geological structure achieves unbiased sampling of possible of between -45 to -90deg from surface.
structures and The mineralized
the extent to which this is known, body is generally shallow dipping to
considering the deposit type. the NE and plunging to the NW at
angles of 30 to 40 degrees.
Current drilling intersects
mineralization at generally a high
oblique angle.
New drilling in the RNW Lower Zone has
seen mineralization approach
subvertical angles. Drilling
in these areas has been at right
angles to steep mineralization and
from 45 to 60 degrees
allowing multiple holes to transect
steeper mineralization over a vertical
elevation spread
of holes.
-------------------------------------- --------------------------------------
If the relationship between the It is not considered that the drilling
drilling orientation and the orientation has introduced a sampling
orientation of key mineralised bias, as the
structures is considered to have drilling is considered to be
introduced a sampling bias, this orthogonal to the stratabound
should be assessed and reported mineralization, or close to it.
if material.
-------------------------------------- --------------------------------------
Sample security The measures taken to ensure sample Chain of Custody of digital data is
security. managed by the Company. Physical
material was stored on
site and, when necessary, delivered to
the assay laboratory. Thereafter
laboratory samples
were controlled by the nominated
laboratory. All sample collection was
controlled by digital
sample control file(s) and hard-copy
ticket books.
Transfer of samples to laboratories is
by a dedicated enclosed commercial
truck. No other
freight is included with shipments.
Weigh-bills are used as are multiple
customs declarations.
Dispatched samples have sample tickets
included, are referenced to a
pre-dispatch sample submission
sheet, and are cross-checked on
receipt at laboratory. To date no
discrepancies, sample loss
or tampering with samples has been
recorded.
-------------------------------------- --------------------------------------
Audits or reviews The results of any audits or reviews Laboratory reviews of SGS Ankara,
of sampling techniques and data. Turkey; ALS Bor Serbia; SGS Bor,
Serbia; ACME (Bureau Veritas)
Ankara, Turkey were completed by
Sergei Smolonogov (MAIG, RPGEO), Head
of Exploration of Adriatic
Metals, in October 2022 and SGS + ACME
Lab in Ankara in February 2023. There
were no material
issues found. Items for laboratory
improvement were noted but were not
considered material
to sample QAQC outcomes.
As a result of Adriatic Metals audit,
SGS Ankara has renovated and installed
vacuum dust extraction
enclosed workstations (crushers,
pulverisers, splitters) to reduce
sample contamination risks
in sample preparation. Changes
effective as of February 2023.
-------------------------------------- --------------------------------------
Section 2: Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section)
----------------------------------------------------------------------------------------------------------------------
Criteria JORC Code explanation Commentary
-------------------------------------------------------------- --------------------------
Mineral tenement and land Type, reference name/number, location and ownership including The Rupice deposit is
tenure status agreements or material issues located within the
with third parties such as joint ventures, partnerships, Company's 100% owned
overriding royalties, native title Concession, No.
interests, historical sites, wilderness or national park and 04-18-21389-1/13,
environmental settings. located 13km west of Vares
in Bosnia. There are no
known material issues with
any third-party
other than normal
royalties due to the
State.
-------------------------------------------------------------- --------------------------
The security of the tenure held at the time of reporting along The Concession is in good
with any known impediments standing with the
to obtaining a licence to operate in the area. governing authority and
there is no known
impediment
to the Concession
remaining in force until
2038 (25 years), subject
to meeting all necessary
reporting requirements.
-------------------------------------------------------------- --------------------------
Exploration done by other Acknowledgment and appraisal of exploration by other parties. Modern exploration
parties commenced with the work of
Energoinvest in the late
1960s. During 1968-1969
underground development of
455 m of drives and cross
cuts were made, and 11
surface trenches
dug for a total length of
93.5 m. Between 1980 and
1989, 49 holes were
drilled for a total
of 5,690.8 m. Sample
material from all these
programs was routinely
analysed for lead, zinc,
and barite, and on
occasion silver and gold.
The deposit was the
subject of several reserve
estimates in the 1980s.
This work is documented in
many reports which are
certified by those
geoscientists and
Institutes that undertook
the work. The work is
considered of a standard
equal to that found within
today's exploration
industry.
-------------------------------------------------------------- --------------------------
Geology Deposit type, geological setting and style of mineralisation. The host rocks at Rupice
comprise Middle Triassic
limestone, dolostone,
calcareous and dolomitic
marl, and a range of
mostly fine-grained
siliciclastic rocks
including cherty mudstone,
mudstone,
siltstone, and
fine-grained sandstone.
The main mineralized
horizon is a brecciated
dolomitic
unit that dips at around
50(o) to the northeast and
has been preferentially
mineralized with
base, precious and
transitional metals. The
Triassic and Jurassic
sequences have been
deformed
by early-stage ductile
shearing and late-stage
brittle faulting.
The Rupice polymetallic
mineralization consists of
sphalerite, galena, barite
and chalcopyrite
with gold, silver,
tetrahedrite, boulangerite
and bournonite, with
pyrite. Most of the
high-grade
mineralization is hosted
within a brecciated
dolomitic unit, which is
interpreted to be
cross-cut
by northwest striking,
westerly dipping syn-post
mineral faulting.
Thickening of the central
portion of the deposit
occurs in an area of
structural complexity.
Mineralized widths of up
to 65 m true thickness are
seen in the central
portion of the deposit.
To date, the massive
sulphide mineralization at
Rupice has a defined
strike length of 650
m, with an average
true-width thickness of
around 20 m. However,
recent drilling northwest
of Rupice has intercepted
a massive sulphide body
referred to as Rupice
Northwest (RNW). RNW
is not connected to Rupice
mineralization. RNW is at
a stratigraphically lower
level (footwall
of Lower GYD unit) than
Rupice (hanging-wall of
Lower GYD unit) and is
interpreted to overlap
but not connect with
Rupice through the area
referred to as the 'Gap'.
RNW currently has a strike
extent of approximately
250 m with mineralization
remaining open
in most directions. The
RNW mineralization appears
mostly not impacted by
deformation at the
scale of drilling and
compared to Rupice is a
continuous tabular
stratabound mineralized
body.
Multiple mineralized
intercepts at RNW have
true thicknesses of over
40 m along the centre
axis of mineralization.
Mineralization away from
the central NW-SE strike
axis tapers away
at the margins to <1.00 m
true thickness. This can
be 60 m to 80 m away and
either side from
the strike axis centre
line. The up-dip extent of
RNW has not yet been
closed-off, therefore
a true SW-NE width of
mineralization cannot be
stated. The strike extent
is similarly open.
To the NW, the RNW
mineralization appears to
be thickening and widening
on the last sections
drilled. To the SE and
closest to Rupice,
mineralization is still
continuous, and has a
thickness
of up to 20 m. On the
sections drilled to date,
RNW is only closed on the
NE side where it
rapidly tapers out with
the absence of the
overlying GYD unit.
Rupice NW mineralization
is strongly associated
with barite occurring as a
matrix to sulphides.
Barite can be up 80% of
mineralized zones. Galena,
sphalerite, pyrite and
chalcopyrite are
the most visible and
identifiable sulphides
during logging. The
footwall zone below
massive
and semi-massive sulphides
is pervasively
silica-sericite altered
with fine disseminated
sulphides
throughout and crosscut by
base metal stringer zones
and mineralized faults /
shears. This
alteration zone can extend
20 m to 30 m below massive
and semi-massive
sulphides. Overall,
the footwall zone appears
enriched in zinc.
