THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this document or the action you should take, you are recommended to seek your own financial advice immediately from an appropriately authorised stockbroker, bank manager, solicitor, accountant or other independent financial adviser who, if you are taking advice in the United Kingdom ("UK"), is duly authorised under the Financial Services and Markets Act 2000 ("FSMA") or, if you are not resident in the UK, from another appropriately authorised independent financial adviser in your own jurisdiction.

This document comprises a prospectus ("prospectus") relating to Adriatic Metals Plc (the "Company" or "Adriatic") prepared in accordance with the prospectus regulation rules of the UK Financial Conduct Authority (the "FCA") made under section 73A of FSMA (the "Prospectus Regulation Rules"). This prospectus has been filed with the FCA and made available to the public in accordance with Rule 3.2 of the Prospectus Regulation Rules by being made available, free of charge, at www.adriaticmetals.com and at the Company's registered office at Stamford House, Regent Street, Cheltenham, Gloucestershire, England, GL50 1HN. This prospectus has been approved by the FCA, as competent authority under Regulation (EU) 2017/1129. The FCA only approves this prospectus as meeting the standards of completeness, comprehensibility and consistency imposed by Regulation (EU) 2017/1129. Such approval should not be considered as an endorsement of the issuer or of the quality of the securities that are the subject of this prospectus.

Applications will be made to the FCA for all of the ordinary shares of nominal value 1.3355 pence each in the capital of the Company (the "Ordinary Shares") which are issued (the "Issued Share Capital") to be admitted to the Official List of the FCA (the "Official List") by way of a standard listing ("Standard Listing") under Chapter 14 of the listing rules of the FCA made under section 73A of FSMA (the "Listing Rules") and to London Stock Exchange plc (the "London Stock Exchange") for such Ordinary Shares to be admitted to trading on the main market for listed securities ("Main Market") of the London Stock Exchange (together, "Admission"). It is expected that Admission will become effective, and that unconditional dealings in the Ordinary Shares will commence, at 8:00 a.m. on 12 December 2019. All dealings in Ordinary Shares on the London Stock Exchange prior to the commencement of unconditional dealings will be on a "when issued" basis and will be of no effect if Admission does not take place and such dealings will be at the sole risk of the parties concerned.

The Ordinary Shares are currently listed on the Australian Securities Exchange, where the Company will continue to be listed. The Company is seeking a secondary listing for the Ordinary Shares on the standard segment of the Official List and to trading on the London Stock Exchange.

The whole of the text of this prospectus should be read by prospective investors. Your attention is specifically drawn to the discussion of certain risks and other factors that should be considered in connection with an investment in the Ordinary Shares, as set out in Part II – Risk Factors beginning on page 10 of this prospectus. Investors should make their own assessment as to the suitability of investing in the Ordinary Shares.

The Company and the Directors, accept responsibility for the information contained in this prospectus. To the best of the knowledge of the Company and the Directors, the information contained in this prospectus is in accordance with the facts, and the prospectus makes no omission likely to affect its import.

ADRIATIC METALS PLC

(Incorporated in England and Wales with registered number 10599833)

Admission to the Official List of 177,715,987 Ordinary Shares of nominal value 1.3355 pence each (by way of a Standard Listing under Chapter 14 of the Listing Rules) and to trading on the Main Market of the London Stock Exchange

Financial Adviser TAMESIS PARTNERS LLP

This prospectus does not constitute an offer to sell or an invitation to purchase or subscribe for, or the solicitation of an offer or invitation to purchase or subscribe for, Ordinary Shares in any jurisdiction where such an offer or solicitation is unlawful or would impose any unfulfilled registration, publication or approval requirements on the Company.

A Standard Listing will afford investors in the Company a lower level of regulatory protection than that afforded to investors in companies with premium listings on the Official List ("Premium Listing"), which are subject to additional obligations under the Listing Rules.

The Ordinary Shares have not been and will not be registered under the US Securities Act of 1933 (the "US Securities Act"), or the securities laws of any state or other jurisdiction of the United States or under applicable securities laws of Canada, Japan or the Republic of South Africa. Subject to certain exceptions, the Ordinary Shares may not be, offered, sold, resold, transferred or distributed, directly or indirectly, within, into or in the United States or to or for the account or benefit of persons in the United States, Canada, Japan, the Republic of South Africa or any other jurisdiction where such offer or sale would violate the relevant securities laws or regulations of such jurisdiction (each, a "Restricted Jurisdiction").

The Ordinary Shares may not be taken up, offered, sold, resold, transferred or distributed, directly or indirectly within, into or in the United States except pursuant to an exemption from, or in a transaction that is not subject to, the registration requirements of the US Securities Act. There will be no public offer in the United States. The Company has not been and will not be registered under the US Investment Company Act of 1940 ("US Investment Company Act") pursuant to the exemption provided by Section 3(c)(7) thereof, and Investors will not be entitled to the benefits of the US Investment Company Act.

The Ordinary Shares have not been approved or disapproved by the US Securities and Exchange Commission, any State securities commission in the United States or any other US regulatory authority, nor have any of the foregoing authorities passed comment upon or endorsed the merits of the adequacy of this prospectus. Any representations to the contrary is a criminal offence in the United States.

The distribution of this prospectus in or into jurisdictions other than the United Kingdom may be restricted by law and therefore persons into whose possession this prospectus comes should inform themselves about and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of securities laws of any such jurisdiction.

Apart from the responsibilities and liabilities, if any, which may be imposed on Tamesis Partners LLP (''Tamesis"), in its capacity as financial adviser to the Company, by FSMA or the regulatory regime established thereunder, Tamesis Partners LLP does not accept any responsibility whatsoever for, or make any representation or warranty, express or implied, as to the contents of this prospectus or for any other statement made or purported to be made by it, or on its behalf, in connection with the Company, the Ordinary Shares, the Admission and nothing in this prospectus will be relied upon as a promise or representation in this respect, whether or not to the past or future. Tamesis accordingly disclaims all and any responsibility or liability, whether arising in tort, contract or otherwise (save as referred to above), which it might otherwise have in respect of this prospectus or any such statement.

Neither Tamesis nor any of its representatives, are making any representation to any prospective investor of the Ordinary Shares regarding the legality of an investment in the Ordinary Shares by such prospective investor under the laws applicable to such prospective investor. The contents of this prospectus should not be construed as legal, financial or tax advice. Each prospective investor should consult their own legal, financial or tax adviser for legal, financial or tax advice.

Tamesis, which is authorised and regulated by the FCA, is acting exclusively for the Company and for no one else in connection with the production of this prospectus and/or Admission and does not regard any other person as a client in relation to the production of this prospectus and/or Admission. Tamesis will not be responsible to anyone (whether or not a recipient of this prospectus) other than the Company for providing the protections afforded to its clients, or for providing advice in connection with the production of this prospectus and/or Admission, or any other matter, transaction or arrangement referred to in this prospectus.

The date of this prospectus is 9 December 2019.

	Page
PART I – SUMMARY	4
PART II – RISK FACTORS	10
PART III – IMPORTANT INFORMATION	15
PART IV – EXPECTED TIMETABLE OF PRINCIPAL EVENTS	18
PART V – ADMISSION STATISTICS AND DEALING CODES	19
PART VI – DIRECTORS, SECRETARIES, REGISTERED OFFICE AND ADVISERS	20
PART VII – COMPANY OVERVIEW	21
PART VIII – DIRECTORS, SENIOR MANAGERS AND CORPORATE GOVERNANCE	36
PART IX – INDUSTRY OVERVIEW	42
PART X – BOSNIA & HERZEGOVINA OVERVIEW AND REGULATORY FRAMEWORK	45
PART XI – HISTORICAL FINANCIAL INFORMATION	47
PART XII – OPERATING AND FINANCIAL REVIEW	48
PART XIII – CAPITALISATION AND INDEBTEDNESS	54
PART XIV – CREST, CHESS DEPOSITORY INTERESTS AND TAKEOVER CODE	56
PART XV – TAXATION	58
PART XVI – CONSEQUENCES OF A STANDARD LISTING	63
PART XVII – ADDITIONAL INFORMATION	65
PART XVIII – DEFINITIONS	99
PART XIX – GLOSSARY OF TECHNICAL TERMS	104
PART XX – ABBREVIATIONS AND UNITS OF MEASUREMENT	107
PART XXI – COMPETENT PERSON'S REPORT	108
APPENDIX FINANCIAL STATEMENTS	213

PART I

SUMMARY

This summary is made up of four sections, and contains all the sections required to be included in a summary for this type of security and issuer.

Even though a sub-section may be required to be inserted in the summary because of the type of securities and issuer, it is possible that no relevant information can be given regarding the sub-section. In this case, a short description of the sub-section is included in the summary with the mention of "not applicable".

INTRODUCTION AND WARNINGS
Name and ISIN of the securities	The securities are the Ordinary Shares, which have the ISIN GB00BL0L5G04.
Identity and contact details of the issuer	The issuer is Adriatic Metals Plc, and its registered address is at Stamford House, Regent Street, Cheltenham, Gloucestershire England, GL50 1HN, United Kingdom and telephone number is +44 (0) 20 7993 0066.
Identity and contact details of the offeror or of the person asking for admission to trading on a regulated market	The Company is the issuer and the person asking for admission to trading of the Ordinary Shares on the Main Market, which is a regulated market.
Date of approval of the prospectus	The prospectus was approved on 9 December 2019.
Identity and contact details	The competent authority approving the prospectus is the FCA.
of the competent authority approving the prospectus	The FCA's registered address is at 12 Endeavour Square, London E20 1JN, United Kingdom and telephone number is +44 (0)20 7066 1000.
Warnings	This summary should be read as an introduction to the prospectus. Any decision to invest in the Ordinary Shares should be based on consideration of the prospectus as a whole by the investor. The investor could lose all or part of the invested capital. Where a claim relating to the information contained in the prospectus is brought before a court, the plaintiff investor might, under national law, have to bear the costs of translating the prospectus before legal proceedings are initiated. Civil liability attaches only to those persons who have tabled this summary including any translation thereof, but only where the summary is misleading, inaccurate or inconsistent, when read together with the other parts of the prospectus, or where it does not provide, when read together with the other parts of the
	prospectus, key information in order to aid investors when considering whether to invest in such securities.
	KEY INFORMATION ON THE ISSUER
Who is the issuer of the securities?
Domicile and legal form	The Company was incorporated in England and Wales on 3 February 2017 as a private company with limited liability under the Companies Act 2006 (the "Companies Act") with an indefinite life, and re-registered as a public limited company on 14 February 2018. The Company's LEI is 549300OHAH2GL1DP0L61.
Principal activities	The Company is the holding company of the Group, which is engaged in the exploration and development of polymetallic mining projects in Bosnia & Herzegovina. The Group's primary focus is the development of the Vareš Project.

Major shareholders	As at the Last Practicable Date, the Company is aware of the following persons that, directly or indirectly, hold interests in 3 per cent. or more of the Company's Issued Share Capital or voting rights:
	Name		Number of Ordinary Shares held as at the Last Practicable Date	Percentage of the Issued Ordinary Share Capital held as at the Last Practicable Date
	Sandfire Resources(1)		28,052,232	15.78%
	Citicorp Nominees Pty Ltd		17,786,647	10.01%
	Paul Cronin		16,851,332	9.48%
	Milos Bosnjakovic		16,000,000	9.00%
	BNP Paribas Nominees Pty Ltd		11,123,709	6.26%
	Glamour Division Pty Ltd		9,148,192	5.15%
	Emanuel Datt(2)		9,037,942	5.09%
	JP Morgan Nominees Aust		8,471,056	4.77%
	BNP Paribas Nominees Hub24		8,252,399	4.64%
	HSBC Custody Nominees		6,744,523	3.80%
	Charles Waite Morgan		5,478,112	3.08%
	—————
	Note: (1) Sandfire Resources holding aggregated with holdings of other members of Sandfire Resources group. (2) Aggregate of entities controlled by Emanuel Datt. There are no differences between the voting rights enjoyed by the persons listed above and those enjoyed by the other holders of Ordinary Shares.

Directors	Peter Bilbe (Non-Executive Chairman)
	Paul Cronin (Managing Director and Chief Executive Officer)
	Julian Barnes (Non-Executive Director)
	Michael Rawlinson (Non-Executive Director)

	Milos Bosnjakovic (Non-Executive Director)
	John Richards (Non-Executive Director)
	Sandra Bates (Non-Executive Director)

Statutory auditors	Lubbock Fine Chartered Accountants
	3rd Floor Paternoster House
	65 St Paul's Churchyard

	London
	EC4M 8AB
	What is the key financial information regarding the issuer?
Selected historical key financial information	The table below sets out summary financial information of the Group as derived from the audited annual consolidated financial statements of the Group for the financial years ended 30 June 2019 and 30 June 2018, and the period from 3 February 2017 to 30 June 2017.
		Year ended 30-Jun-19 £	Year ended 30-Jun-18 £	Period from 3 Feb 2017 to 30 Jun 2017 £
	REVENUE Sale of services	—	—	1,519
	GROSS PROFIT			1,519
	Administrative expenses	(2,163,209)	(2,170,921)	(286,461)
	OPERATING LOSS	(2,163,209)	(2,170,921)	(284,942)
	Finance costs	(254,444)	(242,224)	(7,365)

	LOSS BEFORE TAX FROM CONTINUING OPERATIONS Tax	(2,417,653)	(1,928,697)	(292,307)
	LOSS FROM CONTINUING OPERATIONS Other comprehensive income	— (2,417,653) 42,875	— (1,928,697) 5,965	— (292,307) 25,402

	TOTAL COMPREHENSIVE INCOME	(2,374,778)	(1,922,732)	(266,905)

		As at 30-Jun-19	As at 30-Jun-18	As at 30 Jun 2017
		£	£	£
	NON-CURRENT ASSETS Intangible assets Tangible assets	3,971,210 721,128	1,034,235 626,308	282,107 585,686
		4,692,338	1,660,543	867,793
	CURRENT ASSETS
	Inventories	—	—	22
	Trade and other receivables	361,724	147,711	17,688
	Cash and cash equivalents	5,369,759 5,731,483	4,644,389 4,792,100	311,470 329,180
	TOTAL ASSETS	10,423,821	6,452,643	1,196,973
	EQUITY AND LIABILITIES
	Equity attributable to equity holders of the parent
	Share capital	2,013,701	1,733,042	856,323
	Share premium Other capital reserves	11,084,777 1,714,826	5,515,049 1,282,365	406,183 —
	Other reserves	74,242	31,367	25,402
	Retained deficit	(4,638,657)	(2,221,004)	(292,307)
	TOTAL EQUITY	10,248,889	6,340,819	995,601

	CURRENT LIABILITIES Trade and other payables	174,932	111,824	201,372
	TOTAL EQUITY AND LIABILITIES	10,423,821	6,452,643	1,196,973

	SUMMARY CASH FLOW STATEMENT			Period from
		Year Ended 30 Jun 19	Year Ended 30 Jun 18	3 Feb 2017 to 30 Jun 2017
	Loss	(2,417,653)	(1,928,697)	(292,307)
	Foreign exchange difference on consolidation	42,875	5,965	25,402
	Depreciation and amortisation	88,674	8,910	2,394
	Share based payments	432,461	1,161,408	—
	Other non-cash movements	—	(4,885)	—
	Working capital adjustments: Increase in trade and other receivables	(214,013)	(130,023)	(17,210)
	Decrease in inventories	—	22	(22)
	Increase/(Decrease) in trade and other payables	63,108	(89,548)	186,858
	Net cash flows used in operating activities	(2,004,548)	(976,848)	(94,885)
	Investing activities
	Purchase of property, plant and equipment Purchase of intangible assets	(105,998) (3,014,471)	(40,296) (756,479)	(39,920) (176,624)
	Acquisition of subsidiary undertaking	—	—	(426,624)
	Net cash flows used in investing activities	(3,120,469)	(796,775)	(643,168)
	Financing activities
	Issue of share capital (net of fees)	5,850,387 5,850,387	6,106,542 6,106,542	1,049,523 1,049,523
	Net cash flows generated from financing activities Net increase in cash and cash equivalents	725,370	4,332,919	311,470
	Cash and cash equivalents at period end	5,369,759	4,644,389	311,470
Pro forma financial information	Not applicable. No pro forma financial information is included in this prospectus.
Brief description of any qualifications in the audit report	Not applicable. There are no qualifications in the accountant's report relating to the historical financial information.
	What are the key risks that are specific to the issuer?
Brief description of the most	Risks associated with the Group's early stage status.
material risk factors specific to the issuer contained in	1. Mineral exploration and development is a speculative and high-risk undertaking that may be impeded
the prospectus	by circumstances and factors beyond the control of the Company.
	2. The Company is currently an early stage mineral exploration business. All of the Group's activities will be likely directed to exploration and, if warranted, development of its existing projects and to the search for and the development of new mineral deposits. Significant capital investment will most likely be required and losses are likely to occur in the near future, meaning there can be no assurance that the Group will be profitable in the future.

	Risks associated with exploration and development
	3. There can be no assurance that exploration on the Vareš Project, or any other exploration properties that may be acquired in the future, will result in the discovery of an economic mineral resource. Even if an apparently viable mineral resource is identified, there is no guarantee that it can be economically
	exploited. 4. The Scoping Study on the Vareš Project released by the Company on 19 November 2019 constitutes a conceptual study based on low-level technical and economic assessments. As such, it is insufficient to provide certainty that the conclusions of the Scoping Study will be realised or that any conceptual, projected or indicative net present value or internal rate of return referred to in the Scoping Study is assured by the Vareš Project or certainty as to estimation of ore reserves or any assurance of an economic development case at this stage.
	5. The future exploration activities of the Company may be affected by a range of factors including geological conditions, limitations on activities due to seasonal weather patterns, unanticipated operational and technical difficulties, insufficient or unreliable infrastructure (such as power, water and transport), unanticipated metallurgical problems which may affect extraction costs, industrial and environmental accidents, changing government regulations and many other factors beyond the control of the Company.
	In-country Risks in Bosnia and Herzegovina
	6. The Company will be subject to the risks associated with operating in Bosnia and Herzegovina, including various levels of political, sovereign, economic and other risks and uncertainties, which include, but are not limited to, labour unrest, the risks of war or civil unrest, expropriation and nationalisation, renegotiation or nullification of existing concessions, licences, permits and contracts, illegal mining, changes in taxation policies, restrictions on foreign exchange and repatriation and changing political conditions, currency controls and governmental regulations that favour or require the awarding of contracts to local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction.
	7. Operations and the Company's development and profitability may be affected in varying degrees by government regulations (and changes to government regulations) with respect to, but not limited to, restrictions on production, price controls, export controls, foreign currency remittance, income taxes, expropriation of property, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and mine safety.
	Risks associated with mining concessions in Bosnia and Herzegovina
	8. The laws and regulations on mining in Bosnia and Herzegovina are still developing and as a result some areas of the law on mining are unclear. Additionally certain provisions of the Exploration Concession are unclear and may require renegotiation or clarification, the outcome of which the Company cannot guarantee. If the Company does not comply with the terms of the agreement it may be in default and the Exploration Concession may be terminated, which would have adverse consequences for the Company's operational and financial performance.
	9. Outcomes in courts in Bosnia and Herzegovina may be less predictable than in the United Kingdom, which could affect the enforceability of contracts entered into by the Company or its subsidiary in Bosnia and Herzegovina.
	10. There is no guarantee that the Company will be able to obtain all required approvals, licences and permits relating to its exploration and subsequent exploitation activities. To the extent that required authorisations are not obtained or are delayed, the Company's operational and financial performance may be materially adversely affected.
	Risks associated with Commodity Prices and Currency Exchange Rates
	11. The value of the Company's assets and potential earnings as well as costs and expenses may be affected by fluctuations in commodity prices and exchange rates, such as the US\$ and GBP denominated zinc, lead, gold, silver, copper and barite prices, and exchange rates affecting US\$, GBP, BAM, and A\$.
	Risks associated with resource and reserve estimates
	12. Resource and reserve estimates are expressions of judgement based on knowledge, experience and industry practice. Such estimates may alter significantly when new information or techniques become available and are, by their very nature, imprecise and depend to some extent on interpretation which may prove to be inaccurate.
	Risks associated with reliance on key personnel 13. The Group will rely heavily on a small number of key individuals, in particular the Directors, its senior management and consultants. The loss or diminution in the services of any of the Directors or any member of the management team or an inability to recruit, train and/or retain necessary personnel could have a material and adverse effect on the Group's business, results of operations, financial condition and prospects.
	KEY INFORMATION ON THE SECURITIES

	What are the main features of the securities?
Type, class and ISIN	The securities are Ordinary Shares in the capital of the Company. Applications will be made for the Ordinary Shares to be admitted to the Official List of the FCA with a Standard Listing and to trading on the Main Market of the London Stock Exchange. The Ordinary Shares are registered with ISIN GB00BL0L5G04, SEDOL code BL0L5G0 and TIDM ADT1.

Currency, denomination, par value, number of	The Ordinary Shares are denominated in UK Pounds Sterling with a nominal value of 1.3355 pence each.
securities issues and the term of the securities	As at the date of this prospectus, there are 177,715,987 Ordinary Shares in issue, all of which have been fully paid up. The term of the securities is perpetual.
Rights attached to the securities	Shareholders will have the right to receive notice of and to attend and vote at any meetings of Shareholders. Each Shareholder entitled to attend and being present in person or by proxy at a meeting will, upon a show of hands, have one vote and upon a poll each such Shareholder present in person or by proxy will have one vote for each Ordinary Share held by such Shareholder. In the case of joint holders of an Ordinary Share, if two or more persons hold an Ordinary Share jointly, the vote of the senior shareholder, shall be accepted to the exclusion of the other joint holders and for this purpose, seniority is determined by the order in which the names stand in the register of members in respect of the joint holding. Pre-emption rights have been disapplied (in respect of future share issues whether for cash or otherwise) pursuant to a special resolution passed on 8 November 2019. On a winding up, the liquidator may, with the sanction of a special resolution of the Company and any other sanction required by law, divide among the members the whole or any part of the assets of the Company and may, for that purpose, value any assets and determine how the division shall be carried out as between the members or different classes of members. Any such division may be other than in accordance with the existing rights of the members but if any division is resolved otherwise than in accordance with such rights the members shall have the same right of dissent and consequential rights as if such resolution were a special resolution passed pursuant to section 111 of the Insolvency Act 1986.
Relative seniority of the securities in the issuer's capital structure in the event of insolvency	Not applicable. The Company does not have any other securities in issue or liens over its assets and so the Ordinary Shares are not subordinated in the Company's capital structure as at the date of this prospectus, and will not be immediately following Admission.
Restrictions on the free transferability of the securities	Not applicable. The Ordinary Shares are freely transferable and tradable and there are no restrictions on transfer. Each Shareholder may transfer all or any of their Ordinary Shares which are in certificated form by means of an instrument of transfer in any usual form or in any other form which the Directors may approve. The Directors may refuse to register a transfer of Ordinary Shares which are certificated if (a) the share if not fully paid; (b) the transfer is not lodged at the company's registered office or such other place as the Directors have appointed (c) the transfer is not accompanied by the share certificate or such other evidence as the Directors may require to the show the transferor's right (d) the transfer is in favour of more than four transferees. Each Shareholder may transfer all or any of their Ordinary Shares which are in uncertificated form through CREST. Shareholders wishing to trade their Ordinary Shares on the ASX may transfer their Ordinary Shares in uncertificated form using CHESS Depositary Interests. The Directors may, in circumstances permitted or required by the Companies Act and the ASX Listing Rules, refuse to register the transfer of Ordinary Shares which are in uncertificated form, provided that exercise of such powers does not disturb the market in the Ordinary Shares. In accordance with Chapter 9 of the ASX Listing Rules, certain of the Company's securities are subject to mandatory escrow restrictions imposed by the ASX.
Dividend or pay-out policy	The Company has yet to develop its dividend policy and the funding requirements and expected time for the further development, construction and commissioning of the Vareš Project may restrict the Company in relation to when it will be in a position to pay dividends. Any decision to declare and pay dividends will be made at the discretion of the Board and will depend on, among other things, the Group's results of operations, financial condition and solvency and distributable reserves tests imposed by law and such other factors that the Board may consider relevant.
	Where will the securities be traded?
Application for admission to trading	Application will be made for the Ordinary Shares to be admitted to trading on the Main Market of the London Stock Exchange.
Other markets where the securities are or are to be traded	The Ordinary Shares are currently listed on the ASX.
	What are the key risks specific to the securities?
Brief description of the most material risk factors specific to the securities contained in the prospectus	A Standard Listing affords less regulatory protection than a Premium Listing A Standard Listing will afford investors a lower level of regulatory protection than that afforded to investors in a company with a Premium Listing, which is subject to additional obligations under the Listing Rules, which may have an adverse effect on the valuation of the Ordinary Shares. Investors may not be able to realise returns on their investment in Ordinary Shares within a period that they would consider to be reasonable Admission to listing on the Official List should not be taken as implying that there will always be a liquid market in the Ordinary Shares. The value of the Ordinary Shares may be volatile and may go down as well

	as up and investors may therefore not recover the full value of their original investment. The price at which investors may dispose of their Ordinary Shares may be influenced by a number of factors, some of which may pertain to the Company and others of which are extraneous. On any disposal investors may realise less than the original amount invested. Share Price of the Ordinary Shares may be subject to fluctuation and volatility The market price of the Ordinary Shares could fluctuate significantly based on a number of factors in addition to those listed in this document, including the Company's operating performance and the performance of competitors and other similar companies, the market's reaction to the Company's press releases, other public announcements; changes in earnings estimates or recommendations by research analysts who track the Ordinary Shares or the shares of other companies in the resource sector; changes in general economic conditions; the number of Ordinary Shares publicly traded; the arrival or departure of key personnel; acquisitions, strategic alliances or joint ventures involving the Company, the Group or its competitors; and other risks associated with forward looking statements. Dividend payments on the Ordinary Shares are not guaranteed The Company has not declared or paid any dividends on the Ordinary Shares to date and cannot assure investors that it will pay dividends in the future. The payment of any future dividends will depend upon earnings and the Company's financial condition, current and anticipated cash needs and such other factors as the Directors consider appropriate.
KEY INFORMATION ON THE OFFER OF SECURITIES TO THE PUBLIC AND/OR THE ADMISSION TO TRADING ON THE LONDON STOCK EXCHANGE
Under which conditions and timetable can I invest in this security?
	General terms and conditions Not applicable. There is no offer of securities in connection with the Admission.
Expected timetable of the offer	Not applicable.
Details of admission to trading on a regulated market	Applications will be made for the Ordinary Shares to be admitted to the Official List of the FCA with a Standard Listing.
Plan for distribution	Not applicable.
Amount and percentage of immediate dilution resulting from the offer	Not applicable.
Estimate of total expenses of the issue and/or offer	Not applicable.
	Why is this prospectus being produced?
Reasons for the offer or for the admission to trading on a regulated market	The Company is seeking admission to trading on a regulated market to enable the Company to reach additional institutional investors in the UK and Europe to increase share trading liquidity and to further raise the profile of the Company and the Vareš Project.
Use and estimated net amount of the proceeds	Not applicable.
Indication of whether the offer is subject to an underwriting agreement	Not applicable.
Indication of the most material conflicts of interests relating to the offer or admission to trading	Not applicable.

PART II

RISK FACTORS

Investment in the Company and the Ordinary Shares carries a significant degree of risk, including risks in relation to the Company's business strategy, risks relating to taxation and risks relating to the Ordinary Shares.

Prospective investors should note that the risks relating to the Company, its industry and the Ordinary Shares summarised in Part I – Summary of this prospectus are the risks that the Directors believe to be the most essential to an assessment by a prospective investor of whether to consider an investment in the Ordinary Shares. However, as the risks which the Company faces relate to events and depend on circumstances that may or may not occur in the future, prospective investors should consider not only the information on the key risks summarised in Part I – Summary of this prospectus but also, inter alia, the risks and uncertainties described below.

The risks referred to below are those risks the Company and the Directors consider to be the material risks relating to the Company. However, there may be additional risks that the Company and the Directors do not currently consider to be material or of which the Company and the Directors are not currently aware that may adversely affect the Company's business, financial condition, results of operations or prospects. Investors should review this prospectus carefully and in its entirety and consult with their professional advisers before acquiring any Ordinary Shares. If any of the risks referred to in this prospectus were to occur, the results of operations, financial condition and prospects of the Company could be materially adversely affected. If that were to be the case, the trading price of the Ordinary Shares and/or the level of dividends or distributions (if any) received from the Ordinary Shares could decline significantly. Further, investors could lose all or part of their investment.

PART A – RISK FACTORS SPECIFIC AND MATERIAL TO THE COMPANY

Exploration and Development

Mineral exploration and development is a speculative and high-risk undertaking that may be impeded by circumstances and factors beyond the control of the Company. Success in this process involves (amongst other things):

* discovery and proving-up, or acquiring, an economically recoverable resource or reserve;
* access to adequate capital throughout the acquisition/discovery and project development phases;
* securing and maintaining title to mineral exploration projects;
* obtaining required development consents and approvals necessary for the acquisition, mineral exploration, development and production phases; and
* accessing the necessary experienced operational staff, the applicable financial management and recruiting skilled contractors, consultants and employees.

There can be no assurance that exploration on the Vareš Project, or any other exploration properties that may be acquired in the future, will result in the discovery of an economic mineral resource. Even if an apparently viable mineral resource is identified, there is no guarantee that it can be economically exploited.

Specifically, the Scoping Study on the Vareš Project released by the Company on 19 November 2019 constitutes a conceptual study based on low-level technical and economic assessments. As such, it is insufficient to provide certainty that the conclusions of the Scoping Study will be realised or that any conceptual, projected or indicative net present value or internal rate of return referred to in the Scoping Study is assured by the Vareš Project or certainty as to estimation of ore reserves or any assurance of an economic development case at this stage. Conceptual capital and operating costs set out in the Scoping Study are considered to have an accuracy of +/- 40 per cent. and while the Company considers all the material assumptions in the scoping study to be based on reasonable grounds, there is no certainty that they will prove to be correct which, may affect the range of outcomes, returns or values projected in the Scoping Study.

The economic viability, net present value and returns from the Vareš Project, if developed, will be the subject of further more detailed work including the completion of a feasibility study. There can be no guarantee that such feasibility study will confirm the returns or values projected by the Scoping Study or the economic viability of the Vareš Project. Further, should the Vareš Project be brought into production there can be no guarantee that the returns or values delivered by the Vareš Project will match those projected by the Scoping Study or any later feasibility study. Failure to achieve the outcomes, returns or values projected in the Scoping Study or any subsequent feasibility study may adversely affect the operational and financial performance of the Company.

The future exploration activities of the Company may be affected by a range of factors including geological conditions, limitations on activities due to seasonal weather patterns, unanticipated operational and technical difficulties, industrial and environmental accidents, changing government regulations and many other factors beyond the control of the Company.

In-country Risks in Bosnia and Herzegovina

The Vareš Project is located in Bosnia and Herzegovina. The Company will be subject to the risks associated with operating in that country, including various levels of political, sovereign, economic and other risks and uncertainties.

These risks and uncertainties also include, but are not limited to, labour unrest, the risks of war or civil unrest, expropriation and nationalisation, renegotiation or nullification of existing concessions, licences, permits and contracts, illegal mining, changes in taxation policies, restrictions on foreign exchange and repatriation and changing political conditions, currency controls and governmental regulations that favour or require the awarding of contracts to local contractors or require foreign contractors to employ citizens of, or purchase supplies from, a particular jurisdiction.

Changes, if any, in mining or investment policies or shifts in political attitude in Bosnia and Herzegovina may adversely affect the operations or profitability of the Company. Operations may be affected in varying degrees by government regulations with respect to, but not limited to, restrictions on production, price controls, export controls, foreign currency remittance, income taxes, expropriation of property, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and mine safety.

Failure to comply strictly with applicable laws, regulations and local practices relating to mineral rights applications and tenure, could result in loss, reduction or expropriation of entitlements, or the imposition of additional local or foreign parties as joint venture partners with carried or other interests.

The Company will conduct its operations in accordance with international laws and standards, which may not be consistent with local customs or practices that could result in loss or reduction of production, logistics and sales, which may adversely affect the Company's operational and financial performance.

Outcomes in courts in Bosnia and Herzegovina may be less predictable than in the United Kingdom, which could affect the enforceability of contracts entered into by the Company or its subsidiary in Bosnia and Herzegovina.

Any material adverse changes in government policies, legislation, political, legal and social environments in Bosnia and Herzegovina or any other country that the Company has economic interests in that affect mineral exploration activities, may affect the viability and profitability of the Company.

Mining Concessions in Bosnia and Herzegovina

Following the nation's recovery from the conflict of the 1990s, the laws and regulations on mining in Bosnia and Herzegovina are still developing and as a result some areas of the law on mining are unclear. Exploration concessions are granted by means of a concession agreement between the relevant level of government and the concession holder. The Exploration Concession held by Eastern Mining is located in the Zenica-Doboj Canton and is granted and regulated by an agreement between Eastern Mining and the Government of Zenica-Doboj Canton.

Eastern Mining has provided a bill of exchange for an amount of BAM300,000 to the Government of Zenica-Doboj Canton as security for the quarterly concession fee payable once exploitation commences. The Exploration Concession does not provide any guidance on when the bill of exchange can be enforced.

The Company has been advised that the provisions regarding the bill of exchange, land expropriation and the quarterly concession fee in the Exploration Concession currently lack clarity and that the Company may need to re-negotiate these terms if and when it commences exploitation operations.

In the event the Company wishes to commence exploitation operations it must obtain the consent of all owners of the land subject to the Exploration Concession through a land expropriation process involving the Government of Zenica-Doboj Canton. This process can be lengthy and costly. Further, if the Company commences exploitation operations, it will be required to pay a quarterly concession fee. This fee is to be re-negotiated each quarter between the parties to the Exploration Concession. If the parties cannot agree to a fee, then the agreement can be terminated.

While it is the Company's intention to comply with the terms of the Exploration Concession, there can be no guarantees made that, in the future, the Company will satisfy all of its obligations under the agreement. If the Company does not comply with the terms of the agreement it may be in default and the Exploration Concession may be terminated, which would have adverse consequences for the Company's operational and financial performance.

Grant of Future Authorisations to Explore and Mine

If the Company discovers an economically viable mineral deposit that it then intends to develop, it will, among other things, require various approvals, licences and permits before it will be able to mine the deposit. There is no guarantee that the Company will be able to obtain all required approvals, licences and permits. To the extent that required authorisations are not obtained or are delayed, the Company's operational and financial performance may be materially adversely affected.

Environmental Risks

The Company's activities are subject to the environmental laws inherent in the mining industry and those specific to Bosnia and Herzegovina. The Company intends to conduct its activities in an environmentally responsible manner and in compliance with all applicable laws. However, the Company may be the subject of accidents or unforeseen circumstances that could subject the Company to extensive liability.

In addition, environmental approvals are required from relevant government and regulatory authorities before activities may be undertaken which are likely to impact the environment. Failure or delay in obtaining such approvals will prevent the Company from undertaking its planned activities. Further, the Company is unable to predict the impact of additional environmental laws and regulations that may be adopted in the future, including whether any such laws or regulations would materially increase the Company's cost of doing business or affect its operations in any area.

Operational Risks

The operations of the Company may be affected by various factors, including:

* failure to locate or identify mineral deposits;
* failure to achieve predicted grades in exploration and mining;
* operational and technical difficulties encountered in mining;
* insufficient or unreliable infrastructure, such as power, water and transport;
* difficulties in commissioning and operating plant and equipment;
* mechanical failure or plant breakdown;
* unanticipated metallurgical problems which may affect extraction costs; and
* adverse weather conditions.

In the event that any of these potential risks eventuate, the Company's operational and financial performance may be adversely affected.

Resource and Reserve Estimates

Whilst the Company intends to undertake exploration activities with the aim of defining a resource, no assurances can be given that the exploration will result in the determination of a resource. Even if a resource is identified, no assurance can be provided that this can be economically extracted.

Resource and reserve estimates are expressions of judgement based on knowledge, experience and industry practice. Estimates which were valid when initially calculated may alter significantly when new information or techniques become available. In addition, by their very nature, resource and reserve estimates are imprecise and depend to some extent on interpretation which may prove to be inaccurate.

Commodity Prices

The value of the Company's assets and potential earnings may be affected by fluctuations in commodity prices and exchange rates, such as the US\$ and GBP denominated zinc, lead, gold, silver, copper and barite prices, and the GBP / US\$ exchange rate.

These prices can significantly fluctuate, and are exposed to numerous factors beyond the control of the Company such as world demand for precious and other metals, forward selling by producers, and production cost levels in major metal producing regions. Other factors include expectations regarding inflation, the financial impact of movements in interest rates, global economic trends, and domestic and international fiscal, monetary and regulatory policy settings.

In the event the Company achieves exploration success leading to viable mining production, the Company's financial performance will be highly dependent on commodity prices and exchange rates.

Foreign Exchange Risk

The Company's costs and expenses in Bosnia and Herzegovina and other foreign countries are likely to be in foreign currencies. Accordingly, the depreciation of the GBP and/or the appreciation of the foreign currency relative to the GBP could result in a translation loss on consolidation which is taken directly to shareholder equity.

The majority of the Group's revenues once the Vareš Project is in production are expected to be earned in US\$. Any depreciation of the US\$ relative to the GBP may result in lower than anticipated revenue. The Company will be affected on an ongoing basis by foreign exchange risks between the Australian dollar and the other foreign currencies, and will have to monitor this risk.

Early Stage of Operations

The Group will have no properties producing positive cash flow and its ultimate success will depend on its ability to generate cash flow from active mining operations in the future and its ability to access equity markets for its development requirements. All of the Group's activities will be likely directed to exploration and, if warranted, development of its existing properties and to the search for and the development of new mineral deposits. Significant capital investment will most likely be required to achieve commercial production. Losses are likely to occur in the near future and there can be no assurance that that the Group will be profitable in the future.

RISKS RELATING TO THE COMPANY'S DIRECTORS AND SENIOR MANAGERS

The Group will rely heavily on a small number of key individuals, in particular the Directors, its senior management and consultants and future directors, senior management and consultants, including, among other matters, to develop and maintain important relationships with governmental and regulatory authorities in Bosnia and Herzegovina. The Group's business may be negatively affected by the failure to attract, or the departure of, any of these individuals, or any of a number of other key employees. There can be no guarantee that the Group will be able to continue to attract and retain required employees. The Group does however hold key person insurance in respect of the Directors.

The loss or diminution in the services of any of the Directors or any member of the management team or an inability to recruit, train and/or retain necessary personnel could have a material and adverse effect on the Group's business, results of operations, financial condition and prospects.

PART B – RISK FACTORS SPECIFIC AND MATERIAL TO THE ORDINARY SHARES

A Standard Listing affords less regulatory protection than a Premium Listing

A Standard Listing will afford investors a lower level of regulatory protection than that afforded to investors in a company with a Premium Listing, which is subject to additional obligations under the Listing Rules, which may have an adverse effect on the valuation of the Ordinary Shares.

Realisation of Investment

Admission to listing on the Official List should not be taken as implying that there will always be a liquid market in the Ordinary Shares. Investors should be aware that the value of the Ordinary Shares may be volatile and may go down as well as up and investors may therefore not recover the full value of their original investment. The price at which investors may dispose of their Ordinary Shares may be influenced by a number of factors, some of which may pertain to the Company and others of which are extraneous. On any disposal investors may realise less than the original amount invested.

Volatility of Share Price

The market price of the Ordinary Shares could fluctuate significantly based on a number of factors in addition to those listed in this document, including:

* the Company's operating performance and the performance of competitors and other similar companies;
* the market's reaction to the Company's press releases, other public announcements and the Company's filings with various securities regulatory authorities;
* changes in earnings estimates or recommendations by research analysts who track the Ordinary Shares or the shares of other companies in the resource sector;
* changes in general economic conditions;
* the number of Ordinary Shares publicly traded;
* the arrival or departure of key personnel;
* acquisitions, strategic alliances or joint ventures involving the Company, the Group or its competitors; and
* the factors listed under the heading 'Forward-looking Statements' on page 16 of this document.

Payment of Dividends

The Company has not declared or paid any dividends on the Ordinary Shares to date and cannot assure investors that it will pay dividends in the future. The payment of any future dividends will depend upon earnings and the Company's financial condition, current and anticipated cash needs and such other factors as the Directors consider appropriate.

RISKS RELATING TO TAXATION

Taxation

The acquisition and disposal of Ordinary Shares will have tax consequences, which will differ depending on the individual financial affairs of each investor. All potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring Ordinary Shares from a taxation point of view and generally.

PART III

IMPORTANT INFORMATION

The distribution of this prospectus may be restricted by law in certain jurisdictions and therefore persons into whose possession this prospectus comes should inform themselves about and observe any restrictions, including those set out below. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

General

Shareholders are not required to take any action upon receipt of this prospectus, which is being made available publicly for information purposes only. This prospectus has been published solely to enable the Company to obtain Admission of the Ordinary Shares to the standard listing segment of the Official List and to trading on the London Stock Exchange's Main Market in the United Kingdom.

This prospectus has been approved by the FCA as a prospectus for the purposes of section 85(2) of FSMA and of the Prospectus Regulation which may be used in relation to the admission of transferable securities to a regulated market in the United Kingdom (and not in relation to any offer of securities to the public).

This prospectus does not contain and is not an offer or invitation to the public to subscribe for Ordinary Shares. This prospectus is not, and should not be construed as an inducement or encouragement to buy or sell any Ordinary Shares. No investment decision relating to the Shares should be made on the basis of the information contained in this prospectus.

No arrangement has been made with the competent authority in any other EEA Member State or any other jurisdiction for the use of this prospectus as an approved prospectus in such jurisdiction and no public offer is to be made in any such jurisdiction.

No action has been or will be taken in any other jurisdiction that would permit a public offering of the Ordinary Shares, or possession or distribution of this prospectus or any other offering material in any other country or jurisdiction where action for that purpose is required. Accordingly, the Ordinary Shares may not be offered or sold, directly or indirectly, and neither this prospectus nor any offering material or advertisement in connection with the Ordinary Shares may be distributed or published in or from any country or jurisdiction except under circumstances that will result in compliance with any and all applicable rules and regulations of any such country or jurisdiction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction. This prospectus does not constitute an offer to subscribe for any of the Ordinary Shares to any person in any jurisdiction to whom it is unlawful to make such offer or solicitation in such jurisdiction. The issue or circulation of this prospectus may be prohibited in Restricted Jurisdictions and in countries other than those in relation to which notices are given below.

Supplementary prospectus

In the event that the Company is required to publish any supplementary prospectus, such supplementary prospectus will be published in accordance with the Prospectus Regulation Rules (and notification thereof will be made to a Regulatory Information Service) but will not be distributed to any investors individually. Any such supplementary prospectus will be published in printed form and available free of charge at the Company's registered office at Stamford House, Regent Street, Cheltenham, Gloucestershire, England, GL50 1HN, United Kingdom and (subject to certain restrictions) on the Company's website at www.adriaticmetals.com until 14 days after Admission.

For the attention of all investors

No person has been authorised to give any information or make any representations other than as contained in this prospectus and, if given or made, such information or representations must not be relied on as having been authorised by the Company, the Directors or Tamesis. Without prejudice to the Company's obligations under the FSMA, the Prospectus Regulation Rules, the Listing Rules and the Disclosure Guidance and Transparency Rules, none of the publication or delivery or this prospectus, or any investment made in reliance on the information contained this prospectus shall, under any circumstances, create any implication that there has been no change in the affairs of the Company since the date of this prospectus or that the information in this prospectus is correct as at any time after its date.

In making an investment decision, prospective investors must rely on their own examination of the Company and this prospectus including the merits and risks involved. The contents of this Document are not to be construed as advice relating to legal, financial, taxation, investment decisions or any other matter. Prospective investors should inform themselves as to:

* the legal requirements within their own countries for the purchase, holding, transfer or other disposal of the Ordinary Shares;
* any foreign exchange restrictions applicable to the purchase, holding, transfer or other disposal of the Ordinary Shares which they might encounter; and
* the income and other tax consequences which may apply in their own countries as a result of the purchase, holding, transfer or other disposal of the Ordinary Shares or distributions by the Company, either on a liquidation and distribution or otherwise.

Prospective investors must rely upon their own representatives, including their own legal and financial advisers and accountants, as to legal, tax, financial, investment or any other related matters concerning the Company and an investment therein.

An investment in the Company should be regarded as a long-term investment. There can be no assurance that the Company's objective and acquisition, financing and business strategies will be achieved.

The Ordinary Shares are only suitable for acquisition by a person who: (a) has a significantly substantial asset base such that would enable the person to sustain any loss that might be incurred as a result of acquiring the Ordinary Shares; and (b) is sufficiently financially sophisticated to be reasonably expected to know the risks involved in acquiring the Ordinary Shares.

It should be remembered that the price of the Ordinary Shares and any income from such Ordinary Shares can go down as well as up.

This prospectus should be read in its entirety before making any investment in the Ordinary Shares.

All Shareholders are entitled to the benefit of, are bound by, and are deemed to have notice of, the provisions of the Articles, which prospective investors should review. A summary of the Articles is set out in paragraph 4 of Part XVII of this document and a copy of the Articles is available for inspection at the Company's registered office, Stamford House, Regent Street, Cheltenham, Gloucestershire, England, GL50 1HN.

Australia

This document has not been lodged with the Australian Securities and Investments Commission and is not a disclosure document for the purpose of the Corporations Act 2001 (Cth). No offer of securities is being made pursuant to this document.

Forward-looking statements

This prospectus includes statements that are, or may be deemed to be, 'forward-looking statements'. In some cases, these forward-looking statements can be identified by the use of forward-looking terminology, including the terms 'targets', 'believes', 'estimates', 'anticipates', 'expects', 'intends', 'may', 'will', 'should' or, in each case, their negative or other variations or comparable terminology. They appear in a number of places throughout the prospectus and include statements regarding the intentions, beliefs or current expectations of the Company and the Board concerning, inter alia: the Company's objective, financing and business strategies, plans (including exploration and development plans) results of operations, financial condition, capital resources, prospects, capital appreciation of the Ordinary Shares and dividends. By their nature, forwardlooking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Forward-looking statements are not guarantees of future performance. The Company's actual performance, results of operations, financial condition, distributions to Shareholders and the development of its business and financing strategies may differ materially from the forward- looking statements contained in this prospectus. In addition, even if the Company's actual performance, results of operations, financial condition, distributions to Shareholders and the development of its business and financing strategies are consistent with the forward-looking statements contained in this prospectus, those results or developments may not be indicative of results or developments in subsequent periods.

Prospective investors should carefully review Part II of this prospectus (Risk Factors) for a discussion of additional factors that could cause the Company's actual results to differ materially, before making an investment decision. For the avoidance of doubt, nothing appearing under the heading "Forward-looking statements" constitutes a qualification of the working capital statement set out in paragraph 10 of Part XVII of this prospectus (Additional Information).

Forward-looking statements contained in this prospectus apply only as at the date of this prospectus. Subject to any obligations under the Listing Rules, the Market Abuse Regulation, the Disclosure Guidance and Transparency Rules and the Prospectus Regulation Rules, the Company undertakes no obligation publicly to update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

PART IV

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Publication of this Prospectus 9 December 2019 Admission and commencement of dealings in Ordinary Shares 8:00 a.m. on 12 December 2019

All references to time in this prospectus are to London time, unless otherwise stated. Any changes to the expected timetable will be notified by the Company through an RIS.

PART V

ADMISSION STATISTICS AND DEALING CODES

Number of Ordinary Shares in issue on Admission	177,715,987
Number of Options and Performance Rights outstanding on Admission	23,035,000
Number of Ordinary Shares on a fully diluted basis on Admission	200,750,987
Percentage of issued share capital represented by Options and Peformance Rights outstanding on Admission	12.96%
Expected market capitalisation of the Company on Admission(1)	£148,336,157
ISIN	GB00BL0L5G04
LEI	549300OHAH2GL1DP0L61
Tickers	LSE: ADT1 ASX: ADT

^{—————} Notes:

⁽¹⁾ Based on number of Ordinary Shares in issue at Admission at a share price of A\$1.60 and an exchange rate of 1 GBP: 1.9167 AUD, as at the Last Practicable Date.

PART VI

DIRECTORS, SECRETARIES, REGISTERED OFFICE AND ADVISERS

Directors	Peter Bilbe (Non-Executive Chairman) Paul Cronin (Managing Director and Chief Executive Officer) Julian Barnes (Non-Executive Director) Michael Rawlinson (Non-Executive Director) Milos Bosnjakovic (Non-Executive Director) John Richards (Non-Executive Director) Sandra Bates (Non-Executive Director)
Joint Company Secretaries	Sean Duffy Gabriel Chiappini
Registered Office	Stamford House Regent Street, Cheltenham Gloucestershire GL50 1HN United Kingdom
Financial Adviser	Tamesis Partners LLP 125 Old Broad Street London EC2N 1AR United Kingdom
Accountants	BDO Corporate Finance (WA) Pty Ltd 38 Station Street Subiaco, WA, 6008 Australia
Solicitors to the Company (UK)	Locke Lord (UK) LLP 201 Bishopsgate London EC2M 3AB United Kingdom
Legal Advisers to the Company (Bosnia and Herzegovina)	Maric & Co Law Firm Ltd Mehmeda Spahe 26 71000 Sarajevo Bosnia & Herzegovina
Competent Person	CSA Global (UK) Ltd Suite 2, First Floor, Springfield House Springfield Road, Horsham West Sussex RH12 2RG United Kingdom
Registrar	Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS13 8AE United Kingdom
PR Adviser	Blytheweigh Communications Ltd 4-5 Castle Court London EC3V 9DL United Kingdom

PART VII

COMPANY OVERVIEW

1. Introduction

Adriatic is a mineral exploration and development company focused on polymetallic projects in Bosnia and Herzegovina.

The primary focus of the Group is the Vareš Project located approximately 50 km north of the capital, Sarajevo, in the district of Vareš. Mineral Resources have been estimated at the Veovača and Rupice deposits, and further exploration potential exists from Smailova to Rupice.

Adriatic, through its wholly owned subsidiary company, Eastern Mining, owns 100% of one concession which extends over the entirety of the Veovača and Rupice deposits defined to date. Eastern Mining is the first company to undertake any exploration at the deposits and in the surrounding Vareš District since the late 1980s.

Adriatic has compiled historical exploration activities for the concession and surrounding areas and has completed recent exploration works, including drilling, and has publicly disclosed a current Mineral Resource statement. Exploration by Adriatic has focused on activities at the Rupice and Veovača areas within the concession, including geophysical programs (induced polarisation), soil geochemical programs, drilling at Veovača and Rupice, and evaluation of the corridor between Rupice and Jurasevac-Brestic, and Veovača and Orti. A Scoping Study on the Vareš Project was released in November 2019, outlining a robust, high margin project for low up-front capital expenditure.

2. Key Strengths

Scoping study confirms high margin, high return, low capex project

Adriatic released a Scoping Study on the Vareš Project on 19 November 2019 indicating an attractive, high return project. The Scoping Study outlined an operation with a plant throughput of 800ktpa producing multiple concentrates over a mine life of approximately 14.6 years. Subject to the qualifications and assumptions contained in the Scoping Study, the Vareš Project is projected to deliver a post-tax internal rate of return of 107.4% and a net present value of US\$916.6 million at a discount rate of 8%, for total capital expenditure of US\$178.4 million, including a 30% contingency.

Investors are referred to the risk factor set out on page 10 in relation to the Scoping Study, under the heading "Exploration and Development".

High-grade mineral resources with strong potential for exploration upside

Resources have been delineated at both the Veovača and Rupice deposits at the Vareš Project, containing high grades of zinc, lead, copper, silver, gold, and barite with good potential for mine development. These resources have the potential for extension along strike and at depth. The hydrothermal system driving mineralisation at the Vareš Project typically occurs in clusters, which suggests the potential for further discoveries in the existing licence area. The maiden mineral resource at Rupice totals 9.4Mt at a zinc equivalent grade of 16.4% while the mineral resource at Veovača totals 7.4Mt at a zinc equivalent grade of 3.7%.

Excellent metallurgical recoveries and concentrate grades

Preliminary results of metallurgical testwork confirmed excellent metallurgical recoveries and concentrate grades from samples taken from the Veovača and Rupice deposits. The testwork is ongoing but metal recoveries of 85–90% for zinc, 85–93% for copper, 90–94% for lead, 80–86% for barite, 90% for silver and 80% for gold are appropriate estimates.

Existing infrastructure in a historical mining district

Mining activities first took place in 1983 at the Vareš Project under the state government and continued until Bosnian independence in 1992. The abandoned processing facility remains within the licence area, along with a previously permitted tailings storage facility on the licence area owned by the Company. The nearby town of Vareš has a long history of mining, most famously for iron ore mines, and has sufficient existing rail and power infrastructure to support a mining operation as outlined in the Scoping Study.

Early mover advantage in Bosnia & Herzegovina

Since the end of the civil war and the signing of the Dayton Peace Agreement, Bosnia & Herzegovina has experienced stable democracy. However, despite the historical extractive industry there has been very little mineral exploration in country, in particular using modern exploration techniques. The Company has a first mover advantage for exploration into a prospective region for greenfield exploration.

Experienced team

The Company has a strong and experienced Board and Management team who are well prepared to advance the Vareš Project towards production. The team has experience in exploration for economic mineralisation, financing, legal requirements and permitting, mine planning and development, and corporate social responsibility.

Well-funded to complete Feasibility Study for the Vareš Project whilst continuing aggressive exploration programme

The Company has a strong balance sheet with cash of £3.7 million (approximately A\$6.9 million) as of 30 September 2019 and having completed a successful equity placement in November 2019 raising A\$25 million before expenses from the placement of 25 million new Ordinary Shares at a price of A\$1.00 per Ordinary Share. This ensures that Adriatic is fully funded through to the making of a construction decision for the Vareš Project in early 2021 including the completion of a Feasibility Study, Environmental and Social Impact Assessment and required permitting activities, whilst continuing its aggressive exploration programmes at Veovača and Rupice and other regional exploration targets such as Jurasevac-Brestic over the same period.

3. History of Adriatic

The Company was incorporated on 3 February 2017 in England and Wales for the purposes of acquiring all of the issued capital of Eastern Mining and subsequently exploring and developing the Vareš Project.

On the 3 March 2017, the Company acquired 100% of the issued share capital of Eastern Mining pursuant to a share sale agreement between the Company, Eastern Mining and Balkan Mining Pty Ltd.

During 2017, the Company commenced a confirmatory drill program at both Veovača and Rupice. The drill program allowed an initial JORC compliant mineral resource estimate to be completed for Veovača. At Rupice, it was decided that additional exploration drilling was warranted given the size and grade of mineralisation intercepted. In addition to the drilling campaign, the Company conducted extensive soil geo-chemistry and ground based geophysics in the area of the known deposits, and when combined with additional exploration records discovered in a disused building on the Veovača plant site, provided a number of follow up targets for exploration.

The Company subsequently listed on the ASX with its CDIs admitted to trading on 27 April 2018, raising A\$10 million in equity capital at a price of A\$0.20 per CDI.

The following are some of the key highlights of the Group's achievements since listing on the ASX:

* In May 2018, the Company announced a strategic partnership with ASX listed copper producer Sandfire Resources NL (ASX: SFR); Sandfire invested A\$2 million in the Company's ASX IPO for a shareholding of 7.7%
* In May 2018, the Company commenced a 15,000m drilling programme at the Vareš Project to test several key anomalies at the Rupice deposit
* The first results of the 15,000m drilling programme were received in June 2018 and included intersections such as:
- * 64m @ 4.6g/t Au, 537g/t Ag, 0.9% Cu, 7.7% Pb, 10.8% Zn and 46% BaSO4 from drill hole BR-2-18
- * 36m @ 4.4g/t Au, 463g/t Ag, 0.5% Cu, 5.7% Zn and 55% BaSO4 from drill hole BR-3-18
- * 22m @ 4.1g/t Au, 258 g/t Ag, 0.8% Cu, 7.5% Pb, 12.8% Zn and 56% BaSO4 from drill hole BR-3-18
* Further drilling results were received in July and August of 2018, including:
- * 66m @ 2.1g/t Au, 158g/t Ag, 2.3% Cu, 8.6% Pb, 12.8% Zn and 37% BaSO4 from drill hole BR-5-18
- * 16m @ 1.6g/t Au, 136g/t Ag, 1.1% Cu, 4.0% Pb, 6.5% Zn and 10m @ 56% BaSO4 from drill hole BR-8-18
* In August 2018, the Company announced the approval by the Vareš Municipal Council of a major expansion to the area covered by its existing Exploration Concession for the Vareš Project.
* In September 2018, further drilling results included:
- * 28m @ 10.8% Zn, 5.9% Pb, 271g/t Ag, 2.4g/tAu, 0.5% Cu and 61% BaSO4 from drill hole BR-10-18
- * 18m @ 8.2% zn, 4.2% Pb, 131g/t Ag, 1.4g/t Au, 0.8% Cu and 27% BaSO4 from drill hole BR-12-18
- * 22m @ 0.6% Zn, 1.2% Pb, 91g/t Ag, 1.3g/t Au, 0.3% Cu and 41% BaSO4 from drill hole BR-13-18
- * 24m @ 18.8% Zn, 7.7% Pb, 167g/t Ag, 3.7g/t Au, 0.7% Cu and 53% BaSO4 from drill hole BR-13-18
* In November 2018 ,the Company announced that the Government of Zenica-Doboj Canton had approved the Company's application for a significant extension to the current concession agreement for the Vareš Project.
* In November 2018, the Company announced that it had completed a placing of new CDIs to institutional investors of A\$10 million at a price of A\$0.55 per CDI, with Sandfire Resources subscribing for a further A\$0.8m at the same price.
* In January 2019, the Company announced further drilling results, including the thickest and highest grade intercept to date of 72m @ 18.3% Zn, 10.7% Pb, 211g/t Ag, 2.5g/t Au, 2.5% Cu and 25% BaSO4 from drill hole BR-36-18.
* In February 2019, the Company received an Urban Planning Permit for the Expanded Concession Annexe from the Zenica-Doboj Canton.
* In March 2019, the Company was awarded an Exploration Permit over the expanded Concession Area by the Minister for Energy, Mining and Industry.
* In April 2019, Mr Graham Hill was appointed Chief Operating Officer and Mr Paul Cronin moved from a Non-Executive Director to Executive Director role following the announcement that Mr Geraint Harris would be leaving the Company.
* In July 2019, a maiden Mineral Resource on Rupice and an updated Mineral Resource on Veovača were released.
* In November 2019, a Scoping Study prepared by CSA Global was released indicating an attractive, high return project, with the Vareš Project projected to deliver a post-tax net internal rate of return of 107.4% and a net present value of US\$916.6 million at a discount of 8%.

4. Corporate Structure

The corporate structure of the Group is as follows:

Adriatic was incorporated in England and Wales on 3 February 2017. Other than in its capacity as the holding company of Eastern Mining, Adriatic is not currently involved in any material business activities and does not have any material assets or liabilities other than cash at bank and on hand of approximately £3,695,142 as at 30 September 2019.

Eastern Mining was registered in Bosnia and Herzegovina on 19 May 2008. Eastern Mining is the main operating entity of the Group and holds the Exploration Concession which comprises the Rupice and Veovača deposits.

5. Summary of Key Assets and Operations

The Vareš Project is located approximately 50 km north of the Bosnian capital, Sarajevo, in the district of Vareš and consists of two advanced exploration projects, Veovača and Rupice, and various regional exploration targets.

Figure 1: Exploration Concession, prospects and stratigraphy (the grid is MGI 1901/Balkans Zone 6)

The Vareš Project contains two advanced exploration projects. Veovača was historically mined for lead, zinc and barite. Rupice was historically mined for barite. Recent drilling by Adriatic has intersected gold, silver, barite, copper, lead and zinc, which have been estimated in potentially economic quantities as part of recent Mineral Resource estimations.

Adriatic has also identified various regional prospects which lie both within, and outside the existing concession area.

The concession area covers 865.7 ha and is divided into three areas of which the Veovača pit and plant site are exploitation and exploration areas, and the Rupice Concession is an exploration area.

Project Tenement		Field	Area (ha)	Status
	Veovača pit	1	90.54	Approved – exploitation and exploration
Vareš	Veovača plant site	2	107.68	Approved – exploitation and exploration
	Rupice	3	83.18	Approved – exploration
	Rupice-Borovica		452	Approved – exploration
	Veovača-Orti-Mekuse-Seliste		132	Approved – exploration

————— Table 1: Concession status

History

The Vareš district has a significant mining history dating back to Bronze Age. During the Roman era, the town was famous for its miners and iron smiths. During the Austrian rule of Bosnia & Herzegovina the iron-works of Vareš were an important exporter of iron products to the rest of the Habsburg empire. The first blast furnace in Bosnia & Herzegovina was built in Vareš in 1891 and only ceased operations in 1990.

The Socialist Federal Republic of Yugoslavia through its parastatal company, Energoinvest, commenced modern exploration in the Vareš district in the late 1940s, and over a period of 40 years discovered several iron and polymetallic (lead, zinc, barite, silver, gold) deposits within a 30 km x 10 km sedimentary formation extending from Rupice in the northwest to Smailova Suma in the southeast.

In the late 1960s to the early 1970s exploration in the district consisted of a number of small programs of diamond core drilling and surface trenching which at Veovača, Droscovac, Bretic-Jurasevac and Borovica was followed by the development of exploration adits and drives, and then a more substantial program of diamond core drilling in the late 1970s and the 1980s. The first mineral reserve for Veovača was estimated in 1978 and continued to be refined up to 1983 when open pit mining commenced whilst at Rupice mineral reserves were estimated in the 1980s as drilling progressed.

Open pit mining commenced at Veovača in 1983 at an intended production rate of approximately 400,000 tonnes per annum. After four years of mining, some 1.2 million tonnes of ore had been mined and hauled to the nearby processing facility some 2 km to the southwest.

Mining activities by Energoinvest reached a peak in the 1980s but by the end of the decade all mines closed due to political instability rather than depleted mine reserves.

No exploration was conducted in the Vareš District following the closure of the lead-zinc and iron ore mines in the late 1980s. Thereafter the civil unrest of the 1990s, lack of foreign investment through the early 2000s, and the eventual bankruptcy of the parastatal company, Energoinvest, impeded any attempt at restarting exploration and mining.

Regional and local geology

The Vareš Project is located in the Dinarides, the geological domain that represents the southeast extension of the Alpine orogenic belt. The Dinaride orogen developed through closure of the Vardar Ocean, a branch of the Neotethys Ocean, between the Adriatic terrane (Adria) and the Tisza-Dacia blocks and Moesian platform on the Eurasian terrane, as well as intervening arc belts.

The Dinarides are comprised of the authochtonous western carbonate platform and a series of southwest-verging nappe belts to the east, developed during the Alpine collision event. The Vareš Project is located in the Durmitor Nappe comprising Palaeozoic basement and Triassic-Jurassic volcanic and sedimentary elements.

Mineralisation at Rupice and Veovača occurs in a carbonate-dominated sedimentary sequence deposited in an active marine rift setting, following a period of alkaline volcanism. Sedimentary breccia or conglomeratic units provide evidence for active faulting during sedimentation, and there is sedimentary evidence for rapid subsidence and a deepening depositional environment.

Mineralisation is dominantly replacement-style with subordinate veining. Mineralisation is interpreted to preferentially replace carbonate-bearing lithologies, primarily dolostone and dolomitic sedimentary breccia with subordinate mineralisation in dolomitic marls. The grade of mineralisation at Veovača appears to be directly related to the amount of carbonate in the precursor sedimentary breccia host-rock.

The Vareš metallogenic district is a west northwest-striking curved belt, 2 to 5 km wide and 25 km long, running from Srednje–Draževići in the southeast to Vareš–Borovica in the northwest, and is characterised by Lower Triassic shales, sandstones and limestones, Anisian limestones, and Ladinian spilites interlayered with pyroclastic rocks, cherts, and shales.

Rupice is at the western end of the Vareš ore field and Veovača in the central part are both hosted within a west northwest-striking antiformal thrust-bound belt of Triassic rocks surrounded by Jurassic carbonates. Ladinian (Middle Triassic) alkaline pillow basalts occur in a zone between the deposits, apparently stratigraphically underlying the host rocks to the mineralisation.

Mineralisation at Rupice and Veovača shows more similarities than differences and both deposits are considered to be part of the same mineral system.

Recent exploration activities

There have been several periods of exploration at the Veovača deposit commencing in the 1960s and follow-up work in the late 1970s. Exploration consisted of an initial small program of diamond core drilling and surface trenching (1968–1970), followed by the development of exploration adits and drives. A more substantial program of diamond core drilling was completed in the 1970s. In all, a total of 51 diamond drillholes were completed for approximately 8,000 m. Several IP programs were also completed in this period with chargeability anomalies extending from the Veovača deposit to the Mekusae and Smailova areas to the east-southeast.

Adriatic completed 16 new drillholes in 2017 for 1,379 m to supplement and confirm some of the 48 historical drillholes, areas of adit sampling, and open pit grade control samples. During 2019 an additional 17 drill holes were undertaken at the Veovača deposit for a total advance of 2,342m with the intention to include both base and precious metals into an updated Mineral Resource estimate. A plan map of the completed holes as of 22 July 2019 is shown in Figure 2.

Figure 2: Plan Map showing the location of drill holes completed within the Veovača deposit.

Exploration activities in the Rupice area commenced in 1952 and continued intermittently until 1990, initially focusing on barite mineralisation and later on the polymetallic mineralisation.

Exploration activities included geophysics (IP – chargeability), costeans, exploration adits, and drilling. These indicated the presence of polymetallic mineralisation at Rupice and Jurasevac-Brestic. Chargeability anomalies extend to the south-east between Rupice and Jurasevac-Brestic but these trends have not been drill-tested. Other anomalies in the area (at Upper Borovica and Lower Borovica localities) have not been followed up by drilling either, though these are outside the Adriatic Exploration Concession. During this period Energoinvest completed over 60 holes for 7,000 m targeting Rupice, Borovica and Jurasevac-Brestic.

Adriatic completed IP (gradient array) programs covering the majority of the Rupice deposit and part of the regional prospect area in 2018. The Rupice and Jurasevac prospects are highlighted by moderate to high chargeability anomalies. In addition, 5 km to the southwest of Jurasevac, there is a parallel chargeable anomaly, within the regional prospect area.

Adriatic completed eight holes at Rupice for 1,458 m in 2017. Drilling targeted down plunge of the mineralisation to confirm historical results and assay additional elements, including copper, gold and silver (figure 3). From this work, Adriatic was able to conclude that:

* Mineralisation is open at depth and along strike.
* Despite historical irregular sampling for gold, copper and silver, all the Adriatic significant intervals assayed significant grades for these metals that correlate with the zinc and lead mineralisation.
* Significant exploration potential exists adjacent and down dip to previous significant drill intersections with the deepest drillhole by Adriatic, BR-1-17 intersecting 64 m at 5.1% lead, 8.5% zinc, 1.0% copper, 374 g/t silver and 2.3 g/t gold.

Figure 3: Plan view of plunging mineralised zone with Adriatic drilling at Rupice (the grid is MGI 1901/Balkans Zone 6)

Based on the conclusions of the 2017 exploration programme Adriatic commenced a targeted 15,000m infill drill programme at Rupice on 7 May 2018. Drilling was split into three phases to test several key anomalies at Rupice and Jurasevac-Brestic. The first phase focusing on targets in the Rupice north zone and following the northerly extensions over 220m of strike length (up to the current licence boundary), including the expected down dip and down plunge extensions of the mineralisation.

The northerly extension of Rupice was where both historical and 2017 drilling intersected high grades of base and precious metals, and also where geophysics had shown possible extensions of the mineralisation to the northwest and southeast. Phase 2 targeted the southerly extension of the Rupice mineralisation, including the down-dip and up plunge extensions of the mineralisation over a strike length of 100m. Phase 3 drilling targeted the area near the historical Jurasevac-Brestic underground workings and exploration drives. From this work, Adriatic was able to define a maiden MRE resource for the Rupice project. Drilling to the north in the extended Rupice Licence area continues to intersect mineralisation which remains open down-plunge to the north.

Mineral resource estimates

In July 2019 the Company released an updated mineral resource estimate for the Veovača deposit. The mineral resource estimate was calculated using data comprising 51 historical drillholes, adit sampling and open pit grade control samples, and 33 drillholes from Adriatic's 2017 (16 holes) and 2019 (17 holes) programs. These were used to define the geometry of the mineralisation. Several of Adriatic's drillholes twinned historical holes whilst others infilled the historical drilling in areas of particular interest. The mineral resource estimate is presented below in Table 2.

Veovača Mineral Resources, 1 June 2019

JORC classification		Grades						Contained metal
	Tonnes (Mt)	Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)	Zn (kt)	Pb (kt)	BaSO4 (kt)	Au (koz)	Ag (Moz)
Indicated	5.3	1.6	1.0	16	0.1	50	83	55	860	14	9
Inferred	2.1	1.1	0.5	6	0.1	17	23	11	123	4	1
Total	7.4	1.4	0.9	13	0.1	41	106	66	984	18	10

Table 2 —————

Notes:

* Mineral Resource classifications are based on JORC Code definitions.
* A cut-off grade of 0.6% ZnEq has been applied.
* ZnEq was calculated using conversion factors of 0.80 for lead, 0.08 for BaSO4, 1.80 for gold and 0.019 for silver, and recoveries of 90% for all elements. Metal prices used were US\$2,500/t for zinc, US\$2,000/t for lead, US\$200/t for BaSO4, US\$1,400/oz for gold and US\$15/oz for silver.
* The applied formula was: ZnEq = Zn%* 90% + 0.8* Pb%* 90% + 0.08* BaSO4%* 90% + 1.8* Au(g/t)* 90% + 0.019* Ag(g/t)* 90%.
* Metallurgical recoveries of 90% have been applied in the metal equivalent formula based on recent testwork results.
* It is the opinion of Adriatic and the Competent Persons that all elements and products included in the metal equivalent formula have a reasonable potential to be recovered and sold.
* A bulk density was calculated for each model cell using regression formula BD = 2.70855 + BaSO4* 0.01487 + Pb* 0.03311 + Zn* 0.03493.
* Rows and columns may not add up exactly due to rounding.

In July 2019 the Company released a maiden mineral resource estimate for the Rupice deposit. The mineral resource estimate was calculated using data comprising 49 historical drillholes and 57 drillholes from Adriatic's 2017 (eight holes), 2018 (39 holes) and 2019 (10 holes) programmes. These were used to define the geometry of the mineralisation. Several of Adriatic's drillholes twinned historical holes, others infilled the historical drilling whilst most of the 2018 and 2019 drillholes extended the mineralisation both to the north and south. The mineral resource estimate is presented below in Table 3.

Rupice Mineral Resources, 1 June 2019

	Grades						Contained metal
Tonnes (Mt)	Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)	Cu (%)	Zn (kt)	Pb (kt)	BaSO4 (kt)	Au (koz)	Ag (Moz)	C (kt)
7.5	5.7	3.7	34	2.0	207	0.6	430	278	2,590	470	50	46 6
9.4	5.1	3.3	31	1.8	183	0.6	480	310	2,920	530	55	52
	1.9	2.5	1.6	18	0.9	86	0.3	50	30	330	60	5

Table 3

————— Notes:

^* Mineral Resource classifications are based on JORC Code definitions.

^* A cut-off grade of 0.6% ZnEq has been applied.

^* ZnEq – Zinc equivalent was calculated using conversion factors of 0.80 for lead, 0.08 for BaSO4, 1.80 for gold, 0.019 for silver and 2.40 for copper, and recoveries of 90% for all elements. Metal prices used were US\$2,500/t for zinc, US\$2,000/t for lead, US\$200/t for BaSO4, US\$1,400/oz for gold, US\$15/oz for silver and US\$6,000 for copper.

* The applied formula was: ZnEq = Zn%* 90% + 0.8* Pb%* 90% + 0.08* BaSO4%* 90% + 1.8* Au(g/t)* 90% + 0.019* Ag(g/t)* 90% + Cu%* 2.4* 90%.
* It is the opinion of Adriatic 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 testwork results.
* A bulk density was calculated for each model cell using regression formula BD = 2.88143 + BaSO4* 0.01555 + Pb* 0.02856 + Zn* 0.02012 + Cu* 0.07874 for the barite high-grade domain and BD = 2.76782 + BaSO4* 0.01779 + Pb* 0.03705 + Zn* 0.02167 + Cu* 0.07119 for the barite low-grade domain (the barite domains were interpreted using 30% BaSO4).
* Rows and columns may not add up exactly due to rounding.

Further exploration potential

Outside of known Veovača and Rupice deposits the concession area contains a number of other potential exploration targets. The Vareš mineral field occurs within a well-defined 20 km x 10 km corridor of prospective Triassic stratigraphy with numerous mineralised occurrences. The hydrothermal system driving the mineralisation may be of a Besshi style VMS origin suggesting that mafic units may occur deeper in the stratigraphy. VMS systems typically occur in clusters as appears to be the case in the Vareš mineral field, supporting the potential for further discoveries of base metal mineralisation.

The exploration activity for the Vareš Project can be approached on scales ranging from near mine, in mine and regional exploration activities along the 20 km strike length of the prospective Triassic stratigraphy. Notably, exploration within the regional prospect area outside of the three granted areas is limited to non-destructive exploration activities and is not covered by an exploration concession.

Adriatic has summarised the outcropping mineral occurrences and available historical exploration information and prioritised them. These mineral occurrences have not yet been explored with modern exploration techniques.

Preliminary metallurgical testwork results

On 25 September 2019 the Company released preliminary metallurgical testwork results and conducted a number of flotation tests bulk samples at Veovača and Rupice. All Rupice concentrates meet or exceed specifications at a range of European and Chinese smelters, and exceed specifications for barite.

Estimated payability adjusted recoveries from all concentrates from Rupice were as follows:

Ag	Au	Zn	Pb	Cu	BaSO4
92.6%	66.7%	81.7%	90.4%	82.7%	71.7%

Tests were done at three grind sizes, P80 60 micron, 45 micron and 40 micron, using increased/ decreased lime, sodium hydrosulphide, collector, copper collector, pH conditions and airflow against metal recoveries in the various concentrates. Flotation cleaner work and locked cycle testing has been done on the various test products. The testwork also shows that the proposed processing plant will be able to process ores from both Veovača and Rupice.

The results of the fourth locked cycle test using an average grade are as follows:

	Assay (%)				Recovery (%)
Product	Weight (%)	Cu	Pb	Zn	Fe	STOT	Cu	Pb	Zn	Fe	STOT
Cu/Pb Conc	7.0	6.52	44.2	10.7	4.06	22.1	82.7	90.4	14.5	10.0	11.0
Zn Conc	7.9	0.37	1.25	53.8	0.95	33.2	5.3	2.9	81.7	2.6	18.5
Py Conc	2.3	1.41	2.29	3.28	10.2	21.6	5.8	1.5	1.4	8.2	3.5
Ba Conc	42.7	0.029	0.17	0.11	0.67	13.9	2.2	2.2	0.9	10.0	42.0
Tails	40.1	0.056	0.26	0.19	4.92	8.75	4.0	3.0	1.5	69.2	24.9
Feed	100.0	0.55	3.43	5.19	2.85	14.1	100.0	100.0	100.0	100.0	100.0

Table 4

	Assay (%)				Recovery (%)
Product	Weight (%)	Au (ppm)	Ag (ppm)	As	Sb	BaSO4	Au	Ag	As	Sb	BaSO4
Cu/Pb Conc	7.0	13.9	3,549	0.79	3.78	4.01	47.3	83.7	62.1	90.6	0.6
Zn Conc	7.9	5.37	337	0.034	0.15	6.03	20.4	8.9	3.0	3.9	1.0
Py Conc	2.3	6.58	316	0.25	0.29	37.0	7.2	2.4	6.3	2.2	1.9
Ba Conc	42.7	0.38	9.50	0.010	0.007	84.8	7.9	1.4	4.8	1.0	79.8
Tails	40.1	0.89	26.8	0.053	0.016	19.0	17.2	3.6	23.9	2.2	16.7
Feed	100.0	2.07	298	0.089	0.29	45.4	100.0	100.0	100.0	100.0	100.0

Table 5

Whilst the above results will continue to be optimised, metal recoveries of 85–93% for copper, 90–94% for lead, 85–90% for zinc, 80–86% for barite, 90% for silver and 80% for gold are appropriate for mineral resource estimation purposes. In particular, additional work is required to estimate the impacts of blending the Veovača and Rupice ores.

Scoping Study

Adriatic released a Scoping Study on the Vareš Project on 19 November 2019 indicating an attractive, high return project. The Scoping Study outlined an operation with a plant throughput of 800ktpa producing multiple concentrates over a mine life at steady state of approximately 14.6 years. Ore will be supplied to the processing plant situated at Veovača from the higher-grade underground operation at Rupice for approximately the first 10 years, followed by mining of the open pit at Veovača.

Total production expected to be 495.0kt of zinc, 314.8kt of lead, 47.7kt of copper, 472koz of gold, 55.1koz of silver, 21.0kt of antimony and 3,190kt of barite in concentrates over the life of mine.

Total capital expenditure is estimated at US\$178.4 million, including a 30% contingency, with operating costs forecast to be US\$56.7 per tonne of ore milled.

Subject to the qualifications and assumptions contained in the Scoping Study, the Vareš Project is projected to deliver a post-tax net internal rate of return of 107.4% and a net present value of US\$916.6 million at a discount rate of 8%.

The Scoping Study project development schedule assumes the completion of a Pre-feasibility Study by early 2020 and a Feasibility Study by Q4 2020. Development approvals and investment permits will all be sought from the relevant Bosnian authorities in early 2020 with construction scheduled to commence in Q2 2021 before first production scheduled for Q2 2022.

To achieve the outcomes indicated in the Vareš Project Scoping Study, external funding will be required to finance the capital expenditure to construct the mine, grinding mill, project infrastructure and processing plant. It is anticipated that the finance will be sourced through a combination of equity and debt instruments from existing shareholders, new equity investment and debt providers.

Investors are referred to the risk factor set out on page 10 in relation to the Scoping Study, under the heading "Exploration and Development".

6. Strategy and Work Programmes

Adriatic has planned a systematic exploration program targeting the known deposits extensions and the prospective Triassic stratigraphy. Exploration activities will initially focus on key targets at Rupice and Veovača. Activities will include soil geochemistry, geological mapping, IP and gravity surveys followed by drilling on selected targets.

Based on the review of historical exploration data, Adriatic has identified various regional prospects which lie both within, and outside the existing "expanded" concession area. All the regional prospects lie within the prospective stratigraphy outlined in Figure 1. It is noted that Adriatic may not be successful in obtaining licences over this prospective ground.

Neither the Mining Act nor Concession Law regulate directly geological activities in the regional prospect area surrounding the existing Adriatic Exploration Concession. However, with the approval of either a private landowner or the competent state authority (for State-owned areas), it is possible to undertake limited exploration activities within the regional area if they are non-ground disturbing.

Adriatic intends, subject to securing the ongoing consent of competent state authority and/or private landowners, to conduct such non-ground disturbing work, including inter alia rock chip sampling, soil geochemistry, mapping and ground geophysics (IP) as part of the ongoing assessment of the potential of some of the regional prospects that lie outside the existing concession boundaries. Should Adriatic wish to extend its existing licence boundaries, it will need to continue its dialogue with the Ministry of Economy and take advice on the recommended process to obtain such an extension.

Figure 4: Vareš Project concession, prospects and stratigraphy (the grid is MGI 1901/Balkans Zone 6) Source: Adriatic

Adriatic intends to continue an aggressive exploration program both within its "extended" concession area to include deposit extensions and repetitions, off-mine exploration and district exploration with the latter to extend outside the concession areas of Rupice and Veovača. If permissable exploration will focus in order of scale and priority on the following:

* Complete geological mapping, interpretation and modelling in the prospect areas to improve understanding of mineralisation controls and targeting, integrated with drillhole logging, lithogeochemical data analysis and modelling, and geophysical targeting.
* Drilling to infill and grow the MREs at Rupice and Veovača and upgrade their current classification.
* Commence a drilling program at the Jurasevac and Brestic mineral occurrences where PDP3D geophysics has identified a chargeability anomaly offset from the underground exploration drives and extend this drilling to the northwest where another chargeability anomaly is located midway between the Jurasevac-Brestic workings and the Rupice deposit.
* Commence a detailed exploration program over the entirety of the Veovača North, Orti and Seliste prospects by way of:
- * data compilation;
* geology mapping, logging and interpretation for targeting, including structure, lithofacies and alteration;
* IP using either gradient array, PDP or PDP3D;
* soil geochemistry on a minimum 50 m x 50 m grid in areas of interest, in conjunction with mapping; and
* diamond drilling.
* Commence a detailed exploration program over the entirety of the Borovica corridor by way of:
- * data compilation;
- * geology mapping, logging and interpretation for targeting, including structure, lithofacies and alteration;
- * trenching and rock chipping of the adits, in conjunction with mapping; and
- * diamond drilling.
* Commence exploration of the Triassic stratigraphy between Rupice and Veovača subject to tenure using integrated geological, geochemical and geophysical targeting based on a welldefined targeting model.

Whilst exploration work will continue as outlined above, there will be ongoing study work taking place for metallurgical processing, hydrogeological, hydrological, geotechnical, mine design, tailings storage and environmental. This will culminate a Prefeasibility Study and ultimately a Feasibility Study and complete Environmental and Social Impact Assessment. The Prefeasibility Study is currently targeted to be completed in Q1 2020 with the Feasibility Study and an Environmental and Social Impact Assessment planned for Q4 2020.

The near-term plan is focused around the following targets for 2019/2020, which are identified in the flowchart below:

* Prioritising the continued exploration and growth of a high-grade resource base at Rupice;
* Development of an integrated plan that optimises project economics at both locations;
* Advancing the permitting status on a well-defined pathway towards exploitation; and
* Continued exploration on regional brownfield prospects to define further drill targets.

	Q1 2020	Q2 2020
RUPICE
Expansion Orilling
Expiloitation Permit
VEOVACA
Resource Upate
Expioitation Permit
EVALUATION
Metallurgy - Veovaca & Rupice		Denalled Variability for Feasibility Study.
Hydro & Geotechnical	Detailed Variability for Feasibility Study
Veovaca & Rupice - Scoping Study
FEASIBILITY
Environmental & Social Impact Assessment
Pre Feasibility Study
Definitive Feasibility
REGIONAL EXPLORATION
Borovica
Jurasevac-Brestic
Orti
West Veovaca
Regional Solls and Sediment Sampling

Figure 5: Planned work programs for 2019 and 2020

7. Reasons for Listing

The Directors expect that the dual listing will enable the Company to reach additional institutional investors in the UK and Europe to increase share trading liquidity and to further raise the profile of the Company and the Vareš Project.

8. Competition

The Directors believe that the primary competitors of the Group are companies currently producing base and precious metals that have the ability to expand their operations, and other companies developing new base and precious metals projects.

Once in production, the Vareš Project is expected to represent a relatively small component of the annual market for its key commodities for which supply is broadly diversified, with the possible exception of barite where the Vareš Project has the potential to represent a significant new source of supply to the market.

9. Employees

In the financial years ended 30 June 2019 and 30 June 2018, and the period from 3 February 2017 to 30 June 2017, the Group has employed, on average, and as at the Last Practicable Date employs the following numbers of people:

	Last Practicable Date	2019	2018	2017
Eastern Mining
Administrative staff	5	5	4	1
Exploration	16	16	10	4
Total Eastern Mining Adriatic	21	21	14	5
Directors	7	5	3	2
Administrative and management	4	4	2	1
Total Adriatic	11	9	5	3
Total Group	32	30	19	8

As at the Last Practicable Date, the Company retained the services of 3 consultants.

