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Valuation of $4.40
Added one year ago
Currently sitting at around 40% of NPV8 of US$1.062 Billion for Vares alone. This is low for an asset of this quality at this stage. Minimal permitting risk, planned construction by EOY & a payback of less than 1 year. Also has large exploration potential at Rupice, which has already had some good results with the drill-bit & could have similar geology to Vares. SP could easily double when final enviro permit is granted, or be acquired at a 2x multiple of current valuation & i would not be surprised.
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#Bull Case
Added one year ago

Adriatic with the definitive feasibility study we've been waiting for on Vares Silver Project in Bosnia & Herzegovina. Massive improvements on last years PFS.

IRR >21%
PP <40%
AISC <25%

Project was quality on the PFS metrics. This is an outstanding increase in profitability. 

Room for increase in recoveries flagged:
• Metallurgical and geo-metallurgical test work ongoing post-DFS, 
targeting continuing improvement in recoveries 
• ESIA, concentrate offtake & project finance work streams
advanced, progressing in line with Company’s expectations

Check ASX ann for the full DFS numbers, it is very impressive.

Fully supportive government in country, attained majority of permitting already.

This mine is getting built.


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Valuation of $3.20
Added 2 years ago
15-June-2021: Update: Not in a downtrend any longer. Definitely in an uptrend now. New PT of $3.20 based on momentum and potential. The market is seeing the value now. Still highly speculative because of the stage they are at (developers, not producers) but with massive potential - so high risk, high potential reward, but there will be cap raisings between now and full production, so if you go in, go in with your eyes wide open. I do not hold ADT at this point in RL. Not enough capital to place bets on every horse that looks like a winner to me. 13-Dec-2020: Updating. While ADT are currently now in a shorter term downtrend, I think they'll settle somewhere between $2 and $2.50, so I'm splitting the difference and calling it $2.25. They've now organised some bridging finance, they still have SFR, Datt Group and Sprott on the register. It's a high grade deposit, and there will likely be some M&A at some point. Plus, sentiment towards miners and minerals explorers & developers is starting to head north again. Not holding ADT, and now not holding SFR either. I've sold both of them off my scorecard also at a profit, but I can see the appeal here for ADT at this point - for those with a high risk tolerance. Not for me, but they might be OK for some. Old comments: Early January 2020: Momentum play - with M&A Activity from SFR. Worth a punt - but only with money you can afford to lose. My original PT was $1.37, but it's blown through that, so I'm raising it to $1.77. Let's see if the momentum can continue. SFR (Sandfire Resources) own 15.7% of ADT (as disclosed to the market on December 5th). [12.78% now - see update below] 7-7-2020: Time to update this valuation, as it's now 6 months since I last looked at it. Not currently holding this one. However, $1.77 still looks reasonable, as the investment thesis is still intact. Sandfire (SFR) currently hold 12.78% of ADT, and ADT now also have Datt Group on their register with 5.09%. Emanuel Datt is the founder of Datt Capital, part of Datt Group, and his team there is well respected as skillful stock pickers, particulary in smalls, micro and nano-caps, and he's had some wins with metals explorers and developers before. Paul Cronin, ADT's CEO and MD has plenty of "skin in the game", currently holding 12.88% of all their shares, plus 5 million options, and they have two ex-directors who still remain substantial shareholders also. Eric de Mori, who was a director up until October 10th (2019) holds 7.34%, and Milos Bosnjakovic, who resigned as a ADT director only last month (June 14th) still holds 10.61%. Peter Bilbe, their Chairman, also holds 250,000 shares, plus 1.5 million options. Sandfire's 12.78% stake is a positive of course, but it also serves as a blocking stake because it can prevent all other companies from taking over (acquiring) Adriatic Metals (ADT). It pays to remember that, because while SFR continues to hold over 10% of ADT, it is unlikely that ADT will receive much serious interest from any other company. Still, they have plenty of positives, for a base/precious metals explorer. They aren't even really a JUNIOR explorer any more either, with a market cap of around $277 million. However they are still highly speculative, as all explorers are. No production, so no sales, so no cashflow. I prefer my explorers to have their projects here in Australia, but if you don't mind the locations of their assets/projects - being in the Balkans - Bosnia and Serbia - then they might be worth a good look. Copy and paste the following link into your browser to access their latest company presentation:
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#Business Model/Strategy
Added 2 years ago

Mine timeline - from the nov presentation

Vares Mine construction starts Q3 2021 and expected to take about a year. Production expected in 2023.

