31 March 2025

Adriatic Metals PLC

('Adriatic Metals' or the 'Company')

2024 RUPICE MINERAL RESOURCE AND RESERVES UPDATE

HIGHLIGHTS

·        The Indicated and Inferred 2024 Mineral Resource Estimate update for Adriatic Metals' 100%-owned Rupice deposit in Bosnia and Herzegovina is reported as:

-     20.9Mt @ 153g/t Ag, 4.3% Zn, 2.8% Pb, 1.1g/t Au, 0.4% Cu, 0.2% Sb, 28% BaSO_4, (reported above a cut-off grade of 50g/t AgEq) and contains 102Moz Ag, 901kt Zn, 586kt Pb and 753koz Au.

·           There have been additions and losses due to new drilling, as well as depletion of 165kt from areas mined in 2024. The overall change in Indicated and Inferred resource tonnes since the July 2023 Rupice resource estimate is <1%.

·        The December 2024 Ore Reserve Estimate for the Rupice deposit is reported as:

-     12.3Mt @ 192g/t Ag, 5.7% Zn, 3.6% Pb, 1.5g/t Au, 0.5% Cu and 0.2% Sb with a metal content of 76Moz Ag, 697kt Zn, 442kt Pb, 576koz Au, 60kt Cu and 20kt Sb.

·           Reserve tonnage has decreased by 11% since the prior statement due to depletion and a higher cut-off Net Smelter Return (NSR) value being applied, while grades have increased and contained metals have seen a smaller decrease which demonstrates the robustness of the orebody.

Table 1: Comparison of the 2024 and 2023 Ore Reserves

·       The 2024 Ore Reserve results in a slightly reduced mine life to 2039 (previously 2041) based on an 800ktpa nominal feed rate through the Vareš Processing Plant.

·     Rupice NW has been drilled to the northern extent of the Rupice Exploitation License boundary. Adriatic has applied to the Zenica-Doboj Canton for an Exploration license along strike of Rupice NW.

Note: Unless otherwise stated, all dollar figures are United States dollars ($).  Reporting of Mineral Resources is inclusive of Ore Reserves.

Laura Tyler, Adriatic's Managing Director and CEO commented;

"Positive outcomes from resource development drilling in 2024 have offset mine production and provided tighter definition of the Rupice orebody. There is a minimal change in the reported Mineral Resource Estimate with similarly non-material changes in grade plus potential orebody extension to the north-west.

The 2024 Ore Reserves have decreased with the inclusion of the production costs announced with production guidance for 2025. This has resulted in a higher cut-off NSR value being applied in the Ore Reserves. Despite this increase in NSR, the robust nature of the orebody is clearly demonstrated with contained metal and life of mine impacts relatively low. The Vareš Silver Operation remains in the lowest quartile for costs for silver producers globally and is a significant cash generative operation at nameplate capacity." 

Adriatic Metals Plc (ASX:ADT, LSE:ADT1, OTCQX:ADMLF) ("Adriatic" or the "Company") is pleased to announce the updated Mineral Resource and Ore Reserve Estimates for the Rupice Polymetallic Deposit that underpins the Vareš Silver Operation in Bosnia and Herzegovina. The Mineral Resource has been completed and peer reviewed by AMC Consultants Pty Ltd ("AMC") in Perth and Melbourne, Australia for the sections completed by AMC. The Ore Reserves has been completed by Adriatic and peer reviewed by AMC in the United Kingdom. The updated Mineral Resource and Ore Reserves have been depleted of mined material to the 31 December 2024 by Adriatic Metals with underground survey data provided by qualified and certified Mine Surveyors.

Rupice Deposit Overview

The Rupice deposit is in Bosnia and Herzegovina, approximately 50 km north of Sarajevo, near the historical mining town of Vareš. The site is about 60 minutes by car, accessed via the Sarajevo-Tuzla freeway to Podlugovi, then along a sealed road to Vareš. The administrative centre for the district is located in Vareš.