10. Incentive Schemes

The Company has in place three share option schemes, namely the Option Plan 2018, the Option Plan 2019 and the ESOP 2019. New Options will be granted under the Option Plan 2019 and the ESOP 2019. Further details of the share option schemes and the Options and Performance Rights granted under them are set out in paragraph 17 of Part XVII of this document.

11. Tax

Further details relating to taxation are set out in Part XV of this document, 'Taxation'.

12. Environmental and Social

Adriatic recognises the importance of ethical conduct, human rights and the Company's impact on the environment. The Company is committed to adhering to internationally recognised and accepted standards and responsible business conduct such as the UN Guiding Principles on Business and Human Rights and OECD Guidelines for Multinational Enterprises on Responsible Business Conduct.

To date Adriatic's activities have been primarily exploration and community engagement via public meetings. Recently a Community Liaison Office has been established in the town of Vareš, to facilitate less formal interactions between stakeholders and the Company, but as further project development plans are confirmed, the Community Liaison Office, coupled with active digital and social media campaigns, will expand the information outflows to the local community to facilitate discussion and cooperation.

In August 2019 the Company commissioned Critical Resource, an advisory firm that supports mining and energy companies to assess and manage political, environmental, social and governance and stakeholder issues, to complete a high level review and gap analysis of its early stage approach to ESG issues. Critical Resource provided an initial set of recommendations and a draft 'ESG framework' for strengthening the approach as the Vareš Project progresses and to conduct training on anti-bribery and corruption issues. The Company will be taking recommendations of the Critical Resource report and using them to inform in part the scope and process of the ESIA.

The Company has engaged Wardelll Armstrong International to conduct a full Equator Principles compliant ESIA which commenced in Q4 2019. This ESIA will incorporate the Bosnia & Herzegovina requirements for the Environmental Impact Survey, which was submitted to the Federal Ministry of Environment and Tourism in October 2019, as well as a broader scope to align with Company policies, the Equator Principles (2013), IFC Performance Standards (2012) and EBRD's Performance Requirements (2014).

13. Insurance

During the construction phase of the Vareš Project, should a development decision be taken, and following the commencement of operations at the Vareš Project, the Group's operations will be subject to numerous development, construction and operating risks normally associated with mining exploration, development, construction and production activities. The Directors believe that the Group's existing insurance coverage is reasonable to cover all general material risks associated with the Group's current operations, however additional insurance will be put in place as development activities increase.

14. Dividend policy

The Company has yet to develop its dividend policy and the funding requirements and expected time for the further development, construction and commissioning of the Vareš Project may restrict the Company in relation to when it will be in a position to pay dividends. Any decision to declare and pay dividends will be made at the discretion of the Board and will depend on, among other things, the Group's results of operations, financial condition and solvency and distributable reserves tests imposed by law and such other factors that the Board may consider relevant.

PART VIII

DIRECTORS, SENIOR MANAGERS AND CORPORATE GOVERNANCE

1. THE DIRECTORS

Peter Bilbe, B. Eng (Mining) (Hons) (age 69 (Non-Executive Chairman)

Mr Bilbe is a mining engineer with 40 years Australian and international mining experience in gold, base metals and iron ore at the operational, CEO and board levels. Mr Bilbe is currently Non-Executive Chairman of Independence Group NL and since 2009 has overseen its growth from operating a single mine to a A\$3.5 billion diversified gold and base metals mining and exploration company. Mr Bilbe is also Non-Executive Chairman of Intermin Resources Ltd, an emerging gold developer.

Peter Bilbe was appointed as the Non-Executive Chairman of the Company on 16 February 2018 and serves as Chair of the Remuneration Committee and of the Nomination Committee.

Paul Cronin, B. Com & MBA (age 45) (Managing Director & Chief Executive Officer)

Mr Cronin is a unique resource finance specialist, with significant experience in equity, debt and mergers and acquisitions within the sector. As Chief Executive Officer of ASX Listed Anatolia Energy, Paul oversaw two successful and oversubscribed capital raisings, steering the stock to be the best performing uranium stock globally during his time with the company, and prior to its sale at a significant premium to its market capitalization. Prior to Anatolia, Paul was Vice President at the highly-regarded resource fund, RMB Resources where he originated, structured and managed several debt and equity investments on behalf of the fund. Paul is currently Chief Executive Officer of ASX & TSX listed Black Dragon Gold Corp., and Non-Executive Director of Global Atomic Corporation.

Paul Cronin was appointed as a Director of the Company on 3 February 2017.

Julian Barnes, Bsc (Hons) (age 65) (Non-Executive Director)

Dr Barnes is a geologist with extensive experience in major exploration and development projects. Previously, he was Executive Vice President Dundee Precious Metals where he led exploration, project acquisition, and due diligence with a strong focus on Balkan mining & development.

He founded and led Resource Service Group for nearly two decades, which ultimately became RSG Global and has since been sold to Coffey Mining. He is also a Non-Executive Director of Thor Explorations Ltd, a company listed on the Toronto Stock Exchange (Venture Exchange) and Zinc Of Ireland NL, a company listed on the Australia Securities Exchange.

Julian Barnes was appointed as a Director of the Company on 16 February 2018 and serves as a member of the Audit and Risk Committee and the Nomination Committee.

Michael Rawlinson (age 50) (Non-Executive Director)

Mr Rawlinson was the Global Co-Head of Mining and Metals at Barclays investment bank between 2013 and 2017 having joined from the boutique investment bank, Liberum Capital, a business he helped found in 2007.

Mr Rawlinson is currently a Non-Executive Director of Hochschild Mining Plc and Capital Drilling Limited and previously served as a Non-Executive Director of Talvivaara Mining Company Plc between April 2012 and November 2013.

Mr Rawlinson was appointed to the Board on 4 March 2019 and serves as a Chair of the Audit and Risk Committee and a member of the Remuneration Committee.

Milos Bosnjakovic (age 61) (Non-Executive Director)

Mr Bosnjakovic is a dual national of Australia and Bosnia Herzegovina and was the co-founder of ASX-listed Balamara Resources Limited. He has significant experience in mineral projects in the region and is a qualified lawyer with extensive experience in the Former Yugoslav Republics, Australia and New Zealand. Mr Bosnjakovic is currently engaged as consultant to Adriatic, responsible for government and regulatory relations, and will remain in that important role.

Mr Bosnjakovic was appointed to the Board on 16 July 2018 and serves as a member of the Remuneration Committee.

John Richards (age 59) (Non-Executive Director)

Mr Richards is an economist with more than 35 years' experience in the resources industry. During this time he has held strategy and business development positions within mining companies as well as in investment banks and private equity groups. He has been involved in a wide range of mining M&A transactions in multiple jurisdictions.

Mr Richards is currently a non-executive director of Sheffield Resources Ltd and Saracen Mineral Holdings Ltd.

Previously, Mr Richards was Group Executive (Strategy and Business Development) at Normandy Mining Ltd, Head of Mining and Metals Advisory (Australia) at Standard Bank, Managing Director at Buka Minerals Ltd and Operating Partner at Global Natural Resources Investments. Mr Richards holds a B Econ (Hons) from the University of Queensland.

John Richards was appointed as a Director of the Company on 11 November 2019 and serves as a member of the Audit and Risk Committee.

Sandra Bates, B. Com. & LL. B. (Hons.) (age 46) (Non-Executive Director)

Ms Bates is an international corporate lawyer with over 20 years' experience advising management teams and boards of both listed and private companies in the UK and internationally. She is a specialist in corporate finance, cross-border M&A and corporate law and brings extensive experience of guiding clients in the natural resources sector through complex negotiations.

Originally from Australia, Sandra started her career in London at Freshfields Bruckhaus Deringer LLP in 1999 and subsequently developed her international M&A skills at Skadden, Arps, Slate, Meagher & Flom LLP and Stikeman Elliott (London) LLP where she became a partner in 2011. In 2018, Sandra joined Fladgate LLP as a partner in the corporate finance team where she is a mining and metals sector expert. Sandra is also a member of Women in Mining (UK).

Sandra Bates was appointed to the Board on 11 November 2019 and serves as a member of the Nomination Committee.

Director remuneration

Details of the terms of engagement and remuneration packages of the Directors is set out in paragraphs 15.13 and 15.14 of Part XVII of this document.

2. SENIOR MANAGERS

Graham Hill – Chief Operating Officer

Mr Hill is an experienced mining engineer and was previously Chief Executive Officer of Silver Bear Resources Plc where he took the company from exploration through to production, overseeing the development of a remote underground mining operation in Siberia. Mr Hill has successfully overseen the evaluation and development phases for multiple mining operations in Africa and Central Asia during his 35 year career, which commenced with Anglo American Plc, and where he was later accepted into the company's renowned management development program.

Graham Hill was appointed as Chief Operating Officer on 23 April 2019.

Sean Duffy, MBA, Grad Cert. in Business Marketing – Chief Financial Officer & Joint Company Secretary

Mr Duffy brings with him more than 20 years of international finance experience in the mining industry, including key positions with BHP Billiton and other AIM/ASX listed companies. Mr Duffy was appointed as Chief Financial Officer and Company Secretary on 17 November 2017.

Gabriel Chiappini – Joint Company Secretary

Mr Chiappini is an experienced ASX director and has been active in the capital markets for 17 years. He has assisted in raising over A\$450 million and has provided investment and divestment guidance to a number of companies, and has been involved with 10 ASX IPOs in the last 12 years. He is a member of the Australian Institute of Company Directors and Chartered Accountants Australia and New Zealand. Mr Chiappini is a director of Black Rock Mining Limited and Eneabba Gas Limited.

Adnan Teletovic, B. Eng (Hons.) – General Manager, Eastern Mining

Dr Teletovic is a dual Bosnian-Australian national with extensive experience in the mining industry having previously held senior positions at Kalgoorlie Consolidated Gold Mines Pty Ltd, BHP Billiton Plc and the Prevent Group, one of Bosnia's largest diversified industrial corporations. Dr Teletovic has a Bachelor of Engineering (Hons.) from Victoria University of Technology, a PhD from Deakin University and has significant experience in not only general management but also a track record in managing large capital mining projects in the Australian mining industry.

3. CORPORATE GOVERNANCE

Board of directors

Members and responsibility

The Board currently comprises one executive director, Paul Cronin, and six non-executive directors. The Company considers Michael Rawlinson and Sandra Bates to be independent non-executive directors under the ASX Principles and Recommendations however such persons are not considered independent under the QCA Code.

The Board is responsible for evaluating and setting the strategic direction for the Group, establishing goals for management and monitoring the achievement of these goals. The Managing Director and Chief Executive Officer is responsible to the Board for the day-to-day management of the Group.

The Board derives its authority to act from the Articles and the Companies Act.

Specific responsibilities reserved to the Board include:

* driving the strategic direction of the Company, ensuring appropriate resources are available to meet objectives and monitoring management's performance;
* ensuring a high standard of corporate governance practice and regulatory compliance and promoting ethical and responsible decision making;
* reviewing and ratifying systems of audit, risk management and internal compliance and control, codes of conduct and legal compliance to minimise the possibility of the Company operating beyond acceptable risk parameters;
* appointment, and where necessary, the replacement, of the Managing Director/Chief Executive Officer and other senior executives and the determination of their terms and conditions including remuneration and termination and approving the Company's overall remuneration framework;
* monitoring the timeliness and effectiveness of reporting to Shareholders;
* approving and monitoring the progress of major capital expenditure, capital management and significant acquisitions and divestitures;
* approving and monitoring the budget and the adequacy and integrity of financial and other reporting such that the financial performance of the company has sufficient clarity to be actively monitored and approving the annual, half yearly and quarterly accounts. Recommending to shareholders the appointment of the external auditor as and when their appointment or re-appointment is required to be approved by them (in accordance with the applicable listing rules and regulatory requirements); and
* approving decisions affecting the Company's capital, including determining the Company's dividend policy and declaring dividends.

Frequency of meetings

The Board will hold quarterly meetings and will hold additional meetings as and when required.

Corporate Governance framework

The Board is responsible for the corporate governance of the Company, and has developed policies to ensure that an appropriate level of corporate governance is in place. The Company's corporate governance system is reviewed regularly by the Board to ensure that it fulfils the needs of Shareholders.

As the Company is seeking a Standard Listing, the Company is not required to comply with the provisions of the UK Corporate Governance Code. Nevertheless, the Directors are committed to maintaining high standards of corporate governance as detailed in the Company's corporate governance charter and propose, so far as is practicable given the Company's size, nature, and stage of development to comply with the provisions of the QCA Code. At present, the Directors acknowledge that full compliance with certain provisions of the QCA Code may be delayed until such time as the Directors are able to fully implement them. In particular, action will be required in the following areas:

* The QCA Code recommends that at least two non-executive directors should be independent. Although the QCA Code notes that independence is a board judgement, the QCA Code recommends that non-executive directors should not normally have a significant interest in a company's share option scheme. Of the Company's current non-executive directors, each of Peter Bilbe, Julian Barnes, Michael Rawlinson, Milos Bosnjakovic, John Richards and Sandra Bates have been granted Options. Given the Company's size, stage of development and level of financial resources, the Company considered it appropriate to grant options to such directors in order to secure their services (in lieu of paying greater cash fees) and has, in accordance with the ASX Listing Rules, sought shareholder approval for the grant of Options to Directors.
* The Company does not currently have a senior independent director. Accordingly, the Company does not comply with the QCA Code recommendations regarding board composition. Michael Rawlinson acts as the Company's senior non-executive director, however he is not considered to be independent due the Options granted to him. As the Company grows it is anticipated that the Board will seek to appoint additional independent directors, one of whom will be appointed as a senior independent director.

Given the Company is listed on the ASX, the Board of Directors of the Company is responsible for establishing the corporate governance framework of the group having regard to the ASX Principles and Recommendations. The Board has adopted a corporate governance framework, based upon those Principles and Recommendations deemed appropriate for the Company, which the Board considers to be suitable given the size, history and strategy of the Company. However, the Company departs from certain Principles and Recommendations as determined by the Board. The ASX Listing Rules require companies to either adopt the ASX Principles and Recommendations or to explain why they have not adopted a recommendation if they consider it inappropriate in the company's circumstances. Information about the Company's corporate governance policies is accessible on the Company's website at https://www.adriaticmetals.com/the-business/.

Committees

The standing committees of the Board are currently constituted as follows:

Committee	Chair	Members
Audit and Risk Committee	Michael Rawlinson	Michael Rawlinson Julian Barnes John Richards
Remuneration Committee	Peter Bilbe	Peter Bilbe Michael Rawlinson Milos Bosnjakovic
Nomination Committee	Peter Bilbe	Peter Bilbe Julian Barnes Sandra Bates

Audit and Risk Committee

The Audit and Risk Committee is to assist the Board in monitoring and reviewing any matters of significance affecting financial reporting and compliance. The committee will meet at least twice each financial year. The committee composition requirements which the Board must strive towards include (amongst other items), that the committee must comprise at least three members, all members must be non-executive directors, a majority of the members must be independent nonexecutive directors and the chairman of the Board must not chair the committee.

Remuneration Committee

The Remuneration Committee is to assist the Board in monitoring and reviewing any matters of significance affecting the remuneration of the Board and employees of the Company. The committee will meet at least twice per year. The committee composition requirements which the Board much strive towards include (amongst other items), that the committee must comprise at least three nonexecutive directors, the majority of whom must be independent and the committee will be chaired by an independent non-executive director.

Nomination Committee

The Nomination Committee is to lead the process for the Board in monitoring and reviewing any matters of significance affecting the composition of the Board, in particular making recommendations to the Board to achieve the optimal composition. The committee will meet at least twice per year. The committee composition requirements which the Board must strive towards include (amongst other items), that the committee must comprise at least three non-executive directors, the majority of whom must be independent and the Board shall appoint the chairman of the committee who shall be the chairman of the Board or an independent non-executive director.

Securities trading policy

In order to comply with the Market Abuse Regulations and DTRs and the ASX Listing Rules, the Company will adopt a Securities Trading Policy in relation to the Ordinary Shares, CDIs and other securities in the Company immediately prior to Admission.

The Securities Trading Policy applies to PDMRs and their associates and employees and consultants of the Company. Under the Securities Trading Policy, PDMRs and their associates and employees and consultants are prohibited from dealing in the Company's securities if they have in their possession information that they know, or ought reasonably to know, is inside information. The Securities Trading Policy also provides prescribed closed periods during which PDMRs and their associates and employees and consultants are prohibited from dealing in the Company's securities. PDMRs and their associates and employees and consultants must obtain written clearance from an approving officer prior to any dealings in the Company's securities.

Continuous disclosure policy

Immediately prior to Admission, the Company will adopt a Continuous Disclosure Policy to ensure that the Company, as a minimum: (a) complies with its continuous disclosure obligations under the ASX Listing Rules, MAR and the DTR as applicable to the Company; (b) provides shareholders and the market with timely, direct and equal access to information issued by the Company; and (c) promotes investor confidence in the integrity of the Company and its securities.

PART IX

INDUSTRY OVERVIEW

Industry Overview

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The Rupice and Veovača projects are based on polymetallic orebodies, containing seven identified economic commodities; zinc, lead, silver, gold, copper, antimony and barite.

The prices for these commodities as at 5 December 2019 and average prices for the years 2015 – 2018 and year to date 2019 are set out in the following table:

Unit	2015	2016	2017	2018	YTD-2019	As at 5 Dec 2019
US\$/t	1,929	2,096	2,894	2,920	2,567	2,255
US\$/t	1,786	1,871	2,317	2,241	2,007	1,893
US\$/oz	16	17	17	16	16	17
US\$/oz	1,160	1,250	1,259	1,269	1,388	1,476
US\$/t	5,497	4,865	6,165	6,520	5,995	5,855
US\$/t	194	187	179	180	n/a	n/a
US\$/t	7,318	6,541	8,265	8,254	6,673	6,000

Sources: LME, FactSet, US Geological Survey, Bloomberg

Using the life of mine payable metal production targets from the Scoping Study the economic value of the Rupice and Veovača orebodies is distributed approximately as follows:

Zinc

Zinc is primarily used as a coating to protect iron and steel from corrosion in a process called galvanising. It is also used to make bronze, brass and other alloys. Other uses for zinc are in rubber, chemical, paint and agricultural industries. It is commonly found as a trace element in the human body, and is essential for growth and development of humans, animals and plants. Primary substitutes for zinc are plastics and aluminium for galvanising, with multiple substitutes for other uses.

Global zinc production in 2018 was estimated at 13.42 million tonnes, compared to global consumption estimated at approximately 13.74 million tons, resulting in a slight deficit. Approximately 33% of 2018 global mine production is from China, with other major producing countries including Peru (13%), Australia (6%), India (6%) and the USA (6%).

Lead

Lead is a corrosion resistant, dense material that has been used for thousands of years. Early uses of lead were for building materials and pipes, ammunition, and pigments for paints. More recently the rise in the automotive industry in the twentieth century increased demand for lead in lead-acid storage batteries and as an additive for petrol. More recently, environmental regulations have changed the demand profile for lead, which is now mostly used in storage batteries (88% of consumption) for vehicles, backup power sources for essential services, and load-levelling systems for utility companies.

Global lead production in 2018 was estimated at 11.59 million tonnes, of which 4.4 million tonnes came from mine production. Production from China accounted for 48% of total mine production. Secondary lead production is mostly recycling from old lead-acid batteries. Consumption in 2018 was estimated at 11.71Mt, resulting in a slight deficit.

Silver

Silver has been used as currency and for the production of ornaments and jewellery for thousands of years. More recently, silver's optical reflectivity, thermal and electrical conductivity, catalytic, antibacterial, and photosensitive properties have led to multiple applications including photography, mirrors, healthcare, and electronics.

The world's largest producer of silver is Mexico, producing approximately 23% of world mined production in 2018. Other large producers are Peru (16%) and China (13%). Silver is mostly produced as a by-product from polymetallic mines. The typical substitute for silver is stainless steel, for the production of cutlery and utensils. Increased digital photography has reduced overall demand for traditional photographic uses.

Gold

Gold has been a symbol and store of wealth since the start of recorded history. A dense and malleable metal, gold has been used for jewellery, currency, and art throughout history. The gold standard was used as a monetary policy in the 19th and 20th centuries before being replaced by a fiat currency system in 1971. Today, gold is mostly used either as jewellery or as an investment, representing a long term stable source of value, however the metal has multiple industrial uses, primarily in electronics and circuitry.

Approximately 3,260 tonnes of gold was produced in 2018, the largest proportion coming from China (12%). Other large gold producing countries include Australia (10%), Russia (9%), USA (6%) and Canada (6%).

Copper

Copper is globally the third most used metal, after steel and aluminium, and is primarily used for its superior electrical conductivity, with over half of copper produced is for electrical uses. Copper in the form of a wire or a cable can be used in power generation and transmission, telecommunications, and circuitry. It is also used in industrial processes which require thermal conductivity, ease of machining, strength and malleability, and corrosion resistant in the building construction, consumer durables and utilities sectors. The arrival and rapid growth in electric vehicles has been another source of new demand in recent years.

The largest copper mines in the world are typically large open pit operations mining porphyry copper deposits. Mine production is dominated by Latin America; Peru and Chile comprise c.40% of global primary production. Total world mined production in 2018 was estimated at 21 million tonnes.

Antimony

Antimony is a minor metal primarily used as a fire retardant in adhesives, paints, plastics, sealants, and household furnishings as antimony trioxide, and in industrial and military applications in alloys to add strength, hardness and resistance to corrosion. Antimony is the on the European Union and United States supply 'at risk' watchlists as a strategic metal and was included on the 2018 United States list of critical metals. China hosts approximately 32% of global resources and produces approximately 71% of the world supply and has in place export quotas. Remaining production is largely from Australia and Bolivia.

Barite

Barite has a particularly high specific gravity for a non-metal, of 4.5. The majority of industrial uses for the mineral utilise that trait. Barite is primarily used as a weighting agent in drilling fluids for oil and gas wells. Additionally, barite is used as a filler or weighting agent in paints, plastics and rubber. The mineral also has some usage in the automotive industry and is often mixed into highdensity concrete for radiation shielding.

China produces approximately one third of the global mined supply of barite, India is the next largest producer with 21% market share. Minerals such as ilmenite and hematite have been trialled as substitutes for drilling mud but have had limited penetration.

PART X

BOSNIA & HERZEGOVINA OVERVIEW AND REGULATORY FRAMEWORK

Country Overview

Bosnia and Herzegovina is located in south-eastern Europe, bordered by Croatia, Serbia and Montenegro, having declared independence from the former Yugoslavia on 3 March 1992. The capital, Sarajevo, has a population of approximately 343,000 out of a total country population of approximately 3.3 million.

The 1992 independence referendum was boycotted by ethnic Serbian citizens, and led to armed conflict between 1992 and 1995 as part of the breakup of Yugoslavia. The conflict was primarily along ethnic and religious lines, between the Orthodox Bosnian Serbs, the Roman Catholic Croats and the Muslim Bosniaks.

The Bosniaks are the largest ethnic group in Bosnia and Herzegovina, comprising 50.1% of the population, followed by Serbs (30.8%) and Croats (15.4%). There are three official languages: Bosnia, Serbian, and Croatian.

The country is mostly landlocked, with a narrow 20km coastline at the Adriatic Sea. The terrain consists of mountains and valleys, with hot summers and cold winters. Areas of higher elevation tend to have more extreme cold weather.

A peace agreement was signed in 1995, creating both a multi-ethnic central government in charge of foreign and fiscal policies, and a second tier of government comprising two approximately equal areas: the predominantly Bosniak-Croat 'Federation of Bosnia and Herzegovina and the majority Bosnian-Serb 'Republika Srpska'.

Bosnia and Herzegovina has a three member presidency on a rotation basis, comprising one Bosniak and one Croat elected from the Federation of Bosnia and Herzegovina and one Serb elected from the Republika Srpska.

The country's economy is dominated by exports of commodities (metals, clothing and wood products). The currency is the Convertible Mark, which is pegged to the Euro at a rate of 1: 1.95583. Bosnia and Herzegovina applied for membership of the European Union in 2016 and is considered a 'potential candidate' for EU membership. Presently, the country has a Free Trade Agreement with the EFTA states (Switzerland, Iceland, Liechtenstein, and Norway), is a member of the Central European Free Trade Agreement and has a Stabilisation and Association Agreement with the European Union. Bosnia and Herzegovina is not currently a member of the World Trade Organisation but is well advanced on the path to accession.

Bosnia and Herzegovina has good levels of infrastructure; with four main international airports, five international road connections, and rail links to neighbouring Croatia and Serbia.

Current environmental challenges the country is facing include air pollution, deforestation, wastewater.

Regulatory Framework

The exploration and exploitation of minerals in Bosnia and Herzegovina is primarily governed by the following laws:

* the Law of Geological Explorations (No. 09/10 and 14/10 of 2010), which regulates geological exploration and related activities and research;
* the Law of Mining (No. 26/10 of 2010), which regulates exploitation, extraction and processing of minerals; and
* the Law on Concessions (No. 40/02 of 2002), which regulates the grant of concessions by the Federal Government of Bosnia and Herzegovina or by individual cantons of Bosnia and Herzegovina.

The above laws are applied at both the federal level and by the individual cantons, and are supported by various state, Federal, cantonal and municipal laws relating to environmental protections, planning, forestry, water, property, employment and taxation. The government authority with overall responsibility for exploration and exploitation of minerals is the Ministry of Energy, Mining and Industry.

Before undertaking any exploration or exploitation activities (under permits obtained from the Ministry) a concession agreement must be entered into between the concessionaire and the relevant canton. Although the federal government has authority, pursuant to the Law on Concessions, to grant concessions, to date, none have been granted by the federal government and have instead been granted by individual cantons, subject to the concessionaire satisfying the technical and financial qualifying criteria.

Once the concession agreement has been granted by the relevant canton, the concessionaire may apply to for exploration and exploitation permits in accordance with the Law of Geological Explorations and the Mining Law, respectively.

A concessionaire holding an exploration permit, may apply and receive an exploitation permit after submitting technical documentation and satisfying other technical conditions as required by the Mining Law; following a successful application, an exploitation permit will then be issued.

The duration of exploration and exploitation rights or phases are not defined by the Law of Geological Explorations or Law on Concessions, but are set out in a concession agreement and subject to agreement with the canton. Likewise, minimums work programs, expenditure on exploration activities, and royalty rates and tariffs are not fixed by the legislation but are specified in the concession agreement.

PART XI

HISTORICAL FINANCIAL INFORMATION

Please refer to the Appendix to this document for the audited financial reports of the Group for the financial years ended 30 June 2019 and 30 June 2018, and for the period from 3 February 2017 to 30 June 2017.

Part 1 of the Appendix contains the Company's consolidated audited financial statements for the financial year ended 30 June 2019.

Part 2 of the Appendix contains the Company's consolidated audited financial statements for the financial year ended 30 June 2018.

Part 3 of the Appendix contains the Company's consolidated audited financial statements for the period from 3 February 2017 to 30 June 2017.

PART XII

OPERATING AND FINANCIAL REVIEW

The following discussion and analysis is intended to assist in the understanding and assessment of the trends and significant changes in the Group's results of operations and financial condition during Historical Financial Information Period. Historical results may not be indicative of future financial performance. Forward-looking statements contained in this review that reflect the current view of management involves risks and uncertainties and are subject to a variety of factors that could cause actual results to differ materially from those contemplated by such statements. Factors that may cause such a difference include, but are not limited to, those discussed in "Forward-Looking Statements" and "Risk Factors". In this document the consolidated financial statements presented are those of the Group. This discussion is based on the consolidated financial statements of the Group and should be read in conjunction with its consolidated financial statements and the accompanying notes contained in the Appendix to this document, as referred to in Part IX of this document, 'Historical Financial Information' and with the information relating to the business of the Group included elsewhere in this document. Unless otherwise indicated, all of the financial data and discussions thereof are based upon financial statements prepared in accordance with IFRS. Investors should read the whole of this document and not rely just on summarised information.

1. Overview

The principal activity of the Group during the Historical Financial Information Period was exploration on the Group's licences that comprise the Vareš Project and advancing the Vareš Project through its study phase. The Vareš Project comprises a historic open cut zinc/lead/silver/gold and barite mine at Veovača and Rupice, an advanced proximal deposit which exhibits exceptionally high grades of base and precious metals. The Group intends to expand the current JORC resource at Veovača and to complete in-fill and expansion drilling programme at the high-grade Rupice deposit, followed by the completion of a pre-feasibility study and ultimately bring the Vareš Project into production once the a feasibility study has been completed, the required mining licences have been granted, and development funding has been secured.

In the Historical Financial Period the Group did not record any revenue (aside from interest income from cash held) because it was primarily in the exploration and study phase of operations.

2. Summary of key financial risks

The Group's historical and expected activities expose it to a variety of financial risks including availability of capital, market, commodity, credit, liquidity, foreign exchange and interest rate risks. Further information can be found in Part 2 of this document.

3. Use of estimates and judgements in applying the Company's accounting policies

The preparation of financial statements in accordance with IFRS requires Management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities, income and expenses, and the disclosure of contingent liabilities. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In particular, the following is an area where particular judgement is required:

Exploration and evaluation expenditure

Exploration and evaluation activity involves the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation activity includes:

* Researching and analysing historical exploration data

* Gathering exploration data through geophysical studies
* Exploratory drilling and sampling
* Determining and examining the volume and grade of the resource
* Surveying transportation and infrastructure requirements
* Conducting market and finance studies

Licence costs paid in connection with a right to explore in an existing exploration area are capitalised and amortised over the term of the permit.

Once the legal right to explore has been acquired, exploration and evaluation expenditure is charged to profit or loss as incurred, unless the Group concludes that a future economic benefit is more likely than not to be realised. These costs include directly attributable employee remuneration, materials and fuel used, surveying costs, drilling costs and payments made to contractors.

In evaluating whether the expenditures meet the criteria to be capitalised, several different sources of information are used. The information that is used to determine the probability of future benefits depends on the extent of exploration and evaluation that has been performed.

4. Significant factors affecting results of operations

The Directors consider that the following factors are those, which are most likely to influence the financial position of the Group and results of operations:

Commodity prices

The Group aims to generate the majority of its income from the sale of zinc, lead, gold, silver, copper and barite from the Vareš Project following its development. The Vareš Project comprises a historic open cut zinc, copper, lead, gold, silver, antimony and barite mine at Veovača and Rupice, an advanced proximal deposit which exhibits high grades of base and precious metals.

It is intended that the commodities will be sold primarily via marketing agreements with traders and/or end-users. As a result, the future income of the Group is directly related to the market prices for the suite of commodities produced. Commodity prices can fluctuate and are affected by factors outside of the Group's control, including the balance of global supply and demand.

For further information on the commodity markets relevant to the Group see Part IX. A summary of the average prices of zinc, copper lead, gold, silver, antimony and barite for the previous four years to 31 December 2018 and the six months ended 30 June 2019 is set out below:

Price History	Unit	2015	2016	2017	2018	YTD-2019	As at 5 Dec 2019
Zinc	US\$/t	1,929	2,096	2,894	2,920	2,568	2,255
Lead	US\$/t	1,786	1,871	2,317	2,241	2,007	1,893
Silver	US\$/oz	16	17	17	16	16	17
Gold	US\$/oz	1,160	1,250	1,259	1,269	1,388	1,476
Copper	US\$/t	5,497	4,865	6,165	6,520	5,995	5,855
Barite	US\$/t	194	187	179	180	n/a	n/a
Antimony	US\$/t	7,318	6,541	8,265	8,254	6,673	6,000

————— Sources: LME, FactSet, US Geological Survey, Bloomberg Table 7

Exploration and evaluation results

Results from the Group's current and future exploration and evaluation programmes at the Vareš Project will be important in determining the Group's future strategy and allocation of resources.

Operating costs

The Group prepares budgets and estimates of operating costs for its operations and its main costs relate to material costs, workforce and contractor costs. The development of mineral projects can be subject to substantial expenditures and the fluctuation of costs over time, and development projects may be prone to material cost overruns. The Group's actual costs may vary from estimates for a variety of reasons, including: short-term operating factors; revisions to development plans; risks and hazards associated with mining; natural phenomena, such as inclement weather conditions, water availability and unexpected labour issues, labour shortages, strikes or community blockades. The Group's ability to develop the Vareš Project and its long-term profitability will, to a significant extent, be dependent on its ability to maintain cost effective operations.

Liquidity and financing

Disruptions in the capital and credit markets as a result of uncertainty, geopolitical events, changing or increased regulation of financial institutions, reduced alternatives or failures of significant financial institutions could adversely affect the Group's access to the liquidity needed for its business in the longer term. Failure to obtain such additional funding could result in the delay or indefinite postponement of the exploration and development of the Vareš Project.

Outside of the Working Capital Period, the Group may incur substantial debt from time to time to finance working capital, capital expenditures, investments or acquisitions or for other purposes. If the Group does so, the risks related to the Group's indebtedness could intensify, including: (i) increased difficulty in satisfying existing debt obligations; (ii) limitations on the ability to obtain additional financing, or imposed requirements to make non-strategic divestitures; (iii) imposed hedging requirements, (iv) imposed restrictions on the Group's cash flows, for debt repayment; (v) increased vulnerability to general adverse economic and industry conditions; (vi) interest rate risk exposure as borrowings may be at variable rates of interest; (vii) decreased flexibility in planning for and reacting to changes in the industry in which it competes; (viii) reduced competitiveness as compared to less leveraged competitors; and (ix) increased cost of borrowing.

The Group's ability to make scheduled payments on or refinance its future debt obligations, depends on the Group's financial condition and operating performance which are subject to prevailing economic and competitive conditions and to various external and other risks as indicated above.

Exchange rates

The Group is exposed to currency risk. Adriatic's reporting currency and a proportion of its cost base (primarily corporate overheads) is in GBP. The Company's Ordinary Shares (in the form of CDIs) are admitted to trading on the ASX in A\$. Adriatic's common shares will trade on the London Stock Exchange in GBP. Once in production, Adriatic will receive revenues from the sale of commodities from the Vareš Project primarily in US dollars. The majority of expenses incurred at the Vareš Project will be in BAM and the Group may have other costs denominated in US dollars.

The BAM has been pegged to the Euro at a rate of 1 Euro = 1.95583 BAM since the introduction of the EUR in 2002.

5. Results of operations

The following discussion and analysis of the Group's results of operations and financial condition is based on the Group's historical results as derived from the financial statements for the Historical Financial Information Review Period contained as an Appendix to this document, a summary of which can also be found in Part I.

Income statement

The following table summarises the Group's consolidated income statement for the Historical Financial Information Review Period.

			Period from
	Year ended 30 Jun 2019 £	Year ended 30 Jun 2018 £	3 Feb 2017 to 30 Jun 2017 £
REVENUE Sale of services	—	—	1,519
GROSS PROFIT			1,519
Administrative expenses	(2,163,209)	(2,170,921)	(286,461)
OPERATING LOSS	(2,163,209)	(2,170,921)	(284,942)
Finance costs	(254,444)	(242,224)	(7,365)
LOSS BEFORE TAX FROM CONTINUING OPERATIONS	(2,417,653)	(1,928,697)	(292,307)
Tax	—	—	—
LOSS FROM CONTINUING OPERATIONS	(2,417,653)	(1,928,697)	(292,307)
Other comprehensive income	42,875	5,965	25,402
TOTAL COMPREHENSIVE INCOME	(2,374,778)	(1,922,732)	(266,905)
Earnings per share expressed in pence per share: Basic Diluted	(1.69) (1.49)	(2.27) (2.10)	(0.55) (0.55)

Revenue

The Group had no revenue for the Historical Financial Information Review Period.

Administrative expenses

Administrative expenses were steady between 2018 and 2019 being approximately £2.2 million in both years.

Earnings per share

Basic earnings per share increased from negative 2.27p per share in 2018 to negative 1.69p per share in 2019 driven be an increase in the average weighted number of shares outstanding between the periods.

Statement of financial position

The following table summarises the Group's financial position for the Historical Financial Information Review Period.

	As at 30 Jun 2019 £	As at 30 Jun 2018 £	As at 30 Jun 2017 £
NON-CURRENT ASSETS
Intangible assets	3,971,210	1,034,235	282,107
Tangible assets	721,128	626,308	585,686
	4,692,338	1,660,543	867,793
CURRENT ASSETS
Inventories	—	—	22
Trade and other receivables	361,724	147,711	17,688
Cash and cash equivalents	5,369,759	4,644,389	311,470
	5,731,483	4,792,100	329,180
TOTAL ASSETS	10,423,821	6,452,643	1,196,973
EQUITY AND LIABILITIES Equity attributable to equity holders of the parent
Share capital	2,013,701	1,733,042	856,323
Share premium	11,084,777	5,515,049	406,183
Other capital reserves	1,714,826	1,282,365	—
Other reserves	74,242	31,367	25,402
Retained deficit	(4,638,657)	(2,221,004)	(292,307)
TOTAL EQUITY	10,248,889	6,340,819	995,601
CURRENT LIABILITIES Trade and other payables	174,932	111,824	201,372

TOTAL EQUITY AND LIABILITIES	10,423,821	6,452,643	1,196,973

Assets

The Group's current assets comprise primarily cash and cash equivalents of approximately £5.4 million as at 30 June 2019 (2018: approximately £4.8 million), the increase being the additional equity capital raised during the period net of finance costs and administrative expenses. The Group's non-current assets of approximately £4.7 million as at 30 June (2018: £1.7 million) comprise primarily intangible assets, being the Group's exploration and evaluation assets, the increase attributable to the spending on exploration and evaluation activities during the period.

Liabilities

Total liabilities, consisting solely of trade and other payables were steady between 2018 and 2019 being approximately £0.2 million and £0.1million respectively.

Off balance sheet items

The Group does not have any off-balance sheet items.

Contractual Obligations and Commitments

As at 30 June 2019 the Group has no material contractual obligations or commitments.

Cash flows

	Year ended 30 Jun 2019 £	Year ended 30 Jun 2018 £
Loss	(2,417,653)	(1,928,697)
Foreign exchange difference on consolidation	42,875	5,965
Depreciation and amortisation Share based payments	88,674 432,461	8,910 1,161,408
Other non-cash movements	—	(4,885)
Working capital adjustments:
Increase in trade and other receivables	214,013	(130,023)
Decrease in inventories Increase/(Decrease) in trade and other payables	— 63,108	22 (89,548)
Net cash flows used in operating activities	2,004,548	(976,848)
Investing activities
Purchase of property, plant and equipment	(105,998)	(40,296)
Purchase of intangible assets	(3,014,471)	(756,479)
Net cash flows used in investing activities	3,120,469	(796,775)
Financing activities
Issue of share capital (net of fees)	5,850,387	6,106,542
Net cash flows generated from financing activities	5,850,387	6,106,542
Net increase in cash and cash equivalents	725,370	4,332,919
Cash and cash equivalents at 30 June 2018	4,644,389	311,470
Cash and cash equivalents at 30 June 2019	5,369,759	4,644,389

Cash flows used in operating activities

The majority of net cash flows used in operating activities relate to payments to employees, consultants and suppliers in connection with the development of the Vareš Project. Net cash used in operation activities increased to £2.0 million in 2019 to approximately £1.0 million in 2018 in line with the increase of exploration and evaluation activity at the Vareš Project.

Cash flows used in investing activities

Net cash used in investing activities increased to £3.1 million in 2019 from approximately £0.8 million in 2018, this increase predominately reflects the increase in capitalised expenditure on exploration and evaluation at the Company's Vareš Project.

Cash flows generated from financing activities

The key source of funding for the Group during the Historical Financial Review Period has been by way of equity financings. Cash flows generated from financing activities were approximately £5.9 million in 2019 and approximately £6.1 million in 2018, both predominately from equity financings during the respective periods.

PART XIII

CAPITALISATION AND INDEBTEDNESS

The table below sets out the audited cash and cash equivalents, indebtedness and capitalisation of the Group as at 30 June 2019.

	30 Jun 2019 £
Total Current Debt Guaranteed Secured Unguaranteed/Unsecured	— — —
Total Non-Current Debt Guaranteed Secured Unguaranteed/Unsecured	— — —
Shareholder Equity	30 Jun 2019 £
Share capital Share premium Other capital reserves Other reserves Retained deficit	2,013,701 11,084,777 1,714,826 74,242 (4,638,657)
Total Equity	10,248,889

As at the date of this prospectus, there has been no significant changes to the capitalisation of the Group since 30 June 2019, being the date of the Group's last published financial information, except for:

* A total of 1,850,000 Ordinary Shares of par value £0.013355 each were issued pursuant to the exercise of Options between August and December 2019;
* On 25 September 2019, 83,400 Ordinary Shares of par value £0.013355 each were issued to Sandfire Resources pursuant to their anti-dilution right; and
* On 29 October 2019, Adriatic announced a placement to raise A\$25,000,000 before expenses from the issue of 25,000,000 Ordinary Shares of par value £0.013355 each at an issue price of A\$1.00 per Ordinary Share, the Ordinary Shares were issued in three tranches on 6 November 2019, 14 November 2019 and 22 November 2019.

The following table shows the Group's net indebtedness as at 30 September 2019:

		30 Sep 2019 £
A. B. C.	Cash Cash equivalent Trading securities	3,695,142 — —
D.	Liquidity (A) + (B) + (C)	3,695,142
E. F. G. H. I.	Current financial receivable Current bank debt Current portion of non-current debt Other current financial debt Current Financial Debt (F) + (G) + (H)	467,417 — — — —
J.	Net Current Financial Indebtedness/(liquidity) (I) – (E) – (D)	(4,162,559)
K. L. M. N.	Non-current bank loans Bonds issued Other non-current loans Non-current Financial Indebtedness (K) + (L) + (M)	— — — —
O.	Net Financial Indebtedness (J) + (N)	(4,162,559)

PART XIV

CREST, CHESS DEPOSITORY INTERESTS AND TAKEOVER CODE

Admission and dealings

It is expected that Admission will take place and dealings in the Ordinary Shares will commence on the London Stock Exchange at 8:00 a.m. on 12 December 2019. This date and time may be subject to change.

CREST

CREST is a paperless settlement procedure enabling securities to be evidenced otherwise than by a certificate and transferred otherwise than by written instrument. The Articles permit the holding of Ordinary Shares under the CREST system. The Company has applied for the Ordinary Shares to be admitted to CREST with effect from Admission and it is expected that the Ordinary Shares will be admitted with effect from that time. Accordingly, settlement of transactions in the Ordinary Shares following Admission may take place within the CREST system if any investor so wishes.

CREST is a voluntary system and Shareholders who wish to receive and retain certificates for their Ordinary Shares will be able to do so. Shareholders may elect to receive Ordinary Shares in uncertificated form if such Shareholder is a system-member (as defined in the Regulations) in relation to CREST.

CHESS Depositary Interests

CHESS (Clearing House Electronic Subregister System) is the computer system used by the ASX to record shareholdings and manage the settlement of share transactions. In connection with its ASX listing, the Company has established arrangements to enable interests in Ordinary Shares to be cleared and settled electronically through CHESS, utilising CHESS Depositary Interests.

Where investors choose to settle interests in the Ordinary Shares through the CHESS system, and pursuant to the depositary arrangements established by the Company, the Depositary will hold the Ordinary Shares and issue dematerialised CDIs representing the underlying Ordinary Shares which will be held on trust for the holders of the CDIs. The CDIs are independent securities constituted under Australian law which may be held and transferred through the CHESS system. The Depositary receives no fees for acting as the depositary for the CDIs.

No share certificates will be issued to CDI holders. Shareholders should note that they cannot trade their Ordinary Shares on ASX without first converting their Ordinary Shares into CDIs.

Each Depositary Interest will be treated as one Ordinary Share for the purposes of determining, for example, eligibility for any dividends. The Depositary will pass on to holders of Depositary Interests any stock or cash benefits received by it as Shareholder on trust for such Depositary Interest holder. Depositary Interest holders, through the Depositary, will also be able to receive notices of meetings of Shareholders and other notices issued by the Company to the Shareholders.

The Company operates a certificated principal register of Ordinary Shares in the United Kingdom, and in Australia a branch register of Ordinary Shares and an uncertificated issuer sponsored subregister of CDIs and an uncertificated CHESS sub-register of CDIs. The Company's uncertificated issuer sponsored sub-register of CDIs and uncertificated CHESS sub-register of CDIs is maintained by the Australian Registrar. The branch register is the register of the legal title (and reflects legal ownership by the Depositary of the Ordinary Shares underlying the CDIs. The two uncertificated sub-registers of CDIs combined makes up the register of beneficial title of the Ordinary Shares underlying the CDIs.

CDI holders may at any time convert their CDIs into Ordinary Shares by contacting the Australian Registrar or their CHESS participant (generally a stockbroker). Investors may also convert their Shares to CDIs, by contacting the Australian Registrar or the Registrar, or their stockbroker (or applicable CHESS participant).

The information included within this Part XIV relating to the obtaining and cancellation of CDIs by a holder is intended to be a summary only and is not to be construed as legal, business or tax advice. Each investor should consult his or her own lawyer, financial adviser, broker or tax adviser for legal, financial or tax advice in relation to CDIs.

Selling and distribution restrictions

The Ordinary Shares have not been and will not be registered under the US Securities Act or the securities laws of any state or other jurisdiction of the US and may not be taken up, offered, sold, resold, transferred, delivered or distributed, directly or indirectly, within, into or in the US.

Transferability

The Ordinary Shares are freely transferable and tradable and there are no restrictions on transfer.

TAKEOVER CODE

As at the date of this Prospectus, the Company is not subject to the Takeover Code on account of the Company's place of central management and control being outside of the United Kingdom, Isle of Man and Channel Islands.

The Company's articles of association contain certain provisions which seek to replicate certain protections provided by the Takeover Code, although the Takeover Panel will have no responsibility or involvement in their enforcement. These provisions are summarised in paragraph 5 of Part XVII and shall apply only during such times as the Takeover Code does not apply to the Company.

The Company will be subject to the Takeover Code with effect from Admission.

Under the Takeover Code, where:

(a) any person acquires, whether by a series of transactions over a period of time or not, an interest in shares which (taken together with shares in which such person is already interested, and in which persons acting in concert with such person are interested) carry 30 per cent. or more of the voting rights of a company; or
(b) any person who, together with persons acting in concert with such person, is interested in shares which in the aggregate carry not less than 30 per cent. of the voting rights of a company but does not hold shares carrying more than 50 per cent. of such voting rights and such person, or any person acting in concert with such person, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which such person is interested,

such person shall, except in limited circumstances, be obliged to extend offers, on the basis set out in Rules 9.3, 9.4 and 9.5 of the Takeover Code, to the holders of any class of equity share capital whether voting or non-voting and also to the holders of any other class of transferable securities carrying voting rights. Offers for different classes of equity share capital must be comparable; the Takeover Panel should be consulted in advance in such cases.

An offer under Rule 9 of the Takeover Code must be in cash and at the highest price paid for any interest in the shares by the person required to make an offer or any person acting in concert with such person during the 12 months prior to the announcement of the offer.

Under the Takeover Code, a 'concert party' arises where persons acting together pursuant to an agreement or understanding (whether formal or informal and whether or not in writing) actively co-operate, through an acquisition by them of an interest in shares in a company, to obtain or consolidate control of the company. 'Control' means holding, or aggregate holdings, of an interest in shares carrying 30 per cent. or more of the voting rights of the company, irrespective of whether the holding or holdings give de facto control.

PART XV

TAXATION

United Kingdom taxation

The following statements are intended only as a general guide to current UK tax legislation and to the current practice (which may not be binding) of HMRC as at the date of this document (both of which may be subject to change at any time, possibly with retroactive effect). The statements are not exhaustive and relate only to certain limited aspects of the UK tax consequences of holding or disposing of Ordinary Shares.

The statements below may not apply to certain Shareholders in the Company, such as (but not limited to): traders, brokers, banks, tax exempt organisations, persons connected with the Company, persons holding shares as part of hedging or conversion transactions, holding investments in any HMRC approved arrangements or scheme, dealers in securities, insurance companies, collective investment schemes, pension schemes, Shareholders who are exempt from UK taxation, Shareholders who have (or are deemed to have) acquired their Ordinary Shares by virtue of an office or employment or Shareholders who have acquired their Ordinary Shares other than for bona fide commercial reasons.

The statements below relate (except where stated otherwise) to persons who:

* are resident (and, in the case of individuals, domiciled) in (and only in) the UK for tax purposes;
* are beneficial owners of their Ordinary Shares and dividends paid in respect of them;
* hold (together with associates) less than 5 per cent. of the Ordinary Shares in the Company; and
* hold their Ordinary Shares as an investment (otherwise than through an individual savings account or a pension arrangement).

The statements set out in the paragraphs below do not constitute tax or legal advice. Any person who is in any doubt as to their tax position, or who is resident or otherwise subject to taxation in any jurisdiction other than the UK, should consult their own professional advisers immediately.

(a) Dividends

Under UK tax legislation, the Company is not required to withhold tax at source from any dividend payments it makes.

Individual Shareholders resident for tax purposes in the UK receive an annual dividend income taxfree allowance of £2,000 ("Nil Rate Amount") for tax year 2019/2020. Dividend income in excess of the Nil Rate Amount is taxed at the following rates:

* 7.5 per cent. to the extent that the dividend income falls within the basic rate band;
* 32.5 per cent. to the extent that the dividend income falls within the higher rate band; and
* 38.1 per cent. to the extent that the dividend income falls within the additional rate band.

"Dividend income" means UK and non-UK source dividends and certain other distributions in respect of shares.

In calculating the band into which any dividend income above the Nil Rate Amount falls, the individual Shareholder's total taxable dividend income for the tax year (including the amount of dividend income within the Nil Rate Amount) will be treated as the highest slice of the individual's income.

Dividends paid to UK resident trustees of a discretionary trust will be taxed at the dividend trusts rate of 38.1 per cent. to the extent the total income exceeds the £1,000 (and at 7.5 per cent. below that amount). Trustees of a discretionary trust do not benefit from the annual Nil Rate Amount allowance.

A UK resident corporate Shareholder will be liable to UK corporation tax unless the dividend falls within one of the exempt classes set out in Part 9A of the Corporation Tax Act 2009. It is anticipated that dividends should fall within one of such exempt classes (subject to anti-avoidance rules and provided all conditions are met). If the conditions for exemption are not, or cease to be, satisfied, or such a Shareholder elects for an otherwise exempt dividend to be taxable, the Shareholder will be subject to UK corporation tax on dividends received from the Company at 19 per cent. (17 per cent. from 1 April 2020). Shareholders within the charge to UK corporation tax are advised to consult their independent professional tax advisers to determine whether dividends received will be subject to UK corporation tax.

Non-UK resident Shareholders should not generally be subject to UK tax on their dividend receipts (whether via withholding or direct assessment) but may be subject to foreign taxation on dividend income under local law. Such shareholders should consult their own advisers concerning their tax liabilities on dividends received.

(b) Chargeable gains

Shareholders who are resident in the UK for tax purposes and who dispose of their Ordinary Shares at a gain will ordinarily be liable to UK taxation on chargeable gains, subject to any available exemptions or reliefs. The gain will be calculated as the difference between the sale proceeds and any allowable costs and expenses, including the original acquisition cost of the Ordinary Shares.

Individual Shareholders (or Shareholders not otherwise within the charge to UK corporation tax) will generally be charged at 10 per cent. capital gains tax to the extent that the total chargeable gains and taxable income for the year (after allowable deductions) is less than the upper limit of the income tax basic rate band. To the extent that chargeable gains arising in a tax year exceed the upper limit of the basic rate band when aggregated with taxable income, then capital gains tax will be chargeable at 20 per cent. on the amount of that excess. Individual Shareholders receive an annual exempt allowance for capital gains tax purposes, which for tax year 2019/2020 provides for the first £12,000 of gains realised to fall outside the scope of tax. No indexation allowance will be available.

Individual Shareholders who are not resident in the UK for tax purposes but who carry on a trade, profession or vocation in the UK through a permanent establishment, branch, agency or fixed place of business in the UK may be liable to UK taxation on chargeable gains on a disposal of their Ordinary Shares, if those Ordinary Shares are or have been held, used or acquired for the purposes of that trade, profession or vocation or for the purposes of that permanent establishment, branch, agency or fixed place of business.

If an individual Shareholder ceases to be resident in the UK and subsequently disposes of Ordinary Shares, in certain circumstances any gain on that disposal may be liable to UK capital gains tax upon that Shareholder becoming once again resident in the UK.

Trustees and personal representatives resident in the UK disposing of Ordinary Shares will be taxed at 20 per cent., subject to any available reliefs or exemptions. Trustees and personal representatives receive an annual exempt amount for capital gains tax purposes, which for tax year 2019/2020 is £6,000.

Corporate Shareholders resident in the UK will be taxed to corporation tax on chargeable gains at 19 per cent. for tax year 2019/2020, subject to any available reliefs or exemptions. No indexation allowance will be available.

Corporate Shareholders carrying on a trade in the UK through a branch, agency or permanent establishment with which their investment is connected may be liable to UK taxation on chargeable gains on the disposal of their Ordinary Shares.

(c) Stamp duty and stamp duty reserve tax ("SDRT")

The statements below are intended as a general guide to the current position. The statements do not apply to certain intermediaries who are not liable to stamp duty or SDRT, or to persons connected with depositary arrangements or clearance services, who may be liable at a higher rate.

The allocation and issue of Ordinary Shares will not give rise to a liability to stamp duty or SDRT. Any subsequent conveyance or transfer on sale of shares would usually be subject to stamp duty on any instrument of transfer at a rate of 0.5 per cent. of the amount or value of the consideration (rounded up, if necessary, to the nearest £5), subject to certain exemptions and reliefs. A charge to SDRT at a rate of 0.5 per cent. would usually arise in relation to an unconditional agreement to transfer shares (where the SDRT charge is not cancelled by the execution of an instrument of transfer, within six years of the date of the agreement, and a corresponding payment of stamp duty).

Australian Taxation

Australian taxation implications of acquiring Ordinary Shares or CDIs

Adriatic is a company incorporated in the United Kingdom and registered as a foreign company in Australia and, as such, it would be treated as a foreign company for Australian taxation purposes. Adriatic's financial year ends on 30 June annually.

The following general taxation comments consider the Australian income tax, and Goods and Services Tax (GST) implications for Australian tax residents only. The tax implications for CDI holders relate to the receipt of dividends and potential gains on the disposal of CDIs. It is based on the Australian law, and the Commissioner of Taxation's interpretation of the law, as at the date of this Prospectus. This summary does not take into account or anticipate any changes in the law or practice that may occur.

The summary is general in nature. It does not deal with all aspects of Australian law that may be relevant to specific types of investors. The comments do not purport to provide tax advice to any particular investor and should not be relied upon as the tax position of each investor may vary depending on the specific circumstances of the investor. The Company recommends that each investor seek their own independent income tax advice based on their particular circumstances. All current or potential investors in the Company are urged to obtain independent financial advice about the consequences of acquiring CDIs.

To the maximum extent permitted by law, the Company, its officers, Directors, and each of their respective advisers accept no liability or responsibility with respect to the taxation consequences of acquiring or disposing of CDIs issued under this Prospectus.

Dividends

Where Adriatic pays a dividend to an Australian tax resident CDI holder, the dividend should be included in the CDI holder's assessable income for the relevant year of income.

As the Company is a foreign company, there will not be franking credits attached to any dividend paid (i.e. no franked dividends).

Disposal of CDIs

Profit-making intention

Some CDI holders may hold CDIs on revenue rather than on capital account, for example, holders who acquire their CDIs as part of a business or with a view of profit such as share traders. Gains made on the disposal of CDIs by these CDI holders may be assessable as ordinary income for Australian taxation purposes. Correspondingly, any loss made on disposal may be deductible. In this scenario, the transaction would not be subject to the Capital Gains Tax (CGT) provisions and the general CGT discount concession would not be available. Each investor should seek independent advice as to whether the gain would be considered ordinary income.

CGT

As a CDI is a CGT asset, an Australian resident CDI holder may make a capital gain or capital loss from the disposal of the CDIs.

As a general rule, where the capital proceeds on disposal of a CDI are greater than the CDI's cost base, the CDI holder will make a capital gain. Conversely, a CDI holder incurs a capital loss on the disposal of a CDI where the capital proceeds are less than the CDI's reduced cost base.

If a CDI holder incurs a capital loss, this loss can only be offset against capital gains recognised under the CGT rules in the current or future income years.

In the case of an arm's-length on-market sale, the capital proceeds will generally be the cash proceeds received from the sale of the CDIs.

The cost base of a CDI includes (calculated in AUS\$), among other things:

I. The amount paid to acquire the CDI;
II. Incidental costs in relation to the acquisition and disposal of the CDI; and
III. The costs of ownership of the CDI (e.g. interest expenses on funds an investor borrows in order to acquire the CDI where the interest is not otherwise allowable as a tax deduction).

A CDI holder's reduced cost base in a CDI includes the amounts described in paragraphs (I) and (II), but not the amounts described in paragraph (III).

The CDI holder's cost base and reduced cost base may be reduced by the receipt of nonassessable distributions from the Company, if any.

If a CDI holder is an individual, trust or a complying superannuation fund, they may be entitled to the CGT discount if the CDI has been held for more than 12 months prior to the disposal. This concession means that a portion of any net capital gain made on sale is exempt from income tax, where the CDI holder has held those CDIs for more than 12 months. For individuals and trusts the percentage of the capital gain exempted is 50% and for complying superannuation funds that percentage is 33.33%. This concession is not available for foreign residents.

If a CDI holder is an Australian resident company which holds CDIs that carry at least 10% of the voting rights in the Company and these CDIs have been held for a period of at least 12 months, (beginning no earlier than 24 months prior to disposal), the CDI holder may be entitled to reduce any capital gain or capital loss arising from the disposal of the CDI by a percentage that reflects the degree to which the assets of the Company are used in an active business. Each corporate investor should seek independent advice as to whether this concession applies.

To the extent an amount would be included in a CDI holder's assessable income under both the CGT provisions and the ordinary income provisions, the capital gain amount would generally be reduced, so that the CDI holder would not be subject to double tax on any part of the income gain or capital gain.

Anti-tax deferral provisions

Australia has tax laws which, in certain circumstances, may attribute certain income of a controlled foreign company (CFC), which has not been comparably taxed offshore, to Australian resident investors on an accruals (not receipts) basis. In very broad terms, this CFC regime may apply where a foreign company is regarded as controlled by Australian residents. There are complex rules in determining whether a foreign company is controlled by Australian residents. The Company may be taken to be Australian controlled if, for example:

I. five or fewer Australian resident entities (together with their associates) have 50% or more of the interests in the company; or
II. the Company is controlled by five or fewer Australian resident entities either alone or together with its associates.

If the Company is a CFC, attribution can generally only occur where an Australian investor (together with their associates) holds at least a 10% interest in the Company, although in certain limited cases, attribution can occur where an Australian investor (together with their associates) is one of the entities mentioned above that controls the Company. The attributable income of a CFC is, in broad terms, calculated in accordance with Australian tax rules as if the foreign company were an Australian resident, subject to certain modifications. For listed countries, such as the UK, there are only limited categories of income that are included in the calculation of attributable income (e.g. all income and profits from a UK resident company that has elected to be taxed on a tonnage basis, capital gains in respect of shares in a company where a substantial shareholding exemption applies and passive income derived by a company classed as an open ended investment under UK law). Furthermore, where a CFC passes the active income test, the CFC should generally have no attributable income.

Whether or not the CFC accruals tax rules apply to an investor will depend on, among other things, the level of interest held by an Australian tax resident investor (and its associates) in the Company and the type of income derived by the company. Investors should discuss the application of the CFC provisions with their own professional tax adviser.

Goods and Services Tax

No GST should be payable on the acquisition or disposal of the CDIs. Further, no GST should be payable on the dividends paid.

PART XVI

CONSEQUENCES OF A STANDARD LISTING

Application will be made for the Ordinary Shares to be admitted to a Standard Listing on the Official List pursuant to Chapter 14 of the Listing Rules, which sets out the requirements for Standard Listings. Listing Principles 1 and 2 as set out in Listing Rule 7.2.1 of the Listing Rules also apply to the Company, and the Company must comply with such Listing Principles. Premium Listing Principles 1 to 6 as set out in Listing Rule 7.2.1AR of the Listing Rules do not apply to the Company.

However, while the Company has a Standard Listing, it is not required to comply with the provisions of, inter alia:

* Chapter 8 of the Listing Rules regarding the appointment of a sponsor to guide the Company in understanding and meeting its responsibilities under the Listing Rules in connection with certain matters. The Company has not and does not intend to appoint such a sponsor in connection with the Admission;
* Chapter 9 of the Listing Rules relating to the ongoing obligations for companies admitted to the Premium List, which therefore does not apply to the Company;
* Chapter 10 of the Listing Rules relating to significant transactions, which requires Shareholder consent for certain acquisitions;
* Chapter 11 of the Listing Rules regarding related party transactions;
* Chapter 12 of the Listing Rules regarding purchases by the Company of its Ordinary Shares.; and
* Chapter 13 of the Listing Rules regarding the form and content of circulars to be sent to Shareholders.

There are, however, a number of continuing obligations set out in Chapter 14 of the Listing Rules that will be applicable to the Company. These include requirements as to:

* the forwarding of circulars and other documentation to the UKLA for publication through the document viewing facility and related notification to a Regulatory Information Service;
* the provision of contact details of appropriate persons nominated to act as a first point of contact with the UKLA in relation to compliance with the Listing Rules and the Disclosure Guidance and Transparency Rules;
* the form and content of temporary and definitive documents of title;
* the appointment of a registrar;
* the making of Regulatory Information Service notifications in relation to a range of debt and equity capital issues; and
* at least 25 per cent. of the Ordinary Shares being held by the public in the EEA or the jurisdiction in which the Ordinary Shares are listed.

In addition, as a company whose securities are admitted to trading on a regulated market, the Company will be required to comply with MAR and the Disclosure Guidance and Transparency Rules.

It should be noted that the FCA will not have the authority to (and will not) monitor the Company's compliance with any of the Listing Rules which the Company has indicated herein that it intends to comply with on a voluntary basis, nor to impose sanctions in respect of any failure by the Company so to comply. However, the FCA would be able to impose sanctions for non-compliance where the statements regarding compliance in this prospectus are themselves misleading, false or deceptive.

ASX Listing Rules

As the Company has been admitted to the official list of the ASX, the Company is bound to comply with the ASX Listing Rules, as amended from time to time. The ASX Listing Rules address such matters as admission to listing on the ASX, quotation of securities, continuous disclosure, periodic disclosure, certain requirements for terms of securities, issues of new capital, transfers of securities, disclosure of corporate governance practices, mining and exploration reporting requirements, escrow (lock-in) arrangements, transactions with related/ controlling parties, significant transactions, shareholder meetings, trading halts and suspensions and fees payable. The ASX also publishes guidance notes regarding the interpretation of the ASX Listing Rules.

The ASX Listing Rules and guidance notes can be found at www.asx.com.au.

PART XVII

ADDITIONAL INFORMATION

1. RESPONSIBILITY

The Directors, whose names appear on page 20, and the Company accept responsibility for the information contained in this prospectus. To the best of the knowledge of the Directors and the Company, the information contained in this prospectus is in accordance with the facts and the prospectus makes no omission likely to affect its import.

2. THE COMPANY

2.1. The Company was incorporated on 3 February 2017 as a private company with limited liability under the Companies Act with the name Adriatic Metals Limited under company number 10599833. The Company re-registered as a public company on 14 February 2018 with the name Adriatic Metals Plc.
2.2. The Company is not regulated by the FCA or any financial services or other regulator other than ASIC in relation to its ASX listing. With effect from Admission, the Company will be subject to the Listing Rules and the Disclosure Guidance and Transparency Rules (and the resulting jurisdiction of the FCA), to the extent such rules apply to companies with a Standard Listing pursuant to Chapter 14 of the Listing Rules. In addition, the Company will remain subject to the ASX Listing Rules and the Corporations Act in relation to its ASX listing.
2.3. The principal legislation under which the Company operates, and pursuant to which the Ordinary Shares have been created, is the Companies Act and the regulations made thereunder.
2.4. The Company is operating in conformity with its constitution.
2.5. The Company's registered office is at Stamford House, Regent Street, Cheltenham, Gloucestershire, England, GL50 1HN. The Company's telephone number is +44 (0) 20 7993 006. The Company's website is www.adriaticmetals.com. Information that is on the Company's website does not form part of the prospectus and has not been scrutinised or approved by the FCA unless that information is expressly incorporated by reference to this prospectus.
2.6. The Company's Australian Registered Body Number is 624 103 162.

3. SHARE CAPITAL OF THE COMPANY

3.1. The following table shows the issued and fully paid shares of the Company at the Last Practicable Date:

Class	Amount Number paid
Ordinary Shares	177,715,987	£27,611,929

3.2. The issued and fully paid shares of the Company immediately following Admission shall be shown in the following table:

Class	Number	Amount paid
Ordinary Shares	177,715,987	£27,611,929

3.3. The Company has only Ordinary Shares in issue and no shares which do not represent capital.
3.4. No Ordinary Shares are held by or on behalf of the Company (in treasury or otherwise) or by any subsidiary of the Company.
3.5. On incorporation of the Company, Paul Cronin and Rebecca Cronin each subscribed for 10 ordinary shares of nominal value £0.0005 in the capital of the Company at a price of £0.01 per share.
3.6. During the period commencing on incorporation and ending on the Last Practicable Date, the following changes to the Company's issued share capital have taken place:

Date	Change to issued share capital	Issue price per Ordinary Share
Period from incorporation to 30 June 2017:
10 February 2017	Allotment of 12,000,000 Ordinary Shares of £0.05342 each	£0.05342
13 February 2017	Cancellation of 20 Ordinary Shares of £0.0005 each	N/A
24 April 2017	Allotment of 4,057,036 Ordinary Shares of £0.05342 each	£0.15
1 July 2017	Allotment of 100,000 Ordinary Shares of £0.05342 each	£0.15
Period from 1 July 2017 to 30 June 2018:	Balance as at 30 June 2017: 16,057,036 Ordinary Shares of £0.05342 each.
1 October 2017	Allotment of 3,641,863 Ordinary Shares of £0.05342 each	£0.30
30 January 2018	Subdivision of Ordinary Shares from nominal value £0.05342 to £0.013355	N/A
27 April 2018	Allotment of 51,600,000 Ordinary Shares of £0.013355 each in connection with listing on the ASX	A\$0.20
	Balance as at 30 June 2018: 130,795,596 Ordinary Shares of £0.013355 each.
Period from 1 July 2018 to 30 June 2019:
20 November 2018	Allotment of 19,686,991 Ordinary Shares of £0.013355 each	A\$0.55
15 April 2019	Exercise of options over 100,000 Ordinary Shares of £0.013355 each	A\$0.40
24 April 2019	Exercise of options over 100,000 Ordinary Shares of £0.013355 each	A\$0.40
3 May 2019	Exercise of options over 100,000 Ordinary Shares of £0.013355 each	A\$0.40
	Balance as at 30 June 2019: 150,782,587 Ordinary Shares of £0.013355
	Period from 1 July 2019 to Last Practicable Date:
9 August 2019	Exercise of options over 500,000 Ordinary Shares of £0.013355 each	A\$0.40
25 September 2019	Allotment of 83,400 Ordinary Shares of £0.013355 each	A\$0.933
30 October 2019	Exercise of options over 1,250,000 Ordinary Shares of £0.013355 each	A\$0.40
6 November 2019	Allotment of 10,878,508 Ordinary Shares of £0.013355 each, being tranche 1 of two-tranche placement to institutional investors	A\$1.00
13 November 2019	Allotment of 9,121,492 Ordinary Shares of £0.013355 each, being the first of two settlements of tranche 2 of two tranche placement	A\$1.00
22 November 2019	Allotment of 5,000,000 Ordinary Shares of £0.013355 each, being a deferred settlement of tranche 2 of the two tranche placement	A\$1.00
2 December 2019	Exercise of options over 100,000 Ordinary Shares of £0.013355 each	A\$0.40

3.7. Other than the Options described in paragraph 17.3 and 15.13 of this Part XVII, no person has any option nor has the Company agreed conditionally or unconditionally to grant any option over any Ordinary Shares.

3.8. Pursuant to a resolution of the Shareholders passed at the AGM of the Company convened and held on 8 November 2019:
- (a) the Directors were authorised in accordance with section 551 of the Companies Act to exercise all the powers of the Company to allot shares in the Company or grant rights to subscribe for or convert any securities into shares in the Company ("Relevant Securities") up to an aggregate nominal amount of £673,830 (representing 50,455,260 new equity securities in the Company;
- (b) the Directors were empowered in accordance with section 570 of the Companies Act to allot equity securities (as defined in section 560 of the Companies Act) of the Company for cash pursuant to the general authorities conferred on them by the resolution referred to at (a) above as if section 561(1) of the Companies Act did not apply to any such allotment, provided that such power is limited to:
  - (i) the allotment of equity securities in connection with a rights issue or any other offer to holders of ordinary shares in proportion (as nearly as practicable) to their respective holdings and to holders of other equity securities as required by the rights of those securities or as the Directors otherwise consider necessary, but subject to such exclusions or other arrangements as the Directors seem necessary or expedient in relation to treasury shares, fractional entitlements, record dates, legal or practical problems in or under the laws of any territory or the requirements of any regulatory body or stock exchange; and
  - (ii) the allotment (otherwise than pursuant to sub-paragraph (i) above) of equity securities up to an aggregate nominal amount of £551,840 (representing 41,320,853 new equity securities in the Company);

provided that the authority or power detailed in paragraphs (a) and (b) above, shall expire at the conclusion of the AGM to be held in 2020, or if earlier, 15 months from the date of passing of the resolution save that that the Company may, before such expiry, make an offer or agreement which would or might require Relevant Securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of such an offer or agreement as if the power or authority conferred had not expired.

3.9. The Company's collaboration and partnership deed with Sandfire Resources contains an anti-dilution right which entitles Sandfire Resources to participate in any offer of securities or any issue of securities on conversion or exercise of any equity securities by the Company up to the amount necessary to ensure that Sandfire Resources interest in the Company's securities immediately prior to the completion of such offer or issue of securities in maintained, provided that Sandfire Resources's participation is for cash consideration that is: (a) no more favourable than the cash consideration paid by third parties; or (b) equivalent in value to an non-cash consideration offer by third parties. The anti-dilution right shall cease to apply on the earlier to occur of Sandfire Resources's interest in the Company's securities: (a) falling below 7.70 per cent. of the Company's issued ordinary share capital (other than as a result of the offer or issue of securities to which the antidilution right applies); and (b) increasing to more than 19.99 per cent. of the Company's issued ordinary share capital. Further particulars of the Company's collaboration and partnership deed with Sandfire Resources is set out in paragraph 15.8 of this Part XVII.
3.10. Save as disclosed in this prospectus:
- (a) no Ordinary Share or loan capital of the Company has been issued or is proposed to be issued;
- (b) no person has any preferential subscription rights for any Ordinary Shares in the Company;
- (c) no Ordinary Share or loan capital of the Company is unconditionally to be put under option;
- (d) no commissions, discounts, brokerages or other special terms have been granted by the Company since its incorporation in connection with the issue or sale of any share or loan capital of the Company; and
(e) the Ordinary Shares are freely transferrable.
3.11. All Ordinary Shares in the capital of the Company are in registered form and may be held in either certificated form or uncertificated form (in CREST or by way of CHESS Depositary Interests).
3.12. The Ordinary Shares will be admitted to a Standard Listing on the Official List and traded on the Main Market of the London Stock Exchange. The Ordinary Shares are currently listed on the ASX, however, the Ordinary Shares are not listed or traded on, and no application has been or is being made for the admission of the Ordinary Shares to listing or trading on any other stock exchange or securities market.

4. ARTICLES

4.1. The Articles of the Company were adopted by a special resolution of the Shareholders passed at the AGM convened and held on 8 November 2019. A summary of the terms of the Articles is set out below. The summary below is not a complete copy of the terms of the Articles.
4.2. The Articles contain no specific restrictions on the Company's objects and therefore, by virtue of section 31(1) of the Companies Act, the Company's objects are unrestricted.
4.3. The Articles contain, inter alia, provisions to the following effect:
- (a) Limited Liability

The liability of the members of the Company is limited to the amount, if any, unpaid on the shares held by them.

(b) Share capital

Subject to the provisions of the Companies Act and the Articles, the Board shall have unconditional authority to allot (with or without conferring rights of renunciation), grant options over, offer or otherwise deal with or dispose of any shares or rights to subscribe for or convert any security into shares to such persons (including directors) at such times and generally on such terms and conditions as the Board may determine.

Subject to any rights and restrictions attached to shares, on a vote on a resolution on a show of hands at a meeting, every member (being an individual) present in person or by proxy shall have one vote, and on a poll every member shall have one vote for every share of which he is a holder. In the case of joint holders of a share if two or more persons hold a share jointly, the vote of the senior shareholder, shall be accepted to the exclusion of the other joint holders and for this purpose, seniority is determined by the order in which the names stand in the register of members in respect of the joint holding.

(d) Variation of rights

Subject to the provisions of the Companies Act and the ASX Listing Rules, the rights attached to any class of share in issue may be (unless otherwise provided by the rights attaching to the shares of that class) varied or abrogated, either with the consent in writing of the holders of three-fourths in nominal value of the issued shares of the class (excluding any shares of that class held as treasury shares) or with the sanction of a special resolution passed at a separate meeting of such holders (but not otherwise).

(e) Alteration of capital

A resolution authorising the Company to sub-divide its shares may also determine that, as between the shares resulting from such sub-division, any of them may have any preference or other advantage or deferred or qualified rights or be subject to any restriction as compared with the others.

(f) Transfer of shares

A share held in certificated form must be transferred in writing in any usual form or in any other form which the Board may approve, which shall be executed by or on behalf of the transferor and, unless the share is fully paid, by or on behalf of the transferee. A share held in uncertificated form may be transferred by means of a relevant system (as defined in the uncertificated securities rules) in which the operator of the relevant system has permitted the shares or securities of the Company (or the relevant shares or securities) to be transferred. The transferor shall be deemed to remain the holder of the share until the transferee is entered on the register as its holder.

The Board may refuse to register a transfer of shares held in certificated form if:

(i) the shares are not fully paid up (unless any of the class of shares which are not fully paid up are admitted to trading on a recognised investment exchange, in which case the Board is not entitled to refuse to register the transfer);
(ii) it is in respect of more than one class of share;
(iii) it is not duly stamped or is not duly certified or shown to be exempt from stamp duty;
(iv) it is not delivered for registration to the Company registered office, or such other place as the Board may from time to time determine, accompanied (except in the case of a transfer by a recognised person where a certificate has not been issued) by the certificate for the shares to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer and, if the transfer is signed by some other person on his behalf, the authority of that person to do so.

The Board may also refuse to register any transfer of shares which is in favour of a child, a bankrupt, a person of unsound mind or in favour of more than four joint allottees or transferees.

(g) Restricted Securities

The Company is required to comply with the requirements of the ASX Listing Rules with respect to Restricted Securities (as defined in the ASX Listing Rules), including but not limited to the following:

(i) a holder of Restricted Securities must not dispose of, or agree or offer to dispose of, the Restricted Securities during the escrow period applicable to those securities except as permitted by the ASX Listing Rules or ASX;
(ii) If the Restricted Securities are in the same class as quoted securities, the holder will be taken to have agreed in writing that the Restricted Securities are to be kept on the Company's issuer sponsored subregister and are to have a holding lock applied for the duration of the escrow period applicable to those securities;
(iii) the Company will refuse to acknowledge any disposal (including, without limitation, to register any transfer) of Restricted Securities during the escrow period applicable to those securities except as permitted by the ASX Listing Rules or ASX;
(iv) a holder of Restricted Securities will not be entitled to participate in any return of capital on those securities during the escrow period applicable to those securities except as permitted by the ASX Listing Rules or ASX; and
(v) if a holder of Restricted Securities breaches a restriction deed or a provision of the Articles restricting a disposal of those securities, the holder will not be entitled to any dividend or distribution, or to exercise any voting rights, in respect of those securities for so long as the breach continues.
(h) Dividends

Subject to the provisions of the Companies Act and of the Articles, the Company may by ordinary resolution declare a dividend to be paid to the shareholders according to their respective rights and interests in the profits of the Company, but no dividend shall exceed the amount recommended by the Board. Subject to the provisions of the Companies Act, the Board may pay interim dividends if it appears to the Board that they are justified by the profits of the Company available for distribution. If the share capital is divided into different classes of share, the Board may pay interim dividends on shares which confer non-preferred rights with regard to dividend as well as on shares which confer preferential rights with regard to dividend, unless at the time of payment any preferential dividend is in arrears.

(i) Winding Up

If the Company is wound up, the liquidator may, with the sanction of a special resolution of the Company and any other sanction required by law, divide among the members the whole or any part of the assets of the Company and may, for that purpose, value any assets and determine how the division shall be carried out as between the members or different classes of members. Any such division may be other than in accordance with the existing rights of the members but if any division is resolved otherwise than in accordance with such rights the members shall have the same right of dissent and consequential rights as if such resolution were a special resolution passed pursuant to section 111 of the Insolvency Act 1986. The liquidator may, with the same authority, vest the whole or any part of the assets in trustees upon such trusts for the benefit of the members as he with the same authority determines, but no member shall be distributed assets upon which there is a liability or potential liability (without consent of the member concerned).

(j) Untraced Shareholders

The Company shall be entitled to sell at the best price reasonably obtainable any shares of a member or the shares to which a person is entitled by virtue of transmission on death or if and provided that (i) for a period of twelve years, no cheque, warrant or money order sent by the Company through the post in a pre-paid envelope addressed to the member or to the person entitled to the shares at his address on the register or (if different) the last known address given by the member or the person so entitled to which cheques and warrants are to be sent has been cashed, each attempt to make a payment to such member or person have been returned to the Company and no communication has been received by the Company from the member or the person so entitled, (ii) in such period of twelve years at least three dividends (whether interim or final) have become payable on the shares, (iii) the Company has at the expiration of the said period of twelve years by advertisement in both a national newspaper published in the United Kingdom and in a newspaper circulating in the area in which the address at which services of notices may be effected under the Articles is located, given notice of its intention to sell such shares (and no communication is received for a period of three months following the last of such advertisements), and (iv) notice has been given to the ASX of the Company's intention to make such sale, if shares of the class concerned are listed or dealt on that exchange.

(k) Directors

Unless otherwise determined by the Company by ordinary resolution, the number of Directors (other than any alternate Directors) shall not be less than 2, but there shall be no maximum number of Directors.

Subject to the Articles and the Companies Act, the Company may by ordinary resolution appoint a person who is willing to act as a Director and the Board shall have power at any time to appoint any person who is willing to act as a Director, in both cases either to fill a vacancy or as an addition to the existing Board.

At each AGM of the Company, one third of the directors who are subject to retirement by rotation or, if their number is not three or a multiple of three, the number nearest to but not exceeding one third shall retire from office but so that, if there are fewer than three directors who are subject to retirement by rotation, one shall retire from office.

In addition to this, there shall also be required to retire by rotation any director who at an AGM of the Company shall have been a director at each of the preceding two AGMs of the Company, provided that:

(i) he was not appointed or reappointed at either such AGM; and
(ii) he has not otherwise ceased to be a director (whether by resignation, retirement, removal or otherwise) and been reappointed by general meeting of the Company at or since either such AGM.

Subject to the provisions of the Articles, the Board may regulate their proceedings as they think fit. A Director may, and the secretary at the request of a Director shall, call a meeting of the Directors.

The quorum for a Directors' meeting shall be determined by a decision of the Directors, and until otherwise fixed, it is two.

Questions and matters requiring resolution arising at a meeting shall be decided by a majority of votes of the participating Directors. In the case of an equality of votes, the chair will have a casting vote or second vote.

Unless otherwise determined by the Company by ordinary resolution, the Directors (who do not hold executive office) shall be entitled to receive such remuneration as the Directors shall determine for their services to the Company as directors provided that the aggregate fees payable to the Directors must not exceed A\$400,000 per annum (or such higher amount as may be approved pursuant to a resolution passed at a general meeting).

Any Director who does not hold executive office who serves on a committee or who devotes special attention to the business of the Company or otherwise performs any additional services on behalf of the Company outside the scope of the ordinary duties of a director (in the opinion of the board) may be paid reasonable additional remuneration for such services.

The Directors shall also be entitled to be paid all reasonable expenses properly incurred by them in connection with the performance of their duties as a Director, including attendance at meetings of shareholders or class meetings, board or committee meetings.

The Board may, in accordance with the requirements in the Articles, authorise any matter proposed to them by any Director which would, if not authorised, involve a Director breaching their duty under the Companies Act to avoid conflicts of interests.

A Director seeking authorisation in respect of such conflict shall declare to the Board the nature and extent of their interest in a conflict.

Any authorisation by the Board will be effective only if:

(i) any requirement as to the quorum for consideration of the relevant matter is met without counting the conflicted Director and any other conflicted Director; and
(ii) the matter is agreed to without the conflicted Director voting or would be agreed to if the conflicted Director's and any other interested Director's vote is not counted.

To the extent permitted by the Companies Act, a Director is entitled to be indemnified against all liability.

(l) General Meetings

No business shall be transacted at any general meeting unless a quorum is present when the meeting proceeds to business, but the absence of a quorum shall not preclude the choice or appointment of a chair of the meeting which shall not be treated as part of the business of the meeting. Two shareholders present in person or by proxy and entitled to vote shall be a quorum for all purposes.

(m) Borrowing powers

Subject to the Companies Act, the Board may exercise all of the powers of the Company to:

(i) to borrow money;
(ii) to mortgage or charge all or any part of the undertaking, property and assets (present or future) and uncalled share capital of the Company;
(iii) to issue debentures and other securities; and
(iv) to give security, either outright or as collateral security for any debt, liability or obligation of the Company or of any third party.
(n) Capitalisation of Profits

The Board may, if they are so authorised by an ordinary resolution of the Company, decide to capitalise any profits of the Company (whether or not they are available for distribution) which are not required for paying a preferential dividend, or any sum standing to the credit of any other reserve of the Company (including any share premium account, capital redemption reserve or other non-distributable reserve). The Directors may also, subject to the aforementioned ordinary resolution, appropriate any sum which they so decide to capitalise to the persons who would have been entitled to it if it were distributed by way of dividend and in the same proportions.

(o) Uncertificated Shares

Subject always to the uncertificated securities rules and to the facilities and requirements of the relevant system concerned, the Board may resolve that any class of shares can be held in uncertificated form and that title to such shares may be transferred by means of a relevant system; and the Board may make arrangements for any class of shares to be held and transferred in this form. The Board may also resolve that shares of any class must cease to be held and transferred in uncertificated form.

(p) Disclosure of Interests in Shares

If a disclosure notice has been issued under section 793 of Companies Act and the Shareholder or any other person appears to be interested in the specified shares have failed to give the Company the information required by that notice within the prescribed time period, then subject to obtaining a judgement of a competent court and unless the Board determines otherwise:

(i) the Shareholder shall not be entitled to vote any of his shares;
(ii) in circumstances where the holding represents at least 25% of the nominal value of the shares of their class (excluding any shares held in treasury), the payment of dividends shall be withheld and such holder shall not be entitled to transfer such shares (save for an excepted transfer and subject to the requirements of the relevant system in relation to shares in uncertificated form).
(q) ASX Listing Rules

At such times as the Company is listed on the ASX, if the ASX Listing Rules:

(i) prohibit an act being done, the Company shall not take that act;
(ii) require an act to be done, nothing in the Articles will prevent that act being done and authority is deemed given for such act;
(iii) require that the Articles contain/do not contain a particular provision, that provision is deemed removed/included (respectively); and
(iv) are inconsistent with any provision of the Articles, the Articles are deemed not to contain the provision to the extent that it is inconsistent.
(r) Takeover Provisions

Certain protections which are similar to those provisions of the Takeover Code are incorporated, including (amongst others) the following:

(i) If:
- * any member (or person acting in concert with such member) acquires, whether in a single transaction or by a series of transactions over a period of time, an interest in shares which (taken together with shares in which such member or persons acting in concert with such members are interested) carry 30 per cent, or more of the voting rights of the Company; or
- * any member, together with persons acting in concert with such member, is interested in shares which in the aggregate carry not less than 30 per cent of the voting rights of the Company but does not hold shares carrying more than 50 per cent of such voting rights and such member, or any person acting in concert with such member, acquires an interest in other shares which increases the percentage of shares of the Company carrying voting rights in which he is interested (the "Limit");

such member (the "Offeror") shall extend an offer, to the holders of all the issued (and to be issued) shares in the Company. An offer will not be required where control of the Company is acquired as a result of a voluntary offer made materially in accordance with the provisions of the Takeover Code (as if the Takeover Code applied to the Company) to all holders of shares.

