Silver developer Adriatic Metals has announced a $50-million institutional placement to optimise its balance sheet while ramping up the Vares operation in Bosnia and Herzegovina.
The company, which is listed on the ASX, LSE and OTCQX, will issue about 18.3-million CHESS depositary interests (CDIs) over new fully paid shares in the company.
The offer price of A$4.15 per CDI represents a discount to the five-day volume weighted average price on the ASX on May 24.
Adriatic plans to use $39-million of the placement proceeds to bolster its cash position and $11-million to finalise a termination payment payable to the previous mining contractor.
“Adriatic is pleased with the progress at Vares, with ramp-up well underway and significant milestones such as the first sale of concentrate being achieved in parallel with the transition to an owner/operator model.
“The placement will position the company well to address near-term working capital commitments and provide additional flexibility as it continues hitting milestones in this critical period,” said MD and CEO Paul Cronin.
Adriatic's $25-million Orion debt facility remains undrawn and is available for additional flexibility.
Concurrently with the placement, OMF Fund III (F), an entity advised by Orion Resource Partners, intends to sell eight-million existing CDIs at the offer price. Together with the placement, Orion will own about 16.2-million CDIs, representing 4.99% of the issued ordinary shares in the company.