ADRIATIC METALS PLC — Capital/Financing Update 2021

Oct 18, 2021

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, which comprises a simplified prospectus for the purposes of Article 14 of the UK version of Regulation (EU) 2017/1129 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ("EUWA"), as amended (the "UK Prospectus Regulation"), relating to Adriatic Metals Plc (the "Company" or "Adriatic") has been approved by the Financial Conduct Authority of the United Kingdom ("FCA"), as the competent authority under the UK Prospectus Regulation, in accordance with section 87A of FSMA, and prepared and made available to the public in accordance with the Prospectus Regulation Rules of the FCA made under section 73A of FSMA (the "Prospectus Regulation Rules"). The FCA only approves this document as meeting the standards of completeness, comprehensibility and consistency imposed by the UK Prospectus Regulation and such approval should not be considered as an endorsement of the issuer that is the subject of this document or of the quality of the securities that are the subject matter of this document. Investors should make their own assessment as to the suitability of investing in the securities. The document has been drawn up as a simplified prospectus in accordance with Article 14 of the UK Prospectus Regulation.

The Existing Ordinary Shares are listed on the standard listing segment of the Official List maintained by the FCA and traded on the London Stock Exchange's main market for listed securities. The Existing Ordinary Shares are also listed on the Australian Securities Exchange.

Applications will be made for the New Ordinary Shares to be admitted to the standard listing segment of the Official List maintained by the FCA and trading on the London Stock Exchange's main market for listed securities (together, "Admission"). It is expected that Admission will become effective, and that dealings in the New Ordinary Shares on the London Stock Exchange will commence, at 8.00 a.m. on 1 November 2021.

Applications will also be made for the New Ordinary Shares, in the form of CDIs, to be admitted to trading on the Australian Securities Exchange, which is expected to become effective (and it is expected that dealings in the New Ordinary Shares, in the form of CDIs, on the Australian Securities Exchange will commence) on 2 November 2021.

This prospectus should be read as a whole, including the information incorporated by reference into this prospectus and any accompanying document. Your attention is specifically drawn to the discussion of certain risks and other factors that should be considered in connection with the matters referred to in this prospectus, as set out in the section of this prospectus entitled Risk Factors beginning on page 12 of this prospectus. Investors should make their own assessment as to the suitability of investing in the New Ordinary Shares.

The New Ordinary Shares are not being offered to the public and this document does not constitute an offer to sell to the public, or an invitation to the public to subscribe for, or solicitation to the public to offer to subscribe for or to buy, New Ordinary Shares.

ADRIATIC METALS PLC

(Incorporated in England and Wales with registered number 10599833)

Placing of 25,159,000 Placing Shares at £1.5174 each

Subscription of 24,191,000 Subscription Shares at £1.5174 each

Joint Bookrunner Canaccord Genuity Limited

Joint Bookrunner RBC Europe Limited

Joint Bookrunner Stifel Nicolaus Europe Limited

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, New 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 New 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 New 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 New 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 New 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 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 New 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 respective representatives, are making any representation to any prospective investor of the New Ordinary Shares regarding the legality of an investment in the New 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, the Capital Raising and/or Admission and does not regard any other person as a client in relation to the production of this prospectus, the Capital Raising 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, the Capital Raising and/or Admission, or any other matter, transaction or arrangement referred to in this prospectus.

Each of Canaccord Genuity Limited ("Canaccord") and Stifel Nicolaus Europe Limited ("Stifel") are authorised and regulated by the FCA in the United Kingdom. RBC Europe Limited ("RBC" and, together with Canaccord and Stifel, the "Joint Bookrunners") is authorised by the Prudential Regulation Authority (the "PRA") and regulated in the United Kingdom by the FCA and the PRA. Each of the Joint Bookrunners are acting solely for the Company and no one else in connection with this prospectus, the Capital Raising and Admission and, subject to their responsibilities under FSMA or the regulatory regime established under FSMA, will not be responsible to anyone other than the Company for providing the protections afforded to clients nor for providing advice in relation to this prospectus, the Capital Raising and Admission. None of the Joint Bookrunners nor any of their respective subsidiaries, branches or affiliates owe or accept any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of the Joint Bookrunners, in connection with this prospectus, the Capital Raising, Admission, the contents of this prospectus or any other transaction, arrangement or other matter referred to in this prospectus, subject to any duty, liability or responsibility under FSMA or the regulatory regime established under FSMA.

Save for the responsibilities and liabilities, if any, of the Joint Bookrunners under FSMA or the regulatory regime established under FSMA, none of the Joint Bookrunners nor any of their affiliates, directors, officers, employees and advisers assume any responsibility whatsoever and make no representations or warranties, express or implied, in relation to the contents of this prospectus, including its accuracy, completeness, verification, fairness or sufficiency or regarding the legality of any investment in the New Ordinary Shares by any person under the laws applicable to such person or for any other statement made or purported to be made by the Company, or on the Company's behalf, or by the Joint Bookrunners, or on their behalf, and nothing contained in this prospectus is, or shall be, relied on as a promise or representation in this respect, whether as to the past or the future, in connection with the Company. Each of the Joint Bookrunners and each of their respective affiliates disclaim to the fullest extent permitted by law all and any responsibility and liability whether arising in tort, contract or otherwise which they might otherwise be found to have in respect of this prospectus or any such statement.

In connection with the Capital Raising, each of the Joint Bookrunners and any of their respective affiliates may, in accordance with applicable legal and regulatory provisions and subject to certain restrictions in the Placing Agreement, purchase or sell for their own account such securities and any related or other securities and may engage in transactions in relation to the Placing, the Placing Shares and/or related instruments for its or their own account otherwise than in connection with the Placing. Accordingly, references in this prospectus to New Ordinary Shares being offered or placed should be read as including any offering or placement of Placing Shares to the Joint Bookrunners or any of their affiliates acting in such capacity.

Information to Distributors

Solely for the purposes of the product governance requirements of Chapter 3 of the FCA Handbook Product Intervention and Product Governance Sourcebook (the "UK Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the UK Product Governance Requirements) may otherwise have with respect thereto, the New Ordinary Shares have been subject to a product approval process, which has determined that the New Ordinary Shares are: (a) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in Chapter 3 of the FCA Handbook Conduct of Business Sourcebook; and (b) eligible for distribution through all permitted distribution channels (the "Target Market Assessment"). Notwithstanding the Target Market Assessment, "distributors" (for the purposes of the UK Product Governance Requirements) should note that: the price of the New Ordinary Shares may decline and investors could lose all or part of their investment; the New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the New Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The Target Market Assessment is without prejudice to any contractual, legal or regulatory selling restrictions in relation to the offer of New Ordinary Shares. Furthermore, it is noted that, notwithstanding the Target Market Assessment, the Joint Bookrunners will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the Target Market Assessment does not constitute: (i) an assessment of suitability or appropriateness for the purposes of Chapters 9A or 10A respectively of the FCA Handbook Conduct of Business Sourcebook; or (ii) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Ordinary Shares. Each distributor is responsible for undertaking its own target market assessment in respect of the New Ordinary Shares and determining appropriate distribution channels.

Solely for the purposes of the product governance requirements contained within: (i) EU Directive 2014/65/EU on markets in financial instruments, as amended ("MiFID II"); (ii) Articles 9 and 10 of Commission Delegated Directive (EU) 2017/593 supplementing MiFID II (as it forms part of retained EU law as defined in the EU (Withdrawal) Act 2018); and (iii) local implementing measures (together, the "MiFID II Product Governance Requirements"), and disclaiming all and any liability, whether arising in tort, contract or otherwise, which any "manufacturer" (for the purposes of the MiFID II Product Governance Requirements) may otherwise have with respect thereto, the New Ordinary Shares have been subject to a product approval process, which has determined that they are: (a) compatible with an end target market of retail investors and investors who meet the criteria of professional clients and eligible counterparties, each as defined in MiFID II; and (b) eligible for distribution through all distribution channels as are permitted by MiFID II (the "MiFID II Target Market Assessment"). Notwithstanding the MiFID II Target Market Assessment, Distributors should note that: the price of the New Ordinary Shares may decline and investors could lose all or part of their investment; the New Ordinary Shares offer no guaranteed income and no capital protection; and an investment in the New Ordinary Shares is compatible only with investors who do not need a guaranteed income or capital protection, who (either alone or in conjunction with an appropriate financial or other adviser) are capable of evaluating the merits and risks of such an investment and who have sufficient resources to be able to bear any losses that may result therefrom. The MiFID II Target Market Assessment is without prejudice to the requirements of any contractual, legal or regulatory selling restrictions in relation to the offer of New Ordinary Shares. Furthermore, it is noted that, notwithstanding the MiFID II Target Market Assessment, the Joint Bookrunners will only procure investors who meet the criteria of professional clients and eligible counterparties. For the avoidance of doubt, the MiFID II Target Market Assessment does not constitute: (i) an assessment of suitability or appropriateness for the purposes of MiFID II; or (ii) a recommendation to any investor or group of investors to invest in, or purchase, or take any other action whatsoever with respect to the New Ordinary Shares. Each Distributor is responsible for undertaking its own target market assessment in respect of the New Ordinary Shares and determining appropriate distribution channels.

Website

Without limitation, the contents of the Company's website, or any links accessible through the Company's website, do not form part of this prospectus.

The date of this prospectus is 14 October 2021.

SUMMARY 5
RISK FACTORS 12
IMPORTANT NOTICES 21
EXPECTED TIMETABLE OF PRINCIPAL EVENTS 26
CAPITAL RAISING STATISTICS AND DEALING CODES 27
DIRECTORS, SECRETARIES, REGISTERED OFFICE AND ADVISERS 28
PART I COMPANY OVERVIEW 30
PART II INDUSTRY OVERVIEW 63
PART III BOSNIA AND HERZEGOVINA AND SERBIA OVERVIEW AND REGULATORY FRAMEWORK 65
PART IV FURTHER TERMS OF THE PLACING 69
PART V FINANCIAL INFORMATION ON THE GROUP 71
PART VI TAXATION 73
PART VII CONSEQUENCES OF A STANDARD LISTING 78
PART VIII ADDITIONAL INFORMATION 80
PART IX DOCUMENTS INCORPORATED BY REFERENCE 108
PART X DEFINITIONS 110
PART XI GLOSSARY OF TECHNICAL TERMS 118
PART XII ABBREVIATIONS AND UNITS OF MEASUREMENT 121

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 securities 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 subsection. In this case, a short description of the sub-section is included in the summary with the mention of "not applicable".

INTRODUCTION AND WARNINGS
Details of the issuer	The issuer is Adriatic Metals Plc, a public limited company incorporated in England and Wales with registered number 10599833. The Company's registered address is at Ground Floor, Regent House, 65 Rodney Road, Cheltenham, Gloucestershire GL50 1HX, United Kingdom. The telephone number of the Company is +44 (0) 20 7993 0066 and the legal entity identifier of the Company is
	549300OHAH2GL1DP0L61.
Details of the securities	The securities are the New Ordinary Shares, which, on Admission will have the ISIN GB00BL0L5G04.
Details of the offeror asking for admission to trading on a regulated market	The Company is the issuer and the person asking for admission to trading of the New Ordinary Shares on the Main Market, which is a regulated market.
Date of approval of the prospectus	The prospectus was approved on 14 October 2021.
Competent authority approving the prospectus	The competent authority approving the prospectus is the FCA. 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 this document. Any decision to invest in the New Ordinary Shares should be based on a consideration of this document as a whole by the investor. Any investor could lose all or part of their invested capital. Civil liability attaches only to those persons who have tabled the summary including any translation thereof, but only where the summary is misleading, inaccurate or inconsistent when read together with the other parts of this document, or where it does not provide, when read together with the other parts of this document, key information in order to aid in considering whether to invest in the New Ordinary Shares.
	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. The Company is domiciled in the United Kingdom. The principal legislation under which the Company operates is the Companies Act and regulations thereunder.
Principal activities	The Company is the holding company of the Group, which is engaged in the exploration and development of polymetallic mining projects in the Balkans. The Group's primary focus is the development of the Vares Silver Project, in conjunction with the continued exploration of the wider Vares Concession Area.
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 Existing Ordinary Shares or voting rights:		% the issued
	Name	Number of Ordinary Shares held as at the Last Practicable Date	ordinary share capital held as at the Last Practicable Date
	Sandfire Resources Limited Mr Paul Cronin Mr Milos Bosnjakovic Datt Capital Sprott Asset Management Mr Eric De Mori Helikon Investments Includes 14,351,132 Ordinary Shares held by Dwellstone Limited, a company wholly owned and controlled by Mr Paul Cronin.	34,600,780 17,601,332 14,300,000 8,786,101 8,757,824 8,302,808 6,491,922	16.1% 8.2% 6.7% 4.1% 4.1% 3.9% 3.0%
	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	Michael Rawlinson (Non-Executive Chairman) Paul Cronin (Managing Director and Chief Executive Officer) Julian Barnes (Non-Executive Director) Sandra Bates (Non-Executive Director) Peter Bilbe (Non-Executive Director) Sanela Karic (Non-Executive Director)
Statutory auditors	BDO LLP of 55 Baker Street, London W1U 7EU.

What is the key financial information regarding the issuer?
Selected historical key financial information	The table below sets out selected historical financial information of the Group as derived from the unaudited annual consolidated financial statements for the six months ended 30 June 2021, the audited consolidated financial statements for the six months ended 31 December 2020 and the audited annual consolidated financial statements for the financial year ended 30 June 2020. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
	(In GBP)	Six Months Ended 30 June 2021	Six Months Ended 31 December 2020	Year Ended 30 June 2020
	Exploration costs	(1,331,294)	(798,028)	-
	General and administrative expenses	(2,301,834)	(2,115,707)	(3,315,634)
	Share-based payment expense	(978,386)	(2,267,239)	(3,443,359)
	Other income	62,206	4,816	6,131
	Operating loss	(4,549,308)	(5,176,158)	(6,752,862)
	Finance income	-	-	203,131
	Finance expense	(1,139,382)	(197,039)	(11,580)
	Revaluation of fair value asset	2,398,569	(322,987)	322,987
	Loss before tax	(3,290,121)	(5,696,184)	(6,238,324)
	Tax charge	-	1,681	-
	Loss for the period	(3,290,121)	(5,694,503)	(6,238,324)
	Other comprehensive income that might be reclassified to profit or loss in subsequent periods:
	Exchange gain arising on translation of foreign operations	(251,159)	5,775	145,563
	Total comprehensive loss for the period	(3,541,280)	(5,688,728)	(6,092,761)
	Total comprehensive loss attributable to:
	Owners of the parent	(3,346,896)	(5,169,617)	(6,092,761)
	Non-controlling interest	(194,384)	(519,111)	-
		(3,541,280)	(5,688,728)	(6,092,761)
	Basic and
	Net loss per share diluted (pence)	(1.57)	(2.99)	(3.69)
	CONSOLIDATED STATEMENT OF FINANCIAL POSITION	30 June	31 December	30 June 2020
	(In GBP) Current assets	2021	2020
	Cash and cash equivalents	20,836,983	29,580,538	9,942,729
	Other receivables and prepayments	674,599	654,514	451,546
	Financial asset at fair value through		-	1,241,514
	profit and loss	-
	Total current assets Non-current assets	21,511,582	30,235,052	11,635,789
	Property, plant and equipment	1,098,238	969,464	910,920
	Right of use asset	258,822	236,349	251,898
	Exploration and evaluation assets	39,889,108	36,479,724	9,045,169
	Total non-current assets	41,246,168	37,685,537	10,207,987
	Total assets	62,757,750	67,920,589	21,843,776

