Dundee Precious Metals Announces Proposed Acquisition of Adriatic Metals
Dundee Precious Metals Announces Proposed Acquisition of Adriatic Metals
(Unless otherwise noted, all dollar amounts in this release are expressed in U.S dollars.)
Toronto, Ontario, June 13, 2025 – Dundee Precious Metals Inc. (TSX: DPM) (“DPM” or the “Company”) is
pleased to announce that it has agreed with Adriatic Metals plc (“Adriatic”) to the terms of an acquisition of the entire
issued, and to be issued, ordinary share capital of Adriatic (“the Transaction”) for an implied equity value of
approximately $ 1.3 billion. Upon completion of the Transaction, DPM will acquire 100% of the Vareš operation
(“Vareš”) in Bosnia and Herzegovina, a producing silver-lead-zinc-gold underground mine.
Strategic Rationale :
• Creates premier mining business: Enhances DPM’s existing high-margin asset portfolio with peer -leading
production growth and a high-quality development and exploration pipeline.
• Delivers near-term growth: Expected to grow DPM’s production up to 425,000 gold equivalent ounces1 in
2027 through the ramp-up of Vareš, with access to a strong balance sheet and expanded technical resources
to optimize mining and processing.
• Increases DPM’s mineral reserve life: Vareš has an i nitial 1 5-year operating life with potential to extend
further from a prospective 4,400 -hectare land package led by a team with proven exploration success in the
region.
• Enhanced cash flow generation: Addition of another long -life producing asset complements DPM’s already
strong cash flow profile and provides significant cash generation to fund DPM’s organic growth pipeline and
ongoing capital returns program.
• Combines expertise and regional presence: Builds on decades of regional experience finding, building,
operating and optimizing mines with an enhanced team recognized for strong community relationships.
• Delivers strong returns from a robust platform: Shareholders benefit from DPM’s continued balance sheet
strength, added cash flow diversification and a peer -leading capital returns program with improved trading
liquidity.
David Rae, President and Chief Executive Officer of Dundee Precious Metals , made the following comments in
relation to the Transaction:
“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.
1 Refer to the “Gold Equivalent Calculations” section on page 9 of this news release.
Dundee Precious Metals Announces Proposed Acquisition of Adriatic | 2
“Vareš is a logical fit with our portfolio, as it significantly increases DPM’s mine life while adding near-term production
growth, a highly prospective land package, and cash flow diversification. We are well-positioned to leverage our
expertise in underground mining , our regional presence, successful track record of building and ramping up new
mines, as well as our strong financial position to further optimize the operation and realize Vareš’ full value potential,
based on our analysis.”
Laura Tyler, Managing Director and Chief Executive Officer of Adriatic Metals, stated:
“Vareš remains firmly 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 Vare š so exciting is that it is at the beginning of
its journey, with significant growth potential ahead. This transaction brings together complementary strengths to
create a dynamic and diversified mining company with meaningful scale. 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
is a compelling opportunity to be part of a transformative and long-term success story – one that we fully endorse
and recommend to all our stakeholders.”
Vare š Overview: High -grade precious metals / polymetallic underground mine
Vareš is an underground precious metals-dominant mine with an offsite processing facility and prospective 4,400 -
hectare land package , located approximately 50 k ilometres north of Sarajevo in Bosnia and Herzegovina. Since
announcing first concentration production in 2024, Vareš has been ramping up to nameplate processing capacity.
Vareš produces a saleable silver-zinc concentrate and a lead-silver-gold concentrate.
As part of DPM’s evaluation of Vare š, the Company commissioned SRK Consulting (UK) L imited to prepare an
independent technical report in accordance with National Instrument 43-101 – Standards of Disclosure for Mineral
Projects (“NI 43-101”) for Vareš reflecting DPM’s current plans for the asset, including the mine plan and mining
and operating methods contemplated. The Technical Report has an effective date of April 1, 2025, and is deemed
to be at a pre-feasibility level of study.
Vareš Technical Report Highlights
• Significant mine life and scale with low unit costs: Based only on existing mineral resources, Vares has a
15-year operating life with average annual payable production of approximately 168,000 ounces of gold
equivalent2,3 at an all-in sustaining cost of $893 per ounce of gold equivalent. 4
• Improved value and risk profile: DPM’s approach to the Vareš mine plan reflects an initial grade control and
geotechnical drilling program to better define geological and geotechnical understanding of the orebody ,
2 Refer to the section “Gold Equivalent Calculations” section on page 9 of this news release.
3 Reflects average annual gold equivalent production from 2027 to 2035.
4 All-in sustaining cost per gold equivalent ounce is a non -GAAP measures and has no standardized meaning under IFRS Accounting Standards (IFRS) and may
not be comparable to similar measures used by other issuers. Refer to the “Non -GAAP Financial Measures” section of this news release for more information,
including a detailed description of this measure.