The Vareš Silver Operation consists of an underground mine and a surface mineral processing plant. It is located within a single concession, which comprises three separate exploitation licence areas: one at Rupice in the west and two at Veovača in the east (Figure 1). Exploitation licences allow mineral extraction, while exploration licences are for resource assessment.

Figure 1: Vareš Silver Operation; Rupice and Veovača location map.

2024 RUPICE MINERAL RESOURCE ESTIMATE

The Rupice 2024 Mineral Resource Estimate (MRE) was jointly completed by Adriatic Metals and AMC Consultants (AMC). The Rupice Indicated and Inferred Mineral Resources as of 31 December 2024 comprises 20.9Mt at 153g/t Ag, 4.3% Zn, 2.8% Pb, 1.1g/t Au and 0.4% Cu as set out in Table 1.

A total of 88% of the 2024 Rupice MRE is classified as Indicated resource. There has been sufficient growth in the Indicated resource through additional drilling since previous reporting to replace depleted reserves and deliver 1% more Indicated resource tonnes compared to 2023 Mineral Resource reporting.

The Rupice ore deposit is comprised of two separate significant orebodies - Rupice Main (RM) and Rupice Northwest (RNW). When estimating the Rupice MRE, the RM and RNW orebodies are estimated separately and then combined into a single combined MRE.

The estimates are inclusive of exploration infill drilling; step-out drilling to extend mineralization; verification drilling of historic holes at RM and RNW; and underground grade control drill holes completed between the beginning of May 2024 and the end of September 2024.

Table 2: Rupice Mineral Resources as of 31 December 2024 (using 50g/t AgEq cut-off grade).

Table 3: Rupice Mineral Resources as of 21 July 2023 (using 50g/t AgEq cut-off grade).

Notes:

·      Mineral Resources are based on 2012 JORC Code definitions.

·      A cut-off grade of 50g/t silver equivalent has been applied.

·      AgEq - Silver equivalent was calculated using conversion factors of 31.1 for Zn, 24.88 for Pb, 80.0 for Au, 1.87 for BaSO₄, 80.87 for Cu and 80.87 for Sb, and recoveries of 90% for all elements. Metal prices used were US$2,500/t for Zn, US$2,000/t for Pb, $150/t for BaSO₄, $2,000/oz for Au, $25/oz for Ag, $6500/t for Sb and $6,500 for Cu.

·      The applied formula was: AgEq = Ag(g/t) * 90% + 31.1 * Zn(%) * 90% + 24.88 * Pb(%) * 90% + 1.87 * BaSO₄% * 90% + 80 * Au(g/t) * 90% + 80.87 * Sb(%) * 90% + 80.87 * Cu(%)* 90%

·      It is the opinion of Adriatic Metals and the Competent Persons that all elements and products included in the metal equivalent formula have a reasonable potential to be recovered and sold.

·      Metallurgical recoveries of 90% have been applied in the metal equivalent formula based on recent and ongoing test work results.

·      A bulk density was calculated for each model cell using regression formula BD = 2.745 + BaSO₄ * 0.01793 + Pb * 0.06728 - Zn * 0.01317 + Cu * 0.1105 for the halo domain, BD = 2.7341 + BaSO₄ * 0.01823 + Pb * 0.04801 + Zn * 0.03941 - Cu * 0.01051 for the fault zones and BD = 2.7949 + BaSO₄ * 0.01599 + Pb * 0.05419 + Zn * 0.01169 + Cu * 0.06303 for the low grade domain. Bulk density values were interpolated to the combined high-grade domain from 631 BD measurements.

·      Rows and columns may not add up exactly due to rounding.

2024 RUPICE ORE RESERVE ESTIMATE

The 2024 Rupice Mine Ore Reserve totals 12.3Mt at 192g/t Ag, 5.7% Zn, 3.6% Pb, 1.5g/t Au, 0.5% Cu and 0.2% Sb containing an estimated 76Moz of Ag, 697Kt Zn, 442Kt Pb, 576Koz Au, 60Kt Cu and 20kt Sb.

