Adriatic Metals Plc has announced the outcome of the Definitive Feasibility Study (DFS) for the Vares Silver Project in Bosnia and Herzegovina, which has been completed by a number of international consultants and coordinated by Ausenco Pty Ltd.
The Vares Silver Project hosts two Mineral Resources: the Rupice underground deposit (Rupice) and the Veovaca open-pit deposit (Veovaca). The two deposits are located approximately 11 kilometres apart. Veovaca was a previously operating open-pit mine producing lead, zinc and barite concentrates that ceased operations in 1988.
The potential economic viability of the Rupice deposit was only determined in 2017 after it was acquired by Adriatic Metals earlier the same year. The DFS news follows on from a completed Pre-Feasibility Study, also conducted by international consultants and led by Ausenco, announced in October 2020. The 2021 DFS has only considered the Mineral Resources and Reserves of Rupice and the mine plan does not include mining of Veovaca.
Adriatic’s Managing Director and CEO, Paul Cronin, said the 2021 DFS clearly demonstrates the exceptional potential of the Vares Silver Project.
“During the formulation of this study, we have significantly expanded our relationships with key suppliers in BiH and the region, as well as completing an Organisational Blueprint for human resource development and training, both of which are key requirements for our economic sustainability objectives,” Mr Cronin said.
“Project delivery and execution risks have been substantially reduced through the simplification of the process flowsheet and Initial Capital Costs lowered against the backdrop of inflationary construction costs, whilst improving the overall project economics.”
“In the design of this project, environmental and economic sustainability have been at the core of our thinking, shaping the project to ensure that its economic and environmental benefits extend well beyond the current mine life, and provide a perpetual benefit to our local community in Vares and indeed, to the BiH economy.”
“Our focus from this point is to finalise the project financing, which is well advanced, and concurrently commence construction whilst continuing to look for marginal improvements in metallurgical recovery, capital and operating costs. Additionally, we have commenced a study to expand the renewable energy production we have at the Vares Processing Plant, and augment that capacity, to ensure that the Vares Silver Project reduces its carbon emissions significantly, soon after the commencement of commercial production.”
“As demonstrated in our recent exploration results, we are confident that we can expand the Resources and Reserves at the Vares Project and look forward to working with the Vares community for decades to come, jointly demonstrating the benefits of mining operations in a European context.”
Some highlights from the 2021 DFS include:
- Ore Reserve: 7.3 Mt at 485g/t AgEq
- Mining Rate: 800,000 tonnes / year
- Life of Mine: 10 years
- Mining Method: Transverse Longhole Open Stoping and Longitudinal Longhole Open Stoping
- Operations: Contractor Mining
- Head Grades (UG): Ag 202g/t, Zn 5.7%, Pb 3.6%, Au 1.9g/t, Cu 0.6%, Sb 0.2%
- Roads: 24.5 kilometres of haul road (which includes 9 kilometres of existing road) will be constructed by the Vares Municipality with funding and oversight of construction provided by Adriatic Metals
- Tailings Storage Facility: Dry stacked filtered tailings adjacent to the Vares Processing Plant
- Water: Existing reticulated supply to Vares Processing Plant, plus supply from a nearby stream that used to supply Vares town to Rupice Surface Infrastructure
- Power: Rupice Surface Infrastructure: 6.5 MW average load to be provided by JP Elektroprivreda BiH, plus a 1 MW emergency diesel generator. Vares Processing Plant: 10.0 MW average load to be provided by JP Elektroprivreda BiH
Robust DFS Economics:
- Post-tax NPV8: US$1,062 million
- Post-tax IRR: 134%
- Initial Capital Cost*: US$168 million
- Payback period: 0.7 years
- AISC: US$7.3 / AgEq oz
The full Vares Silver Project Definitive Feasibility Study can be found here.