Dundee Precious Metals Announces Proposed Acquisition of Adriatic | 3
facilitating accelerated access to higher -grade ore tonnage, as well as paste backfilling of mining areas. DPM
forecasts achieving sustainable mill throughput of 850,000 tonnes per annum by year-end 2026.
• Base case NPV5% of $1.6 billion (post-tax) based on consensus long -term (“LT”) metal prices, including LT
silver price of $28 per ounce and LT gold price of $2,212 per ounce (the “Base Case”) . Refer to “Sensitivity
Analysis” on page 10 of this news release for the project’s economics at varying metal price assumptions.
• $2.1 billion of post-tax cash flow over the initial mine life at Base Case commodity price assumptions.
Vareš Operating and Financial Metrics
Macroeconomic Parameters
Long-term metal prices
Gold $ per ounce $2,212
Silver $ per ounce $27.69
Zinc $ per pound $1.21
Lead $ per pound $0.94
Copper $ per pound $4.24
Discount rate % 5.0
Production (life of mine)
Mineral Reserve million tonnes 9.5
Annual throughput thousand tonnes 850
Average gold equivalent grade processed grams per tonne 9.21
Gold equivalent recovery1 % 85.8%
Total gold equivalent recovered1 million ounces 2.4
Gold equivalent payability1 % 76.2%
Total gold equivalent payable production1 million ounces 1.8
Life of mine operating costs
$ million $ per tonne processed1
Mining $570 $60
Processing and tailings $246 $26
General & administrative $142 $15
Contingency $72 $8
Royalties $21 $2
Total cash costs2 $1,050 $111
Offsite costs3 $419
All-in sustaining cost2 $ per gold ounce $893
Capital estimates
Initial capital (H2 2025 – 2026) $ millions $76
Sustaining capital (life of mine) $ millions $143
Closure costs $ millions $24
Project economics
Cash flow (post-tax) $ millions $2,107
NPV (post-tax, 5% discount) $ millions $1,608
1. Refer to the section “Gold Equivalent Calculations” on page 9 of the news release.
2. Cash cost and cash cost per tonne of ore processed; all-in sustaining costs; and all-in sustaining cost per gold equivalent ounce on a co-product basis are non-
GAAP measures or ratios and have no standardized meaning under IFRS Accounting Standards (IFRS) and may not be comparable to similar measures used
by other issuers. Refer to the “Non -GAAP Financial Measures” section of this news release for more information, including a detailed description of these
measures.
3. Offsite costs include concentrate sale costs, including freight, treatment and refining charges.
Dundee Precious Metals Announces Proposed Acquisition of Adriatic | 4
Optimization Opportunities
DPM has identified several medium- and long -term opportunities to optimize Vareš, which have not been
contemplated as part of the Technical Report, that it intends to evaluate, including:
• Ore sorting: Following ramp up to full capacity, this initiative targets a reduction in mine waste tonnage
transported to the processing facilities and an increase in ore grades to the mill.
• Near-mine exploration potential: The Rupice Northwest deposit remains open to the northwest. The ability to
extend mineralization in the area of known mineralization with wider, higher -grade zones is a priority in our
stakeholder engagement and exploration plans. More broadly, the Rupice deposits sit within the prospective
Dinarides deformation belt, hosting several barite and massive sulphide occ urrences over a 22 -kilometre
corridor within close proximity to Vareš infrastructure and operating facilities.
Transaction Summary
Under the terms of the Transaction, shareholders of Adriatic (“Adriatic Shareholders”) will be entitled to receive
0.1590 of a common share of DPM (each whole share, a “ DPM Share”) and 93 pence in cash for each ordinary
share of Adriatic (each, an “Adriatic Share”). Under the terms of the Transaction, the value for each Adriatic Share
is £2.68 (and CHESS Depository Interest (“CDIs”) of Adriatic at AUD$5.56), and the entire issued share capital of
Adriatic at approximately US$1.3 billion, based on the closing price of CAD$ 20.33 per DPM Share and a £:CAD$
exchange rate of £1:CAD$1.85 on June 11, 2025.
It is intended that the Transaction will be implemented by means of a court -sanctioned scheme of arrangement
under Part 26 of the UK Companies Act 2006 (the “Scheme”).
Unless the context r equires otherwise, in this news release, references to Adriatic Shares include Adriatic CDI
holders.
Adriatic Shareholders will be able to elect, pursuant to a “mix and match facility”, subject to off -setting elections, to
vary the proportions in which they receive cash and DPM Shares in respect of their holdings in Adriatic. However,
the total number of DPM Shares to be issued and the aggregate amount of cash to be paid under the terms of the
Transaction will not be varied as a result of the elections under the mix and match facility.
