Adriatic Metals (ASX: ADT) (LON: ADT1) is taking over as the operator of the Rupice deposit development, which is part of the company’s Vares silver mine in central Bosnia.
Local company Nova Mining and Construction has carried out the Rupice deposit development since 2022. In June last year, Adriatic decided to implement an accelerated development action plan, onboarding experienced international operators to “improve productivity levels”. Adriatic said the contractor did not meet contractual expectations.
The miner has now terminated the services contract with Nova and the parties inked a settlement and termination agreement that will allow Adriatic to operate the mine upon completion.
The miner noted that since implementing the accelerated development action plan, underground quarterly development at Rupee has increased by 71%.
The deposit is part of the company’s recently opened Vares silver mine, the first new mining operation to open in Europe in over a decade.
“It is the opportune time for us to transition to mining owner-operator,” Adriatic’s managing director and CEO, Paul Cronin, said in the statement.
“The Vares Project is expected to be one of the lowest-cost silver producers globally. Our focus remains on driving down mining costs further through enhanced operational efficiencies, rigorous cost management and optimized procurement processes,” Cronin said.
Shares in the company jumped on the announcement, closing 5.35% higher in Sydney to A$4.53 a piece and up over 6% in London mid-afternoon, trading at 232.75p each. Adriatic Metals has a market capitalization of £716.42 million ($883 million).
Before reaching commercial production, the Vares project contributed to 25% of Bosnian 2022 foreign direct investment and is expected to account for 2% of the country’s GDP during operations.
About 27% of the mine’s employees are women, Adriatic noted, which exceeds the global mining workforce average of 15%, according to a 2020 World Bank report. It also surpasses the approximately 10% representation in Bosnia and Herzegovina.
