Directly OR Indirectly, IN, into OR from Any Jurisdiction Where to Do so Would Constitute a Violation of the Relevant Laws OR Regulations of Such Jurisdiction This Announcement Contains Inside Information
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NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART,
DIRECTLY OR INDIRECTLY, IN, INTO OR FROM ANY JURISDICTION WHERE TO DO
SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR REGULATIONS
OF SUCH JURISDICTION
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION
FOR IMMEDIATE RELEASE
13 June 2025
RECOMMENDED SHARE AND CASH OFFER
FOR
ADRIATIC METALS PLC
BY
DUNDEE PRECIOUS METALS INC.
to be effected by means of a scheme of arrangement
under Part 26 of the Companies Act 2006
SUMMARY
The Boards of Dundee Precious Metals Inc. (“ DPM”) and Adriatic Metals Plc (“ Adriatic”) are
pleased to announce that they have agreed the terms of a recommended acquisition of the
entire issued and to be issued ordinary share capital of Adriatic (the “Transaction”).
Key Terms
Under the terms of the Transaction, Adriatic Shareholders will be entitled to receive, for each
Adriatic Share:
0.1590 New DPM Share; and
93 pence in cash
The terms of the Transaction value:
each Adriatic Share at 268 pence, based on a GBP:CAD$ exchange rate of 1.850 on
11 June 2025;
each Adriatic CDI at AUD $5.56, based on a AUD:CAD$ exchange rate of 0.891 and
a GBP:AUD exchange rate of 2.077 on 11 June 2025; and
the entire issued share capital of Adriatic at approximately US$1.251 billion, based
on USD:GBP exchange rate of 0.739 on 11 June 2025,
in all cases, based on the Closing Price of CAD$20.33 per DPM Share on 11 June 2025.
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The terms of the Transaction represent a premium of approximately:
50.5 per cent. to the Closing Price on the LSE of 178 pence per Adriatic Share on 19
May 2025 (being the last Business Day in London, England prior to the
commencement of the Offer Period); and
47.8 per cent. to the Closing Price on the ASX of AUD $3.76 per Adriatic CDI on 20
May 2025 (being the last Business Day in Sydney, Australia prior to the
commencement of the Offer Period);
31.8 per cent. to the 30-day volume-weighted average Adriatic share price on the
LSE as of 19 May 2025, based on the 30-day volume-weighted average share price
of DPM on the Toronto Stock Exchange (“ TSX”) as of 16 May 2025 (being the last
Business Day in Toronto, Canada prior to the commencement of the Offer Period);
and
33.5 per cent. to the 30-day volume-weighted average Adriatic CDI price on the ASX
as of 20 May 2025 (being the last Business Day in Sydney, Australia prior to the
commencement of the Offer Period in Sydney, Australia), based on the 30-day
volume-weighted average share price of DPM on the TSX on 16 May 2025 (being the
last Business Day in Toronto, Canada prior to the commencement of the Offer
Period).
The Mix and Match Facility will also be made available to Adriatic Shareholders in order to
enable them to elect, subject to off-setting elections, to vary the proportions in which they
receive cash and New DPM Shares. The aggregate amount of cash to be paid and New DPM
Shares to be issued under the terms of the Transaction will be £321 million and 54.9 million
New DPM Shares, equating to 34.7 per cent cash and 65.3 per cent New DPM Shares, and will
not be varied as a result of the Mix and Match Facility.
Immediately following Completion, it is expected that DPM’s enlarged issued share capital will
be owned approximately 75.3 per cent. by existing DPM Shareholders and approximately 24.7
per cent. by former Adriatic Shareholders.
Holders of CHESS Depository Interests over Adriatic Shares (“ Adriatic CDIs”) will participate
in the Transaction on the same basis as holders of Adriatic Shares. Accordingly, unless the
context requires otherwise, references to Adriatic Shares in this Announcement include Adriatic
CDIs, references to Adriatic Shareholders include Adriatic CDI Holders, references to Adriatic
Shareholders voting on the Transaction, the Scheme or related matters shall include Adriatic
CDI Holders procuring the same.
