Ann: Adriatic Metals Exceptional Pre Feasibility Study Vares, page-63

An interviewer’s notes with Paul Cronin on Fri:

"I battled my way through the $ADT.AX interview @colop did on Friday with Paul Cronin and @MiningCatalyst. https://twitter.com/soarfinancial/status/1316800222576566272?s=20
There was a technical problem so Paul and Christian echoed whenever they spoke. Here are my notes:

Christian started things off and noted there were two things that people maybe questioned in the PFS:
Pricing: Paul said he is a fan of using what you can touch. You can touch spot price. (he's been consistent on this point in interviews that I've seen this summer)
Opex per tonne - majority of the increase relate to transportation. They are shipping 2.4Mt tonnes of barite, the cost of the shipping is about $70 per tonne. This amounts to over 50% of materials movement.

What they could have done is strip out the barite part of the project so you could look at the metals by themselves then look at the barite for comparison. Barite piece of the NPV is minimal, it is less than $50m.
The barite will be coming out of the ground, he is not suggesting they remove it from the project. Paul is saying they really need to focus on the logistics and marketing of it. Now is the time to engage with smelters and they can either do that through traders or themselves. He is confident they are being conservative with respect to the barite for now. (I think he mostly meant the cost side of the equation in saying that but I could be putting words in his mouth, that was my take though)

The Bosnian prime minister and the minister of mines visited the site last week. Paul said they've seen a fair bit of action by the federal government in the few days since the visit to help move things along. Bosnia can be known for bureaucracy and sometimes having the support of someone like the PM can help. The ministry of mines is helping them move things along with other ministries in the govt.

The Veovaca permits will happen this quarter. Once they receive the Urban Planning Permit, the minstry of mines will advertise for two weeks, like with prior enviro permit then a four week comment period then get the exploitation permit.

Similarly Adriatic had their Rupice environmental permit hearing in August and that public comment period expired on Sept 30th. Rupice enviro permit this quarter as well then. Rupice UPP and Exploitation permits in Q1/21 most likely.

How to improve the PFS when doing the DFS? There will more localizing of costs. There will be more certainty on the barite and on the concentrate shipping costs.
They'll be putting the mining contract to tender and he expects it to be very competitive with interest from companies in Turkey. He will head to Istanbul in a couple weeks to talk to some groups there.
To sum it up, he expects incremental improvements but also points out that the NPV covers the Capex by a 6:1 ratio which is extraordinary. Project averages $251m of EBITDA in first 5 years.

Paul noted Adriatic is multi-project too. 2 rigs going at Kizevak, 3rd on way, looking for 4th. Some of that CF at Rupice is going to fund development at Kizevak. They only closed TETH deal the prior week, they launched the drill program a month or so ago, they are drilling in a new area that's never been drilled before and "we are loving it."

There was a brief discussion to end things off about Canadian versus Australian exchange in terms of requirements to put out full technical report. (Canada makes you do so) Paul noted they were pretty detailed in what they released in the announcement."

DYOR, GLTAH