Adriatic requested the halt to announce a proposed project finance package regarding its Vares Silver project.
Yesterday, the Adriatic share price closed at $3.33 after gaining 4%.
Here’s what we know out of the base metals explorer’s camp today.
What was announced?
Adriatic advised it has proposed a project finance package to fund the construction of its flagship Vares Silver project.
The announcement comes after Adriatic completed a definitive feasibility study (DFS) on the site in August.
The package is comprised of an agreement between Adriatic and Orion Resource Partners LLP of the UK. The pair have signed a term sheet for US$142.5 million debt financing.
Specifically, this is made up of a US$120 million senior secured debt facility and, curiously, a “US$22.5 million copper stream”.
Aside from the debt financing, Adriatic also intends to complete a US$102 million equity raise. This will consist of a conditional placing to raise US$52 million and a “conditional equity subscription for US$50 million by Orion at the placing price”.
The placing price is proposed at 1.5174 pounds per new share, “representing a discount of approximately 10.7% to the 10-day volume weighted average price on the ASX to 12 October 2021”.
Combined, the company intends to raise gross US$244.5 million (A$332.9 million) to finance construction of its Vares site in Bosnia & Herzegovina. It expects to take a net US$97.8 million from the round.
In conjunction with the proposed capital raise, fellow ASX resources share Sandfire Resources Ltd (ASX: SFR) announced today that it intends to sell its entire Adriatic stake.
According to Sandfire, Adriatic has not put up any objections to its intended divestment.
Adriatic Metals share price snapshot
The Adriatic Metals share price has gained 42% this year to date, extending its gain over the past 12 months to 48%.
It’s rallied 11% in the last month and has climbed a further 10% into the green in the past week.
These gains have been propped up by strengths in the broader commodity markets Adriatic has exposure to.
These results have outpaced the S&P/ASX 200 Index (ASX: XJO)’s return of around 20% in the last year.
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The author Zach Bristow has no positions in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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