Immediately following completion of the Transaction, it is expected that the current shareholders of DPM (the “DPM
Shareholders”) will own approximately 75 percent, and former Adriatic Shareholders will own approximately 25
percent, of DPM’s enlarged issued share capital.
The Transaction will be subject to certain closing conditions, including, among other things: (i) approval of the
Transaction by Adriatic Shareholders; (ii) court approval; (iii) the issuance of the DPM Shares to be issued in the
Transaction being approved by DPM Shareholders; (iv) receipt of the approval for listing of such DPM common
shares by the Toronto Stock Exchange (“TSX”); (v) 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 December 31, 2025.
Dundee Precious Metals Announces Proposed Acquisition of Adriatic | 5
DPM has received from the Adriatic directors and certain non -director Adriatic Shareholders (including Helikon
Investments Ltd and L1 Capital Pty Ltd) irrevocable undertakings to vote in favour of the Scheme in respect of a
total of 128,541,045 Adriatic Shares in aggregate, representing 37.2 percent of Adriatic’s total issued share capital.
A Rule 2.7 announcement (the “Rule 2.7 Announcement”) has been published in accordance with the City Code on
Takeovers and Mergers (United Kingdom) and can be accessed at the following www.dundeeprecious.com or on
DPM’s SEDAR+ profile at www.sedarplus.ca.
Board of Directors’ Recommendation
The board of directors of DPM has been advised by BMO Capital Markets 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
board of directors of DPM intends to recommend that DPM Shareholders vote in favour of the resolution of the DPM
Shareholders to approve the issuance of DPM Shares in the Transaction (the “ DPM Shareholder Resolution”) at
the DPM special meeting to be called for that purpose.
Advisors and Counsel
BMO Capital Markets are acting as financial advisors to DPM in connection with the Transaction. RBC Capital
Markets and Macquarie Capital (Europe) Limited are acting as joint financial advisors to Adriatic in connection with
the Transaction.
Bryan Cave Leighton Paisner LLP is acting as UK legal advisor to DPM in connection with the Transaction. Cassels
Brock & Blackwell LLP is acting as Canadian legal advisor to DPM in connection with the Transaction. Gilbert +
Tobin is acting as Australian legal advisor to DPM in connect ion with the Transaction. Herbert Smith Freehills
Kramer LLP is acting as UK and Australian legal advisor to Adriatic in connection with the Transaction. Stikeman
Elliott LLP is acting as Canadian legal advisor to Adriatic in connection with the Transaction.
Dundee Precious Metals Announces Proposed Acquisition of Adriatic | 6
Conference Call and Webcast
DPM and Adriatic will host two joint conference calls and webcasts on June 13, 2025, at 3:00 AM Eastern Daylight
Time (5:00 PM Australian Eastern Standard Time) and June 13, 2025, at 8:00 AM Eastern Daylight Time (1:00 PM
British Summer Time) to discuss the Transaction.
To participate via conference call, register in advance at the link in the following table s to receive the dial -in
information as well as a personalized PIN code to access the call.
June 13, 2025 at 3:00 AM Eastern Daylight Time / 5:00 PM Australian Eastern Standard Time
Call registration https://register-conf.media-server.com/register/BI1eb9435b4a8340b1ab42be70de7023af
Webcast link https://edge.media-server.com/mmc/p/g9bn9idd
Replay Available at www.dundeeprecious.com
June 13, 2025 at 8:00 AM Eastern Daylight Time / 1:00 PM British Summer Time
Call registration https://register-conf.media-server.com/register/BI484d6b18e4024f0a8b5508603e9df785
Webcast link https://edge.media-server.com/mmc/p/4efy67ux
Replay Available at www.dundeeprecious.com
This news release does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.
The summary above should be read in conjunction with, and is subject to, the full text of the Rule 2.7 Announcement
(including its Appendices). The Transaction will be subject to the conditions and certain further terms set out in
Appendix 1 of the 2.7 Ann ouncement and to the full terms and conditions to be set out in the Scheme Document
(as defined in the Rule 2.7 Announcement).
About Dundee Precious Metals Inc.
Dundee Precious Metals Inc. is a Canadian-based international gold mining company with operations and projects
located in Bulgaria, Serbia and Ecuador. Our strategic objective is to become a mid-tier precious metals company,
which is based on sustainable, responsible and efficient gold production from our portfolio, the development of
quality assets, and maintaining a strong financial position to support growth in mineral reserves and production
through disciplined strategic transactions. This strategy crea tes a platform for robust growth to deliver above -
average returns for our shareholders. DPM’s shares are traded on the Toronto Stock Exchange (symbol: DPM).