Current liabilities
Accounts payable and accrued	1,440,562	1,900,437	682,402
liabilities Lease liability	31,542	35,609	10,530
Option Liability	1,115,873	2,515,399	-
Borrowings	-	105,515	-
Total current liabilities	2,587,977	4,556,960	692,932
Non-current liabilities
Lease liability	241,892	219,731	255,091
Borrowings	11,416,727	11,590,172	-
Derivative Liability	646,644	3,045,213	-
Total non-current liabilities	12,305,263	14,855,116	255,091
Total liabilities	14,893,240	19,412,076	948,023
Capital and reserves attributable to shareholders of the parent
Share capital	2,848,842	2,772,186	2,401,777
Share premium	53,314,390	51,471,748	23,992,967
Share-based payment reserve	6,182,839	5,756,069	4,426,185
Warrants Reserve	2,507,488	2,797,086	-
Other Equity	-	(2,515,399)	-
Foreign currency translation reserve	(25,579)	225,580	219,805
Retained deficit	(16,963,470)	(13,995,045)	(10,144,981)
	47,864,510	46,512,225	20,895,753
Non-controlling interest	-	1,996,288	-
Total equity	47,864,510	48,508,513	20,895,753
Total equity and liabilities	62,757,750	67,920,589	21,843,776
CONSOLIDATED STATEMENT OF CASH FLOWS (In GBP)	Six Months Ended 30	Six Months Ended 31 December	Year Ended 30 June 2020
Cash flows from operating activities	June 2021	2020
Loss for the period	(3,290,121)	(5,694,503)	(6,238,324)
Adjustments for:
Loss on Disposal of Fixed Asset	-	1,106	-
Depreciation of property, plant and	46,581	36,157	52,645
equipment Amortisation of exploration &		11,469	23,317
evaluation assets	14,999	15,549	13,714
Amortisation of right-of-use assets	16,346	2,267,239	3,443,359
Share-based payment expense	978,386	-	(203,131)
Finance income	-	197,039	11,580
Finance expense Revaluation of fair value asset and	1,139,382 (2,398,569)	322,987	(322,987)
liability
Changes in working capital items: Increase in other receivables and	(38,258)	(151,833)	(85,438)
prepayments Increase in accounts payable and accrued liabilities	(490,111)	687,582	498,074

	Cash flows from investing activities:
	Cash acquired on acquisition	-	311,964	-
	Cash payment in relation to Option Liability	(1,188,706)	-	-
	Purchase of property, plant and equipment	(206,409)	(90,864)	(235,117)
	Purchase of exploration & evaluation assets	(3,901,580)	(3,052,019)	(4,942,689)
	Sale of Property, plant and equipment	-	1,970	-
	Loans issued	-	(723,300)	(876,201)
	Interest received	-	-	37,742
	Net cash used in investing activities	(5,296,695)	(3,552,249)	(6,016,265)
	Cash flows from financing activities:
	Net proceeds from the issue of ordinary shares	1,796,526	12,317,964	13,296,266
	Gross proceeds from loans and borrowings	-	14,956,849	-
	Transaction costs arising from financing activities	(88,048)	(1,447,201)	-
	Interest paid on loans and borrowings	(718,445)
	Interest paid on lease liabilities	(9,990)	(10,523)	(11,580)
	Net cash flows from financing activities	980,043	25,817,089	13,284,686
	Net increase in cash and cash equivalents	(8,338,017)	19,957,632	4,461,230
	Exchange (losses) / gains on cash and cash equivalents	(405,538)	(319,823)	111,740
	Cash and cash equivalents at beginning of the period	29,580,538	9,942,729	5,369,759
	Cash and cash equivalents at end of the period	20,836,983	29,580,538	9,942,729
Pro forma financial information	Not applicable.
Brief description of any qualifications in	There are no qualifications in the auditor's reports on the Group's financial statements for the six months ending 31 December 2020 and for the financial year ended on 30 June 2020.
the audit report	What are the key risks that are specific to the issuer?
Brief description of	Risks associated with additional funding requirements
the most material risk factors specific to the issuer contained in the prospectus	1. The Company anticipates that it will require additional funding of approximately US\$17.6 million in order to have sufficient working capital for the period of 12 months from the date of this prospectus. The working capital shortfall of approximately US\$17.6 million during the Working Capital Period is expected to be funded by the proceeds of the Orion Debt Financing. The Orion Debt Financing, which is expected to provide approximately US\$138.7 million of funding (after expenses), is expected to be completed during Q4 2021. There can be no assurances that the Orion Debt Financing will be completed as anticipated by the Company or at all. If the Company is unable to secure the Orion Debt Financing, the Company would have to seek alternative financing (which may include raising futher equity capital). However, there can also be no assurance that the Company would be successful in securing any such alternative financing on commercially acceptable terms, or at all, but the Company is not confident that this would be achieved. In such case, the Company would seek to reduce its expenditure during the Working Capital Period. Unless the Company was able to reduce expenditure effectively or secure alternative funding or a merger or acquisition transaction on acceptable terms by the end of August 2022, the Board would be required to place the Company into administration or liquidation, which could result in Shareholders losing part of or all of their investment in the Company. In addition, if the Resolution is not passed, the Capital Raising will not be able to proceed. Risks associated with the commencement of the Group's production 2. While the Company's strategy is to commence production at the Vares Silver Project in H1 2023, the Company currently has no producing assets. Therefore, it does not currently generate positive cash flow and has incurred losses since inception. The Vares Silver Project is anticipated to be the Company's sole source of near-term earnings and positive cash flow, and the Company is therefore largely dependent upon the successful development of the Vares Silver Project. Risks associated with development 3. Development of the Vares Silver Project could be delayed, experience interruptions, incur increases
	in costs or be unable to be completed due to a number of factors, including but not limited to changes in the regulatory environment including environmental compliance requirements and non performance by third party consultants and contractors.

	Risks associated with securing sales offtake agreements 4. Although in principle terms have been negotiated with offtakers for the sales of concentrates that will be produced in the future from the Vares Silver Project, changes in the commercial terms ultimately entered into by the Company with offtakers could arise prior to the Company entering into binding offtake agreements. This could have a detrimental impact on future cash flows generated by the Vares Silver Project.
	Reliance on infrastructure
	5. The Company's planned activities depend on adequate infrastructure, including reliable roads, rail and port facilities, power sources and water supplies. Any failure or unavailability of the infrastructure on which the Company's planned operations rely (for example, through equipment failure or service disruption) could adversely affect the Company's development of the Vares Silver Project or revenue generated in the future from mining activities.
	In-country Risks in Bosnia and Herzegovina and Serbia
	6. The Vares Silver Project is located in Bosnia and Herzegovina and the Raska Project is located in Serbia. The Company will be subject to the risks associated with operating in those countries, including various levels of political, sovereign, economic and other risks and uncertainties which include, but are not limited to, terrorism, hostage taking, military repression, high rates of inflation, 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.
	8. Outcomes in courts in Bosnia and Herzegovina and Serbia may be less predictable than in the United Kingdom, which could affect the enforceability of contracts entered into by, or judgments obtained by or given against, the Company or its subsidiaries in Bosnia and Serbia.
	Risks associated with commodity prices and currency exchange rates
	9. 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 USD and GBP denominated silver, zinc, lead, gold, and copper prices, and exchange rates affecting USD, GBP, BAM, and AUD.
	Risks associated with resource and reserve estimates
	10. 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 11. 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 New Ordinary Shares will be fully paid ordinary shares in the capital of the Company with a nominal value of 1.3355 pence each. On Admission, the New Ordinary Shares will be registered with an ISIN of GB00BL0L5G04 and the SEDOL code BL0L5G0.
Currency, denomination, par value, number of securities issued and the term of the securities	The Ordinary Shares are denominated in UK Pounds Sterling with a nominal value of 1.3355 pence each. As at the Last Practicable Date, there are 214,344,843 Ordinary Shares in issue, all of which have been fully paid up and no Existing Ordinary Shares were held by the Company in treasury. The term of the securities is perpetual. Pursuant to the Capital Raising, 49,350,000 New Ordinary Shares will be issued and allotted.
Rights attached to the securities	All New Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions made, paid or declared after the date of issue of the New Ordinary Shares.
	Subject to the provisions of the Companies Act, the Company may from time to time declare dividends and make other distributions on the Ordinary Shares. Shareholders are entitled to participate in the assets of the Company attributable to their shares in a winding-up of the Company or other return of capital. However, they have no rights of redemption.
	Shareholders shall have the right to receive notice of, and to attend and vote at, general meetings of the Company. On a show of hands at general meetings of the Company, every Shareholder who is present in person and every person holding a valid proxy shall have one vote and on a poll every Shareholder present in person or by proxy shall have one vote per New Ordinary Share.
Relative seniority of the securities in the	The capital and assets of the Company on a winding-up or other return of capital shall be applied in repaying to the holders of Ordinary Shares the amounts paid up or credited as paid up on such shares

issuer's capital	and subject thereto shall belong to and be distributed according to the number of such Ordinary Shares
structure in the event of insolvency	held by them respectively. The New Ordinary Shares and the Existing Ordinary Shares, all being Ordinary Shares, will rank pari passu in all respects. The Company has no other classes of shares in
Restrictions on the	issue. The Ordinary Shares are freely transferable and tradable and there are no restrictions on transfer.
free transferability of	Each Shareholder may transfer all or any of their Ordinary Shares which are in certificated form by
the securities	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 is 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.
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 Vares Silver Project and the
	Group's other projects 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	Applications will be made to the FCA for the New Ordinary Shares to be admitted to the standard listing segment of the Official List maintained by the FCA and to the London Stock Exchange for the New
	Ordinary Shares to be admitted to trading on the London Stock Exchange's main market for listed
	securities. It is expected that Admission of the New Ordinary Shares will become effective, and dealings
	in the New Ordinary Shares on the London Stock Exchange's main market for listed securities will commence, at 8.00 a.m. on 1 November 2021.
Other markets where	Applications will also be made for the New Ordinary Shares, in the form of CDIs, to be admitted to
the securities are or	trading on the ASX, which is expected to become effective (and it is expected that dealings in the New
are to be traded	Ordinary Shares, in the form of CDIs, on the ASX will commence) at 8.00 a.m (AEST) on 2 November 2021. No application has been made or is currently intended to be made for New Ordinary Shares to
	be admitted to listing or trading on any other exchange other than the London Stock Exchange and
	ASX.
	What are the key risks specific to the securities?
Brief description of	A Standard Listing affords less regulatory protection than a Premium Listing. A Standard Listing
the most material risk	will afford investors a lower level of regulatory protection than that afforded to investors in a company
factors specific to the securities contained	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.
in the prospectus	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. The 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, 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.
	Dilutive offering. The New Ordinary Shares are not being offered to existing Shareholders in the
	Capital Raising on a pro rata basis. As a result, if the New Ordinary Shares are allotted, then Shareholder's shareholdings will be diluted to the extent that they do not participate in the Capital
	Raising.
	KEY INFORMATION ON THE ADMISSION OF THE NEW ORDINARY SHARES TO A REGULATED MARKET
	Under which conditions and timetable can I invest in this security?

The Company will issue 25,159,000 Placing Shares pursuant to the Placing at the Issue Price of
£1.5174 (AU\$2.80) per Placing Share. The Placing is being underwritten by the Joint Bookrunners as

conditions

	to settlement risk. The Company and the Joint Bookrunners have entered into the Placing Agreement relating to the Placing pursuant to which, subject to certain conditions, each of the Joint Bookrunners has agreed severally to use its reasonable endeavours to procure Placees for the Placing Shares to be issued by the Company. Each of the Joint Bookrunner's obligations are subject to certain conditions in the Placing Agreement. The Placing is conditional on, inter alia: a. the Placing Agreement becoming wholly unconditional (save as to Admission) and not having been terminated in accordance with its terms prior to Admission; b. the Resolution being passed (without amendment) at the General Meeting; c. the Equity Subscription Agreement not having been amended, terminated or lapsed in accordance with its terms prior to Admission; and d. Admission occurring by 8.00 am on 1 November 2021 2021 (or such later date as the Company and the Joint Bookrunners may agree), being not later than 30 November 2021. Orion Equity Subscription Pursuant to the Equity Subscription Agreement, the Company has conditionally agreed to issue 24,191,000 Subscription Shares at the Issue Price of AU\$ 2.80 per Subscription Share to Orion.
	The New Ordinary Shares issued pursuant to the Capital Raising will, upon issue, rank pari passu with the Existing Ordinary Shares. If Admission does not proceed, the Capital Raising will not proceed, and all monies paid will be refunded to the applicants. The New Ordinary Shares issued pursuant to the
Expected timetable of the offer	Capital Raising at the Issue Price will represent approximately 18.7% of the Enlarged Share Capital. The Capital Raising was announced on 12 October 2021. Subject to the passing of the Resolution, it is expected that Admission of the New Ordinary Shares will become effective, and dealings in the New Ordinary Shares on the London Stock Exchange's main market for listed securities will commence, at 8.00 a.m. on 1 November 2021 and on the ASX at 8.00 a.m. (AEST) on 2 November 2021 for CDIs representing New Ordinary Shares.
Details of admission to trading on a regulated market	Applications will be made to the FCA for the New Ordinary Shares to be admitted to the standard listing segment of the Official List maintained by the FCA and to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on the London Stock Exchange's main market for listed securities.
Plan for distribution	The New Ordinary Shares which are the subject of this prospectus are being offered (a) by the Joint Bookrunners to a limited number of institutional and other investors in the Placing; and (b) to Orion only pursuant to the Orion Equity Subscription. There will be no offer to the public of the New Ordinary Shares and no intermediaries' offer.
Amount and Shareholdings immediately prior to Admission will be diluted by approximately 18.7% as a result of percentage of New Ordinary Shares issued pursuant to the Capital Raising. immediate dilution resulting from offer
Estimate of total expenses of the issue and/or offer	The net proceeds of the Capital Raising, after deduction of expenses, will be approximately £72.2 million on the basis that the gross proceeds of the Capital Raising are approximately £75.3 million. The total expenses of the Capital Raising and Admission are estimated to be approximately £3.1 million (exclusive of VAT). Investors will not be charged expenses by the Company in respect of the Capital Raising.
	Why is this prospectus being produced?
Reasons for the admission to trading on a regulated market	The Company is raising equity funds in connection with the proposed development of the Vares Silver Project and for general working capital purposes. This prospectus is being produced in connection with the Capital Raising and the application for Admission of the New Ordinary Shares.
Use and estimated net amount of the proceeds	The net proceeds of the Capital Raising are expected to be £72.2 million (approximately US\$97.8 million and will be used to commence construction of the Vares Silver Project.
Indication of whether the offer is subject to an underwriting agreement	The Placing is being underwritten by the Joint Bookrunners as to settlement risk. Each Joint Bookrunner has agreed that if any Placee procured by that Joint Bookrunner fails to take up any or all of the Placing Shares which have been allocated to it and which it has agreed to acquire at the Issue Price, each Joint Bookrunner agrees to severally to itself subscribe on its own account and pay for such Placing Shares at the Issue Price in its agreed proportion.
Indication of the most material conflicts of interests relating to the offer or admission to trading	Not applicable.

RISK FACTORS

Any investment in the Company and the Ordinary Shares (including the New Ordinary Shares) carries a significant degree of risk, including risks in relation to the Company and its business strategy and risks relating to the Ordinary Shares.

Prospective investors should review this prospectus carefully and in its entirety (together with any documents incorporated by reference into it) and consult with their professional advisers. You should carefully consider the risks and uncertainties described below, together with all other information in this prospectus and the information incorporated into this prospectus by reference, before making any investment decision.

Prospective investors should note that the risks relating to the Company, and the Ordinary Shares summarised the Summary section 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 in the Summary section 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 market 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 AND ITS BUSINESS STRATEGY

Currently the Company has insufficient working capital to meet its requirements for the 12 months from the date of this prospectus

The Company is of the opinion, taking into account available cash balances and the net proceeds of the Capital Raising, the Group does not have sufficient working capital for its present requirements, that is, for at least twelve months following the date of the Prospectus.

The Company's intention during the Working Capital Period is to: (i) continue discretionary exploration activities, at the Vares Silver Project and the Raska Project; (ii) commence construction activities for the Vares Silver Project, including the appointment of contractors, commence civil earthworks and place orders for long lead order items; and (iii) finalise and execute the documentation associated with the Orion Debt Financing.