Although primarily Silver/Zinc there is a bit of copper as well for the copper bulls to think of.


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#SFR to hold 16.2% of ADT
Added 2 years ago

03-Nov-2020:  SFR: Adriatic Metals Investment Update   plus   ADT: Sandfire Resources Litigation Upate

SFR: Sandfire Resources Ltd (ASX: SFR) is pleased to advise that it has entered into a Deed of Settlement and Release with Adriatic Metals Plc (ASX: ADT) whereby both parties have agreed to settle the dispute relating to proceeding CIV 1820 of 2020 brought by Sandfire against Adriatic in the Supreme Court of Western Australia. Under the terms for settlement of the Proceedings, Adriatic will issue to Sandfire 4,830,156 Chess Depository Interests (CDIs) in Adriatic for approximately $8.65 million ($1.79 per CDI) to reinstate Sandfire to 16.2% voting power in Adriatic.

Sandfire and Adriatic have also agreed to having the Proceedings dismissed with no order as to costs.

Sandfire [now] intends to vote in favour of all resolutions at Adriatic's upcoming AGM.

--- end of excerpt ---

ADT: Adriatic Metals PLC (ASX: ADT, LON: ADT1) has entered into a Deed of Settlement and Release with Sandfire Resources Limited (ADT: SFR) where both parties have agreed to settle the dispute relating to proceeding CIV 1820 of 2020 brought by Sandfire against Adriatic in the Supreme Court of Western Australia, as announced on 31 July 2020. Sandfire has agreed to pay Adriatic A$8,649,360.35 in cash for the issue of 4,830,156 Chess Depository Interests (“CDIs”) in the Company, pursuant to Sandfire's anti-dilution right under the previously announced Collaboration and Strategic Partnership Deed.

---end of excerpt ---

[I hold SFR shares, but not ADT shares.  SFR are a substantial shareholder of ADT shares, and will soon own 16.2% of ADT once again.]

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Added 2 years ago

Queens Road Capital, which puchased 20 million convertible debentures from ADT, includes Andrew "Twiggy" Forrest and Jack Cowin as major holders.

All in all, this looks like a good outcome for ADT.

In addition the Prime Minister made a recent visit to meet with management and pledged full support for the project:

As Bosnia now has every incentive to see the project to completion in order to improve its reputation, ADT is still undervalued compared to some of the exploration plays located in Tier 1 jursidictions such as Australia.

Disc: I hold ADT for more than a year (0.86 cents)

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#Capital Raisings
Added 2 years ago

27-Oct-2020:  Adriatic Metals Secures US$28 million Financing

That version of the ASX announcement is directly from the ADT website ( - because the ASX really messed up the first page of their version.

ADT went into a trading halt before the market opened this morning and announced that they'd secured the $28m at 5:39pm this afternoon.  I guess that's one of the big advantages of placements - they can happen very quickly.  And they cost a lot less obviously than SPPs or Rights Issues. 

In this particular case, they appear to have raised money at a premium to their last traded price also, rather than at a discount.  The European Bank for Reconstruction and Development (“EBRD”) subscribed for £6.2 million (~US$8 million) worth of LON: ADT1 ordinary shares of the Company at a price of £1.175 per share.  They last traded in London at £1.155 (and they closed at £1.115 the previous day - 26-Oct-2020). 

The other part of the raising was a US$20 million private placement of 8.5% unsecured convertible debentures to Queen's Road Capital Investment Ltd. (TSXV: QRC) which are unsecured and will have a four-year term from closing. If not otherwise converted earlier into Ordinary Shares, the Debentures are therefore expected to be refinanced as part of the development funding for the construction of the Vareš Silver Project, significantly before they become due for payment.

A cash coupon of 8.5% per annum is payable quarterly. The Debentures will be convertible at the holder's option into Ordinary Shares at a conversion price of A$2.7976, representing a 30% premium to the 20 day volume weighted average price (“VWAP”) of the Company’s Chess Depository Interests on the Australian Securities Exchange (“ASX”) to 23 October 2020. 