(ii) An offer must be conditional only upon the Offeror having receiving acceptances in respect of shares which, together with shares acquired or agreed to be acquired before or during the offer, will result in the Offeror and any person acting in concert with it holdings shares carrying more than 50 per cent of the voting rights of the Company.
(iii) An offer must be in cash or accompanied by a cash alternative at not less than the highest price paid by the Offeror or any person acting in concert with it for any interest in shares during the 12 months prior to the date upon which an announcement of that offer would have been required had the Takeover Code applied to the Company. If, after the obligation to make an offer pursuant to the Articles arises and before the offer closes for acceptance, the Offeror or any person acting in concert with it acquires any interest in shares at above the offer price, it shall increase its offer to not less than the highest price paid for the interest in shares so acquired.
(iv) When an offer is made and the Company has convertible securities outstanding, the Offeror must make an appropriate offer or proposal, on terms equivalent to the offer made for shares, to the holders of such convertible securities to ensure that their interests are safeguarded.
(v) At all times when the Company is in an offer period each member shall comply with the disclosure obligations set out in Rule 8 of the Takeover Code as if the Takeover Code applied to the Company.
(vi) The Board has full authority as to whether to deem the Takeover Code applicable (whether in whole or in part). This authority shall include all discretion vested in the Takeover Panel as if the Takeover Code applied to the Company including, without limitation, the determination of conditions and consents, the consideration to be offered and any restrictions on the exercise of control.
(vii) An acquisition of a share of the Company in excess of the Limit is permitted only if:
- * the Board consents to the acquisition of such share; or
- * the acquisition of the share(s) is in accordance with the procedure set out in at (p)(ii) above; or
- * the acquisition of the share arises from repayment of a stock-borrowing arrangement (on arm's length commercial terms); or
* a person breaches the Limit only as a result of holding the interest/share as nominee, as custodian/nominee of such a custodian or as a depositary/ nominee of such depositary.
(viii) An acquisition of a share in the Company or any interest therein is a "Prohibited Acquisition" if rules 4, 5, 6, 8 or 11 of the Takeover Code would in whole or part apply to the acquisition of such share or interest if the Company were subject to the Takeover Code and the acquisition of such share or interest were made (or, if not yet made, would if and when made be) in breach of or otherwise would not comply with rules 4, 5, 6, 8 or 11 of the Takeover Code.
(ix) In the event that the Board believes that the Limit has or may be breached or a Prohibited Acquisition has or may be effected, the Board has discretion to (amongst other items) determine the "Excess Shares" (being those held in breach of the Articles) non-voting, be sold to af third party, do not carry the right to any dividends. However, these remedies can only be exercised by the Board if a judgement has been obtained from a competent court that a breach of the abovementioned relevant Articles has occurred. The Company can only act in accordance with such judgement including with respect to the remedies available.

5. OTHER RELEVANT LAWS AND REGULATIONS

5.1. Mandatory bid

(a) Takeover Code will apply to the Company with effect from Admission. Under the Takeover Code, where:
- (i) any person acquires, whether by a series of transactions over a period of time or not, an interest in shares which (taken together with shares in which such person is already interested, and in which persons acting in concert with such person are interested) carry 30% or more of the voting rights of a company; or
- (ii) any person who, together with persons acting in concert with such person, is interested in shares which in the aggregate carry not less than 30% of the voting rights of a company but does not hold shares carrying more than 50% of such voting rights and such person, or any person acting in concert with such person, acquires an interest in any other shares which increases the percentage of shares carrying voting rights in which such person is interested,

(b) An offer under Rule 9 of the Takeover Code must be in cash and at the highest price paid for any interest in the shares by the person required to make an offer or any person acting in concert with such person during the 12 months prior to the announcement of the offer.
(c) Under the Takeover Code, a 'concert party' arises where persons acting together pursuant to an agreement or understanding (whether formal or informal and whether or not in writing) actively co-operate, through an acquisition by them of an interest in shares in a company, to obtain or consolidate control of the company. 'Control' means holding, or aggregate holdings, of an interest in shares carrying 30 per cent. or more of the voting rights of the company, irrespective of whether the holding or holdings give de facto control.

5.2. Squeeze-out

(a) Under sections 979 to 982 of the Companies Act, if an offeror were to acquire 90 per cent. of the Ordinary Shares it could then compulsorily acquire the remaining 10 per cent. It would do so by sending a notice to outstanding Shareholders telling them that it will compulsorily acquire their shares, provided that no such notice may be served after the end of: (a) the period of three months beginning with the day after the last day on which the offer can be accepted; or (b) if earlier, and the offer is not one to which section 943(1) of the Companies Act applies, the period of six months beginning with the date of the offer.

(b) Six weeks following service of the notice, the offeror must send a copy of it to the Company together with the consideration for the Ordinary Shares to which the notice relates, and an instrument of transfer executed on behalf of the outstanding Shareholder(s) by a person appointed by the offeror.
(c) The Company will hold the consideration on trust for the outstanding Shareholders.

5.3. Sell-out

(a) Sections 983 to 985 of the Companies Act also give minority Shareholders in the Company a right to be bought out in certain circumstances by an offeror who has made a takeover offer. If a takeover offer relating to all the Ordinary Shares is made at any time before the end of the period within which the offer could be accepted and the offeror held or had agreed to acquire not less than 90 per cent. of the Ordinary Shares, any holder of shares to which the offer related who had not accepted the offer could by a written communication to the offeror require it to acquire those shares. The offeror is required to give any Shareholder notice of their right to be bought out within one month of that right arising. The offeror may impose a time limit on the rights of minority Shareholders to be bought out, but that period cannot end less than three months after the end of the acceptance period, or, if longer a period of three months from the date of the notice.
(b) If a Shareholder exercises their rights, the offeror is bound to acquire those shares on the terms of the offer or on such other terms as may be agreed.

5.4. Shareholder notification and disclosure requirements

(a) Shareholders are obliged to comply with the shareholding notification and disclosure requirements set out in Chapter 5 of the DTRs. A Shareholder is required pursuant to Rule 5 of the DTRs to notify the Company if, as a result of an acquisition or disposal of shares or financial instruments, the Shareholder's percentage of voting rights of the Company reaches, exceeds or falls below, three per cent. of the nominal value of the Company's share capital or any one per cent. threshold above that.
(b) The DTRs can be accessed and downloaded from the FCA's website at http://fshandbook.info/FS/html/FCA/DTR. Shareholders are urged to consider their notification and disclosure obligations carefully as a failure to make a required disclosure to the Company may result in disenfranchisement.
(c) The Company is not subject to chapters 6, 6A, 6B and 6C of the Corporations Act 2001 (Cth) dealing with the acquisition of its shares (including substantial holdings disclosures and takeovers regulation in Australia

5.5. ASX Disclosure requirements

Periodic disclosure

(a) The Corporations Act and ASX Listing Rules set out the periodic disclosure requirements that apply to the Company. For example, the Company must prepare and lodge half-year and full-year financial reports, and must prepare and lodge an annual report to Shareholders.
(b) In addition, as the Company is currently a mining exploration entity for the purposes of the ASX Listing Rules, it must prepare and lodge quarterly reports with the ASX setting out the information required in the ASX Listing Rules, including for the Company and its child entities on a consolidated basis (among other disclosures):
- (i) A quarterly cash flow report.
- (ii) Details of its mining exploration activities for the quarter, including any material developments or material changes in those activities, and a summary of the expenditure incurred on those activities. If there were no substantive mining exploration activities during the quarter, that fact must be stated.
(iii) Details of its mining production and development activities for the quarter and a summary of the expenditure incurred on those activities. If there were no substantive mining production and development activities during the quarter, that fact must be stated.
(iv) Details of:
- (A) any mining tenements acquired or disposed of during the quarter and their location;
- (B) the mining tenements held at the end of the quarter and their location;
- (C) any farm-in or farm-out agreements it entered into during the quarter; and
- (D) the beneficial percentage interests it held at the end of the quarter in farm-in or farm-out agreements.

Continuous disclosure

(a) Pursuant to the ASX Listing Rules, once the Company is aware or becomes aware of any information concerning it that a reasonable person would expect to have a material effect on the price or value of the Company's securities, the Company must immediately announce that information to the ASX (under ASX Listing Rule 3.1), subject to the limited exception outlined below.
(b) Immediate disclosure under ASX Listing Rule 3.1 can only be delayed under ASX Listing Rule 3.1A if each of the following is satisfied:
- (i) a reasonable person would not expect the information to be disclosed; and
- (ii) the information is confidential and ASX has not formed the view that the information has ceased to be confidential; and
- (iii) one or more of the following applies: (1) it would be a breach of a law to disclose the information; (2) the information concerns an incomplete proposal or negotiation; (3) the information comprises matters of supposition or is insufficiently definite to warrant disclosure; (4) the information is generated for internal management purposes of the Company; or (5) the information is a ''trade secret.''

Disclosure in relation to false markets

ASX Listing Rule 3.1B provides that if ASX considers that there is or is likely to be a false market in an entity's securities and ASX asks the entity to give it information to correct or prevent a false market, the entity must immediately give ASX that information.

Information must be given to ASX first

ASX Listing Rule 15.7 requires that an entity must not release information that is for release to the market to anyone until it has given the information to ASX, and has received an acknowledgement from ASX that the information has been released to the market. However, in accordance with ASX Listing Rule 15.7.1, for dual listed companies, where the company becomes aware of information outside of the operating hours of the ASX market announcements office and where it is required to release that information on an overseas exchange, the company is permitted to do so provided that it gives the information to the ASX Market Announcements Office at the same time, together with written advice that the information has been released to the overseas exchange.

JORC Code

In addition, the Company is subject to the JORC Code, a set of minimum standards, recommendations and guidelines defined by the Australasian Joint Ore Reserves Committee, which is sponsored by the Australian mining industry and its professional organisations. The JORC Code covers public reporting of exploration results, mineral resources and ore reserves. The ASX Listing Rules require entities which are listed on the ASX (including the Company) to comply with the JORC Code. Disclosure under the JORC Code is governed by the principles of transparency, materiality and competence. The materiality principle requires disclosure of all the relevant information that investors and their professional advisers would reasonably require, and reasonably expect to find in the report, for the purpose of making a reasoned and balanced judgement. The competence principle requires disclosure on exploration targets, exploration results, mineral resources and ore reserves to be based on, and fairly reflect, the information and supporting documentation prepared by a ''competent person''. A competent person must have a minimum of 5 years relevant experience and be a member of an appropriate professional organisation. The JORC Code does not specify an amount, type or quality of exploration or other work required to be done before a competent person assesses and estimates a Mineral Resource or Ore Reserve.

5.6. ASX Restricted Securities

Under Chapter 9 the ASX Listing Rules, companies seeking to be admitted to the Australian official list for the first time as an ASX Listing must comply with those requirements in relation to any securities that under the ASX Listing Rules are, or are required to be, restricted securities (as such term is defined in the ASX Listing Rules). ASX may determine that securities issued to certain related parties, promoters, professional advisers and seed capital investors shall have mandatory escrow restrictions placed on them for up to 24 months from the date of first listing. In addition, securities which are issued by an already ASX listed entity (such as the Company) to certain vendors of certain assets which cannot readily be valued may be classified as restricted securities for a period of twelve months from their issue. The effect of the escrow restrictions is, among other things, to prohibit the holder from disposing of, or agreeing or offering to dispose of, their restricted securities except as permitted by the ASX Listing Rules or by ASX. Once in place, ASX escrow cannot be varied or terminated except with a waiver from ASX. The escrow restrictions are further underpinned by provisions that must (in accordance with ASX Listing Rules 9.1(a) and 15.12) be included in the company's constitution while it has restricted securities in issue. The company must not amend or remove any of these constitutional provisions while it has any restricted securities in issue unless ASX agrees in writing. A summary of the provisions contained in the Company's Articles in compliance with ASX Listing Rules 9.1(a) and 15.12 are set out in paragraph 4.3(g), above.

The table below sets out, at the Last Practicable Date, those securities of the Company held by each Director (or their spouse) which are subject to the ASX's mandatory escrow restrictions and are therefore classified as restricted securities for the purposes of the ASX Listing Rules.

Name of holder	No. of Ordinary Shares	No. of Options	Escrow Expiry
Paul Cronin	7,271,835	2,500,000	1 May 2020
Rebecca Cronin	7,435,817	2,500,000	1 May 2020
Peter Bilbe	—	1,500,000	1 May 2020
Julian Barnes	—	1,000,000	1 May 2020
Milos Bosnjakovic	16,000,000	1,000,000	1 May 2020

As at the Last Practicable Date 47,846,088 Ordinary Shares (representing, in aggregate 27 per cent. of the Issued Share Capital) and 14,500,000 Options are classified as restricted securities. Each holder of restricted securities has entered into an escrow agreement in the standard form with the ASX. The escrow period will expire on 1 May 2020.

6. DIRECTORS', SENIOR MANAGERS' AND OTHER INTERESTS

6.1. The Ordinary Shares held by the Directors and the Senior Managers (all of which are held beneficially unless otherwise stated) as at the Last Practicable Date are as follows:

Name	No. of Ordinary Shares	Percentage of Issued Ordinary Shares
Peter Bilbe (1)	250,000	0.14%
Paul Cronin (2)	16,851,332	9.48%
Julian Barnes	—	—
Milos Bosnjakovic	16,000,000	9.00%
Michael Rawlinson	40,000	0.02%
John Richards	—	—
Sandra Bates	—	—
Sean Duffy	—	—
Gabriel Chiappini	50,000	0.03%

————— Notes:

(1) Held jointly by Peter Bilbe and Janet Bilbe (spouse of Mr Bilbe) in superannuation fund, PR&JC Bilbe Super Fund.

(2) Includes 8,425,664 Ordinary Shares held by Rebecca Cronin, spouse of Mr Cronin.

6.2. Details of Options and Performance Rights held by Directors and Senior Managers are set out in paragraph 17.3 below. Save as set out in that paragraph and paragraph 6.1 above, none of the Directors or Senior Managers holds Ordinary Shares or options in respect of Ordinary Shares.

7. INFORMATION ON THE DIRECTORS AND SENIOR MANAGERS

7.1. The Directors and the Senior Managers have not held any directorships of any company (other than the Company and its subsidiary) or partnerships within the last five years, except as set forth below:

Directors

Peter Ross Bilbe

Current	Past
Horizon Minerals Ltd Independence Group NL	Northern Iron Ltd
Paul Cronin
Current	Past
Black Dragon Gold Corp. Global Atomic Corp. Swellcap Limited	Anatolia Energy Limited
Julian Barnes
Current	Past
Thor Explorations Limited Zinc of Ireland NL RSG SRL

Michael Rawlinson
Current Past
Capital Drilling Limited Hochschild Mining Plc Neighbrook Estates (partnership) Neighbrook Consulting (partnership)
Milos Bosnjakovic
Current	Past
La Mir Doo Podgorica Eastern Mining Doo Sarajevo	MBL Construction Pty Ltd North Mining Doo Podgorica
John Richards
Current	Past
Saracen Mineral Holdings Ltd Sheffield Resources Ltd J Richards Pty Ltd Fluvium Capital Pty Ltd	Latitude Consolidated Ltd
Sandra Bates
Current	Past
Fladgate LLP	Stikeman Elliot LLP Pillsbury Winthrop Shaw Pittman LLP
Senior Managers
Graham Hill
Current	Past
Shamrock Consulting Ltd	Silver Bear Resources
Sean Duffy
Current	Past
Gumtree Management Services Limited
Gabriel Chiappini
Current	Past
Laurus Corporate Services Pty Ltd Black Rock Mining Ltd Invictus Energy Ltd Eneabba Gas Ltd	Fastbrick Robotics Ltd
Adnan Teletovic
Current	Past
TFK Trading Pty Ltd	Optimal Property Solutions d.o.o BiH

7.2. From November 2007 to May 2016, Peter Bilbe was a director of Northern Iron Ltd ("NFE"), an ASX-listed iron ore exploration and production company. NFE's principal activities were production of magnetite iron concentrate at the Sydvaranger Iron Project in Kirkenes, Northern Norway, via its wholly-owned Norwegian subsidiary Sydvaranger Gruve AS ("SVG"). During 2014 and 2015, the iron ore price declined substantially, which had a significant adverse impact on SVG's revenue and working capital position, ultimately leading to the withdrawal of ongoing support from SVG's lenders. On 18 November 2015, the board of SVG filed for bankruptcy under Norwegian law and the bankruptcy administrator placed the Sydvaranger Iron Project into care and maintenance, and subsequently undertook a sale process for the assets of SVG in Norway. To support SVG's finance and trading operations NFE had provided parent company guarantees to certain of SVG's lenders and suppliers. As a result of the impending insolvency of NFE, the directors of NFE placed NFE into voluntary administration on 19 November 2015. The claims of NFE's creditors were at that time approximately A\$111,773,700 owing to unsecured creditors (including approximately A\$111,170,000 contingent liability outstanding guarantee creditors of SVG). On 24 March 2016, NFE entered into a deed of company arrangement ("DOCA") with its creditors in terms of which its obligations to creditors were compromised and transferred to a creditors' trust. Priority and secured creditors of NFE to the value of approximately A\$285,000 were paid in full, however unsecured creditors to the value of approximately A\$160,000 received nil or very little return. In May 2016, NFE was reinstated to the ASX following the completion of the DOCA and a recapitalisation of the company.

7.3. In 2012, Northern Iron Ltd was served with an infringement notice by ASIC, alleging that it had failed to comply with its continuous disclosure obligations. The company complied with the notice without admission of guilt or liability. No further action was taken by ASIC.
7.4. Save as disclosed at the date of this prospectus none of the Directors or Senior Managers:
- (a) (has any convictions in relation to fraudulent offences for at least the previous five years;
- (b) has been associated with any bankruptcy, receivership or liquidation or company put into administration while acting in the capacity of a member of the administrative, management or supervisory body or of senior manager of any company for at least the previous five years; or
- (c) has been subject to any official public incrimination and/or sanction of them by any statutory or regulatory authority (including any designated professional bodies) or has ever been disqualified by a court from acting as a director of a company or from acting as a member of the administrative, management or supervisory bodies of an issuer or from acting in the management or conduct of the affairs of any issuer for at least the previous five years.
7.5. There a no family relationships between any of the Directors or the Senior Managers.
7.6. There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any Director or Senior Manager was selected
7.7. None of the Directors or Senior Managers has any potential conflicts of interest between their duties to the Company and their private interests or other duties they may also have.

8. MAJOR SHAREHOLDERS

8.1. Save as set out below, the Directors are not aware of any person who, directly or indirectly, has an interest in three per cent. or more of the Issued Share Capital or voting rights of the Company as at the Last Practicable Date:

Name	Number of Ordinary Shares held as at the Last Practicable Date	Percentage of the Issued Ordinary Share Capital held as at the Last Practicable Date
Sandfire Resources(1)	28,052,232	15.78%
Citicorp Nominees Pty Ltd	17,786,647	10.01%
Paul Cronin	16,851,332	9.48%
Milos Bosnjakovic	16,000,000	9.00%
BNP Paribas Nominees Pty Ltd	11,123,709	6.26%
Glamour Division Pty Ltd	9,148,192	5.15%
Emanuel Datt(2)	9,037,942	5.09%
JP Morgan Nominees Aust	8,471,056	4.77%
BNP Paribas Nominees Hub24	8,252,399	4.64%
HSBC Custody Nominees	6,744,523	3.80%
Charles Waite Morgan	5,478,112	3.08%

————— Note:

(1) Sandfire Resources holding aggregated with holdings of other members of Sandfire Resources group.

(2) Aggregate of entities controlled by Emanuel Datt.

8.2. As at the Last Practicable Date, the Company was not aware of any person or persons who, directly or indirectly, jointly or severally, exercise or could exercise control over the Company nor is it aware of any arrangements, the operation of which may at a subsequent date result in a change in control of the Company.
8.3. Those interested, directly or indirectly, in three per cent. or more of the issued Ordinary Shares of the Company (as set out in paragraph 8.1 above) do not now, and, following the Admission, will not, have different voting rights from other holders of Ordinary Shares.

9. SUBSIDIARIES, INVESTMENTS AND PLACES OF BUSINESS

9.1. The Company has one directly held subsidiary, Eastern Mining.
9.2. The Company has no other subsidiaries, investments or places of business.

10. WORKING CAPITAL

In the opinion of the Company, the working capital available to the Group is sufficient for the Group's present requirements, that is, for at least 12 months from the date of this prospectus.

11. CAPITALISATION AND INDEBTEDNESS

As at the date of this prospectus, the Company has no guaranteed, secured, unguaranteed or unsecured debt and no indirect or contingent indebtedness and the Company's Issued Share Capital consists of 177,715,987 Ordinary Shares with no legal reserve or other reserves.

12. SIGNIFICANT CHANGE

In November 2019 the Company completed an institutional placement raising approximately A\$25,000,000 before expenses from the issue of 25,000,000 Ordinary Shares of £0.013355 at an issue price of A\$1.00 per Ordinary Share.

Other than the institutional placement referred to in this paragraph 12, there has been no significant change in the financial performance or financial position of the Group since 30 June 2019, being the date of the end of the last financial period for which financial information has been published up to the date of this prospectus.

13. INVESTMENTS IN PROGRESS

Save as disclosed in this prospectus, the Company has no investments in progress.

14. LITIGATION

There are no governmental, legal or arbitration proceedings including any such proceedings which are pending or threatened and of which the Company is aware) which may have, or have had during the 12 months prior to the date of this document, a significant effect on the Company and/or the Group's financial position or profitability.

15. MATERIAL CONTRACTS

The following contracts are outside the course of business and either: (a) have been entered into by the Group within two years immediately preceding the date of this document; or (b) contain provisions under which the Group has an obligation or entitlement that is or may be material to the Group as at the date of this document.

15.1. Exploration Concession

On 12 March 2013 Eastern Mining entered into the Concession Agreement with the Zenica-Doboj Canton in relation to the Vares Project which is situated in the Municipality of Vares. The Exploration Concession has been granted to Eastern Mining for the exploration and exploitation of metallic mineral resources, including lead, zinc and barite. Eastern Mining is obliged to perform exploration and exploitation work, which includes mining and certain auxiliary works. The term of the Exploration Concession is for a period of 25 years from 12 March 2013. The exploration and preparatory works was originally required to be completed within a period of 5 years from such date. On 19 February 2018 Eastern Mining and the Zenica-Doboj Canton agreed to extend the exploration period until 25 May 2020. Eastern Mining will be required to pay a concession fee every quarter, calculated on the basis of per tonne of ore exploited during the relevant period, at a rate determined between the parties based on the relevant mineral prices on the London Stock Exchange, but no less than BAM 1.50 per tonne, with an obligatory minimum annual payment equal to an amount of 100,000 tons of exploitation ore, even if the amount exploited is less. If no agreement is achieved in reviewing and aligning the price within a period of 90 days, the Zenica-Doboj Canton is entitled to terminate the Exploration Concession. As security for the quarterly concession fees payable, Eastern Mining has issued a bill-of-exchange with a value of BAM 300,000 to the Zenica-Doboj Canton. A letter from the Ministry of Economy dated 18 October 2019 has clarified that Eastern Mining is not under an obligation to meet any such exploitation requirements prior to 25 May 2020.

The Zenica-Doboj Canton may terminate the Exploration Concession in certain circumstances including if Eastern Mining, fails to pay the quarterly concession fee, insolvency proceedings are commenced against it or if it fails to meet any of its obligations under the Exploration Concession. The Zenica-Doboj Canton must provide Eastern Mining at least 30 days to remedy a breach under the Exploration Concession.

15.2. Agreement with Canaccord and Tamesis

An engagement letter dated 28 October 2019 between the Company, Canaccord and Tamesis, pursuant to which the Company appointed Tamesis and Canaccord as joint lead managers to a private placement. The aggregate gross fees payable by the Company is a commission of 6% of the funds raised pursuant to the placement, comprising a cash management fee, fixed fees, variable fees and performance fees.

The engagement letter contains customary indemnities by the Company in favour of Tamesis and Canaccord and standard limitation on the liability of Tamesis and Canaccord to the Company.

15.3. Agreement with Tamesis

An engagement letter dated 15 July 2019 between the Company and Tamesis, pursuant to which the Company appointed Tamesis as its financial adviser, including in connection with this prospectus and Admission. The term of the appointment is for an initial term of 12 months and is automatically renewed on a quarterly basis unless terminated by either party on one months' written notice or immediately on written notice if the other party is in material breach. Pursuant to the Tamesis engagement letter, the Company has agreed to pay to Tamesis a quarterly retainer fee, a success fee on Admission and corporate transactions, and for equity capital raisings.

The engagement letter contains customary indemnities by the Company in favour of Tamesis and standard limitation on the liability of Tamesis to the Company.

15.4. Agreement with Hannam & Partners

Pursuant to an engagement letter dated 4 June 2019, the Company appointed Hannam & Partners as its joint financial adviser. The appointment can be terminated at any time by written notice of the other party. The Company has agreed to pay to Hannam & Partners a monthly retainer fee, and certain base and success fees for certain corporate transactions, and for equity capital raisings. The engagement letter contains customary indemnities by the Company in favour of Hannam & Partners and a limitation on the liability of Hannam & Partners to the Company.

15.5. Agreement with GMN

The Company and GMN entered into an agreement dated 12 June 2019 pursuant to which GMN would provide the Company introductions to potential investor, facilitate road shows and other promotional activities. In consideration of these services the Company pays GMN a retainer of EUR 3,800 per month. In the event that there is a road show, GMN is entitled to receive EUR 3,800 for each road show (per day). The agreement is for an initial term of one month and is automatically renewed for additional successive one-month periods. GMN may terminate the agreement immediately by giving notice to the Company and the Company may terminate on 10 days' notice to GMN.

15.6. Agreement with BMO

Pursuant to an engagement letter dated 21 May 2019, the Company appointed BMO as its joint financial adviser. The agreement can be terminated on written notice and shall terminate automatically on completion of a takeover of the Company, whichever is the earlier. Pursant to the agreement, the Company has agreed to pay to BMO certain base and success fees in respect of specified corporate transactions.

The engagement letter contains customary indemnities by the Company in favour of BMO.

15.7. Registrar Agreement

The Company and the Registrar have entered into the Registrar Agreement pursuant to which the Registrar has agreed to act as registrar to the Company and to provide transfer agency services and certain other administrative services to the Company in relation to its business and affairs.

The commencement date of the Registrar Agreement will be the date of Admission. The Registrar Agreement shall continue for an initial period of three years and thereafter will continue until terminated upon written notice by either party, by giving not less than six months' written notice (such notice not to expire prior to the third anniversary of the commencement date). In addition, the agreement may be terminated by notice in writing if either party (i) commits a material breach of the agreement which has not been remedied within 21 days of a notice requesting the same; (ii) goes into insolvency, liquidation (except voluntary), administration or receivership (provided that the insolvency, liquidation, administration or receivership is not revoked within 30 days); or (iii) ceases to have the appropriate authorisations which permit it to performs its obligations under the agreement.

15.8. Collaboration and Partnership Deed with Sandfire Resources

On 1 May 2018, the Company entered into a collaboration and partnership deed with Sandfire Resources.

The deed contains an anti-dilution right which entitles Sandfire Resources to participate in any offer of securities or any issue of securities on conversion or exercise of any equity securities by the Company up to the amount necessary to ensure that Sandfire Resources interest in the Company's securities immediately prior to the completion of such offer or issue of securities in maintained, provided that Sandfire Resources's participation is for cash consideration that is: (a) no more favourable than the cash consideration paid by third parties; or (b) equivalent in value to an non-cash consideration offer by third parties. The anti-dilution right shall cease to apply on the earlier to occur of Sandfire Resources's interest in the Company's securities: (a) falling below 7.70 per cent. of the Company's issued ordinary share capital (other than as a result of the offer or issue of securities to which the anti-dilution right applies); and (b) increasing to more than 19.99 per cent. of the Company's issued ordinary share capital.

Pursuant to the deed, Sandfire Resources is entitled to nominate one director to the Board of the Company as a non-executive director ("Nominated Director") for so long as Sandfire Resources's interest in the Company's securities is 10 per cent. or more of the Company's issued ordinary share capital. The right of Sandfire Resources to nominate a director shall cease to apply if Sandfire Resources's interest in the Company falls below 10 per cent. of the Company's issued ordinary share capital for more than 30 consecutive days on which the ASX is open for trading.

Any Nominated Director nominated by Sandfire Resources for appointment must be appointed on the same terms as the other non-executive directors of Company, including terms of remuneration, cost reimbursement and rights of indemnity, access and insurance.

Under the deed, the Company agreed to establish a strategic technical committee ("Strategic Committee") which, in relation to the Company's projects (surrounding prospects and related exploration or development opportunities): will be responsible for (a) assessing and reviewing overall progress and (b) providing the Board with recommendations and advice as to technical, in-country, political, funding, and marketing matters. The Strategic Committee must: (i) be chaired by either the Company's Managing Director, or another representative appointed by the Company; (ii) include at least one subject matter expert from each of Sandfire Resources and the Company. Recommendations and advice provided by the Strategic Technical Committee to the Board are non-binding. If Sandfire Resources's interest in the Company's securities falls below 7.70 per cent. of the Company's issued ordinary share capital for more than 30 consecutive days on which the ASX is open for trading, the obligations relating to the Strategic Committee cease to apply.

15.9. Placing Mandate with Ashanti

Pursuant to an engagement letter dated 18 November 2018, the Company appointed Ashanti as its lead manager and settlement agent in connection with the Company's placing of 19.7 million Ordinary Shares to raise A\$ 10.8 million, in consideration for a cash fee payable to Ashanti equal to 6 per cent. of the gross proceeds of the placing. The engagement letter contains customary indemnities by the Company in favour of Ashanti and standard limitation on the liability of Ashanti to the Company.

15.10. Agreements with Discovery Capital Partners and Canaccord

Pursuant to an engagement letter dated 19 December 2017, the Company appointed Discovery Capital Partners as its corporate and financial advisor to its ASX IPO and postlisting to assist the Company with maximising shareholder value in relation to its growth, corporate and capital markets objectives. In consideration for these services, Discovery is entitled to a corporate advisory fee of A\$5,000 which was payable monthly in arrears from the date of the IPO.

Pursuant to an engagement letter with Canaccord dated 13 February 2018, the Company appointed Discovery Capital Partners as its lead manager and bookrunner (and Canaccord as co-manager) in relation to the offering of CDIs representing fully paid Ordinary Shares in the Company through an IPO and listing of the ASX to raise up to A\$10,000,000. The fee payable in consideration for the services is the greater of (i) A\$100,000 plus goods and services tax and (ii) 5 per cent of the funds of the proceeds raised in the IPO from investors procured by Canaccord.

15.11. Computershare Australia Registry Services Agreement

Pursuant to an agreement dated 4 January 2018, the Company appointed the Australian Registrar to provide certain IPO and registry services to the Company in connection with the Company's ASX listing, the creation and maintenance of its Australian branch share register and its CHESS Depositary Interest arrangements. The Company agreed to pay A\$2,000 for the IPO and initial set up fees and A\$575 per month (based on up to 1,000 shareholders) for ongoing share registry services, as well as ad hoc service fees for certain corporate actions and transactions.

Pursuant to the agreement, the Company, in its capacity as attorney of the Depositary pursuant to Rule 13.5.8 of the ASX Settlement Operating Rules, has appointed the Australian Registrar as its attorney to do all things necessary to effectuate any transfer for the purposes of Rule 13.3 of the ASX Settlement Operating Rules and to give full effect to the rights and obligations of the Depositary under Rules 13.1 to 13.3 of the ASX Settlement Operating Rules, including for the completion, execution and delivery of proxies provided for by Rule 13.8 of ASX Settlement Operating Rules.

The initial term of the agreement is for three years and thereafter will continue for successive periods of one year, unless terminated by either party on six months' written notice. The agreement may be terminated by notice in writing if either party (i) commits a material breach of the agreement which has not been remedied within 30 days of a notice requesting the same; (ii) goes into insolvency.

The Company has agreed to indemnify Australian Registrar in respect of any claims or liabilities arising in connection with the provisions of the services by the Australian Registrar except as a result of the fraud, wilful default or negligence of the Australian Registrar. In addition, the liability of the Australian Registrar to the Company is limited in aggregate to the service fees paid to the Australian Registrar in the 12 months preceding the event for which recovery is sought. The agreement is governed by the laws of the State of Western Australia.

15.12. ASX deed of undertaking

By deed of undertaking effective 27 April 2019 the Company gave various undertakings to the ASX including inter alia:

* notifying the market immediately of a person becoming or ceasing to be a substantial holder in the Company;
* producing a statement in each annual report setting out the names of all substantial holders in the Company; and
* producing a statement in each annual report specifying any limitations on the acquisition of securities imposed by legislation governing the Company in the United Kingdom and/or in the Articles.

15.13. Non-Executive Directors' letters of appointment

Peter Bilbe

Peter Bilbe entered into a letter of appointment with the Company on or around 24 February 2019 pursuant to which Mr Bilbe was appointed as a Non-Executive Director of the Company. Mr Bilbe is entitled to a base fee of A\$7,500 per month, which may be increased to A\$15,000 per month in circumstances where 'qualifying transactions' are under consideration or being implemented, requiring additional time and input. These are transactions requiring time and input that is over and above what would ordinarily be required of a Non-Executive Director.

Julian Barnes

Julian Barnes entered into a letter of appointment with the Company on or around 24 February 2019 pursuant to which Mr Barnes was appointed as a Non-Executive Director of the Company. Mr Barnes is entitled to a base fee of £2,500 per month, which may be increased to £5,000 per month in circumstances where 'qualifying transactions' are under consideration or being implemented, requiring additional time and input.

Michael Rawlinson

Michael Rawlinson entered into a letter of appointment with the Company dated 4 March 2019 pursuant to which Mr Rawlinson was appointed as a Non-Executive Director of the Company. Mr Rawlinson is entitled to a base fee of £30,000 per annum, which may be increased to £5,000 per month in circumstances where 'qualifying transactions' are under consideration or being implemented, requiring additional time and input. Mr Rawlinson was also granted 1,000,000 share options with an exercise price of A\$1.00 per share, with an exercise period of three years, subject to the terms and conditions of the Option Plan 2019.

Milos Bosnjakovic

Milos Bosnjakovic entered into a letter of appointment with the Company on or around 13 July 2018 pursuant to which Mr Bosnjakovic was appointed as a Non-Executive Director of the Company. This letter of appointment is in addition to his consultancy agreement with the Company dated 7 February 2018, as varied on 12 July 2018 which is summarised in paragraph 15.14 below. Mr Bosnjakovic is entitled to a base fee of £2,500 per month, which may be increased to £5,000 per month in circumstances where 'qualifying transactions' are under consideration or being implemented, requiring additional time and input. During his appointment as a director, Mr Bosnjakovic is prohibited from being engaged or interested in any public or private work or duties in relation to base metals in Bosnia and Herzegovina which are in direct conflict with the best interests of the Company (in the reasonable opinion of the Board). Except with the consent of the Board or by authority given by a resolution of the Company, during his appointment Mr Bosnjakovic must not be engaged in any other base metals business competing in any material respect in Bosnia and Herzegovina with the business of the Company (save for specific bona fide portfolio investments). The appointment letter contains an acknowledgement that the Company owns all intellectual property developed during or 12 months' after Mr Bosnjakovic's engagement with the Company or anything developed using information Mr Bosnjakovic obtained during his engagement with the Company.

John Richards

John Richards entered into a letter of appointment with the Company on or around 11 November 2019 pursuant to which Mr Richards was appointed as a Non-Executive Director of the Company. Mr Richards is entitled to a base fee of A\$54,000 per annum, which may be increased to higher level by determination of the Board in circumstances where 'qualifying transactions' are under consideration or being implemented, requiring additional time and input. Mr Richards has also been granted 1,000,000 share options with an exercise price of A\$1.25 per share, with an exercise period of three years from grant, subject to the terms and conditions of the Option Plan 2019.

Sandra Bates

Sandra Bates entered into a letter of appointment with the Company on or around 11 November 2019 pursuant to which Ms Bates was appointed as a Non-Executive Director of the Company. Ms Bates is entitled to a base fee of £30,000 per annum, which may be increased to higher level by determination of the Board in circumstances where 'qualifying transactions' are under consideration or being implemented, requiring additional time and input. Ms Bates has also been granted 1,000,000 share options with an exercise price of A\$1.25 per share, with an exercise period of three years from grant, subject to the terms and conditions of the Option Plan 2019.

15.14. Consultancy arrangements

Paul Cronin, Managing Director and Chief Executive Officer

The Company

On 12 September 2019 the Company entered into a consultancy agreement with Swellcap Limited ("Swellcap") and Paul Cronin. Swellcap has agreed to provide the services of Mr Cronin as Managing Director and Chief Executive Officer to the Company under the agreement. Swellcap, through Mr Cronin will (amongst other things) oversee all operations for the Company's projects, manage the completion of technical studies on the Company's projects, develop subordinate staff and oversee the eventual constructions of the Company's projects.

Swellcap and/or Mr Cronin are not required to provide these services on an exclusive basis, however they will not provide services if the provision of which may constitute a conflict of interest or interfere with Swellcap's obligation to provide services to the Company. Swellcap is not required to provide the services for a period of up to 30 days per year.

In consideration for these services, the Company will pay Swellcap a fee of £170,000 per annum, which is to be calculated on a daily basis and paid monthly. Subject to Swellcap achieving certain Key Performance Indicators, the Company will pay Swellcap a bonus. The Board has discretion to determine whether the KPIs have been achieved and if so, what proportion of the bonus amount is payable. The KPIs (and accompanying bonus amounts) include admission of the Company to London Stock Exchange (bonus amount £30,000), the issue of an exploration permit for each of Veovača (bonus amount £35,000) and Rupice (£35,000). Any bonus ceases to be payable if the services are no longer being provided and/or are under notice of termination as at the last day of the period to which the bonus relates.

In accordance with the consultancy agreement, Mr Cronin has been issued 1,500,000 Performance Rights (being a right to be issued shares granted under the Option Plan 2019. By 31 December 2019 750,000 Performance Rights will vest if (a) the scoping study for the Vareš project has completed; and (b) the Volume Weighted Average Market Price per CDI (as quoted on ASX) exceeds A\$1.25 for the 5 consecutive trading days immediately prior to 31 December 2019. By 31 December 2021 750,000 Performance Rights will vest if (a) completion of a JORC compliant definitive feasibility study; and (b) the Volume Weighted Average Market Price per CDI (as quoted on ASX) exceeds A\$1.50 for the 5 consecutive trading days immediately prior to 31 December 2021.

The agreement is deemed to have commenced on 1 July 2019. The Company or Swellcap may terminate the agreement on six months' written notice. The Company is entitled to pay Swellcap in lieu of all or any part of the notice period. The Company or Swellcap may terminate without notice if the other party commits a serious breach of the agreement or otherwise engages in conduct that would justify a decision to terminate without notice. The Company may also terminate with immediate effect if (amongst other items) Swellcap is unable to comply with any necessary regulatory or licensing requirements, if Swellcap and/or Mr Cronin's are subject to insolvency/bankruptcy circumstances or if Swellcap fails to perform the services for a continuous period of more two weeks without written consent of the Company.

Eastern Mining

On 1 April 2017 Eastern Mining entered into a management agreement with Paul Cronin ("Director Management Agreement") in respect of his role as Director of Eastern Mining. Under the terms of the Director Management Agreement Eastern Mining pays Mr Cronin a monthly fee of 1,700 BAM net.

Either party can terminate the Director Management Agreement by giving 14 days' notice. Eastern Mining can terminate the Director Management Agreement without notice if Mr Cronin breaches the provisions of the agreement, including but not limited to neglecting his duties, criminal convictions, misuse of his position or unauthorised disclosure of business secrets.

Milos Bosnjakovic, Non-Executive Director and Head of Regulatory

On 7 February 2018 the Company entered into a consultancy services agreement with Milos Bosnjakovic, pursuant to which Mr Bosnjakovic provides services to the Company as Head of Regulatory from the effective date of the agreement, being 1 February 2017. This agreement was varied by letter dated 13 July 2018. Under the agreement Mr Bosnjakovic is responsible for, inter alia, managing applications and extensions of exploration licenses and mining concessions in Bosnia & Herzegovina, managing the grant of all other licenses or permits required by the Company or its subsidiaries to operate in Bosnia & Herzegovina and identifying potential new business opportunities in Bosnia & Herzegovina.

Mr Bosnjakovic is prohibited from being engaged or interested in any work or duties in relation to base metals in Bosnia & Herzegovina which would result in a direct conflict with the best interests of the Group. Except with the written consent of the Board or by an authorising resolution of the Company, during the term of the agreement Mr Bosnjakovic is prohibited from being engaged, concerned or interested in any other base metals business in Bosnia & Herzegovina competing with the business of the Company. Mr Bosnjakovic is expressly permitted to hold non-executive or executive positions with non-related companies as agreed by the Board or other bona fide portfolio investments. Mr Bosnjakovic is paid a fee of £7,500 per month.

Graham Hill, Chief Operating Officer

On 16 September 2019 the Company entered into a consultancy agreement with Graham Hill in respect of his role as Chief Operating Officer of the Company. The agreement provides that Mr Hill will also be employed by Eastern Mining as Chief Operating Officer (subject to Mr Hill obtaining the requisite work visa). Mr Hill will (amongst other items) oversee operations for the Company's projects, manage the completion of technical studies and develop subordinate staff.

Mr Hill is not required to provide these services on an exclusive basis, Mr Hill will not provide services to another party which may constitute a conflict of interest or interfere with his obligation to provide services to the Company. Mr Hill is not required to provide the services for up to 30 days per year. Payment will be made in lieu of any of the 30 days at the end of each year if they are not accumulated.

The Company will pay Mr Hill's relocation costs of £20,000 in connection with his relocation to Bosnia & Herzegovina. In consideration for the services, the Company will pay Mr Hill fees at a rate of £172,000 per annum, calculated for the period of time that Mr Hill provides the services and paid monthly. Mr Hill is also paid an accommodation fee of £18,000 per annum in equal monthly instalments. Subject to Mr Hill achieving certain Key Performance Indicators, the Company will pay him a bonus. The KPIs and bonus amount will be determined by the Board.

In accordance with the agreement the Company has granted Mr Hill 1,000,000 Options under the Option Plan 2019. The Options will have an exercise price of A\$1.25 per Option and will expire within 3 years from the date of issue. The Options will vest in two tranches being 50 per cent. on completion of a scoping study and 50 per cent. on issuance of an exploitation permit for the Company's Rupice project and Veovača project. In the event that there is a change of control of the Company, Mr Hill be entitled to a payment of £100,000.

The Company or Mr Hill may terminate the agreement on six months' written notice. The Company may pay Mr Hill in lieu of all or any part of the notice period. The Company or Mr Hill may terminate without notice if the other party commits a serious breach of the agreement or otherwise engages in conduct that would justify a decision to terminate without notice. The Company may also terminate with immediate effect if, inter alia, Mr Hill is unable to comply with any necessary regulatory or licensing requirements, if Mr Hill is subject to bankruptcy circumstances or if Mr Hill fails to perform the services for a continuous period of more then two weeks without written consent of the Company.

Sean Duffy, Joint Company Secretary

On 27 November 2017 the Company entered into a consultancy services agreement with Gumtree Management Services Limited ("Gumtree") and Sean Duffy. Gumtree has agreed to provide consultancy services to the Company and Mr Duffy is the person nominated to perform the services. The agreement provides that Mr Duffy will act as Chief Financial Officer and Company Secretary and is responsible for (amongst other items), assisting with the financial and regulatory disclosures and reporting required for the initial public offering of the Company, making all required disclosures to the ASX or LSE and preparing the Company's accounts. During the term of the agreement, Gumtree and Mr Duffy are restricted from being engaged or interested in any work or duties for projects in The Balkans which would result in a direct conflict of interest with the Company.

In consideration for the services, Gumtree receives £4,167 per month which shall accrue daily and is payable monthly in arrears. This fee is subject to annual review by the Company.

Either the Company or Gumtree may terminate the agreement on two months' written notice (or in the case of the Company giving notice to terminate, the option to pay compensation to Gumtree in lieu of notice). The engagement may be terminated without notice if either Gumtree or Mr Duffy are guilty of serious misconduct such as being convicted of certain criminal offences, serious or persistent breach of the agreement and wilful neglect in the discharge of its/his duties.

Gabriel Chiappini, Joint Company Secretary

On 6 November 2018, Gabriel Chiappini was appointed as the Company's joint company secretary. Mr Chiappini is engaged by the Company, through his consulting firm Laurus Corporate Services ("Laurus") under a letter from Laurus to the Company dated 1 November 2018. Laurus is engaged to provide to provide company secretarial services to the Company, including ASX announcements, shareholder general meeting and board meeting notices and coordination of the Company's corporate governance procedures. In consideration for these services, Laurus receives A\$3,000 per month. The appointment of Laurus is for a minimum period of 12 months from 1 November 2018 until terminated on 6 months' notice. The agreement will continue on a rolling basis for successive periods of 12 months unless otherwise agreed.

Adnan Teletovic, General Manager

On 29 May 2018 Eastern Mining entered into a management agreement with Adnan Teletovic ("Management Agreement") in respect of his role as General Manager of Eastern Mining. Eastern Mining will pay Mr Teletovic a monthly fee of 6,000 BAM net and may also pay bonuses.

During the term of the contract, Mr Teletovic is prohibited from engaging in any other business (including but not limited to those business activated conducted by Eastern Mining) without the prior written consent of Eastern Mining. During the agreement and for a period of 12 months from termination, Mr Teletovic is prohibited from being involved in any business which could be in competition with Eastern Mining or any of its connected entities.

Either party can terminate the Management Agreement by giving 30 days' notice. Eastern Mining can terminate the Management Agreement without notice if Mr Teletovic breaches the provisions of the agreement, including (but not limited to) neglecting his duties, criminal convictions, misuse of his position or unauthorised disclosure of business secrets.

The Management Agreement is governed by the laws of Bosnia & Herzegovina.

15.15. Deeds of indemnity and insurance

The Company has entered into deeds of indemnity and insurance with each existing Director which require the Company to provide an indemnity for liability incurred as an officer of the Company, to the maximum extent permitted by law.

Under the deeds, the Company must arrange and maintain Directors' and Officers' insurance during each Director's period of office and for a period of six years after a Director ceases to hold office. The deeds also require the Directors to provide certain information to enable the Company to comply with its continuous disclosure obligations.

The deeds are otherwise on terms and conditions considered standard for deeds of this nature in the United Kingdom.

16. RELATED PARTY TRANSACTIONS

Save for the related party transactions set out in the Historical Financial Information, the non-executive directors' appointment letters and the directors' service agreements summarised in paragraph 15.13 and 15.14 of this Part XVII, there are no related party transactions that were entered into by the Group during the Historical Financial Information Review Period and up to and including the Last Practicable Date.

17. OPTION PLANS

The Company's remuneration policy seeks to provide a strong and clear link between business strategy and incentive arrangements. Set out below are summaries of the principal features of the share option plans adopted by the Company.

17.1. ESOP 2019 and Option Plan 2019

On 8 November 2019 the Company adopted the ESOP 2019 and the Option Plan 2019. The terms of each plan (each a "Plan") are summarised below. The only differences between them is that the ESOP 2019 is specifically for employees of the Group only, whilst the Option Plan 2019 is for the benefit of employees, contractors and consultants of the Group. The Plans are governed by the laws of the State of Western Australia.

The Board has discretion to approve issues of share options and performance rights ("Performance Rights") pursuant to each Plan.

(a) Eligible participants

The eligible participants under the ESOP 2019 are directors and employees of any member of the Group. The eligible participants under the Option Plan 2019 are directors, employees, other consultants or contractors of any member of the Group. Any other person who is declared by the Board in its sole and absolute discretion to be eligible to receive grants of options or Performance Rights under the Plan shall also be an eligible participant.

In accordance with the ASX Listing Rules, prior Shareholder approval will be required before any Director or related party of the Company can participate in the Plan and be granted options or Performance Rights.

(b) Limits on Entitlement

An grant of options or Performance Rights may only be made under the Plan if the number of Ordinary Shares that may be acquired on exercise of the options or Performance Rights when aggregated with the number of Ordinary Shares issuable if each outstanding option and Performance Rights were exercised and the number of Ordinary Shares issued pursuant to the Plan or any other Group employee incentive scheme during the previous three years does not exceed 10 per cent of the total number of Ordinary Shares in issue at the time of the proposed grant.

The maximum allocation and allocated pool may be increased by Board resolution, provided such an increase complies with the ASX Listing Rules. The Plan does not set out a maximum number of Ordinary Shares that may be made issuable to any one person or company.

A grant of options or Performance Rights under a Plan must be set out in a letter or grant certificate delivered to an Eligible Employee, specifying (as determined by the Board) among other things: the number of Options or Performance Rights, the conditions of grant, the grant date, any fee payable by any participant on the grant of options, Performance Rights or Ordinary Share(s) issued pursuant to the exercise of an option or conversion of a Performance Rights (each an "Employee Incentive") (if any), any performance criteria (if any), the vesting conditions (if any), the exercise price (if any), the exercise period (if applicable), the performance period (if applicable), and the expiry date and term (if applicable). Options and Performance Rights will be issued for nil consideration.

(d) Employee Share Trust

The Board may in its sole and absolute discretion use an employee share trust or other mechanism for the purposes of holding Ordinary Shares for participants under the Plans and delivering Ordinary Shares to participants upon exercise of the options or the vesting of a Performance Right.

(e) Cashless Exercise

Under the Plan, a participant may elect to pay the exercise price for each option by setting off the total exercise price against the number of Ordinary Shares which they are entitled to receive upon exercise ("Cashless Exercise Facility"). By using the Cashless Exercise Facility, the holder will receive Ordinary Shares to the value of the surplus after the exercise price has been set off.

(f) Lapse of options and Performance Rights

Subject to the Board's discretion, options and Performance Rights shall automatically be cancelled for no consideration where: (i) the participant ceases to hold employment or office with the Company or Group member (except where the participant is a good leaver); (ii) the participant is determined to have engaged in fraudulent or dishonest conduct (as described below); (iii) the applicable performance criteria and/or vesting conditions are not achieved by the relevant time; (iv) the Board determines, in its reasonable opinion, that the applicable performance criteria and/or vesting conditions have not been met or cannot be met within the relevant time; (v) the Expiry Date has passed; (vi) the Board determines that the participant has brought the Group into disrepute or acted contrary to the interest of the Company or Group; (vii) the participant has elected to surrender the Performance Rights or options; and (viii) the letter of grant provides for the cancellation of the Performance Rights or options in any other circumstances.

(g) Good Leaver

A good leaver is a participant who ceases employment or office with the Company or a member of the Group and is determined by the Board to be a good leaver. Where a participant who holds Employee Incentives becomes a good leaver: (i) all vested options which have not been exercised will continue in force and remain exercisable for 90 days after the date the participant becomes a good leaver, unless the Board determines otherwise in its sole and absolute discretion, after which the Employee Incentives will lapse; and (ii) the Board may in its discretion permit unvested Employee Incentive held by the good leaver to vest, or to continue to be held by the applicable holder or amend the vesting criteria applicable to the Employee Incentives (including performance criteria and/or vesting conditions) or determine that the unvested Employee Incentives lapse.

(h) Bad Leaver

Where a participant who holds Employee Incentives becomes a bad leaver, unless the Board determines otherwise (in its sole and absolute discretion), all vested and unvested Employee Incentives will lapse. Where a participant who holds Employee Incentives becomes a bad leaver the Board may determine to exercise the right to buy back any Ordinary Shares issued upon exercise of an option or conversion of a Performance Rights.

A bad leaver is a participant who, unless the Board determines otherwise, ceases employment or office with the Company or member of the Group (which includes for any of the circumstances which amount to fraudulent or dishonest conduct (described below)).

(i) Fraudulent or Dishonest Conduct

Where, in the opinion of the Board, a participant or former participant (which may include a good leaver) has engaged in fraudulent or dishonest conduct the Board may deem all employee Incentives held by the participant or former participant to be automatically be forfeited. Fraudulent or dishonest conduct means a participant or former participant: (i) acts fraudulently or dishonestly; (ii) wilfully breaches his or her duties to the Company or any member of the Group; brings the Group or its business or reputation into disrepute; (iii) commits any material breach of the provisions of any employment contract entered into by the participant with any member of the Group; (iv) commits any material breach of any of the policies of the Group or procedures or any laws, rules or regulations applicable to the Company or Group; (v) is subject to allegations, has been accused of, charged with or convicted of fraudulent or dishonest conduct in the performance of his duties; (vi) is subject to allegations, has been accused of, charged with or convicted of any criminal offence which involves fraud or dishonesty or any other criminal offence which Board determines (in its absolute discretion) is of a serious nature; (vii) has committed any wrongful or negligent act or omission which has caused any member of the Group substantial liability; (viii) has become disqualified or banned from managing corporations or has committed any act that, may result in the participant being banned from managing a corporation; (ix) has committed serious or gross misconduct, wilful disobedience or any other conduct justifying termination of employment without notice; (x) has wilfully or negligently failed to perform their duties under any employment contract entered into by the participant with any member of the Group; (xi) has engaged in a transaction which involves a conflict of interest to their employment with the Company resulting in the participant obtaining a personal benefit; (xii) accepts a position to work with a competitor of the Company or Group; (xiii) acts in such a manner that could be seen as being inconsistent with the culture and values of the Company or the Group; or (xiv) any other act that the Board determines in its absolute discretion to constitute fraudulent or dishonest by the participant.

(j) Change of Control

All granted Performance Rights which have not yet vested or lapsed shall automatically and immediately vest (regardless of whether any performance criteria or vesting conditions have been satisfied) and a participant may exercise any or all of their options (regardless of whether the vesting conditions have been satisfied but provided that no option will be capable of exercise later than the expiry date) if any of the following change of control events occur (or has been announced and, in the opinion of the Board, will or is likely to occur): (i) the acquisition by a person or group of persons acting in concert (as defined in the Takeover Code) of interests in securities (as defined in the Takeover Code) carrying more than 50 per cent. of the voting rights of the Company; (ii) the acquisition or proposed acquisition by a person or group of persons acting in concert of interests in securities (as defined in the Takeover Code and whether held directly or indirectly) carrying 30 per cent. or more of the voting rights of the Company followed by a general offer to the shareholders of the Company (whether pursuant to Rule 9 of the Takeover Code or otherwise), and which is recommended by the board of the Company, and becomes or is declared unconditional; (iii) a person (either acting alone or with a group of persons acting in concert) has appointed or removed a majority of the board of directors of the Company or has the right or ability to appoint or remove a majority of the board of directors of the Company; (iv) the consummation of a reorganisation, takeover, merger, consolidation, scheme of arrangement, statutory share exchange or similar transaction or series of related transactions after which either: (1) the shareholders of the Company immediately prior to the transaction cease to own more than 50 per cent. of the combined voting rights of the surviving or resulting entity after the transaction or (2) the members of the board of directors of the Company immediately prior to the transaction do not constitute a majority of the board of directors of the surviving or resulting entity after the transaction; and (v) the announcement by the Company that a sale or transfer (in one transaction or a series of related transactions) of the whole or substantially the whole of the undertaking and business of the Company has been completed.

If the Board has procured an offer for all holders of options on like terms (having regard to the nature and value of the options) to the terms proposed under the change in control event and the Board has specified (in its absolute discretion) a period during which the holders of options may elect to accept the offer and, if the holder has not so elected at the end of that offer period, the options, if not exercised within 10 days of the end of that offer period, shall expire.

(k) Lock in arrangements

The Board may request the Company's share registry to impose a holding lock on any Employee Incentives issued pursuant to the Plan where the Board determines or reasonably believes (in its absolute discretion) that a participant (or a former participant) has or may breach the Plan rules.

(l) Amendment of Plan

The Board may at any time amend the Plan rules or the terms and conditions upon which any Employee Incentives have been issued under the Plan, provided that no amendment to the Plan rules or to Employee Incentives granted under the Plan may be made if the amendment, in the opinion of the Board, materially reduces the rights of any participant in respect of Employee Incentives granted to them prior to the date of the amendment, other than: (i) an amendment introduced primarily: (1) for the purposes of complying with or conforming to present or future legislation governing or regulating the Plan or like plans; (2) to correct any manifest error or mistake; (3) to allow the implementation of a trust arrangement in relation to the holding of Shares granted under the Plan; (4) for the purpose of complying with applicable laws; and/or (5) to take into consideration possible adverse taxation implications in respect of the Plan including changes to applicable taxation legislation or the interpretation of that legislation by a court of competent jurisdiction or any rulings from taxation authorities administering such legislation; or (ii) an amendment agreed to in writing by the participant(s). The Board may determine that any amendment to the Plan rules or the terms of Employee Incentives granted under the Plan be given retrospective effect.

(m) Termination or Suspension

Subject to the Board considering and endeavouring to ensure that there is fair and equitable treatment of all participants, the Board may at any time terminate or amend the Plan or suspend the operation of the Plan for such period or periods as it thinks fit.

17.2. Option Plan 2018

The Company adopted the Option Plan 2018 on 12 February 2018, particulars of which are summarised below. The Board has resolved that no new options shall be granted under this plan and that future grants of options shall be made under the Option Plan 2019 and the ESOP 2019. A total of 23,035,000 options remain outstanding under the Option Plan 2018, as identified in the table of outstanding options at paragraph 17.3.

(a) Eligible Participants

The Board at its sole discretion may grant options under the Option Plan 2018 to any eligible persons, being, employees, directors or consultants of any member of the Group.

(b) Grant of options

The Board may grant options under the Option Plan 2018 to eligible persons by executing an option certificate, specifying, among other things, the terms of the options granted, the grant date and total number of options granted, the exercise price, the vesting date and lapse date and any other matters the Board determines necessary, including any performance conditions the exercise conditions and disposal restrictions attaching to the options. The vesting date may not be earlier than the first anniversary of the grant date or later than the fifth anniversary of the grant date.

Performance conditions may, at the discretion of the Board, be specified to apply to all or part of an option and shall be an objective measure of the performance of (i) the Company; (ii) the optionholder; or (iii) a business unit of which the optionholder is a part. The Board is entitled to vary or waive any performance conditions if events occur which cause (i) the options to become exercisable before the end of the period for the assessment of the original performance condition where such original performance condition cannot reasonably be assessed in the shortened time frame; the Board to decide that the performance condition is no longer an appropriate measure of performance or is no longer required.

(d) Lapse of options

Options granted under the Option Plan 2018 shall lapse on the earliest to occur of: (i) any attempt by the optionholder to transfer or encumber his / her options; (ii) the date when any performance condition becomes incapable of being met or is not met within a specified time period; (iii) the lapse date stated in the option certificate; (iv) 90 days following the optionholder ceasing to be an employee of the Group; (v) the optionholder becoming bankrupt or subject to voluntary arrangements with its creditors; (vi) the first anniversary of the optionholder's death; or (vii) six months from the date of a relevant corporate event ("Corporate Event") being a change of control resulting from a takeover offer, or a court sanctioned scheme of arrangement, or shareholders becoming bound by a non-UK reorganization that affects the Ordinary Shares, or any person becoming bound or entitled to acquire the Ordinary Shares under sections 979 to 985 of the Companies Act.

(e) Option Rights

Options granted under the Option Plan 2018 are not capable of being transferred or encumbered by an optionholder. In the event of a purported transfer or grant of encumbrance by the optionholder, the options granted to such optionholder shall lapse. If the Ordinary Shares are listed or traded on any stock exchange, the Company shall apply to the relevant body for any newly issued Ordinary Shares allotted on the exercise of an option to be admitted to trading on that exchange.

(f) Exercise of Options

Options granted under the Option Plan 2018 may be exercised on the earliest to occur of the vesting date, the occurrence of a Corporate Event or at the board discretion during the period of 90 days from the date of cessation of the optionholder's employment with the Group. Options may only be exercised if particular the exercise or vesting conditions have been met and the options are exercised within the respective exercise period, the exercise price has been paid to the Company and all necessary arrangements have been made for the optionholder to pay all relevant tax liabilities.

(g) Cessation of Employment

If an optionholder ceases to be an employee of the Group due to his or her resignation, redundancy dismissal for cause or poor performance on or before the relevant exercise period, the options will lapse.

If an optionholder ceases to be an employee of the Group, due to injury, ill health, disability, retirement, the optionholder's employer ceasing to be a member of the Group or the employment of the optionholder is transferred to a person that is not a member of the Group, the optionholder may exercise their option during the period of 90 days commencing on the earlier of the vesting date and the date on which the option becomes exercisable in relation to a Corporate Event.

(h) Variation of Share Capital

In the event of any variation of the share capital of the Company that affect or may affect the value of the options, the Board may adjust the number of Ordinary Share subject to each option and/or the exercise price in a manner that the board considered to be fair and appropriate.

(i) Compliance with Laws

The terms of the Plan must at all times comply with applicable laws and regulations, including the rules of any stock exchange on which the Company's securities are admitted to trading. Options may not be granted and may not be exercised under the Option Plan 2018 if to do so would contravene any other applicable laws or regulations, including MAR. The Option Plan 2018 is governed by the laws of England.

17.3. Outstanding Options

As at the Last Practicable Date, the following Options and Performance Rights are outstanding:

Name	Options/ Performance Rights	Exercise Price	Award Date	Vesting Conditions	Expiry Date
Geraint Harris	375,000 granted under Option Plan 2018	A\$ 0.60	20 February 2018	Time vested on 1 April 2019 Condition satisfied: completion of a scoping study by the Company	1 July 2021
Peter Bilbe	1,500,000 granted under Option Plan 2018	A\$ 0.30	20 February 2018	Vested on 1 April 2019	1 July 2021
Sean Duffy	600,000 granted under Option Plan 2018	A\$ 0.40	3 May 2019	Vested on 1 April 2019 Condition satisfied: completion of signed audited financial statement for period 30 June 2018	1 July 2021
Robert Annett	500,000 granted to under Options Plan 2018	A\$ 0.40	9 August 2019	Vested on 1 April 2019 Condition satisfied: completion of 5,000 metres of drilling completed by the Company	1 July 2021
Julian Barnes	1,000,000 granted under Option Plan 2018	A\$ 0.30	20 February 2018	Vested on 1 April 2019	1 July 2021
Milos Bosnjacovic	1,000,000 granted under Option Plan 2018	A\$ 0.40	20 February 2018	Vested on 1 April 2019 Condition satisfied: receipt of additional licence and commencement of drilling	1 July 2021
Adnan Teletovic	1,000,000 granted under Option Plan 2018	A\$ 0.40	5 June 2018	Vested on 1 April 2019 Condition outstanding: completion of grant of the exploitation permit for the Vareš Project	5 June 2021
Discovery Capital Partners	2,000,000 service provider Options granted	A\$ 0.40	20 February 2018	Vested upon ASX IPO	1 July 2021
Paul Cronin	2,500,000 granted under Option Plan 2018 being founder share options	A\$ 0.20	20 February 2018	N/A	1 July 2023
Rebecca Cronin	2,500,000 granted under Option Plan 2018 being founder share options	A\$ 0.20	20 February 2018	N/A	1 July 2023
Eric de Mori	4,000,000 granted under Option Plan 2018 being founder share options	A\$ 0.20	20 February 2018	Vested upon ASX IPO.	1 July 2023
Paul Cronin	750,000 Performance Rights under Option Plan 2019	Higher of £1 or nominal value of aggregate of performance rights shares to be allotted	11 November 2019	At 31 December 2019 (a) completion of scoping study for the Vareš Project (b) the Volume Weighted Average Market Price per CDI (as quoted on ASX) exceeds A\$1.25 for the 5 consecutive trading days immediately prior to 31 December 2019.	11 November 2022
	750,000 Performance Rights under Option Plan 2019		11 November 2019	At 31 December 2021 (a) completion of a JORC compliant definitive feasibility study; (b) the Volume Weighted	11 November 2022

Name	Options/ Performance Rights	Exercise Price	Award Date	Vesting Conditions	Expiry Date
				Average Market Price per CDI (as quoted on ASX) exceeds A\$1.50 for the 5 consecutive trading days immediately prior to 31 December 2021.
Graham Hill	1,000,000 granted under Option Plan 2019	A\$1.25	29 November 2022	500,000 vested on completion of the scoping study. 500,000 vest on issuance of an exploitation permit for Vareš Project	29 November 2022
Michael Rawlinson	1,000,000 granted under Option Plan 2019	A\$1.00	29 November 2019	Vest 29 November 2019	29 November 2022
John Richards	1,000,000 granted under Option Plan 2019	A\$1.25	11 November 2019	N/A	11 November 2022
Sandra Bates	1,000,000 granted under Option Plan 2019	A\$1.25	11 November 2019	N/A	11 November 2022
Masa Teran	50,000 Performance Rights under Option Plan 2019	Higher of £1 or nominal value of aggregate of performance rights shares to be allotted	28 November 2019	Vest 30 November 2020 subject to following conditions: (a) share price exceeds \$1.25 (b) issuance of Rupice Exploitation Permit (c) 5,000m drilling in 2020	28 November 2022
Aleksander Vuckovic	100,000 Performance Rights under Option Plan 2019	Higher of £1 or nominal value of aggregate of performance rights shares to be allotted	28 November 2019	Vest 30 November 2020 subject to following conditions: (a) share price exceeds \$1.25 (b) issuance of Rupice Exploitation Permit (c) 5,000m drilling in 2020	28 November 2022
Almir Skenderagic	50,000 Performance Rights under Option Plan 2019	Higher of £1 or nominal value of aggregate of performance rights shares to be allotted	28 November 2019	Vest 30 November 2020 subject to following conditions: (a) share price exceeds \$1.25 (b) issuance of Rupice Exploitation Permit	28 November 2022
Lejla Karcic	50,000 Performance Rights under Option Plan 2019	Higher of £1 or nominal value of aggregate of performance rights shares to be allotted	28 November 2019	Vest 30 November 2020 subject to following conditions: (a) share price exceeds \$1.25 (b) issuance of Rupice Exploitation Permit	28 November 2022
Emir Sudzuka	100,000 Performance Rights under Option Plan 2019	Higher of £1 or nominal value of aggregate of performance rights shares to be allotted	28 November 2019	Vest 30 November 2020 subject to following conditions: (a) share price exceeds \$1.25 (b) issuance of Rupice Exploitation Permit	28 November 2022
Gabriel Chiappini	150,000 Performance Rights under Option Plan 2019	Higher of £1 or nominal value of aggregate of performance rights shares to be allotted	28 November 2019	Vest 30 November 2020 subject to the following conditions: (a) share price exceeds \$1.25 (b) completion of A\$25M capital raising	28 November 2022
Enver Kamberovic	30,000 Performance Rights under Option Plan 2019	Higher of £1 or nominal value of aggregate of performance rights shares to be allotted	28 November 2019	Vest 30 November 2020 subject to following conditions: (a) share price exceeds \$1.25 (b) issuance of Rupice Exploitation Permit	28 November 2022
Zdravko Prajo	30,000 Performance Rights under Option Plan 2019	Higher of £1 or nominal value of aggregate of performance rights shares to be allotted	28 November 2019	Vest 30 November 2020 subject to following conditions: (a) share price exceeds \$1.25 (b) 5,000m drilling in 2020	28 November 2022

18. Competent Person's Report

The Company confirms that no material changes have occurred since the date of the Competent Person's Report the omission of which would make the Competent Person's Report misleading.

19. GENERAL

19.1. CSA Global (UK) Ltd has given and not withdrawn their written consent to the issue of this prospectus with the inclusion in it of its report in Part XXI of this prospectus and the references to its report and to its name in the form and in the context in which it is included. The contents of the report at Part XXI have been authorised by CSA Global (UK) Ltd for the purpose of this prospectus. CSA Global (UK) Ltd has no material interest in the Company.
19.2. The auditors of the Company the financial years ended on 30 June 2019 and 30 June 2018 and the period from 3 February 2017 to 30 June 2017 were Lubbock Fine Chartered Accountants of 3rd Floor, Paternoster House, 65 St Paul's Churchyard, London EC4M 8AB, who are registered to carry out audit work by the Institute of Chartered Accountants in England and Wales and the Financial Reporting Council.
19.3. Save for the remuneration payable in respect of its role as auditor to the Company, Lubbock Fine Chartered Accountants does not have a material interest in the Company.
19.4. Save for the remuneration payable in respect of its role as accountant to the Company, BDO Corporate Finance (WA) Pty Ltd does not have a material interest in the Company.
19.5. The total expenses incurred (or to be incurred) by the Company in connection with Admission is approximately £0.45 million.
19.6. Save as disclosed in this prospectus, the Company is not dependent on patents or licences or other intellectual property, industrial, commercial or financial contracts or new manufacturing processes which are material to the Company's business or profitability.

20. THIRD PARTY SOURCES

The Company confirms that information sourced from third parties has been accurately reproduced and, as far as the Company is aware and is able to ascertain from information published by those third parties, no facts have been omitted which would render the reproduced information inaccurate or misleading. Estimates extrapolated from these data involve risks and uncertainties and are subject to change based on various factors, including those discussed in Part II – Risk Factors of this prospectus.

There is only a limited amount of independent data available about certain aspects of the industry in which the Company intends to operate and no objective or reliable data on the position of the Company relative to its competitors. As a result, certain data and information about its market contained in this prospectus are based on good faith estimates reflecting the Company's reasonable review of internal data and information obtained from other third party sources, such as trade and business organisations and associations and governmental bodies and industry regulators. The Company believes these internal management assessments to be reasonably held; however, no independent sources have verified such assessments.

21. NO INCORPORATION OF INFORMATION BY REFERENCE

The contents of the websites of the Company (including any materials which are hyperlinked to such websites) do not form part of this prospectus, has not been scrutinised or approved by the FCA and prospective investors should not rely on them.

22. AVAILABILITY OF DOCUMENTS

22.1. Copies of the following documents may be inspected at the registered office of the Company at Stamford House, Regent Street, Cheltenham, Gloucestershire, England, GL50 1HN during usual business hours on any day (except Saturdays, Sundays and public holidays) from the date of this prospectus until Admission:

(a) the Articles;
(b) the report of CSA Global (UK) Ltd referred to in Part XXI of this prospectus;
(c) the historical financial information referred to in the Appendix to this prospectus; and
(d) this prospectus.
22.2. In addition, this prospectus will be published in electronic form and be available on the Company's website at www.adriaticmetals.com subject to certain access restrictions applicable to persons located or resident outside the UK.

Date: 9 December 2019

PART XVIII

DEFINITIONS

The following definitions apply throughout this prospectus (unless the context requires otherwise):

"Admission"	admission of the Ordinary Shares to the standard listing segment of the Official List and to trading on the Main Market of the London Stock Exchange;
"Affiliate" or "Affiliates"	an affiliate of, or person affiliated with, a person; a person that, directly or indirectly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified;
"AGM"	an annual general meeting of the Company;
"Articles"	articles of association of the Company in force from time to time;
"Ashanti"	Ashanti Capital Pty Ltd;
"ASIC"	the Australian Securities and Investments Commission;
"ASX"	ASX Limited (ACN 008 624 691) trading as the 'Australian Securities Exchange' or the financial market operated by it, as the context requires;
"ASX Listing Rules"	the official listing rules of ASX;
"ASX Principles and Recommendations"	the ASX Corporate Governance Council's Corporate Governance Principles and Recommendations;
"A\$"	Australian dollars, the lawful currency of Australia;
"Audit and Risk Committee"	the audit and risk committee of the Board;
"Australian Registrar"	Computershare Investor Services Pty Limited (ACN 078 279 277);
"BAM"	Bosnia-Herzegovina Convertible Mark;
"BMO"	BMO Capital Markets Limited;
"Business Day"	any day (other than a Saturday or Sunday) or an English bank or public holiday;
"Canaccord"	Canaccord Genuity (Australia) Limited;
"CDI"	a CHESS Depositary Interest representing one Ordinary Share in the Company;
"certificated" or "in certificated form"	in relation to, as the case may be, a share, warrant or other security, a share, warrant or other security, title to which is recorded in the relevant register of the share, warrant or other security concerned as being held in certificated form (i.e., not in CREST);
"Companies Act"	the Companies Act 2006 (UK);
"Company'' or "Adriatic"	Adriatic Metals plc, a company incorporated in England and Wales with registered number 10599833;
"Corporation Act"	the Australian Corporation Act 2001;
"CHESS" or "CHESS System"	the Clearing House Electronic Subregister System operated by ASX Settlement Pty Limited;
"CHESS Depositary Interest"	a depositary interest representing underlying securities of a foreign issuer deposited in the name of the Depositary and created in accordance with the ASX Settlement Operating Rules;

"CREST" or "CREST System"	the paperless settlement system operated by Euroclear enabling securities to be evidenced otherwise than by certificates and transferred otherwise than by written
"Depositary"	CHESS Depositary Nominees Pty Limited, a subsidiary of ASX, acting in its capacity as depositary;
"Directors" or "Board"	the directors of the Company, whose names appear in Part VIII – The Directors, Senior Management and Corporate Governance of this prospectus, or the board of directors from time to time of the Company, as the context requires, and "Director" is to be construed accordingly;
"Disclosure Guidance and Transparency Rules" or "DTRs"	the disclosure guidance and transparency rules of the FCA made in accordance with section 73A of FSMA;
"Eastern Mining"	Eastern Mining d.o.o Sarajevo, the Company's wholly owned subsidiary;
"EBRD"	European Bank of Reconstruction and Development;
"EEA"	the European Economic Area;
"EEA Member States"	the member states of the EEA;
"EFTA"	The European Free Trade Association;
"Energoinvest"	Energoinvest, d.d. Sarajevo;
"ESIA"	Environmental and Social Impact Assessment;
"ESOP 2019"	the employee share option plan of the Company adopted on 8 November 2019;
"EU"	the European Union;

"Euroclear"	Euroclear UK & Ireland Limited;
"Exploration Concession"	the exploration concession agreement, No. 04-18-21389-1/13 dated 12 March 2013 between the Zenica-Doboj Canton and Eastern Mining (as amended);
"Issued Share Capital"	177,715,987 Ordinary Shares of nominal value 1.3355 pence each in the capital of the Company in issue as at the date of this prospectus;
"FCA"	the UK Financial Conduct Authority;
"Finance Act"	Finance Act 1986;
"FSMA"	the UK Financial Services and Markets Act 2000;
"general meeting"	a meeting of the Shareholders of the Company or a class of Shareholders of the Company (as the context requires);
"GMN"	German Mining Networks GmbH;
"Group"	the Company and its subsidiary undertakings from time to time;
"Hannam & Partners"	H&P Advisory Limited;
"Historical Financial Information"	the historical financial information relating to the Company set out in Part XI on the Company of and the Appendix to this prospectus;
"Historical Financial Information Period"	the financial years of the Company ended 30 June 2019 and 30 June 2018, and for the period from 3 February 2017 to 30 June 2017;
"HMRC"	Her Majesty's Revenue & Customs;

"IFRS IC"	IFRS interpretations committee;
"IPO"	an initial public offering;
"Last Practicable Date"	means 11.00 am (London Time) on 6 December 2019;
"LEI"	legal entity identifier;
"Listing Rules"	the listing rules made by the FCA under section 73A of FSMA;
"London Stock Exchange"	London Stock Exchange plc;
"Main Market"	main market for listed securities of the London Stock Exchange;
"Market Abuse Regulation" or "MAR"	the Market Abuse Regulation (EU) No. 596/2014;
"Nomination Committee"	the nomination committee of the Board;
"Official List"	the official list maintained by the FCA;
"Option"	the option to acquire Ordinary Shares in the Company;
"Option Plan 2019"	the share option plan of the Company adopted on 8 November 2019;
"Option Plan 2018"	the share option plan of the Company adopted on 12 February 2018;
"Order"	the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005;
"ordinary resolution"	a resolution of Shareholders requiring a simple majority of more than 50 per cent.;
"Ordinary Shares"	the ordinary shares of nominal value 1.3355 pence each in the capital of the Company;
"PDMR"	a person discharging managerial responsibilities, as defined in Article 3(1)(25) of the Market Abuse Regulation;
"Performance Right"	a right to be issued Ordinary Shares at nominal value on the satisfaction of applicable performance criteria;
"Premium Listing"	a premium listing under Chapter 6 of the Listing Rules;
"prospectus"	this document, which comprises a prospectus prepared in accordance with the Prospectus Regulation Rules;
"Prospectus Regulation"	Regulation (EU) 2017/1129;
"Prospectus Regulation Rules"	the prospectus regulation rules of the FCA made in accordance with section 73A of FSMA;
"QCA Code"	The Quoted Companies Alliance Corporate Governance Code 2018;
"Qualified Investors"	persons who are "qualified investors" within the meaning of Article 2(e) of the Prospectus Regulation;
"Register"	the register of holders of Ordinary Shares to be maintained by the Registrar;
"Registrar"	Computershare Investor Services PLC or any other registrar appointed by the Company from time to time;
"Registrar Agreement"	the registrar agreement dated 5 December 2019 between the Company and the Registrar;
"Regulations"	the Uncertificated Securities Regulations 2001 (SI 2001 No. 3755);

"Regulatory Information Service" or "RIS"	an information service authorised by the FCA to disseminate regulatory information;
"Remuneration Committee"	the remuneration committee of the Board;
"Restricted Jurisdiction"	the United States, Canada, Japan and the Republic of South Africa;
"Sandfire Resources"	Sandfire Resources NL (ACN 105 154 185);
"Securities Act"	US Securities Act of 1933;
"Share Dealing Code"	the Company's policy on director dealings in securities which is consistent with the Market Abuse Regulation and the ASX Listing Rules;
"Shareholder"	a holder of Ordinary Shares, as the context requires;
"special resolution"	a resolution of Shareholders requiring a majority of not less than 75 per cent.;
"Standard Listing"	a standard listing under Chapter 14 of the Listing Rules;
"Takeover Code"	the City Code on Takeovers and Mergers;
"Takeover Panel"	the UK Panel on Takeovers and Mergers;
"Tamesis"	Tamesis Partners LLP;
"UK Corporate Governance Code"	the UK Corporate Governance Code issued by the Financial Reporting Council in the UK from time to time;
"uncertificated" or "uncertificated form"	in relation to a share or other security, a share or other security, title to which is recorded in the relevant register of the share or other security concerned as being held in uncertificated form (that is, in CREST) and title to which may be transferred by using CREST;
"United Kingdom" or "UK"	the United Kingdom of Great Britain and Northern Ireland;
"United States" or "US"	the United States of America;
"US Investment Company Act"	US Investment Company Act of 1940;
"US Securities Act"	US Securities Act of 1933;
"US Person"	any person who is a US person as defined under the Securities Act;
"US\$"	US dollars, the lawful currency of the United States;
"Vareš Project"	the exploration projects of the Company relating to the Veovača and Rupice deposits under the;
"VAT"	(i) within the EU, any tax imposed by any EU member state in conformity with the Directive of the Council of the European Union on the common system of value added tax (2006/112/EC), and (ii) outside the EU, any tax corresponding to, or substantially similar to, the common system of value added tax referred to in paragraph (i) of this definition;
"Working Capital Period"	the 12 month period from the date of publication of this Prospectus; and
"£" or "GBP"	Pounds Sterling, the lawful currency of the United Kingdom.

References to a "company" in this prospectus shall be construed so as to include any company, corporation or other body corporate, wherever and however incorporated or established.

All references to legislation or regulation in this prospectus are to the legislation of England and Wales unless the contrary is indicated. Any reference to any provision of any legislation or regulation shall include any amendment, modification, supplement, re-enactment or extension thereof. Words importing the singular shall include the plural and vice versa, and words importing the masculine gender shall include the feminine or neutral gender.

For the purpose of this prospectus, ''subsidiary'' and ''subsidiary undertaking'' have the meanings given by the Companies Act.

PART XIX

GLOSSARY OF TECHNICAL TERMS

Adit	An adit is an entrance to an underground mine which is horizontal or nearly horizontal, by which the mine can be entered, drained of water, ventilated, and minerals extracted at the lowest convenient level. Adits are also used as exploration access points.
Alpine orogeny	Period of mountain building that affected the ancient Tethyan ocean. It began in the Triassic continuing through to the Late Oligocene and Miocene.
Antiformal	From antiform. An antiform is a convex upwards fold structure in which the relative ages of the rocks within the fold structure are unknown.
Assay	A measured quantity of material within a sample.
Authochtonous	From authochton. An autochthon in structural geology is a large block or mass of rock which is in the place of its original formation relative to its basement or foundation rock. It can be described as rooted to its basement rock as opposed to an allochthonous block or nappe which has been relocated from its site of formation.
Barite	A mineral predominately consisting of barium and composition BaSO4.
Basement	Highly folded, metamorphic or plutonic rocks, often unconformably overlain by relatively undeformed sedimentary beds (or cover).
Besshi	The location in Japan after which Besshi type VMS deposits are named. The deposits were discovered in 1690 and the mines operated until 1973. Besshi deposits are commonly hosted in sediments of marine origin called turbidites and commonly intruded by mafic sills.
Breccia	Coarse, clastic, sedimentary rock, the constituent clasts of which are angular. The term may also be applied to angular volcanic rocks from a volcanic vent.
Carboniferous	Penultimate period of the Paleozoic era, preceded by the Devonian and followed by the Permian. It began about 359.2 Ma ago and ended about 299 Ma ago.
Collar	Geographical co-ordinates of a drillhole or shaft starting point.
Concession	System of granted tenure which could refer to either exploration or exploitation.
Costeans	Trench completed for geological mapping and sampling.
Cretaceous	Third of the three periods included in the Mesozoic Era. It began 146 Ma ago and ended 65.5 Ma ago.
Copper	Copper is a chemical element with symbol Cu and atomic number 29. It is a soft, malleable, and ductile metal with very high thermal and electrical conductivity.
Costean	A costean is a small trench or pit dug through the surface soil or debris to the underlying rock in place for the purpose of exposing the outcrop of a mineral deposit and determining its course.
Cut-off grade	Threshold above which material is selectively mined or queried.
Dinarides	Dinarides occur in two separate regions: in the Herzegovina area (Outer Dinarides) to the south and in Bosnia to the north. The Inner Dinarides (Bosnia) are composed of deeply weathered

	clastic, metasedimentary. metamorphic and igneous rocks. They included mostly Palaeozoic-Triassic rocks and the Dinaride Ophiolite Zone.
Faults	Approximately plane surface of fracture in a rock body, caused by brittle failure, and along which observable relative displacement has occurred between adjacent blocks.
Flysch	Sedimentary facies term used to describe a thick succession of redeposited, deep-sea, clastic material.
Gold	Native gold is an element and a mineral. Gold occurs in hydrothermal veins deposited by ascending solutions, as disseminated particles through some sulphide deposits, and in placer deposits.
Induced polarisation (IP)	Induced polarization (IP) is a geophysical imaging technique used to identify the electrical chargeability of subsurface materials, particularly sulphide minerals which are typical hosts to base metal and some precious metals mineralisation.
Lead	Lead is a chemical element with symbol Pb, atomic number 82. It is a heavy metal that is denser than most common materials. Lead is soft and malleable and has a relatively low melting point.
Mesozoic	Geologic age that began with the Triassic approximately 251 Ma ago and ended around 65.5 Ma at the start of the Cenozoic. The Mesozoic comprises the Triassic, Jurassic, and Cretaceous periods.
Metallogenic	Derived from metallogeny, and refers to the genesis of, and, global and regional distribution, of mineral deposits and their relationship in space and time, to regional features in the Earth's crust.
Nappe sliding (slide, gravity gliding)	The movement of rock bodies in response to gravitational instability along particular planes in unstable regions which leads to the formation of thrust.
Ophiolite melange	A linear belt of highly deformed rocks, including tectonic mélanges, lenses of ophiolites, deep-sea sediments which is interpreted as the boundary between two collided continents or island arcs.
Palaeozoic	First (542–251 Ma) of the three eras of the Phanerozoic.
Quaternary	Either a sub‐era of the Cenozoic Era of geologic time that began 1.806 Ma ago and continues to the present day.
Schist	Regional metamorphic rock of pelitic composition which displays a schistosity. Schists are coarser-grained than phyllites, having a grain size greater than 1 mm.
Sedimentary Exhalative	(SedEx) Exhalative processes associated with the upwelling of mineralising fluids into submarine sedimentary environments, whereby mineral deposits, usually of base-metal sulphides, are formed.
Siliciclastic sediments	Lithified, conglomeratic, siliciclastic rock which is unsorted, with sand and/or coarser particles dispersed through a mud matrix.
Silurian	Third (443.7–416 Ma) of six periods of the Palaeozoic Era.
Stratigraphy	The branch of geology concerning the classification, nomenclature, correlation, and interpretation of stratified rocks.
Triassic	Earliest (251–199.6 Ma) of the three periods of the Mesozoic Era.