The updated Ore Reserve estimate (ORE) was completed collaboratively by AMC and the Adriatic Technical Services team, following industry best practices. This update is based on the latest Rupice Mineral Resource estimate, as outlined in Table 2 of the preceding Mineral Resource section, which is inclusive of Ore Reserves.

Table 4:  Updated Rupice Ore Reserve - 31 December 2024

Notes:

·      The Rupice Ore Reserve estimate is consistent with JORC 2012 reporting guidelines.

·      The 2024 Ore Reserve estimate uses a NSR Cutoff grade of US$130/t.

·      The 2024 Ore Reserve is depleted of 2024 mined ore material

Inferred Mineral Resources were excluded from the Ore Reserve conversion and estimate. The Ore Reserve is reported on a 100% basis, with a cut-off applied of a net smelter return (NSR) of US$130/t ore. Adriatic has demonstrated that the Operation has a positive net present value (NPV), supporting the statement of Ore Reserves. The 2024 Ore Reserve and the previously reported 2023 Ore Reserve have been presented in Table 5 for visual comparison.

Table 5: Comparison of 2024 and 2023 Rupice Ore Reserve Estimates and Contained Metal

Modifying Factors

Depletion of Ore Reserve

By the end of December 2024, a total of 164,850 tonnes of ore had been mined, with all extracted material taken only from inside the defined Ore Reserve boundary. Mined material consisted of both development and stope ore, with the volumes of both broken down in Table 6.

Table 6: Ore Reserve Depletion

Ore Price Assumptions

An Ore Reserve Estimate was completed jointly by Adriatic and AMC under the direction of Competent Persons (CP) who were assisted by key technical staff at Adriatic and AMC. Adriatic used a Life-of-Mine (LOM) approach, whereby all mining areas were re-evaluated using the new NSR calculation to determine economic mining areas.

NSR

For the 2024 Ore Reserve Update, Adriatic changed to the classic method of NSR calculation by excluding all on-mine costs while including the sale of mineral products after deducting all off-mine concentrate-related costs such as transport, refining, treatment, and sales of the product. As part of this change, the recovery model was simplified down to total recovery parameters and the off-take modelling was stripped down to just the Spot Sale off-take models The final result is a true NSR value per tonne per block in the block model.

The applied 2024 NSR cut-off value is US$130/t, which is 91.2% higher than in 2023 (US$68/t) when the 2021 DFS figures were used. Application of a higher cut-off NSR value has resulted in fewer Rupice Indicated mineral resource tonnes being converted to mineable reserve tonnes.

Metal Prices

Adriatic Metals ran multiple scenarios, testing various metal prices within offtake and recovery parameters. Metal prices used in the 2024 Ore Reserve NSR calculation were adjusted based on a commodity forecast provided by the corporate finance team and are summarised in Table 7.

Table 7: Metals prices used in the 2024 Ore Reserves NSR (Adriatic, 2024) vs 2023 Ore Reserves

Operational Expenses

The cost assumptions used in the 2023 Rupice Reserve Update were based primarily on the Vareš Project Definitive Feasibility Study (DFS) unit rates generated in 2021. Since entering production, Adriatic Metals has undertaken a review of cost models and updated the cut-off grade, as shown in Table 8. Given the time between the DFS model and the 2024 update, inflationary effects post-covid on labour, energy, material, contractor and other costs have affected most areas of the model, along with other factors.

Table 8: Cost (US$/t) Assumptions used in the 2023 vs 2024 Ore Reserve cut-off grade calculation

The mining, milling, backfill and general and administrative (G&A) costs have increased as follows:

Mining costs increased due to:

•     increased ground support requirements in areas of poor ground conditions, primarily experienced in areas of capital development.

•     increased labour costs associated with an expatriate labour model used to support production ramp up and national workforce training.

•     increased backfill costs associated with higher aggregate and binder rates for Paste Aggregate Fill and Cement Aggregate Fill.

Milling costs increased based on:

•     increased labour costs associated with an expatriate labour model used to support production ramp up and national workforce training.