On the hanging wall of
Rupice NW there is a
pyrite rich, low barite,
high base metal content
horizon of mineralization
referred to as the Upper
Zone. It is approximately
90 m to 100 m
vertically above Rupice
NW. It appears to be a
mineralized zone occurring
as matrix within
a dolomite breccia. The
mineralized Upper Zone
marks the transition from
Jurassic into mineralized
Triassic sediments and
generally occurs at the
base of a major thrust
zone and what is referred
to as the Upper GYD unit.
-------------------------------------------------------------- --------------------------
Drill hole information A summary of all information material to the understanding For the 2023 MRE (Rupice
of the exploration results including and RNW), a total of 287
a tabulation of the following information for all Material diamond drill holes for a
drill holes: total of 76,935
* easting and northing of the drill hole collar m define the current
limits of the known
mineralization. Up to
* elevation or RL (Reduced Level - elevation above sea mid-2022, the deposit was
level in metres) of the drill hole collar drilled
and sampled using diamond
drill holes on a nominal
* dip and azimuth of the hole 20 m by 20 m spacing. As
of mid-2022 to
May 2023, the drill hole
* downhole length and interception depth spacing was widened to a
40 m x 30 m spacing across
RNW reflecting
* hole length. the robust continuity of
the stratabound
mineralization along and
If the exclusion of this information is justified on the across strike. Drilling
basis that the information is not defined a combined Rupice
Material and this exclusion does not detract from the and RNW mineralized system
understanding of the report, the Competent having a strike length of
Person should clearly explain why this is the case. >900 m and
an across-strike width of
>350 m.
The Rupice portion of the
2023 Mineral Resource
estimate includes a total
of 207 diamond drill
holes comprising holes
drilled prior to Adriatic
Metals (49), and the
Company's drilling
programs
in 2017, 2018, 2019, 2020,
2021, and 2022 for a total
of 51,228 m to define the
current limits
of known Rupice
mineralization. The
deposit was drilled and
sampled using diamond
drill holes
on a nominal 20 m by 20 m
spacing up to the end of
2022. Drilling defined the
Rupice deposit
to have a strike length of
>600 m and an
across-strike width of
>350 m.
The RNW portion of the
2023 MRE includes a total
of 80 diamond drill holes
from the Company's
drilling programs in 2021,
2022, and 2023 for a total
of 25,708 m to define the
current limits
of the known RNW
mineralization. Up to
Mid-2022, the deposit was
drilled and sampled using
diamond drill holes on a
nominal spacing of 40 m by
20 m. From mid-2022 to end
of May 2023
the drill hole spacing was
widened to a 40 m by 30 m
spacing. The widening of
the drill spacing
was in response to the RNW
deposit being spatially
continuous over its >300 m
strike length
and having a >260 m
across-strike width.
Since the last resource
estimation in September
2020, the drilling program
added 120 new drill
holes and 38,800 m.
No drilling details or
assays are presented in
this release as all have
been publicly reported
to date. The last drill
hole completed and
included in the 2023 July
Resource is BR-29A-23.
-------------------------------------------------------------- --------------------------
Data aggregation methods In reporting Exploration Results, weighting averaging No data aggregation
techniques, maximum and/or minimum methods were applied.
grade truncations (e.g., cutting of high grades) and cut-off Reported Mineral Resource
grades are usually Material and Estimates are calculated
should be stated. by applying a lower
cut-off grade of 50
g/t AgEq (see notes below
Tables 1 to 3 in body of
announcement for
assumptions for AgEq
calculations).
There is no individual
element high-grade
capping.
Grade recoveries of 90%
and commodity prices as
used for the Rupice MRE
from September 2020
were applied.
Metallurgical test work
has been completed on the
Rupice deposit and test
work
is in progress for the RNW
deposit.
Given the style of
mineralization,
mineralogy, and grade of
mineralization at RNW is
similar
to Rupice, the same
metallurgical assumptions
are applied till results
are returned from RNW
test work.
A maximum internal
dilution of 5 m is allowed
within mineralized
wireframes. A top-cut was
not applied.
Previously reported
significant intercepts
were reported as weighted
averages.
-------------------------------------------------------------- --------------------------
Where aggregate intercepts incorporate short lengths of Where significant assays
high-grade results and longer lengths have been previously
of low-grade results, the procedure used for such aggregation reported, short intervals
should be stated and some typical of significant high-grade
examples of such aggregations should be shown in detail. are defined where results
report as >600 g/t AgEq.
This applies down to a
minimum 1 m interval.
Where there are
significant intercepts >5
m, a maximum internal
dilution of 5 m can be
applied.
-------------------------------------------------------------- --------------------------
The assumptions used for any reporting of metal equivalent Metal equivalent
values should be clearly stated. explanations are described
in the body of the text.
-------------------------------------------------------------- --------------------------
Relationship between These relationships are particularly important in the Exploration results used
mineralisation widths and reporting of Exploration Results. in the 2023 July Rupice
intercept lengths Resource update have
previously been reported.
Drill holes have generally
intercepted flat to
shallow dipping
mineralization
orthogonally.
Drill holes have had dips
ranging from 45(0) to
90(0) .
-------------------------------------------------------------- --------------------------
If the geometry of the mineralisation with respect to the The majority of the
drill hole angle is known, its high-grade Rupice
nature should be reported. mineralization is hosted
within a brecciated
dolomitic
unit. Thickening of the
central portion of the
deposit occurs in an area
of interpreted local
folding and deformation.
Mineralized widths up to
65 m true thickness are
seen in the central
portion of the deposit.
To date, the massive
sulphide mineralization at
Rupice has a defined
strike length of 650
m with an average
true-width thickness of
around 20 m. However,
mineralization at Rupice
still
remains open along strike
to the NW, SE, up-dip, and
down-dip.
Recent drilling by
Adriatic Metals BH was
mostly inclined at between
-55(o) and -67(o) to
the southwest,
perpendicular to the
deposit strike, and
intersected the
mineralization at
near orthogonal.
Similarly for RNW,
drilling at -45 to -90
degrees has intersected
mineralization at a high
angle to mineralization
dipping to the NE and
plunging to the NW from 30
to 40 degrees.
-------------------------------------------------------------- --------------------------
If it is not known and only the downhole lengths are reported, Only downhole lengths have
there should be a clear statement been reported in previous
to this effect (e.g. 'downhole length, true width not known'). Exploration releases from
2022 and 2023.
-------------------------------------------------------------- --------------------------
Diagrams Appropriate maps and sections (with scales) and tabulations of Relevant maps and diagrams
intercepts should be included are included in the body
for any significant discovery being reported. These should of the report.
include, but not be limited to
a plan view of drill hole collar locations and appropriate
sectional views.
-------------------------------------------------------------- --------------------------
Balanced reporting Where comprehensive reporting of all Exploration Results is Not applicable. All
not practicable, representative mineralized incepts are
reporting of both low and high-grades and/or widths should be being reported as part of
practiced to avoid misleading 2023 July Rupice MRE
reporting of Exploration Results. Update.
-------------------------------------------------------------- --------------------------
Other substantive Other exploration data, if meaningful and material, should be No substantive exploration
exploration data reported including (but not data not already mentioned
limited to): geological observations; geophysical survey in the report has been
results; geochemical survey results; used in the preparation
bulk samples - size and method of treatment; metallurgical of the Mineral Resource
test results; bulk density, groundwater, estimate.
geotechnical and rock characteristics; potential deleterious
or contaminating substances.
-------------------------------------------------------------- --------------------------
Further work The nature and scale of planned further work (e.g., tests for Further drilling will be
lateral extensions or depth undertaken in 2023 for
extensions or large-scale step-out drilling). mineralization along
strike, and up and down
dip. dependent on
exploration success and
funding.
Adriatic Metals has
committed to fully
defining RNW within its
exploration tenement to
maintain
an updated Rupice MRE with
continued growth of RNW
included. Drilling will
continue on a 40
m section spacing, with
mineralization pierce
points nominally 30 m
between hole intercepts.