VMS	Volcanogenic massive sulphide deposits formed in close temporal association with submarine volcanism by hydrothermal circulation and exhalation of sulphides which are independent of sedimentary processes. When deposited into sedimentary rocks may be termed Besshi Style VMS.
Zinc	Zinc is a chemical element with symbol Zn and atomic number 30. It is the first element in group 12 of the periodic table.

PART XX

ABBREVIATIONS AND UNITS OF MEASUREMENT

%	percent
°C	degrees Celsius
Ag	silver
Au	gold
BaSO4	barite
Cu	copper
FT	flotation test
g	gram(s)
g/t	grams per tonne
ha	hectare(s)
IP	induced polarisation
JORC Code	Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
kg	kilogram(s)
km	kilometre(s)
km2	square kilometre(s)
koz	kilo-ounces
kt	kilo-tonnes
LCT	locked cycle test
LiDAR	light detection and ranging (survey)
M	million(s)
m	metre(s)
mm	millimetre(s)
MRE	Mineral Resource estimate
Mt	million tonnes
Mtpa	million tonnes per annum
NPV	net present value
oz	ounce(s)
Pb	lead
PDP3D	pole-dipole three-dimensional
QAQC	quality assurance and quality control
SedEx	sedimentary exhalative
SHMS	shale-hosted massive sulphide
VMS	volcanogenic massive sulphide
Zn	zinc
ZnEq	zinc equivalent

PART XXI

COMPETENT PERSON'S REPORT

COMPETENT PERSON͛S REPORT

Adriatic Metals Plc VaƌeƓ Project

CSA Global Report Nº R350.2019 21 November 2019

www.csaglobal.com

Report prepared for

Client Name	Adriatic Metals Plc
Project Name/Job Code	ADTSST01_V1
Contact Name	Paul Cronin
Contact Title	Director
Office Address	Second Floor, Stamford House, Regent Street, Cheltenham, GL501HN

Report issued by

CSA Global Office	CSA Global (UK) Ltd Suite 2, First Floor, Springfield House Springfield Road, Horsham West Sussex, RH12 2RG United Kingdom
	T +44 (0) 1403 255 969 E [email protected]
Division	Corporate

Report information

Filename	R350.2019 ADTSST01 Adriatic Vares CPR - FINAL_20191204
Last Edited	04/12/2019 10:32:00
Report Status	Final

Author and Reviewer Signatures

Coordinating Author	Galen White B.Sc. (Hons), FAusIMM, FGSL	Signature:	͞signed and sealed͟
Contributing Author	Neal Reynolds PhD (Geology), FAusIMM, MAIG	Signature:	͞signed and sealed͟
Contributing Author	Dmitry Pertel MSc (Geology), MAIG, GAA	Signature:	͞signed and sealed͟
Contributing Author	Bruce Pilcher B.E (Mining), Eur. Ing, CEng, FIMM, FAusIMM(CP)	Signature:	͞signed and sealed͟
Peer Reviewer	Brendan Clarke PhD (Geology), Pr.Sci.Nat, FGSSA	Signature:	͞signed and sealed͟
CSA Global Authorisation	Galen White B.Sc. (Hons), FAusIMM, FGSL	Signature:

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Notice to third parties

CSA Global PtLJ Ltd ;͞CSA Global͟Ϳ has prepared this Report having regard to the particular needs and interests of Adriatic Metals Plc ;͞the Client͟Ϳ, and in accordance with their instructions. This Report is not designed for any other person͛s particular needs or interests͘ Third partLJ needs͕ and interests maLJ be distinctlLJ different to the Client͛s needs and interests, and the Report may not be sufficient nor fit or appropriate for the purpose of the third party.

CSA Global expressly disclaims any representation or warranty to third parties regarding this Report or the conclusions or opinions set out in this Report (including without limitation any representation or warranty regarding the standard of care used in preparing this Report, or that any forward-looking statements, forecasts, opinions or projections contained in the Report will be achieved, will prove to be correct or are based on reasonable assumptions). If a third party chooses to use or rely on all or part of this Report, then any loss or damage the third party may suffer in so doing is at the third partLJ͛s sole and edžclusive risk͘

CSA Global has created this Report using data and information provided bLJ or on behalf of the Client and the client͛s agents and contractors]. Unless specifically stated otherwise, CSA Global has not independently verified that all data and information is reliable or accurate. CSA Global accepts no liability for the accuracy or completeness of that data and information, even if that data and information has been incorporated into or relied upon in creating this Report.

Purpose of this document

This Report was prepared exclusively for Adriatic Metals Plc ;͞the Client͟Ϳ bLJ CSA Global PtLJ Ltd ;͞CSA Global͟Ϳ͘ The quality of information, conclusions, and estimates contained in this Report are consistent with the level of the work carried out by CSA Global to date on the assignment, in accordance with the assignment specification agreed between CSA Global and the Client.

Results are estimates and subject to change

The interpretations and conclusions reached in this Report are based on current scientific understanding and the best evidence available to the authors at the time of writing. It is the nature of all scientific conclusions that they are founded on an assessment of probabilities and, however high these probabilities might be, they make no claim for absolute certainty.

The ability of any person to achieve forward-looking production and economic targets is dependent on numerous factors that are beLJond CSA Global͛s control and that CSA Global cannot anticipate. These factors include, but are not limited to, site-specific mining and geological conditions, management and personnel capabilities, availability of funding to properly operate and capitalise the operation, variations in cost elements and market conditions, developing and operating the mine in an efficient manner, unforeseen changes in legislation and new industry developments. Any of these factors may substantially alter the performance of any mining operation.

EdžecƵƚŝǀe SƵŵŵaƌLJ

CSA Global ;UKͿ Ltd ;CSA GlobalͿ ǁas requested bLJ Adriatc Metals Plc ;͞Adriatc͟ or the ͞CompanLJ͟Ϳ to prepare a Competent Person͛s Report ;CPRͿ for use in a prospectus prepared in connecton ǁith the proposed listng of the CompanLJ͛s ordinarLJ shares on the Main Market ;Standard SegmentͿ of the London Stock Edžchange͘ This document covers Adriatc͛s Vareš Project in Bosnia and Hernjegovina͕ ǁhich is an Advanced Edžploraton Project͘ Mineral Resources have been estmated for the Veovača and Rupice polLJmetallic deposits and a Scoping StudLJ prepared over the Project͕ ǁith moderate to high grades of njinc͕ lead͕ copper͕ silver͕ gold and barite present in potentallLJ economic quanttes͘

The Scoping StudLJ referred to in this report consttutes a conceptual studLJ based on loǁͲlevel technical and economic assessments͘ Conceptual capital and operatng costs set out in the studLJ are considered to have an accuracLJ of нͬͲ ϦϢй͘ The technical and economic assessment is insufcient to support estmaton of Ore Reserves or to provide assurance of an economic development case at this stage͕ or to provide certaintLJ that the conclusions of the Scoping StudLJ ǁill be realised͘

The CPR and the material informaton relatng to the estmaton of Mineral Resources and the preparaton of the Scoping StudLJ has been prepared bLJ CSA Global in accordance ǁith the ͞Australasian Code for Reportng of Edžploraton Results͕ Mineral Resources and Ore Reserves͟ ;ϤϢϣϤ EditonͿ published bLJ the Joint Ore Reserves Commitee of the Australasian Insttute of Mining and MetallurgLJ͕ Australian Insttute of Geoscientsts and Mineral Council of Australia ;͞the JORC Code͟Ϳ͘

The project area is located approdžimatelLJ ϧϢ km north of the capital of Bosnia and Hernjegovina͕ Sarajevo͕ in the district of Vareš͘ Lead͕ njinc and iron deposits in the Vareš district ǁere frst edžploited in medieval tmes and throughout the AustrianͲHungarian period͘ In the late ϣϪϫϢs͕ iron ore mining and doǁnstream iron and steel manufacturing ǁas established at Vareš and Vareš Maden͕ and these ǁorks contnued for almost a centurLJ͘ Modern edžploraton bLJ parastatal companLJ͕ Energoinvest͕ commenced in the late ϣϫϦϢs under the former Socialist Federal Republic of Yugoslavia͘ Edžploraton peaked during the ϣϫϨϢs to the ϣϫϪϢs and included drilling and limited underground ǁorkings͕ principallLJ at Veovača͕ Ort͕ Droscovac͕ Rupice and Borovica͘ The Veovača deposit ǁas mined as an open pit operaton for lead͕ njinc and barite from ϣϫϪϥ to ϣϫϪϩ͘ BLJ the end of the ϣϫϪϢs͕ all the mines in and around Vareš had closed for reasons of politcal instabilitLJ͘

Adriatc͕ through its ǁhollLJ oǁned local subsidiarLJ companLJ͕ Eastern Mining doo ;Eastern MiningͿ oǁns ϣϢϢй of a Concession comprising fve individual licences͕ ǁhich includes nonͲcontguous areas covering the entretLJ of the Veovača and Rupice deposits as defned to date͘ Eastern Mining is the frst companLJ to undertake anLJ edžploraton at the deposits and in the surrounding Vareš district since the late ϣϫϪϢs͘

Adriatc has compiled data from historical edžploraton actvites on the Concession and surrounding areas and has completed recent edžploraton ǁorks͕ including drilling͕ leading to public reportng of the current Mineral Resource statements under the JORC Code͘ Adriatc͛s edžploraton actvites have focused on the Rupice and Veovača areas and have included geophLJsical programs and soil geochemical programs͕ in additon to drilling at Veovača and Rupice͘

The mineralisaton in the Vareš district is hosted bLJ sedimentarLJ rocks deposited in the Triassic in a rif setng that evolved to a carbonate platorm͘ Alkalic volcanic rocks in the rif sequence atest to the high heatͲfoǁ setng of the rif that subsequentlLJ evolved to the Vardar Ocean domain͘ The host stratgraphLJ ǁas deformed during the Alpine orogenic event accompanLJing collision of Europe and Africa͕ ǁith the Dinaride orogen in the Balkans refectng closure of the Vardar Ocean͘

The Vareš mineralisaton is of stratabound replacement stLJle ǁithin carbonateͲbearing rocks͕ including dolostone͕ dolomitc marl͕ and dolomitc breccia͘ Mineralisaton varies from massive to disseminated and vein stLJle and is characterised bLJ iron carbonate͕ barite͕ and sulphides including pLJrite͕ sphalerite͕ galena͕

chalcopLJrite and a range of polLJmetallic sulphosalts including tetrahedrite and boulangerite͘ Mineralisaton is characterised bLJ a metal associaton including njinc͕ lead͕ copper͕ silver͕ gold͕ arsenic͕ antmonLJ and mercurLJ͘ The iron ore deposits in the district are characterised bLJ siderite and hematte and also shoǁ elevated contents of similar metals and barite suggestng a common origin͘

The updated Veovača Mineral Resource estmate ;MREͿ is summarised in Table ϣ ;see MRE press release ;Adriatc͕ Ϥϥ JulLJ ϤϢϣϫͿ for full disclosure of JORC Table ϣ detailsͿ͘ Note that the previous MRE at ϣ JanuarLJ ϤϢϣϪ did not include gold and silver for the full edžtents of the mineralisaton model͘ The ϤϢϣϫ drilling has noǁ inflled areas ǁhere previouslLJ there ǁas insufcient data to estmate silver and gold mineralisaton͘

JORC classification	Tonnes (Mt)	Grades				Contained metal
		Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)	Zn (kt)	Pb (kt)	BaSO4 (kt)	Au (koz)	Ag (Moz)
Indicated	5.3	1.6	1.0	16	0.1	50	83	55	860	14	9
Inferred	2.1	1.1	0.5	6	0.1	17	23	11	123	4	1
Total	7.4	1.4	0.9	13	0.1	41	106	66	984	18	10

Table 1: Veovača Mineral Resources as at 1 June 2019

Notes:

x Mineral Resource classifications are based on JORC Code definitions.
x The figures presented above are both gross and 100% net attributable to Adriatic.
x The operator is Adriatic
x Source: The Competent Person for the MRE is Mr Dmitry Pertel, a Member of the Australasian Institute of Mining and Metallurgy (AusIMM) and employed by CSA Global.
x A cut-off grade of 0.6% ZnEq has been applied.
x ZnEq was calculated using conversion factors of 0.80 for lead, 0.08 for BaSO4, 1.80 for gold and 0.019 for silver, and recoveries of 90% for all elements. Metal prices used were US\$2,500/t for zinc, US\$2,000/t for lead, US\$200/t for BaSO4, US\$1,400/oz for gold and US\$15/oz for silver.
x The applied formula was: ZnEq = Zn% * 90% + 0.8 * Pb% * 90% + 0.08 * BaSO4% * 90% + 1.8 * Au(g/t) * 90% + 0.019 * Ag(g/t) * 90%.
x Metallurgical recoveries of 90% have been applied in the metal equivalent formula based on recent testwork results.
x It is the opinion of Adriatic and the Competent Persons that all elements and products included in the metal equivalent formula have a reasonable potential to be recovered and sold.
x A bulk density was calculated for each model cell using regression formula BD = 2.70855 + BaSO4 * 0.01487 + Pb * 0.03311 + Zn * 0.03493.
x Rows and columns may not add up exactly due to rounding.

The maiden Rupice MRE is summarised in Table Ϥ ;see MRE press release ;Adriatc͕ Ϥϥ JulLJ ϤϢϣϫͿ for full disclosure of JORC Table ϣ detailsͿ͘ The MRE has been reported in accordance ǁith the JORC Code and it is therefore suitable for public release͘

	Tonnes (Mt)	Grades						Contained metal
JORC classification		Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)	Cu (%)	Zn (kt)	Pb (kt)	BaSO4 (kt)	Au (koz)	Ag (Moz)	C (kt)
Indicated	7.5	5.7	3.7	34	2.0	207	0.6	430	278	2,590	470	50	46
Inferred	1.9	2.5	1.6	18	0.9	86	0.3	50	30	330	60	5	6
Total	9.4	5.1	3.3	31	1.8	183	0.6	480	310	2,920	530	55	52

Table 2: Rupice Mineral Resources as at 1 June 2019

Notes:

x Mineral Resource classifications are based on JORC Code definitions.
x The figures presented above are both gross and 100% net attributable to Adriatic.
x The operator is Adriatic
x Source: The Competent Person for the MRE is Mr Dmitry Pertel, a Member of the AusIMM and employed by CSA Global.
x A cut-off grade of 0.6% ZnEq has been applied.

C (kt)

x ZnEq – Zinc equivalent was calculated using conversion factors of 0.80 for lead, 0.08 for BaSO4, 1.80 for gold, 0.019 for silver and 2.40 for copper, and recoveries of 90% for all elements. Metal prices used were US\$2,500/t for zinc, US\$2,000/t for lead, US\$200/t for BaSO4, US\$1,400/oz for gold, US\$15/oz for silver and US\$6,000 for copper.
x The applied formula was: ZnEq = Zn% * 90% + 0.8 * Pb% * 90% + 0.08 * BaSO4% * 90% + 1.8 * Au(g/t) * 90% + 0.019 * Ag(g/t) * 90% + Cu% * 2.4 * 90%.
x It is the opinion of Adriatic and the Competent Persons that all elements and products included in the metal equivalent formula have a reasonable potential to be recovered and sold.
x Metallurgical recoveries of 90% have been applied in the metal equivalent formula based on recent testwork results.
x A bulk density was calculated for each model cell using regression formula BD = 2.88143 + BaSO4 * 0.01555 + Pb * 0.02856 + Zn * 0.02012 + Cu * 0.07874 for the barite high-grade domain and BD = 2.76782 + BaSO4 * 0.01779 + Pb * 0.03705 + Zn * 0.02167 + Cu * 0.07119 for the barite low-grade domain (the barite domains were interpreted using 30% BaSO4).
x Rows and columns may not add up exactly due to rounding.

Whilst the Vareš deposits are primarilLJ considered as lead and njinc deposits ǁith precious metal credits͕ Adriatc is also considering the potental to mine and produce barite͕ an industrial mineral͕ as a bLJͲproduct͘ Clause Ϧϫ of the JORC Code requires industrial minerals to be reported in terms of the mineral or minerals on ǁhich the project is to be based and must include the specifcaton of these minerals͘ KeLJ characteristcs including likelLJ product specifcatons͕ prodžimitLJ to markets and general marketabilitLJ have been considered both in disclosure of the MRE and in the preparaton of the Scoping StudLJ͘ The Competent Persons are satsfed that this informaton supports the inclusion of barite in the MRE and subsequent doǁnstream technical evaluaton͘ Additonal detail surrounding Clause Ϧϫ is provided in the report bodLJ͘

The Scoping StudLJ of the Rupice and Veovača polLJmetallic projects supports the concept of a potentallLJ economicallLJ viable underground mining operaton at Rupice ǁhich is then replaced bLJ a loǁer grade conventonal surface mine at Veovača͕ supplLJing material at a producton rate of ϪϢϢ kpta to the hLJdrometallurgical processing plant to produce a silverͬlead͕njinc and barite concentrate for a Life of Mine of approdžimatelLJ ϣϦ͘ϧ LJears͘ The economic evaluaton indicates a conceptual NPV of USΧϫϣϩ million using a discount rate of Ϫй ;other discount rates are also set out for comparisonͿ͕ ǁith an Internal Rate of Return of ϣϢϩ й calculated on a PostͲTadž basis ǁith ϣϢϢй atributable equitLJ͘

The Mineral Resources estmated at Veovača and Rupice have potental for edžtension and for enhanced classifcaton based on additonal drilling to increase the level of confdence in the estmates͘ Additonal economic studies and testǁork are required to progress the project toǁards the eventual declaraton of Ore Reserves͘

Metallurgical testǁork has been performed at the laboratories of Wardell Armstrong Internatonal͘ The majoritLJ of the testǁork ǁas undertaken on samples ;Average grade composite͖ High grade composite͖ and highͲgrade copper compositeͿ from the Rupice deposit being the highest grade and largest resource͕ but testǁork ǁas also undertaken on an Average Grade sample originatng from the Veovača deposit͘

Testǁork to date has shoǁn that the sulphide minerals tend to be fne grained and a primarLJ grind sinje of ϪϢй passing ϦϢ ʅm is required to ensure sufcient liberaton of the diferent sulphide minerals͘ Further͕ the results demonstrate the amenabilitLJ of the Rupiceͬ Veovača ore to diferental fotaton to produce separate marketable silverͲlead͕ njinc and barite concentrates at acceptable recoveries͘ There remain concerns about the presence of contaminant elements ;such as arsenic and mercurLJͿ in the fnal concentrate products and further testǁork is required͘ Depending on ǁhich smelter is ultmatelLJ used͕ there is potental for minimal penaltes in relaton to the value of lead and njinc concentrates͕ especiallLJ for the Rupice concentrates͘

Marketng studies have been undertaken bLJ both Bluequest͕ regarding the base metal concentrates͕ and TAK Industrial Mineral ConsultancLJ ;TAKͿ͕ regarding barite͘ The Bluequest studLJ provides a comprehensive insight into potental treatment and refning charges plus marketng fees for several lead and njinc smelters͕ including ratonales for penaltLJ element deductons͘ The TAK report is an update to a

ϤϢϣϩ report bLJ Peter Harben Inc͘ and summarises the global market͕ the historic supplLJ and demand for barite and the qualites required ;under American Petroleum Insttute ;APIͿ standardsͿ͘

Considering the high grade of the Rupice deposit͕ the base case edžtracton strategLJ for the mine design and evaluaton isfor the edžtracton of Rupice as the primarLJ ore source using underground longͲhole open stoping ǁith fll and also cut Θ fll methods͕ transportng Run of Mine ore ;RoMͿ via onͲhighǁaLJ haul trucks some ϤϪkm to the site of the processing plant site located in close prodžimitLJ to the toǁn of Vareš͘ The base case Rupice mining schedule focuses on edžtracton of the highest grades ǁithin the deposit during the earlLJ LJears of operaton͘

The haul trucks returning to the Rupice mine͕ during the underground mining operatons͕ ǁill haul deǁatered tailings from the processing plant back to the pasteͲfll plant at Rupice for the purposes of placing cement pasteͲfll into the underground stope voids͘

A tradeͲof studLJ to edžamine the potental to open pit the relatvelLJ shalloǁ Rupice deposit has been undertaken͕ but taking into consideraton reasonable mining limits͕ the surrounding topographLJ and the geometrLJ and orientaton of the orebodLJ it became apparent that open pit mining ǁas not sustainable due to the edžcessive strip rato and the lack of suitable ǁaste rock storage space͘

The haul road linking Rupice to the proposed plant at Veovača has been designed to avoid edžistng communites͘ It is hoǁever routed over mountainous terrain that can be impacted bLJ climatc conditons during the ǁinter months͘ Further ǁork is required to ensure a safe and productve haul road design͕ including a tradeͲof to edžamine a ropeǁaLJ opton͘

The secondarLJ ore source at Veovača͕ located in close prodžimitLJ to the process plant locaton͕ ǁill replace the ore supplLJ to the processing plant at ϪϢϢ ktpa afer about ten LJears͕ once the Rupice deposit has been depleted͘ Mining ǁill be bLJ conventonal open pit methods͕ requiring deepening of the edžistng open pit͘

CSA Global recommends the folloǁing to enhance the efectveness of targetng Mineral Resource estmaton and further mining and economic studLJ ;PreͲFeasibilitLJ StudLJͿ͖

x Develop a central master drillhole database for the project ǁith appropriate data management protocols͘
x Maintain qualitLJ assuranceͬqualitLJ control procedures to ensure highͲqualitLJ data is available to support future MREs and mining studies͘
x Advance drill defniton of the Rupice and Veovača deposits as a high prioritLJ and progress geological and mining studies to optmise the economic evaluaton of the deposits͘
x Complete integrated geological͕ structural͕ lithogeochemical and alteraton studies͕ interpretaton and modelling at Rupice and Veovača to improve understanding͕ target additonal mineralisaton͕ intergrate ǁith geophLJsical edžploraton and to optmise modelling and targetng of resource edžtensions͘ This should be integrated in to a geometallurgical studLJ to model variabilitLJ of mineralisaton to feed in to additonal tesǁork͘
x Include focused structural and geological mapping and logging of the deposit areas and͕ in this process͕ improve the routne logging procedures and coding sLJstem to align ǁith acquisiton of keLJ geological data͘
x In partcular͕ investgate the development of models for distributon and estmaton of the compledž mineralogLJ and metal distributon͕ including paLJable and potentallLJ deleterious elements͘
x Use the improved geological understanding to refne the ranking and prioritsaton of additonal prospects ǁithin the current granted Concession areas and undertake focused edžploraton on prioritsed targets ǁithin granted tenure͘

x Evaluate ground and airborne geophLJsical surveLJs based on results of geophLJsical propertLJ testǁork to beter understand potental magnetc͕ electromagnetc and induced polarisaton response of mineralisaton and alteraton͘
x Updates to Mineral Resources based on ongoing infll and deͲrisking drilling ǁith improved understanding of domains via geological and geometallurgical investgatons͘
x Targeted drilling of orientated drill core to gather geotechnical data͕ improve structural logging of drill core͕ complete mechanical characterisaton of domains and rock strengths and edžaminaton of aspects of Rupice infrastructure planning in relaton to RAW locatons and prodžimitLJ to major structures͘
x Conduct additonal studies to improve the level of understanding relatng to the hLJdrologLJ and hLJdrogeologLJ at the Rupice deposit͘ This additonal informaton ǁould also increase the confdence ǁith regards to predictons for mine ǁater management at Rupice and Veovača deposits͕ specifcallLJ ǁith the intenton of securing ǁater supplLJ to the processing plant͘
x Improve mining operatng cost͕ beneftng from detailed mining contractor quotatons͘ Revieǁ haulͲ road routng betǁeen Rupice and Veovača and consider ropeǁaLJ tradeͲofs͘
x Revieǁ the mining plan for Rupice ǁith anLJ revised resource models͕ updated smelter TCs Θ RC͕ and commoditLJ pricing͘ Consider implicatons of anLJ penaltLJ elements and edžamine blending optons͘
x Conduct the necessarLJ engineering ǁork to determine the optmum parameters for the cemented paste fll͘ Revieǁ infrastructure laLJout considering updated geomechanical domains and structure model͘
x It is evident that liberaton of the valuable minerals should be the major focus for further improvements to metallurgical performance͘ Regrinding of rougher concentrates to the ultraͲfne sinje ;ϣϢ ʅm to ϣϧ ʅmͿ indicated bLJ petrographic and mineralogical edžaminatons is required to produce a separate saleable copper concentrate͘
x Further test ǁork on other unit processes ;DMS preͲconcentraton͕ ore grinding characteristcs and ancillarLJ processesͿ maLJ be benefcial for cost beneft analLJsis͕ to improve design confdence and to optmise capital and operatng cost estmates͘
x Additonal technologies need to be edžplored to reduce the potental penaltLJ elements reportng to the fnal metal concentrates͘ Further consideraton needs to be given to edžploring technologies for͕ and the economics of͕ depleton of these elements in additon to roastng͕ such as the Tooǁong ProcessΡ͕ Sunshine Process and EquitLJ Process
x CarrLJ out further testng to produce a saleable barite concentrate from the Veovača material͘
x The metallurgical studies ǁill need major enhancement͕ as the informaton is͕ thus far͕ limited͘ It ǁill be important to ensure that the qualitLJ͕ ǁith partcular reference to deleterious elements͕ sulphur content͕ iron and other major elements and compounds is more certain͕ partcularlLJ for the earlLJ LJears of producton͘ Improvements in qualitLJ assurance ǁill facilitate more ease of marketng the material and drive beter terms͘ Radiaton testng͕ though ͚seeminglLJ͛ unnecessarLJ should be made to eliminate potental surprises later͘
x In relaton to marketng it ǁill be important͕ once more data has been gathered on the qualitLJ aspect of the concentrate͕ to begin earlLJͲstage marketng ǁith smelters͘ Budgetng for the costs of enhanced marketng ǁill therefore be needed to be taken into account in anLJ further fnancial analLJsis͘
x The logistcs studies ǁill require enhancement͕ as progress is made on the PFS͘ Further detailed analLJsis and multple quotes from truckers͕ ǁarehouses and handling agents ǁill be needed to assure management that a rigorous analLJsis has been made and that the chosen method and costngs ǁill be verifable and assured͘ Signifcant changes to the cost of transportaton maLJ make a material impact on the economics of the project͘ More analLJsis of potental ocean freight rates ǁould͕ for

instance͕ appear to be a prudent step͘ Potental for ecological damage to the environment ǁill be loǁered using a RotainerΠ tLJpe sLJstem͕ but if other bulk transport alternatves are considered it ǁill be important for Adriatc to be reassured that a high degree of product steǁardship ǁill be maintained͕ to avoid anLJ unnecessarLJ media or NGO issues͘

x Contnue to identfLJ likelLJ requisiton of propertLJ required for the Project assets and infrastructure and contnue current discussionsͬnegotatons for acquisitonͬresetlement preferences and plans͘
x ClearlLJ identfLJ preͲedžistng contaminaton sources and ensure accurate soil qualitLJ mapping as part of the baseline studies to ensure legacLJ issues are not linked to the Project͕ and to aid cleanͲup and rehabilitaton͘
x Undertake comprehensive geotechnical and ǁater qualitLJ assessments of the edžistng TSF to ensure structural stabilitLJ and to beter inform design and planned engineering for future tailings facilitLJ edžpansion as required͘
x Undertake detailed geochemical testǁork͕ ideallLJ using samples from recent drilling programmes that are representatve of ore and ǁaste materials antcipated from the project operatons͘ Representatve sample selecton͕ preparaton͕ testǁork and analLJses can be tme consuming and inital studies should be started as soon as possible͘ Geochemical studies should hoǁever contnue and progress through levels of detail inͲline ǁith scoping͕ PFS and FS͘
x Initate earlLJ and inclusive stakeholder engagement to keep afected communites and the ǁider public aǁare of Project plans and intentons͖ to determine anLJ concerns͖ and to ensure inclusion of suitable mitgatons to alloǁ Project social licence͘

	Report prepared forI
			Report issued by I
	Report information I
			Author and Reviewer Signatures I
			DISCLAIMERS II
			Notice to third partiesII
			Purpose of this document II
			Results are estimates and subject to changeII
			EXECUTIVE SUMMARY III
1			INTRODUCTION 1
	1.1		Context, Scope and Terms of Reference1
	1.2		Adherence to Reporting Code Guidelines2
	1.3		Principal Sources of Information and Reliance on Other Experts2
	1.4		Authors of the Competent Person͛s Report2
	1.5		Independence3

	1.6	1.6.1	Declarations3 Purpose of this Document3
		1.6.2	Competent Person͛s Statement 4
		1.6.3	Site Inspection4
	1.7		About this Competent Person͛s Report5
2			VAREŠ PROJECT 6
	2.1		Location, Access and Infrastructure6
	2.2		Climate, Topography and Vegetation 6
		2.2.1	Climate 6
		2.2.2	Infrastructure 7
		2.2.3	Power 7
		2.2.4	Water7
	2.3		Ownership and Tenure 8
		2.3.1	Legislative Framework8
		2.3.2	History and Tenure8
	2.4		Geology11
		2.4.1	Regional Geology11
		2.4.2 2.4.3	District Mineralisation12 Local Geology and Mineralisation 13
	2.5		Historical Mining and Exploration 22
	2.6		Exploration Activities23
		2.6.1	Veovača Edžploration23
		2.6.2	Rupice Exploration29
		2.6.3	Historical Data Validation41
	2.7		Veovača Mineral Resource Estimate 42
		2.7.1	Mineral Resource Overview 43
		2.7.2	Reasonable Prospects Hurdle45
		2.7.3	Mineral Resource Classification45
	2.8		Rupice Mineral Resource Estimate46
		2.8.1	Mineral Resource Overview 46

	2.8.2	Reasonable Prospects Hurdle48
	2.8.3	Mineral Resource Classification49
2.9	Metallurgical Studies49
	2.9.1	Sample Collection49
	2.9.2	WAI Testwork 51
	2.9.3	Metallurgical Performance55
2.10		Barite 57
	2.10.1	Barite Properties and Uses57
	2.10.2	Global Production of Barite57
	2.10.3	International Trade57
	2.10.4 2.10.5	Prices58 Specifications58
	2.10.6	Historical Production of Barite from Veovača 58
	2.10.7	Recent Testwork58
	2.10.8	Barite Marketability59
2.11		Scoping Level Mining Study60
	2.11.1	Input Mineral Inventory 60
	2.11.2	Rupice60
	2.11.3	Veovača 63
2.12		Conceptual Project Economics ʹ Input Assumptions64
	2.12.1	Production Schedule64
	2.12.2	Commodity Prices65
	2.12.3	Capital & Operating Costs66
	2.12.4	Economic Conclusions67
2.13		Environmental Studies, Permitting and Social or Community Impact68
	2.13.1	Environmental Studies68
	2.13.2	Permitting68
	2.13.3	Social Setting 69
	2.13.4	Stakeholder Engagement 69
	2.13.5	Potential Impacts70
	2.13.6	Mine Closure 70
2.14	Exploration Potential and Targets71
	2.14.1	Veovača Concession Edžploration71
	2.14.2	Rupice Potential and Targets72
2.15		Planned Work73
		TECHNICAL RISKS AND OPPORTUNITIES 77
3.1		Mining78
3.2		Processing 78

3.3	3.3.1	Marketing78 Lead/Silver Concentrate78
	3.3.2	Zinc Concentrate 79
	3.3.3	Barite Concentrate: 79
3.4		Environmental79

		CONCLUSIONS AND RECOMMENDATIONS 81
4.1		Mineral Resources82
4.2		Geotechnical Aspects82
4.3		Hydrology82
4.4		Mining82
4.5		Processing 82
4.6		Market and Economics83
4.7		Environmental83

5	REFERENCES 85
6	GLOSSARY 87
7	ABBREVIATIONS AND UNITS OF MEASUREMENT 89

Figures

Figure 1:	Location of BiH and the Project area 6
Figure 2:	Location of the five licences that collectively comprise the Adriatic Concession 7
Figure 3:	Geotectonic map of the Dinarides within the Balkan states 11
Figure 4:	Simplified geology cross section looking northwest 12
Figure 5:	Rupice simplified geology (plan) 14
Figure 6:	Typical cross section through Rupice South ʹ section Y-Y͛ ;looking northǁestͿ 15
Figure 7:	Typical cross section through Rupice North ʹ section V-V͛ ;looking northǁestͿ 16
Figure 8:	Long section through Rupice ʹ section Z-Z͛ ;looking ǁestͿ 17
Figure 9:	Rupice mineralisation 18
Figure 10:	Simplified geology map of Veovača shoǁing drill collars 19
Figure 11:	Simplified tLJpical geological cross section through Veovača ;section ϭϬ looking east-northeast) 20
Figure 12:	Veovača mineralisation 21
Figure 13:	Historical IP at Veovača ǁith chargeabilitLJ anomalies ;the grid is MGI ϭϵϬϭͬBalkans Zone ϲͿ 25
Figure 14:	Veovača plan vieǁ ǁith geologLJ mineralisation demonstrating the potential plunge of mineralisation (the grid is MGI 1901/Balkans Zone 6) 26
Figure 15:	Long section of Veovača mineralisation and potential targets 26
Figure 16:	Plan map shoǁing the location of drillholes completed ǁithin the Veovača deposit 28
Figure 17:	Plan view of Rupice and geophysical (IP) anomalies (100 m spaced lines) 31
Figure 18:	Plan view of the gradient array IP and prospects (100 m east-west grid; 50 dipoles) ʹ the grid is MGI 1901/Balkans Zone 6 32
Figure 19:	Plan view of plunging mineralised zone with Adriatic drilling at Rupice (the grid is MGI 1901/Balkans Zone 6) 33
Figure 20:	Long section of the mineralised zone at Rupice looking northeast, with recent Adriatic drilling (the grid is MGI 1901/Balkans Zone 6) 34
Figure 21:	Rupice licence phase 1, 2 and 3 plan collar locations 35
Figure 22:	Rupice licence map with location of completed drilling (2019) in context of 2018 IP gradient anomalies 35
Figure 23:	Plan map showing the location of drillholes (2019) with significant grade intercepts 36
Figure 24:	PDP3D IP response over and to the west of the Rupice mineralisation 39
Figure 25:	IP chargeability targets identified for follow-up work in 2019/2020 40
Figure 26:	Soil sample lead results for the Rupice deposit and surrounding IP chargeability targets 41
Figure 27:	Lead and zinc assay comparison (BR-58-86 and BR-24-18) 42
Figure 28:	Reporting wireframes (the grid is MGI 1901/Balkans Zone 6) 44
Figure 29:	Wireframe models for zinc, low-grade domain (looking west) 48
Figure 30:	Metallurgical sampling at Veovača ;looking northͿ 50
Figure 31:	Metallurgical sampling at Rupice (looking west) 51
Figure 32:	Locked cycle flowsheet (LCT3 & LCT4) 52
Figure 33:	Rupice Regression Formulae for Zinc and Lead Concentrates 56
Figure 34:	Cross-Section of the Proposed Rupice U/G Operation (CSA Global, 2019) 61
Figure 35:	Veovača Open Pit Plan and Sectional Vieǁ ;CSA Global͕ ϮϬϭϵͿ 63
Figure 36:	Overvieǁ of the Mine Schedule 64
Figure 37:	Projected Average Annual Feed Grades 64
Figure 38:	Project Commodity Price Sensitivity 65
Figure 39:	Long sections of Veovača mineralisation demonstrating potential for repeat lenses beloǁ the pit and additional plunging mineralisation 72
Figure 40:	Rupice exploitation concession with known prospects within it and the Borovica prospects in the
	regional prospect area to the south (the grid is MGI 1901/Balkans Zone 6) 73
Figure 41:	Vareš Project concession͕ prospects and stratigraphy (the grid is MGI 1901/Balkans Zone 6) 74
Figure 42:	Planned work programs for 2019 76

TabůeƐ

Veovača Mineral Resources as at ϭ June ϮϬϭϵ IV






Silver intervals greater than 5 m (with greater than 30 g/t Ag with less than two consecutive intervals
Adriatic drilling results at Veovača ǁith intervals greater than ϱ m (using lead + zinc greater than 1%
ϮϬϭϵ drillhole intersections at Veovača ;using lead н njinc greater than ϭй ǁith no more than tǁo
Historical drillhole intersections at Rupice (using lead + zinc greater than 1% with no more than two
Adriatic 2017 drilling results at Rupice (using lead + zinc greater than of 1% with no more than two
Adriatic 2018-2019 drilling results at Rupice (using lead + zinc greater than 1% with no more than two




















	Rupice Mineral Resources as at 1 June 2019IV Tenement status 9 Rupice-Juraševac-Brestic exploration tenement coordinates 9 Veovača-Orti-Mekuše-Selište edžploration tenement coordinates 9 Rupice-Borovica exploration tenement conditions 10 Significant historical drill results 23 <30 g/t Ag) 24 with, with no more than two consecutive intervals below cut-off) 27 consecutive intervals below cut-off and greater than 5 m interval) 28 consecutive intervals below cut-off and greater than 5 m interval) 29 consecutive intervals below cut-off and a minimum of 5 m intervals) 32 consecutive intervals below cut-off and greater than 5 m interval) as of 26 August 2019 37 Veovača MRE bLJ classification ʹ 1 June 2019 43 Rupice MRE by classification ʹ 1 June 2019 47 Pit optimisation parameters (Base Case) associated with the Rupice MRE 49 Veovača bulk sample head grade 50 Rupice bulk sample collection 50 Rupice bulk sample ʹ average grade 51 Rupice bulk sample ʹ high grade 51 Rupice bulk sample ʹ high-grade copper 51 Average Grade Locked Cycle Test LCT4 Summary (Part One) 53 Average Grade Locked Cycle Test LCT4 Summary (Part Two) 53 LCT2 Results for Veovača 55 LCT2 Results for Rupice 55 API specification and Eastern Mining barite concentrate 59 JORC Combined Mineral Inventory as at 31st October 2019 60 A Comparison of US\$ Current Spot, 3 Year Trailing Average & Prices Employed in Model 65 Summary of LOM Operating and Capital Costs 66 Summary of Economic Results 67 Permitting Status 68 Exploration Targets in the immediate district 71 Planned budgets (2019/2020) (Australian dollars) 75

1 IŶƚƌŽdƵcƚŝŽŶ

1.1 Context, Scope and Terms of Reference

CSA Global ;UKͿ Ltd ;CSA GlobalͿ ǁas requested bLJ Adriatc Metals Plc ;͞Adriatc͟ or the ͞CompanLJ͟Ϳ to prepare an Independent Competent Person͛s Report ;CPRͿ for use in a prospectus to support a listng on the Standard Segment of the Main Market of the London Stock Edžchange ;LSEͿ͕ planned for QϦ͕ ϤϢϣϫ͘ Adriatc is a UKͲbased edžploraton and mineral development companLJ͕ listed on the Australian Securites Edžchange ;ASXͿ͘

This CPR covers the Vareš Project ;the ͞Project͟Ϳ in Bosnia and Hernjegovina ;BiHͿ for ǁhich Mineral Resources have been estmated at Veovača and Rupice and a Scoping level technical and economic studLJ recentlLJ completed͘ In additon it summarises the edžploraton potental of the Vareš Project from Smailova to Rupice͘

The CPR and the material informaton relatng to the estmaton of Mineral Resources and the preparaton of a Scoping StudLJ have been prepared bLJ CSA Global in accordance ǁith the Australasian Code for Reportng of Edžploraton Results͕ Mineral Resources and Ore Reserves ;ϤϢϣϤ EditonͿ published bLJ the Joint Ore Reserves Commitee of the Australasian Insttute of Mining and MetallurgLJ ;AusIMMͿ͕ Australian Insttute of Geoscientsts ;AIGͿ and Mineral Council of Australia͕ as amended ;JORCͿ͘

In preparing this CPR͕ CSA Global͗

x Adhered to the JORC Code͘
x Relied on the accuracLJ and completeness of the data provided to it bLJ Adriatc͕ and that Adriatc made CSA Global aǁare of all material informaton in relaton to the projects͘ For the purposes of Prospectus Regulaton Rule ϧ͘ϥ͘ϥR;ϤͿ;fͿ from the Financial Conduct AuthoritLJ ;FCAͿ͕ CSA Global accepts responsibilitLJ for the informaton contained in this CPR͘ To the best of our knoǁledge͕ the informaton contained in this CPR is in accordance ǁith the facts and the CPR makes no omission likelLJ to afect its import͘
x Dreǁ on technical appraisal and frstͲhand knoǁledge of the Project through its recent and current involvement in the Project͕ as technical advisors͕ ǁith specifc reference to the estmaton of Mineral Resources and preparaton of the Scoping StudLJ͘
x Relied on Adriatc͛s representaton that it ǁill hold adequate securitLJ of tenure for edžploraton and assessment of the projects to proceed͘
x Required that Adriatc provide an indemnitLJ to the efect that Adriatc ǁould compensate CSA Global in respect of preparing the CPR against anLJ and all losses͕ claims͕ damages and liabilites to ǁhich CSA Global or its Associates maLJ become subject under anLJ applicable laǁ or otherǁise arising from the preparaton of the CPR to the edžtent that such loss͕ claim͕ damage or liabilitLJ is a direct result of Adriatc or anLJ of its directors or ofcers knoǁinglLJ providing CSA Global ǁith anLJ false or misleading informaton͕ or Adriatc͕ or its directors or ofcers knoǁinglLJ ǁithholding material informaton͘

1.2 Adherence to Reporting Code Guidelines

This CPR has been prepared in accordance ǁith the JORC Code and the rules and guidelines issued bLJ the FCA for the requirements of a CPR͕ taking cognisance of the European Securites and Markets AuthoritLJ requirements for technical reports accompanLJing prospectuses͘

1.3 Principal Sources of Information and Reliance on Other Experts

CSA Global has based its revieǁ of the Project on informaton made available to the principal authors bLJ Adriatc along ǁith technical reports prepared bLJ consultants͕ including CSA Global itself͕ government agencies and previous tenements holders͕ and other relevant published and unpublished data͘ CSA Global has also relied upon discussions ǁith Adriatc͛s management for informaton contained ǁithin this assessment͘ This CPR has been based upon informaton available up to and including Ϥϣ November ϤϢϣϫ͘

CSA Global has endeavoured͕ bLJ making all reasonable enquiries͕ to confrm the authentcitLJ͕ accuracLJ͕ and completeness of the technical data upon ǁhich this report is based͘ Unless otherǁise stated͕ informaton and data contained in this technical report or used in its preparaton has been provided bLJ Adriatc in the form of documentaton͘

Adriatc ǁas provided a fnal draf of this CPR and requested to identfLJ anLJ material errors or omissions prior to its lodgement͘

Descriptons of the mineral tenure͕ tenure agreements͕ encumbrances and environmental liabilites ǁere provided to CSA Global bLJ Adriatc or its technical consultants͘ Adriatc has ǁarranted to CSA Global that the informaton provided for preparaton of this CPR correctlLJ represents all material informaton relevant to the Project͘ Full details on the tenements is provided elseǁhere in the prospectus͘

1.4 Authors of the CŽŵƉeƚeŶƚ PeƌƐŽŶ͛Ɛ Report

CSA Global is a privatelLJ oǁned͕ mining industrLJ consultng companLJ headquartered in Perth͕ Western Australia͘ CSA Global provides geological͕ resource͕ mining͕ management and corporate consultng services to the internatonal resources sector and has done so for more than ϥϢ LJears͘

This CPR has been prepared bLJ a team of consultants sourced principallLJ from CSA Global͛s UK ofce and Perth͕ Western Australia ofce͘ The individuals ǁho have provided input to the CPR have edžtensive edžperience in the mining industrLJ and are members in good standing of appropriate professional insttutons͘ The Consultants preparing this CPR are specialists in the felds of geologLJ͕ edžploraton and Mineral Resource estmaton͘

The folloǁing individuals͕ bLJ virtue of their educaton͕ edžperience and professional associaton͕ are considered Competent Persons͕ as defned in the JORC Code ;ϤϢϣϤͿ͕ for this CPR͘ The Competent Persons͛ individual areas of responsibilitLJ are presented beloǁ͗

x CŽŽƌdŝŶaƟŶg aƵƚhŽƌ ʹ Mƌ GaůeŶ Whŝƚe͘ Possesses over Ϥϥ LJears of contnual mining industrLJ edžperience including nine LJears in operatons and over ϣϦ LJears in consultng covering͖ technical geological investgatons͕ project management͕ mineral resource development and estmaton͕ economic studies͕ project evaluaton͕ due diligence studies͕ edžpert reportng and geoͲcorporate advice͘ Galen coordinated the compilaton of this technical report and contributed to aspects of its content ǁith specifc emphasis on ensuring compliance ǁith technical reportng guidelines of the LSE͘
x CŽŶƚƌŝbƵƟŶg aƵƚhŽƌ ʹ Dƌ Neaů ReLJŶŽůdƐ ;PhD͕ FAƵƐIMM͕ MAIGͿ͘ Geologist ǁith more than ϥϢ LJears͛ global edžperience in edžploraton and evaluaton of mineral deposits and specialist edžpertse in sedimentͲhosted baseͲmetal mineral sLJstems͘ Neal has completed or contributed to multple technical reports for use in prospectuses for inital public oferings on the LSE͕ AIM͕ TSX͕ TSXͲV and the ASX͘ Neal undertook a geologicallLJ focused evaluaton of the Vareš Project including a site visit in August ϤϢϣϫ͘

x CŽŶƚƌŝbƵƟŶg aƵƚhŽƌ ʹ Mƌ DŵŝƚƌLJ Peƌƚeů͘ DmitrLJ has over ϤϨ LJears of geological edžperience in mining͕ edžploraton and feld ǁork͕ ofce and operatons establishment and management together ǁith specifc skills in mining and geological computer applicatons using Datamine͕ Micromine and other sofǁare͕ database management͕ resource modelling and evaluaton͕ consultng͕ due diligence services and audits͘ DmitrLJ has contributed to multple technical reports for use in prospectuses on the ASX͕ LSE and AIM͘ DmitrLJ undertook Mineral Resource evaluaton of the Vareš Project͕ including a site visit in JulLJ ϤϢϣϫ͘
x CŽŶƚƌŝbƵƟŶg AƵƚhŽƌ ʹ Mƌ BƌƵce Pŝůcheƌ͘ Bruce is a Mining Engineer ǁith over ϥϢ LJears͛ edžperience in surface and underground mining operatons and as a consultant has edžtensive edžpertse in the revieǁ͕ audit and evaluaton of͕ and completon of technical and economic studies of mining projects͘ Bruce assumes the role of Competent Person for the disclosure of the Scoping StudLJ informaton pertaining to the Vareš Project͕ set out in this document͘
x Peeƌ ƌeǀŝeǁeƌ ʹ Dƌ BƌeŶdaŶ CůaƌŬe ;PhD͕ BSc ;HŽŶƐͿ͕ Pƌ͘Scŝ͘Naƚ͕͘ FGSSAͿ͘ With ϣϫ LJears of mineral edžploraton and project development edžperience͕ Brendan is highlLJ edžperienced in target generaton͕ edžploraton program implementaton and management͘ Brendan has a strong understanding of manLJ deposit stLJles and has edžperience in the edžploraton for deposit stLJles similar to those in this CPR͘ He has been involved in the preparaton of technical reports for use in prospectuses for inital public oferings on the LSE͕ AIM͕ TSX͕ TSXͲV and the ASX͘

1.5 Independence

Neither CSA Global͕ nor the authors of this CPR͕ has or has had previouslLJ͕ anLJ material interest in Adriatc or the mineral propertes in ǁhich Adriatc has an interest͘ CSA Global͛s relatonship ǁith Adriatc is solelLJ one of professional associaton betǁeen client and independent consultant͘

CSA Global is an independent geological consultancLJ͕ part of the ERM Group͘ Fees are being charged to Adriatc at a commercial rate for the preparaton of this report͕ the paLJment of ǁhich is not contngent upon the conclusions of the CPR or the admission or value of Adriatc͘

CSA Global has no economic or benefcial interest ;either present or contngentͿ in Adriatc or anLJ of its assets nor is anLJ emploLJee of CSA Global a director ;or is intended to be a directorͿ͕ ofcer or other direct emploLJee of Adriatc͘ No member or emploLJee of CSA Global has͕ or has had͕ anLJ shareholding in Adriatc͘

There is no agreement betǁeen CSA Global and Adriatc as to Adriatc providing further ǁork for CSA Global͘

1.6 Declarations

1.6.1 Purpose of this Document

This report has been prepared bLJ CSA Global at the request of͕ and for the sole beneft of Adriatc and its advisors͕ for inclusion in a prospectus document in relaton to a proposed listng of the CompanLJ͛s ordinarLJ shares on the Main Market ;Standard SegmentͿ of the LSE͘ Its purpose is to provide a CPR of Adriatc͛s Vareš Project in BiH͘

This CPR is to be included in its entretLJ or in summarLJ form ǁithin a prospectus to be prepared bLJ Adriatc in connecton ǁith the proposed listng͘ It is not intended to serve anLJ purpose beLJond that stated and should not be relied upon for anLJ other purpose͘

The statements and opinions contained in this CPR are given in good faith and in the belief that theLJ are not false or misleading͘ The conclusions are based on the reference date of Ϥϣ November ϤϢϣϫ and could alter over tme depending on edžploraton results͕ mineral prices and other relevant market factors͘

1.6.2 Competent Person's Statement

The informaton in this CPR that relates to Technical Assessment of the geological setng of the Project͕ Edžploraton Targets or Edžploraton Results is based on informaton compiled and conclusions derived bLJ Dr Neal ReLJnolds͕ a Competent Person ǁho is a Felloǁ of the AusIMM and a member of the AIG͘ Dr ReLJnolds is emploLJed bLJ CSA Global͘

The informaton in this report that relates to Technical Assessment of Mineral Resources is based on informaton compiled and conclusions derived bLJ Mr DmitrLJ Pertel͕ a Competent Person ǁho is a Member of the AusIMM͘ Mr Pertel is emploLJed bLJ CSA Global͘

The informaton in this report that relates to Technical Assessment contained ǁithin the Scoping StudLJ is based on informaton compiled and conclusions derived bLJ Mr Bruce Pilcher͕ a Competent Person ǁho is a Felloǁ of the AusIMM͘ MLJ Pilcher is emploLJed bLJ CSA Global͘

The informaton in this report that relates to Technical Assessment of the feld visit and laboratories is based on informaton compiled and conclusions derived bLJ Dr Belinda van Lente͕ a Member of the South African Council for Natural Scientfc Professions͕ and a Member of the Geological SocietLJ of South Africa͕ qualifLJing Dr van Lente as a Recognised Overseas Professional in accordance ǁith the requirements of the JORC Code͘ Dr van Lente is emploLJed bLJ CSA Global͘

The overall coordinatng author of this technical report is Mr Galen White͕ a Competent Person ǁho is a Felloǁ of the AusIMM͘ Mr White͕ Dr ReLJnolds͕ Mr Pertel and Mr Pilcher have sufcient edžperience that is relevant to the Technical Assessment of the Mineral Assets under consideraton͕ the stLJle of mineralisaton and tLJpes of deposit under consideraton and to the actvitLJ being undertaken to qualifLJ as Competent Persons as defned in the ϤϢϣϤ Editon of the ͞Australasian Code for Reportng of Edžploraton Results͕ Mineral Resources and Ore Reserves͘͟ Mr White͕ Dr ReLJnolds͕ Mr Pertel and Mr Pilcher consent to the inclusion in the CPR of the maters based on their informaton in the form and contedžt in ǁhich it appears͘

1.6.3 Site Inspection

Site inspectons have been completed bLJ Dr ReLJnolds and Mr Pertel during the course of preparing this independent technical report͗

x Dr ReLJnolds visited the site betǁeen ϥϣ JulLJ ϤϢϣϫ and ϣ August ϤϢϣϫ for a total of tǁo daLJs͘ During the visit͕ Dr ReLJnolds inspected drill core from the Veovača and Rupice deposits͕ completed a site visit to each of the deposits͕ and revieǁed geological interpretatons and models ǁith the Adriatc technical team͘
x Mr Pertel visited the site betǁeen ϤϤ JulLJ ϤϢϣϫ and ϤϨ JulLJ ϤϢϣϫ for a total of four daLJs͘ During the visit͕ Mr Pertel visited both sites͕ inspected drill core͕ revieǁed current drilling actvites and inspected core processing facilites͘

Additonal site visits have been undertaken bLJ CSA Global consultants in ϤϢϣϪ and ϤϢϣϫ in relaton to the compilaton of previous independent technical reportng and ongoing consultant support to the Project͘ These include͗

x A visit bLJ a CSA Global Principal Mining Engineer ;June ϤϢϣϫͿ to visit both sites and surrounding areas for the purposes of assessing site laLJout and infrastructure͘
x A visit bLJ a CSA Global Principal Resource Geologist ;JanuarLJ ϤϢϣϪͿ for the purposes of visitng both sites͕ inspectng drill core and completng laboratorLJ visits to inspect sample preparaton and analLJsis facilites͘

CSA Global recognise the potental for lead͕ njinc and copper͕ ǁith associated barite͕ gold and silver mineralisaton on the Veovača and Rupice deposits based on the data available͕ studies completed to date

and folloǁing the site inspectons͘ The proposed actvites of Adriatc͛s ǁork program are considered appropriate for the nedžt stage of target development and testng͘

1.7 About this CŽŵƉeƚeŶƚ PeƌƐŽŶ͛Ɛ ReƉŽƌƚ

This CPR describes Adriatc͛s Vareš Project and mineral assets located in BiH͘ The geologLJ and mineralisaton for each tenement or Project area are discussed͕ as ǁell as the edžploraton ǁork completed͕ and the results obtained therefrom͘ Informaton relatng to data and qualitLJ assurance and qualitLJ control ;QAQCͿ for the Mineral Resource estmates ;MREsͿ is draǁn from published Mineral Resource statements prepared bLJ CSA Global ǁith Mr Bob Annet ;a Consultant to AdriatcͿ and Mr DmitrLJ Pertel ;a Principal Consultant from CSA GlobalͿ as principal authors and Competent Persons͘ In additon informaton is draǁn from the recentlLJ completed Scoping StudLJ͕ managed bLJ CSA Global and ǁhich includes data and informaton prepared bLJ CSA Global and additonal consultants and third partes engaged bLJ AML͘ An efort ǁas made to summarise this bodLJ of ǁork in order to contain the sinje and readabilitLJ of the CPR͘

No Mineral Reserves have been declared for the Project͘

2 VaƌeƓ PƌŽũecƚ

2.1 Location, Access and Infrastructure

The Vareš Project is located near the mining toǁn of Vareš approdžimatelLJ ϧϢ km north of the capital͕ Sarajevo͕ and about ϧϢ minutes bLJ car via the SarajevoʹZenica freeǁaLJ to Podlugovi͕ then a sealed road to Vareš͘ The toǁn of Vareš is the administratve centre for the district ;Figure ϣ and Figure ϤͿ͘

Figure 1: Location of BiH and the Project area Source: CSA Global (2019A)

2.2 Climate, Topography and Vegetation

2.2.1 Climate

The area has a contnental climate partallLJ afected bLJ the generallLJ mountainous terrain ǁith cool summers and cold ǁinters͘ Average annual temperature is ϩΣC ǁith temperatures in edžcess of нϥϢΣC recorded in the summer months of JulLJʹAugust͕ and temperatures of up to ͲϤϢΣC in JanuarLJ͘ The average annual rainfall is ϣ͕ϣϧϢ mm͕ ǁith rain falling LJearͲround as short heavLJ doǁnpours͘ Snoǁ is common throughout the ǁinter months ǁith falls of over Ϥ m͕ although rarelLJ staLJing on the ground for long periods͘

Figure 2: Location of the five licences that collectively comprise the Adriatic Concession Source: Adriatic

2.2.2 Infrastructure

The Concession is located in the Vareš district of ǁhich Vareš ;Figure ϤͿ is the administratve centre͕ providing services and supplies͘ The capital͕ Sarajevo͕ is ϧϢ minutes aǁaLJ and the internatonal airport is ϦϢ minutes aǁaLJ͘ Access betǁeen Veovača and Rupice projects is via ϣϧ km of ǁellͲmaintained sealed and unsealed roads͘ The project is at the edžploraton stage of development and Adriatc holds no mining equipment͕ plant or infrastructure on the project tenements͘

2.2.3 Power

A natonal electricitLJ grid is operated and maintained bLJ the State companLJ͕ JP Elektroprivreda BiH͘ Poǁerlines run to the open pit and abandoned processing facilitLJ at Veovača͕ and thereafer to nearbLJ villages͘ Most of these lines deliver a ϣϢ kV service͘

2.2.4 Water

Local ǁater is supplied to all surrounding villages and is maintained bLJ JKP Vareš doo͕ a public companLJ oǁned and operated bLJ the Vareš council͘

2.3 Ownership and Tenure

2.3.1 Legislative Framework

Three relevant pieces of legislaton govern the edžploraton and edžploitaton of minerals in BiH͗

x Concession laǁ͕ ǁhich is localised to a canton ;an administratve regionͿ͕ in this case the ZenicaͲDoboj canton
x The Laǁ of Geological Edžploratons͕ ǁhich covers permitng related to geological edžploraton
x The Mining Laǁ͕ ǁhich covers permitng afer edžploraton ;i͘e͘ edžploitatonͿ͘

ImportantlLJ͕ neither edžploraton nor edžploitaton permits can be obtained untl a concession has been granted bLJ the relevant canton͘ Once this has been granted͕ edžploraton and edžploitaton applicatons are made in accordance ǁith the edžploraton and Mining Laǁs as set out above͘

The duraton of edžploraton and edžploitaton rights are set out in the original agreement and these are not fdžed in the legislaton͘ The edžploraton laǁ makes alloǁance for a single edžtension equal in tme to the original period granted for the licence͘ An edžploitaton permit maLJ be granted to the holder of an edžploraton permit afer submitng technical documentaton in accordance ǁith the requirements set out bLJ the Mining Laǁ͘ Again͕ the Mining Laǁ is nonͲspecifc regarding the duratonͬedžtent of an edžploitaton permit͖ this ǁill be issued in accordance ǁith the duraton of the underlLJing Concession Agreement͘

RoLJaltLJ rates and tarifs are not legislated in the Mining Laǁ͘ These fall under the concessional agreement ǁith the relevant canton͘

2.3.2 History and Tenure

Energoinvest͕ a parastatal edžploraton and mining companLJ registered in Belgrade͕ commenced modern edžploraton in the Vareš area in the late ϣϫϦϢs at a tme ǁhen Socialist Federal Republic of Yugoslavia ǁas established under a communist government ǁith all assets͕ including minerals͕ belonging to the State͘ Edžploraton and mining actvites contnued untl ϣϫϫϤ ǁhen BiH declared its independence͕ and ǁhen bankruptcLJ proceedings ǁere brought against manLJ of the State companies͕ including Energoinvest and its assets͘

Folloǁing bankruptcLJ proceedings against Energoinvest in November ϤϢϣϤ͕ the Vareš Project ;at that stage comprising the Veovača and Rupice licences ǁithout the edžtension discussed beloǁͿ ǁas sold to Balamara Resources Limited and Balkan Mining PtLJ Ltd ǁho ǁere shareholders of MM Project doo1͘

ConcessionarLJ and associated edžploraton and edžploitaton rights for the Vareš Project ǁere granted for Ϥϧ LJears on ϣϤ March ϤϢϣϥ bLJ the MinistrLJ of EconomLJ of the ZenicaʹDoboj Canton ;the ConcessorͿ under Concession Agreement number ϢϦͲϣϪͲϤϣϥϪϫͲϣͬϣϥ͘ MM Project doo subsequentlLJ changed its name to Eastern Mining doo ;Eastern MiningͿ͘ Eastern Mining ǁas acquired bLJ Adriatc in FebruarLJ ϤϢϣϩ and is entrelLJ oǁned bLJ Adriatc͘

In November ϤϢϣϪ͕ Adriatc received a signed Concession Annedže agreement from the Premier and the MinistrLJ of EconomLJ of ZenicaͲDoboj Canton for an additonal ϦϧϤ ha of land in the RupiceͲBorovica area͕ and an additonal ϣϥϤ ha in the VeovačaͲOrtͲMekušeͲSelište area͘ This ǁas approved bLJ the Federal MinistrLJ for EnergLJ͕ Mining and IndustrLJ in March ϤϢϣϫ͕ and an edžploraton permit ǁas granted over these areas͕ edžpiring in March ϤϢϤϥ͘ These areas͕ ǁhich together ǁith the three original licences͕ comprise the ͞edžpanded Adriatc concession͟ and are shoǁn in Figure Ϥ͘ Under the concession͕ Adriatc is commited to a roLJaltLJ paLJment of ϣ͘ϧ BiH convertble mark ;KMͿ per ROM tonne ;equivalent to USΧϢ͘ϧϩ per run of mine ;ROMͿ tonneͿ͘

¹ A doo is the BiH equivalent of a Pty or plc company

The Vareš Project͕ as noǁ defned in this CPR͕ comprises the edžpanded Adriatc Concession of ϪϨϧ͘Ϧ ha in three areas͕ tǁo at Veovača covering the pit and plant site respectvelLJ are edžploitaton and edžploraton areas͕ ǁhile Rupice is an edžploraton area ;Table ϥͿ͘

Project	Tenement	Area (ha)	Status
	Veovača II (Pit Site)	90.54	Exploitation permit expired, new exploitation permit application in progress.
Vareš	Veovača I (Plant Site)	107.68	Exploitation permit expired, new exploitation permit application in progress.
	Rupice-Juraševac-Brestic	83.18	Approved ʹ exploration. Expiry date 25/05/2020; option to renew or apply for exploitation permit.
	Rupice-Borovica	452	Approved ʹ exploration. Expiry date 04/03/2023.
	Veovača-Orti-Mekuše-Selište	132	Approved ʹ exploration. Expiry data 04/03/2023.

Note: The tenements above are on the existing "expanded" Concession which is valid until 12/03/2023.

The coordinate points delimitng the currentlLJ actve edžploraton tenements of RupiceͲJuraševacͲBrestc͖ RupiceͲBorovica and VeovačaͲOrtͲMekušeͲSelište are detailed beloǁ͘ The coordinate reference sLJstem is MGI ϣϫϢϣ Balkans Zone Ϩ͘

Table 4:	Rupice-Juraševac-Brestic exploration tenement coordinates

Point no.	X	Y
I	6519000	4894900
II	6519400	4894900
III	6520275	4893720
IV	6519975	4893560
V	6519000	4894250

Table 5: Veovača-Orti-Mekuše-Selište exploration tenement coordinates

Point no.	X	Y
XV	6529250	4889750
XIV	6529205	4889795
2	6529600	4890510
3	6530375	4890510
XVII	6530375	4889875
XVI	6529875	4890375
XVII	6530375	4889875
5	6530710	4889531.18
6	6531255.66	4890040.76
7	6531693.77	4889618.37
8	6531289.95	4889170.73
9	6529672.14	4889172.14

Table 6:		Rupice-Borovica exploration tenement conditions
Point no.	X	Y	Point no.	X	Y	Point no.	X	Y	Point no.	X	Y	Point no.	X	Y
1	6,518,200.00	4,894,637.04	25	6,518,358.07	4,894,779.07	49	6,518,610.86	4,894,941.00	73	6,518,823.14	4,895,135.29	97	6,518,985.36	4,895,338.29
2	6,518,200.80	4,894,639.30	26	6,518,363.00	4,894,780.50	50	6,518,627.43	4,894,946.07	74	6,518,825.86	4,895,139.43	98	6,518,991.79	4,895,343.50
3	6,518,205.70	4,894,648.80	27	6,518,368.43	4,894,783.21	51	6,518,641.86	4,894,951.43	75	6,518,831.00	4,895,146.21	99	6,518,997.79	4,895,348.29
4	6,518,209.90	4,894,655.20	28	6,518,384.79	4,894,794.71	52	6,518,650.43	4,894,954.86	76	6,518,842.50	4,895,158.79	100	6,519,002.29	4,895,353.50
5	6,518,217.90	4,894,665.80	29	6,518,396.36	4,894,802.21	53	6,518,654.00	4,894,957.50	77	6,518,849.00	4,895,163.93	101	6,519,005.64	4,895,360.43
6	6,518,224.90	4,894,674.90	30	6,518,410.57	4,894,811.86	54	6,518,656.79	4,894,961.50	78	6,518,858.93	4,895,169.86	102	6,519,008.79	4,895,373.50
7	6,518,231.90	4,894,682.40	31	6,518,421.00	4,894,820.93	55	6,518,660.14	4,894,967.79	79	6,518,871.50	4,895,175.14	103	6,519,011.29	4,895,380.93
8	6,518,242.30	4,894,690.90	32	6,518,436.57	4,894,832.21	56	6,518,663.14	4,894,974.14	80	6,518,881.43	4,895,178.50	104	6,519,015.21	4,895,391.86
9	6,518,255.20	4,894,701.00	33	6,518,444.21	4,894,838.50	57	6,518,668.79	4,894,985.00	81	6,518,886.57	4,895,181.00	105	6,519,018.29	4,895,400.00
10	6,518,264.90	4,894,708.60	34	6,518,449.29	4,894,843.64	58	6,518,673.21	4,894,992.43	82	6,518,893.64	4,895,186.43	106	6,519,500.00	4,895,400.00
11	6,518,272.90	4,894,714.40	35	6,518,455.14	4,894,851.14	59	6,518,677.36	4,894,998.00	83	6,518,900.36	4,895,194.86	107	6,520,571.09	4,893,929.71
12	6,518,279.80	4,894,721.50	36	6,518,461.50	4,894,861.93	60	6,518,685.07	4,895,005.86	84	6,518,909.50	4,895,204.36	108	6,519,924.73	4,892,957.24
13	6,518,284.80	4,894,727.40	37	6,518,468.07	4,894,873.43	61	6,518,697.64	4,895,018.50	85	6,518,919.50	4,895,216.36	109	6,519,733.10	4,893,031.79
14	6,518,288.80	4,894,732.30	38	6,518,475.14	4,894,883.71	62	6,518,704.86	4,895,026.79	86	6,518,928.29	4,895,229.57	110	6,519,489.35	4,892,863.01
15	6,518,290.86	4,894,736.64	39	6,518,484.07	4,894,896.93	63	6,518,720.57	4,895,045.00	87	6,518,938.86	4,895,243.14	111	6,519,489.35	4,892,677.06
16	6,518,293.79	4,894,740.07	40	6,518,489.71	4,894,904.64	64	6,518,733.43	4,895,059.79	88	6,518,952.64	4,895,259.29	112	6,519,769.68	4,892,565.52
17	6,518,299.43	4,894,748.07	41	6,518,497.14	4,894,910.57	65	6,518,741.36	4,895,068.79	89	6,518,955.00	4,895,263.64	113	6,519,600.00	4,892,200.00
18	6,518,308.00	4,894,757.21	42	6,518,506.71	4,894,915.57	66	6,518,754.07	4,895,079.50	90	6,518,956.93	4,895,269.71	114	6,518,000.00	4,892,200.00
19	6,518,314.86	4,894,762.43	43	6,518,516.14	4,894,919.79	67	6,518,769.93	4,895,092.86	91	6,518,958.64	4,895,282.79	115	6,518,000.00	4,893,283.39
20	6,518,321.43	4,894,765.50	44	6,518,526.71	4,894,922.36	68	6,518,781.43	4,895,102.43	92	6,518,961.79	4,895,302.93	116	6,518,696.93	4,892,917.46
21	6,518,327.57	4,894,768.43	45	6,518,540.21	4,894,925.14	69	6,518,791.93	4,895,109.57	93	6,518,964.21	4,895,310.71	117	6,518,864.61	4,893,258.61
22	6,518,334.14	4,894,771.93	46	6,518,556.00	4,894,929.07	70	6,518,800.14	4,895,115.43	94	6,518,968.14	4,895,318.71	118	6,518,473.94	4,893,320.30
23	6,518,341.79	4,894,774.71	47	6,518,574.57	4,894,934.86	71	6,518,812.21	4,895,123.64	95	6,518,974.57	4,895,328.07	119	6,518,200.00	4,894,000.00
24	6,518,350.57	4,894,777.21	48	6,518,588.64	4,894,937.57	72	6,518,818.29	4,895,128.93	96	6,518,979.79	4,895,333.86

2.4 Geology

2.4.1 Regional Geology

The Vareš Project is located in the Dinarides͕ the geological domain that represents the southeast edžtension of the Alpine orogenic belt in the Balkans͘ The Dinaride orogen developed through opening and closure of the Vardar Ocean͕ a branch of the NeotethLJs Ocean͕ betǁeen the Adriatc terrane ;AdriaͿ and the TisnjaͲDacia blocks and Moesian platorm on the Eurasian terrane͕ as ǁell as intervening arc belts͘

Rifing in the Vardar belt commenced in the Loǁer to Middle Triassic and led to development of a passive margin carbonate platorm on Adria from the Upper Triassic to Upper Jurassic ;Schmid et al., ϤϢϢϪͿ͘ Ophiolite obducton of Vardar oceanic crust in the latest Jurassic or Loǁer Cretaceous occurred during the earlLJ convergent phase of the orogen͘ Convergence culminated in Palaeogene to Neogene closure of the Vardar Ocean during the Alpine orogenLJ ǁhich͕ at a larger scale͕ represented collision of Europe and Africa and closure of the NeotethLJs Ocean͘

The Dinarides are comprised of the authochtonous ǁestern carbonate platorm and a series of southǁestͲ verging nappe belts to the east͕ developed during the Alpine collision event͘ The Vareš Project is located in the Durmitor Nappe comprising Palaeonjoic basement and TriassicͲJurassic volcanic and sedimentarLJ elements ;Figure ϥͿ͘ West of the Durmitor Nappe͕ the Bosnian FlLJsch represents the passive margin of Adria lLJing east of͕ and largelLJ LJounger than͕ the carbonate platorm of the Dalmatan and High Karst njone͘ Together͕ the carbonate platorm and Bosnian FlLJsch represent the autocthonous Edžternal Dinarides ;or Outer DinaridesͿ͘

Figure 3: Geotectonic map of the Dinarides within the Balkan states Source: Hrvatović (2003)

The Durmitor Nappe and DrinaͲIvanjica Nappe to the east are tectonicallLJ overthrust bLJ͕ and interleaved ǁith͕ the Western Vardar ophiolite belt͕ comprising the Internal Dinarides ;or Central DinaridesͿ͕ representng the adžial part of the rif basin overthrust bLJ oceanic crust of the Vardar Ocean͘

The Durmitor Nappe ;Figure ϦͿ is interpreted to include preͲrifing Palaeonjoic basement͕ Loǁer to Middle Triassic rifͲplatorm sequences͕ and deepͲǁater Jurassic sequences͘ Ladinian ;Middle TriassicͿ alkaline mafc volcanics mark a major edžtensional rif event and are overlain bLJ platorm sediments dominated bLJ carbonate sediments ǁith subordinate siliciclastc sediments͘ Rapid deepening resulted in depositon of deepͲǁater limestones and radiolarianͲbearing mudstones and chert in the Jurassic͘

In the latest Jurassic͕ ǁestǁard slab rollback culminated in collision ǁith an intraͲoceanic arc in the Vardar Ocean and resulted in ophiolite obducton onto the Adria passive margin͘ FlLJsch sedimentaton contnued in the Bosnian FlLJsch belt ahead of the obducted ophiolite͘ Final closure of the Vardar Ocean in the Late Cretaceous to Palaeogene resulted in development of the ǁestǁard verging Dinaride foldͲandͲthrust belt͕ including the Durmitor Nappe͘

Figure 4: Simplified geology cross section looking northwest Note: See text above for reference to the 11-stratigraphic description. Source: Hrvatović (2004)

2.4.2 District Mineralisation

The Vareš Project is located ǁithin the ͞Vareš ore feld͟ ǁhich forms part of a metallogenic province that has previouslLJ been interpreted to be related to Middle Triassic rifing and associated magmatsm ;Palinkaš et al.͕ ϤϢϢϪͿ͘ This province ǁas defned bLJ Palinkaš et al. ;ϤϢϢϪͿ to include stratform sedimentarLJͲedžhalatve ;SedEdžͿ Fe͕ Mn͕ Ba͕ polLJsulphide and Hg deposits and associated feederͲnjone deposits͕ localised ǁithin the Middle Triassic rif sequences of the Internal Dinarides͘

The Vareš metallogenic district is a ǁest northǁestͲstriking curved belt͕ Ϥʹϧ km ǁide and Ϥϧ km long͕ running from SrednjeʹDraǎevići in the southeast to VarešʹBorovica in the northǁest and is characterised bLJ Loǁer Triassic shales͕ sandstones and limestones͕ Anisian limestones͕ and Ladinian spilites interlaLJered ǁith pLJroclastc volcanic rocks͕ cherts͕ and shales͘

Vareš ǁas a signifcant centre for iron ore mining untl the ϣϫϫϢs based on three sideriteͲhematte deposits ǁithin the AnisianͲLadinian stratgraphLJ͕ Smreka͕ Droškovac and Brenjik͘ Footǁall marls are overlain bLJ the partlLJ faultͲbound mineralised njone ǁith remnant limestone and overlain bLJ chertLJ mudstone͘ Mineralisaton includes siderite͕ manganeseͲrich hematte͕ barite͕ pLJrite͕ marcasite͕ chalcopLJrite͕ galena͕ sphalerite͕ tetrahedrite and PbͲsulphosalts͘

The polLJmetallic deposits of the Vareš metallogenic district include Srednje͕ Borovica͕ Rupice͕ and Veovača͘ Srednje and Borovica are hosted bLJ dolostone ǁith minor intercalatons of chert and shale͕ and characterised bLJ barite͕ galena and sphalerite͕ ǁith minor pLJrite and marcasite and accessorLJ arsenopLJrite͕ chalcopLJrite͕ bournonite͕ tetrahedrite͕ stbnite and cinnabar͘

2.4.3 Local Geology and Mineralisation

Rupice at the ǁestern end of Vareš ore feld and Veovača͕ in the central part͕ are both hosted ǁithin a ǁestͲnorthǁestͲstriking antformal thrustͲbound belt of Triassic rocks surrounded bLJ Jurassic carbonates͘ Ladinian ;Middle TriassicͿ alkaline pilloǁ basalts occur in a njone betǁeen the deposits͕ apparentlLJ stratgraphicallLJ underlLJing the host rocks to the mineralisaton͘

Mineralisaton at Rupice and Veovača shoǁs more similarites than diferences and both deposits are clearlLJ part of the same mineral sLJstem͘

Rupice

The Rupice project is located ϣϧ km to the northǁest of Veovača on the ǁestern slope of Kiprovac Ridge͘ Other knoǁn prospects in this area include JurasevacͲBrestc and prospects in the Borovica corridor͘

The host sequence at Rupice comprises Middle Triassic limestone͕ dolostone͕ calcareous and dolomitc marl͕ and a range of mostlLJ fneͲgrained siliciclastc rocks including chertLJ mudstone͕ mudstone͕ siltstone͕ and fneͲgrained sandstone͘ The siliciclastc rocks are commonlLJ red͕ though locallLJ green͘ The internal Triassic stratgraphLJ is not ǁell defned͕ partlLJ due to faultͲrelated structural compledžitLJ and alteraton but͕ in general͕ a footǁall sandstone is overlain bLJ marls and dolostones that host the mineralised horinjon͕ ǁith a hanging ǁall that commonlLJ includes a laminated ferruginous dolomitc mudstone͘

The host sequence shoǁs edžtensive earlLJ sofͲsediment deformaton tedžtures related to compacton and minor slumping͘ Compressional deformaton efects are limited and localised͕ ǁith a domainal compressional fabric locallLJ present͘ The most prominent deformaton is late faultng and associated breccias͘ The Rupice deposit is interpreted to lie in the faulted northeast limb of a northͲnorthǁest to southͲsoutheast trending sLJncline ǁith the northeast limb being stronglLJ deformed bLJ thrustng͘ The geological setng of the nearbLJ Jurasevač and Brestč prospects maLJ represent an edžtension or repetton of this deformed limb͘

Figure 5: Rupice simplified geology (plan) Note: The outermost dashed line represents the extended Rupice area; the inner dashed line is the original Rupice area.

Figure 6: Typical cross section through Rupice South – section Y-Y' (looking northwest) Source: Adriatic (2019C)

Figure 7: Typical cross section through Rupice North – section X-X' (looking northwest) Source: Adriatic (2019C)

Figure 8: Long section through Rupice – section Z-Z' (looking west) Source: Adriatic (2019C)

Mineralisaton shoǁs broadlLJ stratform geometrLJ ǁithin the dominantlLJ calcareous or dolomitc hostͲ rock sequence͕ ǁith localised compledžites related to structure͘ The deposit dips to the east and fatens doǁn dip͘ In the central part of the deposit͕ a thickened njone maLJ represent a structural thickening related to folding͕ or the replacement of a thicker hostͲrock interval͘ The deposit plunges to the north and in its central part occurs as tǁo stacked lenses͘ It is not LJet clear if this represents a structural repetton͘

The Triassic sediments and the mineralised interval are structurallLJ overlain across a major northeastͲ dipping thrust fault bLJ Jurassic sediments comprising locallLJ reddish limestone ǁith minor cherts͘

The Triassic sequence beloǁ the thrust is interpreted to be cut bLJ a set of northeastͲdipping moderatelLJ steep reverse faults that have been interpreted to form a dupledž betǁeen the Jurassic thrust and a blind sole thrust͘

At Rupice͕ mineralisaton is characterised bLJ abundant barite that is intmatelLJ intergroǁn ǁith sulphides that include sphalerite͕ galena͕ chalcopLJrite͕ pLJrite͕ minor tetrahedrite͕ and rare stbnite and cinnabar͘

Mineralisaton carries signifcant silver and gold values͘ Sphalerite is dominantlLJ loǁ iron and varies from LJelloǁ to pale broǁn and broǁn͘

Mineralisaton varies from massive͕ to disseminated and brecciaͲmatridž͕ to stockǁork and vein stLJle͕ but most of the mineralisaton is massive and can be edžceptonallLJ high grade in thick intervals of total replacement ;Figure ϫͿ͘ Massive mineralisaton tLJpicallLJ displaLJs a remnant breccia or conglomeratc tedžture interpreted to refect replacement of dolostone sedimentarLJ breccia͘ Stockǁork vein mineralisaton is locallLJ present in the footǁall͕ ǁith similar bariteͲsphaleriteͲgalenaͲpLJrite mineralogLJ͘ Disseminated pLJrite in the footǁall is associated ǁith silicifcaton͘

Ankerite occurs ǁith mineralisaton and is part of the mineralisaton paragenesis͘ Quartnj also occurs as gangue and locallLJ edžtensive njones of hLJdrothermal silicifcaton are developed͕ especiallLJ in the footǁall dolostone and dolomitc marl͘

Figure 9: Rupice mineralisation

Top – massive replacement mineralisation with coarse barite and pale brown to yellow sphalerite and ghosted remnant breccia texture. Bottom – stockwork vein and replacement in dolomitic marl, with coarse bladed barite and brown to yellowish-green sphalerite at right

Veovača

The host sequence at Veovača is broadlLJ similar to Rupice͕ including Middle Triassic limestone͕ dolostone͕ marl͕ chertLJ mudstone͕ mudstone and siltstone͘ Hoǁever͕ mineralisaton is hosted ǁithin a prominent conglomeratc unit that is much beter developed than at Rupice͘ Dolostone breccia similar to Rupice is also present at Veovača͕ but the dominant lithologLJ is a polLJmict matridžͲ to clastͲsupported subͲrounded to subͲangular conglomerate ǁithout obvious bedding͘ This is most likelLJ a massͲfoǁ sedimentarLJ deposit related to sLJnͲsedimentarLJ faultng͘

The mineralised njone at Veovača trends ǁestͲnorthǁest to eastͲnortheast and plunges to the eastͲ northeast͘ This ǁas previouslLJ interpreted to occur in an eastͲnortheast plunging sLJnform ǁith breccia at its core͕ but this has not been confrmed bLJ more recent ǁork͘

In the open pit at Veovača͕ the mineralised conglomeratc unit has a faulted footǁall contact ǁith stronglLJ deformed mudstone and siltstone ǁith thin limestone beds͘ The hangingǁall consists of interbedded red mudstones and siltstones ǁith thick dolostone or limestone horinjons͘ In drill core͕ limestone and calcareous marl occur in the footǁall͘ The local lithostratgraphLJ is poorlLJ defned͘

Deformaton in the host sequence at Veovača is more intense than at Rupice ǁith an edžtensivelLJ developed compressional fabric that is oblique to bedding͘ Hoǁever͕ fabric formaton is domainal͕ and the conglomeratc unit and mineralisaton maLJ be largelLJ undeformed͘ Tight folding is apparent in local roadͲcuts and in the open pit͕ the footǁall sequence includes a steep overturned fold limb͘

Mineralisaton at Veovača is generallLJ undeformed͕ hoǁever this appears to refect resistance to deformaton͕ ǁhich is highlLJ domainal͕ rather than late postͲdeformatonal mineralisaton͘ Fabrics are locallLJ developed in mineralised rock and remobilisaton of barite and sulphides into clast pressure shadoǁs has occurred locallLJ͘

Figure 10: Simplified geology map of Veovača showing drill collars Source: Adriatic (2019E)

Figure 11: Simplified typical geological cross section through Veovača (section 10 looking east-northeast) Source: Adriatic (2019E)

At Veovača͕ massive mineralisaton similar to Rupice is also present and associated ǁith highest grades͕ but most mineralisaton occurs ǁithin the conglomeratc unit ǁhere it selectvelLJ replaces certain clasts ;probablLJ limestone and dolostoneͿ and the matridž͕ ǁhich is probablLJ calcareous or dolomitc͘ Clasts of sandstone and mudstone are not replaced͘ Grade of mineralisaton appears to be related to the variable conglomeratc compositon and tedžture͖ highest grades occur in dolostone conglomerate ǁhen clasts and matridž are replaced͕ moderate grades in matridžͲ to clastͲsupported coarse conglomerate ǁith dolomitc clasts and probablLJ matridž͕ loǁ grades are associated ǁith clastͲsupported conglomerate dominated bLJ siliciclastc clasts͘

Figure 12: Veovača mineralisation Top Left – banded massive mineralisation; top right, massive breccia mineralisation where clasts and matrix have been replaced. Bottom left – breccia mineralisation with some clasts fully replaced while siliciclastic clasts are not replaced. Bottom right – low-grade mineralisation in the matrix of clast-supported conglomerate.