ADT are entitled to redeem the Debentures early at par plus accrued and unpaid interest (i) at any time that the 20-day VWAP on the ASX exceeds 125% of the Conversion Price; (ii) on or after the third anniversary of the date of the issuance of the Debentures, or (iii) from the proceeds of any project financing or other secured debt financing completed after the Closing Date.

While 8.5% p.a. interest seems a little steep in the current climate, this appears to give ADT some optionality and looks like bridging finance, since they intend to pay it back in full when they put together the financing/funding package for Vareš.

All in all, I don't mind it.  Obviously ordinary retail shareholders usually like to get the same opportunities to buy more shares and to be able to maintain their prior percentage ownership of the company - if they choose to - particularly when shares are offered to others at a discount, but there were no discounts on this occasion.

--- click on the link above for the full announcement ---

[I do not hold ADT shares, but I do hold SFR shares, and Sandfire owns ~16% of ADT, 15.87% at last notice, so I have some indirect exposure to ADT.  SFR is also on my scorecard, and ADT was removed (sold) with a +27% gain @ sell prices ranging from $1.26 to $1.31.  They are now trading around +60% higher than those levels - at $2.03/share.  Would have been a good one to have kept on the old scorecard, eh!?!  I am currently slightly underwater on SFR, which is a copper/gold producer (mainly copper) but as a producer they are substantially derisked compared to a project developer like ADT - and I like SFR for a copper price increase over the next couple of years.]

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#Vares Silver Project News
Added 2 years ago

02-Sep-2020:  Adriatic Metals adds Significant Footprint to Vares Silver Project


  • The Premier of the Zenica-Doboj Canton has approved Adriatic Metals’ application for a significant land extension to its current Concession Agreement.
  • Land expansion amounts to some 32.12 square km.
  • Land coverage incorporates historical targets known to the Company and is now subject to an aggressive exploration strategy in the coming months.
  • Following a change in Cantonal Concession Fees, the fee payable on the expanded area has been substantially reduced.

--- click on link for more ---

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#SFR takes ADT to court
Added 3 years ago

31-7-2020:  Litigation Proceedings Commenced by Sandfire Resources

Adriatic Metals Plc (ASX:ADT, LON:ADT1) refers to its previously announced Collaboration and Strategic Partnership Deed (“Deed”) with its major shareholder, Sandfire Resources Limited (“Sandfire”). 

Sandfire has commenced legal proceedings in the Supreme Court of Western Australia against the Company. Sandfire’s purported claims include a declaration that Adriatic has breached the Deed, specific performance of the Deed, damages, interest and costs.

Sandfire alleges that it was entitled to acquire a total of 4,127,139 shares in Adriatic, in the form of CHESS Depository Interests, at various issue prices pursuant to its anti-dilution right in the Deed.

The Company intends to vigorously defend these claims and will keep its securityholders informed of any material developments in this matter.

--- ends ---

[I do not hold ADT shares currently, but I do hold SFR shares]

We were speculating in recent weeks about why SFR removed their nominated director from the ADT Board.  Was it in preparation for a full takeover attempt, or was it that things had turned sour between the two companies - that their priorities were no longer fully aligned?  It appears to be the latter, but it could actually be both.  However, seeing as SFR are now taking ADT to court, a "friendly" takeover now seems less likely. 

I'm not convinced that SFR have entirely lost interest in taking over ADT, particularly as this court case is all about SFR being able to maintain their previous percentage holding in ADT (at prices that the two companies clearly do not agree on).  SFR believe that their CSPD (Collaboration and Strategic Partnership Deed) agreement had anti-dillution rights in it that guaranteed Sandfire the right to maintain their percentage holding of ADT even when ADT raised capital via private placements, or through any other means in which additional shares were issued by ADT.  It is likely that SFR's view of their agreement meant that SFR thought they should have been able to purchase ADT shares at the same price as the placement price on each occasion (or else at a pre-agreed lower price), but that ADT did not extend that offer to SFR on those occasions.  So, while the honeymoon appears to be over, the real marriage might still be to come.  It's just more likely to be an arranged marriage now, if it happens at all, and the bride might not be entirely happy about it.

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#ASX Announcements
Added 3 years ago

Ann: Response to ASX Price and Volume Query

As a result of the withdrawal of its nominee Director, investors may be speculating as to SFR's intentions with respect to ADT, including potential corporate transactions. ADT advises that it is not in negotiations or discussions with SFR as to any potential further corporate transactions. ADT is not otherwise able to explain the recent trading in its securities.