The working capital shortfall of approximately US\$17.6 million during the Working Capital Period is expected to be funded by the proceeds of the Orion Debt Financing. The Orion Debt Financing which is expected provide approximately US\$138.7 million of funding (after expenses) is expected to be completed during Q4 2021. There can be no assurances that the Orion Debt Financing will be completed as anticipated by the Company or at all.

If the Company is unable to secure the Orion Debt Financing, the Company would have to seek alternative financing (which may include raising futher equity capital). There can be no assurance, however, that the Company would be successful in securing any such alternative financing on commercially acceptable terms, or at all, and the Company is not confident that this would be achieved.

If the Company is unable to raise the required additional funding, the Company would have insufficient cash to finalise the construction of the Vares Silver Project. In such case, the Company would seek to reduce its expenditure during the Working Capital Period by: (i) reducing certain construction activities on the Vares Silver Project and ceasing certain discretionary spending in relation to construction of the Vares Silver Project; (ii) suspending discretionary exploration activities in both Bosnia and Serbia, and (iii) reducing G&A costs in relation to the Company generally. Unless the Company was able to reduce expenditure effectively or secure alternative funding (which may include raising futher equity capital) or a merger or acquisition transaction on acceptable terms by the end of August 2022, the Board would be required to place the Company into administration or liquidation, which could result in Shareholders losing part of or all of their investment in the Company.

In addition, if the Resolution is not passed, the Capital Raising will not be able to proceed. In such circumstances, the Company would not proceed to deploy cash to commence construction of the Vares Silver Project and would not do so unless it was able to secure alternative financing (which may include raising equity capital). In that case, the Company would be required to seek alternative funding or a merger or acquisition transaction both of which the Company would be unlikely to achieve. In such cases, the Board would be required to place the Company into administration or liquidation, which could result in Shareholders losing part of or all of their investment in the Company.

The Company has yet to commence production and is exposed to development risk

While the Company's strategy is to commence Commercial Production of the Vares Silver Project in H1 2023, the Company currently has no producing assets. Therefore, it does not currently generate positive cash flow and has incurred losses since inception.

The Vares Silver Project is anticipated to be the Company's sole source of near-term earnings and positive cash flow. The Company's ultimate success will depend on its ability to commence development of the Vares Silver Project, reach Commercial Production and generate positive cash flow from operations.

It is not uncommon for new mining developments to experience unexpected problems, increased costs and delays during construction, commissioning and production start-up, or indeed for such projects to fail. Any adverse event affecting the Vares Silver Project, either during its development or following the commencement of production, would have a material adverse effect on the Company's business, results of operations, financial condition and the price of its Ordinary Shares.

Risks associated with the development of the Vares Silver Project

The Company's future success will largely depend upon the Company's ability to develop and manage the Vares Silver Project in accordance with the plans set out in the DFS.

Development of the Vares Silver Project could be delayed, experience interruptions, incur increased costs or be unable to complete due to a number of factors, including but not limited to:

• changes in the regulatory environment including environmental compliance requirements;
• inability to comply with the conditions attached to the various permissions, permits and licences;
• non-performance by third party consultants and contractors;
• inability to attract and retain a sufficient number of qualified workers;
• unforeseen escalation in anticipated costs of development, or delays to construction, or adverse currency movements resulting in insufficient funds being available to complete planned development;
• unexpected geological anomalies or other geological characteristics that require plans or projections for the Vares Silver project to be amended;
• increases in extraction, processing or transportation costs;
• shortages or delays in obtaining critical mining and processing equipment, or the breakdown or failure of such equipment;
• catastrophic events such as fires, storms or explosions;
• construction, procurement and/ or performance of the Vares Processing Plant and ancillary operations falling below expected levels of output or efficiency;
• potential opposition from environmental groups, local residents or others;
• civil unrest in and/ or around the mine site, processing plant and supply routes;
• changes to anticipated levels of taxes and royalties; and/ or
• a material and prolonged deterioration in the prices of the commodities to be produced by the Vares Silver Project.

It is not uncommon for new mining developments to experience these factors during their construction, commissioning and production start-up, or indeed for such projects to fail as a result of one or more of these factors occurring to a material extent. There can be no assurance that the Company will complete the various stages of development necessary in order to achieve its strategy in the timeframe currently anticipated by the Company, or at all. Any of these factors may have a material adverse effect on the Company's business, results of operations and activities, financial condition and prospects.

Risks associated with securing sales offtake agreements

Although in principle terms have been negotiated with offtakers for the sales of concentrates that will be produced in the future from the Vares Silver Project, changes in the commercial terms ultimately entered into by the Company with offtakers could arise prior to the Company entering into binding offtake agreements and there can be no assurance that the Company will be able to to secure binding offtake agreements in a timely manner, on the negotiated terms or on otherwise commercially acceptable terms. These factors could have a detrimental impact on future cash flows generated by the Vares Silver Project and on the Company's business, results of operations and activities, financial condition and prospects.

Reliance on Infrastructure

The Company's planned activities depend on adequate infrastructure, including reliable roads, rail and port facilities, as well as power sources and water supplies. It is not uncommon for new mining infrastructure to experience unexpected costs, problems and delays during construction, often resulting in significant upward revisions to expected costs and/or delays.

The planned transportation of concentrates from the Vares Processing Plant is reliant on infrastructure and equipment to be supplied by the Bosnian State rail operator and the port authorities in Croatia. There may be matters beyond of the Company's control related to the availability, reliability and capacity of rail and port facilities and related equipment for the movement and storage of concentrates from the Vares Railhead to the port, including unusual weather or other natural phenomena, capacity and allocation constraints, key equipment failure, collapse of railway tunnels or bridges, derailment, accidents, sabotage, industrial action or other interference in the maintenance or provision of such infrastructure. Any impact to the availability, reliability and/or performance of the rail and port networks could have a material adverse effect on the Group's ability to deliver to the port and to export its concentrates, which is likely to have a significant negative impact on the Group's revenues and financial condition.

The processing of ore at the Vares Processing Plant requires the supply of power from the Bosnian State energy provider. Any power outage, disruption or shortage in power supply available to the Group's operations could therefore have a material adverse impact on the Group's production and employee safety. Whilst back-up power can be provided on site by mobile diesel generators, operating such generators would increase the Group's overall operating costs and its exposure to fuel prices.

The processing of ore at the Vares Processing Plant, also requires a supply of the water, some of which will be provided from a third-party local supplier. Any restriction or disruption in the water supply could adversely affect the Group's processing activities and whilst a secondary source of water may be available from a river source at both the Vares Processing Plant and the Rupice Surface Infrastructure, accessing and utilising the river source may result in increased operating costs and downtime in the processing of ore.

A haulage road will be constructed for the haulage of ROM ore from the Rupice Underground Mine, located within the Rupice Surface Infrastructure, to the Vares Processing Plant, as well as transport of tailings back to Rupice Surface Infrastructure and concentrate from the Vares Processing Plant to the Vares Railhead. The haulage road will be constructed by the Vares municipality and paid for by the Company. The Company will also pay for the maintenance of the haulage road with the maintenance being carried out by the municipality. There may be matters outside of the Company's control related to its maintenance, especially during seasonal changes and adverse weather, which may affect the ability of the Company to access the Rupice Surface Infrastructure and the Vares Processing Plant at certain times. This in turn is likely to have an adverse effect on the Company's overall cost of operations and its financial condition.

Any other failure or unavailability of the infrastructure on which the Company's planned operations rely (for example, through equipment delivery, spare parts availability, failure or service disruption) could adversely affect the Company's development of the Vares Silver Project or revenue generated in the future from mining activities

If the Company's operating costs increase due to inadequate or unreliable infrastructure the Company's business, results of operations and financial condition and the price of the Ordinary Shares could be materially adversely affected.

Reliance on third party contractors

The Company will need to enter into agreements with various third party service providers in connection with the construction and operation of the Vares Silver Project, such as the Bosnian State rail operator, key mining contractors and equipment suppliers, the Bosnian state electricity provider and the port operator. There can be no assurance that the Company will be able to secure in a timely manner, on commercially acceptable terms (including as to cost) or at all, the provision of all of the services and supply of equipment that the Company will need to execute its development plans, or that such arrangements will be sufficient for its future needs or will not be interrupted.

Further, all contracts carry risks associated with the performance by the parties thereto of their obligations as to time and quality of work performed and the Company's business and development plans may be adversely affected by a failure to secure or any failure or delay by third parties in supplying the relevant services and/or equipment, by any change to the terms on which these services are made available or by the lack of availability of key personnel or equipment or the failure of such third party contractors to provide services that meet the Company's quality or volume requirements.

Although the Company will seek to retain contractors it regards as reputable and competent for the scope of work required, and will seek to reduce its risk by negotiating contracts that apportion risk and liability appropriately, the risk that those contractors may breach their contracts with the Company or that contractors may be negligent or otherwise deficient in performing the services for which they were contracted cannot be excluded. It is not uncommon for mining companies to have disputes with third party contractors, and for these disputes to have a material and adverse effect on the companies' operations. Any disruption to such services or supplies may have an adverse effect on the financial performance of the Company's operations.

In-country Risks in Bosnia and Herzegovina and Serbia

The Vares Silver Project is located in Bosnia and Herzegovina and the Raska Project is located in Serbia. The Company will be subject to the risks associated with operating in those countries, including various levels of political, sovereign, economic and other risks and uncertainties.

These risks and uncertainties 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 of funds, changing political conditions 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 and/or Serbia 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. The laws and regulations on mining in Bosnia and Herzegovina and Serbia are still developing.

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.

Outcomes in courts in Bosnia and Herzegovina and Serbia may be less predictable than in the United Kingdom, which could affect the enforceability of contracts entered into by, or judgements obtained by or given against, members of the Group in Bosnia and Herzegovina and/or Serbia.

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

Exploration

There can be no assurance that exploration on the Raska Project and the continued exploration of the wider Vares Concession Area, 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.

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.

Grant of Future Authorisations to Explore and Mine

If the Company acquires further exploration properties or discovers additional economically viable mineral deposits that it then intends to develop, it will, among other things, require various approvals, licences and permits before it will be able to undertake exploration or mine the deposit. There is no guarantee that the Company will be able to obtain all required approvals, licences and permits relating to its exploration and subsequent development and 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.

Environmental Risks

The Company's activities are subject to the environmental laws inherent in the mining industry and those specific to Bosnia and Herzegovina and Serbia. The Company intends to conduct its activities in an environmentally responsible manner and in compliance with all applicable laws, as well as the requirements set out in the Company's Project Support Agreement with the European Bank for Reconstruction and Development. However, there can be no assurance that the systems and procedures implemented by the Company will be adequate to manage the environmental impact of its activities, and the Company may be the subject of environmental accidents or unforeseen circumstances that could subject it 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:

• operational and technical difficulties encountered during mining;
• insufficient or unreliable infrastructure, such as power, water and transportation;
• difficulties in commissioning and / or operating the plant and equipment;
• mechanical failure or plant breakdown;
• shortage of transportation and interruptions in transportation services;
• health and safety issues, including pandemics, epidemics, outbreaks of infectious diseases or any other serious public health concerns;
• unanticipated metallurgical problems which may affect extraction costs; and
• adverse weather conditions.

Moreover, mining activities have inherent risks and hazards such as explosions, fires, flooding, seismic activity, shaft and tunnel integrity issues, discharges of gas in the air or lubricants and fuel oil into watercourses and hazards associated with the use of heavy machinery.

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

Health and safety Risks

Mines and mining construction sites are inherently dangerous workplaces and the Company's employees and contractors may come into close proximity with large pieces of mechanised equipment, moving vehicles, regulated materials and other hazardous conditions associated with construction and underground mining (for example relating to flooding, seismic activity, shaft and tunnel integrity issues). As a result, the Group is subject to a variety of health and safety laws and regulations dealing with occupational health and safety. The Company intends to conduct its activities in compliance with all applicable laws and internationally recognised mining safety standards with the objective of zero harm operations. However, there can be no assurances that these standards and any measures taken by the Company will be successful in preventing accidents and injuries or violations of health and safety laws and regulations, some of which may be beyond the Company's control. Additionally, the Company's safety record can impact the Company's reputation. Any failure to maintain safe work sites or any serious health and safety incident could expose the Company's to significant financial losses as well as civil and criminal liabilities or loss of rights to operate, any of which could have a material adverse effect on the Company's business, financial condition, results of operations and prospects.

Resource and Reserve Estimates

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.

Risks related to the impact of COVID-19 and future pandemics

The COVID-19 outbreak is likely to continue to adversely affect the global economy during at least the remainder of 2021 and could result in a significant negative impact on the Group's business, financial condition, results of operations and prospects. The effects of the COVID-19 outbreak are uncertain, including the duration of the outbreak, new information that may emerge concerning the severity of the infection, new variants of the virus, the scope, duration and economic impact of actions taken to contain the spread of the virus or treat its impact (including the short term and long term effectiveness of regional and international vaccination programs), and the impact of each of these items on macroeconomic conditions and financial markets globally. Any of these factors could have a material adverse effect on the Group's business, financial condition, results of operations and prospects.

Future spread of COVID-19 or future pandemics, epidemics, outbreaks of infectious diseases or any other serious public health concerns, including in areas where the Group's mining operations and its material facilities are located, may result in greater or new risk of exposure to the Group's employees, and the Group may respond by curtailing, rescheduling or suspending its operations, construction or development at its facilities and projects or be required to do so. Future spread of COVID-19 or future pandemics, epidemics, outbreaks of infectious diseases or any other serious public health concerns may also give rise to issues, delays or restrictions in relation to land access and the Group's ability to freely move people and equipment to and from its projects and facilities and may cause delays or cost increases. In addition, COVID-19 or future pandemics, epidemics, outbreaks of infectious diseases or any other serious public health concerns could represent a threat to maintaining a skilled workforce in the mining industry and could be a health-care challenge for the operations of the Group, including the Group's ability to move its personnel. The Group and the Group's personnel may be, and may continue to be, impacted by this pandemic disease and the Group may ultimately see its workforce productivity reduced or incur increased medical costs/insurance premiums as a result of these health risks.

Pandemics, epidemics, outbreaks of infectious diseases or any other serious public health concerns (such as COVID-19) whether on a regional or global scale, together with any resulting restrictions on travel, imposition of quarantines and prolonged closures of workplaces, are likely to have a material adverse effect on the global economy in general, as well as on commodity prices.

Commodity Prices

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

Commodity 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 that can affect commodity prices include expectations regarding inflation, the financial impact of movements in interest rates, global, regional and local economic trends, and domestic and international fiscal, monetary and regulatory policy settings.

Foreign Exchange Risk

The Company's reporting currency is Pounds Sterling. However, the Company's costs and expenses in Bosnia and Herzegovina and Serbia and other foreign countries are likely to be in foreign currencies. Accordingly, 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 Vares Silver Project is in production are expected to be earned in US dollars. Any depreciation of the US dollar relative to the GBP will therefore result in lower than anticipated revenue.

The Orion Debt Financing, if secured, will be denominated in US dollars. Any depreciation in the US dollar relative to the non-US dollar expenditure requirements of the Group will therefore result in a reduction in the effective value of the funding received.

The Company does not currently have and does not plan to put in place any hedging arrangements in respect of its foreign currency risk.

Historic TSF

Although, the Historic TSF is the legal responsibility of the Municipality of Vares and is not located inside the area covered by Veovaca Exploitation Permit, there remains a residual risk to the Company that the community near Vares may consider or perceive the Historic TSF to be the responsibility of the Company, which may adversely affect the Company's standing within the local community and community relations generally.

The Company has cooperated closely with the Municipality of Vares on this matter and while it is not required to do so, the Company has commissioned an independent expert appraisal of the Historic TSF, including assessment of its structural integrity and any associated environmental degradation. The water, air and dust monitoring during the ESHIA process established baseline conditions around the Historic TSF and a management plan will be developed to address any ongoing issues identified.

If the Company elects to further address any concerns relating to the Historic TSF, which it may choose to do to maintain and protect its standing in the community, the Company may incur unrecoverable costs and spend associated management time on the matter which could affect the Company's overall operating costs and revenues.