Fan drilling from a single
drill platform per section
will be used to intersect
the majority
of mineralization on
sections. Additional drill
platforms will be
constructed where a single
fan cannot fully drill out
a section.
Further work on RNW will
focus on completing infill
drilling to an Indicated
level of resource
risk, extending
mineralization
south-westward,
south-eastward and once
land access is secured,
to the northwest beyond
the current Rupice
Exploitation License.
Drilling at Rupice will
also continue to step-out
from mineralized areas
left open by previous
drilling. This is
dominantly in the
southwestern up-dip
direction along the strike
extent
of Rupice.
-------------------------------------------------------------- --------------------------
Diagrams clearly highlighting the areas of possible Diagrams have been
extensions, including the main geological included in the body of
interpretations and future drilling areas, provided this this report. Specific
information is not commercially sensitive. diagrams highlighting
areas
of future Rupice and RNW
growth potential are
included in Adriatic
Metals Exploration Update
Announcements from
January, February, April,
June, and July 2023.
-------------------------------------------------------------- --------------------------
Section 3: Estimation and Reporting of Mineral Resources
(Criteria listed in section 1, and where relevant in section 2, also apply to this section)
----------------------------------------------------------------------------------------------------------------------
Criteria JORC Code explanation Commentary
------------------------- ---------------------------------------------------------------
Database integrity Measures taken to ensure Data used in the MRE was provided from a validated Micromine
that data has not been database, which in turn was sourced
corrupted by, for from a validated acQuire database prepared by Adriatic Metals
example, transcription and hosted on the company SQL
or keying errors, between server. QAQC routines were employed to confirm the validity of
its initial collection data. Data entry was also checked
and its use for Mineral using set procedures e.g., drill hole ID verification,
Resource estimation overlapping intervals, overlength of
purposes. intervals. All files (collar, survey, geology, assay, recovery,
geotechnical, density, logging)
were validated to ensure they were populated with the correct
original data.
Assay data QAQC included checking every field in the data table
for agreement between received
data and sample submission sheets. Strict control of incoming
data formats for compliance
with SQL data requirements was in place.
Using the acQuire Data Management system, there is a strict
prescriptive workflow process
requiring only registered users to be able to enter data in
preset formats. All data is validated
by the user before being able to be checked in. No
non-conforming data passes validation.
acQuire restricts the ability to change / modify data by user
level / authority. Changes to
the database at SQL level is restricted to Database management
staff.
All logging data is directly entered into specific logging
laptops. All drill hole metadata
e.g. collar, downhole survey, orientation, and logging data are
stored in the virtual server
cloud distributed between servers located in Vares, BiH and
Cheltenham, UK.
The Database is managed by the Adriatic Metals dedicated Data
Geologist. A position dedicated
to Data Management within the Exploration Department. The Data
Geologist works with the Adriatic
Metals IT department to ensure security and accessibility to
server-based data. gDat Data
Solutions consultants are retained to assist in managing and
maintaining the acQuire database.
The Database is updated as new data becomes available. Back-ups
are generated daily and kept
on BiH and UK cloud servers.
------------------------- ---------------------------------------------------------------
Data validation Data validation starts with the use of templates for logging
procedures used. core to ensure the correct capture
of data. There is flexibility to adapt and change the data
entry templates. Change can only
be made by an authorized level acQuire user.
Data is transferred directly to the SQL server in real-time as
being inputted. Data is checked
for double entry across columns, logged intervals against final
depth, correct EOH depth,
correct downhole survey coordinates, correct collar survey
coordinates, no overlapping logged
or surveyed intervals, no sampling or logging intervals exceed
the actual EOH depth.
Incoming assay data is checked for correct format before
importing. Checks include usage of
acceptable and agreed characters, headers, and columns. Initial
imports are in text and csv
formats. Checks are made before importing data that there is no
risk of overwriting or duplication
of sample and assay data. Additional checks are performed to
ensure that automatic calculation
fields are not corrupted and are correctly translating results
e.g., ppm in %, conversion
of BaO to BaSO4%.
The database is updated in a streaming format as the work is
completed. The method allows
for checking of the data transfer process and detection /
avoidance of bulk load errors.
The following specific error checks are carried out:
-- Missing collar coordinates.
-- Missing values in fields FROM and TO.
-- Cases when FROM values equal or exceed TO ones (FROM>=TO).
* Data availability. The data availability is checked
for each drill hole in the tables to spot
missing: collar coordinates, sampling data, downhole survey
data, lithological characteristics.
* Duplicate drill hole numbers in the table of the
drill hole collar coordinates.
* Duplicate sampling intervals.
* Duplicate downhole measurement data.
* Duplicate intervals of the lithological column.
* Sample "overlapping" (when the sample TO value
exceeds FROM value of the next sample).
* Negative-grade samples.
Drill hole data is always verified against source
documentation.
Surveyed drill holes are verified visually for consistency.
Survey data is checked visually for deviations in drilling
angles and direction.
The Competent Person is satisfied that database integrity is
appropriate to support Mineral
Resource estimation.
------------------------- ---------------------------------------------------------------
Site visits Comment on any site Sergei Smolonogov (RPGeo) is based on-site in Vares and is
visits undertaken by the responsible for planning and implementation
Competent Person and the of the recent drilling programs, overseeing the preparation of
outcome of those visits. the samples and their dispatch
to the various laboratories. Mr. Smolonogov assumes
responsibility for the data components,
QAQC and geological interpretation. Dmitry Pertel (AMC
Consultants Pty Ltd) assumes responsibility
for the grade interpolation and reporting of the Mineral
Resource estimate and has previously
completed a site visit.
------------------------- ---------------------------------------------------------------
If no site visits have A site visit has been undertaken by Dmitry Pertel in July 2019.
been undertaken, indicate
why this is the case.
------------------------- ---------------------------------------------------------------
Geological interpretation Confidence in (or Sufficient drilling has been conducted to reasonably interpret
conversely, the the geology and the polymetallic
uncertainty of) the mineralization. The mineralization is traceable between
geological interpretation numerous drill holes and drill sections.
of the mineral Specialists in structural geology (site visit),
deposit. litho-geochemistry (remote), regional geology
(site visit), ARD (site visit) and geotechnical (site visit)
have been involved in reviewing
and assessing collected data either through site visits or
through remote review of digital
data, database, assay, and core photos. Check mapping has been
completed by specialists and
drilled collar locations verified.
Interpretation of the deposit was based on the current
understanding of the deposit geology
and distribution of mineralization grade domains. Each cross
section generally spaced 20-30
m apart was displayed in Micromine software together with drill
hole traces color-coded according
to grade values. The interpretation honoured the interpretation
of the main geological elements.
The mineralization for Rupice and RNW was interpreted and
modelled using core logging data,
and with reference to geological data. Construction of a 3D
geological model and a 3D sulphide
model in Micromine assisted in both confirming and bringing
together the geological information
into a coherent and realistic interpretation tied to observed
fact from mapping, drill core
and assay.
High-Grade and Low-Grade geological cut-off grades for 3D solid
modelling were established
using classical statistical analysis (table below). All the
major economic elements were wireframed
independently - Ag, Au, Pb, Zn, Cu, BaSO(4.)
(RNW Deposit)
Rupice Deposit
------------------------- ---------------------------------------------------------------
Nature of the data used Geological logging in conjunction with assays and dynamic 3D
and of any assumptions modelling has been used to interpret
made. mineralization. Sample lengths of 0.2 m to 1.2 m were allowed
to honour discrete coherent
geological / mineralization intervals. This assisted in
establishing precise geological and
grade boundaries.