•     additional screening of the ore prior to crushing not foreseen in the DFS.

•     increase in reagent usage compared to the DFS.

G&A costs increased based on:

•     increased labour costs associated with an expatriate labour model used to support production ramp up and national workforce training.

•     under resourcing of support services in the DFS.

Mine Operations

At Rupice, mining is planned from two orebodies (RM and RNW) with all ore hauled to a surface stockpile, before being crushed and transferred via surface trucks to the Vareš Processing Plant. Active mining is from the RM orebody. As of 2024, mining of the RNW orebody had not yet begun.

Mining Method

The mining method combines mechanised, trackless underground mining using longitudinal longhole open-stoping (LLHOS) and transverse longhole open-stoping (TLHOS) with footwall decline access. Access to the underground workings is through two declines developed from the surface with orebody access via capital development of ramps, level access drives, and footwall drives.

The mine design created in Deswik is shown in the two longitudinal sections below (Figure 2), highlighting the planned stopes and development areas.

Figure 2: Mine design looking east (Adriatic Metals, 2024 Deswik Output

Recovery and processing

The Vareš Processing Plant (VPP) has a nominal capacity of 800,000tpa, and applies three-stage crushing, grinding, flotation and filtration to produce two saleable concentrates (silver/lead and zinc). Concentrates are transported via rail to the Port of Ploče for shipment to smelters.

The silver/lead concentrate contains payable Ag, Pb, Zn, Cu, Sb and Au (Sb is payable if over 2% and if Ag is over 2,500g/t and Zn is payable if over 10%). The zinc concentrate contains payable Zn, Ag, and Au. Figure 4 shows the basic flowsheet, with further breakdowns of the circuits contained within the VPP in Table 9.

Figure 3:  Vareš Process Plant flowsheet (Ausenco, 2021)

Table 9: A breakdown of the circuits contained within the plant infrastructure

Infrastructure

The Vareš Municipality offers general trade services and suppliers, and a considerable amount of 1980s mining infrastructure, including a rail line which connects to the national rail grid and inter alia, the Port of Ploče in the Republic of Croatia, where bulk commodities, including metal concentrates are shipped. The capital of Bosnia and Herzegovina, Sarajevo and its international airport is approximately 60 minutes away.

The VPP is located on a brownfield site that was previously used for mineral processing. It is located approximately 25km south-east of the town of Vareš. A newly constructed, all-weather road was completed in 2023 and is available for inbound freight. Concentrates are trucked 5km from the VPP to an existing rail siding where it will be transloaded and then railed to the Port of Ploče.

Permitting

Adriatic has committed to ensuring that the Vareš Silver Operation will comply with international best practice regarding environmental and social standards. Environmental and groundwater management plans have been submitted, approved and permitted. All major permits for operations have been granted by the various competent authorities within Bosnia and Herzegovina, however some more routine permits and permits that would not ordinarily be issued until after the commencement of production are outstanding and are expected to be issued in due course.

Tailings Management

The Veovaca Tailings Storage Facility (TSF) design concept is based on providing a dry stack facility with sufficient capacity in exceedance of the Life of Mine via a phased development which allows progressive closure of the facility. The TSF is a fully lined impoundment structure that spans the width of the Veovaca II opencast pit. The tailings will be trucked from the VPP to the TSF and deposited to form 10m lifts with 9 lifts in total resulting in an overall stack height of 50m (both Phase 1 and 2). The final stack configuration will not pond water at closure.  

The facility will be developed in two phases. Phase 1 has an estimated capacity of approximately 6 years production at nameplate production. Phase 2 has an estimated capacity of an additional 13 years production, with approximately 40% of tailings being used in the backfill paste plant. Contact water from the facility will be managed to minimise collection on the active tailings area. Bleed water from the stack will be collected by an over drainage layer above the lining system and gravity fed into the contact water sump which is located at the toe of the facility. Non-contact water will be prevented from entering the stack by a series of perimeter ditches which are progressively extended as the TSF is developed.