DPM has received irrevocable undertakings to vote in favour of the Scheme and the Adriatic
Resolutions from certain Adriatic Directors who are interested in Adriatic Shares and Supporting
non-director Shareholders, including Helikon Investments Limited and L1 Capital Pty Ltd, who
hold a total of 128,541,045 Adriatic Shares in aggregate, representing 37.23 per cent. of
Adriatic’s total issued share capital on the Last Practicable Date.
Background to and reasons for the Transaction
The acquisition of Adriatic has compelling strategic merit and is fully aligned with DPM’s core
competencies. DPM believes that the Transaction will form a strong combined group with an
enhanced operating and financial profile, driven by an attractive production, mineral reserve
and mineral resource base and a compelling metal mix. The Transaction is consistent with
DPM’s approach to shareholder returns, portfolio enhancements and leverages its
complementary capabilities and significant balance sheet strength.
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DPM believes that it would be a well-suited operator of the Vareš Silver Operation (“ Vareš”)
given its financial strength and extensive experience and track record in the Balkans, where it
currently operates an underground mine and an open pit mine. DPM has fostered strong
partnerships with local governments and communities in the Balkan region and has a
demonstrated history of working to create sustainable benefits for its stakeholders and local
communities.
Vareš is a new underground precious metals rich mining operation, with a low-cost profile, long
mine life and attractive exploration potential. Furthermore, DPM’s proven exploration team is
excited about the additional upside potential from further exploration activities at the extensive
Vareš land package and, notably, the highly prospective Rupice Mine.
Consistent with DPM’s financial priorities of generating attractive returns for shareholders, DPM
expects the Transaction to be accretive, on a cash flow per share basis, in the first year post-
Completion, delivering attractive returns for existing DPM and Adriatic shareholders, with
additional upside from achieving and maintaining commercial production levels at Vareš,
leveraging corporate infrastructure optimisation and supply efficiencies.
From DPM’s perspective, the predominantly equity-based nature of the Transaction
consideration allows DPM to enhance its balance sheet strength which, when combined with
Adriatic, is expected to increase its ability to fund growth and continue to return cash to
shareholders through its current capital allocation and dividends policy.
The Transaction is expected to offer the following additional benefits:
Improved Financial Strength. DPM anticipates that the Transaction will result in value
creation from corporate and other operational synergies and enhanced financial
flexibility to support the Combined Group’s growth initiatives. Specifically, DPM’s strong
balance sheet and cash flow is expected to fund remaining ramp-up requirements at
Vareš, construction capex for an additional operating mine and accelerate exploration
across its expanded portfolio, thereby resulting in meaningful value creation for the
Combined Group and avoiding dilution associated with large third-party financings.
Optimised Capital Allocation and Investment. The Combined Group is expected to have
a strong balance sheet, with significant free cash flow generation and exposure to
mineral projects with strong economics across Bulgaria, Serbia, Ecuador and Bosnia
and Herzegovina, which DPM believes will enable the Combined Group to optimise
capital allocation, enhance its market valuation and investment across its portfolio of
mining assets. DPM also believes that the strength of the Combined Group (expected
to be evidenced by significant management expertise, free cash flow, a strong balance
sheet and borrowing base potential) will provide an excellent platform for future
investment and consolidation within the regions in which the Combined Group will
operate.
De-Risking Mine Development. The completion of the Transaction is expected to
enhance DPM’s ability to successfully develop a mine and launch operations at its Čoka
Rakita Project, effectively de-risking the Čoka Rakita Project. By integrating Adriatic’s
experienced mining personnel into the Combined Group’s operations, DPM is expected
to demonstrate its ability to navigate the complexities of mine development and
mitigate associated risks.
