Dundee Precious Metals to acquire Adriatic Metals for $1.8 billion

Cassels advising DPM; Stikeman Elliott acting for Adriatic

Dundee Precious Metals to acquire Adriatic Metals for $1.8 billion

Toronto-based Dundee Precious Metals Inc. (DPM) has entered into a definitive agreement to acquire all issued and to-be-issued shares of Adriatic Metals plc in a transaction valued at approximately $1.8 billion (US$1.3 billion). The deal adds Adriatic’s high-grade Vareš mine in Bosnia and Herzegovina to DPM’s asset portfolio, strengthening its presence in the European mining sector.

Under the agreement, Adriatic shareholders will receive 0.1590 DPM common shares and 93 pence in cash per Adriatic share, for a total value of £2.68 per share. The transaction will be implemented via a court-sanctioned scheme of arrangement under Part 26 of the UK Companies Act 2006.

DPM will acquire 100 percent of the Vareš operation, a silver-lead-zinc-gold underground mine, following closing. According to a pre-feasibility study prepared by SRK Consulting, the mine has a projected 15-year life, expected annual production of 168,000 gold-equivalent ounces, and a forecast all-in-sustaining cost of US$893 per ounce. Vareš is expected to generate US$2.1 billion in post-tax cash flow, with a base-case post-tax NPV of US$1.6 billion.

The transaction has received unanimous support from the boards of both companies. DPM’s board, advised by BMO Capital Markets, has recommended that shareholders approve the required share issuance. Adriatic has secured voting support for the scheme from shareholders holding 37.2 percent of its issued capital.

Cassels Brock & Blackwell LLP is acting as Canadian legal counsel to DPM with a team that includes André Boivin, Alexander Pizale, Blanchart Arun, Maria Tapia, and Tushar Sharma (Securities, M&A and Mining); Davit Akman and Dragos Flueraru (Competition & Foreign Investment); Brenda Swick (International Trade and Regulatory); Saundra Johnson (Paralegal); and summer law students Tyler Li, Carlo Rescigno, and Robyn Cumiskey.

DPM is also advised by Bryan Cave Leighton Paisner LLP in the UK and Gilbert + Tobin in Australia. Adriatic is represented by Herbert Smith Freehills Kramer LLP (UK and Australia) and Stikeman Elliott LLP (Canada). RBC Capital Markets and Macquarie Capital (Europe) Limited are joint financial advisors to Adriatic.

Adriatic shareholders will have access to a “mix and match” facility, allowing them to vary the ratio of cash and DPM shares received, subject to pro-rata limitations. Following the transaction, DPM shareholders will own approximately 75 percent of the combined company, with Adriatic shareholders owning the remaining 25 percent.

“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,” said DPM president and CEO David Rae. “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.”

“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,” added Adriatic Metals CEO Laura Tyler. “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.”

The transaction is subject to shareholder, court, regulatory, and TSX listing approvals. Completion is expected by year-end 2025.