RISKS RELATING TO THE COMPANY'S DIRECTORS AND SENIOR MANAGERS

The Company 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 and Serbia. The Group's business may be negatively affected by the departure of, any of these individuals, or any of a number of other key employees and the failure to attract suitable replacements. 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, 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 24 of this prospectus.

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.

Dilutive offering

The New Ordinary Shares being offered in the Capital Raising are not being offered to existing Shareholders on a pro rata basis. As a result, if the New Ordinary Shares are allotted, then Shareholder's shareholdings will be diluted to the extent they do not acquire New Ordinary Shares in the Placing.

The Company may issue additional shares or securities in the future, which may dilute the holdings of Shareholders.

In the future, the Company may offer additional shares or securities, including future public offerings or private placements of shares or securities that are convertible into or exercisable for Ordinary Shares, for capital raising purposes or for other business purposes (including employee share incentives). Any such offerings by the Company or granting of employee share incentives could have an adverse effect on the market price of the Ordinary Shares and dilute the holdings of Shareholders and there can be no guarantee any future equity raises will be undertaken on a pre-emptive basis.

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 in connection with the Admission of the New 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 simplified prospectus in accordance with section 87A of FSMA.

This prospectus does not contain and is not an offer or invitation to the public to subscribe for New Ordinary Shares. This prospectus is not, and should not be construed as an inducement or encouragement to buy or sell any New Ordinary Shares.

No arrangement has however been made with the competent authority in any 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 New 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 New 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 New 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 New 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.

The New Ordinary Shares have not been and will not be registered under the applicable securities laws of any of the Restricted Jurisdictions and, subject to certain exceptions, the New Ordinary Shares may not be offered or sold in the Restricted Jurisdictions or for the account or benefit of any resident of the Restricted Jurisdictions.

This prospectus may not be published or distributed, directly or indirectly, in or into any Restricted Jurisdiction.

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 Ground Floor, Regent House, 65 Rodney Road, Cheltenham, Gloucestershire GL50 1HX, United Kingdom and (subject to certain restrictions) on the Company's website at www.adriaticmetals.com until 14 days after Admission.

Without prejudice to any obligation of the Company to publish a supplementary prospectus pursuant to Article 23 of the UK Prospectus Regulation, neither the publication of this prospectus nor any distribution of New Ordinary Shares shall, under any circumstances, create any implication that there has been no change in the business or affairs of the Group taken as a whole since the date of this prospectus or that the information contained herein is correct as of any time subsequent to its date. No person has been authorised to give any information or make any representations other than those contained in this prospectus and, if given or made, such information or representations must not be relied upon as having been authorised by the Company or by the Joint Bookrunners. Any decision to invest in New Ordinary Shares should be based on a consideration of this prospectus as a whole by the investor.

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, the ASX 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 and the terms of the Placing. The contents of this prospectus 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 copy of the Articles is available for inspection at the Company's registered office, Ground Floor, Regent House, 65 Rodney Road, Cheltenham, Gloucestershire GL50 1HX and can be found on the Company's website.

Investors Resident in the United States

This prospectus is not for publication or distribution, directly or indirectly, in or into the United States of America. This prospectus is not an offer of securities for sale into the United States. The New 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.

The New 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 New 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.

Investors Resident in Australia

This document has not been lodged with the Australian Securities and Investments Commission and is not a prospectus, product disclosure statement or disclosure document for the purpose of the Corporations Act 2001 (Cth) ("Corporations Act") and it does not and is not required to contain all the information which would be required under the Corporations Act to be included in such a disclosure document. This prospectus does not constitute an offer of securities for sale in Australia.

This prospectus is not for publication or distribution, directly or indirectly, in or into Australia other than to persons who are (i) either a "sophisticated investor" within the meaning of Section 708(8) of the Corporations Act or a "professional investor" within the meaning of Section 9 and Section 708(11) of the Corporations Act; and (ii) a "wholesale client" for the purposes of Section 761G(7) of the Corporations Act (and related regulations) who has complied with all relevant requirements in this respect, and has been prepared on that basis. No offer of New Ordinary Shares may be made in Australia except to a person who is a sophisticated investor, a professional investor or a wholesale client (each as defined in the Corporations Act).

Investors Resident in Canada

This prospectus is not for publication or distribution, directly or indirectly, in or into Canada. This prospectus is not an offer of securities for sale into Canada.

The Ordinary Shares and CDIs may be sold only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the Ordinary Shares or CDIs must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable Canadian securities legislation. Canadian investors should note, in particular, that the Company is a "reporting issuer" under the securities legislation of Alberta and British Columbia and, accordingly, the offshore resale exemptions under section 2.14 and section 2.15 of National Instrument 45-102 Resale of Securities and the similar exemptions available under Alberta and Ontario securities legislation are not available. A Canadian investor should seek legal advice prior to any resale of the Ordinary Shares or CDIs. Unless permitted under securities legislation, a holder of Ordinary Shares or CDIs must not trade the security before the date that is 4 months and a day after Admission.

Investors Resident in Singapore

This prospectus is not for publication or distribution, directly or indirectly, in or into Singapore. This prospectus is not an offer of securities for sale into Singapore.

This prospectus has not been and will not be registered as a prospectus with the Monetary Authority of Singapore (the "Authority"). Accordingly, this prospectus and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of Placing Shares to be issued from time to time by the Company pursuant to the Placing may not be circulated or distributed, nor may the Placing Shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor (as defined in Section 4A of the Securities and Futures Act, Chapter 289 of Singapore, as modified or amended from time to time (the "SFA")) pursuant to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA and (where applicable) Regulation 3 of the Securities and Futures (Classes of Investors) Regulations 2018, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where Placing Shares are subscribed or purchased under Section 275 of the SFA by a relevant person which is: (a) a corporation (which is not an accredited investor (as defined in the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or (b) trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities or securities-based derivatives contracts (each term as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries' rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Placing Shares pursuant to an offer made under Section 275 of the SFA except: (i) to an institutional investor or to a relevant person, or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA; (ii) where no consideration is or will be given for the transfer; (iii) where the transfer is by operation of law; (iv) as specified in Section 276(7) of the SFA.; or (v) as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018.

The Company has determined, and hereby notifies all relevant persons (as defined in Section 309A(1) of the SFA), that the Placing Shares are prescribed capital markets products (as defined in the Securities and Futures (Capital Markets Products) Regulations 2018) and Specified Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16: Notice on Recommendations on Investment Products).

Investors Resident in Hong Kong

This prospectus has not been and will not be registered with the Registrar of Companies in Hong Kong. Accordingly, this prospectus may not be issued, circulated or distributed in Hong Kong, and the securities may not be offered for subscription to members of the public in Hong Kong.

No securities have been, may be or will be offered or sold in Hong Kong, by means of any document, other than to persons whose ordinary business is to buy or sell shares or debentures, whether as principal or agent; or to "professional investors" as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (the "SFO") and any rules made thereunder; or in other circumstances which do not result in the document being a "prospectus" as defined in the Companies (Winding UP and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong (the "C(WUMP)O"), or which do not constitute an offer to the public within the meaning of the C(WUMP)O. No document, invitation or advertisement relating to the securities has been issued or may be issued or will be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere), which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted under the securities laws of Hong Kong) other than with respect to securities which are or are intended to be disposed of only to persons outside Hong Kong or only to "professional investors" as defined in the SFO and any rules made thereunder.

Each person acquiring the securities will be required, and is deemed by the acquisition of the securities, to confirm that he is aware of the restriction on offers of the securities described in this prospectus and the relevant offering documents and that he is not acquiring, and has not been offered any securities in circumstances that contravene any such restrictions.

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, forward-looking 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 the section of this prospectus entitled 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 15 of Part I of this prospectus (Company overview).

Other than as required by English law, none of the Company, its Directors, officers, advisers or any other person gives any representation, assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking statements in this prospectus will actually occur, in part or in whole.

Additionally, statements of the intentions of the Board and/or Directors reflect the present intentions of the Board and/or Directors, respectively, as at the date of this prospectus and may be subject to change as the composition of the Company's board of directors alters, or as circumstances require.

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.

No forecasts or estimates

Nothing in this prospectus is intended as a profit forecast or estimate for any period and no statement in this prospectus should be interpreted to mean that earnings or earnings per share for the Company for the current or future financial years will necessarily match or exceed the historical published earnings or earnings per share for the Company.

Market data

Where information contained in this prospectus has been sourced from a third party, such third parties have been identified in this prospectus and the Company confirms that such information has been accurately reproduced and, so far as the Company is aware and has been able to ascertain from information published by that third party, no facts have been omitted which would render the reproduced information inaccurate or misleading.

Presentation of financial and other information

The Company publishes its financial statements in Pounds Sterling. Unless otherwise indicated:

• references in this prospectus to "£" or "Pounds Sterling" are to the lawful currency of the United Kingdom and references to "pence" or "p" represent pence in the lawful currency of the United Kingdom;
• references in this prospectus to "€" are to the lawful currency of the European Econominc Area;
• references in this prospectus to "\$", "US\$", "USD", or "US Dollar" are to the lawful currency of the United States; and
• references in this prospectus to "AU\$" are to the lawful currency of Australia.

The financial information presented in a number of tables in this document has been rounded to the nearest whole number or the nearest decimal point. Therefore, the sum of the numbers in a column may not conform exactly to the total figure given for that column. In addition, certain percentages presented in the tables in this document reflect calculations based upon the underlying information prior to rounding and, accordingly, may not conform exactly to the percentages that would be derived if the relevant calculations were based upon the rounded numbers.

EXPECTED TIMETABLE OF PRINCIPAL EVENTS

Announcement of the Capital Raising	13 October 2021
Posting of the GM Circular to Shareholders	13 October 2021
Publication of this prospectus	14 October 2021
General Meeting	8:30am London time on 29 October 2021
Announcement of results of General Meeting	10.00 am London time on 29 October 2021
Admission of New Ordinary Shares and commencement of dealings on the London Stock Exchange	8.00 a.m. on 1 November 2021
Admission of CDIs representing New Ordinary Shares and commencement of dealings on the ASX	8.00 a.m. (AEST) on 2 November 2021
New Ordinary Shares to be issued in uncertificated form credited to stock accounts in CREST	1 November 2021
CDIs representing New Ordinary Shares to be issued and credited to stock accounts in CHESS	2 November 2021
Ordinary Share certificates (for New Ordinary Shares) despatched by no later than	5 November 2021

All times are London times unless stated otherwise. The dates and times given are indicative only and are based on the Company's current expectations and may be subject to change. If any of the times and/or dates above change the revised and/or dates will be notified by announcement through the Regulatory News Service of the London Stock Exchange. The timetable above assumes the Resolution is duly passed at the General Meeting.

CAPITAL RAISING STATISTICS AND DEALING CODES

Number of Ordinary Shares in issue at the Last Practicable Date	214,344,843
Number of Subscription Shares to be issued pursuant to the Orion Equity Subscription	24,191,000
Number of Placing Shares to be issued pursuant to the Placing	25,159,000
Total number of New Ordinary Shares to be issued pursuant to the Capital Raising	49,350,000
Issue Price (GBP)	£1.5174
Issue Price (AUD)	AU\$2.80
Enlarged Share Capital immediately following Admission	263,694,843
New Ordinary Shares as a percentage of the Enlarged Share Capital immediately following Admission	18.7 per cent.
Estimated gross proceeds of the Capital Raising	£75.3m
Estimated expenses of the Capital Raising	£3.1m
Estimated net proceeds of the Capital Raising receivable by the Company after deduction of commissions, fees and expenses of the Capital Raising	£72.2m
ISIN	GB00BL0L5G04
SEDOL	BL0L5G0
LEI	549300OHAH2GL1DP0L61
Tickers	LSE: ADT1 ASX: ADT

Unless stated otherwise, the exchange rates used in this prospectus are:

• GBP:AUD exchange rate of 1: 1.8453 as at 3.00 p.m. on 12 October 2021;
• USD: GBP exchange rate of 1: 1.3547 as at 3.00 p.m. on 12 October 2021;

DIRECTORS, SECRETARIES, REGISTERED OFFICE AND ADVISERS

Directors	Michael Rawlinson (Non-Executive Chairman) Paul Cronin (Managing Director and Chief Executive Officer) Julian Barnes (Non-Executive Director) Sandra Bates (Non-Executive Director) Peter Bilbe (Non-Executive Director) Sanela Karic (Non-Executive Director)
	The business address of each of the Directors is Ground Floor, Regent House, 65 Rodney Road, Cheltenham, Gloucestershire GL50 1HX, United Kingdom
Joint Company Secretaries	Geoff Eyre Gabriel Chiappini
Registered Office	Ground Floor, Regent House 65 Rodney Road Cheltenham Gloucestershire GL50 1HX United Kingdom
Joint Bookrunners	Canaccord Genuity Limited 88 Wood Street London EC2V 7QR
	RBC Europe Limited 100 Bishopsgate London EC2N 4AA
	Stifel Nicolaus Europe Limited 150 Cheapside London EC2V 6ET
Financial Advisers	Tamesis Partners LLP 125 Old Broad Street London EC2N 1AR
Solicitors to the Company (UK)	Locke Lord (UK) LLP 201 Bishopsgate London EC2M 3AB United Kingdom
Legal Advisers to the Company (Bosnia and Herzegovina)	Sudžuka & Co. d.o.o. Džemala Bijedića 160B 71000 Sarajevo Bosnia and Herzegovina
Legal Advisers to the Company (Serbia)	Curic Law Firm Takovska 12 Milovana Glišića 2b 11000 Belgrade Serbia
Solicitors to the Joint Bookrunners (UK and US)	Ashurst LLP London Fruit & Wool Exchange 1 Duval Square London E1 6PW
Auditors	BDO LLP 55 Baker Street London W1U 7EU

UK Registrar	Computershare Investor Services PLC The Pavilions Bridgwater Road Bristol BS13 8AE United Kingdom
Australian Registrar	Computershare Investor Services Pty Limited Level 11, 172 St Georges Terrace Perth WA 6000 Australia
Technical Advisers to the Company (as to the DFS)	Mining Plus UK Limited 13-14 Orchard Street Bristol BS1 5EH
	Ausenco Engineering Canada, Inc. 855 Homer Street, Vancouver BC, V6B 2W2 Canada
	Wardell Armstrong International Ltd. Sir Henry Doulton House Forge Lane, Etruria Stoke-on-Trent ST1 5BD
Technical Adviser to the Company	CSA Global (UK) Limited 2nd Floor, Exchequer Court, 33 St. Mary Axe, London EC3A 8AA

PART I

COMPANY OVERVIEW

1. Introduction

Adriatic is a mining exploration and development company focused on the development of polymetallic projects in the Balkans.

The primary focus of the Group is the Vares Silver Project located approximately 50 km north of the Bosnia and Herzegovina capital, Sarajevo, in the district of Vares. The results of a DFS were announced on 19 August 2021 and demonstrates potential for a robust, high margin project for low up-front capital expenditure producing on average approximately 3,712koz of silver, 28.5kt of zinc, 21.0kt of lead, 0.7kt of copper, and 21.8koz of gold, on a payable basis per annum over a 10 year mine life. Full construction activities are expected to commence following the completion of the Capital Raising and the Senior Secured Debt and Copper Stream components of the Orion Financing.

The DFS demonstrates that the Vares Silver Project is expected to deliver strong returns with a posttax NPV8% of US\$1,062 million and IRR of 134% for an initial capital cost of US\$168.2 million.

The Vares Concession Area is 41 km² and contains a number of exploration targets that the Company has compiled from historical data and ongoing exploration activities. Exploration was previously focused around the Rupice and Veovaca deposits. However, more recently following the award of exploration permits on the Semizova Ponikva, Bresik and Vares East concession areas in June 2021, the Company will be broadening its exploration activities to include a range of identified targets across these new concessions.

Adriatic also owns the Raska Project in Serbia, which was acquired following Adriatic's acquisition of Tethyan Resource Corp. The Raska Project consists of two brownfield polymetallic prospects called Kizevak and Sastavci, as well as various other greenfield targets across its 92 km² of landholding. A programme of exploration work is ongoing across the Raska Project.