Continued Participation by Adriatic Shareholders. Scheme Shareholders, through their
ownership of New DPM Shares, will also participate in the mineral projects of DPM
along with the potential valuation re-rating associated with a diversified operating
portfolio, larger market capitalisation and more liquid shares.
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Strong and Proven Management Team. The Combined Group will benefit from the skill
and expertise of DPM’s current management team, who possess extensive experience
in mine development, operations, finance, exploration and rightsholder and stakeholder
engagement, all of which would accelerate the successful development of Adriatic’s
mineral projects.
Enhanced Capital Markets Profile. The Transaction is expected to result in increased
scale and liquidity with enhanced market relevance and financial flexibility and a lower
cost of capital, with wider investor appeal and analyst coverage due to an even larger
market capitalisation, which could provide an opportunity for a re-rating of the DPM
Shares following completion of the Transaction.
Comments on the Transaction
Commenting on this Announcement, David Rae, the CEO of DPM, said:
“Adding Adriatic’s Vareš operation to our strong asset portfolio creates a premier mining
business with a peer-leading growth profile, high-quality development and exploration pipeline
and a robust platform to deliver above-average returns.
The Vareš is a logical fit with our portfolio, and adds near-term production growth and mine
life, a highly prospective land package, and cash flow diversification. We are well-positioned to
leverage our expertise in underground mining and our strong financial position to further
optimize the operation and realize Vareš full value potential, based on our analysis.”
Commenting on this Announcement, Laura Tyler, the CEO of Adriatic, said:
“The Vareš Silver Operation remains on track to become a low cost precious metal producer,
underpinned by a long mine life, a high-grade deposit and strong exploration potential. What
makes Vareš so exciting is that it is at beginning of its journey, with significant growth ahead.
This transaction brings together complementary strengths to create a dynamic and diversified
mining company with meaningful scale. The combined group will be well placed to pursue
additional value-additive opportunities. We see clear synergies between the asset portfolios of
DPM and Adriatic, supported by DPM’s strong financial capacity and proven operational
expertise. Together these strengths are expected to unlock further value for shareholders of
both companies, in both the near and longer term. Importantly, the creation of a diversified
mining company in the Balkan region will bring benefits not only to our employees and
shareholders, but also to local communities and broader regional stakeholders. This
Transaction presents a compelling opportunity to be part of a transformative and long-term
success story – one we fully endorse and recommend to all our stakeholders.”
Recommendation of the Adriatic Directors and Adriatic Directors’ Irrevocable
Undertakings
The Adriatic Directors, who have been so advised by RBC Capital Markets as to the financial
terms of the Transaction, consider the terms of the Transaction to be fair and reasonable. RBC
Capital Markets is providing independent financial advice to the Adriatic Directors for the
purposes of Rule 3 of the Takeover Code. In providing its advice, RBC Capital Markets has
taken into account the commercial assessments of the Adriatic Directors.
The Adriatic Directors intend unanimously to recommend that Scheme Shareholders vote (and
that Adriatic CDI Holders direct CDN to vote) in favour of the Scheme at the Court Meeting and
Adriatic Shareholders vote in favour of the Adriatic Resolutions to be proposed at the Adriatic
General Meeting (or in the event that the Transaction is implemented by way of a Takeover
Offer, to accept or procure acceptance of such Takeover Offer), as certain Adriatic Directors
who are interested in Adriatic Shares have irrevocably undertaken to do in respect of their own
beneficial holdings of, in aggregate, 1,572,383 Adriatic Shares (including in respect of Adriatic
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Shares, the underlying Adriatic CDIs), representing, in aggregate, approximately 0.46 per cent.
of Adriatic’s issued share capital as at the close of business on the Last Practicable Date.