Mineralisation Model

The polLJmetallic bariteͲsulphide mineralisaton at Rupice and Veovača is not edžhalatve as described bLJ Palinkaš et al. ;ϤϢϢϪͿ and bLJ the Geological Insttute in Bosnia͖ edžhalatve mineralisaton is not possible ǁithin highͲenergLJ conglomeratc sediments͘ The mineralisaton setng͕ chemistrLJ and stLJle is diferent from SHMS ;shaleͲhosted massive sulphide or ͞SedEdž͟Ϳ deposits globallLJ͕ nor does it shoǁ characteristcs of VMS ;volcanogenic massive sulphideͿ deposits͕ especiallLJ as there is no direct associaton ǁith volcanic rocks͘

Mineralisaton at Rupice and Veovača occurs in a carbonateͲdominated sedimentarLJ sequence deposited in an actve marine rif setng͕ folloǁing a period of alkaline volcanism͘ SedimentarLJ breccia or conglomeratc units provide evidence for actve faultng during sedimentaton͕ and there is sedimentarLJ evidence for rapid subsidence and a deepening depositonal environment͘

Mineralisaton is dominantlLJ replacementͲstLJle ǁith subordinate veining͘ Mineralisaton is interpreted to preferentallLJ replace carbonateͲbearing lithologies͕ primarilLJ dolostone and dolomitc sedimentarLJ breccia ǁith subordinate mineralisaton in dolomitc marls͘ The grade of mineralisaton at Veovača appears to be directlLJ related to the amount of carbonate in the precursor sedimentarLJ breccia hostͲrock͘

Dolomitsaton is interpreted to be an important ͞ground preparaton͟ alteraton event͕ generatng a coarse grained more permeable and reactve rock mass͘ Dolomitsaton predates mineralisaton and probablLJ refects a basinal brine fuid foǁ event accompanLJing edžtension and subsidence͘

In an environment ǁith actve sLJnͲsedimentarLJ faultng͕ signifcant lateral variaton of sedimentarLJ facies and unit thickness is to be edžpected͘ Variaton of the thickness of preferred host units maLJ result in some of the thickness variaton observed in the stratabound mineralised njones ;e͘g͘ dolostone host thickness at RupiceͿ͘

The polLJmetallic metal associaton ǁith Fe͕ Zn͕ Pb͕ Cu͕ Ag͕ Au͕ Sb͕ As͕ Hg and Ba stronglLJ suggests a component of magmatc fuid in the mineralising sLJstem͘ The barite is intergroǁn ǁith sulphides in both massive replacement and vein mineralisaton and barite and sulphides are unlikelLJ to have formed

separatelLJ͘ Fluids are therefore likelLJ to have been relatvelLJ high temperature to carrLJ both metals and barium in the same͕ probablLJ odžidising͕ fuid͘ If evaporites ǁere present in the rif͕ theLJ maLJ have contributed to fuid salinitLJ alloǁing a greater metal carrLJing capacitLJ͘

A relatvelLJ earlLJ tming for mineralisaton is suggested bLJ the fact that mineralisaton predates the compressive Alpine deformaton event and associated faultng͘ The potental trigger events for a hLJdrothermal mineralising sLJstem are earlLJ rifing and magmatsm͕ or the compressive Palaeogene deformaton event͘ The later ǁas relatvelLJ thinͲskinned and cool and ǁithout associated magmatsm in the Inner Dinarides͘

In summarLJ͕ the Rupice and Veovača deposits are interpreted to have formed mainlLJ bLJ replacement͕ principallLJ of dolomitc rocks͕ in a high heatͲfoǁ rif setng ǁith midžing of magmatc fuids and basinal brines͘ The sideriteͲhematte iron deposits ǁith associated barite and base metals are interpreted to be part of the same mineralising sLJstem͘ The high mercurLJ content in the Vareš deposits also suggests that the epigenetc mercurLJ vein deposits ǁere part of the same metallogenic event͘

The Vareš deposits are unusual in their metal content͕ stLJle and setng and do not have anLJ obvious direct analogues globallLJ͘ TheLJ shoǁ some similarites ǁith the polLJmetallic mineralisaton associated ǁith postͲ collisional Neogene alkaline magmatsm in southeast Spain͕ including the La Union Sierra de Cartagena and Rodaliquilar districts͘ These deposits include mantos and epithermal mineralisaton ǁith barite͕ njinc͕ lead͕ copper͕ antmonLJ͕ silver and gold͘

2.5 Historical Mining and Exploration

The Vareš district has a signifcant mining historLJ datng back to Bronnje Age͘ During the Roman era͕ the toǁn ǁas famous for its miners and iron smiths͘ During the Austrian rule of BiH͕ the ironǁorks of Vareš ǁere an important edžporter of iron products to the rest of the Hapsburg empire͘ The frst blast furnace in BiH ǁas built in Vareš in ϣϪϫϣ and onlLJ ceased operatons in ϣϫϫϢ͘

The Socialist Federal Republic of Yugoslavia through its parastatal companLJ͕ Energoinvest͕ commenced modern edžploraton in the Vareš district in the late ϣϫϦϢs and͕ over a period of ϦϢ LJears͕ discovered several iron and polLJmetallic ;lead͕ njinc͕ barite͕ silver͕ goldͿ deposits ǁithin a ϥϢ km dž ϣϢ km sedimentarLJ formaton edžtending from Rupice in the northǁest to SmailovaͲSuma in the southeast͘

In the late ϣϫϨϢs to the earlLJ ϣϫϩϢs͕ edžploraton in the district consisted of a number of small programs of diamond core drilling and surface trenching ǁhich at Veovača͕ Droscovac͕ BretcͲJurasevac and Borovica ǁas folloǁed bLJ the development of edžploraton adits and drives͕ and then a more substantal program of diamond core drilling in the late ϣϫϩϢs and the ϣϫϪϢs͘ The frst ͞mineral reserve͟ for Veovača ǁas estmated in ϣϫϩϪ and contnued to be refned up to ϣϫϪϥ ǁhen open pit mining commenced͘ At Rupice͕ a ͞mineral reserve͟ ǁas estmated in the ϣϫϪϢs as drilling progressed͘

Open pit mining commenced at Veovača in ϣϫϪϥ at a producton rate of approdžimatelLJ ϦϢϢ͕ϢϢϢ tonnes per annum͘ Afer four LJears of mining͕some ϣ͘Ϥ million tonnes ;MtͿ of ore had been mined and hauled to the nearbLJ processing facilitLJ some Ϥ km to the southǁest͘

Mining actvites bLJ Energoinvest reached a peak in the ϣϫϪϢs but bLJ the end of the decade all mines closed due to politcal instabilitLJ rather than depleted mine reserves͘

No edžploraton ǁas conducted in the Vareš District folloǁing the closure of the leadͲnjinc and iron ore mines in the late ϣϫϪϢs͘ Thereafer the civil unrest of the ϣϫϫϢs͕ lack of foreign investment through the earlLJ ϤϢϢϢs͕ and the eventual bankruptcLJ of Energoinvest͕ impeded anLJ atempt at restartng edžploraton and mining͘

2.6 Exploration Activities

2.6.1 Veovača Exploration

There have been several periods of edžploraton at the Veovača deposit commencing in the ϣϫϨϢs and folloǁͲup ǁork in the late ϣϫϩϢs͘ Edžploraton consisted of an inital small program of diamond core drilling and surface trenching ;ϣϫϨϪʹϣϫϩϢͿ͕ folloǁed bLJ the development of edžploraton adits and drives͘ A more substantal program of diamond core drilling ǁas completed in the ϣϫϩϢs͘ In all͕ a total of ϧϣ diamond drillholes ǁere completed for approdžimatelLJ Ϫ͕ϢϢϢ m͘

All historical drillholes ǁere assaLJed for lead͕ njinc and barite and͕ verLJ occasionallLJ͕ copper and mercurLJ͘ Signifcant lead and njinc intervals are listed in Table ϩ͘ Historical drilling ǁas vertcal and as the mineralisaton lies ǁithin an upright sLJnform͕ drillholes either intersected mineralisaton from surface to the keel of the sLJnform and into barren footǁall͕ or missed mineralisaton completelLJ ;Figure ϣϣͿ͘

Drillhole	From (m)	To (m)	Interval (m)	Pb (%)	Zn (%)	BaSO4 (%)
BV-I-3	0.0	20.0	20.0	2.6	3.1	31
BV-II-2	18.0	36.0	18.0	1.3	3.3	11
BV-III-1	0.0	12.0	12.0	1.4	1.7	30
BV-III-1	20.0	26.0	6.0	2.8	3.5	33
BV-III-3	0.0	10.0	10.0	3.6	5.0	58
BV-III-3	18.0	40.0	22.0	1.5	1.9	17
BV-IV-2	17.0	33.0	16.0	1.7	1.4	13
BV-IV-2	35.0	55.5	20.5	1.9	3.2	27
BV-IX-1	0.0	34.0	34.0	0.9	1.1	11
BV-IX-1	42.0	66.0	24.0	0.9	1.1	11
BV-IX-1	76.0	140.0	64.0	0.7	1.6	13
BV-IX-1A	46.0	54.0	8.0	0.2	1.4	0
BV-IX-1A	62.0	86.0	24.0	1.1	1.2	19
BV-IX-3	4.0	10.0	6.0	0.4	2.1	40
BV-IX-3	46.0	68.0	22.0	1.7	3.7	32
BV-V-3	6.0	70.0	64.0	2.6	3.2	37
BV-VI-2	0.0	10.0	10.0	0.6	0.5	9
BV-VI-2	18.0	108.0	90.0	3.1	3.7	47
BV-VII-1	8.0	124.0	116.0	0.7	3.3	24
BV-VII-1A	112.0	120.0	8.0	1.0	1.0	0
BV-VII-3	10.0	30.0	20.0	0.5	1.8	14
BV-VII-3	42.0	60.0	18.0	1.1	3.9	37
BV-VIII-1	48.0	57.0	9.0	1.3	1.5	16
BV-VIII-2	10.0	30.0	20.0	0.8	0.9	19
BV-VIII-2	52.0	110.0	58.0	1.6	2.4	30
BV-X-1	18.0	40.0	22.0	1.5	2.3	24
BV-X-1	64.0	78.0	14.0	0.7	1.0	11
BV-X-1	100.0	118.0	18.0	0.7	0.7	13
BV-X-1	130.0	179.0	49.0	0.8	1.1	15
BV-X-2	37.0	63.0	26.0	0.7	0.9	10
BV-X-2	71.0	95.0	24.0	0.8	1.1	14
BV-X-2A	40.0	50.0	10.0	0.5	0.6	0
BV-XI-1	0.5	26.0	25.5	2.9	3.1	38

Table 7: Significant historical drill results

Drillhole	From (m)	To (m)	Interval (m)	Pb (%)	Zn (%)	BaSO4 (%)
BV-XI-1	38.0	50.0	12.0	0.7	1.1	7
BV-XI-1	76.0	146.0	70.0	1.1	1.2	14
BV-XI-1A	108.0	114.0	6.0	0.7	1.3	13
BV-XI-1A	120.0	128.0	8.0	0.9	2.1	11
BV-XI-1A	150.0	158.0	8.0	0.7	1.5	9
BV-XI-3	68.0	78.0	10.0	1.3	3.9	33
BV-XI-3	93.0	103.0	10.0	0.8	0.6	6
BV-XII-1	7.0	101.0	94.0	1.1	1.6	16
BV-XII-1	107.0	161.0	54.0	1.0	1.2	12
BV-XII-1	167.0	177.0	10.0	0.7	0.9	9
BV-XII-1A	83.5	101.0	17.5	1.2	1.5	31
BV-XII-1A	108.7	120.5	11.8	0.9	1.1	35
BV-XII-1A	180.5	214.5	34.0	3.3	3.2	42
BV-XIII-1	10.0	38.0	28.0	0.9	1.9	2
BV-XIII-1	60.0	74.0	14.0	2.2	2.4	37
BV-XIII-1	132.0	166.0	34.0	0.7	1.6	19
BV-XIII-4	120.0	138.0	18.0	0.6	0.7	7
BV-XIII-4	164.0	172.0	8.0	1.0	1.3	16
BV-XIII-4	190.0	233.0	43.0	2.3	3.1	36
BV-XIII-5	179.0	191.0	12.0	1.1	1.1	22
BV-XIV-2	44.0	54.0	10.0	0.7	0.9	6
BV-XIV-3	112.0	117.5	5.5	0.5	0.7	0
BV-XIV-3	164.0	180.0	16.0	0.7	1.2	12
BV-XIV-3	190.0	207.7	17.7	1.1	1.8	19
BV-XIV-4	30.0	35.0	5.0	0.2	1.1	1
BV-XIV-4	172.8	216.0	43.2	1.1	1.8	17
BV-XIV-5	75.0	80.0	5.0	0.2	1.1	0
BV-XIV-5	235.0	248.0	13.0	1.1	0.6	4
BV-XV-2	172.0	192.0	20.0	0.6	0.8	9
BV-XV-3	213.0	222.0	9.0	1.8	2.0	21
BV-XV-4	60.0	65.0	5.0	1.1	0.1	0
BV-XV-4	240.0	250.0	10.0	2.5	2.5	41
BV-XVII-2	145.0	163.0	18.0	0.6	0.9	9

Note: Intersections greater than 4 m interval at grades using lead + zinc greater than 1% with cut-off with no more than two consecutive intervals below cut-off. BaSO4 = Barite.

Seven diamond drillholes at Veovača ǁere previouslLJ assaLJed bLJ Energoinvest for silver ǁith three drillholes returning the folloǁing results ;Table ϪͿ͘

Table 8: Silver intervals greater than 5 m (with greater than 30 g/t Ag with less than two consecutive intervals <30 g/t Ag)

Drillhole From (m)		Interval (m)	Ag (g/t)
BV-IX-1A	62	24	71
BV-XI-1A	152	6	44
BV-XIII-5	179	12	45

Several induced polarisaton ;IPͿ programs ǁere also completed in this period͘ A gradient arraLJ surveLJ to the northeast of the open pit mine highlighted northǁestͲtrending chargeabilitLJ anomalies͕ orthogonal to the northeastͲtrending orientaton of mineralisaton in the pit͘ The anomalLJ edžtends from Ort

CSA Global Report Nº R350.2019 24

southeast to Seliste͕ northeast of the Veovača pit͕ ǁhile another anomalous trend ǁas defned over the Mekuse prospect ;Figure ϣϥͿ͘

Limited drilling ǁas completed at the Ort prospect͕ a single hole in ϣϫϨϫ͕ ϣϩ holes betǁeen ϣϫϪϦ and ϣϫϪϨ and one hole in ϣϫϫϢ͕ ǁhilst at Mekuse seven holes ǁere drilled betǁeen ϣϫϨϪ and ϣϫϩϢ͘ Whilst CSA Global has vieǁed the drillhole geologLJ logs for Ort͕ and cross sectons shoǁing the drilling at Mekuse͕ these prospects are LJet to be edžplored in anLJ detail͘ Hoǁever͕ ground truthing has identfed edžtensive historical surface mining at Ort and Mekuse ;undertaken during the AustrianͲHungarian period c͘ ϣϪϨϩͲϣϫϣϪͿ and͕ folloǁing a detailed light detecton and ranging ;LiDARͿ surveLJ͕ edžtensive surface diggings immediatelLJ north of Veovača ǁere discovered͘ Adriatc considers the Ort and the Veovača North diggings to be possible faulted repettons of the Veovača mineralisaton ;Figure ϣϦ and Figure ϣϧͿ͕ ǁhilst the mineralisaton at Mekuse appears to have a diferent stratgraphic alignment at a verLJ high angle to the Veovača trend͘

Figure 13: Historical IP at Veovača with chargeability anomalies (the grid is MGI 1901/Balkans Zone 6) Source: Adriatic (2018B)

Figure 14: Veovača plan view with geology mineralisation demonstrating the potential plunge of mineralisation (the grid is MGI 1901/Balkans Zone 6) Note: Figure modified from Adriatic website.

Figure 15: Long section of Veovača mineralisation and potential targets Note: The grid is MGI 1901/Balkans Zone 6 (modified from Adriatic presentation) demonstrating potential for repeat lenses below the pit.

Adriatc completed ϣϨ neǁ drillholes in ϤϢϣϩ for ϣ͕ϥϩϫ m to supplement and confrm some of the ϦϪ historical drillholes͕ areas of adit sampling͕ and open pit grade control samples͘ Results from this drilling are listed in Table ϫ͘ Due to access constraints in and around the old open pit Adriatc drilled a combinaton of vertcal and steeplLJ inclined holes͘ All holes intersected the mineralisaton ǁithin the core of the upright sLJnform mostlLJ from surface or near surface ǁith drilling at a high angle to the adžial plane of the sLJnform͘

Drillhole	From (m)	Interval (m)	Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)
	0	10.6	6.6	5.3	63	0.2	233
BV-2017-1	12.6	27.4	3.7	2.2	39	0.4	121
	46	24	4	2	26	0.1	91
BV-2017-2	0	52	2.9	1.9	27	0.2	106
BV-2017-3	0	34	2.9	1.9	30	0.2	105
BV-2017-4	4	88	2.3	2	28	0.1	99
BV-2017-5	0	40	1.3	0.8	10	0.1	37
BV-2017-6	0	88	1.9	1.3	17	0.1	54
BV-2017-7				Hole abandoned before target
	6	12	1.1	0.7	7	0	27
BV-2017-8	32	80	1.3	0.9	12	0.1	37
	0	20	1.5	1.4	17	0.1	55
BV-2017-9	34	42	1.2	1	13	0.1	46
	84	38	2.6	1.7	20	0.1	77
BV-2017-10	0	42	3.2	2.6	37	0.2	125
BV-2017-11	22	38	2.1	1.6	17	0.1	63
	0	52	3.3	2.7	39	0.2	133
BV-2017-12	64	16	3.8	2.8	28	0.1	115
BV-2017-13	14	84	2.9	2.4	30	0.1	106
BV-2017-14	0	20	0.9	0.7	8	0	23
BV-2017-14	34	24	1.8	0.9	13	0.1	50
	0	24	2.5	1.4	17	0.1	71
BV-2017-15	34	16	0.9	0.7	9	0	27
	58	26	2.2	1.6	17	0.1	70
	18	24.5	0.9	0.5	5	0	21
BV-2017-16	68.5	20	1.7	1.4	15	0.1	53

Table 9: Adriatic drilling results at Veovača with intervals greater than 5 m (using lead + zinc greater than 1% with, with no more than two consecutive intervals below cut-off)

Note: True thickness is generally considered to approximate intersection width (see text).

No drilling took place at the Veovača deposit during ϤϢϣϪ͘ During ϤϢϣϫ͕ an additonal ϣϩ drillholes ǁere undertaken for a total advance of Ϥ͕ϥϦϤ m ǁith the intenton to include both base and precious metals into an updated MRE͘ A plan map of the completed holes as of ϤϤ JulLJ ϤϢϣϫ is shoǁn in Figure ϣϨ͘ Signifcant results from the drilling returned to date for the ϤϢϣϫ campaign ;ϥϣ JulLJ ϤϢϣϫͿ are presented in Table ϣϢ beloǁ͘ Three holes ǁere drilled vertcallLJ and the remainder betǁeen ϧϢΣ and ϪϢΣ toǁards the northͲnortheast or southͲsoutheast in order to best intersect the steeplLJ dipping mineralisaton͘

Figure 16: Plan map showing the location of drillholes completed within the Veovača deposit Source: Adriatic (2019E)

Table 10: 2019 drillhole intersections at Veovača (using lead + zinc greater than 1% with no more than two consecutive intervals below cut-off and greater than 5 m interval)

Drillhole	From (m)	Interval (m)	Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)
BV-2019-1	42	12	2.7	2	27	0.1	83
	64	12	1.1	0.8	9	0	37
	82	72	1.4	1.2	13	0.1	48
	12	8	0.7	0.5	7	0.1	22
	28	28	2	1.3	15	0.1	57
BV-2019-2	66	22	1.1	0.9	11	0	32
	98	14	3	2.4	27	0.1	94
	0	36	1.9	1.6	28	0.1	82
BV-2019-3	56	8	2.5	0.2	0	0	1
	88	20	0.7	0.6	8	0.1	26
	0	78	2.3	1.5	22	0.1	68
BV-2019-4	88	64	2.3	1.5	21	0.1	88
BV-2019-5	2	26	1.2	0.8	14	0.1	40
	34	16	0.9	0.6	7	0.1	30
	60	8	1.7	1	0	0	2
	122	30	1.8	1.7	19	0.1	64
BV-2019-6	8	58	2.5	2	23	0.1	87

Drillhole	From (m)	Interval (m)	Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)
BV-2019-7	30	12	3.3	3.3	43	0.2	177
	28	30	1.3	0.8	9	0.1	31
	76	6	0.8	0.5	5	0	22
BV-2019-8	96	10	2.1	0.3	0	0	3
	142	20	0.8	0.6	8	0	27
BV-2019-9				No Significant Intersection
BV-2019-10	No Significant Intersection
BV-2019-11	No Significant Intersection
	140	24	1.5	1.2	16	0.1	53
BV-2019-12	178	12	1.3	0.9	15	0.1	45
BV-2019-13	14	28	1.4	1.1	14	0.1	47
	50	16.5	3.4	2	36	0.2	148
BV-2019-14	4	38	2.5	1.5	20	0.1	73
BV-2019-15	No Significant Intersection
BV-2019-16	22	12	0.6	0.3	0	0	1
BV-2019-17	8	20	4.2	2.4	32	0.3	107

Note: True thickness approximates intersection widths.

2.6.2 Rupice Exploration

In additon to Rupice͕ other knoǁn prospects include JurasevacͲBrestc and prospects in the Borovica corridor ;Kraljeva Jama͕ Siroki Radakovac͕ Ceo Sutjeska and ZakrunjjeͿ ;Figure ϣϩͿ͘

Previous edžploraton actvites in the Rupice area commenced in ϣϫϧϤ and contnued intermitentlLJ untl ϣϫϫϢ͕ initallLJ focusing on barite mineralisaton and later on the polLJmetallic mineralisaton͘ Edžploraton actvites included geophLJsics ;IPͿ͕ costeans͕ edžploraton adits͕ and drilling͘ During this period͕ Energoinvest completed over ϨϢ holes for ϩ͕ϢϢϢ m targetng Rupice͕ Borovica and JurasevacͲBrestc ;Table ϣϣͿ͘ These indicated the presence of polLJmetallic mineralisaton at Rupice and JurasevacͲBrestc͘ ChargeabilitLJ anomalies edžtend to the southeast betǁeen Rupice and JurasevacͲBrestc but these trends have not been drillͲtested͘ Other anomalies in the area ;at Upper Borovica and Loǁer Borovica localitesͿ have not been folloǁed up bLJ drilling either͕ though some of these are outside the Adriatc granted Concession͘

Drillhole	From (m)	Interval (m)	Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)	Cu (%)
BR-1-86	77	26	1.9	1.4	19	n/a	n/a	n/a
BR-9-82	60	17	3	2.6	64	n/a	223	0.3
	83	10	1	0.3	2	n/a	n/a	n/a
BR-10-81	85	51	2.4	1.8	59	n/a	n/a	n/a
Including re-assay	90	34	n/a	n/a	n/a	1.8	195	n/a
	4	27	2	1.3	74	n/a	n/a	0.3
BR-14a-80	90	34	n/a	n/a	n/a	1.8	195	n/a
BR-19-80	19	10	2.3	1	14	n/a	n/a	n/a
BR-20-80	49	14	2	1	47	n/a	518	0.2
BR-24-82	66.4	11.4	3.8	2.8	85	1.1	273	0.3
BR-25-81	88	34	0.9	1	38	n/a	n/a	n/a
BR-25-81	90	26	n/a	n/a	n/a	0.7	n/a	n/a
BR-27b-81	52	6	0.5	0.9	46	n/a	59	0.3

Table 11: Historical drillhole intersections at Rupice (using lead + zinc greater than 1% with no more than two consecutive intervals below cut-off and greater than 5 m interval)

Drillhole	From (m)	Interval (m)	Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)	Cu (%)
BR-29-82	101	9	0.5	0.5	26	n/a	39	0.2
BR-30-82	123	15	2.2	2.1	35	n/a	221	0.7
BR-33-82	99	14	1.9	1.7	3	0.6	43	0.7
BR-34-82	32	14	0.9	0.5	21	1.1	113	0.5
BR-46-86	152	10	5.6	4.1	54	n/a	n/a	n/a
BR-50-86	164	10.7	1	1.3	8	n/a	n/a	n/a
BR-58-86	137.6	33.9	11.4	6.3	56	n/a	n/a	n/a
Including	141	24	14.8	8	61	n/a	n/a	n/a
BR-59-86	129	24	4	2	41	n/a	n/a	n/a
Including	147	6	11.4	5.1	71	n/a	n/a	n/a
BR-60-86	97	9	2	2.2	22	n/a	n/a	n/a
BR-75-86	178	12	4.5	3.6	4	n/a	n/a	n/a
BR-76-89	190	49	5.3	4.8	54	n/a	n/a	n/a
Including	204.4	10.8	9.3	8.8	67	n/a	n/a	n/a
BR-78-89	171.1	14.6	2	1.3	9	n/a	n/a	n/a
BR-79-89	196.6	7	8.9	5.2	42	n/a	n/a	n/a

Historical drillholes ǁere all vertcal and intersected the mineralisaton at a high angle to the general dip so that true thickness of the intersectons is likelLJ to be Ϩϧй of the doǁnhole intercept͘ According to Adriatc records͕ less than oneͲthird of the historical drillholes in Rupice ǁere assaLJed for silver or gold͘

Historical IP programs cover the majoritLJ of the Concession and part of the larger target area ;Figure ϣϩͿ͘ The Rupice and Jurasevac prospects are highlighted bLJ moderate to high chargeabilitLJ anomalies͘ Several prospects in the Borovica corridor surrounding the Concession are also highlighted͘

Adriatc completed IP ;gradient arraLJͿ programs cover the majoritLJ of the Rupice and part of the regional prospect area in ϤϢϣϪ ;Figure ϣϪͿ͘ The Rupice and Jurasevac prospects are highlighted bLJ moderate to high chargeabilitLJ anomalies͘ In additon͕ ϧ km to the southǁest of Jurasevac͕ there is a parallel chargeable anomalLJ͕ ǁithin the regional area͕ considered for future edžploraton͘

Figure 17: Plan view of Rupice and geophysical (IP) anomalies (100 m spaced lines) Note: Contour units are Mv/Ms. The grid is MGI 1901/Balkans Zone 6. Source: Adriatc

Adriatc completed eight holes at Rupice for ϣ͕ϦϧϪ m in ϤϢϣϩ͘ Drilling targeted doǁn plunge of the mineralisaton to confrm historical results and assaLJ additonal elements͕ including copper͕ gold and silver ;Figure ϣϫ and Figure ϤϢ͕ and Table ϣϤͿ͘ From this ǁork͕ Adriatc concluded that mineralisaton ǁas open at depth and along strike and that all the Adriatc drill intersectons of njinc and lead mineralisaton included signifcant grades of gold͕ copper and silver that had onlLJ been sparselLJ assaLJed in historical sampling͘ Signifcant edžploraton potental edžisted adjacent and doǁn dip to previous signifcant drill intersectons͕ ǁith the deepest drillhole bLJ Adriatc͕ BRͲϣͲϣϩ intersectng ϨϦ m at ϧ͘ϣй Pb͕ Ϫ͘ϧй Zn͕ ϣ͘Ϣй Cu͕ ϥϩϦ gͬt Ag and Ϥ͘ϥ gͬt Au ;Table ϣϤͿ͘ Drillholes ǁere all vertcal and intersected the mineralisaton at a high angle to the general dip so that true thickness of the intersectons is likelLJ to be Ϩϧй of the doǁnhole intercept͘

Based on the conclusions of the ϤϢϣϩ edžploraton program͕ Adriatc commenced a targeted ϣϧ͕ϢϢϢ m drill program at Rupice on ϩ MaLJ ϤϢϣϪ͘ Drilling ǁas split into three phases to test several keLJ anomalies at Rupice and BrestcͲJurasevac ;Figure ϤϣͿ͘ The frst phase focused on targets in the Rupice north njone and folloǁed the northerlLJ edžtensions over ϤϤϢ m of strike length ;up to the then current licence boundarLJͿ͕ including the edžpected doǁn dip and doǁn plunge edžtensions of the mineralisaton͘

Figure 18: Plan view of the gradient array IP and prospects (100 m east-west grid; 50 dipoles) – the grid is MGI 1901/Balkans Zone 6 Source: Adriatic (2019A)

Table 12: Adriatic 2017 drilling results at Rupice (using lead + zinc greater than of 1% with no more than two consecutive intervals below cut-off and a minimum of 5 m intervals)

Drillhole	From (m)	Interval (m)	Zn (%)	Pb (%)	BaSO4 (%)	Cu (%)	Au (g/t)	Ag (g/t)
BR-1-17	180	66	8.3	5	42	0.9	2.2	385
BR-2-17	No significant intercept
BR-3-17
BR-4-17	146	32	5.4	3.9	67	0.2	3.3	360
BR-5-17	No significant intercept
BR-6-17	116	22	1.8	1.7	26	0.3	1.8	161
BR-7-17	94	40	8.2	5.5	57	0.6	3.6	479
BR-8-17	120	14	1	1	2	1	0	32

Figure 19: Plan view of plunging mineralised zone with Adriatic drilling at Rupice (the grid is MGI 1901/Balkans Zone 6) Note: Figure modified from Adriatic website.

The northerlLJ edžtension of Rupice ǁas ǁhere both historical and ϤϢϣϩ drilling had intersected high grades of base and precious metals͕ and also ǁhere geophLJsics had shoǁn possible edžtensions of the mineralisaton to the northǁest͘ Phase Ϥ targeted the southerlLJ edžtension of the Rupice mineralisaton͕ including the doǁnͲdip and up plunge edžtensions of the mineralisaton over a strike length of ϣϢϢ m͘ Phase ϥ drilling targeted the area near the historical BrestcͲJurasevac underground ǁorkings and edžploraton drives͕ referred to as the JB Zone͘

Signifcant results from the drilling returned to date ;Ϩ August ϤϢϣϫͿ are presented in Figure ϤϤ and Figure Ϥϥ͕ as ǁell as in Table ϣϥ͘ From this ǁork͕ Adriatc ǁas able to defne a maiden MRE for the Rupice project͕ as detailed in Secton Ϥ͘Ϫ͘ As of Ϩ August ϤϢϣϫ͕ drilling to the north in the edžtended Rupice licence area contnues to intersect mineralisaton ǁhich remains open doǁnͲplunge to the north͘

Figure 20: Long section of the mineralised zone at Rupice looking northeast, with recent Adriatic drilling (the grid is MGI 1901/Balkans Zone 6) Source: Adriatic (2019C)

Figure 21: Rupice licence phase 1, 2 and 3 plan collar locations Source: Adriatic (2018A)

Figure 22: Rupice licence map with location of completed drilling (2019) in context of 2018 IP gradient anomalies Source: Adriatic (2019C)

Figure 23: Plan map showing the location of drillholes (2019) with significant grade intercepts Source: Adriatic (2019C)

Table 13: Adriatic 2018-2019 drilling results at Rupice (using lead + zinc greater than 1% with no more than two consecutive intervals below cut-off and greater than 5 m interval) as of 26 August 2019

Drillhole	From (m)	Interval (m)	Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)	Cu (%)
BR-01-18					Hole abandoned before target
BR-02-18	210	68	10.3	7.3	44	4.3	612	0.8
BR-03-18	196	36	5.7	4.3	55	4.4	463	0.5
	244	22	12.8	7.5	56	4.1	258	0.8
BR-04-18	No significant intercept
BR-05-18	210	66	12.8	8.6	37	2.1	158	2.3
BR-06-18	No significant intercept
BR-07-18	228	18	9.2	4.5	62	2.6	201	0.5
BR-08-18	206	14	7.4	4.5	38	1.7	148	1.2
BR-09-18				No significant intercept
BR-10-18	200	6	0.9	1.1	11	0.8	44	0.3
	238	32	9.6	5.2	50	3	238	0.5
BR-11-18				No significant intercept
BR-12-18	200	18	8.2	4.2	27	1.4	131	0.8
BR-13-18	170	20	2	0.6	0	98.1	1	1.4
	220	24	14.8	7.7	53	3.7	167	0.7
BR-14-18				No significant intercept
BR-15-18	194	8	0.5	0.8	53	1.4	43	0.1
BR-16-18	No significant intercept
BR-17-18	204	66	9.5	4.9	56	2.4	187	0.5
BR-18-18	212	18	0.8	0.8	2	0.3	45	0.1
BR-19-18				No significant intercept
BR-20-18	204	8	1.1	4.2	1	0.4	57	0.5
BR-21-18				No significant Intercept
BR-22-18	222	42	14.1	8.4	34	5.7	245	1.4
BR-23-18	74	12	1.4	2.8	16	0.8	228	0.3
BR-24-18	146	34	13.3	6.8	60	3	455	0.5
BR-25-18	218	46	12.7	9.6	40	4.1	309	1
BR-26-18	44	6	1.5	1.2	28	0.6	63	0.2
BR-27-18	92	10	1.4	0.9	23	1	51	0.5
BR-28-18				No significant Intercept
BR-29-18	218	6	1.8	2.2	66	3.2	252	0.3
	234	10	2.2	4.3	60	3.2	535	0.4
BR-30-18				No significant intercept
BR-31-18				No significant intercept
BR-32-18	192	16	1.3	1.4	4	0.4	49	0.2
	228	20	8.2	5.6	60	4.1	479	0.5
BR-33-18	228	36	4.9	3.2	45	2.7	306	0.5
BR-34-18				No significant intercept
BR-35-18	228	20	2.9	3.9	51	3.1	349	0.4
BR-36-18	206	72	18.3	10.7	25	2.5	211	2.5
BR-37-18	212	8	1.5	1.5	20	0.9	281	0.2
	232	20	4	5.8	64	3.7	525	0.4
BR-38-18				No significant intercept
BR-39-18					Hole abandoned before target

Drillhole	From (m)	Interval (m)	Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)	Cu (%)
	206	10	0.9	0.2	4.3	0.7	26.6	0.1
BR-01-19	240	16	13.7	10	51.9	1.6	241	1
	218	6	3.1	2.4	38	2	193	0.2
BR-02-19	230	12	2.2	3.7	40	3	294	0.3
	216	6	2	2.2	52	2.9	460	0.4
BR-03-19	236	12	4	3	60	1.8	286	0.7
BR-04-19	250	26	11.1	6	50	5.3	304	0.4
BR-05-19	196	6	2.6	0.7	4	0	0	0
BR-06-19	252	14	1.2	0.6	0	0.3	14	0.8
BR-07-19	250	20	0.8	0.5	1	0.2	58	0.1
	202	16	1.6	1.7	29	1.4	208	0.3
BR-08-19	234	26	1.2	1.1	20	0.4	78	0.3
BR-09-19	232	28	3.3	2.4	29	1	162	0.3
BR-10-19	214	36	1.4	0.9	0	0.2	34	0.2
BR-11-19	258	8	4.4	2.8	55	3.2	364	0.3
	274	18	8.2	4.7	66	2.6	586	0.4
	176	22	2.9	1.8	16	1.24	308	0.2
BR-12-19	218	30	2.1	2.5	3	0.63	103	0.6
	198	6	2.1	0.6	1	0.54	12	0.1
BR-13-19	214	6	0.5	0.3	0	0.16	68	0.4
	242	6	1.9	1.2	4	0.42	23	0.3
BR-14-19	204	12	7.4	3.6	36	2.05	90	1.4
	208	38	6.2	3.8	33	1.93	174	0.4
BR-17-19	254	20	2	2.8	3	0.27	96	0.6
BR-18-19	230	8	2.5	1.8	18	1.43	143	0.6
	254	18	3.9	2.1	34	0.98	180	0.7
BR-19-19	284	8	0.7	0.4	1	0.1	26	0.1
	234	36	2.1	1.2	1	0.13	56	0.2
BR-20-19	280	18	2.1	1.2	1	0.11	48	0.2

Note: During the 2017, 2018 and 2019 drilling completed by Adriatic, correlation of lithological units between diamond drillholes, particularly the lower contact of the Mine Sequence with the turbiditic sandstone, suggest bedding and bedding parallel foliation dip broadly at around 45-50° to the northeast. Typical drilling azimuths are 230° which is broadly orthogonal to the deposit stratigraphy, and with hole declinations generally 70° the high core to bedding angles indicate that drilling intersects the mineralisation at reasonably high angles suggesting that downhole intercepts for the most part approximate true thicknesses for latter, 2019 intercepts and for early holes intercepts are approximately 65% of true thickness. However, CSA Global notes that this can be variable as localised folding affects both bedding and mineralisation.

In ϤϢϣϫ͕ a detailed highͲpoǁered ;ϥϢ kVAͿ IP surveLJ using a poleͲdipole threeͲdimensional ;PDPϥDͿ arraLJ method ǁas completed over the Rupice and BrestcͲJurasevac target area͘ PreliminarLJ results have demonstrated that the knoǁn mineralisaton has a clear IP chargeabilitLJ response͘ An additonal anomalLJ has been defned approdžimatelLJ ϤϢϢ m ǁest of the current and historical drilling ;Figure ϤϦͿ in an untested locaton͘ ϥD IP surveLJing contnues at the BrestcͲJurasevac and Borovica Prospects identfLJing further edžploraton targets for later in ϤϢϣϫ and ϤϢϤϢ ;Figure ϤϧͿ͘ HighlLJ anomalous lead values in recent soil sampling coincides ǁith the IP chargeabilitLJ anomalies and Rupice prospect and some historical ǁorkings at BrestcͲJurasevac ǁorkings ;Figure ϤϨͿ͘

Figure 24: PDP3D IP response over and to the west of the Rupice mineralisation Source: Adriatic (2019D)

Figure 25: IP chargeability targets identified for follow-up work in 2019/2020 Source: Adriatic (2019B)

Figure 26: Soil sample lead results for the Rupice deposit and surrounding IP chargeability targets Source: Adriatic (2019B)

2.6.3 Historical Data Validation

Veovača

In JulLJ ϤϢϣϩ͕ Eastern Mining discovered a bodž containing ϫϫ laboratorLJ pulps from four drillholes drilled in ϣϫϩϢ ;BVͲIIͲϣ͕ BVͲIVͲϤ͕ BVͲXIVͲϤ͕ BVͲXIͲϣͿ͘ The bodž contained both single samples and duplicates͕ indicatng that their procedure for sample preparaton and eventual analLJsis did include qualitLJ control samples͘ UnfortunatelLJ͕ the number of duplicates and other QAQC samples used is not knoǁn͘

A high level of correlaton edžists betǁeen historicallLJ reported assaLJ results and results from reͲassaLJing͕ and ǁhen combined ǁith similar grades reported from tǁinͲhole drilling actvites ;carried out in ϤϢϣϫͿ͕ provides sufcient evidence that the historical assaLJs are reliable and can be combined ǁith the recent

assaLJs for the purposes of Mineral Resource estmaton͘ Edžamples are provided beloǁ ;Figure Ϥϩ͕ Figure ϤϪͿ͘

Rupice

All the lead͕ njinc and barite assaLJs from the drill campaigns of ϣϫϪϢ͕ ϣϫϪϣ͕ ϣϫϪϤ͕ ϣϫϪϨ and ϣϫϫϢ ǁere analLJsed at Energoinvest͛s laboratorLJ at Vareš and their Certfcate of AnalLJsis are in a number of reports ǁhich are held bLJ Eastern Mining͘ The Vareš laboratorLJ began operatons in the ϣϫϩϢs and analLJsed all the drill sample material for the Veovača edžploraton and as such the acceptable assaLJ QAQC fndings for Veovača are considered to applLJ equallLJ to Rupice͘

As part of its drilling to add copper and precious metals in areas ǁhere historical drilling had not assaLJed for these elements͕ Eastern Mining drilled BRͲϤϦͲϣϪ ;ϤϢϣϪͿ as a ͞near tǁin hole͟ to historical drillhole BRͲϧϪͲϪϨ͘ A comparison of the assaLJ results for lead͕ njinc and barite demonstrates verLJ good correlaton ;notǁithstanding the someǁhat variable nature of the mineralisatonͿ and provides assurance of the validitLJ of the historical assaLJs in both grade and ǁidth of mineralisaton ;Figure ϤϩͿ͘ The historical assaLJs are therefore considered reliable and can be combined ǁith the recent assaLJs for the purposes of the MRE͘

Figure 27: Lead and zinc assay comparison (BR-58-86 and BR-24-18)

2.7 VeŽǀača Mineral Resource Estimate

The frst MRE for the Veovača deposit reported under the JORC Code ;ϤϢϣϤ EditonͿ ǁas prepared in FebruarLJ ϤϢϣϪ bLJ Mr DmitrLJ Pertel from CSA Global͘ Adriatc commissioned CSA Global to update the MRE for the deposit folloǁing additonal edžploraton drilling in ϤϢϣϫ͘ Both the Veovača and Rupice estmates

relLJ signifcantlLJ on historical drilling data͕ ǁhich ǁas validated through a pulp reͲassaLJ and tǁin drilling program ;Secton Ϥ͘Ϩ͘ϥͿ͘

2.7.1 Mineral Resource Overview

Adriatc provided databases including drillhole logging͕ sampling͕ analLJtcal results and collar locatons͘ Mr Robert Annet of Adriatc Metals completed the data qualitLJ evaluaton for the Veovača deposit ;QAQC analLJsisͿ͕ ǁhilst Mr DmitrLJ Pertel of CSA Global prepared the MRE͘ The Competent Persons ;Adriatc press release͕ Ϥϥ JulLJ ϤϢϣϫͿ consider the qualitLJ of drilling͕ sampling͕ logging͕ core recoverLJ͕ and geological descripton to be of a reasonable standard sufcient for MRE purposes͘

CSA Global notes that there is no central master drillhole database for the project͕ and stronglLJ recommends that a central master database should be established as a ͚͞single point of truth͟ ǁith appropriate data management protocols͘

Historical data comprises ϧϣ historical drillholes͕ adit sampling and open pit grade control samples͕ and ϥϥ drillholes from Adriatc͛s ϤϢϣϩ ;ϣϨ holesͿ and ϤϢϣϫ ;ϣϩ holesͿ programs͘ These ǁere used to defne the geometrLJ of the mineralisaton͘ Several of Adriatc͛s drillholes tǁinned historical holes ǁhilst others inflled the historical drilling in areas of partcular interest͘ The assaLJs ;both recent and historicalͿ are of sufcient industrLJ standard and considered appropriate for MREs͘

A njinc equivalence calculaton ǁas used as a mechanism to report the polLJmetallic block model above cutͲof grades͘ An assumed recoverLJ of ϫϢй ǁas based on historical producton records from the Veovača open pit͖ metallurgical testng is in progress to confrm this assumpton͘ The cutͲof grades ǁere applied to the njinc equivalent ;ZnEqͿ values in the block model onlLJ͖ the ZnEq values themselves ǁere not reported as theLJ ǁere generated onlLJ to facilitate the reportng of the estmated lead͕ njinc͕ barite͕ gold and silver grades͘ The ZnEq formula applied ǁas͗

ZnEq с Znй * ϫ0й н 0.Ϫ * Pbй * ϫ0й н 0.0Ϫ * BaSOϦй * ϫ0й н 1.Ϫ * Au(g/t) * ϫ0й н 0.01ϫ * Ag(g/t) * ϫ0й

The MRE has been reported in accordance ǁith the JORC Code and is therefore suitable for public release͘ The MRE is reported bLJ classifcaton in Table ϣϦ͕ above a cutͲof grade of Ϣ͘Ϩй ZnEq͘

JORC classification				Grades					Contained metal
	Tonnes (Mt)	Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)	Zn (kt)	Pb (kt)	BaSO4 (kt)	Au (koz)	Ag (Moz)
Indicated	5.3	1.6	1.0	16	0.1	50	83	55	860	14	9
Inferred	2.1	1.1	0.5	6	0.1	17	23	11	123	4	1
Total	7.4	1.4	0.9	13	0.1	41	106	66	984	18	10

Table 14: Veovača MRE by classification – 1 June 2019

Notes:

x Mineral Resource classifications are based on JORC Code definitions.

x The figures presented above are both gross and 100% net attributable to Adriatic.
x The operator is Adriatic.
x Source: The Competent Person for the MRE is Mr Dmitry Pertel, a Member of the AusIMM and employed by CSA Global.
x A cut-off grade of 0.6% ZnEq has been applied.
x ZnEq was calculated using conversion factors of 0.80 for lead, 0.08 for BaSO4, 1.80 for gold and 0.019 for silver, and recoveries of 90% for all elements. Metal prices used were US\$2,500/t for zinc, US\$2,000/t for lead, US\$200/t for BaSO4, US\$1,400/oz for gold and US\$15/oz for silver.
x The applied formula was: ZnEq = Zn% * 90% + 0.8 * Pb% * 90% + 0.08 * BaSO4% * 90% + 1.8 * Au(g/t) * 90% + 0.019 * Ag(g/t) * 90%.
x Metallurgical recoveries of 90% have been applied in the metal equivalent formula based on recent testwork results.
x It is the opinion of Adriatic and the Competent Persons that all elements and products included in the metal equivalent formula have a reasonable potential to be recovered and sold.
x A bulk density was calculated for each model cell using regression formula BD = 2.70855 + BaSO4 * 0.01487 + Pb * 0.03311 + Zn * 0.03493.

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

Whilst the Veovača deposit is primarilLJ seen as a lead and njinc deposit ǁith precious metal credits͕ partcularlLJ silver͕ Adriatc propose to mine and produce barite as a bLJͲproduct ǁhich is an industrial mineral͘ Clause Ϧϫ of the JORC Code requires industrial minerals to be reported in terms of the mineral or minerals on ǁhich the project is to be based and must include the specifcaton of these minerals͘ KeLJ characteristcs including likelLJ product specifcatons͕ prodžimitLJ to markets and general marketabilitLJ have been considered and the Competent Persons are satsfed that this informaton supports the inclusion of barite in the MRE͘ Additonal detail surrounding Clause Ϧϫ is provided in the report bodLJ͘

Note that the previous Mineral Resource at ϣ JanuarLJ ϤϢϣϪ did not include gold and silver for the full edžtents of the mineralisaton model ;the ϤϢϣϫ drilling has noǁ inflled areas ǁhere previouslLJ there ǁas insufcient data to estmate silver and gold mineralisatonͿ͘

There are underground edžploraton drives at Veovača some of ǁhich have been intersected bLJ the recent drilling͕ although the adit portal;sͿ are noǁ collapsed͘ These are not considered signifcant͕ and the MRE has not been depleted for these ǁorkings͘ The MRE lies beneath the current pit foor and all the mineralisaton is primarLJ ;sulphideͿ͘

Mineralisaton ǁireframes ǁere developed separatelLJ for each element using individual cutͲof grades that ǁere established using geostatstcal analLJsis͘ Five elements ǁere modelled͖ njinc͕ lead͕ barite͕ gold and silver͕ and three of them ;barite͕ silver and goldͿ had tǁo grade domains interpreted and modelled͘ A representatve ϥD vieǁ of the completed ǁireframes for njinc is shoǁn in Figure ϤϪ͘

Figure 28: Reporting wireframes (the grid is MGI 1901/Balkans Zone 6) Source: Adriatic (2019E)

A block model constrained bLJ the interpreted mineralised envelopes ǁas constructed͘ A parent cell sinje of ϣϢ m;EͿ dž ϣϢ m;NͿ dž ϣϢ m;RLͿ ǁas adopted ǁith standard subͲcelling to Ϥ m;EͿ dž Ϥ m;NͿ dž Ϥ m;RLͿ to maintain the resoluton of the mineralised lenses͘ Samples composited to Ϥ m length ǁere used to interpolate all grades into the block model using ordinarLJ kriging interpolaton techniques͘ Block grades ǁere validated both visuallLJ and statstcallLJ͕ and all modelling ǁas completed using Micromine sofǁare͘

The folloǁing observatons and recommendatons applLJ to the model͗

x Current qualitLJ assurance procedures should be maintained to ensure highͲqualitLJ data is available for subsequent resource estmates͘

x Contnued focus should be placed on the improvement of the geological model͘ In partcular͕ gaining a more detailed understanding of the controls to the mineralisaton ;including the interrelatonship of Zn͕ Pb͕ Ag͕ Au and BaSOϦͿ is required to validate the edžistng domaining approach͘
x Additonal metallurgical testǁork is recommended to support the proposed conventonal fotaton process and provide greater confdence in processing recoveries and other metallurgical parameters͕ partcularlLJ those relatng to barite͘ Testǁork should be based on a geometallurgical model to ensure that the variabilitLJ ǁithin the deposit is tested on a representatve basis͘
x A scoping studLJ and prefeasibilitLJ studLJ should be completed for the deposit͕ including testng the sensitvitLJ of the model to the main variables impactng project economics͕ such as metallurgical recoveries͕ metal prices͕ mining costs and processing costs͘
x Further edžploraton at the fanks and depth of the deposit should be completed and maLJ result in an increase in the MRE͘
x Geotechnical and hLJdrogeological drilling and assessment is required to support pit ǁall stabilitLJ͕ mining parameters and cost estmaton͘
x Comparison betǁeen the updated MRE and the previous MRE ;FebruarLJ ϤϢϣϪͿ reveals that the diference betǁeen the base metals is not signifcant because the overall volume of the modelled ǁireframes did not increase signifcantlLJ͘ The estmate of the precious metals has changed signifcantlLJ because the ϤϢϣϪ model edžcluded gold and silver grades from almost half of the deposit ǁhere assaLJs for precious metals ǁere missing at the tme͘

2.7.2 Reasonable Prospects Hurdle

The Competent Person deems that there are reasonable prospects for eventual economic edžtracton on the folloǁing basis͗

x All mineralisaton bodies are relatvelLJ close to the surface and edžposed at the base of the edžistng pit and therefore potentallLJ amenable to open pit mining
x Historical mineral processing and recent metallurgical testǁork confrm that the Veovača mineralisaton is amenable to fotaton processing
x PreliminarLJ metallurgical testǁork bLJ WAI to produce a barite concentrate from Veovača mineralisaton using fotaton methods has confrmed that a barite concentrate maLJ meet API specifcatons
x The cutͲof grade adopted for reportng ;Ϣ͘Ϩй ZnEqͿ is considered reasonable given the Mineral Resource is likelLJ to be edžploited bLJ open cut mining methods and processed using fotaton techniques
x PreliminarLJ open pit optmisaton tests ;refer to Secton ϣϫ͘Ϥ in CSA Global RϥϤϢ͘ϤϢϣϫ reportͿ confrmed that the deposit has potentallLJ positve net present value ;NPVͿ͕ and that almost the entre mineralised njone is potentallLJ mineable using open pit methods under the given economic scenario and parameters͘

2.7.3 Mineral Resource Classification

The MRE has been classifed as Indicated and Inferred based on the JORC Code guidelines͘ The classifcaton level is based upon an assessment of geological understanding of the deposit͕ geological and grade contnuitLJ͕ drillhole spacing͕ qualitLJ control results͕ search and interpolaton parameters͕ and an analLJsis of available densitLJ informaton͘ The deposit appears to be of sufcient grade͕ quanttLJ͕ and

coherence to have reasonable prospects for eventual economic edžtracton͕ ǁhich ǁas assessed bLJ carrLJing out a conceptual pit optmisaton͘

The Mineral Resource ǁas classifed in accordance ǁith guidelines contained in the JORC Code͘ The classifcaton refects the Competent Persons͛ vieǁs of the strengths and ǁeaknesses associated ǁith the Mineral Resources reported herein͕ as ǁell as the data upon ǁhich the estmate ǁas based͘ KeLJ criteria that ǁere considered ǁhen classifLJing the Mineral Resource are described in JORC Table ϣ͕ ǁhich is included in the Adriatc MRE update press release ;Adriatc͕ ϤϢϣϫͿ͘ The MREs are based on historical drilling results generallLJ obtained betǁeen ϣϫϨϩ and ϣϫϩϫ͕ the drilling of ϣϨ tǁin andͬor infll holes during April to October ϤϢϣϩ͕ and ϣϩ holes during the recent ϤϢϣϪʹϤϢϣϫ campaigns͘ The MRE ǁas classifed as Indicated and Inferred͕ refectng the folloǁing observatons͗

x The close spacing betǁeen drillholes
x Accurate surveLJ control ;east͕ north͕ elevatonͿ for the historical drillholes
x Reasonable confdence in the grade contnuitLJ
x Reasonable correlaton betǁeen the assaLJ results from the tǁin and infll drillholes ;ϤϢϣϩͿ͕ and that of its nearest historical neighbour
x A sufcient number of bulk densitLJ determinatons͘

The folloǁing approach ǁas adopted͗

x MeaƐƵƌed ReƐŽƵƌceƐ͗ Not reported͘
x IŶdŝcaƚed ReƐŽƵƌceƐ͗ Indicated Mineral Resources categorisaton ǁas assigned to blocks ǁith the drill densitLJ not edžceeding approdžimatelLJ ϥϢ m dž ϥϢ m ǁith at least tǁo mineralisaton intersectons on edžploraton lines͘ Geological structures are relatvelLJ ǁell understood and interpreted͘
x IŶfeƌƌed ReƐŽƵƌceƐ͗ Inferred Mineral Resources are model blocks lLJing outside the Indicated ǁireframes͕ ǁhich stll displaLJ reasonable strike contnuitLJ and doǁn dip edžtension͕ based on the current drillhole and trench intersectons͘

2.8 Rupice Mineral Resource Estimate

Adriatc commissioned CSA Global PtLJ Ltd ;CSA GlobalͿ to prepare an MRE for the Rupice polLJmetallic deposit͘ Signifcant reliance has been placed on historical drilling data͕ ǁhich ǁas subjected to a validaton program comprising limited tǁinͲhole drilling ;Secton Ϥ͘Ϩ͘ϥͿ͘

2.8.1 Mineral Resource Overview

Adriatc provided databases including drillhole logging͕ sampling͕ analLJtcal results and collar locatons͘ Mr Annet performed an evaluaton of the qualitLJ of the data for the Rupice deposit ;qualitLJ assuranceͬqualitLJ control analLJsisͿ͕ ǁhilst Mr Pertel prepared the MRE͘ The qualitLJ of drilling͕ sampling͕ logging͕ core recoverLJ͕ and geological descripton is of a reasonable standard sufcient for MRE purposes͘

CSA Global notes that there is no central master drillhole database for the project͕ and stronglLJ recommends that a central master database should be established as a ͚single point of truth͛ ǁith appropriate data management protocols͘

Historical data comprises Ϧϫ historical drillholes and ϧϩ drillholes from Adriatc͛s ϤϢϣϩ ;eight holesͿ͕ ϤϢϣϪ ;ϥϫ holesͿ and ϤϢϣϫ ;ϣϢ holesͿ programs͘ These ǁere used to defne the geometrLJ of the mineralisaton͘ Several of Adriatc͛s drillholes tǁinned historical holes͕ others inflled the historical drilling ǁhilst most of the ϤϢϣϪ and ϤϢϣϫ drillholes edžtended the mineralisaton both to the north and south͘ The assaLJs ;both recent and historicalͿ are of sufcient industrLJ standard and considered appropriate for MREs͘

The MRE has been reported in accordance ǁith the JORC Code and it is therefore suitable for public release͘ The MRE is reported bLJ classifcaton in Table ϣϧ͕ above a cutͲof grade of Ϣ͘Ϩй ZnEq͘

JORC classification		Grades				Contained metal
	Tonnes (Mt)	Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)	Cu (%)	Zn (kt)	Pb (kt)	BaSO4 (kt)	Au (koz)	Ag (Moz)	C (kt)
Indicated	7.5	5.7	3.7	34	2.0	207	0.6	430	278	2,590	470	50	46
Inferred	1.9	2.5	1.6	18	0.9	86	0.3	50	30	330	60	5	6
Total	9.4	5.1	3.3	31	1.8	183	0.6	480	310	2,920	530	55	52

Table 15: Rupice MRE by classification – 1 June 2019

Notes:

x Mineral Resource classifications are based on JORC Code definitions.

x The figures presented above are both gross and 100% net attributable to Adriatic.
x The operator is Adriatic.
x Source: The Competent Person for the MRE is Mr Dmitry Pertel, a Member of the AusIMM and employed by CSA Global.
x A cut-off grade of 0.6% ZnEq has been applied.
x ZnEq – Zinc equivalent was calculated using conversion factors of 0.80 for lead, 0.08 for BaSO4, 1.80 for gold, 0.019 for silver and 2.40 for copper, and recoveries of 90% for all elements. Metal prices used were US\$2,500/t for zinc, US\$2,000/t for lead, US\$200/t for BaSO4, US\$1,400/oz for gold, US\$15/oz for silver and US\$6,000 for copper.
x The applied formula was: ZnEq = Zn% * 90% + 0.8 * Pb% * 90% + 0.08 * BaSO4% * 90% + 1.8 * Au(g/t) * 90% + 0.019 * Ag(g/t) * 90% + Cu% * 2.4 * 90%.
x It is the opinion of Adriatic and the Competent Persons that all elements and products included in the metal equivalent formula have a reasonable potential to be recovered and sold.
x Metallurgical recoveries of 90% have been applied in the metal equivalent formula based on recent testwork results.
x A bulk density was calculated for each model cell using regression formula BD = 2.88143 + BaSO4 * 0.01555 + Pb * 0.02856 + Zn * 0.02012 + Cu * 0.07874 for the barite high-grade domain and BD = 2.76782 + BaSO4 * 0.01779 + Pb * 0.03705 + Zn * 0.02167 + Cu * 0.07119 for the barite low-grade domain (the barite domains were interpreted using 30% BaSO4).
x Rows and columns may not add up exactly due to rounding.

Whilst the Rupice deposit is primarilLJ seen as a lead and njinc deposit ǁith precious metal credits͕ Eastern Mining propose to mine and produce barite͕ ǁhich is an industrial mineral͕ as a bLJͲproduct͘ Clause Ϧϫ of the JORC Code requires industrial minerals to be reported in terms of the mineral or minerals on ǁhich the project is to be based and must include the specifcaton of these minerals͘ KeLJ characteristcs including likelLJ product specifcatons͕ prodžimitLJ to markets and general marketabilitLJ have been considered and the Competent Persons are satsfed that this informaton supports the inclusion of barite in the MRE͘ Additonal detail surrounding Clause Ϧϫ is provided in the report bodLJ͘

A total of ϣϢϨ diamond drillholes for ϤϢ͕Ϥϫϧ m defne the Rupice deposit͘ EightLJͲseven assaLJed drillholes intersect the interpreted mineralisaton njones͘ The Rupice deposit ǁas sampled using diamond drillholes at nominal ϤϢ m spacing on ϤϢ m northeastͲsouthǁest oriented sectons͘

Holes drilled bLJ Adriatc ǁere generallLJ angled ʹϨϢΣ to ʹϪϢΣ toǁards the southǁest ǁith dip angles set to optmallLJ intersect the mineralised bodies͕ ǁhilst most of the historical holes ǁere vertcal͘

Mineralisaton ǁireframes ǁere developed separatelLJ for each element using individual cutͲof grades that ǁere established bLJ the geostatstcal analLJsis͘ Sidž elements ǁere modelled͖ Zn͕ Pb͕ BaSOϦ͕ Cu͕ Au and Ag͕ and four of them had tǁo grade domains interpreted and modelled͘ A representatve ϥD vieǁ of the completed ǁireframes for njinc͕ loǁͲgrade domain͕ is shoǁn in Figure Ϥϫ͘

A block model constrained bLJ the interpreted mineralised envelopes ǁas constructed͘ A parent cell sinje of ϣϢ m;EͿ dž ϣϢ m;NͿ dž ϧ m;RLͿ ǁas adopted ǁith standard subͲcelling to Ϥ m;EͿ dž Ϥ m;NͿ dž ϣ m;RLͿ to maintain the resoluton of the mineralised lenses͘ Samples composited to Ϥ m length ǁere used to interpolate all grades into the block model using ordinarLJ kriging interpolaton techniques͘ Block grades ǁere validated both visuallLJ and statstcallLJ and all modelling ǁas completed using Micromine sofǁare͘

Figure 29: Wireframe models for zinc, low-grade domain (looking west) Source: Adriatic (2019E)

2.8.2 Reasonable Prospects Hurdle

Clause ϤϢ of the JORC ;ϤϢϣϤͿ Code requires that all reports of Mineral Resources must have reasonable prospects for eventual economic edžtracton͕ regardless of the classifcaton of the resource͘ The Competent Person deems that there are reasonable prospects for eventual economic edžtracton on the folloǁing basis͗

x All mineralisaton bodies are relatvelLJ close to the surface and therefore potentallLJ amenable to loǁer cost open pit mining
x Metallurgical testǁork bLJ WAI has confrmed that the Rupice mineralisaton is amenable to fotaton processes
x PreliminarLJ metallurgical testǁork bLJ WAI to produce a barite concentrate from Rupice mineralisaton using fotaton methods has confrmed that a barite concentrate maLJ meet the API specifcatons
x A marketng studLJ bLJ a leading consultant ;Peter Harben Inc͕͘ December ϤϢϣϩͿ in the feld of barite confrmed that there is an opportunitLJ to enter the market as a niche plaLJer levering anLJ logistcal advantages for a supplier in BiH and the neighbouring countries
x The cutͲof grade adopted for reportng ;Ϣ͘Ϩй ZnEqͿ is considered reasonable given the Mineral Resource maLJ be edžploited bLJ open cut mining methods and processed using fotaton techniques
x PreliminarLJ open pit optmisaton tests confrmed that the deposit has a conceptuallLJ positve NPV͕ and that almost the entre mineralised njone is potentallLJ mineable using open pit methods under the given economic scenario and parameters ;Table ϣϨͿ͘

Parameters	Units	Value
1. Mining
Ore mining cost	US\$/t	1.80
Waste mining cost	US\$/t	1.53
Mining losses	%	5
Mining dilution	%	5
2. Processing
Processing cost (per 1 tonne of ore, including admin costs)	US\$/t	15
Smelting cost (per 1 tonne of metal)	US\$/t	0
Processing recovery:
ZnEq (in-built in the ZnEq formula 90% recovery)	%	100
3. Pricing
Elements price:	US\$/unit
ZnEq	US\$/t	2,500
Selling cost	US\$/unit	0
4. Other to optimisation
Density parameters for ore	t/m3	in model
Density parameters for waste	t/m3	2.70
General pit slopes	°	55

Table 16: Pit optimisation parameters (Base Case) associated with the Rupice MRE

2.8.3 Mineral Resource Classification

The classifcaton level is based upon an assessment of geological understanding of the deposit͕ geological and mineralisaton contnuitLJ͕ drillhole spacing͕ qualitLJ control results͕ search and interpolaton parameters and an analLJsis of available densitLJ informaton͘

The classifcaton refects the Competent Persons͛ vieǁs of the strengths and ǁeaknesses associated ǁith the Mineral Resources reported herein͕ as ǁell as the data upon ǁhich the estmate ǁas based͘ KeLJ criteria that ǁere considered ǁhen classifLJing the Mineral Resource are described in JORC Table ϣ͕ ǁhich is included in the maiden MRE press release ;Adriatc͕ ϤϢϣϫͿ͘

The folloǁing approach ǁas adopted͗

x MeaƐƵƌed ReƐŽƵƌceƐ͗ Not reported͘
x IŶdŝcaƚed ReƐŽƵƌceƐ͗ It ǁas decided that Indicated Mineral Resources be assigned to blocks ǁhich ǁere edžplored ǁith the drill densitLJ not edžceeding approdžimatelLJ ϦϢ m dž ϦϢ m ǁith at least tǁo mineralisaton intersectons on edžploraton lines͘ Geological structures are relatvelLJ ǁell understood and interpreted͘
x IŶfeƌƌed ReƐŽƵƌceƐ͗ Inferred Mineral Resources are model blocks lLJing outside the Indicated ǁireframes͕ ǁhich stll displaLJ reasonable strike contnuitLJ and doǁn dip edžtension͕ based on the current drillhole and trench intersectons͘

2.9 Metallurgical Studies

2.9.1 Sample Collection

Metallurgical samples ǁere taken over intervals of Ϥ m from half diamond core ;HQͿ afer the analLJtcal laboratorLJ had crushed the material to ϣϢϢй passing Ϥ mm͘

At Veovača͕ ϫϩ samples ǁere collected from each of the nine drillholes ;BVͲϤϢϣϩͲϣ to BVͲϤϢϣϩͲϫͿ available for sampling͘ Each sample ǁas variouslLJ reduced in sinje to about ϣ kg using a Davis rife spliter and composited to make a single bulk sample of around ϣϢϢ kg͘ The samples ǁere collected across the entretLJ of the drilling to ensure the bulk sample grade matched the average grade of the mineralisaton block

model ǁhich ǁas current at that tme ;Table ϣϩͿ͘ The estmated grade of the bulk sample is reported in Table ϣϩ alongside the head grade from the recent ǁork completed bLJ Wardell Armstrong Internatonal ;WAI ʹ refer Secton Ϥ͘ϫ͘ϤͿ͕ and the current grades reported in this MRE for that part of the block model that lies inside the proposed pit͘

Bulk sample	Zn (%)	Pb (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)
Composite average	1.6	1.1	16	0.09	56
WAI head grade	1.7	1.2	11	0.10	59
MRE (within pit)	1.7	1.0	16	0.10	52

Table 17: Veovača bulk sample head grade

Figure 30: Metallurgical sampling at Veovača (looking north)

At Rupice͕ three bulk samples ǁere collected for metallurgical testǁork͖ an average grade sample͕ a highͲ grade sample͕ and a highͲgrade copper sample͘ The detail is shoǁn in Table ϣϪ and locatons are shoǁn in Figure ϥϣ͘ The samples ǁere from across the entretLJ of the deposit to ensure a bulk sample grade ǁhich corresponded to the average grade of the mineralisaton block model ǁhich ǁas current at that tme͘ The estmated grades of the bulk samples are reported in Table ϣϫ͕ Table ϤϢ and Table Ϥϣ alongside the head grade from the WAI ǁork͘

Bulk sample	Drillholes	No. of samples	Bulk sample weight
Average grade	BR-1-17, 4-17, 6-17, 7-17, 8-17, 2-18, 3-18, 5-18, 7-18, 10- 18, 13-18, 17-18, 22-18, 23-18, 24-18	107	135 kg
High grade	BR-1-17, 4-17, 7-17, 2-18, 3-18, 5-18, 7-18, 8-18, 13-18, 17- 18, 22-18, 24-18	69	90 kg
High-grade copper	BR-1-17, 5-18, 22-18	24	32 kg

Table 18: Rupice bulk sample collection

Figure 31: Metallurgical sampling at Rupice (looking west)

Table 19:	Rupice bulk sample – average grade
-----------	------------------------------------

Bulk sample	Zn (%)	Pb (%)	Cu (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)
Composite average	4.8	2.9	0.5	40	1.8	238
WAI	5.0	3.2			1.8	268
2018 MRE	3.9	2.6	0.4	28	1.2	282

Table 20:		Rupice bulk sample – high grade

Bulk sample	Zn (%)	Pb (%)	Cu (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)
Composite average	10.1	5.3	0.7	59	3.1	340
WAI	9.8	5.7	0.6		3.2	348

Table 21: Rupice bulk sample – high-grade copper

Bulk sample	Zn (%)	Pb (%)	Cu (%)	BaSO4 (%)	Au (g/t)	Ag (g/t)
Composite average	20.0	13.3	3.7	24	3.6	256
WAI	19.9	14.7	3.8		3.5	269

2.9.2 WAI Testwork

WAI conducted a number of fotaton tests on both the Veovača bulk sample and the Rupice average grade bulk sample͘ PreliminarLJ testǁork commenced at a grind sinje of ϪϢй passing ϨϢ micron to produce a copper͕ lead and njinc rougher concentrate ;tests Flotaton Test ;FTͿ FTϣ and FTϤͿ before reducing the grind sinje frst to Ϧϧ micron ;FTϥ and FTϦͿ͕ and then to ϦϢ micron ;FTϧ and FTϨͿ͘ Thereafer at the ϦϢ micron grind sinje͕ various testǁork ;FTϩ to FTϣϧͿ tested combinatons ǁere completed including

increasedͬdecreased lime͕ sodium hLJdrosulphide͕ collector͕ copper collector͕ pH conditons and airfoǁ against metal recoveries in the various concentrates͘

Flotaton cleaner ;FTCͿ ǁork ǁas undertaken on the various FT products including͕ inter alia͕ cleaner fotaton on the reͲgrind of the copperͬlead concentrate to frst ϤϢ micron and then ϣϢ micron ;FTCϣ and FTCϤͿ͕ cleaner fotaton to produce variouslLJ a copperͬlead͕ pLJrite and barite concentrate ǁhilst varLJing additves such as potassium dichromate͕ collectors͕ sodium silicate and sulphurous acid and starch ;FTCϦ to FTCϫ and FTCϣϤ to FTCϣϦͿ͘ FTCϣϢ ǁas a specifc barite cleaner test ǁith reduced collectorͬdosage residence tmes and increased number of cleaning stages͕ ǁith FTCϣϣ and optmisaton of FTCϣϢ͕ and FTCϣϤ a repeat of FTCϣϢ using sodium silicate͘

Four locked cLJcle tests ǁere undertaken on the Average Grade sample͘ The frst ;LCTϣͿ ǁas a CuͬPb fotaton onlLJ test focused on proving that a saleableͲgrade concentrate could be achieved ǁith acceptable selectvitLJ against njinc͘ The second ;LCTϤͿ ǁas a full foǁsheet test including copperͬlead fotaton͕ njinc fotaton͕ pLJrite fotaton and barite fotaton͘ AnalLJsis of the LCTϤ products indicated that the test had not reached a steadLJ state͕ likelLJ because of the large recirculatng load͕ predominantlLJ ǁithin the barite circuit͘ Based on the results of the frst tǁo locked cLJcle tests͕ a third test ǁas undertaken ;Test LCTϥͿ ǁith a modifed barite circuit in order to alloǁ more mass to edžit the circuit and prevent the buildͲup of material in the recirculatng load͘ The CuͬPb conditons ǁere changed to refect those of Test LCTϣ to LJield increased copper recoveries͘ A pLJrite cleaning stage ǁas added to alloǁ for the rejecton of contained barite to the head of the barite circuit͘

A fourth locked cLJcle test ;Test LCTϦͿ ǁas undertaken using the same foǁsheet as Test LCTϥ ;Figure ϥϤͿ͕ but ǁith edžtended residence tmes in the njinc rougher and increased residence tmes and collector dosages in the barite roughing and cleaning circuits͘

Figure 32: Locked cycle flowsheet (LCT3 & LCT4)

These are all part of the testǁork phase designed to shoǁ potental for recoverLJ of the economic minerals to the diferent products͘ Each test is focused on demonstratng the possible recoverLJ of one or more concentrates and ǁhilst doing so other minerals ǁill also report to that concentrate ǁhich are not refected in the above table in order to simplifLJ it͘ In additon͕ there are recoverable metals in the pLJrite concentrate and the fnal tailings͕ ǁhich ǁill all be subject to further testǁork and foǁsheet development as the Project advances toǁards full FeasibilitLJ StudLJ͘

Table 22: Average Grade Locked Cycle Test LCT4 Summary (Part One)

	STOT	11.0	18.5	3.5	42.0	24.9	100.0
	Fe	10.0	2.6	8.2	10.0	69.2	100.0
Recovery (%)	Zn	14.5	81.7	1.4	0.9	1.5	100.0
	Pb	90.4	2.9	1.5	2.2	3.0	100.0
	Cu	82.7	5.3	5.8	2.2	4.0	100.0
	STOT	22.1	33.2	21.6	13.9	8.75	14.1
	Fe	4.06	0.95	10.2	0.67	4.92	2.85
Assay (%)	Zn	10.7	53.8	3.28	0.11	0.19	5.19
	Pb	44.2	1.25	2.29	0.17	0.26	3.43
	Cu	6.52	0.37	1.41	0.029	0.056	0.55
Weight	(%)	7.0	7.9	2.3	42.7	40.1	100.0
	Product	Cu/Pb Conc	Zn Conc	Py Conc	Ba Conc	Tails	Feed

Table 23: Average Grade Locked Cycle Test LCT4 Summary (Part Two)

	Weight			Assay (%)					Recovery (%)
Product	(%)	Au (ppm)	Ag (ppm)	As	Sb	BaSO4	Au	Ag	As	Sb	BaSO4
Cu/Pb Conc	7.0	13.9	3,549	0.79	3.78	4.01	47.3	83.7	62.1	90.6	0.6
Zn Conc	7.9	5.37	337	0.034	0.15	6.03	20.4	8.9	3.0	3.9	1.0
Py Conc	2.3	6.58	316	0.25	0.29	37.0	7.2	2.4	6.3	2.2	1.9
Ba Conc	42.7	0.38	9.50	0.010	0.007	84.8	7.9	1.4	4.8	1.0	79.8
Tails	40.1	0.89	26.8	0.053	0.016	19.0	17.2	3.6	23.9	2.2	16.7
Feed	100.0	2.07	298	0.089	0.29	45.4	100.0	100.0	100.0	100.0	100.0

The results ;Table ϤϤ Θ Table ϤϥͿ of the Locked CLJcle Test LCTϦ͕ informed conceptual metal recoveries of Ϫϧʹϫϥй for copper͕ ϫϢʹϫϦй for lead͕ ϪϧʹϫϢй for njinc͕ ϪϢʹϪϨй for barite͕ ϫϢй for silver and ϪϢй for gold͕ considered appropriate for use in the MRE consideratons regarding reasonable chances of eventual economic edžtracton͘

Further Comments on Flotation Testwork

The copperͲlead metallurgLJ is based upon producton of a bulk copperͲlead concentrate containing signifcant metal credits͘ Further testǁork is required to establish ǁhether or not an economic split of the bulk concentrate can be achieved to generate separate copper and lead concentrates for marketng͘ Further testǁork is also justfed to edžamine the potental for a threeͲstage sequental foat for copper͕ lead͕ and njinc to alloǁ separate concentrates for marketng͘

The pLJrite concentrate removed ahead of the barite foat is presentlLJ designed to pass to fnal tailing͘ Testǁork is required to establish ǁhether or not the precious metal values maLJ be leached from the concentrate or the concentrate can be marketed directlLJ as a smelter fudž͘

Crushing-Grinding

Three comminution circuit options were considered:

x Option 1: 1-stage crush-SAG-ball milling; or
x Option 2: 3-stage crush-rod-ball milling; or
x Option 3: 3-stage crushing-single stage ball milling.