2. Key Strengths

DFS confirms potential for high margin, high return, low capex project

Adriatic released the results of a DFS on the Vares Silver Project on 19 August 2021 demonstrating potential for an attractive, high return project. The DFS outlined an operation with a design plant throughput of 800ktpa producing two concentrate streams over a mine life of approximately 10 years. The Vares Silver Project is projected to deliver a post-tax internal rate of return of 134% and a posttax net present value of US\$1,062 million at a discount rate of 8%, for total initial capital cost of US\$168.2 million, including contingencies.

High-grade Ore Reserves and Mineral Resources with strong potential for exploration upside

Ore Reserves and Mineral Resources have been delineated at the Rupice deposit at the Vares Silver Project, containing high grades of silver, zinc, lead, copper, gold and barite. These resources have the potential for extension along strike and at depth. The hydrothermal system driving mineralisation at the Vares Silver Project typically occurs in clusters, which suggests the potential for further discoveries in the existing licence area. A Mineral Resource Estimate has also been delineated at the Veovaca deposit.

The Ore Reserve at Rupice totals 7.3Mt at a silver equivalent grade of 485g/t. The Rupice Mineral Resource Estimate totals 12.0Mt at a silver equivalent grade of 387g/t, as shown in table 1.

Existing infrastructure in a historical mining district

Commercial mining activities previously took place around the town of Vares under the ownership of the state government, ceasing in the late 1980s. The site of the abandoned processing facility at Tisovci is within the licence area of the Vares Silver Project and is the site of the new Vares Processing Plant. The nearby town of Vares has a long history of mining, most famously for iron ore mining and smelting. These operations all ceased in the 1980s, however the road, rail, water and power infrastructure remains, which can support a new mining operation.

Early mover advantage in Bosnia and Herzegovina

Since the end of the civil war and the signing of the Dayton Peace Agreement in 1995, Bosnia and Herzegovina has experienced a stable democracy. However, despite historical extractive industry activities, there has been very little recent mineral exploration in the country, in particular using modern exploration techniques. The Directors believe that the Company has an early 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 Vares Silver Project towards production. The team has experience in exploration for economic mineralisation, financing, legal requirements and permitting, mine development and construction, operations and corporate social responsibility.

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, which holds the Vares Concession, and to explore and develop the Vares Silver Project.

On 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 Veovaca and Rupice. The drill program allowed an initial JORC compliant Mineral Resource Estimate to be completed for Veovaca. 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 geo-physical surveys. When this data was combined with additional exploration records discovered in a disused administration building at the abandoned processing facility at Tisovci, it provided a number of additional 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) and entered into the Collaboration and Partnership Deed; Sandfire Resources 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 Vares Silver 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:
  • o 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;
  • o 36m @ 4.4g/t Au, 463g/t Ag, 0.5% Cu, 5.7% Zn and 55% BaSO4 from drill hole BR-3-18; and
  • o 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:
  • o 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; and
  • o 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 Vares Municipal Council of a major expansion to the area covered by its existing Vares Concession for the Vares Silver Project.
• In September 2018, further drilling results included:
  • o 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;
  • o 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;
  • o 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; and
  • o 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 an extension to the concession agreement for the Vares Silver Project.
• In November 2018, the Company 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 its urban planning permit for the expanded Vares Concession Area from the Zenica-Doboj Canton.
• In March 2019, the Company was awarded an exploration permit over the expanded Vares Concession Area by the Minister for Energy, Mining and Industry.
• In April 2019, Mr Paul Cronin a founding director of the Company, moved from a Non-Executive Director to an Executive Director role and was subsequently appointed in September 2019 as Managing Director and CEO.
• In July 2019, a maiden Mineral Resource on Rupice and an updated Mineral Resource on Veovaca were released.
• In November 2019, a Scoping Study prepared by CSA Global was released indicating an attractive, high return project, with the Vares Silver Project projected to deliver a post-tax IRR of 107.4% and a NPV8% of US\$916.6 million.
• In December 2019, the Company's Ordinary Shares were admitted to the main market of the London Stock Exchange (standard segment) under the ticker ADT1.
• In January 2020, the Company announced high-grade intercepts at Rupice extending mineralisation to the south: 11.3m @ 4.37g/t Au, 406g/t Ag, 16.1% Zn, 9.8% Pb, 1% Cu and 50% BaSO4 from 244.7m.
• In May 2020, the Company announced that it would acquire 100% of Tethyan, by way of a plan of arrangement under the Business Corporations Act (British Columbia, Canada).
• In September 2020, the Company released an updated mineral resource estimate for Rupice which represented a 32% increase in tonnes compared to the maiden 2019 maiden resource estimate.
• In October 2020, the Company completed the Tethyan Acquisition.
• In October 2020, a PFS for the Vares Silver Project prepared by a number of consultants and led by Ausenco Pty Ltd was released indicating an even more attractive project than outlined at the Scoping Study level with an IRR of 113%, post-tax NPV8% of US\$1,040 million, 1.2 year payback period and an initial capex of US\$173 million.
• In October 2020, the Company entered into a binding agreement for US\$28 million financing, comprising a US\$20 million private placement of the Convertible Bonds to QRC and a subscription by the EBRD of 5,276,595 Ordinary Shares for £6.2 million (US\$8 million) at a price of £1.175 per share.
• In November 2020, the Company received its urban planning permit for Veovaca (open pit, plant and tailings areas).
• In December 2020, the Company completed the issue and allotment of 4,830,156 new Ordinary Shares in the form of CDIs to Sandfire Resources for proceeds of A\$8.6 million.
• In December 2020, drilling results at Kizevak were released:
  • o 53 metres at 4.2% zinc, 2.0% lead, 21g/t silver and 0.4/t gold from 100 metres; and
  • o 22 metres at 4.3% zinc, 1.7% lead, 28g/t silver and 0.4g/t gold from 48m.
• In January 2021:
  • o the Company received the Veovaca Exploitation Permit from the Federal Ministry for Energy, Mining and Industry; and
  • o more drilling at Kizevak and Sastavci delivered thick intercepts:
    • Kizevak 38 metres at 2.7 % zinc, 2.2 % lead, 30 g/t silver and 0.6 g/t gold from 100 metres; and
    • Sastavci 27.7 metres 3.1 % zinc, 1.3 % lead, 22 g/t silver, 0.5 g/t gold from 13 metres and 45 metres at 3.3 % zinc, 1.0 % lead, 17 g/t silver, 0.2 g/t gold from 17 metres.
• In February 2021, the Company:
  • o received a positive Record of Decision from the Federal Ministry of Environment and Tourism in respect of the Environmental Permit for Rupice; and
  • o completed the acquisition of RAS Metals, which holds the exploration permits for Kizevak and Sastavci, under an agreement originally entered into by Tethyan.
• In March 2021, further drilling results at Kizevak and Satavci were released:
  • o Kizevak 10.2 metres at 2.1 % zinc, 1.0 % lead, 12 g/t silver, 0.4 g/t gold from 70.8 metres; and
  • o Satavci 15.8 metres at 3.8 % zinc, 1.5 % lead, 28 g/t silver and 0.2 g/t gold from 122.5 metres.
• In April 2021, the Company provided a Corporate and Operations update.
  • o Rupice underground mine plan optimised
  • o Demolition of the Old Processing Plant Site is nearing completion
  • o Permitting progress update on the urban planning permit and exploitation permit for Rupice, as well as the exploration permit for the 32km² of new concession area
  • o Recommencement of exploration drilling at Rupice
  • o The receipt of several non-binding term sheets for the project financing
• In June 2021, the Company:
  • o received the urban planning permit for the Rupice underground deposit from the Federal Ministry of Spatial Planning;
  • o received the exploration permit from Federal Ministry of Energy, Mining and Industry for the 32 km² of new concession area for the Vares Silver Project; and
  • o launched the Adriatic Foundation, a charitable trust established by Adriatic with the objective of supporting the communities around the Vares Silver Project through initiatives designed to create a positive long-term legacy, as well as alignment between the Company and the communities that the Adriatic Foundation supports.
• In July 2021, the Company received the Exploitation Permit for Rupice.
• In August 2021, the Company released encouraging results from exploration drilling at Rupice, with an intercept of 21.1 metres at 296 g/t Ag, 5.5% Zn, 3.7% Pb, 1.2 g/t Au, 0.2% Cu, 80% BaSO4, 0.1% Sb from 338.6 metres. The hole is located 80m northwest of the Rupice Mineral Resource.
• On 19 August 2021, the Company published the results of the DFS for the Vares Silver Project confirming potential for an attractive project with a post-tax IRR of 134%, post-tax NPV8% of US\$1,062 million, 0.7 year payback period and an initial capital cost of US\$168.2 million.

4. Corporate Structure

The corporate structure of the Group is as follows:

Eastern Mining d.o.o. is the main operating entity of the Group and holds the Vares Concession and the key licences and permits underpinning the Vares Silver Project in Bosnia and Herzegovina.

Ras Metals d.o.o. holds the Kizevak and Sastavci exploration permits and Toar d.o.o. holds the Kremice permit which together form the Raska Project in Serbia.

Adriatik Metali d.o.o., Global Mineral Resources d.o.o., Tethyan Resources Bulgaria EOOD and Kosovo Resource Company LLC are inactive.

The Company aslo intends to incorporate a direct subsidiary in the Netherlands to act as a trading and finance company for the Group.

5. Summary of Key Assets and Operations

Adriatic's asset portfolio consists of two polymetallic projects situated on the Tethyan Metallogenic Belt in the Balkan region of Southeast Europe. The Company's flagship asset is the constructionready Vares Silver Project in Bosnia and Herzegovina. Adriatic also has a pre-resource exploration project in southern Serbia called the Raska Project.

The Vares Silver Project, Bosnia and Herzegovina

The Vares Silver Project is located approximately 50 km north of the capital Sarajevo, near the mining town of Vares. The town of Vares is about 50 minutes by car, from Sarajevo – Tuzla freeway to Podlugovi, then a sealed road to Vares – and is the administrative centre for the municipality of Vares.

The Vares Silver Project has two mineral deposits for which Mineral Resource Estimates have been declared, called Rupice and Veovaca, as well as number of prospective exploration targets across the Vares Concession Area.

Adriatic, through its wholly owned subsidiary Eastern Mining, owns 100% of the Vares Concession. The Vares Concession expires in 2038, but can, subject to the approval of the Zenica-Doboj Canton, be extended for a further 10 years upon written request. On 28 January 2021, the Company received the Veovaca Exploitation Permit from the Federal Ministry for Energy, Mining and Industry. The receipt of this permit initiated the formal exploitation period for the Vares Silver Project, inlcluding. Rupice, which at the time had not yet received its exploitation permit. Rupice was subsequently granted an exploitation permit on 16 July 2021. Under the terms of the Vares Concession, the exploitation period, is up to 30 years, which the Group can apply to extend.

Figure 1 Vares Concession, prospects and main infrastructure. Source: Adriatic

History

The Municipality of Vares has a rich mining history that dates back to the Bronze Age. During the Roman era, the town of Vares was famous for its miners and iron smiths. During the Austro-Hungarian Empire rule of Bosnia and Herzegovina, the iron-works at Vares were an important supplier of iron products to the Empire. The first blast furnace in Bosnia and Herzegovina was built in Vares, during this era, in 1891 and only ceased operations in 1990.

The Socialist Federal Republic of Yugoslavia, through its parastatal company Energoinvest, commenced mineral exploration in the Vares municipality 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 from Rupice in the northwest extending to Smailova Suma in the southeast.

In the late 1960s to the early 1970s, a number of small exploration programs consisting of diamond core drilling and surface trenching at Veovaca, Droskovac, Jurasevac-Brestic and Borovica were completed. This was followed by underground exploration development that consisted of 455m of drives and cross cuts, as well as 11 surface trenches dug for a total length of 93.5m. A more substantial exploration program took place in the late 1970s, with diamond core drilling delineating the first mineral reserve at Veovaca.

To the Northwest, exploration activities around the Rupice area commenced in 1952 and continued intermittently until 1990. Activities were focused initially on exploring for barite mineralisation, but latterly the focus turned to base and precious metal mineralisation.

Between 1980 and 1989, 5,691m of exploration drilling over 49 holes was completed. Sample material from these programs was routinely analysed for lead, zinc, and barite, and on occasion for silver and gold. This work is documented in many reports and has been certified by the geoscientists and institutes that undertook the work.

The open pit mining at Veovaca commenced in 1983 at an intended production rate of 400,000 tonnes per annum. After four years of mining, some 1.2 million tonnes of ore had been mined and processed at the Tisovci processing facility, located 2 km to the southwest of the Veovaca mine. At Rupice, mineral reserves were estimated in the 1980s, but were never commercially exploited.

Mining activities by Energoinvest ceased at the end of the 1980s due to political instability, rather than depleted mine reserves. No further exploration was conducted in the Vares District. Following the civil conflict in the 1990s, and a lack of foreign investment through the early 2000s, Energoinvest eventually fell into bankruptcy, impeding any attempt at restarting exploration and mining activities.

Following bankruptcy proceedings against Energoinvest in November 2012, the Vares Silver Project (which at that stage consisted of just the Veovaca and Rupice exploration licences) was sold to Balamara Resources Limited and Balkan Mining Pty. Ltd. who were shareholders of MM Project d.o.o. Concessionary and associated exploration and exploitation rights for the Vares Silver Project were granted for 25 years on 12 March 2013. MM Project d.o.o. subsequently changed its name to Eastern Mining d.o.o. and Eastern Mining was acquired in its entirety by the Company in February 2017.

Regional and local geology

The Vares Silver 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 autochthonous western carbonate platform and a series of southwest-verging nappe belts to the east, developed during the alpine collision event. The Vares Silver Project is located in the Durmitor Nappe comprising Palaeozoic basement and Triassic-Jurassic volcanic and sedimentary elements.

The Vares Silver Project is located within the Vares Metallogenic Belt, which forms part of a metallogenic province that has previously been interpreted to be related to Middle Triassic rifting and associated magmatism. The polymetallic mineralisation seen in the Vares Concession Area is thought to be related to this Triassic rifting, primarily hosted in a faulted sequence of Triassic and Jurassic sedimentary (mostly carbonate) rocks. The deposit style is not clearly defined, and can best be described as replacement-style type of mineralisation. It was previously classified as either a SEDEX, VMS or carbonate replacement. However, it has distinct differences from these deposit styles.

The Rupice deposit is located at the northwest end of Vares Metallogenic Belt and the Veovaca deposit in the centre. Both deposits are hosted in Triassic rocks surrounded by Jurassic carbonates. To the southeast, at Vares East, basement Palaeozoic metamorphic rocks are also seen.

The Vares Metallogenic Belt comprises of Triassic limestone, dolostone, calcareous and dolomitic marl, and a range of mostly fine-grained siliciclastic rocks including cherty mudstone, mudstone, siltstone and fine-grained sandstone, with minor stratiform spilites. At Rupice the main mineralised horizon is a brecciated dolomitic unit and at Veovaca it is a polymict breccia. Mineralisation at Rupice and Veovaca shows more similarities than differences and both deposits are clearly part of the same mineral system.

Mineralisation consists of sphalerite, galena, barite and chalcopyrite with gold, silver, tetrahedrite, boulangerite and bournonite, with pyrite. The majority of the high-grade mineralisation is hosted within the brecciated dolomitic unit, which is offset and cut by northwest striking, westerly dipping syn-post mineral faulting. This faulting displaces the mineralised body up to 20 metres in places. Thickening of the central portion of the orebody occurs where these faults flexure and deform. Mineralised widths up to 65 metres true thickness are seen in the central portion of the orebody. To date, the massive sulphide mineralisation at Rupice has a defined strike length of 650 metres, with an average truewidth thickness of around 20 metres. However, mineralisation at Rupice still remains open towards the north and down-dip to the south.

Recent exploration activities

Since acquisition in 2017, the Company has defined JORC compliant Mineral Resources at both Rupice and Veovaca. The Rupice and Veovaca deposits are located within the Company's 100% owned Vares Concession, No. 04-18-21389-1/13, located 8.7km west-northwest and 3.5km east of the town of Vares in Bosnia, respectively. The Vares Concession is in good standing with the governing authority and there is no known impediment to the Vares Concession remaining in force until 2038, subject to meeting all necessary reporting requirements.