The average length of sampled intervals within all interpreted
mineralized intervals in the
final estimation is 1.01m for RNW and 1.5 m for Rupice Main
(considering historical data).
The Rupice deposit was historically sampled in 2 m intervals,
selectively, and generally only
where there was visible sulphide mineralization and 10 m above
and below the main mineralized
zone regardless of visible sulphides. This methodology was
updated as of 2022 to nominal 1m
sampling of all cores once through the Jurassic cover sequence
and into the Triassic mineralization
host sequence. The average sample interval for Rupice reflects
the historical wider 2 m sampling.
RNW has been sampled in 2022 and 2023 in 1m intervals through
the complete mineralized Triassic
sequence. As a result, there has been a gain in hanging-wall
and footwall mineralization to
the main RNW deposit as reported in the 2023 July Resource
estimate.
Note: Most of the Jurassic cover sequence over Rupice and RNW
has not been sampled as early
assayed drilling identified the Jurassic cover sequence as
being unmineralized. There are
no visible sulphides in the Jurassic cover sequence
lithologies.
------------------------- ---------------------------------------------------------------
The effect, if any, of Alternative interpretations are likely to materially impact on
alternative the MRE on a local, but not
interpretations on global basis.
Mineral Resource The 2020 Rupice MRE invoked two major steep faults with major
estimation. offsets to explain the thicker
mineralization at Rupice. Additional drilling, geotechnical
assessments, review of core and
development of two underground portal declines did not identify
the interpreted structures.
Review of drilling data (core and core photos) linked with 3D
modelling and knowledge of the
developing structural architecture controlling mineralization
at RNW indicated that mineralization
thickening and continuity is more likely influenced by flatter
thrust related structures.
This has resulted in a more continuous and simplified Rupice
mineralization model without
major global impact on the resource.
RNW was treated as a separate geological entity. Geology and
structure were developed in parallel.
RNW was not part of the 2020 Rupice MRE. On the scale of
drilling, there is lithological and
mineralization continuity not seen at Rupice. No steep
structures are defined within the areas
included in the current 2023 July Rupice Resource in the areas
of RNW. Structures are present
and are interpreted to be flat, bedding sub-parallel and
reflected as shearing about the mineralization
hanging-wall and footwall contacts. It is interpreted that a
steep late-stage structure is
likely further west of the current resource model. This has not
at the time of the 2023 July
Rupice resource been substantiated with data available to the
resource model.
Folding and low angle structures are considered mechanisms for
localizing thicker areas of
mineralization, versus steep fault offsets.
------------------------- ---------------------------------------------------------------
The use of geology in Geological logging, 3D geological model and 3D massive sulphide
guiding and controlling model in conjunction with
Mineral Resource assays and results of the statistical analysis have been used
estimation. to interpret the mineralization.
Available historical maps and sections have been used to guide
interpretation near surface.
Up to 5 m of internal waste is included into interpreted
mineralized bodies of sufficient
width to carry proportional amounts of internal waste. Where
there is greater than 5 m of
internal waste, a separate mineralization solid is created.
There is a high correlation between interpreted logged sulphide
mineralization and mineralized
zones defined by assay. There is a 98.7% correlation between
logged sulphides and returned
assays. Variation occurs in areas of low-grade generally on the
hanging-wall and footwall
of significantly mineralized zones. These are generally areas
of strong alteration, disseminated
and stringer sulphide occurrence. Accurate estimation of
sulphide percent is linked to logger
experience. Use of a pXRF has reduced the uncertainty.
------------------------- ---------------------------------------------------------------
The factors affecting Continuity is affected by the nature of the host rocks,
continuity both of grade interpreted deformation (faults and
and geology. shears) and drill hole coverage.
As an example, the distribution of significant mineralization
is localized either on the hanging-wall
or the footwall of a thick hematite altered interbedded chert,
sandstone and tuff rich unit
logged as the GYD. The GYD itself is unmineralized. There is an
Upper and Lower GYD unit.
Mineralization rapidly lenses out in the absence of the GYD
unit. The GYD is present at both
Rupice and RNW.
The Competent Person is satisfied that the geological
interpretation is appropriate to support
Mineral Resource estimation.
------------------------- ---------------------------------------------------------------
Dimensions The extent and Drilling has defined a combined Rupice and RNW mineralized
variability of the system having a strike length of
Mineral Resource >900 m and an across-strike width of >350 m.
expressed as length The Rupice deposit has a strike length of >600 m and an
(along strike or across-strike width of 300 m to 350
otherwise), m. The true thickness of mineralization is from a few metres to
plan width, and depth 65 m. Mineralization is from
below surface to the surface to a depth of 380 m below surface. The mineralization
upper and lower limits of axis strikes to the Northwest
the Mineral Resource. and dips 35(0) to 45(0) to the Northeast.
RNW deposit being spatially continuous over its >300 m strike
length and having a 260 m to
350 m across-strike width. The true thickness of mineralization
is from a few metres to 55
m. Mineralization is from 78 m to a depth of 340 m below
surface. The mineralization axis
strikes to the Northwest and dips 35(0) to 40(0) to the
Northeast.
The Competent Person is satisfied that the dimensions
interpreted are appropriate to support
Mineral Resource estimation.
------------------------- ---------------------------------------------------------------
Estimation and modelling The nature and The Mineral Resource estimate was based on surface diamond
techniques appropriateness of the drill core using ordinary kriging
estimation technique(s) (OK) to form 5x5x5 m blocks. The block model was constrained by
applied and key wireframes modelled based
assumptions, on geology using sectional interpretation. Additional
including treatment of wireframing for each element for the
extreme grade values, high-grade domains within these geological wireframes (except
domaining, interpolation for As, S, Sb and Hg) was completed.
parameters and maximum Sulphur grades were domained at 10% S using grade indicators.
distance of extrapolation The applied cut-off grades for
from data points. If a high-grade domains were:
computer assisted
estimation method was Micromine software was used to generate the wireframes and for
chosen block modelling.
include a description of Hard boundaries were used between mineralized lenses at each
computer software and domain. The drill hole data were
parameters used. composited to a target length of 2 m at the Rupice Main zone
and of 1m at Rupice Northwest
zone based on the length analysis of raw intercepts.
Geostatistical analysis was completed for all elements, and
averaged long ranges were employed
to justify the search ellipse - 160m along strike, 122m down
dip and 33m across dip.
Interpolation parameters were:
Search pass 1: 1/3 of the variogram log ranges (53m by 40m by
11m). Minimum samples number
- 3, minimum holes - 2, maximum samples number - 16.
Search pass 2: 2/3 of the variogram log ranges (107m by 80m by
22m). Minimum samples number
- 3, minimum holes - 2, maximum samples number - 16.
Search pass 3: Full semi-variogram ranges (160m by 120m by
33m). Minimum samples - 3, maximum
samples - 16, minimum holes 2.
Search pass 4: Double the distances for full semi-variogram
ranges with minimum samples -
3, maximum samples - 16, minimum holes 2.
Block discretisation 2 x 2 x 2.
The optimal parent cell size was selected during block
modelling based of 20x20 m exploration
drilling.
Classical statistical analysis was used to identify grade
domains for all main modelled elements.
The Competent Person is satisfied that estimation and modelling
techniques are appropriate
to support Mineral Resource estimation.
------------------------- ---------------------------------------------------------------
The availability of check Previous Mineral Resources estimates were reported July 2019
estimates, previous and in September 2020. The July
estimates and/or mine 2023 MRE is approximately 75% higher in tonnage with almost the
production records and same global silver equivalent
whether the MRE takes grades relative to the September 2020 MRE. The material change
appropriate account of to the MRE has been the addition
such data. of the RNW deposit increasing MRE tonnages and grades.