The possible use of a SAGͲBall milling circuit ǁas considered͕ and rejected͕ on the basis of tonnage throughput and mill sinjings͘ Additonal cost for the SAG mill ǁould far outǁeigh the cost of a small crushing plant to prepare conventonal mill feed͘ AdditonallLJ͕ the skillslevel of mechanical support ǁithin the mining area is probablLJ more familiar ǁith conventonal mills ;previouslLJ installedͿ͘

Opton ϥ ǁas chosen as being a simpler crushing plant to produce Ϥϧmm rod mill feed compared to ϣϢmm feed required for ball milling͘

The major disadvantage of the rodͲball design is that tǁo mills are required͕ ǁhereas for ball milling potentallLJ one large mill could be used͘

Concentrate Treatment Options

As shoǁn above the CuͲPb͕ and Zn concentrates contain levels of arsenic and mercurLJ ǁhich maLJ atract smelter penaltes and should be considered in marketng studies͘

Further consideraton maLJ need to be given to edžploring technologies for the removal of potentallLJ deleterious elements such as͗

x Tooǁong ProcessΡ͖
x Sunshine Process; and
x Equity Process

Grinding Power and Performance Predictions

Comminuton testǁork carried out on samples representng the tǁo deposits suggest that the overall grinding energLJ requirements ǁill be loǁ to moderate͘ The Bond ball mill ǁork indedž ranged from Ϫ͘ϧϦ kWhͬt ;RupiceͿ to ϣϤ͘ϥϣ kWhͬt ;VeovačaͿ͕ at closed screen sinje of ϣϢϢђm͘

Flotaton optminjaton testǁork has also shoǁn that a fne primarLJ grind sinje target PϪϢ of ϦϢ ʅm is required ensure sufcient liberaton to alloǁ saleable copperͲlead and njinc cleaner concentrates to be produced͘

UltraͲfne grinding of the Cu rougherͬscavenger concentrate doǁn to ϣϢ ʅm to ϣϧ ʅm is required in order to produce a saleable copper concentrate͘

2.9.3 Metallurgical Performance

Veovača – Low Grade Ore

The metallurgical performance obtained in LCT Ϥ ;Table ϤϦͿ should be used to develop an economic assessment or a metals equivalent value for the Veovača deposit͘

Product	Weight (%)				Assay (%), or (ppm)			Distribution (%)
		Pb	Zn	Au	Ag	BaSO4	Pb	Zn	Au	Ag	BaSO4
Pb Cl 2 Conc	1.64	51.23	11.71	1.27	1,766.0	0.00	77.14	14.02	20.86	49.18	0.00
Zn Cl 2 Conc	1.81	2.40	57.84	0.50	442.0	0.00	4.01	76.20	9.04	13.54	0.00
Ba Cl 2 Conc.	5.93	0.09	0.06	0.00	0.00	86.86	1.06	0.56	0.00	0.00	70.0
Feed	100.0	1.02	1.29	0.10	59.0	16.10	100.0	100.0	100.0	100.0	100.0

Table 24: LCT2 Results for Veovača

The metallurgical performance obtained in LCT Ϥ ;Table ϤϧͿ should be used to develop an economic assessment or a metals equivalent value for the Rupice deposit͘

	Weight	Assay (%)					Distribution (%)
Product	(%)	Cu	Pb	Zn	Au (g/t)	Ag (g/t)	BaSO4	Cu	Pb	Zn	Au	Ag	BaSO4
Cu/Pb Conc.	6.5	6.70	45.3	10.1	15.0	3,443	3.65	79.2	89.0	12.4	46.2	78.9	0.5
Zn Conc.	7.6	0.36	1.31	57.4	5.50	352	3.47	5.0	3.0	82.5	19.8	9.4	0.6
Py Conc.	2.5	1.93	2.56	4.77	6.84	394	37.4	8.9	2.0	2.3	8.2	3.5	2.1
Ba Conc.	30.1	0.017	0.16	0.084	0.28	20.6	97.2	0.9	1.4	0.5	4.0	2.2	64.8
Final Tailings	53.3	0.062	0.29	0.23	0.87	31.8	27.2	6.1	4.6	2.3	21.9	6.0	32.0
Feed	100.0	0.55	3.30	5.28	2.11	283	45.2	100.0	100.0	100.0	100.0	100.0	100.0

Table 25: LCT2 Results for Rupice

Concentrate Marketability

As shoǁn above the CuͲPb͕ and Zn concentrates contain levels of arsenic and mercurLJ ǁhich maLJ atract smelter penaltes and should be considered in marketng studies͘

The lead and njinc concentrates contain signifcant silver credits and gold credits͘

Further testng is required to reduce the base metals levels in the barite concentrate͘

Predictions of Reagent and Consumable Consumption

Given the fact that a diferental foat is required to produce separate copperͲlead and njinc concentrate products the reagent suite is quite elaborate͘ The additon of depressants such as SOϤ and SMBS is deemed to be moderatelLJ high and is required to ensure that the njinc does not report to the respectve copperͲlead concentrate product͘

Rupice Metallurgical Prediction

Folloǁing the testǁork carried out bLJ Wardell Armstrong ;WAͿ UK on the Rupice average grade composite Holland and Holland consultants analLJsed the results further to provide a range of gradeͲrecoverLJ values for the respectve value products to be produced at the mine site͘ These values ǁere used bLJ the mining department to calculate the cutͲof grade for the Rupice mine͕ and to establish a tonnage resource and mine design͘ The metallurgical results for the three value products ǁere developed from release curves͕ in associaton ǁith correlatons for base metal and precious metal values͕ as detailed in the ϢϨ Sept ϤϢϣϫ report of Holland and Holland͘ ;A Predicton for the Rupice Resource MetallurgLJ based upon batch and lockͲcLJcle testǁork to date͘ FridaLJ͕ ϢϨ September ϤϢϣϫ͘Ϳ

The predicted metallurgical scenarios for the three value products are provided beloǁ ;Figure ϥϥͿ͕ ǁhich illustrates the regression formulae used to determine the njinc͕ lead and precious metal recoveries for the Zinc and Lead concentrate streams

Figure 33: Rupice Regression Formulae for Zinc and Lead Concentrates

Improvements in overall barite recoveries of roughlLJ ϣϢ per cent maLJ be achievable ǁith additonal barite optmisaton testǁork͘

Summary

CSA Global considers that the procedures͕ the process optons and the ǁide range of reagent combinatons emploLJed ǁere generallLJ appropriate͘ Although sometmes erratc͕ the results demonstrate the amenabilitLJ of the Rupiceͬ Veovača ore to fne grinding and diferental fotaton to produce separate marketable copperͲlead and njinc concentrates at acceptable recoveries͘ There is the potental for smelter penaltes given the levels of deleterious elements reportng to concentrates and this should be investgated further as additonal testǁork is performed and refnements made as part of the nedžt stage of project development͘

2.10 Barite

Rupice and Veovača are polLJmetallic deposits containing fneͲgrained concentratons of galena͕ sphalerite͕ gold͕ silver and barite ǁithin a breccia͘ The mineralised bodLJ displaLJs litle to no mineral njonaton͕ and thus there is no capacitLJ to selectvelLJ mine each mineral commoditLJ͘ As such͕ barite ǁill be mined and processed as a ͞bLJͲproduct͟ from Eastern Mining͛s proposed mining and benefciaton operatons͘

Barite is an industrial mineral and therefore Clause Ϧϫ of the JORC Code needs to be addressed͘ Clause Ϧϫ requires an understanding of the specifcaton of the mineral and its keLJ characteristcs or qualites such as likelLJ product specifcatons͕ prodžimitLJ to markets and general product marketabilitLJ͘

Eastern Mining commissioned Peter W Harben Inc͕͘ a marketng consultant ǁith over ϦϢ LJears͛ edžperience in industrial minerals including barite͕ to assess the market potental for barite from the Veovača deposit͘ A summarLJ of this informaton is set out in the subͲsectons beloǁ͘

Eastern Mining also commissioned WAI ;UKͿ to conduct testǁork on material from the Rupice and Veovača deposits ǁith a vieǁ to determine if the barite product ǁhich ǁill be produced on site meets industrLJ specifcatons͘ This ǁork is ongoing but informaton available at the tme of reportng in summarised in Secton Ϥ͘ϣϢ͘ϩ͘

2.10.1 Barite Properties and Uses

Barite has a relatvelLJ high theoretcal specifc gravitLJ of Ϧ͘Ϩ gͬcmϥ ͕ Mohs͛ hardness of ϥʹϥЪ͕ is relatvelLJ inert͕ and virtuallLJ insoluble in ǁater͘ It is the primarLJ ǁeightng agent used in drilling fuids or muds͘ The ǁeightng material is designed to increase the hLJdrostatc pressure of the drilling mud and thus control highͲpressure njones encountered during drilling͘ Its relatve sofness minimises damage to drilling tools͘

In additon to its use in drilling muds͕ barite is used as a feedstock for barium chemicals͕ as a barium source in glass and ceramics͕ in pharmaceutcals͕ and as a functonal fller͘

The nonͲdrilling market probablLJ consttutes about ϧй of commercial barite consumpton͘

2.10.2 Global Production of Barite

World producton ranged from ϫ Mt ϤϢϣϤ to ϩ Mt in ϤϢϣϨ from Ϥϧ countries͕ ǁith China at Ϥ͘Ϫ million tonnes per annum ;MtͬaͿ ;ϥϫй of global outputͿ as the major producer folloǁed bLJ India ;ϣ MtͬaͿ͕ Morocco ;ϩϢϢ͕ϢϢϢ tͬaͿ͕ United States ;ϥϢϢ͕ϢϢϢ tͬaͿ͕ Kanjakhstan and Iran ;ϥϥϢ͕ϢϢϢ tͬa respectvelLJͿ͕ and Medžico and TurkeLJ ;ϤϧϢ͕ϢϢϢ tͬa eachͿ͘ These countries account for a combined ϪϢй of global producton͘ Asia dominates regional producton ;largelLJ China and IndiaͿ ǁith more than ϨϢй folloǁed bLJ North AfricaͬMiddle East ;including TurkeLJͿ ;ϣϫйͿ and Europe ;ϣϢйͿ͘

2.10.3 International Trade

Internatonal trade in barite accounts for approdžimatelLJ half of the ϩ Mt of barite produced globallLJ ;ϤϢϣϨͿ͘ Edžports are dominated bLJ͗

x China at approdžimatelLJ ϣ͘Ϩ Mtͬa
x India at approdžimatelLJ ϣ͘Ϣ Mtͬa
x Morocco at approdžimatelLJ Ϣ͘ϧϧ Mtͬa
x TurkeLJ at approdžimatelLJ Ϣ͘ϣϩ Mtͬa
x United States at approdžimatelLJ Ϣ͘ϣϧ Mtͬa͘

Imports are dominated bLJ the Middle East ǁhich takes more than ϦϢй of global barite imports folloǁed bLJ North America ;ϥϢйͿ͕ Western Europe ;ϣϨйͿ͕ and Asia͕ Eastern Europe͕ and South America ǁith a

combined ϣϤй͘ The ǁorld͛s largest importng countries accountng for ϪϢй of trade are the United States͕ Saudi Arabia͕ Kuǁait͕ NorǁaLJ͕ Netherlands͕ Algeria͕ United Arab Emirates͕ GermanLJ͕ and ItalLJ͘

2.10.4 Prices

There is no terminal market to set the selling price of barite͖ it is based on negotatons betǁeen buLJer and seller͘ The demand for barite and therefore its selling price is driven predominantlLJ bLJ the prevailing price of oil and gas͘ Recent price levels for ground material are approdžimatelLJ͗

x TurkeLJ͕ FOB ;ϤϢϣϨ trade dataͿ͕ USΧϣϥϣͬt
x N Europe͕ CIF͕ ground ;MIͲSǁacoͿ USΧϣϪϢʹϤϢϢͬt
x USA FOB Gulf Coast͕ average ;USGS ϤϢϣϨͿ USΧϣϫϪͬt͘

2.10.5 Specifications

Drilling mudͲgrade specifcatons are covered bLJ the API through its API Specifcaton ϣϥA ϣϪth Editon͕ August ϤϢϣϢ ʹ Specifcaton for Drilling Fluids ʹ Specifcatons and Testng͘ API specifcatons for barite used in the oil industrLJ primarilLJ deal ǁith specifc gravitLJ͕ partcle sinje͕ and madžimum quanttes of some impurites͗

x BaSOϦ ϫϢй minimum
x Specifc gravitLJ Ϧ͘ϣ and Ϧ͘ϤϤ gͬcmϥ minimum
x Moisture content Ϣ͘ϧй madžimum
x Residue хϩϧ microns ϥй madžimum
x Partcles ф ϪͲmicron equivalent spherical diameter ϥϢй madžimum
x Water Soluble Alkaline Earth Metals ;as CaϤн Ϳ ϤϧϢ mgͬkg madžimum͘

Some drillers use loǁer densitLJ barite around ϥ͘ϫ gͬcmϥ ͕ ǁhich although not an API specifcaton maLJ be deemed ͞ft for purpose͟ in certain applicatons ;Source͗ A͘ Scogings͕ MaLJ ϤϢϣϫͿ͘

2.10.6 Historical Production of Barite from Veovača

Betǁeen ϣϫϪϥ and ϣϫϪϨ͕ the Veovača operatons produced over ϩϢ͕ϢϢϢ tonnes of barite concentrate from the selectve fotaton of lead͕ njinc and barite͘

In order to provide an inital assessment of the qualitLJ of the barite concentrate͕ Ϧϧ grab samples ǁere collected from degraded stockpiles at the historical plant site and ǁithin the open pit͘ The samples returned an average grade of ϫϥ͘Ϧй BaSOϦ ǁithin a range betǁeen ϫϢ͘Ϫй and ϫϧ͘ϩй BaSOϦ͕ suggestng that a relatvelLJ highͲgrade barite concentrate ǁas produced͕ and highͲgrade barite mineralisaton edžists in the open pit͘

ChemicallLJ͕ barite for producton of drilling mud͕ requires a barium sulphate content above ϫϢй since it infuences the principal phLJsical atribute of a relatvelLJ high specifc gravitLJ of Ϧ͘ϣ or Ϧ͘Ϥ gͬcmϥ ͘

2.10.7 Recent Testwork

WAI has and contnues to conduct a series of rougher͕ cleaner and locked cLJcle fotaton tests to develop a foǁsheet for the treatment of the Rupice͕ Veovača and a blend of Rupice and Veovača material͘ This ǁork also has been conducted on both highͲgrade and averageͲgrade material͘

Samples for metallurgical testǁork ǁere collected in the folloǁing manner͗

x Material ǁas sourced from coarse rejects from recent drill samples͘
x Veovača ʹ The sample ǁas sourced from all nine holes that ǁere drilled in ϤϢϣϩ͘ A total of ϫϩ samples in total ǁere collected across the deposit ǁith a calculated grade approdžimatelLJ equivalent to the mean grade from the block model͘ In total͕ ϣϢϢ kg ǁas collected͘

x Rupice ʹ A sample ǁas collected from average grade material͘ A total of ϣϣϦ samples from ϣϧ holes drilled in ϤϢϣϩ and ϤϢϣϪ ǁas selected ǁith a calculated grade approdžimatelLJ equivalent to the mean grade from the block model͘ In total͕ ϣϥϧ kg ǁas collected͘
x Rupice ʹ A sample ǁas collected from high grade material͘ A total of Ϩϫ samples from ϣϤ holes drilled in ϤϢϣϩ and ϤϢϣϪ ǁas selected ǁith a calculated grade approdžimatelLJ equivalent to three tmes the mean grade from the block model͘ In total͕ ϫϢ kg ǁas collected͘
x Rupice ʹ A sample ǁas collected from high grade copper material͘ A total of ϤϦ samples from three holes drilled in ϤϢϣϩ and ϤϢϣϪ ǁas selected ǁith a calculated grade of approdžimatelLJ ϧй copper͘ In total͕ ϥϥ kg ǁas collected͘

A report summarising the results of the ǁork ǁas not available at the tme of report compilaton͕ as the testǁork remains ongoing͘ Hoǁever͕ preliminarLJ results ǁere provided to CSA Global ǁhich demonstrated that both Rupice and Veovača material ;tests FTCϩ͕ FCϣϤ and locked cLJcle test LCTϤͿ produced barite concentrates ǁhich met the API specifcatons͘ PreliminarLJ results are shoǁn in Table ϤϨ:

Description	API Specification	Eastern Mining Barite
Barite grade	90% minimum	>93% BaSO4
Specific gravity	4.1 g/cm3 and 4.22 g/cm3	>4.4 g/cm3
Moisture content	0.5% maximum	Not undertaken but a simple function of drying the product
Residue sizing	>75 microns 3% maximum	>75 micron less than 3%
Residue sizing	<8 microns 30% maximum	<6 micron less than 30%
Water soluble alkaline earth metals	250 mg/kg maximum (Ca2+)	To be undertaken but noted that the levels of these metals in the concentrate are low

Table 26:	API specification and Eastern Mining barite concentrate

2.10.8 Barite Marketability

Based on limited grab sampling and preliminarLJ metallurgical testǁork results͕ there appears to be reasonable potental to produce a product that meets the required specifcatons of the global barite market͘ Hoǁever͕ additonal metallurgical testǁork is required to beter understand likelLJ recoveries and product specifcatons͘

Based on an edžternal assessment of the barite market there ǁould appear to be an opportunitLJ to enter the market as a niche plaLJer leveraging anLJ logistcal advantages for a supplier in Bosnia͘ The most atractve markets ǁould be͗

x Middle East and North Africa ǁhich takes more than ϦϢй of global barite imports ;c͘ ϣ͘ϧ MtͬaͿ through the Adriatc Sea to the Mediterranean
x Northern Europe
x The United States͘

The Competent Persons consider that Eastern Mining has an adequate understanding of the global and prodžimal barite market͕ and sufcient understanding of the general product marketabilitLJ of barite͘ Furthermore͕ the Competent Persons are satsfed that preliminarLJ testǁork͕ LJet to be optmised͕ has demonstrated that there is potental to produce a barite product that meets market specifcaton requirements of puritLJ͕ specifc gravitLJ͕ and fneness of partcle sinje͘

There is therefore considered to be reasonable prospects for Eastern Mining to enter the barite market ǁhich fulfls the requirements of Clause Ϧϫ of the JORC Code͘

2.11 Scoping Level Mining Study

2.11.1 Input Mineral Inventory

Table Ϥϩ summarises the Statement͕ prepared in accordance ǁith the JORC Code ;ϤϢϣϤ EditonͿ for the Rupice͕ Veovača and Combined Mineral Inventories based on the ǁork detailed above͘

CaƚegŽƌLJ	Unit	Indicated	Inferred	Total	CaƚegŽƌLJ	Unit	Indicated	Inferred	Total	CaƚegŽƌLJ	Unit	Indicated	Inferred	Total
VeŽǀača				Rupice				Combined
Tonnes	Mt	3.6	1.2	4.8	Tonnes	Mt	6.3	0.9	7.2	Tonnes	Mt	9.8	2.1	11.9
Mineral Grade Inventory					Mineral Grade Inventory				Mineral Grade Inventory
ZŶeƋǀ	й			0.00%	ZŶeƋǀ	й				ZŶeƋǀ	й
Zn	й	1.61%	1.15%	1.50%	Zn	й	6.27%	3.52%	5.92%	Zn	й	4.57%	2.19%	4.16%
Pb	й	1.05%	0.52%	0.92%	Pb	й	4.01%	2.25%	3.79%	Pb	й	2.93%	1.28%	2.64%
Cu	%	0.07%	0.06%	0.07%	Cu	%	0.65%	0.42%	0.62%	Cu	%	0.44%	0.22%	0.40%
BaSOϦ	%	16.50%	6.20%	14.00%	BaSOϦ	%	36.50%	27.10%	35.30%	BaSOϦ	%	29.20%	15.30%	26.80%
Au	g/t	0.1	0.1	0.1	Au	g/t	2.1	1.3	2	Au	g/t	1.4	0.6	1.2
Ag	g/t	54.1	19.1	45.5	Ag	g/t	221.1	125.6	209.1	Ag	g/t	160.1	65.6	143.8
Sb	%	0.10%	0.08%	0.10%	Sb	%	0.23%	0.19%	0.23%	Sb	%	0.19%	0.13%	0.18%
As	%	0.03%	0.03%	0.03%	AƐ	%	0.08%	0.05%	0.08%	As	%	0.06%	0.04%	0.06%
Hg	%	0.02%	0.01%	0.02%	Hg	%	0.01%	0.01%	0.01%	Hg	%	0.01%	0.01%	0.01%

Table 27: JORC Combined Mineral Inventory as at 31st October 2019

2.11.2 Rupice

A conceptual mine plan for the Rupice Deposit ǁas developed͕ as shoǁn in Figure ϥϦ using DatamineΡ Mineable Shape Optmiser ;MSOͿ sofǁare to generate stope geometries ǁithin the current block model ͞ModelͺOreͺWasteͺϤϢϣϪ͘dm͟ ͘

The planned primarLJ and secondarLJ access infrastructure results in an underground mine design containing approdžimatelLJ ϩ͘Ϥ Mt of ore bearing material at ϧ͘ϫй Zn͕ ϥ͘Ϫй Pb͕ Ϣ͘Ϩй Cu͕ ϥϧ͘ϥй BaSOϦ͕ Ϥ͘Ϣgͬt Au͕ ϤϢϫ͘ϣgͬt Ag͕ Ϣ͘Ϥϥй Sb͕ Ϣ͘ϢϪй As and Ϣ͘Ϣϣй Hg average grades ;an overall diluton of ϤϨ͘ϣй results from the MSO process that generated the stopesͿ͘ Edžaminaton of the MSO outputs presented tǁo keLJ areas requiring both short hole and longͲhole edžtracton methods ǁith cement pasteͲfll to be used to stabilise stope voids͘ The upper porton of the deposit from ϣ͕ϣϪϧRL to ϣ͕ϢϫϧRL is characterised bLJ a thinner economic stoping ǁidth ;less than ϣϧmͿ and narroǁs in strike length as the orebodLJ approaches the outcrop positon͘ Beloǁ ϣ͕ϢϫϧRL the orebodLJ ǁidens rapidlLJ to some ϥϧm on average amenable to longͲhole higher productvitLJ mining methods͘ The longͲhole edžtracton consists of three main longͲhole sectons namelLJ͖ tǁo Ϧ subͲlevel sectons ;ϤϢm interͲlevel spacingͿ in the highͲgrade areas of the orebodLJ and a single medium grade longͲhole secton consistng of ϧ subͲlevels͘

Figure 34: Cross-Section of the Proposed Rupice U/G Operation (CSA Global, 2019)

Considering required access to inital higherͲgrade stoping areas͕ the primarLJ access to the orebodLJ is via a tǁo parallel declines͕ ǁith dimensions of ϧm high dž ϧm ǁide͕ developed from a terraced portal area located to the north east of the main bodLJ of the deposit͘ A single end trackless drive ;ϧm dž ϧmͿ is developed from ϫϨϧ RL doǁn to ϫϢϧRL and subͲlevel drifs and return ventlaton infrastructure is established to enable stoping actvites to commence on ϫϢϧRL͘ The ϫϢϧ Ͳ ϫϨϧRL longͲhole secton is replaced bLJ the ϪϤϧ ʹ ϪϪϧRL secton͘ Edžtracton from the cut and fll mining secton͕ ǁith loǁer edžpected productvites͕ ǁill be permited to commence prior to edžtracton of the fnal longͲhole secton ;ϫϪϧ ʹ ϣϢϨϧRLͿ in order to ensure high overall productvites͘

The proposed underground mining operaton at Rupice is considered to be of medium risk from a technical mining operatons standpoint for the folloǁing reasons͗

ϣ͘ An average underground mining rate of approdžimatelLJ ϪϢϢ ktpa ǁill be required to sustain a Ϥ͕ϤϧϢ tpd plant feed is considered as a medium scale underground trackless mining operaton͘
Ϥ͘ Mining equipment suitable for this tLJpe of mining method utlising a standard underground mining feet͖ it is considered nonͲspecialised and common ǁith reasonable procurement and mobilisaton tmeͲframes͘
ϥ͘ Considering the sinje of the equipment proposed for the mining operaton͕ mobilisaton and demobilisaton of mining equipment should not present signifcant challenges for the transport of these mining machines͘
Ϧ͘ Site conditons are edžpected to be moderate to high difcultLJ in terms of climatc͕ topographical and access conditons͘
1. Underground geotechnical ground conditions are expected to have poor to moderate rock mass strengths, indicating challenging development and stoping support conditions. Detailed stope sizing studies would be required to assess the impact of the following parameters on the layout of stopes:
2. x Spatal variabilitLJ of rock mass qualitLJ͖
3. x Incorporatng diferences in lithological ǁall rocks on the basis of stope locaton͖
4. x Accountng for the frequencLJ͕ persistence and conditon of major geological structures on stopes͖
5. x The ambient stress magnitudes and orientatons͖
6. x Changes to the geometrLJ of the orebodLJ͖
7. x Impact of the tLJpe of fll selected on sequencing and stope sinjes͖
8. x Stand up tme analLJsis͕ and
9. x Detailed ground stabilisaton measures͘
Ϩ͘ The Rupice site is a greenͲfeld site requiring a neǁ access road to be constructed to the public sealed road at Borovica Gornja͘
ϩ͘ Water management ǁill require careful planning as the mine infrastructure is sited ǁithin a series of valleLJs ǁith potental edžposure to a large ǁaterͲshed area͘
Ϫ͘ There are small villages located ǁithin or in close prodžimitLJ to the Rupice and Veovača Deposits site͘

2.11.3 Veovača

The pit optmisaton and subsequent pit design for Veovača͕ as shoǁn in Figure ϥϧ results in an open pit mine design containing approdžimatelLJ Ϧ͘ϩϧ Mt of ore bearing material at ϣ͘ϧй Zn͕ Ϣ͘ϫϤй Pb͕ Ϣ͘ϩй Cu͕ ϣϦй BaSOϦ͕ Ϣ͘ϢϪgͬt Au͕ Ϧϧ͘ϧgͬt Ag͕ Ϣ͘Ϣϣй Sb͕ Ϣ͘Ϣϥй As and Ϣ͘ϢϤй Hg average grades utlising a ϧй diluton and a ϫϧй mining recoverLJ͘ The pit design contains some ϣϣ͘ϨMt ǁaste and subͲeconomic ore resultng in a Ϥ͘Ϧ͗ϣ mass stripping rato͘

Figure 35: Veovača Open Pit Plan and Sectional View (CSA Global, 2019)

2.12 Conceptual Project Economics ʹ Input Assumptions

2.12.1 Production Schedule

The conceptual baseͲcase producton schedule assumes an ϪϢϢ ktpa plant throughput rate͕ proposing to commence ǁith the Rupice deposit ;ϤϢϤϣ ʹ ϤϢϥϤͿ contnuing ǁith the Veovača open pit operaton from ϤϢϥϤ to the end of the Life of Mine ;Figure ϥϨͿ͕ ǁith a vieǁ to edžtractng the highest grade at the Rupice deposit in the earlLJ stage of the Rupice underground operaton ;Figure ϥϩͿ͘

Figure 36: Overvieǁ of the Mine Schedule

Figure 37: Projected Average Annual Feed Grades

2.12.2 Commodity Prices

The commodity prices employed in the economic model are tabulated in the table below;

Commodity	Unit	Spot (30/10/2019)	3 Year Trailing Average (A)	Model Price (B)	%Diff A - B
Zinc	US\$ per tonne	2585	2778	2500	-10%
Lead	US\$ per tonne	2265	2200	2000	-9%
Copper	US\$ per tonne	5906	6400	6500	2%
Antimony	US\$ per tonne		7,710	6500	-16%
Silver	US\$ per oz	17.85	16.02	17.20	7%
Gold	US\$ per oz	1489.9	1250	1440.0	15%
Barite1	US\$ per tonne	-	-	155	-

Table 28: A Comparison of US\$ Current Spot, 3 Year Trailing Average & Prices Employed in Model

Notes

1. Barite is not a traded commodity but the value used is based on current European pricing with deductions for shipping, handling and insurance.

Whilst acknowledging historical trailing-average pricing, cognisance of consensus future pricing is considered to reflect anticipated lower base metal pricing with reduced economic growth rates (particularly in China) and envisaged increased geopolitical uncertainty influences on precious metal prices.

It should be noted that Project commodity price sensitivities are most pronounced for zinc and silver, followed by lead, gold, barite, copper and antimony, as illustrated in Figure 38.

Figure 38: Project Commodity Price Sensitivity

2.12.3 Capital & Operating Costs

Both capital and operatng costs assume a base case contract mining scenario͘

The operatng and capital cost estmate for mining operatons and associated infrastructure have been derived bLJ CSA Global considering inͲhouse cost databases and comparison ǁith other similar operatons͘ The process plant operatng and capital cost estmates have been completed bLJ Holland Θ Holland Consultants and revieǁed bLJ CSA Global for reasonableness͘ Local costs have been provided and assured bLJ Adriatc Metals and have been emploLJed ǁhere appropriate͘ A contngencLJ of ϥϢй has been considered for all items͘

Where appropriate, a Rate of Exchange of 1.75 BAM to 1 USD has been used for currency conversion.

Corporate tax rates in Bosnia & Herzegovina are 10%. A five-year straight-Line Depreciation method of redeeming capital expenditure has been used to amortise the capital cashflows.

Provision for potental roastng or further processing requirements to possiblLJ reduce penaltLJ elements ǁithin the concentrates has not been considered at this stage in the Concentrator capital estmates or provision for further blending needs ǁithin the operatng costs͘ These aspects ǁill need to be investgated as part of a further studLJ͘

Estmates are considered to have an order of accuracLJ of нͲϦϢй and hence are appropriate for a Scoping StudLJ͘ A summarLJ of the operatng and capital costs is presented in Table Ϥϫ͘

Category	Units	Combined Projects
Operating Costs
Veovača OP Mining Note 1	US\$/tonnemilled	15.60
Rupice UG Mining Note 1	US\$/tonnemilled	40.46
Concentrator Plant	US\$/tonnemilled	18.29
On-mine	US\$/tonnemilled	2.10
Off-mine	US\$/tonnemilled	2.82
Sustaining CAPEX	US\$/tonnemilled	1.43
Environmental Provision	US\$/tonnemilled	1.50
Total	US\$/tonnemilled	56.67
Capital Costs
Veovača Open Pit Mining	US\$m	7.6
Rupice Underground Mining	US\$m	17.4
On & Off-mine Infrastructure	US\$m	34.9
Processing Plant	US\$m	58.2
Surface Infrastructure	US\$m	0.0
EPCM Fees	US\$m	16.2
HO Fees	US\$m	3.0
Study Costs	US\$m	0.0
Rehabilitation and Closure	US\$m	0.0
Contingency	US\$m	41.2
Total	US\$m	178.4

Table 29: Summary of LOM Operating and Capital Costs

NŽƚeƐ͗

ϣ͘ Total operatng costs for LOM are reported from a ǁeighted average calculaton of the open pit mining at Veovača and underground mining at Rupice deposits͘

2.12.4 Economic Conclusions

On the basis of these parameters͕ the conceptual Net Present Value ;NPVͿ of the Vareš polLJmetallic project is considered to be USΧ ϫϣϩ million at a baseͲcase discount rate of Ϫй͕ ǁith an Internal Rate of Return of ϣϢϩ й calculated on a PostͲTadž basis ǁith ϣϢϢй atributable equitLJ͘

A summarLJ of economic results emploLJing various discount factors is presented in Table ϥϢ͘

Post Tax Results	Units	VaƌeƓ Combined Project
NPV @ 0%	US\$M	1,534.8
NPV @ 5%	US\$M	1,102.1
NPV @ 10%	US\$M	814.8
NPV @ 15%	US\$M	616.5
NPV @ 20%	US\$M	475.1
NPV @ 8%	US\$M	916.6
IRR	%	107.4%
Payback (Project Start)	Years	2
Payback (Processing Start)	Years	1
ROCE	EBIT/CE	10.6
Economic Tail Cut	Year	2037

Table 30: Summary of Economic Results

Note:

x The Scoping Study referred to in this report is based on low-level technical and economic assessments and is insufcient to support estmaton of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Scoping Study will be realised.
x The economic result is based on approximately ϴϮ.ϱй of the overall feed Mineral Resource being classifed as Indicated Mineral Resources and ϭϳ.ϱй being classifed as Inferred Resources and the sequencing of these materials is shown in Figure ϯϲ.
x The Net Present Value considers the tme from the commencement of project constructon projected in this analysis to be ϮϬϮϭ.
x Further study costs and other charges required by Adriatc prior to project executon are not included.
x Selecton of an ϴй discount rate considers a current general norm. No appropriate assessment of the weighted average cost of capital for the Project and Sponsor has been undertaken.

2.13 Environmental Studies, Permitting and Social or Community Impact

2.13.1 Environmental Studies

An Environmental and Social ;EΘSͿ Scoping StudLJ to meet internatonal requirements has recentlLJ been commissioned ǁhich ǁill͕ inter alia͕ involve a gap analLJsis of the edžistng data against tLJpical internatonal requirements and ǁhich ǁill include the development of detailed scopes of ǁork for baseline environmental and social studies͘ The EΘS Scoping StudLJ ǁill take place in QϦ ϤϢϣϫ͕ ǁith a vieǁ to startng some long lead tme baseline studies ;for ǁhich ϣϤ months of monitoring data is requiredͿ as soon as possible͘ It is envisaged that the baseline data collecton phase ǁill take place during ϤϢϤϢ͕ ǁith inital impact assessments taking place from Qϥ ϤϢϤϢ onǁards͕ depending on the level of engineering detail available from concurrent PreͲFeasibilitLJ and or FeasibilitLJ Studies͘ As far as possible͕ identfed impacts ǁill be avoided through project laLJout and design͖ those that cannot be avoided ǁill be reduced and mitgated͘ The residual impacts ǁill be addressed in a suite of Management Plans for use during the constructon and operaton of the site͘

2.13.2 Permitting

Betǁeen MaLJ and September ϤϢϣϫ͕ Eastern Mining d͘o͘o͘ Sarajevo ;Eastern MiningͿ has initated actvites to complete the necessarLJ investment͕ technical and environmental documentaton in order to obtain all the necessarLJ permits for commencing ore edžploitaton and processing at the former plant site and open pit at Veovača͘

There are tǁo phases for this͖ frstlLJ the permitng around the rehabilitaton and closure of the former mine ;referred to as the ͚demoliton permit͛Ϳ and a second phase ǁhich focuses on planned actvites for a neǁ operaton at Veovača͘ Each phase requires both a Water Permit and an Environmental Permit as ǁell as the Permit to carrLJ out the specifed actvitLJ͘

To date͕ no permitng actvites have focussed on the Rupice deposit specifcallLJ͕ although it is understood that the Veovača edžploitaton ǁill also secure the Rupice concession͘ Table ϥϣ beloǁ summarises the permitng status of the tǁo phases of the project͘

Permit type		Submitted	Approved
Demolition Permit
Water Permit		24th June 2019	Decision on Preliminary Water Permit No: UP-I/25-1-40-365- 4/19, 11th July 2019
Environmental	Permit	27th June 2019	Received 28 November 2019
(includes	Waste
Management Plan)
Exploitation Permit
Water Permit		13th September 2019	Two permits issued. One (04 November 2019) for discharge of site runoff (UP-I/25-1-40- 508-5/19), one (05 November 2019) for water supply and discharge of process water (UP-I/25-1-40-556-3/19.
Environmental Permit		30th September	Awaiting approval

Table 31:	Permitting Status

2.13.3 Social Setting

The site is located in the MunicipalitLJ of Vareš ǁhich consists of the toǁn of Vareš and five small surrounding communities͕ namelLJ Tisovci͕ Prǎići͕ Brenjik͕ Daštansko and Višnjići͘ The population of the Municipality was 8,892 in 2013, down from 25,523 in 1971 when the mine and other industrial activities were active. The population of the villages listed above is 293. The average age of the population of Vareš is ϰϰ͘ϱ͕ ǁhich is higher than the average for BiH͕ ǁhich is ϯϴ͘ϱ͘ The average age of the residents in the surrounding villages is higher again, at 52.7. This is indicative of younger people leaving the area in search of employment elsewhere in Bosnia, the Balkans and further afield.

The project site is in a relatively isolated area with few developed roads. The R-ϰϰϰ connects Vareš with the neighbouring municipality of Breza. The railway which previously served the mine ceased operating in 1991.

Some dwellings are located within 20 - 30m of the old processing plant and 40m from the old open pit. The potential impact of the project on these will be determined in the forthcoming environmental and social studies, but it may be necessary in due course (7 ʹ 8 years from the start of construction) to resettle some families in the village of Daštansko ;population 118 in 2013) which is close to the old Veovača open pit. However, it is envisaged that no mining activities will take place here until 7 ʹ 8 years after mining commences at Rupice. A road leading to the village which currently runs through the open pit will need to be rerouted to the north, increasing the length of the access road from 3km to 4.5km.

Baseline social and economic data will be collected from Household Surveys during the baseline study phase, as determined by the E&S Scoping Study. Topics likely to be covered include Ecosystem Services, Traffic, Landscape and Visual assessment, Human Health Risk Assessment, Cultural heritage and Land use.

There are some known archaeological and cultural heritage sites in the area, such as the 16th Century church in Vareš believed to be the oldest Catholic church in the country, and the Ottoman period bridge in Vareš town which is similar in style and date to that in Mostar. However, none are believed to be in the immediate vicinity of planned project infrastructure. Surveys will be carried out and a Chance Find Procedure will be developed for use during the life of the project. The rich industrial heritage of the area will also be documented as part of these studies.

2.13.4 Stakeholder Engagement

Eastern Mining is reported to enjoy excellent relations with the local Municipality, who are supportive of the project, recognising that it represents an opportunity not only for the redevelopment of a derelict and potentially contaminated site, but that it will bring direct jobs and indirect jobs and benefits through the local purchase of goods and services. To date, some small community projects have been funded by AML/Eastern Mining, such as cultural events and the donation of laptops to the local library.

An Information Centre has recently been opened in Vareš which acts as a focal point for enquiries about project activities, job opportunities, selling land, and requests for support for cultural and community projects. Initial stakeholder mapping has been carried out.

As part of the environmental and social Scoping StudLJ͕ a Stakeholder Engagement Plan ǁill be developed folloǁing inital stakeholder engagement͘ This ǁill help to guide and document the sharing of informaton and communitLJ concerns about the project͕ to ensure that theLJ are taken into account both during the studies and the planning of the project͘

2.13.5 Potential Impacts

At this stage͕ potental impacts onlLJ can be identfed͘ These ǁill be edžamined further using a rigorous assessment process during the Impact Assessment phase ǁhich is likelLJ to take place during the FeasibilitLJ StudLJ͘ Hoǁever͕ impact assessment is an iteratve process and relevant informaton on the fndings of the baseline studies ǁill be shared and discussed ǁith the engineering team on an ongoing basis͘ In partcular͕ environmental and social sensitvites and constraints ǁill be identfed͕ including the spatal edžtent͕ locaton͕ potental for avoidance and potental for mitgaton͕ as appropriate͘ AnLJ tme constraints ǁill also be included ;for edžample͕ seasonal presence of protected species or periods ǁhen actvites should be avoidedͿ͘ TLJpical impacts from a mine of this nature derive from the constructon͕ operatonal and closure phases and ǁill be assessed on this basis͘ These ǁill include͗

x Air qualitLJ ʹ gaseous emissions͕ dust depositon and suspended partcles͖
x Water qualitLJ ʹ suspended solids͕ dissolved metals and products of ARD and surface and groundǁater͖
x Noise͖
x Trafc͖
x Vibraton and fLJrock͖
x Dislocaton͖
x Visual impact͖
x Spills͖
x Land use͖
x BiodiversitLJ͖
x ArchaeologLJ and cultural heritage͖
x SocioͲeconomic development͖
x EmploLJment͕ and
x Resetlement͘

2.13.6 Mine Closure

Mine closure planning is an ongoing process which starts at the design phase and will progress from a preliminary plan prior to or during early construction to the completion of a detailed Mine Rehabilitation and Closure Plan (MRCP). This will be prepared during the production phase of the project, once further information is available regarding the operations, stakeholder expectations, results of any progressive rehabilitation, success of revegetation trials for closure and an updated schedule on mine closure. The MRCP will include decommissioning of all production facilities, the handover agreements of infrastructure to local or national authorities, staff retrenchment, final land rehabilitation and the stakeholder engagement process. The closure and abandonment of the former lead zinc mine, as well as the iron mine and smelting facilities, has left an obvious environmental and social legacy at Vareš, so closure of the planned operations has particular significance in terms of leaving a safe, stable and clean environment and a positive social legacy.

2.14 Exploration Potential and Targets

The Vareš mineral feld occurs ǁithin a ǁellͲdefned ϤϢ km dž ϣϢ km corridor of prospectve Triassic stratgraphLJ ǁith numerous mineralised occurrences͘ The hLJdrothermal sLJstem driving the mineralisaton tLJpicallLJ occur in clusters as appears to be the case in the Vareš mineral feld͕ supportng the potental for further discoveries of base metal mineralisaton͘

Edžploraton of the Vareš Project can be approached on scales ranging from inͲmine͕ near mine͕ and͕ if additonal tenure is granted͕ regional edžploraton actvites along the ϤϢ km strike length of the prospectve Triassic stratgraphLJ͘ Past edžploraton ǁithin the prospectve trend outside of the three granted areas has been limited ǁith no drilling͘

Adriatc has summarised the outcropping mineral occurrences and available historical edžploraton informaton and prioritsed them ;Figure Ϧϣ and Table ϥϤͿ͘ These mineral occurrences have not been edžplored ǁith modern edžploraton techniques and include prospects outside granted licences͘

Deposit	Work completed to support the conceptual exploration potential
Orti	19 diamond drillholes over an area of 500 m x 150 m
Široki-Radakovac
Ceo-Sutjeska	Possibly five diamond drillholes, numerous outcrops of lead-zinc mineralisation, and geochemistry,
Kraljeva Jama	geophysics and mapping of host rock over an area of 1,000 m x 750 m
Zakrušje
Juraševac-Brestić	Underground workings over an area of 400 m x 280 m and five diamond drillholes
Selište	At least one diamond hole, and mapping of the host rock over a distance of 400 m x 300 m
Suma*	Numerous outcrops of lead-zinc mineralisation, and geochemistry, geophysics and mapping of host rocks over an area of 1,000 m x 2,000 m

Table 32: Exploration Targets in the immediate district

Note: Suma is outside of the current "expanded" Adriatic concession.

Given the nature of the mineralisaton and structural compledžitLJ͕ the potental for additonal nonͲ outcropping mineralisaton appears reasonable͘ The use of modern edžploraton techniques and a sLJstematc approach ǁill improve the potental for discoverLJ͘

2.14.1 Veovača Concession Exploration

Within the Veovača edžploitaton concession͕ there are opportunites for edžtensional and incremental additons to the defned resource͘ Edžtensional opportunites include the doǁn plunge edžtension to the northeast such as highlighted in Figure ϥϫ͘ Given the shalloǁ nature of the mineralisaton intersected ;i͘e͘ ϣϢϢ m to ϣϧϢ mͿ͕ deeper drilling is a loǁͲriskͬhighͲreǁard propositon but further geological mapping and modelling is required to generate drill targets͘ AdditonallLJ͕ but as LJet completelLJ untested͕ is the Veovača North prospect ǁhere historical diggings over a strike length of ϧϢϢ m remain to be edžplored͕ although recent soil sampling over the area as part of the inital edžploraton of the OrtͲ MekuseͲSeliste area͕ returned coincident lead and njinc in soil values of up to Ϥй͘

The Ort and Seliste prospects͕ both of ǁhich are ǁithin ϣϢϢ m of the main Veovača mineralisaton͕ have not been edžplored bLJ Adriatc͘ Adriatc has scanned logs of ϣϪ historical drillholes from Ort͕ ϣϢϢ m to the north of the main Veovača mineralisaton͕ some of ǁhich have intersected loǁͲgrade lead and njinc mineralisaton ǁithin brecciated limestone͘ Litle is knoǁn about the Seliste prospect͕ located ϣϢϢ m to the northeast of Veovača ;Figure Ϧϣ and Table ϥϤͿ͘

There are feǁ gold or silver analLJses available in the prospect drilling on the peripherLJ of the Veovača resource and future assaLJing for these elements represents an opportunitLJ to increase the value of the resource͘ During edžploraton drilling͕ mineralised and ǁaste samples should be subjected to phLJsical propertes tests including densitLJ͕ conductvitLJ and magnetc susceptbilitLJ to guide future

regional geophLJsical edžploraton actvites͘ Trace element geochemistrLJ should also be undertaken to provide guidance for lithogeochemical edžploraton and geometallurgical modelling͘

Edžploraton potental ǁithin the ͞edžpanded͟ Adriatc concession is indicated bLJ historical IP chargeabilitLJ anomalies associated ǁith historic broǁnfelds base metal prospects͘

Figure 39: Long sections of Veovača mineralisation demonstrating potential for repeat lenses below the pit and additional plunging mineralisation

Note: Modified from Adriatic presentation. Source: Adriatic (2019A)

2.14.2 Rupice Potential and Targets

Historical geophLJsical programs ;IPͿ from Rupice to Jurasevac defned several chargeabilitLJ anomalies͘ A detailed highͲpoǁered ;ϥϢ kVAͿ IP surveLJ using a PDPϥD arraLJ method ǁas completed over the Rupice mineralisaton in ϤϢϣϫ͘ PreliminarLJ results have demonstrated that the knoǁn mineralisaton has a clear IP chargeabilitLJ response͘ An additonal anomalLJ has been defned approdžimatelLJ ϤϢϢ m ǁest of the current and historical drilling͘ This data ǁarrants further edžploraton for repettons or edžtensions to the Rupice mineralisaton toǁards Jurasevac ;Figure ϦϢͿ͘

To the south of Rupice͕ there is a subͲparallel trend ǁith several chargeable anomalies ǁithin the Borovica Corridor ;Figure ϦϢͿ͘ The Borovica corridor is partlLJ ǁithin the ͞edžpanded͟ concession area͕ ǁith the balance edžtending regionallLJ into areas earmarked for potental future edžploraton bLJ Adriatc͘ These anomalies represent signifcant edžploraton targets͕ further edžploraton at this stage using nonͲ destructve actvites ;i͘e͘ geochemical and geophLJsical surveLJsͿ is recommended͘

Figure 40: Rupice exploitation concession with known prospects within it and the Borovica prospects in the regional prospect area to the south (the grid is MGI 1901/Balkans Zone 6) Note: The dotted purple lines represent chargeability corridors identified by Adriatic. Source: Adriatic.

2.15 Planned Work

Adriatc has planned a sLJstematc edžploraton program targetng the knoǁn deposits edžtensions and the prospectve Triassic stratgraphLJ͘ Edžploraton actvites ǁill initallLJ focus on keLJ targets at Rupice and Veovača͘ Actvites ǁill include soil geochemistrLJ͕ geological mapping͕ IP and gravitLJ surveLJs folloǁed bLJ drilling on selected targets͘

Based on the revieǁ of historical edžploraton data͕ Adriatc has identfed various regional prospects ǁhich lie both ǁithin͕ and outside the edžistng ͞edžpanded͟ concession area͘ All the regional prospects lie ǁithin the prospectve stratgraphLJ outlined in Figure Ϧϣ͘ It is noted that Adriatc maLJ not be successful in obtaining licences over this prospectve ground͘

According to Adriatc͕ neither the Mining Act nor Concession Laǁ regulate directlLJ geological actvites in the regional prospect area surrounding the edžistng Adriatc Concession͘ Hoǁever͕ according to Adriatc͕ ǁith the approval of either a private landoǁner or the competent state authoritLJ ;for StateͲ oǁned areasͿ͕ it is possible to undertake limited edžploraton actvites ǁithin the regional area if theLJ are nonͲground disturbing͕ such as geochemistrLJ͕ geophLJsics and mapping actvites ;Figure ϦϣͿ͘

Adriatc intends͕ subject to the ongoing consent of competent state authoritLJ andͬor private landoǁners͕ to conduct nonͲground disturbing ǁork͕ including inter alia rock chip sampling͕ soil geochemistrLJ͕ mapping and ground geophLJsics ;IPͿ as part of the ongoing assessment of the potental

of some of the regional prospects that lie outside the edžistng concession boundarLJ͘ Should Adriatc ǁish to edžtend its edžistng licence boundaries͕ it ǁill need to contnue its dialogue ǁith the MinistrLJ of EconomLJ and take advice on the recommended process to do such an edžtension͘

Figure 41: Vareš Project concession, prospects and stratigraphy (the grid is MGI 1901/Balkans Zone 6) Source: Adriatic

Adriatc intends to contnue an aggressive edžploraton program both ǁithin its ͞edžtended͟ concession area to include deposit edžtensions and repettons͕ ofͲmine edžploraton and district edžploraton ǁith the later to edžtend outside the concession areas of Rupice and Veovača if permissible͘ Edžploraton ǁill focus in order of scale and prioritLJ on the folloǁing͗

x Complete geological mapping͕ interpretaton and modelling in the prospect areas to improve understanding of mineralisaton controls and targetng͕ integrated ǁith drillhole logging͕ lithogeochemical data analLJsis and modelling͕ and geophLJsical targetng͘
x Drilling to infll and groǁ the MREs at Rupice and Veovača and upgrade their current classifcaton͘
x Commence a drilling program at the Brestc and Jurasevac ;BJͿ mineral occurrences ǁhere PDPϥD geophLJsics has identfed a chargeabilitLJ anomalLJ ofset from the underground edžploraton drives and edžtend this drilling to the northǁest ǁhere another chargeabilitLJ anomalLJ is located midǁaLJ betǁeen the BJ ǁorkings and the Rupice deposit͘
x Commence a detailed edžploraton program over the entretLJ of the Veovača North͕ Ort and Seliste prospects bLJ ǁaLJ of͗
- o data compilaton
- o geologLJ mapping͕ logging and interpretaton for targetng͕ including structure͕ lithofacies and alteraton
- o IP using either gradient arraLJ͕ PDP or PDPϥD

o soil geochemistrLJ on a minimum ϧϢ m dž ϧϢ m grid in areas of interest͕ in conjuncton ǁith mapping
o diamond drilling͘
x Commence a detailed edžploraton program over the entretLJ of the Borovica corridor bLJ ǁaLJ of͗
- o data compilaton
- o geologLJ mapping͕ logging and interpretaton for targetng͕ including structure͕ lithofacies and alteraton
- o trenching and rock chipping of the adits͕ in conjuncton ǁith mapping
- o diamond drilling͘
x Commence edžploraton of the Triassic stratgraphLJ betǁeen Rupice and Veovača subject to tenure using integrated geological͕ geochemical and geophLJsical targetng based on a ǁellͲdefned targetng model͘

Budgets for the ǁork programs detailed above are provided in Table ϥϥ͘ The ǁork programs and associated budgets are considered reasonable and appropriate bLJ CSA Global͘

	2019			2020
Activities (A\$)	Q3	Q4	Q1	Q2	Q3	Q4	TOTAL
Exploration staff	222,500	222,500	222,500	267,000	267,000	267,000	1,468,500
Geochemistry	20,000	20,000	20,000	20,000	20,000	20,000	120,000
Geophysics	135,000	135,000	135,000	135,000	135,000	135,000	810,000
Drilling	600,000	600,000	200,000	600,000	800,000	600,000	3,400,000
Assays	43,680	43,680	14,560	43,680	58,240	43,680	247,520
Access	20,000	20,000	6,667	20,000	26,667	20,000	113,333
Equipment hire/purchase	50,000	-	50,000	-	50,000	-	150,000
Remote sensing (airborne)	-	-	400,000	-	-	-	400,000
Subtotal ʹ Exploration	1,091,180	1,041,180	1,048,727	1,085,680	1,356,907	1,085,680	6,709,353
Metallurgical	400,000	400,000	100,000	200,000	400,000	400,000	1,900,000
Mining	200,000	200,000	50,000	100,000	200,000	200,000	950,000
Geotechnical	35,000	35,000	35,000	35,000	35,000	35,000	210,000
Hydro	20,000	20,000	20,000	20,000	20,000	20,000	120,000
Scoping and feasibility	300,000	300,000	300,000	300,000	300,000	300,000	1,800,000
Environmental	250,000	250,000	250,000	250,000	250,000	250,000	1,500,000
Subtotal ʹ Pre-Development	1,205,000	1,205,000	755,000	905,000	1,205,000	1,205,000	6,480,000
Working capital	-	-	-	-	-	-	-
Public offering costs	-	-	-	-	-	-	-
GRAND TOTAL	2,296,180	2,246,180	1,803,727	1,990,680	2,561,907	2,290,680	13,189,353

Table 33: Planned budgets (2019/2020) (Australian dollars)

Note: includes A\$23.6M that Adriatic communicate they currently has at hand on 29 November 2019.

Whilst edžploraton ǁork ǁill contnue as outlined above͕ there ǁill be ongoing studLJ ǁork taking place for metallurgical processing͕ hLJdrogeological͕ hLJdrological͕ geotechnical͕ mine design͕ tailings storage and environmental͘ This ǁill feed in to a PrefeasibilitLJ StudLJ and potentallLJ ultmatelLJ a FeasibilitLJ StudLJ and complete Environmental and Social Impact Assessment͘ The PrefeasibilitLJ StudLJ is currentlLJ targeted to be completed in Qϣ ϤϢϤϢ ǁith the FeasibilitLJ StudLJ and an Environmental and Social Impact Assessment planned for QϦ ϤϢϤϢ͘

The nearͲterm plan is focused around the folloǁing targets for ϤϢϣϫͬϤϢϤϢ͕ ǁhich are captured in the foǁchart beloǁ ;Figure ϦϤͿ͖

x Prioritsing the contnued edžploraton and groǁth of a highͲgrade resource base at Rupice
x Development of an integrated plan that optmises project economics at both locatons
x Advancing the permitng status on a ǁellͲdefned pathǁaLJ toǁards edžploitaton
x Contnued edžploraton on regional broǁnfeld prospects to defne further drill targets for ϤϢϣϫ͘


	03 04 01 07 03 03 04
RUPICE Resource Drilling
BRESTIC - JURASEVAC Resource Drilling
VEOVACA AND VEOVACA NORTH Geotechnical Drilling Resource Drilling
ORTI Resource Drilling		RESULTS
BOROVICA Resource Drilling		DRIVEN CONSTRUCTION
REGIONAL EXPLORATION Barovice Other Areas Selishte and Meuse Other Areas		COMMENCEMENT DATE
EVALUATION Metallurgy - Veovada and Rupice Mining Studies Hydro and Geotechnical Scoping and Feasibility Environmental

Figure 42: Planned work programs for 2019 Source: Adriatic

3 TechŶŝcaů RŝƐŬƐ aŶd OƉƉŽƌƚƵŶŝƚŝeƐ

The keLJ technical risks borne out of recent studLJ are as folloǁs͗

x The Veovača edžploitaton licences I and II covering the processingͬtailings site and the Veovača pit respectvelLJ have edžpired͘ Adriatc are currentlLJ reapplLJing for these licences under the edžistng Concession Agreement ϢϦͲϣϪͲϤϣϥϪϫͲϣͬϣϥ͘
x Given the Veovača conceptual pit covers ϨϢй of Veovača II͕ there is a limit of edžpansion potental͕ partcularlLJ for pit depth edžtension as the conceptual pit abuts against the northern concession boundarLJ͘ Adriatc has been granted the VeovačaͲOrtͲMekušeͲSelište edžploraton licence adjacent to Veovača II in November ϤϢϣϪ͘
x According to the Rjesenje ;Permission Concession documentͿ͕ the current concession relates to metallic mineral resources including͕ lead͕ njinc and barite analLJsis and edžtracton͘ Historical and recent edžploraton has identfed potental value in silver͕ gold͕ antmonLJ and copper as coͲ products͘ According to Adriatc͕ although these elements are not specifcallLJ stated͕ this is in discussion ǁith the MinistrLJ of Mining and Adriatc edžpects to have approvals for these additonal elements͘
x All minerals project face similar risks during the progression to mining and producton͗
- o The progression of Mineral Resources to increasing levels of confdence is dependent on the outcome of infll drilling͘ There is no guarantee that additonal drilling ǁill lead to progressive upgrades in resource confdence͘
- o The progression from Mineral Resources to Ore Reserves requires the applicaton of a raf of modifLJing factors ǁhich are detailed in the JORC Code͘ Signifcant further data acquisiton and technical studLJ ǁork ǁill be required to address each of these factors͘ There is a risk that adverse fndings ǁill prevent Ore Reserves from being determined͘ An edžample is metallurgLJ͘ It is understood that Adriatc are currentlLJ planning additonal studLJ ǁorks͘
- o The metallurgLJ of polLJmetallic deposits such as Veovača and Rupice are compledž and ǁill require additonal geometallurgical modelling and metallurgical testng to refne recoveries͘ Poor metallurgical performance of samples could inhibit the reportng of Ore Reserves͘ It is understood that Adriatc currentlLJ have additonal metallurgical studLJ underǁaLJ͘
- o The progression from Ore Reserves to mine development requires a FeasibilitLJ StudLJ to estmate the costs involved and the revenue projected to result͘ Signifcant further data acquisiton͕ technical studLJ ǁork͕ detailed engineering design and economic modelling ǁill be required to address numerous factors͘ There is a risk that adverse fndings ǁill determine the Project to be unfeasible͘ For instance͕ marketng of the forecast concentrate products ǁill require further studLJ͘
x At all stages there is the risk that commoditLJ prices maLJ fall beloǁ prices that sustain a potental mine͘

Environmental͕ permitng͕ legal͕ ttle͕ tadžaton͕ socioͲeconomic͕ marketng͕ and politcal or other relevant issues could potentallLJ materiallLJ afect access͕ ttle or the right or abilitLJ to perform ǁork on the PropertLJ͘ Hoǁever͕ as of the Efectve Date of this CPR͕ the Competent Person is unaǁare of anLJ such potental issues afectng the PropertLJ͘

Specifc potental risks in relaton to specifc areas of technical and economic evaluaton completed to date͕ ǁhich should be addressed as part of further studLJ͕ include͖

3.1 Mining

x Ground conditons indicated poor to moderate rock mass conditons͘ Cost and producton delaLJs might arise from edžtensive and ͬ or intermitent verLJ poor rock mass conditons͘
x Mechanical raiseͲboring of the main edžhaust ventlaton shaf maLJ not be possible due to rock mass conditons͘ It is recommended that a geotechnical borehole be drilled at the proposed ventlaton shaf positon to determine if mechanical edžcavaton and subsequent longͲterm support is possible͘
x Groundǁater sources that ǁill not be able to sustainablLJ augment the potental negatve ǁater balance at Rupice͘
x Geotechnical analLJsis indicatng that the proposed mining edžtracton strategLJ is not possible maLJ lead to increased cost for alternatve mining methods such a cutͲandͲfll͘
x The Veovača open pit is in close prodžimitLJ to a nearbLJ village setlement͘ A detailed blastng studLJ ǁill be required to ensure that fLJͲrock͕ ground vibratons and air blast risks are mitgated͘

3.2 Processing

x VariabilitLJ in njinc͕ lead͕ precious metal and barite recoverLJ bLJ lithologLJ͘
x The edžistng tailings impoundment ǁill not be used for the frst ϩͲϪ LJears of producton as the tailings ǁill be transported back to Rupice for stope backflling͘ This presents a reputatonal risk should a failure occur during this inital period͕ although the responsibilitLJ of the tailings maLJ not be applicable for the inital period͘ Consideraton should be given to butressing the dam ǁall ǁith ǁaste material from Veovača open pit and edžercised as an ͞opton cost͟ once a decision to mine Veovača is fnalised͘
x CurrentlLJ ǁater balance requirement at the Veovača locaton appears to have been completed on average annual basis͕ ignoring monthlLJ precipitaton values and potental for a negatve ǁater balance during the drLJer summer months͘ Beter understanding is required to assure adequate ǁater storage capacitLJ͘
x Metallurgical testǁork to date has been mainlLJ limited to average grade samples͘ Higher grades of penaltLJ elements͕ such as mercurLJ͕ do edžist ǁithin the deposit and should be investgated͘
x Testng to produce Barite concentrates has shoǁn that these are accompanied bLJ highͲgrades of mercurLJ͕ potentallLJ above US EPA levels in certain markets͘ This maLJ impact on marketabilitLJ of the barite concentrate͘ Whilst roastng tests have indicated a signifcant reducton͕ the capital required is not considered in the overall capital estmate͘

3.3 Marketing

3.3.1 Lead/Silver Concentrate

x Variable and potentallLJ high levels of deleterious elements ;mercurLJ͕ arsenic͕ bariumͿ maLJ potentallLJ impact or limit edžport to certain markets and penaltes maLJ applLJ͖
x RelatvelLJ loǁ silver for Western smelters ǁill limit override of high mercurLJ content͖
x More edžpensive and edžtensive logistcs required for lead concentrate shipments compared to other bulk commodites͖

x Product steǁardship issues ǁith high mercurLJ content material ǁill potentallLJ increase costs and visibilitLJ ǁith NGOs͖
x Blending maLJ be needed to increase marketabilitLJ and reduce costs but at the edžpense of blending costsͬdiscounted sales values͘

3.3.2 Zinc Concentrate

x Variable and potentallLJ high levels of deleterious elements ;mercurLJ͕ bariumͿ could impact or limit edžport to certain markets and penaltes maLJ applLJ͖
x High levels of silver and gold ǁill impact value recoverLJ if blended on the basis of current market paLJables͖
x Blending maLJ be needed to increase marketabilitLJ and reduce costs but at the edžpense of blending costsͬdiscounted sales values
x Product steǁardship issues ǁith potentallLJ high mercurLJ content material could increase costs and visibilitLJ ǁith NGOs͖

3.3.3 Barite Concentrate:

x Potental future threshold values for heavLJ metals including lead and mercurLJ maLJ require further processing to ensure a cleaner product͘

3.4 Environmental

x In relaton to permitng͕ Rupice maLJ not be alloǁed to be included under the Veovača permit͖
x In relaton to land oǁnership and acquisiton͕ determining legal status of oǁnership at Veovača͕ Rupice and along the haul road betǁeen the tǁo deposits maLJ be complicated and maLJ delaLJ the project͖
x There maLJ be potental delaLJ during the compulsorLJ purchase and resetlement of isolated propertes near Rupice and the village of Dastansko near Veovača͖
x Work maLJ be required on remediaton of historicallLJ contaminated land in the prodžimitLJ of the old Veovača plant͘ There maLJ be legacLJ issues arising from the old tailings dam and contaminated ǁater͖
x Potental acid generatng mineralisaton ǁith signifcant heavLJ metal load͕ and͖
x There maLJ be some negatve response to the project due to the recent advance in tourism based actvites in the area͘

The folloǁing opportunites have been identfed͖

x Potental emploLJment for local people͖
x Opportunites for local supplLJ and support businesses͖
x Neǁ and upgraded roads in the area͖
x Potental for rail infrastructure to be upgraded͖
x Removal and cleanͲup of historic contaminated sites͖
x Improvement to local communicatons netǁorks͖
x Locaton of process plant to be closer to Rupice͖
x Reduced haulage costs bLJ considering aerial ropeǁaLJ sLJstem ǁith gondolas͖
x Alternatve technologies for processing to reduce potentallLJ deleterious material͕ and

x Potental for further concentrate products͕ i͘e͘ copper concentrate͕ gold edžtracton from pLJrite concentrate͘

4 CŽŶcůƵƐŝŽŶƐ aŶd RecŽŵŵeŶdaƚŝŽŶƐ

In CSA Global͛s opinion͕ the Vareš Project has good potental for economic edžploitaton of the tǁo keLJ deposits͕ Veovača and Rupice͕ and for further edžploraton success and discoverLJ͘ The Mineral Resource estmated for Veovača and Rupice have potental for edžtension and improved classifcaton ǁith additonal drilling to increase the level of confdence in the estmates and͕ ǁith additonal economic studies͕ to progress toǁards the eventual reportng of Ore Reserves͘

CSA Global recommends the folloǁing to enhance the efectveness of targetng͕ Mineral Resource estmaton and economic optmisaton͗

x Develop a central master drillhole database for the project as a ͞single point of truth͟ ǁith appropriate data management protocols and to maintain current QAͬQC procedures to provide robust data for subsequent Mineral Resource upgrade evaluaton͘
x Advance drill defniton of the Rupice and Veovača deposits as a high prioritLJ and progress geological and mining studies to optmise the economic evaluaton of the deposits͘
x Complete integrated geological͕ structural͕ lithogeochemical and alteraton studies͕ interpretaton and modelling at Rupice and Veovača to improve understanding and to optmise modelling and targetng of resource edžtensions͘ As part of this studLJ͕ complete focused structural and geological mapping and logging of the deposit areas ʹ at present͕ there is no detailed geologLJ mapping of the Veovača deposit and geological understanding is poor ǁhereas at Rupice͕ outcrop is more limited but additonal geological understanding can be developed from representatve reͲlogging of drill core͘
x In this process͕ improve the routne logging process and coding sLJstem to align ǁith keLJ geological data acquisiton͘ In partcular͕ focus the geological evaluaton on improved understanding͕ modelling and targetng of highͲgrade mineralisaton based on understanding of structural and lithostratgraphic controls and lithogeochemical signature͘
x Integrate the geological and lithogeochemical studLJ into a geometallurgical studLJ to interpret and model variabilitLJ in mineralisaton and ensure selecton of representatve samples for testǁork͘ In partcular͕ develop models for distributon and estmaton of the compledž mineralogLJ and metal distributon͕ including paLJable and deleterious elements ǁhich ǁill add confdence to doǁnstream mining studies͘
x Integrate the geological and lithogeochemical studLJ ǁith geophLJsical rockͲpropertLJ testǁork to fullLJ understand the geophLJsical response of the mineralisaton and host rocks to assist ǁith further geophLJsical edžploraton͘
x Use the improved geological understanding to refne the ranking and prioritsaton of additonal prospects ǁithin the current granted concession areas and undertake focused edžploraton on prioritsed targets ǁithin granted tenure͘
x Consideraton ǁill be given to edžploraton outside of currentlLJ permited areas͕ subject to technical merit and approval bLJ the relevant authorites͘
x Evaluate ground and airborne geophLJsical surveLJs based on results of geophLJsical propertLJ testǁork to beter understand potental magnetc͕ electromagnetc and IP response of mineralisaton and alteraton͘
x If possible͕ edžtend tenure to cover the main part of the Vareš district͘
x Complete mining and processing studies as part of a PrefeasibilitLJ StudLJ͘
x As a prioritLJ͕ complete additonal metallurgical testǁork guided bLJ a geometallurgical studLJ and domain model to ensure representvitLJ͘

It is suggested that a progression to PFS is ǁarranted͕ and should consider the folloǁing͖͖

4.1 Mineral Resources

x Updates to Mineral Resources based on ongoing infll and deͲrisking drilling ǁith improved understanding of domains via geological and geometallurgical investgatons͘

4.2 Geotechnical Aspects

x Outcrop mapping
x Targeted orientated geotechnical drilling using tripleͲtube methods to improve the qualitLJ sample collecton
x Improve structural logging of the core͘
x Develop a comprehensive dataset of intact rock strengths
x Complete geomechanical characterisaton of rock domains and fault njones
x Edžamine aspects of Rupice infrastructure planning re portal and RAW locatons and prodžimitLJ to major structures͘

4.3 Hydrology

Conduct additonal studies to improve the level of understanding relatng to the hLJdrologLJ and hLJdrogeologLJ at the Rupice deposit͘ This additonal informaton ǁould also increase the confdence ǁith regards to predictons for mine ǁater management at Rupice and Veovača deposits͕ specifcallLJ ǁith the intenton of securing ǁater supplLJ to the processing plant͘

4.4 Mining

x Improve mining operatng cost beneftng from detailed mining contractor quotatons͘
x Revieǁ haulͲroad routng betǁeen Rupice and Veovača and consider ropeǁaLJ tradeͲofs͘
x Revieǁ the mining plan for Rupice ǁith anLJ revised resource models͕ updated smelter TCs Θ RC͕ and commoditLJ pricing͘ Consider implicatons of penaltLJ elements and edžamine blending optons͘
x Conduct the necessarLJ engineering ǁork to determine the optmum parameters for the cemented paste fll͘
x Revieǁ infrastructure laLJout considering updated geomechanical domains and structure model͘

4.5 Processing

Areas ǁhich should be considered in a further evaluaton of the project are as folloǁs͗

x It is evident that liberaton of the valuable minerals should be the major focus for further improvements to metallurgical performance͘ Regrinding of rougher concentrates to the ultraͲfne sinje ;ϣϢ ʅm to ϣϧ ʅmͿ indicated bLJ petrographic and mineralogical edžaminatons is required to produce a separate saleable copper concentrate͘
x Further test ǁork on other unit processes ;DMS preͲconcentraton͕ gravitLJ gold recoverLJ͕ ore grinding characteristcs and ancillarLJ processesͿ maLJ be benefcial for cost beneft analLJsis͕ to improve design confdence and to optmise capital and operatng cost estmates͘
x Additonal technologies need to be investgated on technical and economic grounds to look to reduce the potental penaltLJ elements reportng to the fnal metal concentrates͘ Further consideraton needs to be given to investgate the alkaline sulphide leach process

and other potental technologies for the removal of potentallLJ deleterious elements in additon to roastng͕ such as͗

o Tooǁong ProcessΡ͖
o Sunshine Process͖ and
o EquitLJ Process
x CarrLJ out further testng to ensure a saleable barite concentrate from the Veovača material͘

4.6 Market and Economics

x The metallurgical studies ǁill need major enhancement͕ as the informaton is͕ thus far͕ limited͘ It ǁill be important to ensure that the qualitLJ͕ ǁith partcular reference to deleterious elements͕ lead͕ njinc͕ antmonLJ͕ gold͕ silver content͕ sulphur content iron and other major elements and compounds is more certain͕ partcularlLJ for the earlLJ LJears of producton͘ Improvements in qualitLJ assurance ǁill facilitate more ease to market the material and drive beter terms͘ Radiaton testng͕ though ͚seeminglLJ͛ unnecessarLJ should be made to eliminate potental surprises later͘
x In relaton to marketng it ǁill be important͕ once more data has been gathered on the qualitLJ aspect of the concentrate͕ to begin earlLJͲstage marketng ǁith smelters͘ Budgetng for the costs of enhanced marketng ǁill therefore be needed to be taken into account in anLJ further fnancial analLJsis͘
x The logistcs studies ǁill require enhancement͕ as progress is made on the PFS͘ Further detailed analLJsis and multple quotes from truckers͕ ǁarehouses and handling agents ǁill be needed to assure management that a rigorous analLJsis has been made and that the chosen method and costngs ǁill be verifable and assured͘ Signifcant changes to the cost of transportaton maLJ make a material impact on the economics of the project͘ More analLJsis of the potental for higher ocean freight rates ǁould͕ for instance͕ appear to be a prudent step͘ Potental for ecological damage to the environment ǁill be loǁered using a RotainerΠ tLJpe sLJstem͕ but if other bulk transport alternatves are considered it ǁill be important for Adriatc to be reassured that a high degree of product steǁardship ǁill be maintained͕ to avoid anLJ unnecessarLJ media or NGO issues͘ CSR ǁill need to be reassured of the efcacLJ and viabilitLJ of the logistcs setͲup for AML͘

4.7 Environmental

x Confirm permitting coverage and develop a contingency plan for rapid application for a separate Rupice exploitation permit if required.
x Undertake a land/property ownership inventory for Veovača open pit, waste dumps and processing plant sites; Rupice U/G mine site facility; and the transport corridor. Set up and publicise an appropriate acquisition procedure.
x Identify likely requisition of property required for the Project assets and infrastructure and continue discussions/negotiations for acquisition/resettlement preferences and plans.
x Clearly identify pre-existing contamination sources and ensure accurate soil quality mapping as part of the baseline studies to ensure legacy issues are not linked to the Project, and to aid clean-up and rehabilitation.
x Undertake comprehensive geotechnical and water quality assessments of the existing TSF to ensure structural stability and to better inform design and planned engineering for future tailings facility expansion as required.

x Undertake detailed geochemical testwork, ideally using samples from recent drilling programmes that are representative of ore and waste materials anticipated from the project operations. Representative sample selection, preparation, testwork and analyses can be time consuming and initial studies should be started as soon as possible. Geochemical studies should however continue and progress through levels of detail in-line with scoping, PFS and FS.
x Initiate early and inclusive stakeholder engagement to keep affected communities and the wider public aware of Project plans and intentions; to determine any concerns; and to ensure inclusion of suitable mitigations to allow Project social licence.

5 RefeƌeŶceƐ

Adriatc͕ ϤϢϣϪA͘ ϣϧ͕ϢϢϢm drill program commences at Rupice online ʹ ϢϩͬϢϧͬϤϢϣϪ͘ Available from htps͗ͬͬǁǁǁ͘invest͘com͘auͬapiͬannouncementsͬadtͬcϥcdϫfϤϫͲϪfa͘pdf ;Adriatc Metals ASX Announcements pageͿ͘
Adriatc͕ ϤϢϣϪB͘ Adriatc Metals receives approval for concession edžtension online ʹ ϢϩͬϣϣͬϤϢϣϪ͘ Available from htps͗ͬͬǁǁǁ͘invest͘com͘auͬapiͬannouncementsͬadtͬϢϣϤbϥcϢdͲcϣϦ͘pdf ;Adriatc Metals ASX Announcements pageͿ͘
Adriatc͕ ϤϢϣϫA͘ Adriatc Metals Plc ʹ Investor update online ʹ ϤϢͬϢϥͬϤϢϣϫ͘ Available from htps͗ͬͬǁǁǁ͘invest͘com͘auͬapiͬannouncementsͬadtͬϨϫacdϪϦdͲcϪϫ͘pdf ;Adriatc Metals ASX Announcements pageͿ͘
Adriatc͕ ϤϢϣϫB͘ CommoditLJ DiscoverLJ Fund Conference online ʹ ϣϤͬϢϦͬϤϢϣϫ͘ Available from htps͗ͬͬǁǁǁ͘invest͘com͘auͬapiͬannouncementsͬadtͬϫeϫϫcbfϧͲϧdd͘pdf ;Adriatc Metals ASX Announcements pageͿ͘
Adriatc͕ ϤϢϣϫC͘ High grade mineralisaton edžtends North and South at Rupice online ʹ ϢϩͬϢϧͬϤϢϣϫ͘ Available from htps͗ͬͬǁǁǁ͘invest͘com͘auͬapiͬannouncementsͬadtͬϢaϨϥϧeϣdͲϤϥϨ͘pdf ;Adriatc Metals ASX Announcements pageͿ͘
Adriatc͕ ϤϢϣϫD͘ High grade mineralisaton contnues north at Rupice online ʹ ϢϫͬϢϩͬϤϢϣϫ͘ Available from htps͗ͬͬǁǁǁ͘invest͘com͘auͬapiͬannouncementsͬadtͬϦaϪϤaϦbϨͲcϥϪ͘pdf ;Adriatc Metals ASX Announcements pageͿ͘
Adriatc͕ ϤϢϣϫE͘ Maiden Mineral Resource for Rupice and Updated Mineral Resource for Veovača online ʹ ϤϥͬϢϩͬϤϢϣϫ͘ Available from htps͗ͬͬǁǁǁ͘invest͘com͘auͬapiͬannouncementsͬadtͬϥbaϨϪϢcϫͲϩϪϩ͘pdf ;Adriatc Metals ASX Announcements pageͿ͘
CSA Global͕ ϤϢϣϫ͘ The Vares PolLJmetallic Project Scoping StudLJ͘ ;fnal drafͿ
Čičić͕ S͘ ;ϣϫϫϢͿ͕ Mineral Occurrences in the Immediate District͘ Publisher unknoǁn͘
Eastern Mining͕ ϤϢϣϪ͘ Elaborate on Reserves of Lead͕ Zinc and Barite Veovača ϤϢϣϪ͘ Eastern Mining doo ;SarajevoͿ internal report͘
Emsbo͕ Poul͕ Seal͕ R͘R͕͘ Breit͕ G͘N͕͘ Diehl͕ S͘F͕͘ and Shah͕ A͘K͘ ;ϤϢϢϫͿ SedimentarLJ Edžhalatve ;SededžͿ ZincͲLeadͲ Silver Deposit Model͘
Emsbo͕ Poul͕ Seal͕ R͘R͕͘ Breit͕ G͘N͕͘ Diehl͕ S͘F͕͘ and Shah͕ A͘K͘ ;ϤϢϣϨͿ͕ SedimentarLJ edžhalatve ;sededžͿ njincͲleadͲ silver deposit model͗ U͘S͘ Geological SurveLJ Scientfc Investgatons Report ϤϢϣϢʹϧϢϩϢʹN͕ ϧϩ p͕͘ htp͗ͬͬddž͘doi͘orgͬϣϢ͘ϥϣϥϥͬsirϤϢϣϢϧϢϩϢN͘
EnergoInvest͕ Sarajevo͕ BiH ;OAϧϨ͕ϣϫϩϫͿ͕ EdžploratorLJ Operatons at Veovača for the Period October ϣϫϩϪ to December ϣϫϩϫ͘ Internal companLJ document
Hrvatovic͕ ϤϢϢϧ͘ Geological guidebook through Bosnia and Hernjegovina͘͟ Geological SurveLJ Sarajevo Ustanička ϣϣ͕ BΘHͲϩϣϤϣϢ Ilidǎa͕ Separate Monograph of Herald Geological͕ volume Ϥϧ
Jackson A͘ ;ϤϢϣϦͿ͕ Edžploraton ϣϢϣ VMS and SEDEX͕ Economic geologist and analLJst ǁith Global Resource Investments͘
JORC͕ ϤϢϣϤ͘ Australasian Code for Reportng of Exploraton Results, Mineral Resources and Ore Reserves (The JORC Code) online͘ Available from htp͗ͬͬǁǁǁ͘jorc͘org ;The Joint Ore Reserves Commitee of The Australasian Insttute of Mining and MetallurgLJ͕ Australian Insttute of Geoscientsts and Minerals Council of AustraliaͿ͘
LeadͲZinc Ores of BorovicaͲVareš͕ ϣϫϨϪ͘ Internal Memorandum for Mine and Steelǁorks͕ Vareš͕ BiH ;OAϤϧ Geographic Poston͕ Deposits͕ Communicatons͕ Mining InvestgatonsͿ͘
Mineral Raǁ Material Resources in the Triassic Structure of BorovicaͲVarešͲDranjevici͕ ϣϫϫϢ͘ EnergoInvest͕ Sarajevo͕ BiH ;OAϥϤ͕ ϣϫϫϢͿ͘

Overvieǁ of Generated Producton for the Period ϣϫϪϥ to ϣϫϪϨ͕ ϣϫϪϨ͘ OAͺϨϥ Report͘ Internal companLJ report

Pertel͕ D͕͘ and Annet͕ R͘ ϫ JanuarLJ ϤϢϣϪ͘ ͞Mineral Resource Estmate͗ Veovača Deposit͕ Bosnia and Hernjegovina͕ CSA Report NǑ RϣϢϩ͘ϤϢϣϩ͕ ϧ FebruarLJ ϤϢϣϪ͘ Unpublished Adriatc Metals Limited internal report
Pertel͕ D͘ ϤϢϣϫA͘ CSA Global Report No͘ RϥϤϢ͘ϤϢϣϫ ʹ Mineral Resource Estmate Update Veovača PolLJmetallic Deposit͘
Pertel͕ D͘ ϤϢϣϫB͘ CSA Global Report No͘ RϥϤϨ͘ϤϢϣϫ ʹ Mineral Resource Estmate Rupice PolLJmetallic Deposit͘
Peter Harben Inc͘ ;ϤϢϣϩͿ Market Potental for Barite from Vareš polLJmetallic project͕ Bosnia͘ ϥϩ pp͘
Pirajno͕ A͕͘ Chen͕ Y͕͘ Li͕ N͕͘ Chao͕ L͕͘ Zhou͕ L͘ ϤϢϢϫ͘ Geological setng of Besshi stLJle BesshiͲtLJpe mineral sLJstems in the Palaeoproteronjoic BrLJah RifͲBasin͕ Capricorn Orogen͕ Western Australia͗ Implicatons for tectonic setng and geodLJnamic evoluton
Pirajno͕ F͕͘ Chen͕ Y͕͘ Li͕ N͕͘ Li͕ C͕͘ Zhou͕ L͘ ϤϢϣϨ͘ ΖBesshiͲtLJpe mineral sLJstems in the Palaeoproteronjoic BrLJah RifͲ Basin͕ Capricorn Orogen͕ Western Australia͗ Implicatons for tectonic setng and geodLJnamic evolutonΖ͕ Geoscience Fronters͕ ϩ͕ pp͘ ϥϦϧͲϥϧϩ͘
Report on Edžecuted Geological Mining EdžploratorLJ Operatons of LeadͲZinc at the LocalitLJ Droskovac and Mining EdžploratorLJ Operatons at the LocalitLJ Veovača for the Period of the Term of ϣ JanuarLJ ϣϫϨϫ to ϥϢ June ϣϫϨϫ͘ Mine and Steelǁorks͕ Vareš͕ BiH ;OAϥϪ͕ ϣϫϨϫͿ͘
Report on Edžecuted Geological Mining EdžploratorLJ Operatons of LeadͲZinc at the LocalitLJ Droskovac and Mining EdžploratorLJ Operatons at the LocalitLJ Veovača for the Period of the Term Ϣf ϣ JanuarLJ ϣϫϨϫ to ϥϢ June ϣϫϨϫ͘ Mine and Steelǁorks͕ Vareš͕ BiH ;OAϥϪ͕ ϣϫϨϫͿ͘
Technical Note on Data Capture for Balamara Resources Veovača and Rupice Projects͕ ϤϢϣϤ͘ Aurum Edžploraton Services͘
VALMIN͕ ϤϢϣϧ͘ Australasian Code for Public Reportng of Technical Assessments and Valuatons of Mineral Assets ;The VALMIN CodeͿ online͘ Available from htp͗ͬͬǁǁǁ͘valmin͘org ;The VALMIN Commitee of the Australasian Insttute of Mining and MetallurgLJ and Australian Insttute of GeoscientstsͿ͘

6 GůŽƐƐaƌLJ

Beloǁ are brief descriptons of some terms used in this report͘ For further informaton or for terms that are not described here͕ please refer to internet sources such as Wikipedia ;htp͗ͬͬǁikipedia͘orgͿ͘

Alpine orogeny	Period of mountain building that affected the ancient Tethyan ocean. It began in the Triassic continuing through to the Late Oligocene and Miocene.
Assay	A measured quantity of material within a sample.
Barite	A mineral predominately consisting of barium and composition BaSO4.
Basement	Highly folded, metamorphic or plutonic rocks, often unconformably overlain by relatively undeformed sedimentary beds (or cover).
Breccia	Coarse, clastic, sedimentary rock, the constituent clasts of which are angular. The term may also be applied to angular volcanic rocks from a volcanic vent.
Carboniferous	Penultimate period of the Paleozoic era, preceded by the Devonian and followed by the Permian. It began about 359.2 Ma ago and ended about 299 Ma ago.
Collar	Geographical co-ordinates of a drillhole or shaft starting point.
Concession	System of granted tenure which could refer to either exploration or exploitation.
Costeans	Trench completed for geological mapping and sampling.
Cretaceous	Third of the three periods included in the Mesozoic Era. It began 146 Ma ago and ended 65.5 Ma ago.
Copper	Copper is a chemical element with symbol Cu and atomic number 29. It is a soft, malleable, and ductile metal with very high thermal and electrical conductivity.
Cut-off grade	Threshold above which material is selectively mined or queried.
Dinarides	Dinarides occur in two separate regions: in the Herzegovina area (Outer Dinarides) to the south and in Bosnia to the north. The Inner Dinarides (Bosnia) are composed of deeply weathered clastic, metasedimentary. metamorphic and igneous rocks. They included mostly Palaeozoic-Triassic rocks and the Dinaride Ophiolite Zone.
Faults	Approximately plane surface of fracture in a rock body, caused by brittle failure, and along which observable relative displacement has occurred between adjacent blocks.
Flysch	Sedimentary facies term used to describe a thick succession of redeposited, deep-sea, clastic material.
Gold	Native gold is an element and a mineral. Gold occurs in hydrothermal veins deposited by ascending solutions, as disseminated particles through some sulphide deposits, and in placer deposits.
Lead	Lead is a chemical element with symbol Pb, atomic number 82. It is a heavy metal that is denser than most common materials. Lead is soft and malleable and has a relatively low melting point.
Mesozoic	Geologic age that began with the Triassic approximately 251 Ma ago and ended around 65.5 Ma at the start of the Cenozoic. The Mesozoic comprises the Triassic, Jurassic, and Cretaceous periods.
Nappe sliding (slide, gravity gliding)	The movement of rock bodies in response to gravitational instability along particular planes in unstable regions which leads to the formation of thrust.
Ophiolite melange	A linear belt of highly deformed rocks, including tectonic mélanges, lenses of ophiolites, deep-sea sediments which is interpreted as the boundary between two collided continents or island arcs.
Palaeozoic	First (542ʹ251 Ma) of the three eras of the Phanerozoic.
Quaternary	Either a subͲera of the Cenonjoic Era of geologic time that began ϭ͘ϴϬϲ Ma ago and continues to the present day.
Schist	Regional metamorphic rock of pelitic composition which displays a schistosity. Schists are coarser grained than phyllites, having a grain size greater than 1 mm.

Sedimentary Exhalative	(SedEx) Exhalative processes associated with the upwelling of mineralising fluids into submarine sedimentary environments, whereby mineral deposits, usually of base-metal sulphides, are formed.
Siliciclastic sediments	Lithified, conglomeratic, siliciclastic rock which is unsorted, with sand and/or coarser particles dispersed through a mud matrix.
Silurian	Third (443.7ʹ416 Ma) of six periods of the Palaeozoic Era.
Triassic	Earliest (251ʹ199.6 Ma) of the three periods of the Mesozoic Era.
VMS	Volcanogenic massive sulphide deposits formed in close temporal association with submarine volcanism by hydrothermal circulation and exhalation of sulphides which are independent of sedimentary processes. When deposited into sedimentary rocks may be termed Besshi Style VMS.
Zinc	Zinc is a chemical element with symbol Zn and atomic number 30. It is the first element in group 12 of the periodic table.

7 AbbƌeǀŝaƚŝŽŶƐ aŶd UŶŝƚƐ Žf MeaƐƵƌeŵeŶƚ

%	percent
°C	degrees Celsius
A\$	Australian dollars
Adriatic	Adriatic Metals Plc
AIG	Australian Institute of Geoscientists
ALS	ALS Laboratory Services
API	American Petroleum Institute
ASIC	Australian Securities and Investments Commission
ASX	Australian Securities Exchange
Au	gold
AusIMM	Australasian Institute of Mining and Metallurgy
BiH	Bosnia and Herzegovina
CPR	Competent Person͛s Report
CSA Global	CSA Global (UK) Ltd
Eastern Mining	Eastern Mining doo
FT	flotation test
g	gram(s)
g/t	grams per tonne
ha	hectare(s)
IP	induced polarisation
IPO	Initial Public Offering
JORC Code	Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves
kg	kilogram(s)
km	kilometre(s)
km2	square kilometre(s)
koz	kilo-ounces
kt	kilo-tonnes
ktpa	kilo-tonnes per annum
LCT	locked cycle test
LiDAR	light detection and ranging (survey)
LSE	London Stock Exchange
m	metre(s)
M	million(s)
mm	millimetres
MRE	Mineral Resource estimate
Mt	million tonnes
Mt/a	million tonnes per annum
NPV	net present value

oz	ounce(s)
PDP3D	pole-dipole three-dimensional
QAQC	quality assurance and quality control
SedEx	sedimentary exhalative
SHMS	shale-hosted massive sulphide
tpd	tonnes per day
VMS	volcanogenic massive sulphide
WAI	Wardell Armstrong International
ZnEq	zinc equivalent

APPENDIX

FINANCIAL STATEMENTS

Part 1 of this Appendix contains the Company's consolidated audited financial statements for the financial year ended 30 June 2019.

Part 2 of this Appendix contains the Company's consolidated audited financial statements for the financial year ended 30 June 2018.

Part 3 of this Appendix contains the Company's consolidated audited financial statements for the period from 3 February 2017 to 30 June 2017.

PART 1

ADRIATIC METALS PLC CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

COMPANY DIRECTORY

Adriatic Metals plc and Controlled Entities Company Registration No. 10599833 ARBN 624 103 162

DIRECTORS

Peter Bilbe (Non-Executive Chairman) Paul Cronin (Managing Director & CEO) Julian Barnes (Non-Executive Director) Eric de Mori (Non-Executive Director) Milos Bosnjakovic (Non-Executive Director) Michael Rawlinson (Non-Executive Director)

COMPANY SECRETARY

Sean Duffy (Joint) Gabriel Chiappini (Joint)

UNITED KINGDOM REGISTERED OFFICE

Stamford House, Regent Street Cheltenham, Gloucestershire GL50 1HN England

AUSTRALIAN OFFICE

Ground Floor, 24 Outram Street West Perth WA 6005 Australia

AUDITOR

Lubbock Fine Chartered Accountants

65 St Paul's Churchyard London EC4M 8AB England

STOCK EXCHANGE LISTING

Australian Securities Exchange (Code: ADT)

SHARE REGISTRY

Computershare Investor Services Pty Limited

Level 11, 172 St Georges Terrace Perth WA 6000 Australia

WEBSITE

www.adriaticmetals.com

02 STRATEGIC REPORT FY19 HIGHLIGHTS ACTIVITIES AND DIFFERENTIATION CEO REVIEW

PRINCIPAL RISKS AND UNCERTAINTIES

11 REPORT OF THE DIRECTORS DIRECTORS AND KEY MANAGEMENT DIRECTORS' REPORT

CORPORATE GOVERNANCE REPORT DIRECTORS' RESPONSIBILITIES STATEMENT

18 FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF

FINANCIAL POSITION COMPANY STATEMENT OF

FINANCIAL POSITION

CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT OF CASH FLOWS

COMPANY STATEMENT OF

CASH FLOWS

NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS

48 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ADRIATIC METALS PLC

52 ASX ADDITIONAL INFORMATION

216

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

STRATEGIC REPORT HIGHLIGHTS FY19

Following Adriatic's successful Initial Public Offering in May 2018, Adriatic finished the calendar year as the best ASX IPO of 2018, with the share price increasing from the A\$0.20 issue price at IPO to close the year at A\$0.575.

In November 2018, Adriatic closed a successful capital raising of A\$10.8 million at an issue price of A\$0.55, welcoming new institutional shareholders onto our register.

We concluded a 13,000m drill programme in December 2018 on Adriatic's 100% owned Vareš project in Bosnia and Herzegovina, significantly extending the known mineralisation of the Rupice prospect, with major drill hole intercepts being announced including;

• Hole BR-13-18 intercepted 24m @ 3.7 g/t Au, 167 g/t Ag, 14.8% Zn, 7.7% Pb, 0.7% Cu and 53% BaSO4 from 220m
• Hole BR-22-18 intercepted 42m @ 5.7 g/t Au, 245 g/t Ag, 14.1% Zn, 8.4% Pb, 1.4% Cu and 34% BaSO4 from 222m
• Hole BR-24-18 intercepted 34m @ 3.0 g/t Au, 455 g/t Ag, 13.3% Zn, 6.8% Pb, 0.5% Cu and 60% BaSO4 from 146m
• Hole BR-25-18 intercepted 46m @ 4.1 g/t Au, 309 g/t Ag, 12.7% Zn, 9.6% Pb, 1.0% Cu and 40% BaSO4 from 218m
• Hole BR-36-18 intercepted 72m @ 2.5 g/t Au, 211 g/t Ag, 18.3% Zn, 10.0% Pb, 2.5% Cu and 25% BaSO4 from 206m.

Completion of over 20,000m of drilling on the project has led to the completion of an updated JORC (2012) mineral resource estimate for VeovaĀa and a maiden JORC (2012) mineral resource estimate for Rupice, as follows;

Commenced an extensive Gradient Array Pole Di-Pole Induced Polarisation survey over the entire Rupice prospect seeking to distinguish and identify further high grade target areas for follow up drilling.

Expansion of our senior management team to include Graham Hill as Chief Operating Officer, and expanded our board to include Michael Rawlinson as Non-Executive Director.

Achieved significant regulatory milestones including approvals of an expanded concession area covering key targets at both Rupice and VeovaĀa, and the subsequent issue of an Urban Planning Permit and Exploration Permit over the increased area. Additionally, the 'Reserves' Elaborat for the Rupice deposit was issued by The Federal Ministry for Mines, Energy and Infrastructure, representing a step toward the issue of an Exploitation Permit for the combined Vareš Concession.

ACTIVITIES & DIFFERENTIATION

Adriatic is a base and precious metals explorer and developer via its 100% interest in the Vareš Project in the Federation of Bosnia & Herzegovina (Bosnia). The Project comprises a brown-field open cut zinc/lead/barite and silver mine at VeovaĀa, and at Rupice, an advanced exploration deposit which exhibits exceptionally thick mineralisation with high grades of precious and base metals.

Focussed on expediting exploration and development activities and the establishment of strong in-country relationships, Adriatic has recruited a world class multi-disciplinary team to rapidly advance the Company's assets and to capitalise on its first mover advantage in Bosnia through the assessment of additional potential strategic land holdings.