Adriatic Shareholder Irrevocable Undertakings
In addition, DPM has received irrevocable undertakings from the Supporting non-director
Shareholders to vote in favour of the Scheme and the Adriatic Resolutions in respect of a total
of 126,968,662 Adriatic Shares (including the underlying Adriatic CDIs) representing, in
aggregate, 36.77 per cent. of Adriatic’s total issued share capital as at the Last Practicable
Date.
Recommendation of the DPM Directors and DPM Directors’ and Executive Officers'
Voting Support Agreements
The issuance of the New DPM Shares pursuant to the Transaction requires the DPM Shareholder
Resolution to be approved by a simple majority of the votes cast by DPM Shareholders,
represented in person or by proxy, at the DPM Special Meeting.
The DPM Board has been advised by BMO as to the financial terms of the Transaction and
considers the Transaction to be in the best interest of DPM and fair to DPM, from a financial
point of view. The DPM Board intends to recommend that DPM Shareholders vote in favour of
the DPM Shareholder Resolution at the DPM Special Meeting. DPM Directors and Executive
Officers have irrevocably undertaken to vote in favour of the DPM Shareholder Resolution at
the DPM Special Meeting in respect of their own beneficial holdings of, in aggregate, 313,016
DPM Shares, representing, in aggregate, approximately 0.19 per cent. of DPM’s issued share
capital as at the close of business on the Last Practicable Date.
Transaction Structure and Timing
It is intended that the Transaction will be effected by means of a Court-sanctioned scheme of
arrangement between Adriatic and the Scheme Shareholders under Part 26 of the Companies
Act, further details of which are contained in the full text of this Announcement and full details
of which will be set out in the Scheme Document to be published by Adriatic in due course.
The purpose of the Scheme is to provide for DPM to become the owner of the entire issued
and to be issued share capital of Adriatic. In order to achieve this, the Scheme Shares will be
transferred to DPM under the Scheme, in consideration for which Scheme Shareholders will
receive the Consideration on the basis set out in the paragraph entitled “Key Terms” above.
The Transaction will be subject to the Conditions and further terms set out in Appendix
1 (Conditions to and Certain Further Terms of the Transaction ) to this Announcement (and to
the full terms and conditions which will be set out in the Scheme Document), including, among
other things: (i) approval by the requisite majority of Scheme Shareholders at the Court Meeting
and the requisite majority of the Adriatic Shareholders at the Adriatic General Meeting; (ii) the
Court sanctioning the Scheme; (iii) the DPM Shareholder Resolution being approved by a simple
majority of the votes cast by DPM Shareholders represented in person or by proxy at the DPM
Special Meeting; (iv) receipt of the approval for the listing of the DPM Shares by the TSX to be
issued as part of the Consideration; (v) the receipt by DPM of an unconditional approval of the
Transaction by the Bosnian Competition Council in accordance with the Bosnian Competition
Act; and (vi) the Transaction becoming Effective no later than the Long Stop Date.
It is expected that the Scheme Document, containing further information about the Transaction
and notices of the Court Meeting and Adriatic General Meeting, together with the Forms of
Proxy (for Adriatic Ordinary Shareholders), CDI Voting Instruction Forms (for Adriatic CDI
Holders) and forms of election in respect of the Mix and Match Facility, will be mailed or emailed
(as applicable) to Adriatic Shareholders as soon as reasonably practicable.
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The Scheme is expected to become Effective during the fourth quarter of 2025, subject to the
satisfaction (or, where applicable, waiver) of all relevant Conditions and further terms set out
in Appendix 1 (Conditions to and Certain Further Terms of the Transaction ).
DPM reserves the right, subject to the terms of the Co-operation Agreement and with the
consent of the Panel, to implement the Transaction by way of a Takeover Offer.
This summary should be read in conjunction with, and is subject to, the full text of
this Announcement and the Appendices.