Exploration activities to date have included geophysics (induced polarisation, gravity magnetics and radiometrics), field geochemical sampling, mapping, and diamond core drilling. Analysis from this data has indicated the presence of polymetallic mineralisation at a number of targets across the Vares Concession, many of which have not been drill tested. The targets are identified in Figure 2.

In 2017, immediately after acquisition, Adriatic completed a 1,458 m diamond core drilling program at Rupice. Confirmatory drilling targeted down plunge of the historically identified mineralisation and these results were assayed for additional elements. This program intercepted significant mineralisation with BR-1-17, the deepest drillhole drilled at that time, intersecting 64 m at 5.1% lead, 8.5% zinc, 1.0% copper, 374 g/t silver and 2.3 g/t gold. Since then, the Company has focused the majority of its exploration activities at Rupice.

The maiden Mineral Resource Estimate of 9.4Mt for Rupice was delineated in July 2019. It was subsequently updated to 12.0Mt in August 2020, as shown in table 1. 167 diamond drill holes (38,134.65m) were used for the Rupice Mineral Resource estimate. This includes 46 historical holes (5,071.8m) not drilled by Adriatic. All these holes were used to support the Mineral Resource estimate.

In September 2020, the Group secured an additional 32 km² extension to the Vares Concession (outlined in light blue in Figure 1), the exploration permit for which was granted in June 2021. The Vares Concession Area now covers a total area of 41 km² . The expanded Vares Concession Area includes an area between Veovaca and Rupice (Semizova Ponikva and Brezik), as well as an area to the south-east of Veovaca (Vares East) as shown in figure 1. In May 2021 the Company completed a geophysics survey across the total Vares Concession Area. The granting of the exploration permit on the 32km²of new concession area in June 2021 allows invasive exploration programs to occur, such as channel sampling and diamond core drilling.

Mineral resource estimates

All exploration results, mineral resources and ore reserves included in this prospectus comply with the JORC Code.

On 1 September 2020, the Company announced an updated Indicated and Inferred Mineral Resource estimate for the Rupice deposit representing a 32% increase in tonnes compared to the Rupice maiden Mineral Resource estimate using a 50g/t AgEq cut-off. On 23 July 2019, the Company announced a Maiden Indicated and Inferred Mineral Resource estimate for Veovaca. Both the Rupice and Veovaca Mineral Resource Estimates are compliant with the JORC Code.

Table 1: Mineral Resources Estimate for Rupice (Source: Adriatic announcement dated 19 August 2021)

		Grades							Contained Metal
Class.	(Mt)	AgEq (g/t)	Ag (g/t)	Zn (%)	Pb (%)	Cu (%)	Au (g/t)	BaSO4 (%)	Sb (%)	AgEq (Moz)	Ag (Moz)	Zn (kt)	Pb (kt)	Cu (kt)	Au (koz)	BaSO4 (kt)	Sb (kt)
Ind.	9.5	450	176	4.9	3.1	0.5	1.6	29	0.2	137	54	465	294	52	500	2,730	21
Inf.	2.5	111	49	0.9	0.7	0.2	0.3	9	0.1	9	4	23	18	4	27	218	3
Total	12. 0	387	149	4.1	2.6	0.5	1.4	25	0.2	149	58	488	312	56	526	2,948	24

Rupice Mineral Resources, August 2020

Rupice Notes:

• A cut-off grade of 50g/t silver equivalent has been applied
• AgEq Silver equivalent was calculated using conversion factors of 32.4 for Zn, 25.9 for Pb, 79.2 for Au, 1.9 for BaSO4, 84.2 for Cu and 84.2 for Sb. Metal prices used were US\$2,500/t for Zn, US\$2,000/t for Pb, \$150/t for BaSO4, \$2,000/oz for Au, \$24/oz for Ag, \$6,500/t for Sb and \$6,500 for Cu.
• Metal recoveries and payabilities from the PFS have been applied
• The applied formula was: AgEq = Ag(g/t) * 92% * 86% + 32.4 * Zn(%) * 97% * 71% + 25.9 * Pb(%) * 93% * 84% + 1.9 * BaSO4(%) * 58% * 99% + 79.2 * Au(g/t) * 70% * 76% + 84.2 * Sb(%) * 96% * 17% + 84.2 * Cu(%) * 97% * 82%
• A bulk density was calculated for each model cell using regression formula BD = 2.745 + BaSO4 * 0.01793 + Pb * 0.06728 – Zn * 0.01317 + Cu * 0.1105 for the halo domain, BD = 2.7341 + BaSO4 * 0.01823 + Pb * 0.04801 + Zn * 0.03941 – Cu * 0.01051 for the fault zones and BD = 2.7949 + BaSO4 * 0.01599 + Pb * 0.05419 + Zn * 0.01169 + Cu * 0.06303 for the low-grade domain. Bulk density values were interpolated to the combined high-grade domain from 631 BD measurements

Table 2: Mineral Resources Estimate for Veovaca (Source: Adriatic announcement dated 19 August 2021)

Grades							Contained Metal
Class.	(Mt)	AgEq (g/t)	ZnEq (%)	Ag (g/t)	Zn (%)	Pb (%)	Au (g/t)	BaS O4 (%)	AgEq (Moz)	ZnEq (kt)	Ag (Moz)	Zn (kt)	Pb (kt)	Au (koz)	BaS O4 (kt)
Ind.	5.3	225	4.3	50	1.6	1.0	0.1	16	38	230	9	83	55	14	860
Inf.	2.1	116	2.2	17	1.1	0.5	0.1	6	8	47	1	23	11	4	123
Total	7.4	193	3.7	41	1.4	0.9	0.1	13	46	275	10	106	66	18	984

Veovača Mineral Resources, July 2019

Veovaca Notes:

• A cut-off grade of 0.6% ZnEq has been applied
• Metallurgical recoveries of 90% have been applied in the metal equivalent formula based on recent and ongoing test work results
• 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. AgEq – silver equivalent is calculated using ZnEq*1/51.84
• 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%
• A bulk density was calculated for each model cell using regression formula BD = 2.70855 + BaSO4 * 0.01487 + Pb * 0.03311 + Zn * 0.03493

Combined Notes:

• Mineral Resources are based on JORC Code definitions
• It is the opinion of Adriatic and its competent person (Mr Dmitry Pertel of CSA Global) that all elements and products included in the metal equivalent formula have a reasonable potential to be recovered and sold
• Rows and columns may not add up exactly due to rounding
• Ind. = Indicated
• Inf. = Inferred

Further exploration potential

The Vares Concession Area contains a number of highly prospective exploration targets, which lie within the Vares Metallogenic Belt.

Figure 2 splits up the exploration targets into two categories. The targets marked in yellow are where invasive exploration activities have commenced, namely Jurasevac-Brestic, Borovica, Veovaca West and Orti. Those targets marked in blue are where mineralisation is known at surface, however the targets are greenfield and invasive exploration has not yet taken place, These are SP1, SP2, Droskovac, Seliste, Mekuse, Barice, Brgule,Smaljova Suma and Debele Mede.

Figure 2. Vares Silver Project exploration targets overlaid with Radiometric Elemental Ratios – RGB: (U/Th2)*K, K2/Th, K2/U. Source: Adriatic.

Definitive Feasibility Study

Adriatic released the results of a DFS on the Vares Silver Project on 19 August 2021 demonstrating a potentially attractive, high return project. The DFS outlined an operation with a plant throughput of 800ktpa producing multiple concentrates over a mine life of approximately 10 years. The DFS report was prepared by Ausenco, with support from Mining Plus, Wardell Armstrong International and Libertas Metallurgy.

The Vares Processing Plant will be built on the site of the previously operated processing plant that treated ore from the historical Veovaca open pit. It lies within a mountainous region with widespread forests and meadows. Access to the Vares Processing Plant area, which is adjacent to the village of Tisovci, is via 9 km of well-maintained sealed roads from the town of Vares.

The Rupice Underground Mine, situated in the Rupice concession, will be connected to the Vares Processing Plant via 24.5 km of sealed and unsealed roads that by-pass the town of Vares. Access will be available all year round. The Rupice Surface Infrastructure and Rupice Underground Mine are a greenfield site that is on the southern side of the Vruci Potok valley on forestry land.

Ore from the Veovaca open pit which was included in an earlier Pre-Feasibility Study and scheduled to follow depletion of the Rupice Underground Mine, is not included in the mine plan for the DFS. Adriatic will assess the economics of reincorporating Veovaca into the mine plan at a later date in the context of ongoing regional exploration work.

Key financial assumptions used for the DFS are presented in table 3 below.

Table 3: Key Financial Assumptions

Metric	Unit	Value
Exchange Rate	BAM/USD	1.60
Silver Price	US\$/oz	25
Gold Price	US\$/oz	1,800
Zinc Price	US\$/tonne	3,000
Lead Price	US\$/tonne	2,300
Copper Price	US\$/tonne	9,500

Antimony Price	US\$/tonne	2,300
----------------	------------	-------

Key DFS Metrics

The key project metrics are shown in Table 4 below.

Table 4: DFS Metrics

Key Metric	Unit	2021 DFS
Mined tonnes to plant	Mt	7.3
Life of operation	Years	10
Average annual AqEq production years 1-5	koz/year	14,975
Cash Cost	\$USD/AqEq ounce	7.0
All-in Sustaining Cost (AISC)	\$USD/AqEq ounce	7.3
Revenue	\$USD/t Milled	376.9
Pre-production capital	US\$ Million	168.2
Post tax NPV8%	US\$ Million	1,062
Post tax Internal Rate of Return	%	134
Project payback from first production	years	0.7
Profitability Index	(Post-Tax NVP8/CAPEX)	6.3

Cost Estimates

The capital and operating cost estimates were compiled by Ausenco with inputs from other engineering consultants and the Company. Initial and sustaining capital costs, and LOM operating costs are summarised in the tables below.

Table 5: Capital cost estimates, life of mine

Capital Cost Estimate	US\$ M
Initial Capital	168
Sustaining Capital	32
Rehabilitation and Closure	12
Salvage Value	(16)

Table 6: Initial Capital Cost estimates

Initial Capital Cost Estimate	US\$ M
Rupice Underground Mining	21.1
Rupice Surface Site Infrastructure	35.8
Minerals Processing	46.1
Vares Processing Plant Site Infrastructure	6.4
Regional Infrastructure and Utilities	5.7
Temporary Infrastructure Construction	5.8
Common Costs and Services	0.8
Owners Costs	46.6
Total	168.2

Table 7: Life of mine average operating costs

Metric	Unit	Value
Mining Cost	US\$/t mined	24.1
Underground Mining Cost (mining)	US\$/t mined	24.1
Open Pit Mining Cost (mining)	US\$/t mined	n/a
Mining Cost	US\$/t milled	30.0
Underground Mining Cost (milling)	US\$/t milled	30.0
Open Pit Mining Cost (milling)	US\$/t milled	n/a
Processing Cost	US\$/t milled	30.3
G&A Cost	US\$/t milled	7.7
Operating Costs	US\$/t milled	68.0
Operating Costs	US\$/ AgEq oz	4.5
Refining & Freight Cost	US\$/t milled	35.7
Refining & Freight Cost	US\$/ AgEq oz	2.4
Cash Cost	US\$/ AgEq oz	7.0
All-in Sustaining Cost	US\$/AgEq oz	7.3

Mining

The selected mining method for the Rupice deposit is underground mining. The mining recovery for Rupice has been estimated at 95% with an average underground dilution factor of 13%.

Table 8: Vares Silver Project DFS Ore Reserve Estimate (Source: Adriatic announcement dated 19 August 2021)

Vares Silver Project Ore Reserve Estimate, August 2021
Deposit	JORC Class.	Ore	AgEq	Ag	Zn	Pb	Au	Cu	Sb
		Mt	g/t	g/t	%	%	g/t	%	%
Rupice	Probable	7.3	485	202	5.7	3.6	1.9	0.6	0.23

Notes:

• Mineral Resources and Ore Reserves are based on JORC Code definitions
• It is the opinion of Adriatic and its competent persons (Mr John Battista and Mr Simon Grimbeek of Mining Plus) that all elements and products included in the metal equivalent formula have a reasonable potential to be recovered and sold
• Rows and columns may not add up exactly due to rounding
• DFS metal prices, payabilities and recoveries have been applied
• AgEq Silver equivalent was calculated using conversion factors of 37.31 for Zn, 28.6 for Pb, 72.0 for Au, 118.2 for Cu and 118.2 for Sb
• The applied formula was: AgEq = Ag(g/t) * 89% * 88% + 37.3 * Zn(%) * 91% * 75% + 28.6 * Pb(%) * 92% * 87% + 72.0 * Au(g/t) * 64% * 77% + 118.2 * Sb(%) * 95% * 84% + 118.2 * Cu(%) * 94% * 16%

The primary access to the underground workings will be via two separate access declines developed from the surface. A third primary main return airway decline has replaced the previously proposed return air raise-bore shaft. Trackless equipment will access the mine via the two access decline portals.

Following the excavation of the box cuts and installation of portal support systems, the declines will be developed with dimensions of 5.5m wide x 5.5m high. The lower access decline will serve as the main ingress route into the mine while the middle decline will serve as the main egress, hence allowing for dedicated traffic in one direction with minimal disruption to the hauling operations. The additional benefit of the lower decline is that it enables rapid access to the high-grade zone of the orebody. All decline ramps have been positioned to minimise development required to access the initial high-grade stoping area and to provide the shortest distances to the centre of mass of each of the major stoping areas.

The declines will be developed in a 'figure of 8' geometry to allow for better visibility, reduce driver fatigue associated with turning in only one direction, reduce vehicle wear and to gradually follow the higher-grade zones along the strike of the orebody.

Secondary development will consist of level access drives that are driven to connect the ramps with the footwall drives on each sub-level. The footwall drives are designed with a minimum stand-off of 25m from the orebody and will have dimensions of 5.0m wide x 5.5m high.

The sub-levels will be spaced at 20m vertical intervals. The lower 12 sub-levels will serve as access to transverse longitudinal stopes while the upper five sub-levels will be used as access for longitudinal long hole stopes. The transverse stopes will be accessed along horizontal cross-cut drives leading from the footwall drive at dimensions of 5.0m wide x 5.0m high and developed at right angles to the strike of the deposit. The cross cuts will be spaced 15m apart along strike to adequately traverse the deposit and provide for a 15m stope strike drilling envelope in a primary-secondary stope sequence and retreating from the hanging wall to the footwall (direction).

The ore will be recovered from the ROM stockpiles by front end loader, with a pre-planned recovery method to achieve the planned grade for feed to the processing plant. The front-end loader will discharge into the primary crusher so that blending effectively takes place in the crushing plant. The crushed ore will then be deposited onto a stockpile before being reloaded onto on-highway trucks for haulage to the Vares Processing Plant.

Figures 3 and 4 illustrate the declines, ramps, levels and stopes of the Rupice Underground Mine. The mine design comprises largely of the access and ventilation portals areas (these are shown in red in Figure 4), main declines (light blue), trackless ramps (light purple) sub-level access drive (green), and the sub-level footwall drives (green).

The underground mining method is sub-divided into two main divisions, namely the Longitudinal Longhole Stoping zone (LLOS) and the Transverse Longhole Stoping Zone (TLOS). The LLOS zone will extend upwards from and above the 1,065 level and the TLOS zone will be below the 1,065 level. The main ventilation infrastructure includes the return airway decline, return air drives and return air raises.

Figure 3: Rupice Underground Mine design (view one). Source: Adriatic.

Figure 4: Rupice Underground Mine design (view two). Source: Adriatic.

The Veovaca open pit mine on which a Mineral Resource has been defined and which was included in the prior Pre-Feasibility Study is not included in the mine plan for the DFS.

Metallurgy and Processing

The process design for the Vares Silver Project is based on treating ore from the Rupice Underground Mine through sequential flotation process to produce a lead-silver and zinc concentrate. The approximate plant capacity is to accept a design throughput of 800 ktpa.