Mining of Rupice from underground had not commenced at the time
of the 2023 July MRE.
------------------------- ---------------------------------------------------------------
The assumptions made The Rupice deposit is a silver-gold-zinc-lead-barite deposit.
regarding recovery of Historical mining and beneficiation
by-products. over a four-year period have shown that a conventional sulphide
flotation method is a suitable
recovery method. Metallurgical test work on the Rupice deposit
has been completed and included
in the Rupice DFS and Reserve. Test work confirms a flotation
process is suitable for Rupice
ore.
The RNW deposit is considered an analogue of the Rupice deposit
in terms of grades, mineralogy,
depositional environment, internal waste, host rock and
controls on mineralization. Rupice
recovery values and metallurgical characteristics are
extrapolated to apply to RNW for the
2023 July MRE. A metallurgical test work program has been
initiated to confirm RNW metallurgical
performance equivalence to Rupice.
------------------------- ---------------------------------------------------------------
Estimation of deleterious As, Sb, S and Hg have been estimated in the model using their
elements or other own semi-variogram models and
non-grade variables of OK interpolation method.
economic significance
(e.g. sulphur for acid
mine drainage
characterisation).
------------------------- ---------------------------------------------------------------
In the case of block The average exploration drilling spacing was 20x20 m. The
model interpolation, the selected parent cell size was 5x5
block size in relation to m (quarter the exploration density). The search was based on
the average sample the results of geostatistical
spacing and the search analysis with average for all elements long ranges of
employed. 160x122x33m.
------------------------- ---------------------------------------------------------------
Any assumptions behind No assumptions were made for selective mining unit, apart from
modelling of selective the assumption that the deposit
mining units. is to be mined by underground method and that 5x5 m parent cell
approximately reflects SMU
for underground mining.
------------------------- ---------------------------------------------------------------
Any assumptions about Correlation matrices were calculated for each zone and the
correlation between indicators of significant positive
variables. or negative correlation (in this case 30%) were highlighted.
The Rupice Main zone clearly
stands out. The basic modelled elements for Rupice have
correlation coefficient ranges from
40 (Ag and Cu) to 93 (Pb and Zn).
There are strong correlations with Sb, Cd and Hg. The Sb
correlation varies from 43% to 59%;
Cd from 52% to 97% to Zn and 93% to Pb. The correlation of Sb
to Cd is 56%. Cd also correlates
with As (34%), and Mo (47%). Sb correlates with Hg (42%) and Mo
(43%). Hg correlates with
Cu (31%) and Ag (51%). As correlates with Zn (35%) and Cu
(56%). The correlations suggest
the possibility of multiple mineralizing events.
Correlations appear similar for RNW mineralization / elements
to Rupice.
Correlation between bulk density and the main elements (BaSO(4)
, Pb, Zn and Cu) was used
to calculate bulk density separately for high-grade barite
domain and for the material outside
of the barite high-grade domain.
------------------------- ---------------------------------------------------------------
Description of how the The geological interpretation of the mineralized zone was based
geological interpretation on geological logging of drill
was used to control the core with cross-checking against assay data.
resource estimates. The position of lithological units was considered in the
modelling. The geological model was
updated faster than the mineralization model allowing the
geological model to guide the mineralization
model based on visual sulphides and sulphide percent. The
mineralization model was then calibrated
against received assays.
High-grade domains for each element were modelled individually,
except for As, Sb and Hg,
which did not demonstrate mixed grade populations within the
modelled mineralized zone. Sulphur
grades demonstrated mixed population with the boundary of 10%,
thus grade indicator approach
was selected and used to model sulphur grades.
------------------------- ---------------------------------------------------------------
Discussion of basis for Statistical analysis was carried out for each element and each
using or not using grade domain. It was found that histograms
cutting or capping. and probability plots did not demonstrate any apparent mixed
populations within the limits
of corresponding modelled domains. Top-cuts were identified
and applied as shown in the table
below:
Main zone:
Northwest zone:
------------------------- ---------------------------------------------------------------
The process of Grade estimation was validated using visual inspection of
validation, the checking interpolated block grades versus
process used, the underlying data, and swath plots.
comparison of model data Swath plots demonstrated reasonable correlation of modelled
to drill grades with the sample composites.
hole data, and use of The Competent Person is satisfied that estimation and modelling
reconciliation data if techniques are appropriate
available. to support Mineral Resource estimation.
------------------------- ---------------------------------------------------------------
Moisture Whether the tonnages are The tonnages were estimated on an in-situ dry bulk density
estimated on a dry basis basis which includes natural moisture.
or with natural moisture, Moisture content was not estimated.
and the method
of determination of the
moisture content.
------------------------- ---------------------------------------------------------------
Cut-off parameters The basis of the adopted The reporting cut-off grade of 50 g/t silver equivalent was
cut-off grade(s) or supported by estimation of marginal
quality parameters cut-off for underground mining using input economic parameters
applied. and criteria.
The Competent Person is satisfied that cut-off parameters were
appropriately considered, to
support Mineral Resource estimation.
------------------------- ---------------------------------------------------------------
Mining factors or Assumptions made A DFS and Reserve estimate was completed in 2021 showing that
assumptions regarding possible mining there are reasonable prospects
methods, minimum mining for the eventual economic extraction of the mineralization. The
dimensions and internal DFS supported the deposit
(or, if applicable, is to be developed by underground mining method(s). Input
external) mining parameters were provided by the
dilution. It is always Company as being typical for the commodity, mining method and
necessary as part of the costs for a Balkan silver-lead-zinc
process mining operation.
of determining reasonable The Rupice deposit has reasonable prospects for eventual
prospects for eventual economic extraction as:
economic extraction to * Metallurgical test work by WAI has confirmed that
consider potential Rupice mineralization is amenable to flotation
mining methods, but the processes.
assumptions made
regarding mining methods
and parameters when * Metallurgical test work has confirmed that a barite
estimating concentrate would meet API specifications.
Mineral Resources may not
always be rigorous. Where
this is the case, this * A marketing study by a leading consultant in the
should be reported field of barite confirmed that there is an
with an explanation of opportunity to enter the market as a niche player
the basis of the mining leveraging logistical advantages for a supplier in
assumptions made. Bosnia & Herzegovina.
* The cut-off grade adopted for reporting (50 g/t Ag
equivalent) is considered reasonable given the
Mineral Resource will be exploited by underground
mining methods and potentially processed using
flotation techniques or as a direct shipping product
for massive ores.
* The Vares Project DFS study (August 2021)
demonstrated that the deposit has a positive post-tax
net present value (NPV) of USD 1,062M; a post-tax
internal rate of return (IRR) of 134%; a payback
period of 0.7 years; and that the mineralized zone is
mineable using underground methods under the given
economic scenario and parameters.
* The Project has a JORC compliant Reserve (August
2021) not inclusive of new mineralization included in
this July 2023 Resource Update.
* The Vares Project is fully funded.
* Concentrate off-take agreements and transport
logistics have been negotiated.
* Adriatic Metals has secure long-term tenure across
all tenements.
* All permits and licenses from the Bosnian and
Herzegovinian Government (Federal, State, Cantonal)
are in good standing and as required to mine and
produce base and precious metals concentrates.
* Two underground declines and underground development
are in progress. First ore has been intersected on
15/07/23 in a planned development drive. The accuracy
of the Reserve is confirmed.
* Construction of the Vares Processing Plant is in
progress with first concentrate product as of Q1
2024.