IMHO: This probably doesn't change anything. SFR could just be hiding and waiting for the right moment to pounce.

Unfortunate for me. I want to hold this one long term (have held since 2018 when it was 80c)

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#Speeding Ticket
Added 3 years ago

11-July-2020:  I just noticed that the ASX issued ADT with a Speeding Ticket (aka "please explain", or, officially, an "ASX Price and Volume Query") yesterday morning and then published that with ADT's official response during the afternoon (just after 2pm).

In their response, ADT said the following:  "Prior to the commencement of trading on 9 July 2020, ADT announced the resignation of John Richards from the board of ADT.  Mr Richards was appointed as a Non-Executive Director of ADT following his nomination by Sandfire Resources Limited (SFR), under the terms of the Collaboration and Strategic Partnership Deed between ADT and SFR.  SFR had advised ADT that they have withdrawn their nomination of Mr Richards.  As a result of the withdrawal of its nominee Director, investors may be speculating as to SFR's intentions with respect to ADT, including potential corporate transactions. ADT advises that it is not in negotiations or discussions with SFR as to any potential further corporate transactions. ADT is not otherwise able to explain the recent trading in its securities."

A little heat came out of the ADT share price as a result of that.  They traded as high as $2.05 earlier in the day, which was +11.7% above their Thursday closing price of $1.835, after they had risen +17.63% on Thursday (from $1.56 to $1.835) on the speculation that they describe here (and that I described in my straw here on Thursdsay morning titled "ADT now in play??"), however - the heat did come out of the share price after the "Speeding Ticket" response was published - and they closed almost flat, down just -1.5 cents (or -0.8%) at $1.82, which was their low of the day.  Still, ADT closed up +20.5% for the week, so there are still some prepared to speculate on some M&A activity from SFR here. 

All we can glean from the ADT response to the ASX query is that SFR and ADT have NOT been in negotiations or discussions regarding a potential corporate transaction, but, as I said on Thursday, I would expect that SFR removing their nominated director from the ADT board might well be a preliminary (early) step in that process, so I wouldn't discount the possibility too much.  In other words, it might still happen.

However, as I also said, it could play out two ways.  The other way it could play out is that SFR are preparing to sell down their ADT stake (or sell out) to a level where they would no longer necesarily be entitled to have a nominated director on the ADT board.  The only time that the ADT share price has been this high before was for a couple of days in January this year, so ADT are basically trading at all time highs (or within a few percentage points of).  SFR have a working copper/gold mine in WA (De Grussa, near Meekatharra) where they are currently well into the high-grade Monty deposit that they found on Talisman Mining's land a couple of year ago (and then bought off TLM), they are actively searching for more viable deposits around De Grussa via a number of JVs with tenement holders, plus Sandfire are already well into the development of two other projects.  The most advanced is their Tshukudu Operations which include the T3 Copper-Silver Project located in the Kalahari Copper Belt in Botswana.  That came via their acquisition last year of MOD Resources.  Sandfire also have their Black Butte copper project in Montana USA.  I wouldn't put it past Karl Simich to take on a third development at the same time as he's developing T3 and Black Butte, but he could also just be positioning his company to realise some decent profit from their ADT investment.

As an SFR shareholder, I actually would prefer it to be the "take profits" option, because I think companies can spread themselves too thin if they try to do too many things at once in different parts of the world.  If SFR do buy out ADT, they would then be operating in Australia while developing projects in Southern Africa (Botswana), and the USA, and in the Balkan Peninsula in southeastern Europe.  And that could be a little too much to do all at once.

If I was an ADT shareholder, I would of course be hoping for the takeover, or I'd be selling into the expectation of one perhaps.

One thing remains fairly certain.  This is not over yet.

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Valuation of $4.75
Added 3 years ago
Nov 19 Update: SS released. True tier 1 deposit with tier 1 economics. Assuming debt of 60% and raising at $1.36, undiscounted valuation is $4.75. Upside target at 70% debt and raise at $2.00 is $5.80. April 19 update: Progress being made across all facets of the asset. Given potential to be 6mt to 12mt at 12% zinc+ with low production costs, EV could range between $750m to $1000m. At low end of range and assuming further raises to get share base to 350m, valuation is $2.14 First: $1.00 See my bull case for thoughts on valuation upside/downside.
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