Dundee Precious Metals Inc. (DPM) has announced its intention to acquire Adriatic Metals plc for approximately $1.3 billion. This strategic move will integrate Adriatic's Vareš operation, a producing silver-lead-zinc-gold mine in Bosnia and Herzegovina, into DPM's portfolio, aiming to enhance production, extend mine life, and diversify cash flow.
Dundee Precious Metals Inc. (TSX: DPM) has reached an agreement to acquire Adriatic Metals plc, a UK-based precious and base metals producer, for an implied equity value of approximately $1.3 billion. The acquisition will grant DPM full ownership of Adriatic's Vareš operation in Bosnia and Herzegovina, a high-grade silver-lead-zinc-gold underground mine.
This acquisition is poised to create a premier mining business with significant growth potential. Key strategic benefits include:
David Rae, President and CEO of Dundee Precious Metals, emphasized that Vareš is a logical fit, significantly increasing DPM's mine life and adding near-term production growth and cash flow diversification. Laura Tyler, Managing Director and CEO of Adriatic Metals, highlighted the complementary strengths of both companies, expecting to unlock further value for shareholders and benefit local communities.
Vareš is an underground precious metals-dominant mine located approximately 50 kilometers north of Sarajevo. It commenced concentrate production in 2024 and is currently ramping up to nameplate processing capacity, producing saleable silver-zinc and lead-silver-gold concentrates.
According to an independent technical report, Vareš has a 15-year operating life based on existing mineral resources, with average annual payable production of approximately 168,000 ounces of gold equivalent at an all-in sustaining cost of $893 per ounce of gold equivalent. The project's post-tax NPV5% is estimated at $1.6 billion, with $2.1 billion in post-tax cash flow over its initial mine life.
Adriatic shareholders will receive 0.1590 of a DPM common share and 93 pence in cash for each Adriatic share, valuing each Adriatic share at £2.68 (approximately US$1.3 billion for the entire issued share capital). Following the transaction, current DPM shareholders are expected to own approximately 75% of the enlarged company, with former Adriatic shareholders owning about 25%.
The transaction is subject to several closing conditions, including approvals from Adriatic and DPM shareholders, court approval, Toronto Stock Exchange listing approval, and unconditional approval from the Bosnian Competition Council. The transaction is expected to be effective no later than December 31, 2025.
DPM has identified several medium- and long-term opportunities to optimize Vareš, including:
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