For Immediate Release October 27, 2020
Queen’s Road Capital Investment Ltd. (TSXV-QRC) (the “Company”, “QRC” or “Queen’s Road Capital”) is pleased to announce that it has entered into a binding agreement with Adriatic Metals Plc (“Adriatic”) (ASX: ADT, LON: ADT1) whereby the Company will purchase US$20,000,000 of convertible debentures to be issued by Adriatic.
The convertible debentures will have a 4-year term, carry an 8.5% coupon, a 3% establishment fee and will be convertible into Adriatic common shares at a price of A$2.7976, representing a 130% premium to the 20-day volume weighted average price. QRC’s investment in the convertible debentures is being made concurrent with a £6.2 million equity private placement by Adriatic to the European Bank for Reconstruction & Development (“EBRD”).
Adriatic is a precious and base metals development company that owns the Vares silver project in Bosnia & Herzegovina. The Vares silver project consists of two high-grade polymetallic deposits located at Rupice and Veovaca. On October 15, 2020, Adriatic released the results of a Pre-Feasibility Study at Vares with some of the strongest returns in the industry. The study indicated a NPV8 of US$1.04 billion and an IRR of 113% based on spot commodity prices with an initial capital cost of US$173 million. Approximately 45% of the life-of-mine revenues of the project are expected to come from precious metals.
Adriatic is advancing the Vares project into the development phase and through to production. Adriatic is expected to complete a Bankable Feasibility Study by April 2021 and Adriatic expects to have all permits in place to build the mining and processing operations by the end of November 2021.
The proceeds from the convertible debenture investment and the EBRD private placement are expected to be used to fund the Bankable Feasibility Study, pay deposits on long-lead capital cost items for the construction of the mine and advance exploration activities at Adriatic’s Bosnian and Serbian projects.
Warren Gilman, Chairman and CEO of QRC commented: “Adriatic’s Vares project ranks among the highest return projects in the global mining industry. Its position in QRC’s portfolio alongside NexGen’s Arrow project and ISO Energy’s Hurricane deposit is well deserved. With this investment, Queen’s Road Capital’s convertible debenture portfolio will total US$41 million with an average annual coupon exceeding 8% with unlimited equity upside across our entire portfolio.”
Completion of the investment is subject to receipt of all required regulatory approvals and is expected to occur in November 2020.
Queen’s Road Capital is a leading financier to the global resource sector. The Company is a resource focused investment company, making investments in privately held and publicly traded resource companies. It is intended that the Company will acquire and hold securities for both long-term capital appreciation and short-term gains, with a focus on convertible debt securities and resource projects in advanced development or production located in safe jurisdictions.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Caution Regarding Forward Looking Statements
Certain statements in this News Release, which are not historical in nature, constitute “forward looking statements” within the meaning of that phrase under applicable Canadian securities law. These statements include, but are not limited to, statements or information concerning the Company’s growth strategy and the Company’s future performance. These statements reflect management’s current assumptions and expectations and by their nature are subject to certain underlying assumptions, known and unknown risks and uncertainties and other factors which may cause actual results, performance or events to be materially different from those expressed or implied by such forward looking statements. Those risks include the interpretation of drill results; the geology, grade and continuity of mineral deposits; the possibility that future exploration, development or mining results will not be consistent with our expectations; commodity and currency price fluctuation; failure to obtain adequate financing; regulatory, recovery rates, refinery costs, inability to identify or successfully conclude corporate transactions, and other relevant conversion factors, permitting and licensing risks; and general market and mining exploration risks. Forward-looking statements should not be construed as investment advice. Readers should perform a detailed, independent investigation and analysis of the Company and are encouraged to seek independent professional advice before making any investment decision. Accordingly, readers should not place undue reliance on any forward-looking statement. Except as required by applicable securities laws, the Company disclaims any obligation to update or revise any forward-looking statements to reflect events or changes in circumstances that occur after the date hereof.