Water supply

Local water is supplied to all surrounding villages and is provided by a public company owned and operated by the Vareš council. Raw water supply to the Rupice mine is from a dedicated utility source provided by the local water company JKP d.o.o. Vareš (JKP).

Upgrades to the water supply for VPP were executed in Q1 2025, this included a dedicated pipeline from the distribution tank to ensure stable supply. Additional to this, a project was initiated to extract ground water, this will allow decoupling from the utility provider and ensure water supply security. This project will be completed during 2025.

Power

Power is supplied by the local utility company (JP Elecktroprivreda BiH). The electrical infrastructure at the Processing Plant has been designed for 8.3MW peak demand, with an average load of 7.6MW. Upgraded 35kV transmission lines connect the local grid to the Vareš Majdan Substation where the feed is stepped down to 6kV for further distribution.

Power supply for the Rupice Surface Infrastructure is provided from a new, buried 35kV powerline which runs from Vareš Majdan regional sub-station, following the route of the road between Rupice Mine and VPP, and terminate/connect at the 35kV incomer switchgear at the Rupice main sub-station. From the new sub-station at Rupice, power is reticulated at 10kV through underground powerlines to the Rupice surface and underground infrastructure.

Underground power distribution

The electrical power to underground mining consumers via the underground reticulation is supplied at 10kV and stepped down via secondary distribution transformers which feed 1kV underground power distribution centres.

Maximum power demand for the underground mine operation at site supply voltage to support full development and production activities is required to appropriately size and select the electrical infrastructure for the underground mine. A provision of emergency power has been made for the critical underground loads.

Underground services

Services, namely service water, potable water, compressed air, and dewatering, are reticulated underground via adequately sized and rated polyethylene piping routed up or down decline ramps or up or down service holes to or from the production levels.

-ends-

Authorised by Laura Tyler, CEO and Managing Director of Adriatic Metals.

For further information please visit: www.adriaticmetals.com; email: info@adriaticmetals.com,; or contact:

MARKET ABUSE REGULATION DISCLOSURE

The information contained within this announcement is deemed by the Company (LEI: 549300OHAH2GL1DP0L61) to constitute inside ‎information for the purpose of Article 7 of EU Market Abuse Regulation (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018, as amended. The person ‎responsible for arranging and authorising the release of this announcement on behalf of the Company is Laura Tyler, CEO and Managing Director.

COMPETENT PERSONS REPORT

The information in this report that relates to the Mineral Resources is based on and fairly represents information and supporting information compiled by Dmitry Pertel. Dmitry Pertel is a full-time employee of AMC Consulting and is a Member of the Australian Institute of Geoscientists. Dmitry Pertel has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). Dmitry Pertel consents to the disclosure of information in this report in the form and context in which it appears.

The information in this report which relates to Exploration Results is based on and fairly represents information and supporting information compiled by Mr Sergei Smolonogov, who is a member of the Australian Institute of Geoscientists (AIG) and Registered Professional Geologist (RPGeo). Mr Smolonogov is General Manager Growth for Adriatic Metals Plc and has sufficient experience relevant to the style of mineralization and type of deposit under consideration and to the activity he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Smolonogov consents to the inclusion in this report of the matters based on that information in the form and context in which it appears.

The information in this report that relates to the Ore Reserves is based on and fairly represents information and supporting information compiled by Dominic Claridge and Christopher Hunter. Dominic Claridge is a full-time employee of AMC Consulting and is a Fellow of the Australian Institute of Mining and Metallurgy. Christopher Hunter is a full-time employee of Adriatic Metals and is a Member of the Australian Institute of Mining and Metallurgy. Dominic Claridge and Christopher Hunter have sufficient experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a Competent Persons as defined in the 2012 Edition of the Australasian Code for the Reporting of Exploration Results, Mineral Resources, and Ore Reserves (JORC Code). Dominic Claridge and Christopher Hunter consent to the disclosure of information in this report in the form and context in which it appears.