The Transaction will be subject to the Conditions and further terms set out in this
Announcement, including Appendix 1 ( Conditions to and Certain Further Terms of
the Transaction ) to this Announcement, and to the full terms and conditions which
will be set out in the Scheme Document. Appendix 2 ( Sources of Information and
Bases of Calculation ) to this Announcement contains the bases of calculation and
sources of certain information contained in this Announcement. Details of the
irrevocable undertakings received by DPM in connection with the Transaction are
set out in Appendix 3 (Details of Irrevocable Undertakings ) to this Announcement.
Certain terms used in this Announcement are defined in Appendix 4 ( Definitions )
to this Announcement.
Analyst and investor presentations
DPM and Adriatic will host two joint presentations for analysts and investors today, 13 June
2025, the first will be held at 08:00 London time / 03:00 Eastern Standard Time and the second
will be held at 13:00 London time / 08:00 Eastern Standard Time to discuss the Transaction.
Analysts and investors may join via webcast or conference call.
Conference call pre-registration:
https://register-conf.media-server.com/register/BI484d6b18e4024f0a8b5508603e9df785
Webcast link: https://edge.media-server.com/mmc/p/4efy67ux
Subject to certain restrictions, the slides used in the presentation will be available to all
interested parties at https://dundeeprecious.com/investors/possible-offer-for-adriatic-metals/
and https://www.adriaticmetals.com/investors/offer/.
Your attention is also drawn to the important information below and at the back of this
Announcement.
The person responsible for making this announcement on behalf of Adriatic is Laura Tyler, CEO
of Adriatic.
Enquiries
DPM
Dundee Precious Metals Inc
David Rae and Jennifer Cameron
+1 416 219 6177
BMO (Financial Adviser to DPM)
Gary Mattan, Thomas Rider and Nick Macann
+44 (0) 207 236 1010
Tavistock (Financial PR to DPM)
Gareth Tredway and Tara Vivian-Neale
+44 (0) 207 920 3150
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Adriatic
Adriatic Metals plc
Laura Tyler and Michael Horner
via Burson Buchanan
RBC Capital Markets (Joint Financial Adviser and
Corporate Broker)
Farid Dadashev, Mark Preston, James Agnew and
Samuel Jackson
+44 (0) 20 7653 4000
Macquarie Capital (Joint Financial Adviser)
Michael Clifton, Magnus Scaddan and Peter Cho
+44 (0) 20 3037 2000
Stifel Nicolaus Europe Limited (Capital Markets
Adviser)
Ashton Clanfield, Varun Talwar
+44 (0) 20 7710 7600
Burson Buchanan
Bobby Morse and Christopher Jones
+44 (0) 20 7466 5000
BMO is acting as financial adviser to DPM in connection with the Transaction. RBC Capital
Markets is acting as joint financial adviser to Adriatic in connection with the Transaction.
Macquarie Capital (Europe) Limited is acting as joint financial adviser to Adriatic in connection
with the Transaction.
Bryan Cave Leighton Paisner LLP is acting as UK legal adviser to DPM in connection with the
Transaction. Cassels Brock & Blackwell LLP is acting as Canadian legal adviser to DPM in
connection with the Transaction. Gilbert + Tobin is acting as Australian legal adviser to DPM in
connection with the Transaction. Herbert Smith Freehills Kramer LLP is acting as UK and
Australian legal adviser to Adriatic in connection with the Transaction. Stikeman Elliott LLP is
acting as Canadian legal adviser to Adriatic in connection with the Transaction.
Inside information
This Announcement contains inside information as stipulated under the Market Abuse
Regulation No. 596/2014 (incorporated into UK law by virtue of the European Union
(Withdrawal) Act 2018 as amended by virtue of the Market Abuse (Amendment) (EU Exit)
Regulations 2019). Upon the publication of this Announcement via an RNS, this inside
information is now considered to be in the public domain.
Further information
This Announcement is for information purposes only and is not intended to and does not
constitute, or form part of, any offer or invitation, or the solicitation of any offer or invitation,
to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities, or the
solicitation of any vote or approval in any jurisdiction pursuant to the Transaction or otherwise,
nor shall there be any sale, issuance or transfer of securities of DPM or Adriatic in any
jurisdiction pursuant to the Transaction in contravention of applicable law.