------------------------- ---------------------------------------------------------------
Metallurgical factors or The basis for assumptions Several flotation tests were completed on Rupice and Veova
assumptions or predictions regarding č a (nearby deposit) bulk
metallurgical samples. Results indicate there is potential to produce Zn,
amenability. It is always Pb/Cu and barite concentrates
necessary as part of the via flotation processes, with good recoveries of all
process of determining constituents.
reasonable prospects for The test work also indicates that a barite product that meets
eventual economic market specification requirements
extraction to consider of purity, specific gravity, and fineness of particle size can
potential metallurgical be achieved, which meets the
methods, but the requirements of Clause 49 of the JORC Code.
assumptions regarding Metallurgical test work on the RNW deposit is in progress with
metallurgical results at time of 2023 July
treatment processes and Rupice MRE not available. Rupice metallurgical recoveries are
parameters made when used in the 2023 July Rupice
reporting Mineral MRE for RNW based on analogous mineralization styles,
Resources may not always overlapping mineralization, same mineralogy,
be equivalent grade ranges, same lithologies, same alteration,
rigorous. Where this is similar controls on mineralization.
the case, this should be Metallurgical test work on RNW is designed to validate the
reported with an mineralization being equivalent
explanation of the basis to Rupice.
of the metallurgical A processing plant is under construction and will treat both
assumptions made. Rupice and RNW mineralization.
Recoveries for Rupice and RNW used in this MRE are as per the
2020 September Rupice MRE to
ensure accurate comparison between estimates.
The Competent Person is satisfied that metallurgical factors
and assumptions were appropriately
considered, to support Mineral Resource estimation.
------------------------- ---------------------------------------------------------------
Environmental factors or Assumptions made The area of the current 2023 July Rupice MRE, including RNW is
assumptions regarding possible waste within a Bosnian and Herzegovinian
and process residue approved and granted Mining Exploitation License. Underground
disposal options. It is development is currently in
always progress.
necessary as part of the Environmental and groundwater management plans have been
process of determining submitted, approved and permitted.
reasonable prospects for Current surface and underground development are proceeding with
eventual economic all Environmental, Social,
extraction to consider Governmental, Permitting issues addressed since last MRE update
the potential in September 2020.
environmental impacts of
the mining and processing
operation.
While at this stage the
determination of
potential environmental
impacts, particularly for
a greenfield project, may
not always be well
advanced, the status of
early consideration of
these potential
environmental impacts
should be reported. Where
these aspects have not
been
considered this should be
reported with an
explanation of the
environmental assumptions
made.
------------------------- ---------------------------------------------------------------
Bulk density Whether assumed or Bulk densities were determined on drill core every 1 or 2 m in
determined. If assumed, ore and every 5 m in waste.
the basis for the At total of 7,831 determinations for Rupice, and 5,460
assumptions. If determinations for RNW were used to
determined, calculate regression formulas using barite, lead zinc and
the method used, whether copper grades vs bulk density separately
wet or dry, the frequency for high-grade and low-grade barite domains, and separately for
of the measurements, the Rupice Main and Rupice Northwest
nature, size and zones.
representativeness of the
samples.
------------------------- ---------------------------------------------------------------
The bulk density for bulk Bulk density determinations adopted the weight in air / weight
material must have been in water method using a suspended
measured by methods that or hanging scale. First the core billet was accurately weighed
adequately account dry ("in air"), the core billet
for void spaces (vugs, was removed, and the wire cage fully submerged in water and its
porosity, etc), moisture tare set to "zero" mass. The
and differences between billet of core was then fully submerged and weighed ("weight in
rock and alteration water"). The bulk density
zones within the deposit. is calculated by the formula BD = Md / Md - Mw, where Md =
weight in air and Mw = weight in
water.
------------------------- ---------------------------------------------------------------
Discuss assumptions for No assumptions were made for Bulk Density.
bulk density estimates The Competent Person is satisfied that density was
used in the evaluation appropriately considered, to support Mineral
process of the different Resource estimation.
materials.
------------------------- ---------------------------------------------------------------
Classification The basis for the Resource classification was based on confidence in the QAQC
classification of the data analysis, geological interpretation,
Mineral Resources into drill spacing, geostatistical measures, a visual evaluation of
varying confidence cross sections and drill density,
categories. and manual interpretation of resource categories. The
interpreted boundaries between categories
were wireframed and used to code the block models. Generally,
the Indicated category was assigned
to the areas with reasonable continuity of mineralized lodes
based on 20x20 m and 40x40 m
exploration drilling. All other blocks were classified as
Inferred. No blocks were classified
as Measured.
------------------------- ---------------------------------------------------------------
Whether appropriate The classification has taken into account all available
account has been taken of geological and sampling information
all relevant factors as well as the structural information, and the classification
(i.e., relative level is considered appropriate
confidence for the current stage of this project.
in tonnage/grade
estimations, reliability
of input data, confidence
in continuity of geology
and metal values,
quality, quantity and
distribution of the
data).
------------------------- ---------------------------------------------------------------
Whether the result The Mineral Resource estimate appropriately reflects the view
appropriately reflects of the Competent Person.
the Competent Person's The Competent Person is satisfied that classification of this
view of the deposit. Mineral Resource estimate appropriately
reflects the data and interpreted geological controls on
mineralization.
------------------------- ---------------------------------------------------------------
Audits or reviews The results of any audits The current model has not been audited by an independent
or reviews of MREs. third-party but has been subject
to AMC's internal peer review processes.
------------------------- ---------------------------------------------------------------
Discussion of relative Where appropriate a Industry standard modelling techniques were used,
accuracy/ confidence statement of the relative including but not limited to:
accuracy and confidence * Statistical analysis, cut-offs selection.
level in the MRE using
an approach or procedure
deemed appropriate by the * Interpretation and wireframing.
Competent Person. For
example, the application
of statistical or * Top-cutting and interval compositing.
geostatistical procedures
to quantify the relative
accuracy of the resource * Geostatistical analysis.
within stated confidence
limits, or, if such an
approach is not deemed * Block modelling and grade interpolation techniques.
appropriate, a
qualitative
discussion of the factors * Model classification, validation and reporting.
that could affect the
relative accuracy and
confidence of the The relative accuracy of the estimate is reflected in the
estimate. classification of the deposit.
The relative accuracy of the Mineral Resource estimate is
reflected in the reporting of the
Mineral Resource to an Indicated and Inferred
classification as per the guidelines of the
2012 JORC Code.
------------------------- ---------------------------------------------------------------
The statement should The statement refers to global estimation of tonnes and grade
specify whether it and is suitable for use in reserve
relates to global or conversion studies and further exploration at the deposit.
local estimates, and, if
local,
state the relevant
tonnages, which should be
relevant to technical and
economic evaluation.
Documentation should
include assumptions made
and the procedures used.
------------------------- ---------------------------------------------------------------
These statements of No production data is available.
relative accuracy and The Competent Person is satisfied that classification of this
confidence of the Mineral Resource estimate appropriately
estimate should be reflects the data and interpreted geological controls on
compared with mineralization.
production data, where
available.
------------------------- ---------------------------------------------------------------
Table 10: Rupice Updated Ore Reserve Estimate
Criteria JORC Code explanation Commentary
Mineral
Resource * Description of the Mineral Resource estimate used as * The Mineral Resource Estimate was produced by Mr
estimate for a basis for the conversion to an Ore Reserve. Dmitry Pertel, Principal Geologist of AMC Consultant
conversion s
to Ore Pty Ltd (AMC), with an effective date of 11 July 202
Reserves * Clear statement as to whether the Mineral Resources 3
are reported additional to, or inclusive of, the Ore as described in Section 3 of Table 1.
Reserves.
* The Mineral Resources are reported inclusive of the
Ore Reserves.
================================================================= ================================================================
Site visits
* Comment on any site visits undertaken by the * A site visit from 3 September to 6 September 2023,
Competent Person and the outcome of those visits. was undertaken by the Ore Reserves Competent Person
(CP), Mr Dominic Claridge of AMC Consultants (UK)
Limited.