DISCLAIMER

Forward-looking statements are statements that are not historical facts. Words such as "expect(s)", "feel(s)", "believe(s)", "will", "may", "anticipate(s)", "potential(s)"and similar expressions are intended to identify forward-looking statements. These statements include, but are not limited to statements regarding future production, resources or reserves and exploration results. All of such statements are subject to certain risks and uncertainties, many of which are difficult to predict and generally beyond the control of the Company, that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. These risks and uncertainties include, but are not limited to: (i) those relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits and conclusions of economic evaluations, (ii) risks relating to possible variations in reserves, grade, planned mining dilution and ore loss, or recovery rates and changes in project parameters as plans continue to be refined, (iii) the potential for delays in exploration or development activities or the completion of feasibility studies, (iv) risks related to commodity price and foreign exchange rate fluctuations, (v) risks related to failure to obtain adequate financing on a timely basis and on acceptable terms or delays in obtaining governmental approvals or in the completion of development or construction activities, and (vi) other risks and uncertainties related to the Company's prospects, properties and business strategy. Our audience is cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof, and we do not undertake any obligation to revise and disseminate forward-looking statements to reflect events or circumstances after the date hereof, or to reflect the occurrence of or non-occurrence of any events.

APPENDICES

Appendix 1

RUPICE 2024 MRE by DOMAIN & CLASSIFICATION

Table 10: Rupice Mineral Resources on 31 December 2024 by Classification - Total (using AgEq cut-off of 50g/t)

Notes:

·      Mineral Resources are based on 2012 JORC Code definitions.

·      A cut-off grade of 50g/t silver equivalent has been applied.

·      AgEq - Silver equivalent was calculated using conversion factors of 31.1 for Zn, 24.88 for Pb, 80.0 for Au, 1.87 for BaSO₄, 80.87 for Cu and 80.87 for Sb, and recoveries of 90% for all elements. Metal prices used were US$2,500/t for Zn, US$2,000/t for Pb, $150/t for BaSO₄, $2,000/oz for Au, $25/oz for Ag, $6500/t for Sb and $6,500 for Cu.

·      The applied formula was: AgEq = Ag(g/t) * 90% + 31.1 * Zn(%) * 90% + 24.88 * Pb(%) * 90% + 1.87 * BaSO₄% * 90% + 80 * Au(g/t) * 90% + 80.87 * Sb(%) * 90% + 80.87 * Cu(%)* 90%

·      It is the opinion of Adriatic Metals and the Competent Persons that all elements and products included in the metal equivalent formula have a reasonable potential to be recovered and sold.

·      Metallurgical recoveries of 90% have been applied in the metal equivalent formula based on recent and ongoing test work results.

·      A bulk density was calculated for each model cell using regression formula BD = 2.745 + BaSO₄ * 0.01793 + Pb * 0.06728 - Zn * 0.01317 + Cu * 0.1105 for the halo domain, BD = 2.7341 + BaSO₄ * 0.01823 + Pb * 0.04801 + Zn * 0.03941 - Cu * 0.01051 for the fault zones and BD = 2.7949 + BaSO₄ * 0.01599 + Pb * 0.05419 + Zn * 0.01169 + Cu * 0.06303 for the low grade domain. Bulk density values were interpolated to the combined high-grade domain from 631 BD measurements.

·      Rows and columns may not add up exactly due to rounding.

RUPICE GEOLOGY AND MINERALIZATION

The host rocks at Rupice Main and RNW include Middle Triassic limestone, dolostone, calcareous and dolomitic marl, and a range of mostly fine-grained siliciclastic rocks including cherty mudstone, mudstone, siltstone and fine-grained sandstone. The main mineralized horizon is a brecciated dolomitic unit that dips at around 50˚ to the northeast and has been preferentially mineralized with base, precious and transitional metals. The Triassic sequence has been deformed by early-stage ductile shearing and late-stage brittle faulting.