Adriatic's exploration programme is continuing, following exceptional intercepts at Rupice and declaration of a maiden resource at Rupice, and an updated resource at Veovaˈa. The sites are less than 12km apart and are proximal to or in the near vicinity of existing infrastructure in terms of power, water, rail, sealed roads, access to a skilled workforce, accommodation facilities, service providers and an international airport.

Adriatic seeks to differentiate through its competitive advantages of:

establishing an early mover advantage in Bosnia as the Company is the only publicly listed mining concession holder in a country with a rich mining history, a pro-mining outlook, highly prospective geology and a stable fiscal and political system.
strategically increasing its concession footprint, based on a database of historically discovered mineralisation near to its current projects and by reviewing other historic and new opportunities within Bosnia.
a capable and multi-disciplinary management team which includes well regarded and experienced mining professionals with a track record of project delivery and operating experience.
identifying through exploration drilling some of the highest grade polymetallic results globally; and
being well funded for its current activities including the 20,000m diamond core drill programme and numerous technical evaluation programs, to culminate in a Scoping Study during the fourth quarter of 2019.

STRATEGIC REPORT CHIEF EXECUTIVE OFFICER'S REVIEW

This year has been exceptionally rewarding for Adriatic and its shareholders. Our 2018 and 2019 drilling programme has seen a significant number of extremely high-grade intercepts at the Rupice prospect, and culminated in a maiden Mineral Resource Estimate exceeding most expectations. Your board and management team are focused on ensuring we continue to develop our mineral assets in Bosnia with a view to increasing both the tonnage and metal values of the resources and rapidly progressing scoping and feasibility studies together with progressing the various approvals processes. The Company's key strategic highlights as follows.

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

FINANCIAL

EXPLORATION PROGRAMME & ASSETS

(i) Rupice Prospect -

The Rupice Prospect was an advanced exploration project which when acquired, exhibited exceptionally high grades of base and precious metals and is located approximately 12 km North West of the Veovaˈa Deposit. The company has released dozens of drill holes which demonstrate the lateral extent, and continuous nature of high-grade mineralisation at Rupice, which has enabled it to define a maiden Mineral resource estimate outlined in table 1.

FIGURE 1 – PLAN MAP OF RUPICE INTERCEPTS

TABLE 1 – RUPICE MAIDEN MINERAL RESOURCE ESTIMATE (JORC 2012) – JULY 2019

JORC CLASSIFICATION	TONNES	GRADES						CONTAINED METAL
	MT	Au g/t	Ag g/t	Zn %	Pb %	BaSO4 %	Cu %	Au oz	Ag oz	Zn Kt	Pb Kt	BaSO4 Kt	Cu Kt
Indicated	7.5	2.0	207	5.7	3.7	34	0.6	470	50	430	278	2,590	46
Inferred	1.9	0.9	86	2.4	1.6	18	0.3	60	5	50	30	330	6
Total	9.4	1.8	183	5.1	3.3	31	0.6	530	55	480	310	2,920	52

RUPICE MINERAL RESOURCES, JULY 2019

Notes:

1. Mineral Resources are based on JORC Code definitions.
2. A cut-off grade of 0.6% zinc equivalent has been applied.
3. ZnEq Zinc equivalent was calculated using conversion factors of 0.80 for lead, 0.08 for BaSO4, 1.80 for Au, 0.019 for Ag and 2.40 for Cu, and recoveries of 90% for all elements. Metal prices used were US\$2,500/t for Zn, US\$2,000/t for Pb, \$200/t for BaSO4, \$1,400/oz for Au, \$15/oz for Ag and \$6,000 for Cu.
4. The applied formula was: ZnEq = Zn% * 90% + 0.8 * Pb% * 90% + 0.08 * BaSO4% * 90% + 1.8 * Au(g/t) * 90% + 0.019 * Ag(g/t)* 90% + Cu% * 2.4 * 90%.
5. 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.
6. Metallurgical recoveries of 90% have been applied in the metal equivalent formula based on recent test work results.
7. A bulk density was calculated for each model cell using regression formula BD = 2.88143 + BaSO4 * 0.01555 + Pb * 0.02856 + Zn * 0.02012 + Cu * 0.07874 for the barite highgrade domain and BD = 2.76782 + BaSO4 * 0.01779 + Pb * 0.03705 + Zn * 0.02167 + Cu * 0.07119 for the barite low-grade domain (the barite domains were interpreted using 30% BaSO4).
8. Rows and columns may not add up exactly due to rounding.

STRATEGIC REPORT CHIEF EXECUTIVE OFFICER'S REVIEW

"The company has released dozens of drill holes which demonstrate the lateral extent, and continuous nature of high-grade mineralisation at Rupice."

FIGURE 2 – LONG SECTION OF RUPICE INTERCEPTS

	TABLE 2 – SIGNIFICANT INTERCEPTS TO DATE AT RUPICE

HOLE	FROM	TO	INTERVAL	Au	Ag	Zn	Cu	Pb	BaSO4
#	m	m	m	g/t	g/t	%	%	%	%
BR-01-17	178	242	64	2.3	396	8.4	0.9	5.1	44
BR-02-18	214	278	64	4.6	537	10.8	0.9	7.7	46
BR-03-18	196	232	36	4.4	463	5.7	0.5	4.3	55
BR-05-18	210	276	66	2.1	158	12.8	2.3	8.6	37
BR-10-18	236	264	28	3.4	271	10.8	0.5	5.9	61
BR-13-18	220	244	24	3.7	167	14.8	0.7	7.7	53
BR-22-18	222	264	42	5.7	245	14.1	1.4	8.4	34
BR-24-18	146	180	34	3.0	455	13.3	0.5	6.8	60
BR-25-18	218	264	46	4.1	309	12.7	1.0	9.6	40
BR-32-18	228	248	20	4.1	479	8.2	0.5	5.6	60
BR-36-18	206	278	72	2.5	211	18.3	2.5	10.7	25
BR-01-19	240	256	16	1.59	241	13.7	1.0	10	52
BR-04-19	246	276	30	4.6	265	9.7	0.4	5.2	43

FINANCIAL

EXPLORATION PROGRAMME & ASSETS – CONTINUED

(ii) VeovaĀa Deposit - is an historic open cut zinc, lead, barite and silver mine which operated between 1983 and 1987 and ultimately shut down prior to emerging hostilities in the region. Following a 1,381 metre diamond drilling programme at Veovaˈa in 2017 to confirm historical results, the company completed a further 2,341m program in 2018 and 2019 to define an updated mineral resources estimate outlined in table 3.

This represents a significant increase in mineral resources at Veovaˈa and provides a solid base for future scoping and mine studies, currently being prepared by the Company.

(iii) Approval received for Expanded Concession area –

in August 2018, the Vareš Municipal Council approved Adriatic's application for a major land expansion to its existing Concession Agreement at its 100% owned Vareš Projects that comprise Rupice and Veovaˈa. Under the terms of the Concession Agreement, the Company has three Fields, being Veovaˈa I & II and Rupice-Jurasavec Brestic, as outlined in red in Figure 3 (right). The extension areas include land where the Company has identified strong exploration potential and where additional drilling has identified extensions to the known mineralisation or where historical or recent data indicates the potential for new discoveries. The expanded Concession area includes land immediately to the north of hole BR-5-18, which intercepted 66m of high-grade mineralisation, and subsequent drilling has identified extensions to the Rupice mineralisation into the Expanded Concession as described above. In January 2019 the Federal Ministry of Mines, Energy & Infrastructure, approved the company's request for a new Exploration Permit over the Expanded Concession Area.

TABLE 3 – UPDATED MINERAL RESOURCE ESTIMATE VEOVAˇA (JORC 2012)

JORC CLASSIFICATION	TONNES	Au	Ag	Zn	Pb	BaSO4
	MT	g/t	g/t	%	%	%
Indicated	5.3	0.08	50	1.6	1.0	16
Inferred	2.1	0.06	17	1.1	0.5	6
Total	7.4	0.08	41	1.4	0.9	13

FIGURE 3 – MAP SHOWING ADRIATIC'S EXISTING (RED) AND NEW CONCESSION AREAS (BLUE)

STRATEGIC REPORT CHIEF EXECUTIVE OFFICER'S REVIEW

EXPLORATION PROGRAMME & ASSETS – CONTINUED

(iv) Permitting Milestone –

Adriatic recently confirmed that the Federal Ministry of Mining within the Federation of Bosnia & Herzegovina has provided written acknowledgment of the completion of the Reserves Elaborat for the Rupice deposit complimenting the previous approval received for the Veovaˈa Deposit, and representing a major milestone toward the issue of the Exploitation Permit. Under the terms of the Concession Agreement, the Company is required to complete the conditions for an Exploitation Permit by May 2020, which will then provide the company with licence tenure until 2038 and can be further extended at the election of the Company for a period of 10 years. Following the issue of the Exploitation Permit, Adriatic will prepare and submit a Main Mining Plan (Feasibility Study) and apply for a Water Management Permit, which once accepted, will result in an Operations Permit being granted.

(v) Scoping and Economic

Studies – Adriatic is in the process of preparing a JORC compliant Scoping Study on the Vareš project. Significant Metallurgical, Geo-Technical, Hydro-Geological and Concentrate marketing work has been conducted to support the Study, and the results are expected to be released in the fourth quarter of 2019.

RESULT FOR FY19

As the company is in pre-production there is no forecast earnings nor expectation for profits and the Company will continue to invest in its exploration assets and incur losses in the near to medium term. The Loss after tax for the period was £2,417,653; FY18 (£1,928,697) and comprised one off costs for the 2019 year including share option costs for £456,617 as per note 17 in the Group Consolidated Financial Statements to 30 June 2019.

CAPITAL RAISING

During the year, Adriatic successfully completed a A\$10.8 million capital raising from select institutions, and Sandfire Resources NL who exercised their Anti-Dilution Right as described in the Strategic Collaboration Agreement between Adriatic and Sandfire Resources.

Paul Cronin MANAGING DIRECTOR & CEO

FINANCIAL

TENEMENT PORTFOLIO TABLE

CONCESSION NUMBER	LICENCE AREAS (HA)				RUPICE EXPLORATION RIGHTS EXPIRY	VEOVAÿA EXPLOITATION RIGHTS
	VEOVAÿA I	VEOVAÿA II	RUPICE	DURATION (YEARS)	EXPIRY	DURATION (YEARS)	EXPIRY
04-18-21389-1/13	107.69	222.87	535.16	7.5	25 May 2020	25	12 March 2038(i)

(i) Tenure exploitation rights approved by Federal Ministry of Mining within the Federation of Bosnia & Herzegovina, subject to completing the conditions for an Exploitation Permit by May 2020, which will then provide the company with license tenure until 2038 and can be further extended at the election of the Company for a period of 10 years.

COMPETENT PERSONS STATEMENT

The information in this report which relates to Exploration Results is based on information compiled by Mr Robert Annett, who is a member of the Australian Institute of Geoscientists (AIG). Mr Annett is a consultant to Adriatic Metals PLC and has sufficient experience relevant to the style of mineralisation 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 Annett consents to the inclusion in this report of the matters based on that information in the form and context in which it appears.

KEY PERFORMANCE INDICATORS

The near term and primary performance indicators for Adriatic are related to its exploration activities and include:

(i) Efficiently managing the exploration programme and increasing the current mineralised footprint and Increasing Adriatic's current JORC resource base
(ii) Advancing the permitting status on a pathway towards exploitation
(iii) Continued exploration on nearby prospects to define further drill targets with the intent of making additional mineral discoveries
(iv) Progressing the technical study elements for the deposits, culminating in publishing a scoping study and making progress towards future Pre-Feasibility and Feasibility Studies.

FUTURE PROSPECTS

Adriatic are concluding a Scoping Study based on the recently declared Mineral Resource estimates and the metallurgical testwork programme initiated in Q4 2018. Successful drilling at Rupice has led to continuous growth of that resource and drilling will continue there to further expand the resources, improve the geological understanding of the deposits, and to collect further metallurgical samples and carry out geotechnical and hydrogeotechnical drilling work to support ongoing technical studies. Adriatic will continue to move along the permitting pathway and are aiming to obtain the Veovaˈa Exploitation Permit in Q4 2019.

Metallurgical testwork aimed at optimising currently developed flowsheets and carrying out necessary variability and other work will continue and will support ongoing technical studies leading to development of a Feasibility Study planned for 2020. Further permitting work will progress for Rupice and in parallel with Feasibility Study and other work with the future goal being to initiate project implementation leading ultimately to mining and processing operations.

Simultaneously Adriatic will continue with exploration activities on new targets generated by recent geophysical investigations as well as historical areas of mining activity. Expansion of the concession areas to allow investigation of the corridor between Veovaˈa and Rupice is being investigated and ongoing soil sampling of all areas within existing concessions will continue to advance the potential of further areas of known mineralisation.

STRATEGIC REPORT

PRINCIPAL RISKS AND UNCERTAINTIES

The management of the business and the execution of the Group's strategy expose it to a number of risks. These risks are reviewed by the Board and Management with appropriate processes put in place to monitor and mitigate the risks.

Key business risks affecting the Group are set out below.

• EXPLORATION & DEVELOPMENT

Mineral exploration and development is a speculative and high-risk undertaking that may be impeded by circumstances and factors beyond the control of the Company. There can be no assurance that exploration on the Projects, or any other exploration properties that may be acquired in the future, will result in the discovery of an economic mineral resource. Even if an apparently viable mineral resource is identified, there is no guarantee that it can be economically exploited.

• FUTURE FUNDING NEEDS

The funds raised to date are considered sufficient to meet the immediate objectives of the Company. Further funding may be required by the Company in the event costs exceed estimates or revenues do not meet estimates, to support its ongoing operations and implement its strategies.

• BOSNIAN IN-COUNTRY RISKS

The Projects are located in Bosnia and Herzegovina. The Company will be subject to the risks associated with operating in that country, including various levels of political, sovereign, economic and other risks and uncertainties.

Any material adverse changes in government policies, legislation, political, legal and social environments in Bosnia and Herzegovina and or any other country that the Company has economic interests in that affect mineral exploration activities, may affect the viability and profitability of the Company.

• OPERATIONAL RISKS

The operations of the Company may be affected by various factors, including:

(i) failure to locate or identify mineral deposits;
(ii) failure to retain and secure key management;
(iii) failure to achieve predicted grades in exploration and mining; and
(iv) operational and technical difficulties encountered in metallurgy, processing and mining.

In the event that any of these potential risks eventuate, the Company's operational and financial performance may be adversely affected.

• ENVIRONMENTAL RISK

• COMMODITY & CURRENCY EXCHANGE PRICES

The value of the Company's assets and potential earnings may be affected by fluctuations in commodity prices and exchange rates, such as the USD and GBP denominated zinc price and the GBP / USD exchange rate.

Peter Bilbe CHAIRMAN

REPORT OF THE DIRECTORS

DIRECTORS AND KEY MANAGEMENT

PETER BILBE, B. ENG (MINING) (HONS)

Non-Executive Chairman

Mr Bilbe is a mining engineer with 40 years Australian and international mining experience in gold, base metals and iron ore at the operational, CEO and board levels. Mr Bilbe is currently Non-Executive Chairman of Independence Group NL and since 2009 has overseen the growth of Independence from operating a single mine to a AUD\$3 billion diversified gold and base metals mining and exploration company. Mr Bilbe is also Non-Executive Chairman of Horizon Minerals Limited, an emerging gold developer.

Peter Bilbe was appointed as the Non-Executive Chairman of the Company on 16 February 2018 and serves as Chair of the Remuneration Committee.

JULIAN BARNES, BSC (HONS)

Non-Executive Director

Dr Barnes is a geologist with extensive experience in major exploration and development projects. Previously, he was Executive Vice President Dundee Precious Metals where he lead exploration, project acquisition, and due diligence with a strong focus on Balkan mining & development.

He founded and led Resource Service Group for nearly two decades, which ultimately became RSG Global and has since been sold to Coffey Mining. He is also a Non-Executive Director of Thor Explorations Ltd, a company listed on the Toronto Stock Exchange (Venture Exchange) and Zinc Of Ireland, a company listed on the Australia Stock Exchange.

Julian Barnes was appointed as a Director of the Company on 16 February 2018 and serves as a member of the Audit Committee.

PAUL CRONIN, B. COM & MBA

Managing Director & CEO

Mr Cronin is a unique resource finance specialist, with significant experience in equity, debt and mergers and acquisitions within the sector. As CEO of ASX Listed Anatolia Energy, Paul oversaw two successful and oversubscribed capital raisings, steering the stock to be the best performing uranium stock globally during his time with the company, and prior to its sale at a significant premium to its market capitalisation. Prior to Anatolia, Paul was Vice President at the highly-regarded resource fund, RMB Resources where he originated, structured and managed several debt and equity investments on behalf of the fund. Paul is currently CEO of ASX listed Black Dragon Gold, and Non-Executive Director of Global Atomic Corporation.

Paul Cronin was appointed as a Director of the Company on 3 February 2017 and on 18 September 2019, Paul Cronin was appointed as Managing Director and CEO of Adriatic.

ERIC DE MORI,

B. MARKETING & DIP. FINANCIAL SERVICES

Non-Executive Director

Mr de Mori has over 15 years' experience in ASX small capital investment and corporate finance, specializing in natural resources, biotechnology and technology. Eric has a broad skill set across ASX listed company corporate finance and has held several director and major shareholder positions with ASX listed technology and resource companies. Eric is the head of natural resources for institutional stockbroker Ashanti Capital and a Non-Executive Director of Invictus Energy Ltd.

Mr de Mori was appointed to the Board on 10 August 2017 and serves as a member of the Audit Committee.

MILOS BOSNJAKOVIC

Non-Executive Director

Mr Bosnjakovic was appointed to the Board of the Company on 16 July 2018 and serves as a member of the Remuneration Committee.

MICHAEL RAWLINSON

Non-Executive Director

Mr Rawlinson was previously served as a Non-Executive Director of Talvivaara Mining Company Plc between April 2012 and November 2013. Mr Rawlinson is currently Senior Independent Non-Executive Director of Hochschild Mining plc and Non-Executive Director at Capital Drilling.

Mr Rawlinson was appointed to the Board of the Company on 4 March 2019 and serves as a member of the Remuneration Committee and Chair of the Audit Committee.

REPORT OF THE DIRECTORS

SENIOR MANAGEMENT

GRAHAM HILL

Chief Operating Officer

Mr Hill is an experienced mining engineer and was previously CEO of Silver Bear resources where he took the company from exploration through to production, overseeing the development of a remote underground mining operation in Siberia. Mr Hill has successfully overseen the evaluation and development phases for multiple mining operations in Africa and central Asia during his 35 year career, which commenced in Anglo American, and where he later was accepted into the company's renowned management development program.

ROBERT ANNETT,

BSC (HONS), ARSM, AIMM, AIG & MIQ

Head of Exploration

Mr Annett is an experienced geologist with over 40 years' experience across all aspects of exploration, evaluation and mining of precious, base & industrial metals. He is a Competent Person under the JORC Code and is responsible for the day to day management of all exploration works.

Robert Annett was appointed as Head of Exploration on 1 April 2017.

SEAN DUFFY,

MBA, GRAD CERT. IN BUSINESS MARKETING

Chief Financial Officer & Company Secretary (Joint)

Mr Duffy brings with him more than 20 years of international finance experience in the mining industry, including key positions with BHP Billiton and other AIM/ASX listed companies. Sean Duffy was appointed as Chief Financial Officer and Company Secretary on 17 November 2017.

GABRIEL CHIAPPINI

Company Secretary (Joint)

Mr. Chiappini is an experienced ASX director and has been active in the capital markets for 17 years. He has assisted in raising \$AUD450m and has provided investment and divestment guidance to a number of companies and has been involved with 10 ASX IPO's in the last 12 years. He is a member of the AICD and CA ANZ. Mr. Chiappini is a director of Black Rock Mining and Eneabba Gas Limited.

ADNAN TELETOVIC, B. ENG (HONS.)

General Manager, Eastern Mining d.o.o.

Dr. Teletovic is a dual Bosnian-Australian national with extensive experience in the mining industry having previously held senior positions at Kalgoorlie Consolidated Gold Mines, BHP Billiton and the Prevent Group, one of Bosnia's largest diversified industrial corporations. Adnan has a Bachelor of Engineering (Hons.) from Victoria University of Technology, a PhD from Deakin University and has significant experience in not only general management but also a track record in managing large capital mining projects in the Australian mining industry.

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

DIRECTORS REPORT

The Directors present their annual report with the statutory financial statements of the Group for the year ended 30 June 2019.

This report should be read in conjunction with the Strategic Report on pages 2 to 10.

1. BOARD OF DIRECTORS AND OFFICERS OF THE COMPANY

The names of the Directors who held office during the financial year and to the date of this report were:

DIRECTOR NAME	POSITION	APPOINTED

Peter Bilbe	Non-Executive Chairman	16 February 2018
Paul Cronin	Managing Director & CEO	3 February 2017
Julian Barnes	Non-Executive Director	16 February 2018
Eric de Mori	Non-Executive Director	10 August 2017
Milos Bosnjakovic	Non-Executive Director	16 July 2018
Michael Rawlinson	Non-Executive Director	4 March 2019

The company secretary is Sean Duffy and Gabriel Chiappini (joint).

2. RESULTS

The Group realised a loss after tax for the year of £2,417,653 (2018 loss of £1,928,697).

3. GOING CONCERN

The Group incurred a loss of £2,417,653 (30 June 2018: £1,928,697) in the period however the Group also had a net asset position at the balance sheet date.

The Company and Group meet their day to day working capital requirements by support of investors. The directors believe it is appropriate to prepare the financial statements on a going concern basis which assumes that the Company and the Group will continue in operational existence for the foreseeable future on the basis of the Group's plans and the continued support of investors

If the Company and Group are unable to continue in operational existence for the foreseeable future, adjustments would have to be made to reduce the balance sheet values of the assets to their recoverable amounts, provide for further liabilities that might arise, and reclassify non-current assets and liabilities to current.

4. DIVIDEND

The Directors do not recommend the payment of a final dividend for the year ended 30 June 2019 (2018: \$nil).

5. DIRECTORS' INDEMNITY INSURANCE

The Company has arranged appropriate Directors' and Officers' insurance to indemnify the Directors against liability in respect of proceedings brought about by third parties. Such provisions remain in place at the date of this report.

6. AUDITOR

Lubbock Fine Chartered Accountants have been appointed as auditors of Adriatic Metals plc and at the Company's 2nd Annual General Meeting Lubbock Fine Chartered Accountants will be proposed for re-appointment.

7. FINANCIAL RISK MANAGEMENT OBJECTIVES

The Group's financial risk management objectives and policies and exposures to risk are outlined in Note 23 to the financial statements.

REPORT OF THE DIRECTORS

DIRECTORS REPORT (CONTINUED)

8. ROUNDING OF AMOUNTS AND PRESENTATIONAL CURRENCY

Unless otherwise expressly stated, the Group financial statements are presented in British Pounds ("£") which is the Group's presentational currency.

On behalf of the Board

Peter Bilbe CHAIRMAN

25 September 2019

CORPORATE GOVERNANCE REPORT

The Board of Directors of Adriatic is responsible for establishing the corporate governance framework of the group having regard to the ASX Corporate Governance Council published guidelines. The Board guides and monitors the business and affairs of the group on behalf of the shareholders by whom they are elected and to whom they are accountable. The Board has adopted a corporate governance framework, based upon ASX Corporate Governance Principles, which it considers to be suitable given the size, history and strategy of the Company.

The Company's Corporate Governance Statement has been approved by the Board and can be located on the Company's website at https://www.adriaticmetals.com/downloads/corp-governance-files-/corporate-governance-manual-adriaticmetals-plc-3-march-2018.pdf

REMUNERATION POLICY FOR EXECUTIVES AND MANAGEMENT

During 2018 the company established a Remuneration Committee comprising of Non Executive Directors.

The Board is responsible for determining and reviewing compensation arrangements for the Directors and senior executives reporting to the Chief Executive Officer and/or Managing Director. The broad policy is to ensure that remuneration properly reflects the individuals' duties and responsibilities and that remuneration is fair and competitive in attracting, retaining and motivating quality people with appropriate skills and experience. At the time of determining remuneration, consideration is given by the Board to the Group's financial circumstances and performance.

As part of its suite of corporate governance policies and procedures, the Board has adopted a formal Remuneration and Nomination Committee Charter and Remuneration Policy.

The Committee and Board have established the following parameters as part of the remuneration framework for executives:

The Directors have responsibility for the appointment and performance assessment of the Chief Executive Officer and Chief Financial Officer, Company Secretary, other senior executives and terms and conditions including remuneration and approving the Company's remuneration and rewards framework. When considering the remuneration policy for the Company's Executives and Management the Board will consider performance and achievement in line with the Company's objectives and to ensure the interests of shareholders and stakeholders are enhanced. The Board will perform an annual review to ensure a strong link between performance and reward is made and will form part of the annual remuneration review.

SHARE OPTIONS

The Company has adopted a company share option plan (Plan). The Plan forms what the Board considers to be an important element of the Company's total remuneration strategy for its officers and staff.

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

THE DIRECTORS STRATEGIC

FINANCIAL STATEMENTS REPORT OF

REMUNERATION POLICY FOR NON-EXECUTIVE DIRECTORS

The Directors have responsibility to review, monitor and make recommendations to the Board regarding the orientation and education of directors which includes an annual review of the directors' compensation programme.

The Company Articles provide that each Director is entitled to such remuneration from the Company as the Directors decide, but the total amount provided to all non-executive directors must not exceed in aggregate the amount fixed by the Directors prior to the first annual general meeting. The aggregate remuneration for all non-executive directors has been set at an amount of AUD\$400,000 per annum by the Directors. The remuneration of the Non- Executive Directors must not be increased except pursuant to a resolution passed at a general meeting of the Company where notice of the proposed increase has been given to Shareholders in the notice convening the meeting.

DIRECTORS' REMUNERATION (AUDITED)

The Company paid the following remuneration to each Director:

2019	SALARY/FEE	LONG TERM BENEFIT	TOTAL
	£	£	£

Paul Cronin	30,000	-	30,000
Eric de Mori	29,854	-	29,854
Peter Bilbe	49,850	-	49,850
Julian Barnes	30,225	-	30,225
Milos Bosnjakovic	10,000	-	10,000
Michael Rawlinson	9,762	-	9,762
TOTAL	159,691	-	159,691

The annual Directors fees payable by the Company is as follows:

TOTAL	200,000
Michael Rawlinson	30,000
Milos Bosnjakovic	30,000
Julian Barnes	30,000
Peter Bilbe	50,000	(AU\$90,000) equivalent
Eric de Mori	30,000	(AU\$54,000) equivalent
Paul Cronin	30,000

	£
	SALARY/FEE

REPORT OF THE DIRECTORS

DIRECTORS' REMUNERATION (AUDITED) (CONTINUED)

RELATED PARTY NOTE – DIRECTOR ADVISOR FEES

The Company considers personnel with the authority and responsibility for planning, directing and controlling the activities of the Company to be key management personnel.

The following amounts were incurred with respect to the Company's Directors, Chief Executive Officer and Chief Financial Officer of the Company;

	30 JUNE 2019 £	30 JUNE 2018 £

Chief Executive Officer	172,917	76,000
Chief Operating Officer	32,250	-
Chief Finance Officer	55,002	29,725
Company Secretary - Joint	21,529	-
Directors Fees	172,191	41,239
Advisory Fees - Directors	134,500	195,400
Total	588,389	342,364

Swellcap is a related party of the Company as it is controlled by Paul Cronin, a Director of the Company. The Company has engaged Swellcap to provide the Company with corporate office facilities and services from 1 April 2018 at £5,000 per month. This fee was increased to £6,000 per month from 1 May 2019 and the total fees to 30 June 2019 were £67,000.

Milos Bosnjakovic, a Director of the Company, has a consultancy agreement with the Company for his Head of Government Affairs role for £5,000 per month in addition to his Directors Fees. The total fees to 30 June 2019 were £67,500.

DIRECTOR'S SHARE OPTIONS

In addition to the fees above, the Company has issued the following options to Directors.

NAME OF DIRECTOR NON-EXECUTIVE	OPTIONS GRANTED	TOTAL OPTIONS VESTED AS AT 1 JULY 2018	OPTIONS VESTING IN THE YEAR	OPTIONS LAPSING IN THE YEAR	TOTAL OPTIONS VESTED AS AT 30 JUNE 2019	EXERCISE PRICE	EARLIEST DATE OF EXERCISE (ESCROW DATE)	DATE OF EXPIRY

Peter Bilbe	1,500,000	1,500,000	1/4/2019	-	1,500,000	AUD \$0.30	1/5/2020	1/7/2021
Paul Cronin	5,000,000	5,000,000	1/4/2019	-	5,000,000	AUD \$0.20	1/5/2020	1/7/2023
Eric de Mori	4,000,000	4,000,000	1/4/2019	-	4,000,000	AUD \$0.20	1/5/2020	1/7/2023
Julian Barnes	1,000,000	1,000,000	1/4/2019	-	1,000,000	AUD \$0.30	1/5/2020	1/7/2021
Milos Bosnjakovic	1,000,000	1,000,000	1/4/2019	-	1,000,000	AUD \$0.40	1/5/2020	1/7/2021

Michael Rawlinson was appointed to the Board of Directors on March 4, 2019 and included and award of 1M share options with a 3 year term and exercise price of A\$1.00, subject to shareholder approval.

DIRECTORS' INTERESTS

The Directors' interests in shares and other securities in Adriatic plc are set out below:

NON-EXECUTIVE DIRECTOR	NUMBER OF ORDINARY SHARES (CDI'S) 30 JUNE 2019	NUMBER OF OPTIONS 30 JUNE 2019

Peter Bilbe	250,000	1,500,000
Paul Cronin	16,851,332	5,000,000
Eric de Mori	11,054,000	4,000,000
Julian Barnes	-	1,000,000
Milos Bosnjakovic	16,000,000	1,000,000
Michael Rawlinson	40,000	-

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) and applicable UK Company law. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that year. In preparing these financial statements, the directors are required to:

· select suitable accounting policies and then apply them consistently;
· make judgements and estimates that are reasonable and prudent;
· state whether applicable International Financial Reporting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors confirm that:

so far as each director is aware, there is no relevant audit information of which the company's auditor is unaware; and
the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

On behalf of the Board

Peter Bilbe CHAIRMAN

25 September 2019

YEAR ENDED 30 JUNE 2019

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME

		YEAR ENDED 30 JUN 2019	YEAR ENDED 30 JUN 2018
	NOTE	£	£

Administrative expenses	5	(2,163,209)	(2,170,921)
OPERATING LOSS		(2,163,209)	(2,170,921)

Finance costs	8	(254,444)	(242,224)
LOSS BEFORE TAX FROM CONTINUING OPERATIONS		(2,417,653)	(1,928,697)

Tax	9	-	-

LOSS FROM CONTINUING OPERATIONS		(2,417,653)	(1,928,697)

Other comprehensive income	10	42,875	5,965

TOTAL COMPREHENSIVE INCOME		(2,374,778)	(1,922,732)

Earnings per share expressed in pence per share:	16
Basic		(1.69)	(2.27)
Diluted		(1.49)	(2.10)

All the activities of the Group are classed as continuing.

The Company has taken advantage of section 408 of the Companies Act 2006 not to publish its own statement of profit or loss.

The notes on pages 24 to 47 form part of these financial statements.

AS AT 30 JUNE 2019 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

	NOTE	30 JUN 2019 £	30 JUN 2018 £

NON-CURRENT ASSETS
Intangible assets	12	3,971,210	1,034,235
Tangible assets	11	721,128	626,308
		4,692,338	1,660,543

CURRENT ASSETS
Trade and other receivables	13	361,724	147,711
Cash and cash equivalents	14	5,369,759	4,644,389
		5,731,483	4,792,100
TOTAL ASSETS		10,423,821	6,452,643

EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital	16	2,013,701	1,733,042
Share premium		11,084,777	5,515,049
Other capital reserves	18	1,714,826	1,282,365
Other reserves	18	74,242	31,367
Retained deficit	18	(4,638,657)	(2,221,004)

TOTAL EQUITY		10,248,889	6,340,819

CURRENT LIABILITIES
Trade and other payables	15	174,932	111,824
TOTAL EQUITY AND LIABILITIES		10,423,821	6,452,643

The notes on pages 24 to 47 form part of these financial statements.

These financial statements were approved by the Board and were signed on its behalf by:

Mr P Cronin DIRECTOR

Date: 25 September 2019 Company Registration Number: 10599833

AS AT 30 JUNE 2019 COMPANY STATEMENT OF FINANCIAL POSITION

		30 JUN 2019	30 JUN 2018
	NOTE	£	£

NON-CURRENT ASSETS
Investments	4	4,888,901	1,517,405
Intangible assets	12	734,414	345,761
Tangible assets	11	22,486	26,454
		5,645,801	1,889,620
CURRENT ASSETS
Trade and other receivables	13	97,246	110,494
Cash and cash equivalents	14	5,100,764	4,572,426
		5,198,010	4,682,920

TOTAL ASSETS		10,843,811	6,572,540

Equity
Share capital	16	2,013,701	1,733,042
Share premium		11,084,777	5,515,049
Other capital reserves	18	1,714,826	1,282,365
Retained earnings	18	(4,072,190)	(2,023,689)

TOTAL EQUITY		10,741,114	6,506,767

CURRENT LIABILITIES
Trade and other payables	15	102,697	65,773

TOTAL EQUITY AND LIABILITIES		10,843,811	6,572,540

These financial statements were approved by the Board and were signed on its behalf by:

Mr P Cronin DIRECTOR Date: 25 September 2019 Company Registration Number: 10599833 The notes on pages 24 to 47 form part of these financial statements.

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

FINANCIAL STATEMENTS DIRECTORS'

GROUP	SHARE CAPITAL	SHARE PREMIUM	OTHER CAPITAL RESERVE	RETAINED EARNINGS	OTHER RESERVES (FOREIGN CURRENCY TRANSLATION RESERVES)	TOTAL
	£	£	£	£	£	£

As at 1 July 2017	856,323	406,183	-	(292,307)	25,402	995,601
Loss for the period	-	-	-	(1,928,697)	-	(1,928,697)
Issue of share capital	876,719	5,108,866	-	-	-	5,985,585
Issue of options			1,282,365			1,282,365
Other comprehensive income	-	-	-	-	5,965	5,965

As at 30 June 2018	1,733,042	5,515,049	1,282,365	(2,221,004)	31,367	6,340,819

Loss for the period	-	-	-	(2,417,653)	-	(2,417,653)
Issue of share capital	276,684	5,484,230	-	-	-	5,760,914
Exercise of options	3,975	85,498	(24,156)			65,317
Issue of options	-	-	456,617	-	-	456,617
Other comprehensive income	-	-	-	-	42,875	42,875

As at 30 June 2019	2,013,701	11,084,777	1,714,826	(4,638,657)	74,242	10,248,889

COMPANY	SHARE CAPITAL	SHARE PREMIUM	OTHER CAPITAL RESERVE	RETAINED EARNINGS	OTHER RESERVES (FOREIGN CURRENCY TRANSLATION	TOTAL
	£	£	£	£	RESERVES) £	£

As at 1 July 2017	856,323	406,183	-	7,982	-	1,270,488
Loss for the period	-	-	-	(2,031,671)	-	(2,031,671)
Issue of share capital	876,719	5,108,866	-	-	-	5,985,585
Issue of options	-	-	1,282,365	-	-	1,282,365
Other comprehensive income	-	-	-	-	-	-
As at 30 June 2018	1,733,042	5,515,049	1,282,365	(2,023,689)	-	6,506,767

Loss for the period	-	-	-	(2,048,501)	-	(2,048,501)
Issue of share capital	276,684	5,484,230	-	-	-	5,760,914
Exercise of options	3,975	85,498	(24,156)			65,317
Issue of options	-	-	456,617	-	-	456,617
Other comprehensive income	-	-	-	-	-	-
As at 30 June 2019	2,013,701	11,084,777	1,714,826	(4,072,190)	-	10,741,114

YEAR ENDED 30 JUNE 2019 CONSOLIDATED STATEMENT OF CASH FLOWS

	2019 £	2018 £

Loss	(2,417,653)	(1,928,697)
Foreign exchange difference on consolidation	42,875	5,965
Depreciation and amortisation	88,674	8,910
Share based payments	432,461	1,161,408
Other non-cash movements	-	(4,885)
Working capital adjustments:
Increase in trade and other receivables	(214,013)	(130,023)
Decrease in inventories	-	22
Increase/(Decrease) in trade and other payables	63,108	(89,548)

Net cash flows used in operating activities	(2,004,548)	(976,848)

Investing activities
Purchase of property, plant and equipment	(105,998)	(40,296)
Purchase of intangible assets	(3,014,471)	(756,479)
Net cash flows used in investing activities	(3,120,469)	(796,775)

Financing activities
Issue of share capital (net of fees)	5,850,387	6,106,542

Net cash flows generated from financing activities	5,850,387	6,106,542
Net increase in cash and cash equivalents	725,370	4,332,919

Cash and cash equivalents at 30 June 2018	4,644,389	311,470
Cash and cash equivalents at 30 June 2019	5,369,759	4,644,389

The notes on pages 24 to 47 form part of these financial statements.

YEAR ENDED 30 JUNE 2019 COMPANY STATEMENT OF CASH FLOWS

	2019 £	2018 £

(Loss)/profit	(2,048,501)	(2,031,671)
Depreciation and amortisation	3,968	-
Share based payments	432,461	1,161,408
Working capital adjustments:
Decrease/(increase) in trade and other receivables	13,248	164,506
Increase/(Decrease) in trade and other payables	36,924	(122,886)

Net cash flows used in operating activities	(1,561,900)	(828,643)

Investing activities
Purchase of property, plant and equipment	-	(26,094)
Purchase of intangible assets	(388,653)	(272,349)
Investment in subsidiary undertaking	(3,371,496)	(633,860)

Net cash flows used in investing activities	(3,760,149)	(932,303)

Financing activities Issue of share capital	5,850,387	6,106,542

Net cash flows generated from financing activities	5,850,387	6,106,542

Net increase in cash and cash equivalents	528,338	4,345,596
Cash and cash equivalents at 30 June 2018	4,572,426	226,830

Cash and cash equivalents at 30 June 2019	5,100,764	4,572,426

The notes on pages 24 to 47 form part of these financial statements

YEAR ENDED 30 JUNE 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

The consolidated financial statements present the financial information of Adriatic Metals Plc and its subsidiary (collectively, the Group) for the year ended 30 June 2019. Adriatic Metals Plc (the Company or the parent) is a public company limited by shares and incorporated in England & Wales. The registered office is located at Second Floor, Stamford House, Regent Street, Cheltenham, United Kingdom, GL50 1HN.

The Group is principally engaged in the exploration for metals for future mining activity.

Information on the Group's structure is provided in Note 4.

2. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PREPARATION

The consolidated financial statements of the Company and its subsidiaries have been prepared in accordance with International Financial Reporting Standards, issued by the International Accounting Standards Board (IASB) as adopted by the European Union ("IFRSs"), and with the Companies Act 2006.

The consolidated financial statements have been prepared on a historical cost basis.

The principal accounting policies adopted by the Group in the preparation of the financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated.

The consolidated financial statements are presented in British Pounds (£) rounded to the nearest pound.

GOING CONCERN

The Group incurred a loss of £2,417,653 (2018 - £1,928,697) in the year however the Group also had a net asset position at the balance sheet date.

BUSINESS COMBINATIONS

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group measures non-controlling interest in the acquiree at the proportionate share of the acquiree's identifiable net assets.

If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss.

The acquisition of an additional ownership interest in a subsidiary without a change of control is accounted for as an equity transaction. Any excess or deficit of consideration paid over the carrying amount of the non-controlling interest is recognised in equity of the parent in transactions where the non-controlling interest is acquired or sold without loss of control. The Group has elected to recognise this effect in retained earnings.

GOODWILL

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised as the non-controlling interest over the fair value of identifiable assets, liabilities and contingent liabilities acquired.

Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.

24 ²⁴⁰

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

REPORT

REPORT STRATEGIC

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FOREIGN CURRENCIES

The Group's consolidated financial statements are presented in GBP (£), which is considered to be the Group's functional currency. For each entity the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency which is the currency of the primary economic environment in which the entity operates ('the local functional currency').

TRANSACTIONS AND BALANCES

Transactions in foreign currencies are initially recorded by the Group's entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Differences arising on settlement or translation of monetary items are recognised in profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item.

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.

GROUP COMPANIES

On consolidation, the assets and liabilities of foreign operations are translated into GBP (£) at the rate of exchange prevailing at the reporting date and their income statements are translated at average exchange rates prevailing during the period. The exchange differences arising on translation for consolidation are recognised in other comprehensive income.

REVENUE RECOGNITION

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty.

TAXES

Current income tax

Current income tax assets and liabilities for the current period are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Group operates and generates taxable income.

Current income tax relating to items recognised directly in equity is recognised in equity and not in the income statement. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
In respect of taxable temporary differences associated with investments in subsidiaries and associates, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

YEAR ENDED 30 JUNE 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

TAXES (CONTINUED)

Deferred tax (CONTINUED)

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
In respect of deductible temporary differences associated with investments in subsidiaries and associates, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

Tax benefits acquired as part of a business combination, but not satisfying the criteria for separate recognition at that date, are recognised subsequently if new information about facts and circumstances change. The adjustment is either treated as a reduction to goodwill (as long as it does not exceed goodwill) if it was incurred during the measurement period or recognised in profit or loss.

Sales tax

Expenses and assets are recognised net of the amount of sales tax, except:

When the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
When receivables and payables are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

EXPLORATION AND EVALUATION EXPENDITURE

Pre-licence costs

Pre-licence costs relate to costs incurred before the Group has obtained legal rights to explore in a specific area. Such costs may include the acquisition of exploration data and the associated costs of analysing that data. These costs are expensed in the period in which they are incurred.

Exploration and evaluation expenditure

Exploration and evaluation activity involves the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource.

Exploration and evaluation activity includes:

· Researching and analysing historical exploration data
· Gathering exploration data through geophysical studies
· Exploratory drilling and sampling
· Determining and examining the volume and grade of the resource
· Surveying transportation and infrastructure requirements
· Conducting market and finance studies

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

REPORT

REPORT STRATEGIC

EXPLORATION AND EVALUATION EXPENDITURE (CONTINUED)

Exploration and evaluation expenditure (CONTINUED)

Licence costs paid in connection with a right to explore in an existing exploration area are capitalised and amortised over the term of the permit.

Exploration and evaluation expenditure incurred on licences where a JORC-compliant resource has not yet been established is expensed as incurred until sufficient evaluation has occurred in order to establish a JORC-compliant resource.

Costs expensed during this phase are included in 'Other operating expenses' in the statement of profit or loss and other comprehensive income.

Upon the establishment of a JORC-compliant resource (at which point, the Group considers it probable that economic benefits will be realised), the Group capitalises any further evaluation expenditure incurred for the particular licence as exploration and evaluation assets up to the point when a JORC-compliant reserve is established. Capitalised exploration and evaluation expenditure is considered to be an intangible asset.

Exploration and evaluation assets acquired in a business combination are initially recognised at fair value, including resources and exploration potential that is considered to represent value beyond proven and probable reserves. Similarly, the costs associated with acquiring an exploration and evaluation asset (that does not represent a business) are also capitalised.

They are subsequently measured at cost less accumulated impairment. Once JORC-compliant reserves are established and development is sanctioned, exploration and evaluation assets are tested for impairment and transferred to 'Mines under construction' which is a sub-category of 'Mine properties'. No amortisation is charged during the exploration and evaluation phase.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment is stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. Such cost includes the cost of replacing part of the property, plant and equipment and borrowing costs for long-term construction projects if the recognition criteria are met. When significant parts of property, plant and equipment are required to be replaced at intervals, the Group recognises such parts as individual assets with specific useful lives and depreciates them accordingly. All other repair and maintenance costs are recognised in profit or loss as incurred.

Property, plant and equipment transferred from acquisitions are initially measured at the fair value at the date on which control is obtained.

Land and buildings are measured at cost less accumulated depreciation on buildings and impairment losses.

Depreciation is calculated on a straight-line at the following rates per each category of asset:

Land & buildings Not depreciated
Plant & equipment 15%
Office Equipment 15%
Vehicles 15%
Assets under construction Not depreciated

An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the income statement when the asset is derecognised.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

27 ²⁴³

YEAR ENDED 30 JUNE 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

INTANGIBLE ASSETS

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses.

Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in profit and loss in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite.

Intangible assets with finite lives are amortised over their useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. The amortisation expense on intangible assets with finite lives is recognised in the income statement as the expense category that is consistent with the function of the intangible assets.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the asset is derecognised.

Amortisation is calculated on a straight-line at the following rates per each category of asset:

Patents & Licences – 20%

FINANCIAL INSTRUMENTS

The Company classifies its financial assets in the following measurement categories:

· Those to be measured subsequently at fair value (either through OCI "FVTOCI", or through profit or loss "FVTPL"); and
· Those to be measured at amortised cost.

The classification depends on the Company's business model for managing the financial assets and the contractual terms of the cash flows.

On initial recognition, a financial asset is classified as measured: at amortised cost, FVOCI or FVTPL.

A financial asset is measured at amortised cost if it meets both the following conditions and is not designated as at FVTPL:

· The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and
· The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at amortised cost are subsequently measured at amortised cost using effective interest method. The amortised cost is reduced by impairment losses if any.

A debt instrument is measured at FVOCI only if it meets both of the following conditions and is not designated as at FVTPL:

· The asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
· The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in fair value in other comprehensive income (OCI). This election is made on an investment-by-investment basis.

All other financial assets that are not classified as measured at amortised cost or FVOCI are measured at FVTPL.

In addition, on initial recognition, the Company may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

For trade and contract receivables, the Company has applied simplified approach permitted by IFRS 9. Simplified approach is applied to a portfolio of trade receivables that are homogenous in nature and carry similar credit risk. However, simplified approach requires expected lifetime losses to be recognised from initial recognition of the receivables.

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

REPORT

STATEMENTS DIRECTORS' REPORT STRATEGIC

FINANCIAL

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FINANCIAL INSTRUMENTS (CONTINUED)

Receivables are written off when they are deemed uncollectible because of bankruptcy or other forms of receivership of the debtors. The assessment of expected credit losses on receivables takes into account credit-risk concentration, collective debt risk based on average historical losses, specific circumstances such as serious adverse economic conditions in a specific country or region and other forward-looking information.

FINANCIAL LIABILITIES

The classification of financial liabilities at initial recognition depends on the purpose for which the financial liability was issued and its characteristics.

Financial liabilities are measured at cost and have not been amortised. These includes trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at cost.

A financial liability (in whole or in part) is derecognised when the company has extinguished its contractual obligations or is cancelled. Any gain or loss on derecognition is taken to the statement of comprehensive income.

TRADE RECEIVABLES

Trade receivables are initially measured at fair value, and are subsequently measured at amortised cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognised in statement of comprehensive income when there is objective evidence that the asset is impaired. The allowance recognised is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

TRADE AND OTHER PAYABLES

Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents in the statement of financial position comprise cash at banks and on hand and short-term deposits with a maturity of three months or less. For the purpose of the consolidated statement of cash flows, cash and cash equivalents consist of cash and short-term deposits as defined above, net of outstanding bank overdrafts.

SHARE-BASED PAYMENTS

Employees and consultants (including senior executives) of the Group receive remuneration in the form of share-based payments, whereby services are rendered as consideration for equity instruments (equity-settled transactions).

EQUITY-SETTLED TRANSACTIONS

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model, further details of which are given in Note 17.

That cost is recognised in employee benefits expense (Note 5), together with a corresponding increase in equity (other capital reserves), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.

Service and non-market performance conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group's best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value. Any other conditions attached to an award, but without an associated service requirement, are considered to be non-vesting conditions. Non-vesting conditions are reflected in the fair value of an award and lead to an immediate expensing of an award unless there are also service and/or performance conditions.

YEAR ENDED 30 JUNE 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

EQUITY-SETTLED TRANSACTIONS (CONTINUED)

No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.

When the terms of an equity-settled award are modified, the minimum expense recognised is the grant date fair value of the unmodified award, provided the original terms of the award are met. An additional expense, measured as at the date of modification, is recognised for any modification that increases the total fair value of the share-based payment transaction, or is otherwise beneficial to the employee. Where an award is cancelled by the entity or by the counterparty, any remaining element of the fair value of the award is expensed immediately through profit or loss.

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further details are given in Note 16).

PROVISIONS AND CONTINGENCIES

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When the Group expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to a provision is presented in the income statement net of any reimbursement.

STANDARDS ISSUED BUT NOT YET EFFECTIVE

Standards issued and not yet effective for the Group's financial statements for the period ended 30 June 2019 are listed below. This listing of standards and interpretations issued are those that the Group reasonably expects to have an impact on disclosures, financial position or performance when applied at a future date. The Group intends to adopt these standards when they become effective.

CHANGES IN ACCOUNTING POLICY AND DISCLOSURES

a) IFRS 15, 'Revenue from Contracts with Customers' issued in May 2014 provides a single, principles based five-step model to be applied to all contracts with customers. The five steps in the model are as follows:
- · Identify the contract with the customer
- · Identify the performance obligations in the contract
- · Determine the transaction price
- · Allocate the transaction price to the performance obligations in the contract
- · Recognise revenue when (or as) the entity satisfies a performance obligation

The standard's requirements will also apply to the recognition and measurement of gains and losses on the sale of some non-financial assets that are not an output of the entity's ordinary activities (e.g., sales of property, plant and equipment or intangibles). Extensive disclosures will be required, including disaggregation of total revenue information about performance obligations; changes in contract asset and liability account balances between periods and key judgements and estimates.

The Company adopted IFRS 15 using the full retrospective method. The effect of initially applying this standard did not have any material impact on the Company's financial statements as of 31 December 2018 and 31 December 2017 as a result of the changes in accounting policies as detailed below).

b) IFRS 9, 'Financial Instruments' outlines the recognition, measurement and derecognition of financial assets and financial liabilities, the impairment of financial assets and hedge accounting. Financial assets are to be measured at amortised cost, fair value through profit or loss or fair value through other comprehensive income, with an irrevocable option on initial recognition to recognise some equity financial assets at fair value through other comprehensive income. The impairment model in IFRS 9 moves to one that is based on expected credit losses rather than the IAS 39 incurred loss model. The derecognition principles of IAS 39, 'Financial Instrument: Recognition and Measurement' have been transferred to IFRS 9. The hedge accounting requirements have been liberalised from that allowed previously. The requirements are based on whether an economic hedge is in existence, with less restriction to prove whether a relationship will be effective than current requirements.

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

REPORT STRATEGIC REPORT

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

CHANGES IN ACCOUNTING POLICY AND DISCLOSURES (CONTINUED)

The Company adopted IFRS 9 retrospectively, with the initial application date of 1 January 2018 and adjusting the comparative information for the period beginning 1 January 2017 for any effects in adoption of IFRS 9. The key changes to the Company's accounting policies resulting from the adoption of IFRS 9 as detailed in below) did not result to any restatement of the Company's comparative figures as of 31 December 2017 and did not have any material effect on the Company's financial statements as of 31 December 2018.

The management believes that the adoption of the above and other amendments effective for the current accounting period has not had any material impact on the recognition, measurement and presentation in the financial statements.

Standard that is not yet effective and has not been adopted early by the Company

The following standard that is applicable to the Company has been published and is mandatory for accounting periods of the Company beginning after 1 January 2018, but which has not been adopted early by the Company:

· IFRS 16, 'Leases' is effective for annual periods beginning on or after 1 January 2019.The scope of IFRS 16 includes leases of all assets, with certain exceptions. IFRS 16 requires lessees to account for all leases under a single on-balance sheet model in a similar way to finance leases under IAS 17. The standard includes two recognition exemptions for lessees – leases of 'low-value' assets and short-term leases (i.e., leases with a lease term of 12 months or less). At the commencement date of a lease, a lessee will recognise a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. Lessees will be required to separately recognise the interest expense on the lease liability and the depreciation expense on the right-of-use asset. Lessor accounting is substantially unchanged from accounting under IAS 17. A lessee can choose to apply the standard using either a full retrospective or a modified retrospective transition approach. The standard's transition provisions permit certain reliefs. Early application is permitted, but not before an entity applies IFRS 15.

The management has started an initial assessment of the potential impact of the above standard on its financial statements. The most significant impact identified is that the Company will recognise new assets and liabilities for its operating leases of office space.

USE OF ESTIMATES AND JUDGEMENTS

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

In particular, the following is an area where particular judgement is required:

Exploration and evaluation expenditure

Exploration and evaluation activity involves the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource.

Exploration and evaluation activity includes:

· Researching and analysing historical exploration data
· Gathering exploration data through geophysical studies
· Exploratory drilling and sampling
· Determining and examining the volume and grade of the resource
· Surveying transportation and infrastructure requirements
· Conducting market and finance studies

Licence costs paid in connection with a right to explore in an existing exploration area are capitalised and amortised over the term of the permit.

YEAR ENDED 30 JUNE 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

USE OF ESTIMATES AND JUDGEMENTS (CONTINUED)

Exploration and evaluation expenditure (CONTINUED)

3. SEGMENT INFORMATION

It is the opinion of the directors that the operations of the Group represent one segment, as they are treated as such when evaluating performance.

4. GROUP INFORMATION

	INVESTMENT IN SUBSIDIARY £

Additions	1,517,405
At 30 June 2018	1,517,405

Additions	3,371,496
At 30 June 2019	4,888,901
NET BOOK VALUE
At 30 June 2019	4,888,901

At 30 June 2018	1,517,405

The consolidated financial statements of the Group include:

NAME	PRINCIPAL ACTIVITIES	ADDRESS OF REGISTERED OFFICE	% EQUITY INTEREST
			2019	2018


Eastern Mining d.o.o	Mining exploration	Marsala Tita 3/II, 1000 Sarajevo,
		Bosnia and Herzegovina	100	100

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

5. ADMINISTRATIVE EXPENSES

NOTE	2019 £	2018 £


Wages and salaries	233,896	173,850
Employee benefit expense – share options 17	456,616	1,121,275
Consultancy fees	591,651	531,954
Depreciation 11	11,646	4,632
Amortisation 12	77,496	5,321
Other costs	791,904	210,883
IPO Costs	-	123,006
	2,163,209	2,170,921

6. EMPLOYEES

The average monthly number of employees during the year was as follows:

	2019	2018

Eastern Mining d.o.o.
Administrative staff - Eastern Mining	5	4
Exploration staff - Eastern Mining	16	10
	21	14

	2019	2018

Adriatic Metals Plc
Directors	5	3
Administrative and Management	4	2
	9	5

7. AUDITORS REMUNERATION

	2019 £	2018 £
Auditor's remuneration – fees payable to the Group's auditor for the audit of the group's annual accounts.	25,000	12,500
Auditor's remuneration – fees payable to the auditor for the audit of accounts of subsidiaries of the company	3,605	3,625
	28,605	16,125

YEAR ENDED 30 JUNE 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

8. FINANCE COSTS

	2019 £	2018 £

Foreign currency movements	(291,949)	(242,224)
Interest receivable	37,505	-
	(254,444)	(242,224)

9. INCOME TAX

No liability to corporation tax arose on ordinary activities for the year ended 30 June 2019 or 30 June 2018.

RECONCILIATION OF TOTAL TAX CHARGE INCLUDED IN PROFIT AND LOSS

	2019 £	2018 £

Loss before tax	(2,417,653)	(1,928,697)
Loss multiplied by the standard rate of corporation tax in the UK 19%	(459,354)	(366,452)
Effects of:
Losses carried forward	459,354	366,452
Total tax charge	-	-

FACTORS THAT MAY AFFECT FUTURE CURRENT AND TOTAL TAX CHARGES

A deferred tax asset of £78,100 (2018 - £70,000) at the year end has not been recognised due to uncertainty surrounding the Group's future taxable profits.

The UK corporation tax rate will be reduced to 17%, effective 1 April 2020. The effects of this change has been reflected in the financial statements.

10. OTHER COMPREHENSIVE INCOME

	2019 £	2018 £

Foreign exchange differences on consolidation	42,875	5,965

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

REPORT

STATEMENTS DIRECTORS' REPORT STRATEGIC

FINANCIAL

TANGIBLE ASSETS

GROUP

	LAND & BUILDINGS	PLANT & EQUIPMENT	ASSETS UNDER CONSTRUCTION	TOTAL
	£	£	£	£

COST
At 1 July 2017	562,362	19,055	4,693	586,110
Additions	-	40,205	91	40,296
Disposals	-	-	-	-
Foreign exchange differences	3,758	125	32	3,915

At 30 June 2018	566,120	59,385	4,816	630,321

Additions	58,663	41,140	-	99,803
Disposals	-	4,816	(4,816)	-
Foreign exchange differences	6,195	-	-	6,195

At 30 June 2019	630,978	105,341	-	736,319
DEPRECIATION
At 1 July 2017	-	424	-	424
Charge for the year	-	3,589	-	3,589

At 30 June 2018	-	4,013	-	4,013
Charge for the year	-	11,178	-	11,178
On disposals	-	-	-	-

At 30 June 2019	-	15,191	-	15,191

NET BOOK VALUE
At 30 June 2019	630,978	90,150	-	721,128

At 30 June 2018	566,120	55,372	4,816	626,308

YEAR ENDED 30 JUNE 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. TANGIBLE ASSETS (CONTINUED)

COMPANY

	LAND & BUILDINGS	PLANT & EQUIPMENT	ASSETS UNDER CONSTRUCTION	TOTAL
	£	£	£	£

COST
At 1 July 2017	-	360	-	360
Additions	-	26,094	-	26,094
Disposals	-	-	-	-
At 30 June 2018	-	26,454	-	26,454
Additions	-	-	-	-
Disposals	-	-	-	-
At 30 June 2019	-	26,454	-	26,454

DEPRECIATION
At 1 July 2017	-	-	-	-
Charge for the year	-	-	-	-
At 30 June 2018	-	-	-	-
Charge for the year	-	3,968	-	3,968
On disposals	-	-	-	-
At 30 June 2019	-	3,968	-	3,968

NET BOOK VALUE
At 30 June 2019	-	22,486	-	22,486
At 30 June 2018	-	26,454	-	26,454

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

INTANGIBLE ASSETS

GROUP

	EXPLORATION & EVALUATION	PATENTS AND LICENCES	TOTAL
	ASSETS £	£	£

COST
At 1 July 2017	172,337	111,740	284,077
Additions	756,479	-	756,479
Disposals	-	-	-
Foreign exchange differences	444	526	970

At 30 June 2018	929,260	112,266	1,041,526
Additions	2,600,409	414,062	3,014,471
Disposals	-	-	-
Foreign exchange differences	-	-	-

At 30 June 2019	3,529,669	526,328	4,055,997

AMORTISATION AND IMPAIRMENT
At 1 July 2017	-	1,970	1,970
Charge for the year	-	5,321	5,321
At 30 June 2018	-	7,291	7,291

Charge for the year	-	77,496	77,496
On disposals	-	-	-
At 30 June 2019	-	84,787	84,787

NET BOOK VALUE
At 30 June 2019	3,529,669	441,541	3,971,210

At 30 June 2018	929,260	104,975	1,034,235

YEAR ENDED 30 JUNE 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

12. INTANGIBLE ASSETS (CONTINUED)

COMPANY

	EXPLORATION & EVALUATION	PATENTS AND LICENCES	TOTAL
	ASSETS £	£	£

COST
At 1 July 2017	73,412	-	73,412
Additions	272,349	-	272,349
Disposals	-	-	-
Foreign exchange differences	-	-	-
At 30 June 2018	345,761	-	345,761
Additions	388,653	-	388,653
Disposals	-	-	-
At 30 June 2019	734,414	-	734,414
AMORTISATION AND IMPAIRMENT
At 1 July 2017	-	-	-
Charge for the year	-	-	-
At 30 June 2018	-	-	-
Charge for the year	-	-	-
At 30 June 2019	-	-	-
NET BOOK VALUE
At 30 June 2019	734,414	-	734,414

At 30 June 2018	345,761	-	345,761

13. TRADE AND OTHER CURRENT RECEIVABLES

	GROUP		COMPANY
	2019 £	2018 £	2019 £	2018 £


VAT	287,514	128,583	78,482	91,730
Other receivables	74,210	19,128	18,764	18,764
	361,724	147,711	97,246	110,494

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

STATEMENTS DIRECTORS'

FINANCIAL

14. CASH AND CASH EQUIVALENTS

	GROUP		COMPANY
	2019	2018	2019	2018
	£	£	£	£

Cash at bank	5,366,266	4,640,896	5,097,271	4,568,933
Petty cash	3,493	3,493	3,493	3,493
	5,369,759	4,644,389	5,100,764	4,572,426

15. TRADE AND OTHER CURRENT PAYABLES

	GROUP		COMPANY
	2019 £	2018 £	2019 £	2018 £

Trade payables	105,886	46,258	77,760	14,258
Accruals	26,423	51,515	24,937	51,515
Taxes payable	2,546	4,485	-	-
Other payables	40,077	9,566	-	-
	174,932	111,824	102,697	65,773

16. SHARE CAPITAL

GROUP AND COMPANY	30 JUN 2019 £	30 JUN 2018 £


Issued and fully paid
Shares issued	2,013,701	1,733,042

In October 2017, the company issued 3,641,863 shares with a par value of £0.05342

On January 30, 2018 the company performed a share split on a 1:4 basis from the 19,798,899 shares issued to 79,195,596 shares in preparation for a listing on the Australian Stock Exchange ("ASX").

On February 2, 2018 the company issued 1,000,000 shares in lieu of a capital raising fee and issued on the ASX with a listing price of A\$0.20c

YEAR ENDED 30 JUNE 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SHARE CAPITAL (CONTINUED)

On April 27, 2018 the company listed on the ASX and, upon listing, awarded the following shares and options:

SHARE SUMMARY

	NO. OF SHARES


Total shares at IPO	80,195,596
Shares issued for fees	600,000
CDIs issued on listing	50,000,000
Total Shares	130,795,596

On November 20, 2018 the company made an institutional placement of CDI's on the ASX as follows:

NO. OF SHARES


130,795,596
19,686,991
150,482,587

From April 11, 2019 to May 1, 2019 options were exercised for shares:

	NO. OF SHARES


Total shares on issue before option exercise	150,482,587
CDI's issued on exercise	300,000
Total Shares at June 30, 2019	150,782,587

OPTIONS – SEE NOTE 17

Fully diluted Share Capital	169,607,587
Total Options	18,825,000
Executive options (various)	7,825,000
Advisor options at A\$0.40	2,000,000
Founder options at A\$0.20	9,000,000

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

REPORT

FINANCIAL STATEMENTS DIRECTORS'

EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

Reconciliations are set out below.

2019	EARNINGS	WEIGHTED AVERAGE NUMBER OF SHARES	PER-SHARE AMOUNT
	£		PENCE

Basic EPS
Earnings attributable to ordinary shareholders	(2,417,653)	142,826,588	(1.69)
Effect of dilutive securities	-	19,693,014	-

Diluted EPS
Adjusted earnings	(2,417,653)	162,519,601	(1.44)

2018	EARNINGS	WEIGHTED	PER-SHARE
		AVERAGE NUMBER OF	AMOUNT
	£	SHARES	PENCE

Basic EPS
Earnings attributable to ordinary shareholders	(1,928,697)	84,960,236	(2.27)
Effect of dilutive securities	-	6,678,082	-

Diluted EPS

The weighted average number of shares has been calculated as if the share split occurred at the start date of the comparative period presented so that the earning per share figure is comparable.

Adjusted earnings (1,928,697) 91,638,318 (2.10)

YEAR ENDED 30 JUNE 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17. SHARE OPTION SCHEME

During 2018, the Company issued a number of share options, and the details of these are as follows:

EXECUTIVE OPTIONS	30c EXECUTIVE OPTIONS	40c EXECUTIVE OPTIONS	60c EXECUTIVE OPTIONS

Underlying share price (A\$)	0.200	0.200	0.200
Exercise price (A\$)	0.300	0.400	0.600
Valuation date	20 Feb 2018	20 Feb 2018	20 Feb 2018
Expiry date	1 Jul 2021	1 Jul 2021	1 Jul 2021
Life of the options (years)	3.36	3.36	3.36
Volatility	135%	135%	135%
Risk free rate	2.01%	2.01%	2.01%
Number of options	2,500,000	5,250,000	750,000
Value per option (A\$)	0.150	0.143	0.132
Value per Tranche (A\$)	375,000	607,750	330,000

OTHER OPTIONS	FOUNDER	ADVISOR

Underlying share price (A\$)	0.200	0.200
Exercise price (A\$)	0.200	0.400
Valuation date	20 Feb 2018	20 Feb 2018
Expiry date	1 Jul 2023	1 Jul 2021
Life of the options (years)	5.36	3.36
Volatility	135%	135%
Risk free rate	2.45%	2.01%

Number of options	9,000,000	2,000,000
Value per option (A\$)	0.178	0.143
Value per Tranche (A\$)	1,602,000	286,000

The share options have been valued, at the grant date, using the Black Scholes model for valuing options, and the inputs included in the modelling of this are shown above.

The key uncertainty in relation to this modelling is the volatility of the underlying share prices. For the purposes of the modelling, this has been determined by assessing volatility of the shares in the 4 months post listing, which represents the only suitable basis for determining the volatility.

During the 2018 year, the founder and advisor options fully vested, and the full value of these options were therefore recognised in the year ended 30 June 2018.

The executive options are recognised over their vesting period, taking into account the number of options which are expected to vest.

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

REPORT STRATEGIC REPORT

17. SHARE OPTION SCHEME (CONTINUED)

The impact of share options on the financial statements was as follows:

	GRANT DATE FAIR VALUE £	RECOGNISED IN 2018 £	RECOGNISED IN 2019 £

Executive options
30c Executive Options	211,243	67,806	143,437
40c Executive Options	422,860	135,733	269,657
60c Executive Options	55,904	12,381	43,523
Other options
Advisor Options	161,090	161,090	-
Founder Options	905,355	905,355	-
	1,756,452	1,282,365	456,617

All recognised amounts in relation to options were shown within administrative expenses in the year, within the "Employee benefit expense – share options" line in Note 5.

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options during the year (excluding share appreciation rights):

	2019		2018
	NUMBER	WAEP	NUMBER	WAEP


Outstanding at 1 July	19,500,000	\$0.30	-	-
Granted during the year	-		19,500,000	\$0.30
Exercised during the year	(300,000)	\$0.40	-
Expired during the year	-		-
Outstanding at 30 June	19,200,000	\$0.30	19,500,000	\$0.30

Exercisable at 30 June	18,200,000		11,000,000

The weighted average remaining contractual life for the share options outstanding as at 30 June 2019 was 2.5 years (2018: 3.5 years).

The weighted average fair value of options granted during the year was 0c (2018: 16c).

The range of exercise prices for options outstanding at year end was 20c to 60c (2018 20c to 60c).

18. RETAINED EARNINGS AND RESERVES

The other reserves of the Company are as follows:

Retained Earnings	Includes all current and prior period retained profits and losses, less dividends paid.
Other Capital Reserve	Used to recognise the value of equity-settled share-based payments. See Note 17.
Other Reserves (Foreign currency translation reserves)	Used to recognise the foreign currency movements on consolidation.

43 ²⁵⁹

YEAR ENDED 30 JUNE 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. RELATED PARTIES

The Company considers personnel with the authority and responsibility for planning, directing and controlling the activities of the Company to be key management personnel.

The following amounts were incurred with respect to the Company's Directors, Chief Executive Officer and Chief Financial Officer of the Company;

	30 JUNE 2019 £	30 JUNE 2018 £


Chief Executive Officer	172,917	76,000
Chief Operating Officer	32,250	-
Chief Finance Officer	55,002	29,725
Company Secretary - Joint	21,529	-
Directors Fees	172,191	41,239
Advisory Fees - Directors	134,500	195,400
Total	588,389	342,364

ADVISORY FEES – DIRECTORS £134,500

Milos Bosnjakovic, a Director of the Company, has a consultancy agreement with the Company for his Head of Government Affairs role for £5,000 per month in addition to his Director's Fees. The total fees to 30 June 2019 were £67,500.

20. COMMITMENTS AND CONTINGENCIES

The company had no commitments as at 30 June 2019, or 2018.

21. EVENTS AFTER THE REPORTING DATE

On July 2, 2019 the Company announced a change in substantial holding due to on market trading from Sandfire Resources NL from a holding of 7.65% to 11.13% with 16,776,855 shares held. On August 14, 2019 a further notice of change of interests and substantial holding was announced for 2,551,717 shares taking Sandfire Resources NL to 12.78% with 19,328,572 shares held.

On July 23, 2019 the Company released a Maiden Mineral Resource for Rupice for 9.4Mt at 5.1% Zinc, 3.3% Lead, 183g/t Silver, 1.8g/t Gold, 0.6% Copper and 31% Barium Sulphate in the Indicated and Inferred category and an updated Mineral Resource for Veovaˈa for 7.4Mt at 1.4% Zinc, 0.9% Lead, 41g/t Silver, 0.1g/t Gold and 13% Barium Sulphate in the Indicated and Inferred category.

On September 18, 2019 the Company announced the appointment of Paul Cronin as Managing Director and CEO which included a total of 1.5M performance rights conditional upon set milestones and shareholder approval.

Michael Rawlinson was appointed to the Board of Directors on March 4, 2019 and included an award of 1M share options with a 3 year term and exercise price of A\$1.00, subject to shareholder approval.

Subsequent to 30 June 2019, the Board approved 1M share options with a 3 year term and exercise price of A\$1.25 to the Company's COO, Graham Hill.

44 ²⁶⁰

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

REPORT STRATEGIC REPORT

22. FINANCIAL INSTRUMENTS

FAIR VALUE

The fair value of the financial assets and financial liabilities of the Group, at each reporting date, approximates to their carrying amount as disclosed in the Consolidated Statement of Financial Position and in the related notes.

The fair value of the financial assets and liabilities are included at the amounts at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The cash and cash equivalents, trade and other receivables and trade and other payables approximate their carrying value amounts largely due to the short-term maturities of these instruments. Set out below is a comparison of the carrying amounts and fair values of financial instruments as at 30 June 2019:

GROUP	2019		2018
	CARRYING AMOUNT	FAIR VALUE	CARRYING AMOUNT	FAIR VALUE
	£	£	£	£

Financial assets
Cash and cash equivalents	5,369,759	5,369,759	4,644,389	4,644,389
Trade and other receivables	361,724	361,724	19,128	19,128
Financial liabilities
Trade and other payables	174,932	174,932	107,339	107,339

COMPANY	2019		2018
	CARRYING AMOUNT	FAIR VALUE	CARRYING AMOUNT	FAIR VALUE
	£	£	£	£

Financial assets
Cash and cash equivalents	5,100,764	5,100,764	4,572,426	4,572,426
Trade and other receivables	97,246	97,246	18,764	18,764
Financial liabilities
Trade and other payables	102,697	102,697	65,773	65,773

23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

CAPITAL RISK MANAGEMENT

The Group's objectives when managing capital are:

· to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;
· to support the Group's growth; and
· to provide capital for the purpose of strengthening the Group's risk management capability.

The Group actively and regularly reviews and manages its capital structure to ensure an optimal capital structure and equity holder returns, taking into consideration the future capital requirements of the Group and capital efficiency, prevailing and projected profitability, projected operating cash flows, projected capital expenditures and projected strategic investment opportunities. Management regards total equity as capital and reserves, for capital management purposes.

YEAR ENDED 30 JUNE 2019 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

FINANCIAL RISK FACTORS

The Group is exposed to market risk, foreign currency risk, credit risk and liquidity risk. Within each of the operating subsidiaries, the entities senior management oversees the management of these risks for their operations and periodically identify, measure and manage these risks. These risks are summarised below.

MARKET RISK

Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of the changes in market prices. Market risk reflects interest rate risk, currency risk and other price risks.

Given that the company is not yet selling any minerals this is not a risk that affects the company in the current year, however, when the company does begin to trade in minerals it is a risk that will have to be considered given the volatility of mineral prices.

FOREIGN CURRENCY RISK

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Group's exposure to the risk of changes in foreign exchange rates relates primarily to the Group's subsidiary company operating in Bosnian Mark while the Group's presentation currency is that of British Pound. If the rate of the Bosnian Mark were to increase this would have a negative impact on the turnover and profit of the Group.

See the below sensitivity analysis for details of the possible impacts.

GROUP FOREIGN CURRENCY SENSITIVITY ANALYSIS

The following table demonstrates the sensitivity to a possible change in the Bosnian Mark exchange rates, with all other variables held constant and the impact on the Group's profit before tax to changes in the fair value of monetary assets and liabilities.

30 JUNE 2019	EFFECT ON PROFIT OR LOSS £	EFFECT ON EQUITY £

Increase in foreign exchange rate of 10%
Bosnian Mark	33,560	(390,466)
Decrease in foreign exchange rate of 10%
Bosnian Mark	(41,017)	477,236

30 JUNE 2018	EFFECT ON PROFIT OR LOSS £	EFFECT ON EQUITY £

Increase in foreign exchange rate of 10% Bosnian Mark	15,155	(120,351)
Decrease in foreign exchange rate of 10% Bosnian Mark	(18,523)	147,096

The movement in profit or loss is a result of a change in the fair value of assets and liabilities denominated in Bosnian Mark where the functional currency of the entity is a currency other than the entity's reporting currency.

The movement in equity arises from changes in foreign currency offsetting the translation of foreign operations' net assets into £.

As can be seen from the above analysis the profit and loss would not be materially affected however equity could be affected with a slight movement in foreign exchange rates.

FOR THE YEAR ENDED 30 JUNE 2019 ADRIATIC METALS PLC ANNUAL REPORT

REPORT STRATEGIC REPORT

23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

GROUP FOREIGN CURRENCY SENSITIVITY ANALYSIS (CONTINUED)

In addition to investments in foreign subsidiaries denominated in Bosnian Marks, at the year-end the Group held financial assets denominated in other currencies, as follows:

30 JUNE 2019	30 JUNE 2019	30 JUNE 2018


Amounts in Euros	¤ 268,230	€ 1,827,922
Amounts in Australian Dollars	A\$ 9,236,297	A\$ 4,834,668

A 10% movement in the exchange rates with these currencies would have an impact of 10% of the above on both losses and equity.

CREDIT RISK

Credit risk is the risk that a counterparty will not meet its obligations under a customer contract leading to a financial loss. The Group is exposed to credit risk from its operating activities (trade receivables) and from its financing activities, including taxes receivable, foreign exchange transactions and other financial instruments. Management do not consider that the Group has significant exposure to credit risk.

LIQUIDITY RISK

Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position potentially enhances profitability, but can also increase the risk of losses. The Company does not face significant liquidity risks and uncertainties as they are currently in a net asset position.

TO THE SHAREHOLDERS OF ADRIATIC METALS PLC

INDEPENDENT AUDITOR'S REPORT

ADRIATIC METALS PLC

INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF ADRIATIC METALS PLC

OPINION

We have audited the consolidated financial statements of Adriatic Metals Plc (the 'Company') and its subsidiaries (the 'Group') for the year ended 30 June 2019, which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated and Company Balance Sheets, the Consolidated and Company Statements of Changes in Equity, the Consolidated and Company Statement of Cash Flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards as adopted by the European Union.

In our opinion the consolidated financial statements:

· give a true and fair view of the state of the Group's and of the parent Company's affairs as at 30 June 2019 and of the Group's loss for the year then ended;
· have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union; and
· have been prepared in accordance with the requirements of the Companies Act 2006.

BASIS FOR OPINION

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We are independent of the Group and Company in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

CONCLUSIONS RELATING TO GOING CONCERN

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

· the directors' use of the going concern basis of accounting in the preparation of the consolidated financial statements is not appropriate; or
· the directors have not disclosed in the consolidated financial statements any identified material uncertainties that may cast significant doubt about the Group's or the parent Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the consolidated financial statements are authorised for issue.

KEY AUDIT MATTERS

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing the efforts of the engagement team.

These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter	How our audit addressed the key audit matter
Impairment of exploration and evaluation assets and investment in subsidiary company	In accordance with IFRS 6 we reviewed the exploration and evaluation (E&E) assets for indications
The Group has capitalised significant costs in	of impairment.
respect of its mining exploration activities, in accordance with IFRS 6 'Exploration for Evaluation of Mineral Resources' (IFRS 6), therefore there is a risk of impairment.	We have reviewed the assets for indications of impairment, considered and discussed the Groups forecasts and impairment reviews and obtained evidence that the licences remain in good standing.
The results from the exploration activity are key to ensuring that future commercialisation will be achievable and that there are no indications of impairment, as well as the good standing of the licences in place.	Based on the above, no indications of impairment were noted.
The Company also has a significant investment in its subsidiary, the carrying value of which is linked to the underlying exploration asset. Therefore there is also a risk of impairment of the investments.

OUR APPLICATION OF MATERIALITY

The scope and focus of our audit was influenced by our assessment and application of materiality. We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements on our audit and on the consolidated financial statements.

We define financial statements materiality as the magnitude by which misstatements, including omissions, could influence the economic decisions taken on the basis of the consolidated financial statements by reasonable users.

We also determine a level of performance materiality, which we use to determine the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality for the consolidated financial statements as a whole.

· Overall materiality We determine materiality for the consolidated financial statements as a whole to be £210,000. This was based on the key performance indicator, being 2% of gross assets. We believe gross asset values are the most appropriate bench mark due to the minimal income statement activity during the year and existence of key balance sheet items.
· Performance materiality On the basis of our risk assessment, together with our assessment of the company's control environment, our judgement is that performance materiality for the consolidated financial statements should be 55% of materiality, amounting to £115,000.

AN OVERVIEW OF THE SCOPE OF OUR AUDIT

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated financial statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain.

We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial statements as a whole, taking into account an understanding of the structure of the Group and Company, its activities, the accounting processes and controls, and the industry in which they operate. Our planned audit testing was directed accordingly and was focused on areas where we assessed there to be the highest risk of material misstatement. During the audit, we reassessed and re-valuated audit risks and tailored our approach accordingly.

The audit testing included substantive testing on significant transactions, balances and disclosures, the extent of which was based on various factors such as our overall assessment of the control environment, the effectiveness of controls and management of specific risk.

We communicated with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant findings, including any significant deficiencies in internal control that we identify during the audit.

TO THE SHAREHOLDERS OF ADRIATIC METALS PLC INDEPENDENT AUDITOR'S REPORT

OTHER INFORMATION

The directors are responsible for the other information. The other information comprises the information included in the Annual Report, other than the consolidated financial statements and our Auditors' Report thereon. Our opinion on the consolidated financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is a material misstatement in the consolidated financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006

In our opinion, based on the work undertaken in the course of the audit:

· the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the consolidated financial statements; and
· the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

In the light of the knowledge and understanding of the Group and the parent Company and its environment obtained in the course of the audit, we have not identified material misstatements in the Group Strategic Report or the Directors' Report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

· adequate accounting records have not been kept by the Group, or returns adequate for our audit have not been received from branches not visited by us; or
· the Group consolidated financial statements are not in agreement with the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are not made; or
· we have not received all the information and explanations we require for our audit.

RESPONSIBILITIES OF DIRECTORS

As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the consolidated financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, the directors are responsible for assessing the Group and parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the parent Company or to cease operations, or have no realistic alternative but to do so.

AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE GROUP FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditors' Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

A further description of our responsibilities for the audit of the consolidated financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditors' Report.

USE OF OUR REPORT

This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.

Stephen Banks (Senior Statutory Auditor)

for and on behalf of

Lubbock Fine

Chartered Accountants & Statutory Auditors

3rd Floor Paternoster House 65 St Paul's Churchyard London EC4M 8AB

Date:

SHAREHOLDINGS

The issued capital of the Company as at 6 August 2019 is 150,782,587 fully paid ordinary shares. All issued ordinary shares carry one vote per share and carry the rights to dividends.

DISTRIBUTION OF ORDINARY SHARES

RANGE	TOTAL HOLDERS	SHARES	% SHARES

1 - 1,000	99	52,158	0.03
1,001 - 5,000	218	648,400	0.43
5,001 - 10,000	125	1,014,336	0.67
10,001 - 100,000	279	9,999,290	6.63
100,001 Over	101	139,068,403	92.23
Rounding			0.01
Total	822	150,782,587	100.00

UNMARKETABLE PARCELS AS AT 6 AUGUST 2019

	MINIMUM PARCEL SIZE	HOLDERS	SHARES

Minimum \$ 500	1	44	5,988

TOP 20 SHAREHOLDERS AS AT 6 AUGUST 2019

RANK	NAME	UNITS	% OF UNITS

1.	MR MILOS BOSNJAKOVIC	16,000,000	10.61
2.	SANDFIRE RESOURCES NL	11,505,173	7.63
3.	CITICORP NOMINEES PTY LIMITED	10,936,764	7.25
4.	GLAMOUR DIVISION PTY LTD	9,148,192	6.07
5.	MR PAUL DAVID CRONIN	8,425,668	5.59
6.	MRS REBECCA CRONIN	8,425,664	5.59
7.	BNP PARIBAS NOMINEES PTY LTD	8,364,524	5.55
8.	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	7,329,780	4.86
9.	BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD DRP	6,724,682	4.46
10.	J P MORGAN NOMINEES AUSTRALIA PTY LIMITED	5,829,766	3.87
11.	MR CHARLES WAITE MORGAN	5,478,112	3.63
12.	NATIONAL NOMINEES LIMITED	2,685,000	1.78
13.	MR ALBERTO LAVANDEIRA ADAN	2,666,664	1.77
14.	UBS NOMINEES PTY LTD	2,500,000	1.66
15.	ILWELLA PTY LTD	2,318,181	1.54
16.	GLAMOUR DIVISION PTY LTD	1,655,808	1.10
17.	EQUITY TRUSTEES LIMITED	1,451,000	0.96
18.	ILWELLA PTY LTD	1,239,000	0.82
19.	DISCOVERY CAPITAL	1,000,000	0.66
20.	GREAT AUSTRALIA CORPORATION PTY LTD	1,000,000	0.66

REPORT STRATEGIC

SUBSTANTIAL SHAREHOLDERS AS AT 6 AUGUST 2019

As at 6 August 2019 there were four shareholders who held a substantial shareholding within the meaning of the Australian Corporations Act. A person has a substantial holding if the total votes that they or their associates have relevant interests in is five per cent of more of the total number of votes.

NAME	SHARES	% OF ISSUED CAPITAL

Paul Cronin	16,851,332	11.18%
Sandfire Resources NL	16,776,855	11.13%
Milos Bosnjakovic	16,000,000	10.61%
Eric de Mori	11,054,000	7.34%

VOTING RIGHTS

The Company is incorporated under the legal jurisdiction of England and Wales. To enable companies such as the Company to have their securities cleared and settled electronically through CHESS, Depositary Instruments called CHESS Depositary Interests (CDIs) are issued. Each CDI represents one underlying ordinary share in the Company (Share). The main difference between holding CDIs and Shares is that CDI holders hold the beneficial ownership in the Shares instead of legal title. CHESS Depositary Nominees Pty Limited (CDN), a subsidiary of ASX, holds the legal title to the underlying Shares.

Pursuant to the ASX Settlement Operating Rules, CDI holders receive all of the economic benefits of actual ownership of the underlying Shares. CDIs are traded in a manner similar to shares of Australian companies listed on ASX.

CDIs will be held in uncertificated form and settled/transferred through CHESS. No share certificates will be issued to CDI holders. Each CDI is entitled to one vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands.

If holders of CDls wish to attend and vote at the Company's general meetings, they will be able to do so. Under the ASX Listing Rules and the ASX Settlement Operating Rules, the Company as an issuer of CDls must allow CDI holders to attend any meeting of the holders of Shares unless relevant English law at the time of the meeting prevents CDI holders from attending those meetings.