The Vares Silver Project has two processing sites; the Rupice Surface Infrastructure site and the Vares Processing Plant site. The Rupice Surface Infrastructure site, which is a greenfield site, is located above the Rupice Underground Mine site and is approximately 11 km as the crow flies, or 24.5 km by road, northwest from the Vares Processing Plant.

During operation, three-stage crushing occurs at the Rupice Surface Infrastructure site and the crushed ore is trucked to the Vares Processing Plant. The crushing circuit is also used to crush waste rock for use in backfill. Crushed ore is received and stored in two crushed ore bins prior to the ball mill grinding circuit, which consists of a ball mill and cyclones to grind and classify material to 80% passing 40 microns.

Crushed ore is received at the Vares Processing Plant coarse ore hopper and conveyed to and stored in two crushed ore bins prior to the ball mill grinding circuit, which consists of a ball mill and cyclones. The cyclone overflow reports to the sequential flotation circuit, which consists of lead-silver flotation and regrinding and zinc flotation and regrinding. The process produces two saleable concentrates, (lead-silver and zinc), that are subsequently thickened, filtered, and placed in sealed shipping containers for transport.

Tailings from the Vares Processing Plant reports to a tailings thickener to produce filtered tailings. The resulting filtrate is returned to the Vares Processing Plant as recycled process water. The filtered tailings are then either trucked back to the Rupice backfill plant or trucked and placed at the tailings storage facility located near the Vares Processing Plant.

At the Rupice Surface Infrastructure, The filtered tailings will be stockpiled next to the backfill plant. Waste rock from the Rupice Underground Mine is crushed and mixed with the filtered tailings and a cement binder in the backfill plant to produce Paste Aggregate Fill ("PAF"). The PAF backfill is then pumped into the underground reticulation system. The backfill plant will also produce Cemented Aggregate Fill ("CAF"), which utilises waste rock and cement, which will be produced and trucked underground to meet mining CAF requirements.

The Vares Processing Plant is located on a brownfield site. The historic surface infrastructure has already been demolished, except for the administration building and the historical tailings thickener that will be repurposed for future use. The grinding circuit consists of a ball mill and cyclones. The grinding circuit will be designed to reduce ore from an 80% passing size of 7 mm to 40 microns.

The flotation circuit consists of lead-silver flotation and zinc flotation circuits. The pyrite and barite flotation circuits present in the prior Pre-Feasibility Study are not present in the DFS, simplifying the design and reducing up front capital expenditure.

The TSF is proximal and southwest of the Vares Processing Plant.The TSF has been designed to international design codes and standards, such as the EU Mine Waste Directive and Best Available Techniques Reference Document for the Management of Waste from Extractive industries and the Global Industry Standard on Tailings Management.

Tailings generated in excess of the paste backfill requirements will be stored in a dry-stack tailings facility, located in the valley immediately south of the Vares Processing Plant site. The facility will have sufficient capacity to store the excess tailings for the 10 year life of mine.

Infrastructure

The Vares Processing Plant is accessed from the R444, a main sealed road connecting the town of Vares to the capital city of Sarajevo. From the R444, a secondary sealed road runs east towards the Tisovci village, located near the Vares Processing Plant.

The Vares Processing Plant site contains existing paved and unpaved roads around the legacy infrastructure from previous operations.

The Rupice Surface Infrastructure is currently accessed by travelling north from Sarajevo on the R444 and north of Vares, turning west onto the R444a, towards Rupice. From the R444a, a secondary sealed road (bi-directional single lane) accesses the village of Borovica Gornja.

A 24.5 km haulage road will be built for the purposes of transporting ROM ore from the Rupice Underground Mine to the Vares Processing Plant. The route will also be used to for transporting dewatered tailings from the Vares Processing Plant back to the Rupice Surface Infrastructure for use in the paste backfill plant.

The haulage road will be comprised of:

• 1. 15.5 km of road that requires construction as a public road; and
• 1. 9.0 km of existing public road that requires upgrade.

The haulage road will be constructed and maintained by the Vares municipality and paid for by the Company.

All mine vehicles, other than underground vehicles, will be legally allowed to travel on public roads.

Electricity

A national electricity grid is operated and maintained by the Bosnian State company, JP Elektroprivreda BiH. Powerlines run to the Vares Processing Plant, and thereafter to nearby villages. The State company is obligated to supply power to the project and if required will upgrade the existing power lines. Any upgrades to the existing 35kV powerline will be part of the connection fee payable to JP Elektroprivreda BiH.

Water Supply

Water supply for Rupice Surface Infrastructure will come from the Studenac stream near Pogar. The site was previously a source of water for the town of Vares. It will be operated by JKP Vares d.o.o., the local municipal contractor and supply water to Rupice Site Infrastructure via a new pump and 5 km long pipeline.

The existing municipal water supply to the Vares Processing Plant site will be utilised for supply of all water for the plant and infrastructure operations.

Both sites can supply sufficient water to meet the Vares Silver Project's needs.

Marketing and Logistics

Concentrate Marketing

Adriatic has engaged the services of Bluequest Resources AG ("BQR") to assist with the marketing of the silver-lead and zinc concentrates. Requests for proposals for the concentrates were sent to nine potential offtakers, who all subsequently submitted bids.

The following table shows the expected metals recovered in each concentrate stream during the first 24 months of Commerical Production.

Zinc Concentrates			Silver – Lead Concentrate
Element	Unit	Amount*	Element	Unit	Amount*
Zn	%	55 – 58	Pb	%	43 – 49
Ag	g	300 – 600	Ag	g	1,500 – 4,000 (Ave 2,600)
Au	g	3 – 8	Au	g	5 – 10
Cu	%	0.5 – 1	Cu	%	6 – 10
Pb	%	2.50	Zn	%	8 – 12

* Expected average 0-24 months

In a change from the PFS, the processing circuits for barite concentrate and pyrite concentrate were removed. The removal of the barite and pyrite circuits has reduced the overall capital expenditure, simplifying the flowsheet as well as reducing the project execution risk commensurately.

Market research conducted by an independent barite marketing expert concluded that, while the barite concentrate was suitable as a drilling mud, the unfavourable current market prices (a direct result of stagnating oil and gas exploration) and the current high shipping rates negated its commerciality. Should market conditions become more favourable, the Vares Processing Plant has been designed for a barite circuit to be installed in the future.

Zinc Concentrate

It is projected that Vares will produce up to 90k dmt pa of zinc concentrate. Notably the zinc concentrate is expected to have a very low iron content, which is particularly advantageous for European smelters.

The following table outlines the payabilities, charges and other assumptions used for the sale of zinc concentrates. The data is based on bids received from an offtake tender process that took place during the DFS.

Zinc Concentrates Baseline Assumptions
Payable silver	75% payable after deduction of 93.31g
Payable zinc	85% payable
Payable gold	75% payable after deduction of 1.5g
Treatment charges	US\$195 per dmt (US\$20 discount to benchmark)
Refining charges	None
Inland freight	US\$24.72 per wmt
Export freight	US\$35.02 per wmt
Weight losses	0.2%
Insurance	US\$3 per wmt
Moisture	9%

Silver-Lead Concentrate

It is projected that Vares will produce up to 60k dmt pa of silver-lead concentrate. High silver content concentrates, similar to the Vares silver-lead concentrate, are attractive for Chinese lead smelters, allowing them to toll treat the payable elements under a more favourable tax import/export scheme. Traditionally most of these high silver Chinese smelters operate on the spot market, and do not enter long term offtake agreements. Also, Chinese smelters routinely pay for contained antimony.

The following table outlines the payabilities, charges and other assumptions used for the sale of silverlead concentrates. The data is based on bids received from an offtake tender process that took place during the 2021 DFS.

Silver-Lead Concentrate Baseline Assumptions
Payable silver	95% payable (subject to minimum deduction of 50g)
Payable zinc	10% payable above 10% zinc content
Payable lead	95% payable (subject to minimum deduction of 3%)
Payable copper	100% payable at the lead price
Payable gold	US95% payable (subject to a minimum deduction of 1g)
Treatment charges	US\$65 per dmt
Refining charges	Au US\$15 per troy ounce, Ag US\$1 per troy ounce
Inland freight	30.62 per wmt
Export freight	US\$56.02 per wmt
Weight losses	0.25%
Insurance	US\$4-5 per wmt
Moisture	9%

Zinc Market

The zinc market has been buoyed by strong global demand and renewed investor interest, seeking to gain exposure to the long-term zinc price outlook. Prices have comfortably held above the longterm five-year average (2015-2020) of \$2,544, and are consolidating, despite the recent surge in (recovering) Peruvian mine output and the release of strategic stockpiles of zinc (by the Chinese government) to dampen prices. Government-led infrastructure projects and strong automobile sales are expected to keep prices steady, as the world returns to work in the second half of 2021; releasing pent up demand fuelled by record personal savings accumulated during the pandemic. Refined zinc demand is expected by analysts to exceed mine output in the next few years. Significant price increases are needed to encourage further investment in new mines or expansion of existing mines.

Concentrate terms have remained low during 2021, as significantly lower output from South American mines in 2020 forced smelters to cover in tonnages, tightening terms significantly below the 5-year and 10-year adjusted average Benchmark Treatment Charges of \$204/dmt and \$211/dmt respectively. Higher average prices have allowed Chinese smelters in particular to benefit from the large free metal gains in recovery as they seek to top-up domestic supplied feed by importing additional tonnes from western mines. This can be expected to continue if prices consolidate their recent gains, creating a healthy outlook for mines vis-à-vis Treatment Charges for the foreseeable future.

Lead Market

Increasing pressures by governments to force greater recycling of lead products has seen lead battle the head-winds of increased supply versus demand. This has dampened prices relative to the surges seen in copper, nickel and zinc where increased demand has driven prices higher. Despite this, lead has continued to consolidate its recent gains and traded on a spot basis significantly above the 10 year average of \$2,079 per mt.

Terms for spot high silver-lead concentrates have remained below the 5 and 10-year average silverlead Bench Mark terms of \$127 per dmt and \$172 per dmt respectively. With limited supply increases in primary lead supply foreseen, smelters are expected to be continually challenged to secure longterm supplies at reasonable Treatment Charges.

Silver

Following the surge in prices in the second half of 2020, silver has spent most of 2021 to date consolidating its gains. Silver benefits from both industrial demand and its precious metal investment status. Silver has seen increased physical demand from its use in the renewal energy sector, particularly photovoltaic cells. However, partial substitution by copper and aluminium in the next five years (2021-2026) in this sector is likely to weaken the longer-term industrial demand outlook, though only marginally as the overall volume of this sector increases. Despite this, prices have remained above the 10-year (2010-2020) average of \$21.05 per troy ounce and recent inflationary pressures bode well for its precious metal status as investors seek to migrate from bonds into fixed assets.

Logistics

The zinc and silver-lead concentrates will each be loaded into lined Twenty-foot Equivalent Unit (TEU) containers at the Vares Processing Plant. They will then be transported 5km by road to the Vares Railhead, where the containers will be either stored or cross-loaded directly onto waiting rail wagons. A maximum of 900wmt of concentrate (36 TEU), stored in containers, can be transported by rail with each rail movement from the Vares Railhead.

Rail

The rail journey from the Vares Railhead to the Ploce Port passes through three locations, where locomotives will be changed according to the line requirements. The first 25 km section of the line from Vares to Podlugovi uses diesel locomotives. This section of line also requires upgrading in places. The Bosnian State Railway Company, BiH Railways, consider this to be easily completed within a short timescale. The Company agreed with BiH Railways that the Company will provide BiH Railways with 3 months' notice prior to use, and in-turn BiH Railways will complete the work within 2 months. This section of track, from Vares Majden to Podlugovi (25km), was last used in 2012.

The remaining journey to the Ploce Port will be on electrified lines, with regular other freight traffic. The second locomotive change occurs when passing over the Crotian border, north of Ploce. The complete journey from the Vares Railhead to the Ploce Port will take approximately 10 hours.

Port

Ploce Port is located on the Croatian Adriatic coast. It has extensive railway sidings, dedicated road and rail access and modern security measures and provides full stevedoring services. It is a relatively large, but under-utilised port that is located near the mouth of the Neretva River. It is a sheltered deep water (draft/depth of up to 17.8m) port, allowing large vessels (up to Capesize) to berth.

The port has been the recipient of recent funding from both the EBRD and the World Bank. The funding provided an infrastructure upgrade consisting of a container storage facility with 60K TEU of annual capacity, a new crane, as well as new plant and vehicles. The port container facilities are currently operating at circa 50% of full operating capacity and have more than adequate capacity for the concentrates to be produced by the Vares Processing Plant.

Containers, supplied by a shipping agent, will be unloaded from the train to a secured container storage facility and placed into stacks in readiness for onward shipping to their final destination.

Sea transportation

The Company has worked with an independent shipping consultant to provide analysis of the shipping markets and target a list of ports derived from the negotiations with the potential offtakers. Whilst global shipping remains in a state of turmoil and prices for some routes are at a very high premium to pre-COVID levels, other routes (such as empty containers returning to main port China) are very competitive.

The Company expects shipping lines to maintain a portion of the recent gains in the longer term. When supply chain disruptions ease, expected during 2022, and post-pandemic consumer spending begins to normalise, the Company expects container freight costs to fall by approximately 10 to 20%, and from 2023 onwards, container freight levels to increase in line with average inflation levels.

Royalties

Under the Vares Concession, concession fees will be payable to the Zenica-Doboj Canton on production at the rate of BAM 3.90 (€1.99) per tonne ROM. Other than the concession fee, the Vares Silver Project is not subject to any other royalties or payments.

Surface rights and land access

The Company has secured all necessary surface land rights for the initial phases of exploitation at Rupice and Veovaca as follows.

The Company has at all times complied with Article 9 of the EBRD's policy on Resettlement Guidance and Good Practice.

Rupice (Cadastral municipality: Borovice)

Plot No.	Official Area (m2 )	Nature of rights
1816	11,021	land acquired by Eastern Mining
1817	2,004	land acquired by Eastern Mining
1813	7,013	land acquired by Eastern Mining
1814	6,212	land acquired by Eastern Mining
1815/1	6,427	land acquired by Eastern Mining
1815/2	3,492	land under acquisition by Eastern Mining; right of use granted1
1797/1	7,249,922	State owned land, all necessary rights included within the grant of exploitation permit2
1831	62,342	State owned land, all necessary rights included within the grant of exploitation permit2

Veovaca (Cadastral municipality: Pržići)

Plot No.	Official Area (m2 )	Nature of rights
969	112,692	land acquired by Eastern Mining
737	7,600	land acquired by Eastern Mining
739	31,803	land acquired by Eastern Mining
738	3,681	land acquired by Eastern Mining
744/1	4,148	land acquired by Eastern Mining
745	3,485	land acquired by Eastern Mining
747/1	2,243	land acquired by Eastern Mining
748/1	1,653	land acquired by Eastern Mining
749/1	5,375	land acquired by Eastern Mining
744/2	2,160	land acquired by Eastern Mining
746	4,504	Land acquired by Eastern Mining, pending entry to
		Cadastral Registry
747/2	1,495	land acquired by Eastern Mining
748/2	1,926	land acquired by Eastern Mining
749/2	2,331	land acquired by Eastern Mining
761	213,777	State owned land, consent to use issued3
754	103,449	land acquired by Eastern Mining
750	28,424	State owned land, consent to use issued3
743	2,635	land acquired by Eastern Mining
744/2	1,767	land acquired by Eastern Mining
1203/1	804,476	State owned land, consent to use issued (pending
		conversion from forestry to construction (industrial
		use) designation)3
942	1,080	Required for Phase 3 of TSF (LoM yr >7) sale
		agreed with private landowner
943	2,355	Required for Phase 3 of TSF (LoM yr >7) sale
		agreed with private landowner
946	1,894	Required for Phase 3 of TSF (LoM yr >7) sale
		agreed with private landowner
947	6,593	Required for Phase 3 of TSF (LoM yr >7) sale
		agreed with private landowner

Notes:

1. Right to use contract for an indefinite period before closure of purchase agreement for a one off payment of 500 BAM.

2. 1. Right to use established through the Vares Concession, the subsequent urban planning permit and codified by issuance of the Rupice exploitation permit. Eastern Mining will be recorded in the Cadaster as "concessionaire". No fee for right to use which remains extant for the duration of the Vares Concession (and any extension to the original term).
3. 1. Consent to use for the length of the Vares Concession (and any extension to the original term) granted by State successor to the registered owner (the Municipality of Vares). Subsequently superceded by the Vares exploitation permit.

