Adriatic Metals (ASX: ADT) (LON: ADT1) said on Monday that is ready to kick off production at its Vares silver project in central Bosnia in November, which will make of the asset Europe’s first new mine in over a decade.
Speaking to Reuters, chief executive Paul Cronin said the project consists of bringing back to life a former silver mine that sat abandoned through the years of civil strife that hit the region from the early 1990s.
Once in operations, Cronin notes, Vares will grow Bosnia’s GDP by 2%.
“Mining in Bosnia has a big future because you’ve got a huge potential for exploration that would lead to new mines,” he said.
Adriatic Metals says it has spent $40 million on exploration so far and has been approved for another $30 million to continue with it as the proposed mine was awarded awarded the status of “project of special importance” by the government of Bosnia-Herzegovina.
Vares currently has a resource of 21 million tonnes of polymetallic ore that includes copper, silver, zinc, lead and gold, Cronin said.
The company has secured offtake agreements for 82% of Vares’ production for the first two years with Trafigura, Glencore, Boliden and Transamine.
Adriatic Metals also helped a local rail company to restore a railroad line, iddled for 25 years, so that the ore can be shipped via Sarajevo to the Croatian port of Ploce and further on to smelters in Belgium, Norway, Sweden, Spain and Italy.
The mayor of Vareš, Zdravko Marošević, said the company’s involvement in the railway reconstruction was vital, adding that the local government is now mulling adding a passengers train, which could boost tourism in the country.