The Rupice Main and RNW polymetallic mineralization consists of sphalerite, galena, barite and chalcopyrite with silver, gold, tetrahedrite, boulangerite, bournonite and pyrite. The majority of the high-grade mineralization is hosted within the brecciated dolomitic unit. The majority of deformation is along shears wrapping about the margins of mineralization. This is consistent with the deposit being within a compressional low angle thrust environment mapped on a regional scale. Thickening of the central portion of the Rupice deposit is considered to be associated with thrust related folding. Mineralized widths of up to 65m true thickness are seen in the central portion of the Rupice deposit. URNW is less deformed than Rupice Main. Differential shearing along the deposits' massive sulphide boundaries appears to have created a large sigmoidal structure which hosts the polymetallic mineralization. Effectively a large lozenge with tapering ends in section-view that gently rolls-over to the west. Rupice Main sits at a stratigraphically higher position than RNW. They are separated by a ferruginous siliceous chert unit (GYD). Rupice and RNW overlap at their strike extremities over an interval of ~80m. The area between Rupice and RNW is referred to as the 'GAP'. In the area of the GAP, both Rupice and RNW lenses transition from massive to semi-massive to disseminated sulphides.

To date, the massive sulphide mineralization at Rupice Main has a defined strike length of >600m, with a maximum true-width thickness of around 65m and a minimum of 0.3m. Mineralization at Rupice still remains open to the northwest. In the existing areas drilled, the up-dip portions of Rupice are yet to be closed-off to the southwest. This presents a significant opportunity for further resource growth at Rupice over its strike length.

To date, the massive sulphide mineralization at RNW has a defined strike length of >300m, with a maximum true-width thickness of around 40m and a minimum of 0.4m. The mineralization increases in width, grade and thickness from southeast to northwest. RNW has been drilled to the northern extent of the Rupice Exploitation License boundary. There is no geological reason to believe mineralization does not extend beyond the Exploitation License boundary to the northwest. Adriatic is in process with Zenica-Doboj Canton to secure an Exploration license over land to the northwest of Rupice to confirm extension of the RNW deposit beyond the current Rupice Exploitation license. RNW south-eastward narrows with increasing base metal content, higher grades, elevation in copper and gold values, and a reduction in barium content.

Figure 4: Plan View of 2024 Resource Block Model Outline of Rupice vs 2023 Resource Block Model

RUPICE MODELLING AND GRADE INTERPOLATION

The geological controls on polymetallic mineralization at Rupice Main and RNW were interpreted using lithological, alteration, structural and geochemical data available from logging and assays. Separate solids for each lithology from surface to below mineralization were modelled. Massive and semi-massive visually logged sulphides where combined to form coherent mineralized solids. The trends in mineralization were matched to modelled stratigraphic units controlling the distribution of mineralization. The current mineralization and geological interpretation assume the majority of movement is compressional and sub-parallel to mineralization, controlling the geometry of mineralization thickening and thinning. Multiple high-grade and low-grade mineralized solids exist as satellite stratabound mineralized bodies on the hanging wall and in the footwall of continuous bodies of massive sulphide mineralization.

The majority of satellite mineralized solids have been modelled to capture isolated mineralization at various elevations and associated with different parts of the stratigraphic sequence. The majority of smaller, discontinuous, poorly informed and low-grade solids are not included in either Inferred or Indicated mineralization as they are currently considered uneconomic. The subgrade solids are there to identify areas: of future mineralization potential, of low-grade mining dilution, for potential acid rock drainage, and for mine planning.

Statistical analysis of modelled domains shows that the main mineralized brecciated dolomite has a bi-modal population for the majority of the elements being modelled. The higher-grade populations clustered spatially and were subsequently individually interpreted and wireframed.

Ten elements were modelled; Ag, Zn, Pb, BaSO4, Cu, Au, Sb, Hg, As and S. The higher-grade populations were interpreted and wireframed for all elements except Hg, As, S and Sb, and Ag in the Main zone. Sulphur grade populations were modelled using indicator approach.