* If no site visits have been undertaken indicate why
this is the case.
================================================================= ================================================================
Study status
* The type and level of study undertaken to enable * A feasibility study was completed in 2021.
Mineral Resources to be converted to Ore Reserves.
* Rupice Mine has been under construction since 2022
* The Code requires that a study to at least and has commenced mine development with more than 15
Pre-Feasibility Study level has been undertaken to years mine life.
convert Mineral Resources to Ore Reserves. Such
studies will have been carried out and will have
determined a mine plan that is technically achievable * The Ore Reserve is based on the life-of-mine design
and economically viable, and that material Modifying generated by the Mine Technical Services Department
Factors have been considered. (effective date of 11 October 2023), which has been
reviewed by AMC.
* AMC produced a schedule and cost model based on the
data provided by Adriatic.
================================================================= ================================================================
Cut-off Cut-off grades are calculated
parameters * The basis of the cut-off grade(s) or quality using a NSR calculation based
parameters applied. at US$68/t using the revenue
contributions of the payable
metals Au, Ag, Cu, Pb, and
Zn.
The NSR calculation includes
all site operating costs associated
with the mine, process plant,
and G&A along with royalties,
transport and concentrate
treatment, and refining charges
and penalties.
Mining areas are considered
for inclusion in the Ore Reserve
if the diluted NSR greater
than US$68/t.
================================================================= ================================================================
Mining factors Ore Reserves are based on
or assumptions * The method and assumptions used as reported in the an operating mine design generated
Pre-Feasibility or Feasibility Study to convert the by the on-site technical staff,
Mineral Resource to an Ore Reserve (i.e. either by which has been reviewed by
application of appropriate factors by optimisation or AMC.
by preliminary or detailed design). The mining method used is
long-hole open-stoping, which
is an appropriate method for
* The choice, nature and appropriateness of the the deposit.
selected mining method(s) and other mining parameters Avoca Geotech completed a
including associated design issues such as pre-strip, geotechnical study in 2021,
access, etc. from which site geotechnical
personnel have developed procedures
with operational experience.
* The assumptions made regarding geotechnical All development headings and
parameters (eg pit slopes, stope sizes, etc), grade stopes are to be assessed
control and pre-production drilling. before and during development
by the Geotechnical Engineer
and have geotechnical specifications
* The major assumptions made and Mineral Resource model detailing support requirements.
used for pit and stope optimisation (if appropriate). Individual stopes have a maximum
length of 20 m and maximum
height of 25 m.
* The mining dilution factors used. A minimum mining width of
15m has been set for the transverse
long-hole open-stoping.
* The mining recovery factors used. Two declines access the deposit.
All underground infrastructure
for commencement of mining
* Any minimum mining widths used. operations is in place. This
includes dewatering, ventilation,
backfill, ground support systems.
* The manner in which Inferred Mineral Resources are Dilution is accounted for
utilised in mining studies and the sensitivity of the in the Ore Reserve, based
outcome to their inclusion. on geometry. The average dilution
factors in the Ore Reserve
12.8%.
* The infrastructure requirements of the selected During the stope optimization
mining methods. process all stopes were limited
to a maximum allowable inclusion
of 5% Inferred material. Inferred
and Unclassified Mineral Resources
were given a zero grade. Less
than 1% Inferred material
is included in the total Ore
Reserve.
================================================================= ================================================================
Metallurgical
factors or * The metallurgical process proposed and the * Silver/lead and zinc concentrates are produced
assumptions appropriateness of that process to the style of through conventional crushing, grinding, flotation,
mineralisation. thickening, and filtration.
* Whether the metallurgical process is well-tested * The process plant is capable of crushing 290 tph. Th
technology or novel in nature. e
grinding and flotation circuits have a maximum
capacity of approximately 900 ktpa.
* The nature, amount and representativeness of
metallurgical test work undertaken, the nature of the
metallurgical domaining applied and the corresponding * Metallurgical recoveries are based on metallurgical
metallurgical recovery factors applied. test work.
* Any assumptions or allowances made for deleterious * The Ore Reserve is based on the Mineral Resource
elements. estimate which includes individual estimation
parameters for the payable metals Au, Ag, Cu, Pb, an
d
* The existence of any bulk sample or pilot scale test Zn; and as such, is appropriate to the mineralogy
work and the degree to which such samples are being processed.
considered representative of the orebody as a whole.
* Deleterious elements Hg and As are also modelled in
* For minerals that are defined by a specification, has the Mineral resource model; however, with the curren
the ore reserve estimation been based on the t
appropriate mineralogy to meet the specifications? mining locations and for the remainder of the mine
plan, the grades are not high enough to warrant
corrective measures in the process plant.
================================================================= ================================================================
Environmental The status of studies of Adriatic possesses the required
potential environmental impacts permits and planning permissions
of the mining and processing to effectively operate the
operation. Details of waste Varés Project, in accordance
rock characterisation and with Bosnian environmental
the consideration of potential regulations.
sites, status of design options To the best of the CP's knowledge,
considered and, where applicable, all sites for waste rock and
the status of approvals for process tailings and their
process residue storage and design and construction have
waste dumps should be reported. complied with all environmental
regulations, permits, and
recommendations.
================================================================= ================================================================
Infrastructure The existence of appropriate All infrastructure required
infrastructure: availability for the processing and mining
of land for plant development, of ore are currently under
power, water, transportation construction. Operations are
(particularly for bulk commodities), due to commence early 2024.
labour, accommodation; or The Rupice deposit is located
the ease with which the infrastructure near the mining town of Vares
can be provided, or accessed. approximately 50 km north
of the capital Sarajevo
================================================================= ================================================================
Costs The derivation of, or assumptions Operating costs are based
made, regarding projected on costs established during
capital costs in the study. the completion of the Feasibility
The methodology used to estimate Study in 2021. AMC has reviewed
operating costs. costs and Adriatic has updated
Allowances made for the content costs based on additional
of deleterious elements. studies and current market
The source of exchange rates rates.
used in the study. Treatment and refining costs
Derivation of transportation are based on indicative concentrate
charges. sales terms.
The basis for forecasting Penalty elements are accounted
or source of treatment and for in the concentrate treatment
refining charges, penalties charges.
for failure to meet specification, Transportation costs are included
etc. in the NSR calculation.
The allowances made for royalties Concentrates are trucked to
payable, both Government and the local rail siding. Rail
private. transport is then used to
take the concentrates to the
Port of Plo č e.
================================================================= ================================================================
Revenue The derivation of, or assumptions Head grades are based on the
factors made regarding revenue factors block model prepared by AMC
including head grade, metal in July 2023.
or commodity price(s) exchange Revenue has been based on
rates, transportation and metal prices of US$1,912/oz
treatment charges, penalties, Au, US$23.0/oz Ag, US$8,335/t
net smelter returns, etc. Cu, US$2,280/t Pb and US$2,450/t
The derivation of assumptions Zn applied to the concentrate
made of metal or commodity sales terms. These pricing
price(s), for the principal estimates were provided by
metals, minerals and co-products. Adriatic and are viewed by
AMC as reasonable.
Transportation, treatment
charges, and penalties for
both Ag/Pb and zinc concentrates
are accounted for in the NSR
cut-off grade calculation.
================================================================= ================================================================
Market The demand, supply and stock Adriatic has indicative agreements
assessment situation for the particular with customers for concentrate
commodity, consumption trends sales.
and factors likely to affect Concentrates are sent via
supply and demand into the rail to the Port of Plo č
future. e for shipment to end users.
A customer and competitor
analysis along with the identification
of likely market windows for
the product.
Price and volume forecasts
and the basis for these forecasts.
For industrial minerals the
customer specification, testing
and acceptance requirements
prior to a supply contract.