In order to vote at such meetings, CDI holders have the following options:

(i) instructing CDN, as the legal owner, to vote the Shares underlying their CDls in a particular manner. A voting instruction form will be sent to CDI holders with the notice of meeting or proxy statement for the meeting and this must be completed and returned to the Company's Share Registry prior to the meeting; or
(ii) informing the Company that they wish to nominate themselves or another person to be appointed as CDN's proxy with respect to their Shares underlying the CDls for the purposes of attending and voting at the general meeting; or
(iii) converting their CDls into a holding of Shares and voting these at the meeting (however, if thereafter the former CDI holder wishes to sell their investment on ASX it would be necessary to convert the Shares back to CDls). In order to vote in person, the conversion must be completed prior to the record date for the meeting. See above for further information regarding the conversion process.

As holders of CDls will not appear on the Company's share register as the legal holders of the Shares, they will not be entitled to vote at Shareholder meetings unless one of the above steps is undertaken.

As each CDI represents one Share, a CDI Holder will be entitled to one vote for every CDl they hold.

Proxy forms, CDI voting instruction forms and details of these alternatives will be included in each notice of meeting sent to CDI holders by the Company.

These voting rights exist only under the ASX Settlement Operating Rules, rather than under the Companies Act 2006 (England and Wales). Since CDN is the legal holder of the applicable Shares and the holders of CDIs are not themselves the legal holder of their applicable Shares, the holders of CDls do not have any directly enforceable rights under the Company's articles of association.

As holders of CDIs will not appear on our share register as the legal holders of shares of ordinary shares they will not be entitled to vote at our shareholder meetings unless one of the above steps is undertaken.

www.adriaticmetals.com

270

PART 2

ADRIATIC METALS PLC CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2018

COMPANY DIRECTORY

Adriatic Metals plc and Controlled Entities Company Registration No. 10599833 ARBN 624 103 162

DIRECTORS

Peter Bilbe (Non-Executive Chairman) Paul Cronin (Non-Executive Director) Julian Barnes (Non-Executive Director) Eric de Mori (Non-Executive Director) Milos Bosnjakovic (Non-Executive Director)

COMPANY SECRETARY

Sean Duffy

UNITED KINGDOM REGISTERED OFFICE

Stamford House, Regent Street Cheltenham, Gloucestershire GL50 1HN England

AUSTRALIAN OFFICE

50 Ord Street West Perth WA 6005 Australia

AUDITOR

Lubbock Fine Chartered Accountants

65 St Paul's Churchyard London EC4M 8AB England

STOCK EXCHANGE LISTING

Australian Securities Exchange (Code: ADT)

SHARE REGISTRY

Computershare Investor Services Pty Limited

Level 11 172 St Georges Terrace Perth WA 6000 Australia

WEBSITE

www.adriaticmetals.com

02 STRATEGIC REPORT 2018 HIGHLIGHTS ACTIVITIES AND DIFFERENTIATION CEO REVIEW

PRINCIPAL RISKS AND UNCERTAINTIES

11 REPORT OF THE DIRECTORS DIRECTORS AND KEY MANAGEMENT DIRECTORS' REPORT CORPORATE GOVERNANCE REPORT

DIRECTORS' RESPONSIBILITIES STATEMENT

18 FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

COMPANY STATEMENT OF FINANCIAL POSITION

CONSOLIDATED AND COMPANY STATEMENT

OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF

CASH FLOWS

COMPANY STATEMENT OF CASH FLOWS

NOTES TO THE CONSOLIDATED AND

COMPANY FINANCIAL STATEMENTS

47 INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF ADRIATIC METALS PLC

51 ASX ADDITIONAL INFORMATION

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

STRATEGIC REPORT HIGHLIGHTS 2018

Adriatic Metals plc (Adriatic or the Company) Initial Public Offering (IPO) was completed in May 2018, with the Company listing on the Australian Securities Exchange (ASX). A total of AUD\$10m was raised in a heavily oversubscribed IPO offering, with 50 million securities issued at AUD\$0.20 per share, which funded a two-year budget.

Leading Australian copper producer Sandfire Resources NL (ASX:SFR) became a cornerstone investor, which provided a significant endorsement from a highly regarded mining company and paved the way for ongoing technical collaboration. Sandfire subscribed for 10 million securities at IPO and holds a relevant interest of 7.7%.

A maiden JORC Resource was declared on Veovaca of 7.3 million tonnes at a 0.5% Zinc equivalent cut-off grade.

Commencement of a 15,000m diamond drilling programme at Adriatic's 100% owned Vares Project with 1st phase of drilling focusing on the high grade Rupice deposit and surrounding drill targets. Drilling since IPO has significantly extended the Rupice mineralisation in several directions, with major drill hole intercepts announced including:

> Hole BR-2-18, intercepted 64m @ 4.6g/t Au, 537g/t Ag, 0.9% Cu, 7.7% Pb, 10.8% Zn, 46% BaSO4, from 214m
> Hole BR-3-18, intercepted 36m @ 4.4g/t Au, 463g/t Ag, 0.5% Cu, 4.3% Pb, 5.7% Zn, 55% BaSO4 from 196m; and 22m @ 4.1g/t Au, 258g/t Ag, 0.8% Cu, 7.5% Pb, 12.8% Zn, 56% BaSO4 from 244m
> Hole BR-5-18, intercepted 66m @ 2.1g/t Au, 158g/t Ag, 2.3% Cu, 8.6% Pb, 12.8% Zn and 37% BaSO4 from 210m
> Hole BR-7-18, intercepted 18m @ 2.6g/t Au, 201g/t Ag, 0.5% Cu, 4.5% Pb, 9.2% Zn and 62% BaSO4 from 228m
> Hole BR-8-18, intercepted 16m @1.6g/tAu, 136g/t Ag, 1.1% Cu, 4.0% Pb, 6.5% Zn and 10m at 51% BaSO4 from 206m

Achieved significant regulatory milestones including initial approval, by the municipality, of the Company's application to expand the concession area at the Vareš Project and also the approval by the Federation of Bosnia & Herzegovina of the 'Reserves' Elaborat for the Veovaca deposit, representing a step toward the issue of an Exploitation Permit for the combined Vareš Concession.

ACTIVITIES & DIFFERENTIATION

Adriatic is a zinc polymetallic explorer and developer via its 100% interest in the Vareš Project in the Federation of Bosnia & Herzegovina (Bosnia).

The Project comprises a brown-field open cut zinc/lead/barite and silver mine at Veovaca and at Rupice, an advanced exploration deposit which exhibits exceptionally thick mineralisation with high grades of base and precious metals.

Adriatic's exploration programme is well underway with exploration activities currently focussed on the high grade Rupice deposit. The short-term aim is to complete a drilling programme and maiden resource estimate at Rupice and to advance a technical study for the proposed development of the Vares project. Further drilling is also proposed at the Veovaca deposit to refine and optimise the subsequent mining plan.

Adriatic has announced its initial world class exploration results at Rupice with strong exploration growth potential and has defined a JORC mineral resource at the previously operating open pit mine at Veovaca. The sites are less than 20km apart and are proximal to or in the near vicinity of existing infrastructure in terms of power, water, rail, sealed roads, access to a skilled workforce, accommodation facilities, service providers and an international airport.

Adriatic seeks to differentiate through its competitive advantages of:

establishing an early mover advantage in Bosnia as the Company is the only publicly listed mining concession holder in a country with a rich mining history, a pro-mining outlook, highly prospective geology and a stable fiscal and political system.
strategically increasing its concession footprint, based on a database of historically discovered mineralisation near to its current projects and by reviewing other historic and new opportunities within Bosnia.
a capable and multi-disciplinary management team which includes well regarded and experienced mining professionals with a track record of project delivery and operating experience.
identifying through exploration drilling some of the highest grade polymetallic results globally; and
being well funded for its current activities including the 15,000m diamond core drill programme and numerous technical evaluation programs.

STRATEGIC REPORT CHIEF EXECUTIVE OFFICER'S REVIEW

This is Adriatic's first Annual Report as a listed company and it is pleasing to report that the Company is delivering on the key milestones we outlined in our 2018 IPO prospectus. Your board and management team are focused on ensuring we continue to develop our mineral assets in Bosnia with a view to increasing both the tonnage and metal values of the resources and rapidly progressing scoping and feasibility studies together with progressing the various approvals processes.

The Company's key strategic highlights are detailed below.

EXPLORATION PROGRAMME & ASSETS

(i) Rupice Prospect – The Rupice Prospect was an advanced exploration project which when acquired, exhibited exceptionally high grades of base and precious metals and is located approximately 18 km North West of the Veovaca Deposit. As announced to the ASX, the Company released drill hole results that have already returned the highest grade and thickest results to date (BR 2, 3 & 5) and have extended the thick high-grade mineralisation down dip circa 80m and along plunge circa 160m. In the coming months, the Company plans to continue drilling to expand the known mineralised zone both laterally and down plunge. Adriatic has also delineated well defined drill targets both along strike and parallel to the known mineralisation at Rupice.

HOLE	FROM M	TO M	INTERVAL M	Au g/t	Ag g/t	Cu %	Pb %	Zn %	BaSO4 %

BR-10-18	236	264	28	3.4	271	0.5	5.9	10.8	61
BR-8-18	206	222	16	1.6	136	1.1	4	6.5	33
BR-7-18	228	246	18	2.6	201	0.5	4.5	9.2	62
BR-5-18	210	276	66	2.1	158	2.3	8.6	12.8	37
BR-3-18	196	232	36	4.4	463	0.5	4.3	5.7	55
BR-3-18	244	266	22	4.1	258	0.8	7.5	12.8	56
BR-2-18	214	278	64	4.6	537	0.9	7.7	10.8	46
BR-7-17	94	134	40	3.6	479	0.6	5.5	8.2	57
BR-6-17	116	138	22	1.8	161	0.3	1.7	1.8	26
BR-4-17	146	176	30	3.5	382	0.2	4.1	5.8	71
BR-1-17	178	242	64	2.3	373	0.9	5.1	8.4	44

TABLE 1 DRILL HOLE RESULTS FOR KEY RUPICE HIGH GRADE INTERSECTIONS

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

REPORT STRATEGIC

FINANCIAL STATEMENTS DIRECTORS'

FIGURE 1 PLAN MAP SHOWING KEY DRILL HOLES & OUTLINE OF PREVIOUSLY KNOWN MINERALISATION

STRATEGIC REPORT CHIEF EXECUTIVE OFFICER'S REVIEW

"The extension areas include land where the Company has identified a strong exploration potential and where additional drilling could identify extensions to the known mineralisation or where historical or recent data indicates the potential for new discoveries."

EXPLORATION PROGRAMME & ASSETS (CONTINUED)

(ii) Veovaca Deposit – is an historic open cut zinc, lead, barite and silver mine which operated between 1983 and 1987 and ultimately shut down prior to emerging hostilities in the region. The Company completed a 16-hole, 1,381 metre diamond drilling programme at Veovaca in 2017 to confirm historical results and support a maiden JORC compliant resource of 4.4 million tonnes at a 2% cut-off (7.3 million tonnes at a 0.5% cut-off). The ongoing work programme for Veovaca is to conduct further exploration drilling with a view of increasing the current JORC resource, thoroughly sample for gold and silver across the entire resource base and to undertake metallurgical and mining studies.

(iii) Approval received for Expanded

Concession area – in August 2018, the Vareš Municipal Council approved Adriatic's application for a major land expansion to its existing Concession Agreement at its 100% owned Vareš Projects that comprise Rupice and Veovaca. Under the terms of the Concession Agreement, the Company has three Fields, being Veovaca I & II and Rupice-Jurasavec Brestic, as outlined in red in Figure 4 below. The extension areas include land where the Company has identified a strong exploration potential and where additional drilling could identify extensions to the known mineralisation or where historical or recent data indicates the potential for new discoveries. The expanded Concession area includes land immediately to the north of hole BR-5-18, which intercepted 66m of high grade mineralisation, with this area being a high priority for future drilling. The Government of Zenica Canton has opened a 30 day Public Review period for the amendment of the Concession Agreement, and we expect final approval from the Canton within a short period following the end of the Public Review period.

(iv) Permitting Milestone – Adriatic recently confirmed that the Federal Ministry of Mining within the Federation of Bosnia & Herzegovina has provided written acknowledgment of the completion of the Reserves Elaborat for the Veovaca deposit, which forms part of the broader Vareš Project, representing a major milestone toward the issue of the Exploitation Permit. Under the terms of the Concession Agreement, the Company is required to complete the conditions for an Exploitation Permit by May 2020, which will then provide the company with license tenure until 2038 and can be further extended at the election of the Company for a period of 10 years. Following the issue of the Exploitation Permit, Adriatic will prepare and submit a Main Mining Plan (Feasibility Study) and apply for a Water Management Permit, which once accepted, will result in an Operations Permit being granted.

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

FINANCIAL

FIGURE 3 VEOVACA LONG SECTION

FIGURE 4 MAP SHOWING ADRIATIC'S EXISTING (RED) AND NEW CONCESSION AREAS (BLUE)

STRATEGIC REPORT CHIEF EXECUTIVE OFFICER'S REVIEW

BOSNIAN OPERATING ENVIRONMENT & IN-COUNTRY MANAGEMENT TEAM

The Balkans have some of the world's largest deposits (Cu, Au) and attracted significant investment from Rio Tinto, Freeport McMoran, First Quantum, Dundee Precious Metals and Nevsun. In the Federation of Bosnia and Herzegovina (Bosnia), a legacy mining code and complex bureaucracy has limited foreign investment and modern exploration over the last 20 years, creating an opportunity for potential major discoveries. Bosnia is now a stable democracy with over 20 years of peace, has a multi-party political system and is aspiring to join the EU and NATO. The Government of Bosnia is pro-mining and has an open policy to foreign investment and a low corporate tax rate of 10%. Foreign investors have equal rights and full legal protection and the local government in the Vareš region has publicly expressed strong support for the Project.

Bosnia has no requirement for government participation or free carry. The country has a skilled workforce, low labour rates and low cost of living, established transportation networks and low electricity costs. Rail networks link European smelters and seaboard markets through ports in Montenegro (Bar) and Croatia (PloÏe).

Adriatic's exploration programme is managed by Bob Annett, an experienced geologist with over 40 years' experience across all aspects of exploration, evaluation and mining of precious, base & industrial metals and is the nominated JORC Competent Person.

During the year, Adriatic has been able to recruit and assemble a strong and highly competent Bosnian management team to ensure that it is well represented at community and government levels and to manage operations in Bosnia. Milos BošnjakoviÉ is Head of Regulatory affairs in Bosnia and a Non-Executive Director. Milos has significant experience in mineral projects in the region was formally a qualified lawyer within the Interior Ministry of the former Yugoslavian government.

In May 2018, Adriatic announced the appointment of Adnan Teletovic as the General Manager of Adriatic's wholly owned subsidiary, Eastern Mining d.o.o, in Bosnia. Mr. Teletovic is a dual Bosnian-Australian national with extensive experience in the mining industry having previously held senior positions at Kalgoorlie Consolidated Gold Mines, BHP Billiton and has significant experience in general management and a track record in managing large capital mining projects.

RESULT FOR FY18

As the company is in pre-production there is no forecast earnings nor expectation for profits and the Company will continue to invest in its exploration assets and incur losses in the near to medium term. The Loss after tax for the period was £1,928,697; FY17(£292,307) and comprised one off costs for the 2018 year including share option costs for £1,121,275 and IPO expenses of £123,006 relating to the ASX listing as per note 17 in the Group Consolidated Financial Statements to 30 June 2018.

INITIAL PUBLIC OFFERING ON ASX

During the year, Adriatic successfully completed its IPO on the ASX with a heavily oversubscribed offer that raised AUD\$10 million. This included a strategic cornerstone investment by leading Australian copper producer Sandfire Resources. Sandfire invested AUD\$2m into the IPO and is a substantial shareholder owning 7.7% of Adriatic.

Adriatic is now well positioned with a strong share register including significant board and management ownership and is fully funded for its current exploration and development budget. Board & management hold 34% of issued securities which are subject to a 2-year escrow period from date of ASX quotation.

Geraint Harris CHIEF EXECUTIVE OFFICER

FINANCIAL

TENEMENT PORTFOLIO TABLE

CONCESSION NUMBER	LICENCE AREAS (HA)				RUPICE EXPLORATION RIGHTS EXPIRY	VEOVACA EXPLOITATION RIGHTS
	VEOVACA I	VEOVACA II	RUPICE	DURATION (YEARS)	EXPIRY	DURATION (YEARS)	EXPIRY

04-18-21389-1/13	107.69	90.54	83.19	7.5	25 May 2020	25	12 March 2038(i)

KEY PERFORMANCE INDICATORS

The near term and primary performance indicators for Adriatic are related to its exploration activities and include:

(i) Efficiently managing the exploration programme and increasing the current mineralised footprint and increasing Adriatic's current JORC resource base
(ii) Advancing the permitting status on a pathway towards exploitation
(iii) Continued exploration on nearby prospects to define further drill targets with the intent of making additional mineral discoveries
(iv) Progressing the technical study elements for the deposits, culminating in publishing a scoping study and making progress towards future Pre-Feasibility and Feasibility Studies.

	2018 £	2017 £
Exploration & Evaluation Assets	929,260	172,337

COMPETENT PERSONS STATEMENT

FUTURE PROSPECTS

Adriatic's prospects are contingent upon the finalisation and completion of a successful 1st phase drilling programme. Subject to being able to expand the current identified mineralisation and continue reporting significant drill hole mineralised results at both Rupice and Veovaca, the Company's primary near term objectives are to declare a maiden resource at Rupice and continue to advance the technical studies and permitting on the concession and at Veovaca. Adriatic is also actively investigating new areas of interest within its current tenement portfolio and also new prospects.

Subject to the above being achieved, the Company will conclude a metallurgical programme and initiate a technical study.

STRATEGIC REPORT

PRINCIPAL RISKS AND UNCERTAINTIES

Key business risks affecting the Group are set out below.

EXPLORATION & DEVELOPMENT

FUTURE FUNDING NEEDS

The funds raised under the Offer are considered sufficient to meet the immediate objectives of the Company. Further funding may be required by the Company in the event costs exceed estimates or revenues do not meet estimates, to support its ongoing operations and implement its strategies.

BOSNIAN IN-COUNTRY RISKS

OPERATIONAL RISKS

The operations of the Company may be affected by various factors, including:

(i) failure to locate or identify mineral deposits;
(ii) failure to retain and secure key management;
(iii) failure to achieve predicted grades in exploration and mining; and
(iv) operational and technical difficulties encountered in metallurgy, processing and mining.

In the event that any of these potential risks eventuate, the Company's operational and financial performance may be adversely affected.

ENVIRONMENTAL RISK

COMMODITY & CURRENCY EXCHANGE PRICES

REPORT OF THE DIRECTORS

DIRECTORS AND KEY MANAGEMENT

PETER BILBE, B. ENG (MINING) (HONS)

Non-Executive Chairman

Mr Bilbe is a mining engineer with 40 years Australian and international mining experience in gold, base metals and iron ore at the operational, CEO and board levels. Mr Bilbe is currently Non-Executive Chairman of Independence Group NL and since 2009 has overseen the growth of Independence from operating a single mine to a AUD\$2.5 billion diversified gold and base metals mining and exploration company. Mr Bilbe is also Non-Executive Chairman of Intermin Resources Ltd, an emerging gold developer.

Peter Bilbe was appointed as the Non-Executive Chairman of the Company on 16 February 2018 and serves as Chair of the Remuneration Committee.

JULIAN BARNES, BSC (HONS)

Non-Executive Director

Dr Barnes is a geologist with extensive experience in major exploration and development projects. Previously, he was Executive Vice President Dundee Precious Metals where he lead exploration, project acquisition, and due diligence with a strong focus on Balkan mining & development.

He founded and led Resource Service Group for nearly two decades, which ultimately became RSG Global and has since been sold to Coffey Mining. He is also a Non-Executive Director of Thor Explorations Ltd, a company listed on the Toronto Stock Exchange (Venture Exchange) and Zinc Of Ireland, a company listed on the Australian Stock Exchange.

Julian Barnes was appointed as a Director of the Company on 16 February 2018 and serves as a member of the Audit Committee.

PAUL CRONIN, B. COM & MBA

Non-Executive Director

Mr Cronin is a unique resource finance specialist, with significant experience in equity, debt and mergers and acquisitions within the sector. As CEO of ASX Listed Anatolia Energy, Paul oversaw two successful and oversubscribed capital raisings, steering the stock to be the best performing uranium stock globally during his time with the company, and prior to its sale at a significant premium to its market capitalization. Prior to Anatolia, Paul was Vice President at the highly-regarded resource fund, RMB Resources where he originated, structured and managed several debt and equity investments on behalf of the fund. Paul is currently CEO of ASX & TSX listed Black Dragon Gold, and Non-Executive Director of Global Atomic Corporation.

Paul Cronin was appointed as a Director of the Company on 3 February 2017 and serves as a member of the Remuneration Committee and Chair of the Audit Committee.

ERIC DE MORI, B. MARKETING & DIP. FINANCIAL SERVICES

Non-Executive Director

Mr de Mori was appointed to the Board on 10 August 2017 and serves as a member of the Audit Committee.

MILOS BOSNJAKOVIC

Non-Executive Director

Mr Bosnjakovic was appointed to the Board of the Company on 16 July 2018 and serves as a member of the Remuneration Committee.

REPORT OF THE DIRECTORS

SENIOR MANAGEMENT

GERAINT HARRIS, B. ENG (HONS) & M. SC. ENG. (MINING)

Chief Executive Officer

Mr Harris is a mining engineer with over 20 years' experience across mining operations, consultancy, fund management and project finance – specialising in gold and base metals. Mr Harris has worked and lived in numerous countries across his career including Europe, North and South America, Central Asia, former Soviet Union and China. Geraint was also Manager mine services for Lisheen (high grade U/G) in Ireland, one of the biggest zinc mines in the world until its recent closure.

Geraint Harris was appointed as Chief Executive Officer on 1 October 2017.

ROBERT ANNETT, BSC (HONS), ARSM, AIMM, AIG & MIQ

Head of Exploration

Robert Annett was appointed as Head of Exploration on 1 April 2017.

SEAN DUFFY, MBA, GRAD CERT. IN BUSINESS MARKETING

Chief Financial Officer & Company Secretary

Mr Duffy brings with him more than 20 years of international finance experience in the mining industry, including key positions with BHP Billiton and other AIM/ASX listed companies. Sean Duffy was appointed as Chief Financial Officer and Company Secretary on 17 November 2017.

ADNAN TELETOVIC, B. ENG (HONS.)

General Manager, Eastern Mining d.o.o

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

STATEMENTS REPORT OF THE DIRECTORS STRATEGIC

FINANCIAL

DIRECTORS' REPORT

The Directors present their annual report with the statutory financial statements of the Group for the year ended 30 June 2018. This report should be read in conjunction with the Strategic Report on pages 02 to 10.

1 BOARD OF DIRECTORS AND OFFICERS OF THE COMPANY

The names of the Directors who held office during the financial year and to the date of this report were:

DIRECTOR NAME	POSITION	APPOINTED

Peter Bilbe	Non-Executive Chairman	16 February 2018
Paul Cronin	Non-Executive Director	3 February 2017
Julian Barnes	Non-Executive Director	16 February 2018
Eric de Mori	Non-Executive Director	10 August 2017
Milos Bosnjakovic	Non-Executive Director	16 July 2018

The company secretary is Sean Duffy.

2 RESULTS

The Group realised a loss after tax for the year of £1,928,697 (2017 loss of £292,307).

3 GOING CONCERN

The Group incurred a loss of £1,928,697 (30 June 2017: £292,307) in the period however the Group also had a net asset position at the balance sheet date.

4 DIVIDEND

The Directors do not recommend the payment of a final dividend for the year ended 30 June 2018 (2017: \$nil).

5 DIRECTORS' INDEMNITY INSURANCE

6 AUDITOR

Lubbock Fine Chartered Accountants have been appointed as auditors of Adriatic Metals plc and at the Company's 1st Annual General Meeting Lubbock Fine Chartered Accountants will be proposed for re- appointment.

REPORT OF THE DIRECTORS

DIRECTORS' REPORT (CONTINUED)

7 FINANCIAL RISK MANAGEMENT OBJECTIVES

The Group's financial risk management objectives and policies and exposures to risk are outlined in Note 23 to the financial statements.

8 ROUNDING OF AMOUNTS AND PRESENTATIONAL CURRENCY

Amounts in the Directors Report and the accompanying financial report have been rounded to the nearest thousand dollars, or in certain cases to the nearest dollar, unless otherwise expressly stated. The Group financial statements are presented in British Pounds ("£") which is the Group's presentational currency.

On behalf of the Board

Peter Bilbe CHAIRMAN

25 September 2018

CORPORATE GOVERNANCE REPORT

The Company's Corporate Governance Statement has been approved by the Board and can be located on the Company's website at http://www.adriaticmetals.com/corporate-governance/

REMUNERATION POLICY FOR EXECUTIVES AND MANAGEMENT

Given the size of the company and current board structure at 30 June 2018 the company had not established a Remuneration and Nominations Committee with any relevant matters being considered by the full Board of the Company. Subsequent to year end the Board established a Remuneration Committee on 14 September 2018.

SHARE OPTIONS

The Company has adopted a company share option plan (Plan). The Plan forms what the Board considers to be an important element of the Company's total remuneration strategy for its officers and staff.

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

TOTAL

REMUNERATION POLICY FOR NON-EXECUTIVE DIRECTORS

The Company Articles provide that each Director is entitled to such remuneration from the Company as the Directors decide, but the total amount provided to all non-executive directors must not exceed in aggregate the amount fixed by the Directors prior to the first annual general meeting. The aggregate remuneration for all non-executive directors has been set at an amount of AUD\$400,000 per annum by the Directors. The remuneration of the Non-Executive Directors must not be increased except pursuant to a resolution passed at a general meeting of the Company where notice of the proposed increase has been given to Shareholders in the notice convening the meeting.

The remuneration of the Non-Executive Directors is determined by the Board as a whole, based on a review of current practices in other equivalent companies. The Non-Executive Directors each have service agreements that are reviewed annually by the Board.

DIRECTORS' REMUNERATION (AUDITED)

2018 SALARY/FEE LONG TERM BENEFIT £ £ £ Paul Cronin 5,000 - 5,000 Eric De Mori 5,059 - 5,059 Peter Bilbe 19,573 - 19,573 Julian Barnes 11,607 - 11,607

The Company paid the following remuneration to each Director:

The annual Directors fees payable by the Company is as follows:

TOTAL	140,000
Julian Barnes	30,000
Peter Bilbe	50,000	(AUD\$90,000) equivalent
Eric De Mori	30,000	(AUD\$54,000) equivalent
Paul Cronin	30,000

	SALARY/FEE £

TOTAL 41,239 - 41,239

Milos Bosnjakovic was appointed as a Non-Executive Director on 16 July 2018 and therefore did not receive any Director fees for the period to 30 June 2018.

DIRECTORS - PRE IPO ADVISOR FEES	2018 £	2017 £

Swellcap Limited	120,400	100,000
Lancaster Corporate	75,000	75,000
TOTAL	195,400	175,000

REPORT OF THE DIRECTORS

DIRECTORS' REMUNERATION (AUDITED) (CONTINUED)

RELATED PARTY NOTE – DIRECTOR ADVISOR FEES

The Company engaged Swellcap Limited, as a corporate advisor, under a corporate advisory agreement which commenced on 1 February 2017. Swellcap is a related party of the Company as it is controlled by Paul Cronin, a Director of the Company. Under this agreement, the Company paid £100,000 for advisory fees and £10,000 per month from 1 February 2017 (capped at £100,000) for services provided by Paul Cronin in his capacity as a Director. No further payments are due to Swellcap Limited under the terms of this agreement. The Company has also engaged Swellcap to provide the Company with corporate office facilities and services from 1 April 2018 at £5,000 per month.

The Company engaged Lancaster Corporate Pty Ltd, as a corporate advisor, under a corporate advisory agreement which commenced on 1 February 2017. Lancaster is a related party of the Company as it is controlled by Eric De Mori, a Director of the Company. Under this agreement, the Company paid £50,000 for advisory fees and £10,000 per month from 1 February 2017 (capped at £100,000) for services provided by Eric De Mori in his capacity as a Director. No further payments are due to Lancaster Corporate under the terms of this agreement.

DIRECTOR'S SHARE OPTIONS

In addition to the fees above, the Company has issued the following options to Directors.

NAME OF DIRECTOR NON-EXECUTIVE	OPTIONS GRANTED	TOTAL OPTIONS VESTED AS AT 1 JULY 2017	OPTIONS VESTING IN THE YEAR	OPTIONS LAPSING IN THE YEAR	TOTAL OPTIONS VESTED AS AT 30 JUNE 2018	EXERCISE PRICE	EARLIEST DATE OF EXERCISE (ESCROW DATE)	DATE OF EXPIRY


Peter Bilbe	1,500,000	-	1,500,000	-	1,500,000	AUD\$0.30	1/5/2020	1/7/2021
Paul Cronin	5,000,000	-	5,000,000	-	5,000,000	AUD\$0.20	1/5/2020	1/7/2023
Eric De Mori	4,000,000	-	4,000,000	-	4,000,000	AUD\$0.20	1/5/2020	1/7/2023
Julian Barnes	1,000,000	-	1,000,000	-	1,000,000	AUD \$0.30	1/5/2020	1/7/2021

DIRECTORS' INTERESTS

The Directors' interests in shares and other securities in Adriatic Metals plc are set out below:

NON-EXECUTIVE DIRECTOR	NUMBER OF ORDINARY SHARES (CDI'S) 30 JUNE 2018	NUMBER OF OPTIONS 30 JUNE 2018

Peter Bilbe	250,000	1,500,000
Paul Cronin	16,851,332	5,000,000
Eric De Mori	11,054,000	4,000,000
Julian Barnes	-	1,000,000
Milos Bosnjakovic(i)	16,000,000	1,000,000

(i) Milos Bosnjakovic – was appointed to the board as a non-executive director on 16 July 2018

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

FINANCIAL

DIRECTORS RESPONSIBILITIES STATEMENT

The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the financial statements in accordance with International Financial Reporting Standards (IFRS) and applicable UK Company law. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Group for that year. In preparing these financial statements, the Directors are required to:

select suitable accounting policies and then apply them consistently;
make judgements and estimates that are reasonable and prudent;
state whether applicable International Financial Reporting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group's and Company's transactions and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors confirm that:

so far as each Director is aware, there is no relevant audit information of which the company's auditor is unaware; and
the Directors have taken all the steps that they ought to have taken as Directors in order to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the company's website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

On behalf of the Board

Peter Bilbe CHAIRMAN 25 September 2018

YEAR ENDED 30 JUNE 2018

CONSOLIDATED STATEMENT OF PROFIT OR LOSS & OTHER COMPREHENSIVE INCOME

		PERIOD FROM 1 JUL 2017 TO	PERIOD FROM 3 FEB 2017 TO
	NOTE	30 JUN 2018 £	30 JUN 2017 £

REVENUE
Sale of services		-	1,519
GROSS PROFIT		-	1,519

Administrative expenses	5	(2,170,921)	(286,461)
OPERATING LOSS		(2,170,921)	(284,942)

Finance costs	8	242,224	(7,365)
LOSS BEFORE TAX FROM CONTINUING OPERATIONS		(1,928,697)	(292,307)

Tax	9	-	-

LOSS FROM CONTINUING OPERATIONS		(1,928,697)	(292,307)

Other comprehensive income	10	5,965	25,402

TOTAL COMPREHENSIVE INCOME		(1,922,732)	(266,905)


Earnings per share expressed in pence per share:	16
Basic		(2.27)	(0.55)
Diluted		(2.10)	(0.55)

All the activities of the Group are classed as continuing.

The Company has taken advantage of section 408 of the Companies Act 2006 not to publish its own statement of profit or loss.

The notes on pages 24 to 46 form part of these financial statements.

AS AT 30 JUNE 2018 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

NOTE	30 JUN 2018 £	30 JUN 2017 £

NON-CURRENT ASSETS
Intangible assets 12	1,034,235	282,107
Tangible assets 11	626,308	585,686
	1,660,543	867,793
CURRENT ASSETS
Inventories	-	22
Trade and other receivables 13	147,711	17,688
Cash and cash equivalents 14	4,644,389	311,470
	4,792,100	329,180

TOTAL ASSETS	6,452,643	1,196,973

EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital 16	1,733,042	856,323
Share premium	5,515,049	406,183
Other capital reserves 18	1,282,365	-
Other reserves 18	31,367	25,402
Retained deficit 18	(2,221,004)	(292,307)

TOTAL EQUITY	6,340,819	995,601

CURRENT LIABILITIES
Trade and other payables 15	111,824	201,372
TOTAL EQUITY AND LIABILITIES	6,452,643	1,196,973

The notes on pages 24 to 46 form part of these financial statements.

These financial statements were approved by the board and were signed on its behalf by:

Mr P Cronin DIRECTOR

Date: 25 September 2018

Company Registration Number: 01682644

AS AT 30 JUNE 2018 COMPANY STATEMENT OF FINANCIAL POSITION

	NOTE	30 JUN 2018 £	30 JUN 2017 £


NON-CURRENT ASSETS
Investments	4	1,517,405	883,545
Intangible assets	12	345,761	73,412
Tangible assets	11	26,454	360
		1,889,620	957,317
CURRENT ASSETS
Trade and other receivables	13	110,494	275,000
Cash and cash equivalents	14	4,572,426	226,830
		4,682,920	501,830

TOTAL ASSETS		6,572,540	1,459,147

Equity
Share capital	16	1,733,042	856,323
Share premium		5,515,049	406,183
Other capital reserves	18	1,282,365	-
Retained earnings	18	(2,023,689)	7,982

TOTAL EQUITY		6,506,767	1,270,488
CURRENT LIABILITIES
Trade and other payables	15	65,773	188,659

TOTAL EQUITY AND LIABILITIES		6,572,540	1,459,147

The notes on pages 24 to 46 form part of these financial statements.

These financial statements were approved by the board and were signed on its behalf by:

Mr P Cronin DIRECTOR Date: 25 September 2018 Company Registration Number: 01682644

YEAR ENDED 30 JUNE 2018 CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY

GROUP	SHARE CAPITAL £	SHARE PREMIUM £	OTHER CAPITAL RESERVE £	RETAINED EARNINGS £	OTHER RESERVES (FOREIGN CURRENCY TRANSLATION RESERVES) £	TOTAL £

As at 3 February 2017	-	-	-	-	-	-
Loss for the period	-	-	-	(292,307)	-	(292,307)
Issue of share capital	856,323	406,183	-	-	-	1,262,506
Other comprehensive income	-	-	-	-	25,402	25,402
As at 30 June 2017	856,323	406,183	-	(292,307)	25,402	995,601

Loss for the period	-	-	-	(1,928,697)	-	(1,928,697)
Issue of share capital	876,719	5,108,866	-	-	-	5,985,585
Issue of options	-	-	1,282,365	-	-	1,282,365
Other comprehensive income	-	-	-	-	5,965	5,965
As at 30 June 2018	1,733,042	5,515,049	1,282,365	(2,221,004)	31,367	6,340,819

COMPANY	SHARE CAPITAL	SHARE PREMIUM	OTHER CAPITAL RESERVE	RETAINED EARNINGS	OTHER RESERVES (FOREIGN CURRENCY TRANSLATION RESERVES)	TOTAL
	£	£	£	£	£	£

As at 3 February 2017	-	-	-	-	-	-
Loss for the period	-	-	-	7,982	-	7,982
Issue of share capital	856,323	406,183	-	-	-	1,262,506
Other comprehensive income	-	-	-	-	-	-

As at 30 June 2017	856,323	406,183	-	7,982	-	1,270,488

Loss for the period	-	-	-	(2,031,671)	-	(2,031,671)
Issue of share capital	876,719	5,108,866	-	-	-	5,985,585
Issue of options	-	-	1,282,365	-	-	1,282,365
Other comprehensive income	-	-	-	-	-	-

As at 30 June 2018	1,733,042	5,515,049	1,282,365	(2,023,689)	-	6,506,767

YEAR ENDED 30 JUNE 2018 CONSOLIDATED STATEMENT OF CASH FLOWS

	2018 £	2017 £

Loss	(1,928,697)	(292,307)
Foreign exchange difference on consolidation	5,965	25,402
Depreciation and amortisation	8,910	2,394
Share based payments	1,161,408	-
Other non-cash movements	(4,885)	-
Working capital adjustments:
Increase in trade and other receivables	(130,023)	(17,210)
Decrease/(increase) in inventories	22	(22)
(Decrease)/increase in trade and other payables	(89,548)	186,858

Net cash flows used in operating activities	(976,848)	(94,885)

Investing activities
Purchase of property, plant and equipment	(40,296)	(39,920)
Purchase of intangible assets	(756,479)	(176,624)
Acquisition of subsidiary undertaking	-	(426,624)
Net cash flows used in investing activities	(796,775)	(643,168)

Financing activities
Issue of share capital (net of fees)	6,106,542	1,049,523

Net cash flows generated from financing activities	6,106,542	1,049,523
Net increase in cash and cash equivalents	4,332,919	311,470
Cash and cash equivalents at 30 June 2017	311,470	-
Cash and cash equivalents at 30 June 2018	4,644,389	311,470

The notes on pages 24 to 46 form part of these financial statements.

FINANCIAL STATEMENTS DIRECTORS'

YEAR ENDED 30 JUNE 2018 COMPANY STATEMENT OF CASH FLOWS

	2018 £	2017 £

(Loss)/profit	(2,031,671)	7,982
Share based payments	1,161,408	-

Working capital adjustments:
Decrease/(increase) in trade and other receivables	164,506	(275,000)
(Decrease)/increase in trade and other payables	(122,886)	188,659

Net cash flows used in operating activities	(828,643)	(78,359)

Investing activities
Purchase of property, plant and equipment	(26,094)	(360)
Purchase of intangible assets	(272,349)	(73,412)
Investment in subsidiary undertaking	(633,860)	(670,562)

Net cash flows used in investing activities	(932,303)	(744,334)

Financing activities
Issue of share capital	6,106,542	1,049,523

Net cash flows generated from financing activities	6,106,542	1,049,523

Net increase in cash and cash equivalents	4,345,596	226,830

Cash and cash equivalents at 30 June 2017	226,830	-

Cash and cash equivalents at 30 June 2018	4,572,426	226,830

The notes on pages 24 to 46 form part of these financial statements

YEAR ENDED 30 JUNE 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. CORPORATE INFORMATION

The consolidated financial statements present the financial information of Adriatic Metals and its subsidiaries (collectively, the Group) for the year ended 30 June 2018. The comparative period represents the period from 3 February 2017 to 30 June 2017 and so is not directly comparable. Adriatic Metals Plc (the Company or the parent) is a public company limited by shares and incorporated in England & Wales. The registered office is located at Second Floor, Stamford House, Regent Street, Cheltenham, United Kingdom, GL50 1HN.

The Group is principally engaged in the exploration for metals for future mining activity.

Information on the Group's structure is provided in Note 4.

2. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PREPARATION

The consolidated financial statements have been prepared on a historical cost basis.

The consolidated financial statements are presented in British Pounds (£) rounded to the nearest pound.

GOING CONCERN

The Group incurred a loss of £1,928,697 (2017 - £292,307) in the year however the Group also had a net asset position at the balance sheet date.

BUSINESS COMBINATIONS

If the business combination is achieved in stages, the previously held equity interest is remeasured at its acquisition date fair value and any resulting gain or loss is recognised in profit or loss.

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

GOODWILL

FOREIGN CURRENCIES

TRANSACTIONS AND BALANCES

Transactions in foreign currencies are initially recorded by the Group's entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date.

Differences arising on settlement or translation of monetary items are recognised in profit or loss.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of nonmonetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item.

GROUP COMPANIES

REVENUE RECOGNITION

YEAR ENDED 30 JUNE 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

TAXES

Current income tax

Deferred tax

Deferred tax liabilities are recognised for all taxable temporary differences, except:

When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
In respect of taxable temporary differences associated with investments in subsidiaries and associates, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.
In respect of deductible temporary differences associated with investments in subsidiaries and associates, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

Sales tax

Expenses and assets are recognised net of the amount of sales tax, except:

When the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable.
When receivables and payables are stated with the amount of sales tax included.

The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

FINANCIAL

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

EXPLORATION AND EVALUATION EXPENDITURE

Pre-licence costs

Exploration and evaluation expenditure

Exploration and evaluation activity involves the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource.

Exploration and evaluation activity includes:
Researching and analysing historical exploration data
Gathering exploration data through geophysical studies
Exploratory drilling and sampling
Determining and examining the volume and grade of the resource
Surveying transportation and infrastructure requirements
Conducting market and finance studies

Licence costs paid in connection with a right to explore in an existing exploration area are capitalised and amortised over the term of the permit.

Costs expensed during this phase are included in 'Other operating expenses' in the statement of profit or loss and other comprehensive income.

YEAR ENDED 30 JUNE 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment transferred from acquisitions are initially measured at the fair value at the date on which control is obtained.

Land and buildings are measured at cost less accumulated depreciation on buildings and impairment losses.

Depreciation is calculated on a straight-line at the following rates per each category of asset:

Land & buildings Not depreciated
Plant & equipment 15%
Office Equipment 15%
Vehicles 15%
Assets under construction Not depreciated

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.

INTANGIBLE ASSETS

Amortisation is calculated on a straight-line at the following rates per each category of asset:

Patents & Licenses – 5%

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

REPORT

REPORT STRATEGIC

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

FINANCIAL INSTRUMENTS

Financial assets in the scope of IAS 39 Financial Instruments: Recognition and Measurement are classified as financial assets at fair value through profit or loss, loans and receivables, held to maturity investments, available-for-sale financial assets, or derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial assets at initial recognition.

All financial assets are recognised initially at fair value plus transaction costs, except in the case of financial assets recorded at fair value through profit or loss which do not include transaction costs. Purchases or sales of financial assets that require delivery of assets in a time frame established by regulation or convention in the marketplace (regular way trades) are recognized on the trade date, i.e., the date at which the Company commits to purchase or sell the asset.

The Company's financial assets include cash and cash equivalents, and trade and other receivables.

Financial liabilities in the scope of IAS 39 are classified as financial liabilities at fair value through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Company determines the classification of its financial liabilities at initial recognition.

All financial liabilities are recognized initially at fair value and, in the case of loans and borrowings, net of directly attributable transaction costs.

The Company's financial liabilities are classed as trade and other payables.

TRADE RECEIVABLES

Trade receivables are initially measured at fair value, and are subsequently measured at amortized cost using the effective interest rate method. Appropriate allowances for estimated irrecoverable amounts are recognized in statement of comprehensive income when there is objective evidence that the asset is impaired. The allowance recognized is measured as the difference between the asset's carrying amount and the present value of estimated future cash flows discounted at the effective interest rate computed at initial recognition.

TRADE AND OTHER PAYABLES

Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

CASH AND CASH EQUIVALENTS

SHARE-BASED PAYMENTS

Employees (including senior executives) of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments (equity-settled transactions).

EQUITY-SETTLED TRANSACTIONS

The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model, further details of which are given in Note 17.

YEAR ENDED 30 JUNE 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

EQUITY-SETTLED TRANSACTIONS (CONTINUED)

The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further details are given in Note 16).

PROVISIONS AND CONTINGENCIES

STANDARDS ISSUED BUT NOT YET EFFECTIVE

Standards issued and not yet effective for the Group's financial statements for the period ended 30 June 2018 are listed below. This listing of standards and interpretations issued are those that the Group reasonably expects to have an impact on disclosures, financial position or performance when applied at a future date. The Group intends to adopt these standards when they become effective.

NEW AND AMENDED STANDARDS AND INTERPRETATIONS

IFRS 9 Financial Instruments

IFRS 9, 'Financial instruments', addresses the classification, measurement and recognition of financial assets and financial liabilities. The complete version of IFRS 9 was issued in July 2014. It replaces the guidance in IAS 39 that relates to the classification and measurement of financial instruments. IFRS 9 retains but simplifies the mixed measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through other comprehensive income and fair value through profit and loss. The basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset.

Investments in equity instruments are required to be measured at fair value through profit or loss with the irrevocable option at inception to present changes in fair value in other comprehensive income not recycling. There is now a new expected credit losses model that replaces the incurred loss impairment model used in IAS 39. For financial liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in other comprehensive income, for liabilities designated at fair value through profit or loss. IFRS 9 relaxes the requirements for hedge effectiveness by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and for the 'hedged ratio' to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is still required but is different to that currently prepared under IAS 39. The standard is effective for accounting periods beginning on or after 1 January 2018. Early adoption is permitted. The Group is yet to assess IFRS 9's full impact.

FINANCIAL

2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

NEW AND AMENDED STANDARDS AND INTERPRETATIONS (CONTINUED)

IFRS 15 Revenue from Contracts with Customers

IFRS 15, 'Revenue from contracts with customers' deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity's contracts with customers. Revenue is recognised when a customer obtains control of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces IAS 18 'Revenue' and IAS 11 'Construction contracts' and related interpretations. The standard is effective for annual periods beginning on or after 1 January 2018 and earlier application is permitted. The Group is assessing the impact of IFRS 15.

IFRS 16 Leases

IFRS 16, 'Leases' deals with recognition, measurement, presentation and disclosure of leases. The standard provides a single accounting model, requiring lessees to recognise assets and liabilities for all leases unless the lease term is 12 months or less. Lessors continue to classify leases as operating or finance with IFRS 16's approach to lessor accounting substantially unchanged from its predecessor, IAS 17. The standard is effective for annual periods beginning on or after 1 January 2019 and earlier application is permitted.

USE OF ESTIMATES AND JUDGEMENTS

In particular, the following is an area where particular judgement is required:

EXPLORATION AND EVALUATION EXPENDITURE

Exploration and evaluation activity involves the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource.

Exploration and evaluation activity includes:

Researching and analysing historical exploration data
Gathering exploration data through geophysical studies
Exploratory drilling and sampling
Determining and examining the volume and grade of the resource
Surveying transportation and infrastructure requirements
Conducting market and finance studies

Licence costs paid in connection with a right to explore in an existing exploration area are capitalised and amortised over the term of the permit.

31 ³⁰⁴

YEAR ENDED 30 JUNE 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

3. SEGMENT INFORMATION

It is the opinion of the directors that the operations of the Group represent one segment, as they are treated as such when evaluating performance.

4. GROUP INFORMATION

Additions 883,545 At 30 June 2017 883,545 Additions 633,860 At 30 June 2018 1,517,405 NET BOOK VALUE At 30 June 2018 1,517,405	INVESTMENT IN SUBSIDIARY £















At 30 June 2017 883,545

The consolidated financial statements of the Group include:

NAME	PRINCIPAL ACTIVITIES	ADDRESS OF REGISTERED OFFICE	% EQUITY INTEREST
			2018	2017
Eastern Mining d.o.o	Mining exploration	Marsala Tita 3/II, 1000 Sarajevo, Bosnia and Herzegovina	100	100

ACQUISITIONS IN PERIOD ENDED 30 JUNE 2017

The Group acquired 100% of the share capital of Eastern Mining d.o.o (Eastern Mining) a company holding certain exploration licences, on 28 February 2017 for €750k cash and 4,000,000 shares in the Company. Eastern Mining has been acquired to gain access to additional reserves for the Group.

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

REPORT

4. GROUP INFORMATION (CONTINUED)

ACQUISITIONS IN PERIOD ENDED 30 JUNE 2017 (CONTINUED)

Acquisition date fair values

The provisional fair values of identifiable assets acquired and liabilities assumed of Eastern Mining as at the date of acquisition were:

	FAIR VALUE £

Assets
Intangible assets	107,453
Property, plant and equipment	546,190
Other current assets	478
Cash and cash equivalents	(657)
	653,464
Liabilities
Trade and other payables	(14,514)

Total identifiable assets at fair value	638,950

Due to the early stage nature of the company acquired and the nature of its operations, the Directors do not consider that any goodwill was acquired on acquisition. Any excess in amount paid is reflected in a fair value uplift in the licenses acquired.

Acquisition-date fair value of consideration transferred

	£

Cash paid	425,967
Fair Value of shares issued	212,983

Consideration transferred	638,950
The cash outflow on acquisition is as follows:
Net cash acquired with the subsidiary	(657)
Cash paid	(425,967)

Net consolidated cash outflow	426,624

From the date of acquisition (28 February 2017) to 30 June 2017, Eastern Mining contributed £1,519 to Group revenue and (£25,289) to Group loss. Due to the timing of the acquisition if this had taken place at the beginning of the period, Group revenue and loss for the 2017 period would have been materially the same as that shown in the Consolidated Statement of Comprehensive Income.

YEAR ENDED 30 JUNE 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

5. ADMINISTRATIVE EXPENSES

NOTE	2018 £	2017 £

Wages and salaries	173,850	60,378
Employee benefit expense – share options 17	1,121,275	-
Consultancy fees	531,954	175,000
Depreciation 11	4,632	424
Amortisation 12 Other costs	5,321 210,883	1,970 48,689
IPO Costs	123,006	-
	2,170,921	286,461

6. EMPLOYEES

The average monthly number of employees during the year was as follows:

Directors	3	2
Administrative staff - Eastern Mining	4	1
Exploration staff - Eastern Mining	10	4
Administrative and Management - Adriatic Metals	2	1
	19	8

7. AUDITORS REMUNERATION

	2018 £	2017 £

Auditor's remuneration – fees payable to the Group's auditor for the audit of the group's annual accounts	12,500	15,000
Auditor's remuneration – fees payable to the auditor for the audit of accounts of subsidiaries of the company	3,625	1,586
	16,125	16,586

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

8. FINANCE COSTS

	2018	2017
	£	£



Foreign currency movements	(242,224)	7,365

9. INCOME TAX

No liability to corporation tax arose on ordinary activities for the period ended 30 June 2018 or 30 June 2017.

RECONCILIATION OF TOTAL TAX CHARGE INCLUDED IN PROFIT AND LOSS

	2018 £	2017 £

Loss before tax	(1,928,697)	(292,307)

Loss multiplied by the standard rate of corporation tax in the UK 19%	(366,452)	(55,538)
Effects of:
Losses carried forward		55,538
	366,452
Total tax charge	-	-

FACTORS THAT MAY AFFECT FUTURE CURRENT AND TOTAL TAX CHARGES

A deferred tax asset of £70,000 (2017 - £10,000) at the year end has not been recognised due to uncertainty surrounding the Group's future taxable profits.

The UK corporation tax rate has reduced from 20% to 19%, effective 1 April 2017, and will be reduced further to 17% from 1 April 2020. The effects of these changes have been reflected in the financial statements.

10. OTHER COMPREHENSIVE INCOME

	2018 £	2017 £

Foreign exchange differences on consolidation	5,965	25,402

YEAR ENDED 30 JUNE 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

11. TANGIBLE ASSETS

GROUP

	LAND & BUILDINGS	PLANT & EQUIPMENT	ASSETS UNDER CONSTRUCTION	TOTAL
	£	£	£	£

COST
At 3 February 2017	-	-	-	-
Acquired through acquisition	546,190	-	-	546,190
Additions	-	19,055	4,693	23,748
Foreign exchange differences	16,172	-	-	16,172
At 30 June 2017	562,362	19,055	4,693	586,110
Additions	-	40,205	91	40,296
Disposals	-	-	-	-
Foreign exchange differences	3,758	125	32	3,915

At 30 June 2018	566,120	59,385	4,816	630,321
DEPRECIATION
At 3 February 2017	-	-	-	-
Charge for the year	-	424	-	424
At 30 June 2017	-	424	-	424
Charge for the year	-	3,589	-	3,589
On disposals	-	-	-	-
At 30 June 2018	-	4,013	-	4,013
NET BOOK VALUE
At 30 June 2018	566,120	55,372	4,816	626,308
At 30 June 2017	562,362	18,631	4,693	585,686

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

REPORT

STATEMENTS DIRECTORS' REPORT STRATEGIC

FINANCIAL

TANGIBLE ASSETS (CONTINUED)

COMPANY

	LAND & BUILDINGS	PLANT &	ASSETS UNDER	TOTAL
	£	EQUIPMENT £	CONSTRUCTION £	£

COST
At 3 February 2017	-	-	-	-
Additions	-	360	-	360
Disposals	-	-	-	-

At 30 June 2017	-	360	-	360

Additions	-	26,094	-	26,094
Disposals	-	-	-	-

At 30 June 2018	-	26,454	-	26,454
DEPRECIATION
At 3 February 2017	-	-	-
Charge for the year	-	-	-	- -

At 30 June 2017	-	-	-	-

Charge for the year	-	-	-	-
On disposals	-	-	-	-

At 30 June 2018	-	-	-	-

NET BOOK VALUE
At 30 June 2018	-	26,454	-	26,454

At 30 June 2017	-	360	-	360

YEAR ENDED 30 JUNE 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

12. INTANGIBLE ASSETS

GROUP

	EXPLORATION & EVALUATION	PATENTS AND LICENSES	TOTAL
	ASSETS
	£	£	£

COST
At 3 February 2017	-	-	-
Acquired through acquisition	-	107,453	107,453
Additions	172,337	-	172,337
Foreign exchange differences	-	4,287	4,287
At 30 June 2017	172,337	111,740	284,077
Additions	756,479	-	756,479
Disposals	-	-	-
Foreign exchange differences	444	526	970
At 30 June 2018	929,260	112,266	1,041,526

AMORTISATION AND IMPAIRMENT
At 3 February 2017	-	-	-
Charge for the year	-	1,970	1,970
At 30 June 2017	-	1,970	1,970
Charge for the year	-	5,321	5,321
On disposals	-	-	-
At 30 June 2018	-	7,291	7,291
NET BOOK VALUE
At 30 June 2018	929,260	104,975	1,034,235

At 30 June 2017	172,337	109,770	282,107

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

REPORT STRATEGIC

INTANGIBLE ASSETS (CONTINUED)

COMPANY

	EXPLORATION & EVALUATION	PATENTS AND LICENSES	TOTAL
	ASSETS £	£	£

COST
At 3 February 2017	-	-	-
Acquired through acquisition	73,412	-	73,412
Additions	-	-	-
Foreign exchange differences	-	-	-

At 30 June 2017	73,412	-	73,412

Additions Disposals	272,349 -	- -	272,349 -

At 30 June 2018	345,761	-	345,761

AMORTISATION AND IMPAIRMENT
At 3 February 2017	-	-	-
Charge for the year	-	-	-
At 30 June 2017	-	-	-
Charge for the year	-	-	-

At 30 June 2018	-	-	-
NET BOOK VALUE
At 30 June 2018	345,761	-	345,761

At 30 June 2017	73,412	-	73,412

13. TRADE AND OTHER CURRENT RECEIVABLES

	GROUP		COMPANY
	2018	2017	2018	2017
	£	£	£	£

VAT	128,583	17,245	91,730	-
Other receivables	19,128	443	18,764	-
Accrued management fee	-	-	-	275,000
	147,711	17,688	110,494	275,000

YEAR ENDED 30 JUNE 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

14. CASH AND CASH EQUIVALENTS

GROUP		COMPANY
2018 £	2017 £	2018 £	2017 £
4,640,896	311,470	4,568,933	226,830
3,493	-	3,493	-
4,644,389	311,470	4,572,426	226,830

15. TRADE AND OTHER CURRENT PAYABLES

	GROUP		COMPANY
	2018 £	2017 £	2018 £	2017 £

Trade payables	46,258	10,933	14,258	9,159
Accruals	51,515	179,500	51,515	179,500
Taxes payable	4,485	1,436	-	-
Other payables	9,566	9,503	-	-
	111,824	201,372	65,773	188,659

16. SHARE CAPITAL

GROUP AND COMPANY	30 JUN 2018	30 JUN 2017
	£	£


Issued and fully paid
Shares issued	1,733,042	856,323

On incorporation the company issued 20 shares of par value £0.0005 at £0.01 each, totalling £0.20.

On 10 February 2017 the company issued 12 million shares with par value of 0.05342, totalling £638,950.

On 13 February 2017, the company cancelled the 20 shares of par value £0.0005.

In April 2017, the company issued 200,000 shares with par value of £0.05342 at £0.15, totalling £30,000.

In April 2017, the company issued a further 200,000 shares with par value of £0.05342 at £0.15, totalling £30,000.

In April 2017, the company issued a further 3,757,036 shares with a par value of £0.05342 at £0.15, totalling £563,555.

In October 2017, the company issued a further 3,641,863 shares with a par value of £0.05342

On January 30, 2018 the company performed a share split on a 1:4 basis from the 19,798.899 shares issued to 79,195,596 shares in preparation for a listing on the Australian Stock Exchange ("ASX").

On February 2, 2018 the company issued 1,000,000 shares in lieu of a capital raising fee and issued on the ASX with a listing price of A\$0.20c

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

REPORT

REPORT STRATEGIC

16. SHARE CAPITAL (CONTINUED)

On April 27, 2018 the company listed on the ASX and upon listing, awarded the following shares and options:

SHARE SUMMARY	NO. OF SHARES

Total shares at IPO	80,195,596
Shares issued for fees	600,000
CDIs issued on listing	50,000,000
Total Shares	130,795,596
Options – see Note 17
Founder options at A\$0.20	9,000,000
Advisor options at A\$0.40	2,000,000
Executive options (various)	7,750,000
Total Options	18,750,000
Fully diluted Share Capital	149,545,596

EARNINGS PER SHARE

Basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period.

Diluted earnings per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

Reconciliations are set out below.

2018	EARNINGS	WEIGHTED AVERAGE NUMBER	PER-SHARE AMOUNT
		OF SHARES
	£		PENCE

Basic EPS
Earnings attributable to ordinary shareholders	(1,928,697)	84,960,236	(2.27)
Effect of dilutive securities	-	6,678,082	-

Diluted EPS
Adjusted earnings	(1,928,697)	91,638,318	(2.10)

2017	EARNINGS	WEIGHTED	PER-SHARE
		AVERAGE NUMBER OF SHARES	AMOUNT
	£		PENCE

Basic EPS
Earnings attributable to ordinary shareholders	(292,307)	52,808,122	(0.55)
Effect of dilutive securities	-	-	-

Diluted EPS

The weighted average number of shares has been calculated as if the share split occurred at the start date of the comparative period presented so that the earning per share figure is comparable.

Adjusted earnings (292,307) 52,808,122 (0.55)

YEAR ENDED 30 JUNE 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

17. SHARE OPTION SCHEME

During the year, the Company issued a number of share options, and the details of these are as follows:

EXECUTIVE OPTIONS	30C EXECUTIVE OPTIONS	40C EXECUTIVE OPTIONS	60C EXECUTIVE OPTIONS

Underlying share price (A\$)	0.200	0.200	0.200
Exercise price (A\$)	0.300	0.400	0.600
Valuation date	20 Feb 2018	20 Feb 2018	20 Feb 2018
Expiry date	1 Jul 2020	1 Jul 2020	1 Jul 2020
Life of the options (years)	2.36	2.36	2.36
Volatility	135%	135%	135%
Risk free rate	2.01%	2.01%	2.01%

Number of options	2,500,000	4,250,000	2,500,000
Value per option (A\$)	0.150	0.143	0.132
Value per Tranche (A\$)	375,000	607,750	330,000

OTHER OPTIONS	FOUNDER	ADVISOR

Underlying share price (A\$)	0.200	0.200
Exercise price (A\$)	0.200	0.400
Valuation date	20 Feb 2018	20 Feb 2018
Expiry date	1 Jul 2023	1 Jul 2021
Life of the options (years)	5.36	3.36
Volatility	135%	135%
Risk free rate	2.45%	2.01%
Number of options	9,000,000	2,000,000
Value per option (A\$)	0.178	0.143
Value per Tranche (A\$)	1,602,000	286,000

The share options have been valued, at the grant date, using the Black Scholes model for valuing options, and the inputs included in the modelling of this are shown above.

The key uncertainty in relation to this modelling is the volatility of the underlying share prices. For the purposes of the modelling, this has been determined by assessing volatility of the shares in the 4 months since listing, which represents the only suitable basis for determining the volatility.

During the year, the founder and advisor options fully vested, and the full value of these options is therefore recognised in the year ended 30 June 2018.

The executive options are recognised over their vesting period, taking into account the number of options which are expected to vest.

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

REPORT STRATEGIC REPORT

17. SHARE OPTION SCHEME (CONTINUED)

The impact of share options on the financial statements was as follows:

	GRANT DATE FAIR VALUE £	RECOGNISED IN 2018 £

Executive options
30c Executive Options	211,243	67,806
40c Executive Options	422,860	135,733
60c Executive Options	55,904	12,381
Other options
Advisor Options	161,090	161,090
Founder Options	905,355	905,355
	1,756,452	1,282,365

All recognised amounts in relation to options were shown within administrative expenses in the year, within the "Employee benefit expense – share options" line in Note 5, with the exception of Advisor Options which were directly related to the Company's issue of new shares in the year and so have been recognised as a deduction from equity.

18. RETAINED EARNINGS AND RESERVES

The other reserves of the Company are as follows:

Retained Earnings	Includes all current and prior period retained profits and losses, less dividends paid
Other Capital Reserve	Used to recognise the value of equity-settled share-based payments. See Note 17.
Other Reserves (Foreign currency translation reserves)	Used to recognise the foreign currency movements on consolidation.

19. RELATED PARTIES

The Company considers personnel with the authority and responsibility for planning, directing and controlling the activities of the Company to be key management personnel.

The following amounts were incurred with respect to the Company's Directors, Chief Executive Officer and Chief Financial Officer of the Company;

	30 JUNE 2018 £	30 JUNE 2017 £

Chief Executive Officer	76,000	-
Chief Finance Officer	29,725	-
Directors Fees	41,239	-
Directors – Advisory Fees	195,400	175,000
Total	342,364	175,000

YEAR ENDED 30 JUNE 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

19. RELATED PARTIES (CONTINUED)

The Company engaged Swellcap Limited, as a corporate advisor, under a corporate advisory agreement which commenced on 1 February 2017. Swellcap is a related party of the Company as it is controlled by Paul Cronin, a Director of the Company. Under this agreement the Company paid £100,000 for advisory fees and £10,000 per month from 1 February 2017 (capped at £100,000) for services provided by Paul Cronin in his capacity as a Director. No further payments are due to Swellcap Limited under the terms of this agreement. The Company has also engaged Swellcap to provide the Company with corporate office facilities and services from 1 April 2018 at £5,000 per month.

The Company engaged Lancaster Corporate Pty Ltd, as a corporate advisor, under a corporate advisory agreement which commenced on 1 February 2017. Lancaster is a related party of the Company as it is controlled by Eric De Mori, a Director of the Company. Under this agreement the Company paid £50,000 for advisory fees and £10,000 per month from 1 February 2017 (capped at £100,000) for services provided by Eric De Mori in his capacity as a Director. No further payments are due to Lancaster Corporate Pty Ltd under the terms of this agreement.

These fees are included in Directors – Advisory Fees in the above table.

In addition to the above analysis, the share options granted during the year shown in Note 17 represent related party transactions, with the founder options paid to shareholders of the Company, and the Executive options paid to key management personnel.

20. COMMITMENTS AND CONTINGENCIES

The company had no commitments as at 30 June 2018.

21. EVENTS AFTER THE REPORTING DATE

On September 4, 2018 the Company announced that the Federal Ministry of Mining within the Federation of Bosnia & Herzegovina ("FERMI") has provided written acknowledgment of the completion of the Reserves Elaborat for the Veovaca deposit, which forms part of the broader Vareš Project, representing a major milestone toward the issue of the Exploitation Permit.

22. FINANCIAL INSTRUMENTS

The notes contained within the significant accounting policies section provide a description of each category of financial assets and financial liabilities and the related accounting policies.

The carrying amounts of financial assets and financial liabilities not carried at fair value through the income statement (FVTPL) approximate their fair values.

A description of the Group's financial instrument risks, including risk management objectives and policies is given in note 23.

The carrying amounts of financial assets and financial liabilities in each category (excluding prepayments, deferred income, accrued income and expense) are included in the consolidated financial statements as follows:

	GROUP		COMPANY
	2018	2017	2018	2017
	£	£	£	£

Cash and cash equivalents	4,644,389	311,470	4,572,426	226,830
Trade and other receivables	19,128	443	18,764	275,000
Loans and receivables	4,663,517	311,913	4,591,190	501,830

Trade and other payables	107,339	199,936	65,773	188,659
Financial liabilities	107,339	199,936	65,773	188,659

44 ³¹⁷

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

REPORT STRATEGIC REPORT

23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

CAPITAL RISK MANAGEMENT

The Group's objectives when managing capital are:

to safeguard the Group's ability to continue as a going concern, so that it continues to provide returns and benefits for shareholders;
to support the Group's growth; and
to provide capital for the purpose of strengthening the Group's risk management capability.

FINANCIAL RISK FACTORS

The Group is exposed to market risk, foreign currency risk, credit risk and liquidity risk. Within each of the operating subsidiaries, the entities senior management oversees the management of these risks for their operations and periodically identify measure and manage these risks. These risks are summarised below.

MARKET RISK

Given that the company is not yet selling any minerals this is not a risk that affects the company in the current year however when the company does begin to trade in minerals it is a risk that will have to be considered given the volatility of mineral prices.

FOREIGN CURRENCY RISK

See the below sensitivity analysis for details of the possible impacts.

YEAR ENDED 30 JUNE 2018 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

23. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)

GROUP FOREIGN CURRENCY SENSITIVITY ANALYSIS

30 JUNE 2018	EFFECT ON PROFIT OR LOSS £	EFFECT ON EQUITY £

Increase in foreign exchange rate of 10%
Bosnian Mark	15,155	(120,351)
Decrease in foreign exchange rate of 10%
Bosnian Mark	(18,523)	147,096

30 JUNE 2017	EFFECT ON PROFIT OR LOSS £	EFFECT ON EQUITY £

Increase in foreign exchange rate of 10%
Bosnian Mark	2,299	(77,371)
Decrease in foreign exchange rate of 10%
Bosnian Mark	(2,810)	94,566

The movement in equity arises from changes in foreign currency offsetting the translation of foreign operations' net assets into £.

As can be seen from the above analysis the profit and loss would not be materially affected however equity could be affected with a slight movement in foreign exchange rates.

In addition to investments in foreign subsidiaries denominated in Bosnian Marks, at the year-end the Group held financial assets denominated in other currencies, as follows:

30 JUNE 2018	30 JUNE 2018	30 JUNE 2017


Amounts in Euros	€ 1,827,922	€ -
Amounts in Australian Dollars	A\$ 4,834,668	A\$ -

A 10% movement in the exchange rates with these currencies would have an impact of 10% of the above on both losses and equity.

CREDIT RISK

LIQUIDITY RISK

FINANCIAL

ADRIATIC METALS PLC

INDEPENDENT AUDITOR'S REPORT TO THE SHAREHOLDERS OF ADRIATIC METALS PLC

OPINION

We have audited the consolidated financial statements of Adriatic Metals Plc (the 'Company') and its subsidiaries (the 'Group') for the year ended 30 June 2018, which comprise the Consolidated Statement of Profit or Loss and Other Comprehensive Income, the Consolidated and Company Balance Sheets, the Consolidated and Company Statements of Changes in Equity, the Consolidated and Company Statement of Cash Flows and the related notes, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards as adopted by the European Union.

In our opinion the consolidated financial statements:

give a true and fair view of the state of the Group's and of the parent Company's affairs as at 30 June 2018 and of the Group's loss for the year then ended;
have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union; and
have been prepared in accordance with the requirements of the Companies Act 2006.

BASIS FOR OPINION

CONCLUSIONS RELATING TO GOING CONCERN

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:

the directors' use of the going concern basis of accounting in the preparation of the consolidated financial statements is not appropriate; or
the directors have not disclosed in the consolidated financial statements any identified material uncertainties that may cast significant doubt about the Group's or the parent Company's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the consolidated financial statements are authorised for issue.

KEY AUDIT MATTERS

Key audit matter	How our audit addressed the key audit matter
Impairment of exploration and evaluation assets and investment in subsidiary company	In accordance with IFRS 6 we reviewed the exploration and evaluation (E&E) assets for indications of impairment.

TO THE SHAREHOLDERS OF ADRIATIC METALS PLC

INDEPENDENT AUDITOR'S REPORT

The Group has capitalised significant costs in respect of its mining exploration activities, in accordance with IFRS 6 'Exploration for Evaluation of Mineral Resources' (IFRS 6), therefore there is a risk of impairment.

The results from the exploration activity are key to ensuring that future commercialisation will be achievable and that there are no indications of impairment, as well as the good standing of the licences in place.

The Company also has a significant investment in its subsidiary, the carrying value of which is linked to the underlying exploration asset. Therefore there is also a risk of impairment of the investments.

We have reviewed the assets for indications of impairment, considered and discussed the Groups forecasts and impairment reviews and obtained evidence that the licences remain in good standing.

Based on the above, no indications of impairment were noted.

OUR APPLICATION OF MATERIALITY

Overall materiality We determine materiality for the consolidated financial statements as a whole to be £130,000. This was based on the key performance indicator, being 2% of gross assets. We believe gross asset values are the most appropriate bench mark due to the minimal income statement activity during the year and existence of key balance sheet items.
Performance materiality On the basis of our risk assessment, together with our assessment of the company's control environment, our judgement is that performance materiality for the consolidated financial statements should be 55% of materiality, amounting to £70,000.

AN OVERVIEW OF THE SCOPE OF OUR AUDIT

OTHER INFORMATION

We have nothing to report in this regard.

OPINION ON OTHER MATTERS PRESCRIBED BY THE COMPANIES ACT 2006

In our opinion, based on the work undertaken in the course of the audit:

the information given in the Group Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the consolidated financial statements; and
the Group Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.

MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

adequate accounting records have not been kept by the Group, or returns adequate for our audit have not been received from branches not visited by us; or
the Group consolidated financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.

RESPONSIBILITIES OF DIRECTORS

TO THE SHAREHOLDERS OF ADRIATIC METALS PLC INDEPENDENT AUDITOR'S REPORT

AUDITORS' RESPONSIBILITIES FOR THE AUDIT OF THE GROUP FINANCIAL STATEMENTS

USE OF OUR REPORT

Stephen Banks (Senior Statutory Auditor)

for and on behalf of

Lubbock Fine

Chartered Accountants & Statutory Auditors

3rd Floor Paternoster House 65 St Paul's Churchyard London EC4M 8AB

Date:

FOR THE YEAR ENDED 30 JUNE 2018 ADRIATIC METALS PLC ANNUAL REPORT

REPORT STRATEGIC REPORT

SHAREHOLDINGS

The issued capital of the Company as at 11 September 2018 is 130,795,596 fully paid ordinary shares. All issued ordinary shares carry one vote per share and carry the rights to dividends.

DISTRIBUTION OF ORDINARY SHARES

Total	667	130,795,596	100.00
Rounding			0.00
100,001 Over	116	117,765,098	90.04
10,001 - 100,000	307	11,750,819	8.98
5,001 - 10,000	109	967,333	0.74
1,001 - 5,000	103	302,835	0.23
1 - 1,000	32	9,511	0.01

RANGE	TOTAL HOLDERS	SHARES	% SHARES

UNMARKETABLE PARCELS AS AT 11 SEPTEMBER 2018

	MINIMUM PARCEL SIZE	HOLDERS	SHARES

Minimum \$ 500	1,266	45	24,458

TOP 20 SHAREHOLDERS AS AT 11 SEPTEMBER 2018

RANK	NAME	SHARES	% SHARES
1	MR MILOS BOSNJAKOVIC	16,000,000	12.23
2	SANDFIRE RESOURCES NL	10,000,000	7.65
3	GLAMOUR DIVISION PTY LTD	9,148,192	6.99
4	MR PAUL DAVID CRONIN	8,425,668	6.44
5	MRS REBECCA CRONIN	8,425,664	6.44
6	CITICORP NOMINEES PTY LIMITED	5,864,574	4.48
7	MR CHARLES WAITE MORGAN	5,478,112	4.19
8	BNP PARIBAS NOMINEES PTY LTD	4,661,184	3.56
9	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	2,750,767	2.10
10	MR ALBERTO LAVANDEIRA ADAN	2,666,664	2.04
11	NATIONAL NOMINEES LIMITED	2,000,000	1.53
12	J P MORGAN NOMINEES AUSTRALIA LIMITED	1,943,355	1.49
13	GLAMOUR DIVISION PTY LTD	1,655,808	1.27
14	BPM CAPITAL LIMITED	1,380,000	1.06
15	UBS NOMINEES PTY LTD	1,350,000	1.03
16	MR EAN BRANSTON	1,333,336	1.02
17	ASHANTI INVESTMENT FUND PTY LTD	1,300,000	0.99
18	GREAT AUSTRALIA CORPORATION PTY LTD	1,250,000	0.96
19	ILWELLA PTY LTD	1,162,000	0.89
20	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
		1,090,000	0.83
Total		87,885,324	67.19%

SUBSTANTIAL SHAREHOLDERS AS AT 11 SEPTEMBER 2018

As at 11 September 2018 there were four shareholders who held a substantial shareholding within the meaning of the Australian Corporations Act. A person has a substantial holding if the total votes that they or their associates have relevant interests in is five per cent of more of the total number of votes.

NAME	SHARES	% OF ISSUED CAPITAL

Paul Cronin	16,851,332	12.88%
Milos Bosnjakovic	16,000,000	12.23%
Eric de Mori	11,054,000	8.45%
Sandfire Resources NL	10,000,000	7.65%

VOTING RIGHTS

In order to vote at such meetings, CDI holders have the following options:

(i) instructing CDN, as the legal owner, to vote the Shares underlying their CDls in a particular manner. A voting instruction form will be sent to CDI holders with the notice of meeting or proxy statement for the meeting and this must be completed and returned to the Company's Share Registry prior to the meeting; or
(ii) informing the Company that they wish to nominate themselves or another person to be appointed as CDN's proxy with respect to their Shares underlying the CDls for the purposes of attending and voting at the general meeting; or
(iii) converting their CDls into a holding of Shares and voting these at the meeting (however, if thereafter the former CDI holder wishes to sell their investment on ASX it would be necessary to convert the Shares back to CDls). In order to vote in person, the conversion must be completed prior to the record date for the meeting. See above for further information regarding the conversion process.

As each CDI represents one Share, a CDI Holder will be entitled to one vote for every CDl they hold.

Proxy forms, CDI voting instruction forms and details of these alternatives will be included in each notice of meeting sent to CDI holders by the Company.

www.adriaticmetals.com

327

PART 3

ADRIATIC METALS PLC CONSOLIDATED AUDITED FINANCIAL STATEMENTS FOR THE PERIOD FROM 3 FEBRUARY 2017 TO 30 JUNE 2017

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CONTENTS	PAGE
Officers and professional advisers
Directors' report
Independent auditor's report to the shareholders	4
Consolidated statement of profit or loss and other comprehensive income	ದ
Consolidated statement of financial position	7
Company statement of financial position	0
Consolidated statement of changes in equity	0
Consolidated statement of cash flows	10
Notes to the financial statements	. 19

The board of directors	P Cronin E De Mori C Morgan
Company secretary	S Dury
Registered office	10 Pine House The Square Stow On The Wold Gloucestershire United Kingdom GLA 1AF
Auditor	Lubbock Fine Chartered Accountants & Statutory Auditor Pagernoster House 65 St Paul's Churchyard London ECAM BAB

-

REVENUE	Note	Period from 3 Feb 2017 to 30 Jun 2017
Sale of services		1,619
GROSS PROFIT		1,519
Administrative expenses	. 5	(200,461)
OPERATING LOSS		(284,942)
Finance costs	1	(7,365)
LOSS BEFORE TAX FROM CONTINUING OPERATIONS		(292,307)
Tax	7
LOSS FROM CONTINUING OPERATIONS		(282,307)
Other comprehensive income	-	25,402
TOTAL COMPREHENSIVE INCOME		(200,905)

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	Share Capital 14	Share Preffilum	Retained earnings	Other Reserves (Foreign currency translation reserves)	Total
As at 3 February 2017
Loss for the period			(292,307)	1	(292,307)
Issue of share capital	856,323	406,183			1,262,500
Other comprehensive incorne				25,402	25,402
At at 10 June 2017	856,373	406,183	(292,307)	25.402	995,601

	Period ended 30 Jun 17 11
LOSE Foreign exchange difference on consolidation Depreciation and amonsisation	(292,307) 25,402 2,304
Working capital adjustments: Increase in trade and other receivables Increase in inventories Increase in trade and other payables	(17,210) (22) 186,859
Not cash flows used in operating activities	(04,885)
Investing activities Purchase of property, plant and equipment Purchase of intengible assets Acquisition of subsidiary undertaking	(30 850) (176,024) (420,624)
Not cash flows used in investing activities	(643,168)
Financing activities Issue of share capital	1,049,523
Net cash flows generated from financing activities	1,040,523
Not increase in cash and cash equivalents	311,470
Cash and cash equivalents at 3 Feb 2017
Cash and cash equivalents at 30 June 2017	311,470

-

Name	Principal activities Incorporation	Country of	% equity interest
Eastern Mining d.o.o.o. Mining exploration		Bounta and Herzegovina	100

	Fair value
Assets Intangible Assets Property, plant and equipment Other current assess Cash and cash equivalents	107,453 546,190 478 (657)
	653.464
Liabilities Trade and other payables	(14,514)
Total identifiable assots at fair value	638.950

Cash paid	426,967
Fair Value of shares issued	212,983
Consideration transferred	638.950
The cash outflow on acquisition is as follows:	1
Net cash acquired with the subsidiary	(657)
Cash paid - - - - - - - - - - - - - - - - - - - - - -	(425,967)
Net consolidated cash outflow	(426,624)

	Investment in subsidiaries L
COST Apquisition of subsidiary underlaking Additions	038.950 244,595
At 30 June 2017	683,545

		5. ADMINISTRATIVE EXPENSES

Carlos Control Concernation Color Comparis	2017 1
Wages and salaries Consultancy lees Depreciation Amortisation Other costs	60,378 175,000 11:11:24 1,970 40,689
	286,461

DECORD THE C	2017 11
2 Se Mall products h Book A Barrie Foreign currency movements	7,365
CALCAL YATINGA	10/10/2019 11:00 PM 7,365

Reconcillution of total tax charge included in profit and loss	C
Loss before tax	(292,307)
Loss multiplied by the standard rate of corporation fax in the UK 19%	(56,538)
Effects of: Losses carried forward	55,538
Total tax charge

	2017 -
Foreign exchange differences on consolidation	25,402

GROUP	Land & buildings 6	Plant & equipment 1	Assets under Construction 1	Total C
COST.
M 3 February 2017
Acquired through acquisition	546,190			546,190
Additions		19.066	4.693	23,748
Foreign exchange differences	16,172			10,172
At 30 June 2017	603,302	19,055	4.693	686,110
DEPRECIATION At 3 February 2017
Charge for the year		424		424
At 30 June 2017	1	424	i	474
NET BOOK VALUE
At 30 June 2017	662,362	10.031	4.693	685 686

COMPANY	Land & buildings	Plant & equipment	Assets under Construction	Total
	C	C	e
COST
At 3 February 2017
Addisons		300		300
Disposals
At 30 June 2017		360		360

DEPRECIATION
At 3 February 2017
Charge for the year	0
On disposals
			11
At 30 June 2017
NET BOOK VALUE
At 30 June 2017		360		360

GROUP	Exploration & Evaluation Assets	Patents and Licenses	Total
	1	1	11
COST
A. 3 February 2017
Acquired through acquisition	1	107,453	107,453
Additions	172.337		172,337
Foreign exchange differences		4,287	4,287
At 30 June 2017	172,337	111,740	284,077
AMONTISATION AND IMPAIRMENT M 3 February 2017
Charge for the year		1,970	1,970
At 30 June 2017		1.970	1,970
NET BOOK VALUE
At 30 June 2017	172,337	109,770	282,107

Exploration & Evaluation Assets	Patents and Licenses	Total
		=

73,412		73,412
11
17
73,412		73,412

1
11
18
1150		ਵਿ
0 0


73,412	- -	73,412
	L	C

	2017 176	GROUP COMPANY 2017
WAT	17,245 443
Other receivables Accrued management fee .		276,000
	17,688	276,000

	2017 11	GROUP COMPANY 2017 -
Trade payables Accrumits - 1 - Taxes Payable Other payables	\$0.933 179,500 1,430 9.503	9,159 179,500
	201,372	188,659

GROUP AND COMPANY	2017 10
Issued and fully paid -------------------------------------------------------------------------------------------------------------------------------------------------------- 16,157,036 Ordinary shares of ED 053 each	856.323

GROUP	Retained Earnings	Other Reserves	Total
	C	13	ﻟﻌﺎ
A: 3 February 2017 Loss for the year Foreign exchange gain on consolidation	(467,307)	25,402	(467,307) 25,402
At 30 June 2017	(467,307)	25,402	(441,905)
COMPANY	Retained Earnings 10	Other Reserves L	Total
At 3 February 2017
Profit for the year	7,982		7,982
At 30 June 2017	7,982	17	7,982

-

30 June 2017	Effect on profit OF OWN	Effect on equity
Increase in foreign exchange rate of 10%	1
Boenian Mark	2.299	(77,371)
Decrease in foreign exchange rate of 10%
Bosnian Mark	(2,810)	94.500

AI assistant

ADRIATIC METALS PLC — Capital/Financing Update 2019

5033_prs_2019-12-13_b4ad71a1-e78d-4385-8bc0-e8ebead8a6ac.pdf

ADRIATIC METALS PLC

Table of Contents

PART I

SUMMARY

PART II

RISK FACTORS

Investment in the Company and the Ordinary Shares carries a significant degree of risk, including risks in relation to the Company's business strategy, risks relating to taxation and risks relating to the Ordinary Shares.

PART A – RISK FACTORS SPECIFIC AND MATERIAL TO THE COMPANY

Exploration and Development

In-country Risks in Bosnia and Herzegovina

Mining Concessions in Bosnia and Herzegovina

Grant of Future Authorisations to Explore and Mine

Environmental Risks

Operational Risks

Resource and Reserve Estimates

Commodity Prices

Foreign Exchange Risk

Early Stage of Operations

RISKS RELATING TO THE COMPANY'S DIRECTORS AND SENIOR MANAGERS

PART B – RISK FACTORS SPECIFIC AND MATERIAL TO THE ORDINARY SHARES

A Standard Listing affords less regulatory protection than a Premium Listing

Realisation of Investment

Volatility of Share Price

Payment of Dividends

RISKS RELATING TO TAXATION

Taxation

PART III

IMPORTANT INFORMATION

General

Supplementary prospectus

For the attention of all investors

Australia

Forward-looking statements

PART IV

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

PART V

ADMISSION STATISTICS AND DEALING CODES

PART VI

DIRECTORS, SECRETARIES, REGISTERED OFFICE AND ADVISERS

PART VII

COMPANY OVERVIEW

1. Introduction

2. Key Strengths

Scoping study confirms high margin, high return, low capex project

High-grade mineral resources with strong potential for exploration upside

Excellent metallurgical recoveries and concentrate grades

Existing infrastructure in a historical mining district

Early mover advantage in Bosnia & Herzegovina

Experienced team

Well-funded to complete Feasibility Study for the Vareš Project whilst continuing aggressive exploration programme

3. History of Adriatic

4. Corporate Structure

5. Summary of Key Assets and Operations

History

Regional and local geology

Recent exploration activities

Mineral resource estimates

Veovača Mineral Resources, 1 June 2019

Rupice Mineral Resources, 1 June 2019

Further exploration potential

Preliminary metallurgical testwork results

Scoping Study

6. Strategy and Work Programmes

7. Reasons for Listing

8. Competition

9. Employees

10. Incentive Schemes

11. Tax

12. Environmental and Social

13. Insurance

14. Dividend policy

PART VIII

DIRECTORS, SENIOR MANAGERS AND CORPORATE GOVERNANCE

1. THE DIRECTORS

Peter Bilbe, B. Eng (Mining) (Hons) (age 69 (Non-Executive Chairman)

Paul Cronin, B. Com & MBA (age 45) (Managing Director & Chief Executive Officer)

Julian Barnes, Bsc (Hons) (age 65) (Non-Executive Director)

ADRIATIC METALS PLC Capital/Financing Update 2019