If you believe ADT is on the cusp of proving a Tier 1 asset and regional play (subject to further land acquisition) then there is a reasonably high chance that ADT will be a takeover target. The chart attached, illustrates that Tier 1 assets get bid and bids at premium prices, even though the depressed part of a mining cycle. Should ADT progress the project and shows its Tier 1, a TO is much more likely than not and this could see an offer price with a handle of $4, $5 or $6. The company needs around another year to shore up a few aspects of the project and then they can then look for a compelling and fair offer. Another reason why I think this ends in a bid is because I don't think management really want to build and run the mine themselves. Anecdotes suggest its being fattened up for sale and a number of mid and large tier miners are showing strong interest.
ADT released a metallurgical update. new test works confirms ability to produce a separate copper con. Copper recovery is thus improved, but more important is payability which lifts to 90%+ from 30% in the SS. Au and Ag recoveries benefit as to payability due to material proportion of both being produced in the copper con. Still need to see how a third con stream impacts CAPEX and OPEX but overall should be accretive to the NPV of the project.
ADT competitive advantage of first geographical mover and has access to prior historical documentation.
Company is well managed and has good co-operation with local government.
May well be a takeover target for bigger players.
$1b resource PFS. Polymetallic, being treated by market as industrial metals developer (Zi, Ni, Cu) has dropped on that basis. Resource assays point toward Au/Ag play though...with drilling to confirm reserves and DFS 12-16 months away. High risk recovery rates gamble.
Adriatic Metals (ADT) is pleased to advise that the Bosnian Federal Ministry of Environment and Tourism has issued a positive Record of Decision (“RoD”) to Adriatic’s subsidiary, Eastern Mining d.o.o., for the Veovaca Environmental Permit, one of the key approvals required for the issue of the Exploitation Permit. With the RoD received, the Environmental Permit will be issued by the Ministry as the RoD is final and cannot be challenged.
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17-Apr-2020: Quarterly Activities Report update
ADT QUARTERLY ACTIVITIES REPORT For the 3 months ended 31 March 2020:
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Disclosure: I hold ADT shares. I also hold SFR shares, and Sandfire owns 12.78% of ADT. Highly speculative explorer, but for that small portion of your available capital that some people are happy to gamble with (rather than invest), ADT are one of the more active explorers, with a solid copper producer (in SFR) on the register. ADT will likely give you some serious bang for your bucks based on my past experience with them. Volatile share price, very news driven, but they tend to release news reasonably regularly - as you do when you've got 5 active drilling rigs operating. You can trade them, or hold for the takeover that might come (from SFR), or, if you have a lower risk tolerance, you could avoid them altogether. That would be the best course of action for the vast majority. I do like a little excitement at the smaller (position) end of my main trading portfolio. Of course, my larger positions are much bigger companies who are all profitable and reliable, pay dividends, and have very strong balance sheets. Companies like ADT (and LEG more recently) just add some excitement and interest at the other end.
Also - same day - Adriatic Delivers High Grade Intercept at Rupice South
Disclosure: I'm not currently holding any ADT, but I do hold Sandfire (SFR) shares - and SFR now own almost 16% of ADT.