The Transaction will be made and implemented solely pursuant to the terms of the Scheme
Document (or if the Transaction is implemented by way of a Takeover Offer, the Offer
Document), which, together with the Forms of Proxy, will contain the full terms and conditions
of the Transaction and details of how to vote in respect of the Transaction. Any vote or other
decision in respect of, or other response to, the Transaction (including any vote in respect of
the resolutions to be proposed at the Adriatic Meetings to approve the Transaction, the Scheme
or related matters) should be made only on the basis of the information contained in the
Scheme Document (or if the Transaction is implemented by way of a Takeover Offer, the Offer
Document).
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Adriatic and DPM will prepare the Scheme Document (or if the Transaction is
implemented by way of a Takeover Offer, the Offer Document) to be distributed to
Adriatic Shareholders. Adriatic and DPM urge Adriatic Shareholders to read the
Scheme Document (or if the Transaction is implemented by way of a Takeover Offer,
the Offer Document) when it becomes available because it will contain important
information relating to the Transaction.
Any vote in respect of resolutions to be proposed at the Adriatic Meetings to approve the
Transaction, the Scheme or related matters, should be made only on the basis of the
information contained in the Scheme Document.
This Announcement does not constitute a prospectus, prospectus equivalent document or an
exempted document for the purposes of Article 1(4) or (5) of the UK Prospectus Regulation.
This Announcement does not constitute or form part of, and should not be construed as, any
public offer under any applicable legislation or an offer to sell or solicitation of any offer to buy
any securities or financial instruments or any advice or recommendation with respect to such
securities or other financial instruments.
The Transaction may have tax consequences for Adriatic Shareholders. Adriatic Shareholders
are urged to consult with their own legal, tax and financial advisers in connection with making
a decision regarding this Transaction.
The statements contained in this Announcement are made as at the date of this Announcement,
unless some other time is specified in relation to them. Publication shall not give rise to any
implication that there has been no change in the facts set forth in this Announcement since
such date.
Disclaimers
BMO, which is authorised and regulated by the FCA in the United Kingdom, is acting exclusively
for DPM and no one else in connection with the matters set out in this Announcement and will
not regard any other person as its client in relation to the matters in this Announcement and
will not be responsible to anyone other than DPM for providing the protections afforded to
clients of BMO nor for providing advice in relation to any matter referred to in this
Announcement. Neither BMO nor any of its affiliates owes or accepts any duty, liability or
responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute
or otherwise) to any person who is not a client of BMO in connection with this Announcement,
any statement contained herein or otherwise.
RBC Europe Limited (trading as RBC Capital Markets), which is authorised by the Prudential
Regulation Authority and regulated by the Financial Conduct Authority and the Prudential
Regulation Authority in the United Kingdom, is acting exclusively as financial adviser to Adriatic
and no one else in connection with the Transaction and will not be responsible to anyone other
than Adriatic for providing the protections afforded to its clients nor for providing advice in
relation to the matters referred to in this announcement. Neither RBC Europe Limited nor any
of its affiliates, directors or employees owes or accepts any duty, liability or responsibility
whatsoever (whether direct or indirect, consequential, whether in contract, tort, in delict, under
statute or otherwise) to any person who is not a client of RBC Europe Limited in connection
with the Transaction or any matter referred to herein.
Macquarie Capital (Europe) Limited, which is regulated by the Financial Conduct Authority in
the United Kingdom, is acting as financial adviser exclusively for Adriatic and no one else in
connection with the matters set out in this Announcement. In connection with such matters,
Macquarie Capital, its affiliates and their respective directors, officers, employees and agents
(together, “Macquarie Group”) will not regard any other person as their client, nor will they
be responsible to any other person for providing the protections afforded to their clients or for