================================================================= ================================================================
Economic The inputs to the economic NPV has been generated as
analysis to produce the net part of the Ore Reserves determination;
present value (NPV) in the however, all material contained
study, the source and confidence within the reserve is deemed
of these economic inputs including to generate positive cashflow
estimated inflation, discount based on the economic input
rate, etc. parameters.
NPV ranges and sensitivity A life-of-mine plan (LOMP)
to variations in the significant has been generated from the
assumptions and inputs. September 2023 mine design.
Analysis of the LOMP physicals
within the current Adriatic
financial model has been shown
to yield a net positive cashflow
and NPV.
================================================================= ================================================================
Social The status of agreements To the best of the CP's knowledge,
with key stakeholders and all agreements with the local
matters leading to social authorities are in place and
licence to operate. are current with all key stakeholders.
================================================================= ================================================================
Other To the extent relevant, the To the best of the CP's knowledge,
impact of the following on Adriatic is currently compliant
the project and/or on the with all legal and regulatory
estimation and classification requirements and there is
of the Ore Reserves: no reason to assume any further
Any identified material naturally government or local council
occurring risks. permits, licences, or statutory
The status of material legal approvals will not be granted,
agreements and marketing arrangements. if required.
The status of governmental
agreements and approvals critical
to the viability of the project,
such as mineral tenement status,
and government and statutory
approvals. There must be reasonable
grounds to expect that all
necessary Government approvals
will be received within the
timeframes anticipated in
the Pre-Feasibility or Feasibility
study. Highlight and discuss
the materiality of any unresolved
matter that is dependent on
a third party on which extraction
of the reserve is contingent.
================================================================= ================================================================
Classification The basis for the classification As there are no Measured Resources,
of the Ore Reserves into varying the Ore Reserves have been
confidence categories. classed Probable as per JORC
Whether the result appropriately Code (2012) guidelines.
reflects the Competent Person's It is the CP's opinion that
view of the deposit. the Ore Reserves reflect the
The proportion of Probable deposit accurately given the
Ore Reserves that have been current level of geological
derived from Measured Mineral and geotechnical knowledge.
Resources (if any). Inferred Resources have not
been included in the Ore Reserve.
================================================================= ================================================================
Audits or The results of any audits The Competent Person completed
reviews or reviews of Ore Reserve a "best practices" review
estimates. of the mine planning as part
of the Ore Reserves.
The Ore Reserve has been Peer
Reviewed internally and is
in line with current industry
standards.
================================================================= ================================================================
Discussion of Where appropriate a statement The Rupice M ine is not yet
relative of the relative accuracy and in production. Anticipated
accuracy/ confidence level in the Ore mine life is more than 15
confidence Reserve estimate using an years.
approach or procedure deemed The deposit is well-understood
appropriate by the Competent by the on-site technical team
Person. For example, the application which consists of locals and
of statistical or geostatistical expats with experience of
procedures to quantify the the deposit.
relative accuracy of the reserve Owner and contractor costs
within stated confidence limits, are based on current contracts.
or, if such an approach is All modifying factors have
not deemed appropriate, a been applied to the Ore Reserves
qualitative discussion of with dilution parameters ore
the factors which could affect widths and geotechnical assessments.
the relative accuracy and
confidence of the estimate.
The statement should specify
whether it relates to global
or local estimates, and, if
local, state the relevant
tonnages, which should be
relevant to technical and
economic evaluation. Documentation
should include assumptions
made and the procedures used.
Accuracy and confidence discussions
should extend to specific
discussions of any applied
Modifying Factors that may
have a material impact on
Ore Reserve viability, or
for which there are remaining
areas of uncertainty at the
current study stage.
It is recognised that this
may not be possible or appropriate
in all circumstances. These
statements of relative accuracy
and confidence of the estimate
should be compared with production
data, where available.
================================================================= ================================================================
Authorised by, and for further information, please contact:
Paul Cronin
Managing Director & CEO
info@adriaticmetals.com
-ends-
COMPETENT PERSONS REPORT
The information in this report that relates to estimates of
Mineral Resources is based on and fairly represents information and
supporting information compiled by Mr Dmitry Pertel, a Competent
Person who is a Member of the Australian Institute of
Geoscientists. Mr Pertel is employed by AMC Consultants Pty Ltd. Mr
Pertel is not a shareholder in Adriatic Metals. Consulting work has
been completed on a contractual basis, with payment to AMC
Consultants Pty Ltd for hours worked. Mr Pertel has sufficient
experience that is relevant to the style of mineralisation and type
of deposit under consideration and to the activity being undertaken
to qualify as a Competent Person as defined in the 2012 Edition of
the 'Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves'. Pertel consents to the
inclusion in the report of the matters based on his information in
the form and context in which it appears.
The information in this report which relates to Exploration
Results and QAQC analysis is based on and fairly represents
information and supporting information compiled by Mr Sergei
Smolonogov, who is a member of the Australian Institute of
Geoscientists (AIG) and Registered Professional Geologist (RPGeo).
Mr Smolonogov is Head of Exploration for Adriatic Metals Plc and
has sufficient experience relevant to the style of mineralization
and type of deposit under consideration and to the activity he is
undertaking to qualify as a Competent Person as defined in the 2012
Edition of the "Australian Code of Reporting of Exploration
Results, Mineral Resources and Ore Reserves". Mr Smolonogov
consents to the inclusion in this report of the matters based on
that information in the form and context in which it appears.
The Ore Reserve is based on and fairly represents information
compiled or reviewed by AMC Principal Mining Engineer, Mr Dominic
Claridge. Dominic is a Competent Person (CP) as defined by the JORC
Code, 2012 Edition, having ten years of experience that is relevant
to the style of mineralisation and type of deposit, and to the
activity for which he is accepting responsibility. He is a Fellow
of the Australian Institute of Mining and Metallurgy (FAusIMM), and
consents to the inclusion in the report of matters based on his
information in the form and context in which it appears. The CP is
not aware of any mining, metallurgical, infrastructure, permitting,
or other relevant factors that could materially affect the Ore
Reserve statement.
DISCLAIMER
Forward-looking statements are statements that are not
historical facts. Words such as "expect(s)", "feel(s)",
"believe(s)", "will", "may", "anticipate(s)", "potential(s)"and
similar expressions are intended to identify forward-looking
statements. These statements include, but are not limited to
statements regarding future production, resources or reserves and
exploration results. All of such statements are subject to certain
risks and uncertainties, many of which are difficult to predict and
generally beyond the control of the Company, that could cause
actual results to differ materially from those expressed in, or
implied or projected by, the forward-looking information and
statements. These risks and uncertainties include, but are not
limited to: (i) those relating to the interpretation of drill
results, the geology, grade and continuity of mineral deposits and
conclusions of economic evaluations, (ii) risks relating to
possible variations in reserves, grade, planned mining dilution and
ore loss, or recovery rates and changes in project parameters as
plans continue to be refined, (iii) the potential for delays in
exploration or development activities or the completion of
feasibility studies, (iv) risks related to commodity prices and
exchange rate fluctuations, (v) risks related to failure to obtain
adequate financing on a timely basis and on acceptable terms or
delays in obtaining governmental approvals or in the completion of
development or construction activities, and (vi) other risks and
uncertainties related to the Company's projects, prospects,
properties and business strategy. Investors are cautioned not to
place undue reliance on these forward-looking statements that speak
only as of the date hereof, and the Company does not undertake any
obligation to revise and disseminate forward-looking statements to
reflect events or circumstances after the date hereof, or to
reflect the occurrence of or non-occurrence of any events.
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END
MSCLKLLFXLLBFBB
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December 20, 2023 02:00 ET (07:00 GMT)
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