For further information please contact:
Jennifer Cameron
Director, Investor Relations
Tel: (416) 219-6177
Dundee Precious Metals Announces Proposed Acquisition of Adriatic | 7
About Adriatic Metals plc
Adriatic is a UK -based precious and base metals producer, with listings on the London Stock Exchange and
Australian Stock Exchange. Adriatic’s asset portfolio consists of its flagship Vareš Silver Operation in Bosnia and
Herzegovina and the exploration -stage Raška Project in Serbia. The Vareš Silver Operation produces silver/lead
and zinc concentrates and has the potential to be one of the wor ld’s largest producing, low-cost silver mines, with
a high-grade Mineral Reserve base underpinning a 15 -year mine li fe. First sale of concentrate was achieved in
2024 and the asset is currently ramping up to commercial production, with further plans underway to expand the
plant processing capacity from 0.8 to 1.3 million tonnes per annum. The orebody remains open along strike and at
depth, and there are several options available for regional exploration targets on Vareš’ 44km 2 concession.
Dundee Precious Metals Announces Proposed Acquisition of Adriatic | 8
Mineral Resource s and Mineral Reserve s Estimate
The NI 43-101 Rupice Mineral Resource Statement was estimated as of April 1, 2025, and is inclusive of Mineral
Resources not modified to produce the Mineral Reserve. Mineral Resources are reported above a cut -off net
smelter return (“NSR”) of $100 per tonne, and are reported in the table below:
Resource
classification Tonnage Ag Zn Pb Au Cu Sb
(Mt) (g/t) (%) (%) (g/t) (%) (%)
Indicated 10.7 264 7.4 4.8 1.9 0.65 0.22
Inferred 0.9 150 3.5 2.8 0.8 0.37 0.15
1. Mineral Resource is estimated in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Definition Standards for
Mineral Resources & Mineral Reserves and NI 43-101.
2. Indicated Mineral Resources stated are inclusive of those modified to produce the Mineral Reserve.
3. Mineral Resources have been reported above a cut-off NSR value of $100/tonne. It is a direct report from the Adriatic block model without
consideration of mining shape optimization.
4. Mineral Resources are reported on the basis that they are planned to be mined via long hole open stoping, processed via a known
demonstrated process route, and sales concentrate delivered to market. At present, this is supported by technical studies perceived to be a
pre-feasibility or feasibility study level of confidence. Risks associated with the technical feasibility and economic viability of extraction remain,
relating to unknowns, tho ugh are greatly reduced as mining has commenced, the process plant h as been commissioned, and early
concentrate sales have taken place, thereby shedding light on numerous previous unknowns have now been identified and are bei ng
addressed.
5. Mineral Resources may further be materially affected by any known environmental, permitting, legal, taxation, socio -economic, marketing,
political, or other relevant factors.
6. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
The NI 43 -101 Rupice Mineral Reserve Statement was estimated as of April 1 , 2025. The Mineral Reserve is
reported above a cut-off NSR of $100 per tonne for long-hole open stopes and $120 per tonne for mechanized cut
and-fill.
Reserve
classification Tonnage Ag Zn Pb Au Cu Sb
(Mt) (g/t) (%) (%) (g/t) (%) (%)
Probable 9.5 230 6.9 4.4 1.7 0.6 0.2
Proven – – – – – – –
Total 9.5 230 6.9 4.4 1.7 0.6 0.2
1. CIM (2014) definitions were followed for Mineral Reserves.
2. The long-term commodity prices applied in the estimation of the Mineral Reserve are: zinc $2,661/t, lead $2,064/t, copper $9,348/t, gold
$2,212/oz, and silver $28/oz. In order of priority, revenue is generated from silver, zinc, followed by lead and gold, and minor contributors
from copper and antimony.
3. The entire Indicated Mineral Resource was considered for the Mineral Reserve. Therefore, the only opportunity to increase the Mineral
Reserve is to increase the Indicated Mineral Resource through upgrading of the Inferred to Indicated or further exploration.
4. The QP identified some 2% of Inferred Mineral Resource included in the mining shapes constituting the Mineral Reserve. The is a result of
mine design, and falling within the levels of accuracy of estimate, is not deemed material to the Mineral Reserve.
5. DPM’s life of mine plan commencing April 1, 2025, projects production for the second quarter of 2025. Actual production will differ, which is
not deemed material to the Mineral Reserve Statement.
6. Aspects relating to permitting (paste backfill plant), hydrogeology, water management and discharge, surface haulage, tailings facilities have
been identified and are being addressed. Required costs and duration ha ve been incorporated into the life of mine plan. Until they are
remediated, they remain as areas of high risk associated with the Mineral Reserves.
7. The Mineral Reserve Estim ate was completed under the supervision of Sabine Anderson (M eng, CEng, MIMM) , who is an independent
Qualified Person (“QP”) as defined under NI 43-101.