All the domains were interpreted on a section-by-section basis and were used to generate three-dimensional (3D) 'solid' wireframes. The same method was applied for the individual high-grade and low-grade populations for each modelled main element. Once mineralization and domains for each element were interpreted and wireframed, classical statistical analysis was repeated for the samples within the interpreted domains. Drill data was composited to 2m down hole intervals for the Main zone and 1m down hole intervals for the Northwest zone. Boundary statistical analyses and top-cuts were determined and applied where appropriate. The geostatistical analysis generated a series of semi-variograms that were used during grade estimation. The semi-variogram ranges determined from the analysis contribute to the determination of the search neighbourhood dimensions. All variograms were calculated and modelled using composited sample files, constrained by the corresponding mineralized envelopes for each element. Where low-grade and high-grade domains were modelled, samples were combined for both domains to make sure that the number of samples was sufficient for robust geostatistical analysis. It was found that absolute semi-variograms were difficult to model for most of elements, and therefore, relative pair-wise variograms were modelled for all elements. The bulk density values were calculated for each model cell based on its domain and regression formula. Domains included Main zone, high-grade barite, low-grade barite, and northwest domains. The formulas were derived using scattergrams for density versus BaSO4, Pb, Cu and Zn grades.

A block model was constructed, constrained by the interpreted mineralized envelopes. A parent cell size of 5m(E) x 5m(N) x 5m(RL) was adopted with standard sub-celling to 1m(E) x 1m(N) x 1m(RL) to maintain the volumetric resolution of the mineralized lenses. Grades for all ten elements were interpolated into the empty block model using the Ordinary Kriging method and a "parent block estimation" technique, i.e., all sub-cells within a parent cell were populated with the same grade. The ordinary kriging (OK) process was performed at different search radii until all cells were interpolated. The search radii were determined by means of the evaluation of the semi-variogram parameters, which determined the kriging weights to be applied to samples at specified distances. Hard boundaries were honoured between each modelled lens and each grade domain. Block grades were validated both visually and statistically and all modelling was completed using Micromine software.

Figure 5: Rupice Ore Block Model by AgEq Grade Ranges

CLASSIFICATION AND REPORTING

Clause 20 of the JORC (2012) Code requires that all reports of Mineral Resources must have reasonable prospects for eventual economic extraction, regardless of the classification of the resource. The Rupice deposit has reasonable prospects for eventual economic extraction on the following basis:

·      The Rupice Mineral Resource classification criteria is based on the geological understanding of the deposit, geological and mineralization continuity, drillhole spacing, QAQC results. The MRE is reported by classification in Table 10 above a cut-off grade of 50 g/t AgEq with the effective date of 30 November 2023.

·      The cut-off grade adopted for reporting (50 g/t Ag equivalent) is considered reasonable given the Mineral Resource will be exploited by underground mining methods and potentially processed using flotation techniques to produce a concentrate or as a direct shipping crushed product for massive ores.

·      Adriatic has secure long-term tenure across all tenements.

·      All permits and licenses from the Bosnian and Herzegovinian Government (Federal, State, Cantonal) are in good standing and as required to mine and produce base and precious metals concentrates.

·      Rupice Mine is at the production stage.

·      Underground workings are actively in progress, with the first stope blasted in August 2024. The accuracy of the Resource and Reserve was confirmed.

Figure 6: Grade Tonnage Curve with AgEq Grades

Figure 7: Grade Tonnage Curve with AgEq Metal

Figure 8: Cross Section #4 Rupice 2024 Resource Block Model - Rupice Main, Upper and Lower Zones

Figure 9: Cross Section #20 Rupice 2024 Resource Block Model - Rupice Main, Upper and Lower Zones, northern orebody extension.

Figure 10: Cross Section #2 Rupice 2024 Resource Block Model - Main orebody currently being mined and developed.

Figure 11: Cross Section #1 Rupice 2024 Resource Block Model - Southwest Upper Orebody. Extension to near surface of Rupice 'Upper' orebody.

APPENDIX 2: RUPICE MRE JORC TABLES

APPENDIX 3: RUPICE ORE JORC TABLES

JORC Code (2012) Table 1 - Section 4: Estimation and Reporting of Ore Reserves