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Adriatic Metals completes debt financing package with Orion

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Global Mining Review,

Adriatic Metals PLC has advised that, further to the announcement on 12 October 2021, definitive documentation for the US$142.5 million debt financing package (Orion debt package) with Orion Resource Partners (UK) LLP has been entered into by the company’s wholly owned subsidiary, Adriatic Metals Trading & Finance B.V.

The terms of the Orion debt package have not changed since they were originally announced on the 12 October 2021 and comprise of:

  • US$120 million senior secured debt (the senior secured debt).
  • US$22.5 million copper stream.

First draw down of the Orion debt package is expected to take place in 2Q22, following satisfaction by the company of customary conditions precedent to financial close.

The US$244.5 million Vares Silver Project financing package is now complete following the execution of the Orion debt financing, together with the institutional equity raise of US$102 million that closed on 13 October 2021. Orion subscribed for US$50 million (24 191 000 ordinary shares) in the institutional equity raise, making it a 9.1% shareholder in Adriatic. The company is now fully funded to production from the Vares Silver Project. First production is expected in 2Q23.

Adriatic Foundation

The project finance debt package includes a donation by Orion to the Adriatic Foundation of US$100 000/yr during the repayment period of the senior secured debt. Tamesis Partners LLP is also contributing US$10 000 of its fee to the foundation. The Foundation was set up in June 2021 with the objective of supporting the communities around the Vares Silver Project, through initiatives designed to create a positive long-term legacy, as well as alignment between the company and the communities that the Foundation supports. The foundation’s initiatives are specifically focused on improving local education, healthcare and environmental protection.

Financial and legal advisers

Tamesis Partners LLP and Terrafranca Advisory Ltd acted as the company’s joint financial advisers, and Herbert Smith Freehills acted as the company’s legal adviser in relation to the senior secured debt and the copper stream.

Paul Cronin, Adriatic’s Managing Director and CEO, commented: “Adriatic Metals has entered a new phase with the Vares Silver Project fully funded through to production. This significantly de-risks the company and puts us in a strong position to become Europe’s next miner, providing the continent with locally sourced, strategic metals.

“We are delighted to have Orion on board and believe it’s a strong validation of the potential of the Vares Silver Project. Critical to achieving production at Vares is our social license to operate, which we have secured by taking a responsible approach to developing and working towards the creation of a positive long-term legacy. Orion’s contribution to the Adriatic Foundation emphasises its alignment with our commitment to the community.”

Michael Barton, Portfolio Manager at Orion, commented: “We are delighted to have completed the project financing with Adriatic, which marks the culmination of a significant amount of work from both our respective teams. Since we were first introduced to the project in 2018, we have been impressed by the project’s potential. We very much look forward to developing our working relationship with the company and assisting in realising that potential as Adriatic evolves.”

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