A/ Announcement “Land coverage incorporates historical targets...

A/ Announcement

“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.

Under the terms of the original Concession Agreement, the Company has three fields, being Veovaca I & II and Rupice-Jurasavac Brestic, as outlined in Figure 1 below.

The approval of the second amendment to the Concession Agreement extended those fields into the areas adjacent to the original fields.

This third amendment that covers areas Borovica-Semizova Ponikva (“Semizova Ponikva; Orti-Seliste-Mekuse-Barice-Smajlova Suma-Macak (“Vares East; and Droskovac-Brezik (“Brezik”, represents a significant milestone for Adriatic, and the Zenica-Doboj Canton Government. The area covered by this new agreement is 3,212 ha or 32.12 km2. Total area covered by Adriatic Metals’ concessions is now 4,078 ha (40.78 km2).

The Concession Fee of KM 481,800 (€246,335) will be paid to Zenica Doboj Canton, and it is expected that 70% of the fee will directly benefit the Vares Municipality.

The Brezik Concession (aka Brezik-Droskovac), to the west of the Veovaca deposit, hosts the disused Brezik iron-ore mine and the historical Droskovac iron-ore mine. Droskovac was historically mined in the 1980s for iron ore, but it has an historical A + C1 resource of 0.9Mt @ 1.0% Zn & 2.9% Pb. - excerpts from announcement

B/ Picture snapshot

IMO investors would do well to have a look at picture on Pg 2/14 of announcement which clearly shows the new concession and gives a quick snapshot of this announcement. Following is mentioned there -

1/ Based on mining life stage -

Resource development and scoping study – Rupice and Veovaca (green)

Advanced stage exploration targets- Borovica and Jurasevac-Brestic (yellow)

Historical brownfield targets – Orti, West Veovaca, Mekuse, Seliste, Brgule, Smajlova Suma (blue)

2/ Based on old granted license and new concession boundaries – Veovaca 1 (red), Veovaca 2 (red), Rupice (red), Semizova Ponikva (blue), Brezik (blue) and Vares East (blue)

C/ Benefits / positives / implications

1/ 5 times original concession -

Just like Tethyan, this could be a very significant announcement from longer term angle.

Area covered by ADT concessions in Bosnia has moved from around 8 km to 40 sqkm. We have quintupled our exploration potential.
I’ve seen too many companies with great potential ultimately stumble on something basic as cash management. If ADT does not get taken over, then IMHO ADT might want to consider doing a proper sized capital raise somewhere in year to come, to fully take advantage of exploration potential and further opportunities.

2/ There is also clearly co-operation from government in Bosnia, which reduce country risk, which some people were originally afraid of. Also refer Point D below for Bosnian article

3/ ADT has talked of historical brownfield targets. This fits in with what Paul has been talking of in the past, and gives an idea of the company’s strategy.

“Strategy was to look for projects in Balkans with some exploration done and not fully greenfield, but similar characteristics like not drilled deep enough, not assayed for precious metals, not drilled as extensively, etc. Tethyan ticked boxes.” - Excerpts from recent podcast

While Paul was talking about Teth, the strategy is similar. Also Paul has long spoken of wealth of data accumulated during Yugoslav era which ADT has in its possession.

4/ As I mentioned yesterday, I look at ADT as a giant dart board, where you hope some darts stick.
Rupice, our main dart is already on the bullseye with NPV significantly more than our current market cap. If ADT even manages to find half a Rupice anywhere else, it would be great. Also keep in mind that there is still Tethyan (Kizevak + Sastavci)

5/ Even if it does not find anything, ADT is a much better takeover target for a well cashed bigger company, with a much bigger concession in same area, and thus much more exploration potential, and also fact that we are first movers in Bosnia

6/ Interesting that Droskovac was historically mined in the 1980s, and has a foreign resource estimate. Refer point 3 above again on ADT's strategy on brownfield projects.

D/ Recent Bosnian article

“Mirza Ganic, the Prime Minister of Zenica-Doboj Canton, told “Avaz” that this is a big story and that so far the Ministry of Economy has responded positively to all the company’s requests.

“We have good cooperation, we are in constant contact. This project is a positive story for ZDC, but also for the whole of BiH. If it comes to life at full capacity, we will all benefit, primarily the local community, because, according to the law on concessions, most of the funds, 70 percent, remain in Vares, which is currently poorly developed. This would accelerate its development,” states Ganic.

“Earlier, the problem was the introduction to the research, for which an enormous fee was paid. When it was realized that the payment of the first fees until the ore is found slows down the development of investments in that part of the research, the Ministry decided to lower the amount of fees so that people could further explore. If the results were encouraging, then a concession would be charged,” Ganic explains.” -excerpts from recent Bosnian article

https://www.sarajevotimes.com/current-estimated-value-of-mine-in-vares-is-one-million-dollars/

Above excerpts from recent Bosnian news article seems to tie in with info above about government co-operation, etc.

E/ Fibonacci retracements

As I mentioned yesterday, there were several reasons for potential fall including normal market retracements.

23.6% retracement – 2.37
38.2% retracement – 2.07
50% retracement – 1.82
61.8% retracement - 1.58

I mentioned that yesterday ADT found support at the 38.2% level. Notice that today, ADT on its rise was attracted like a magnet to the 23.6% level and high of day and close of day was $2.38

Cheers