The Raska Project, Serbia

The Raska Project in Serbia was acquired following Adriatic's acquisition of Tethyan. Tethyan had been exploring a highly prospective 99 km² land package in southern Serbia, which contains two historic zinc-silver mining operations called Sastavci and Kizevak. The Sastavci and Kizevak deposits, like those in the Vares Silver Project sit on the polymetallic Tethyan Metallogenic Belt. Therefore, like the Vares Silver Project, they have zinc, silver and lead mineralisation.

Recent drilling has also confirmed near-surface polymetallic mineralisation as well as an anomalous broad gold structure at depth. Further mineralised sub-parallel structures have also been discovered within 100m of the main mineralising trend, which demonstrate potential for scale.

There are a number of other targets across the Raska Project, such as Rudnica and Karadak in the South West of the Raska licence area, which the Company plans to follow up in due course.

Figure 5: Concession map of Raska Project. Source: Adriatic.

6. Strategy and Work Programmes

Adriatic plans to create a European-focused, mid-tier mining company with a diversified portfolio of production and development assets. The Company is currently focused on advancing its flagship Vares Silver Project into production.

Work Program Bosnia

The primary work program is the construction of the Vares Silver Project, which consists of surface and underground infrastructure at Rupice, as well as the associated surface infrastructure for the Vares Processing Plant.

The Company will continue to conduct exploration activities across the Vares Concession with the aim of increasing the existing resources and to find and delineate additional resources from new targets.

Exploration activities are focused on;

• 1) continuing to define extensions of the defined Rupice deposit;
• 2) drilling test identified exploration targets across the Vares Concession; and
• 3) analysing data and conduct field-sample activities to identify new targets.

Step-out exploration activities around the Rupice deposit will be focused on defining the extent of mineralisation that remains open to the north as well as down dip.

Analysis of historical exploration data and the exploration activities completed since incorporation, has identified various regional greenfield prospects that lie within the Vares Concession. The Company intends to continue to systematically explore each of these regional targets.

Work Program Serbia

The work program in Serbia is focused on exploration activities around the brownfield prospects of Kizevak and Sastavci, as well as the greenfield prospects of Karadak and Rudnica. The Kizevak and Sastavci prospects are formerly operating open pit mines. The Company plans to produce a Maiden Resource Estimate and Scoping Study on the Raska Project in Q1 2022.

7. 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 Vares Silver Project is expected to represent a relatively small component of the annual market for its key commodities for which supply is broadly diversified.

8. Directors and Senior Management

The Directors and their principal functions within the Company, together with a brief description of their management experience and expertise and principal business activities outside the Company, are set out below.

Name	Position
Michael Rawlinson	Non-Executive Chairman
Paul Cronin	Managing Director and Chief Executive Office
Julian Barnes	Non-Executive Director
Sandra Bates	Non-Executive Director
Peter Bilbe	Non-Executive Director
Sanela Karic	Non-Executive Director

Michael Rawlinson – Non-Executive Chairman

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.

He is currently a Senior Independent Non-Executive Director at Hochschild Mining and Independent Non-Executive Director at Capital Limited.

Mr Rawlinson serves on the Audit and Risk Committee and the Environmental Social & Governance Committee.

Paul Cronin – Managing Director and CEO

Mr Cronin is a co-founder and Director of Adriatic and is Executive Director of ASX listed Black Dragon Gold Corp and a Non-Executive Director of ASX Listed Taruga Minerals Limited.

Mr Cronin has over 20 years of experience in corporate finance, investment banking, funds management, and commodity trading, with a strong European mining focus.

Julian Barnes – Non-Executive Director

Mr Barnes is a geologist with extensive experience in major exploration and development projects. Previously, he was Executive Vice President of Dundee Precious Metals with a strong focus on Balkan mining & development.

Mr Barnes founded and led Resource Service Group for nearly two decades, which ultimately became RSG Global and has since been sold to Coffey Mining.

Mr Barnes serves on the Audit and Risk Committee, the Remuneration Committee and the Nomination Committee.

Sandra Bates – Non-Executive Director

Ms Bates is a commercial and strategic international 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 risk assessment specialist and brings extensive experience of guiding clients in the natural resources sector through complex negotiations often with a cross-cultural element. Ms Bates is a partner at Keystone Law, the London based law firm, a Non-Executive Director of LSE listed Pensana plc and a member of Women in Mining UK.

Ms Bates serves on the Audit and Risk Committee, the Remuneration Committee and the Nomination Committee.

Peter Bilbe – Non-Executive Director

Mr Bilbe is a mining engineer with 40 years of Australian and international mining experience in gold, base metals and iron ore at the operational, CEO and board levels.

Mr Bilbe is a Non-executive Director of IGO Limited (previously chair for 10 years) and has overseen the growth of IGO from a single mine to a AUD\$7bn diversified battery metals mining company in the ASX 100 Index. Mr Bilbe is also Non-executive Chairman of Horizon Minerals Ltd, an emerging gold developer.

Mr Bilbe serves on the Remuneration Committee, the Nomination Committee and the Environmental Social & Governance Committee.

Sanela Karic – Non-Executive Director

Ms Karic, brings a wealth of experience, with over 15 years' experience as a lawyer and a career spanning corporate affairs, mergers & acquisitions and human resources. Ms Karic is a graduate of the University of Sarajevo, and is currently the Executive Director for Legal Affairs and Human Resources at the Prevent Group, Bosnia's largest diversified industrial corporation. She also holds the position of Chief Executive Officer at Sanitex, a subsidiary company of the Prevent Group, specialising in the manufacturing of medical and hygiene products for export across the European Union.

Ms Karic serves on the Environmental Social & Governance Committee.

The Senior Managers of the Company are as follows:

Name	Position
Geoff Eyre	Chief Finance Officer and Joint Company Secretary
Dominic Roberts	Head of Corporate Affairs
Graham Hill	Chief Operating Officer
Phil Fox	Chief Geologist
Adnan Teletovic	General Manager - Bosnia

9. Environmental and Social

Adriatic has committed to ensuring that the Vares Silver Project will comply with international best practice regarding environmental and social standards. As such, Adriatic engaged Wardell Armstrong International ("WAI") to undertake an Environmental, Social and Health Impact Assessment ("ESHIA") in conformance with the European Bank for Reconstruction and Developments ("EBRD") environmental and social policy, including the Performance Requirements ("PRs"). The Project is now fully permitted with regards to environmental requirements.

An Environmental and Social Scoping Study was developed and finalised in January 2020. Alongside this, a 12-month period of baseline data collection took place and the ESHIA was developed. WAI worked closely with the Vares Silver Project team and engineers to integrate the mitigation hierarchy into the project design.

Baseline studies utilised local consultants and contractors where possible and have covered air quality, noise, soils, biodiversity, hydrology, hydrogeology, geochemistry, landscape and visual impact assessment, social aspects, human rights, traffic, ecosystem services, and archaeology and cultural heritage across the defined Vares Silver Project area of influence.

As far as possible, environmental measures have been integrated into the Vares Silver Project design, ensuring the application of the mitigation hierarchy, where avoidance of potential impact is the preferred option.

Stakeholder engagement and consultation has been ongoing during the development of the ESHIA to share information with the community and gather feedback. An information centre was established in Vares in 2019 and acts as a central point for local stakeholders to obtain information and raise concerns or questions with Eastern Mining. A Stakeholder Engagement Plan ("SEP") and grievance mechanism has been established for the Vares Silver Project. The SEP will be updated as the Project evolves and is available in both English and Bosnian on the Adriatic and Eastern Mining websites. A Public Liaison Committee was established during 2020 and now meets quarterly; members are representative of all local communities in the region, as well as of local government, business owners and religious groups.

Environmental and social aspects are managed on site by a dedicated team based at Vares Processing Plant, the manager of which reports directly to the Managing Director & CEO. Several policies pertaining to environmental and social aspects have been developed and implemented by Adriatic and are available in the Corporate Governance section on its corporate website. The Board of Adriatic has established an Environmental Social & Governance committee to oversee and advise on policy implementation. Governance policy aspects are also addressed at the corporate level and will apply to all subsidiary companies.

A framework for mine closure has been developed for the Vares Silver Project. The closure plan considers relevant legislation of Bosnia and Herzegovina as well as international best practice, including that of the International Council for Metals and Mining. The plan covers the complete closure and rehabilitation of the Rupice mine, the remediation of the Vares Processing Plant to a state suitable for light industry and the closure and rehabilitation of the Vares Silver Project TSF. The costings consider physical closure, aftercare, and social closure requirements.

Adriatic Foundation

Adriatic incorporated a charitable trust registered in the Federation of Bosnia and Herzegovina called the Adriatic Foundation in June 2021. The foundation has been established with the objective of supporting the communities around the Vares Silver Project through initiatives designed to create a positive long-term legacy, as well as alignment between the Company and the communities that the foundation supports. The initiatives are specifically focused on improving education, healthcare and environmental protection.

The foundation's management is independent of Adriatic and the Company's Vares Silver Project. The foundation is managed by a Board of Trustees, who are representatives of the local communities surrounding the Company's operations.

The foundation's programme funding will be primarily received through grants. Adriatic will provide an initial sum of €100,000 to the foundation, as well as an ongoing commitment of 0.25% of profits from its operations in Bosnia and Herzegovina. Paul Cronin, the Company's Managing Director and CEO, has pledged to give 250,000 of his personal shares in the Company to the foundation. Sanela Karic, a non-executive director of the Company, pledged her director's fees from March to June 2021.

10. Tax

Further details relating to taxation are set out in Part VI (Taxation) of this prospectus. In particular, investors should be aware that the tax legislation of any jurisdiction where a investor is resident or otherwise subject to taxation (as well as the jurisdictions discussed in Part VI (Taxation) of this prospectus) may have an impact on the tax consequences of an investment in Ordinary Shares including in respect of any income received from the Ordinary Shares.

11. Insurance

During the construction phase of the Vares Silver Project and following the commencement of operations at the Vares Silver 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.

12. Employees

As at 30 June 2021, the Group employed the following numbers of people:

	United Kingdom	Bosnia Herzegovina	Serbia	Other	Total
Directors	2	2	0	2	6
Management	7	3	1	0	11
G&A	6	15	4	0	25
Operational	2	36	13	0	51
Total	17	56	18	2	93

As at 30 June 2021 the Company retained the services of 6 consultants.

The Group's workforce is expected to increase to over 300 by the time the Vares Silver Project commences production. The Group intends to recruit locally, targeting people with relevant experience to ensure high competency at the commencement of operations. The majority of this workforce is expected to be direct employees of the Group. However, the Company may outsource certain specialist skills.

13. 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 Vares Silver 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.

14. Current trading

The Group made an operating loss of £4.5 million for the six months ended 30 June 2021 compared with an operating loss of £5.2 million in the prior six months ended 31 December 2020.

Cash and cash equivalents at 30 June 2021 was £20.8 million, a decrease of £8.7 million compared to 31 December 2020 primarily as a result of cash used in ongoing operating and investing activities. For further details of current trading performance, refer to the Interim Report and Condensed Consolidated Financial Statements for the Six Months Ended 30 June 2021 which were released on 16 August 2021 and which are incorporated by reference in this prospectus in Part IX.

15. Working capital explanation

In the opinion of the Company, taking into account available cash balances and the net proceeds of the Capital Raising, the Group does not have sufficient working capital for its present requirements, that is, for at least twelve months following the date of the Prospectus.

The Company is of the opinion that, taking into account its existing cash balances and the net proceeds of the Capital Raising, the Group will have sufficient working capital for its requirements to the end of July 2022. The Company's primary near-term business objective is to start the construction of the Vares Silver Project in Q4 2021, with the aim of commencing Commercial Production in H1 2023. The Group has incurred losses since inception and does not currently have any revenue generating assets and will not have any revenue generating assets during the construction of the Vares Silver Project.

Accounting for current cash resources as at the Last Practicable Date of US\$22.4 million and the net proceeds of the Capital Raising of US\$97.8 million, the Company will have a funding shortfall during the Working Capital Period of approximately US\$17.6 million.

The working capital shortfall of approximately US\$17.6 million during the Working Capital Period is expected to be funded by the proceeds of the Senior Secured Debt and Copper Stream components of the Orion Financing (the "Orion Debt Financing"), comprising

• US\$120 million by way of the Senior Secured Debt, as further described below; and
• US\$22.5 million in connection with the Copper Stream, as further described below.

The Orion Debt Financing is expected to provide approximately US\$138.7 million of funding (after expenses) and is expected to be completed during Q4 2021. The proceeds of the Orion Debt Financing will therefore also be sufficient to meet the additional funding requirement of US\$54.3 million to achieve Commercial Production of Vares Silver Project.

Whilst there can be no assurances that the Orion Debt Financing will be completed as anticipated by the Company or at all, the Company is confident that the Orion Debt Financing can be completed by the end of Q4 2021 on acceptable terms, based on the following factors:

• The Company engaged Tamesis Partners and Terrafranca Advisory in H2 2020 to provide debt advisory services to assist with the evaluation of the various funding options available to the Company for the Vares Silver Project and to select, negotiate and secure the most appropriate financing package.
• The Company and Orion have entered into a project finance term sheet relating to the Orion Debt Financing.
• While its due diligence is ongoing Orion has undertaken technical, legal and financial due diligence of the Vares Silver Project.
• Orion has since entered into the Equity Subscription Agreement with the Company for gross proceeds of US\$50.0 million.

If the Company has not secured the Orion Debt Financing by the end of Q4 2021, the Company will consider whether to continue its efforts to complete the Orion Debt Financing or to seek alternative financing (which may include raising futher equity capital). Although, the Company received several proposals from a range of financial institutions to provide either a portion of, or all of its debt financing requirement during its tender process (in addition to Orion's proposal), there can be no assurance, however, that the Company would be successful in securing any such alternative financing on commercially acceptable terms, or at all, and the Company is not confident that this would be achieved.

Unless the Company was able to secure the Orion Debt Financing or alternative financing (including providing a similar amount of funding to the Company (if any such alternative financing were available to the Company, which it may not be) by the end of Q1 2022, then a decision to delay the construction of the Vares Silver Project would be taken.

In circumstances where the Capital Raising is completed, but the Orion Debt Financing or alternative financing providing a similar amount of funding to the Company is not in place by Q1 2022, the Company would have insufficient cash to finalise the construction of the Vares Silver Project. In such case, the Company would seek to reduce its expenditure during the Working Capital Period by:

• i. reducing certain construction activities on the Vares Silver Project and ceasing certain discretionary spending in relation to construction of the Vares Silver Project,
• ii. suspending discretionary exploration activities in both Bosnia and Serbia, and
• iii. reducing G&A costs in relation to the Company generally.

The Board is confident that by taking these mitigating steps to conserve cash, the Company would have sufficient working capital to meet all of its contractual commitments during the Working Capital Period.

At the same time the Company would consider all options available to it. Unless the Company was able to reduce expenditure effectively or secure alternative funding (which may include raising futher equity capital) or a merger or acquisition transaction on acceptable terms by the end of August 2022, the Board would be required to place the Company into administration or liquidation, which could result in Shareholders losing part of or all of their investment in the Company.

In addition, if the Resolution is not passed, the Capital Raising will not be able to proceed. In such circumstances, the Company would not proceed to deploy cash to commence construction of the Vares Silver Project and would not do so unless it was able to secure alternative financing (which may include raising equity capital). In that case, the Company would be required to seek alternative funding or a merger or acquisition transaction both of which the Company would be unlikely to achieve. In such cases, the Board would be required to place the Company into administration or liquidation, which could result in Shareholders losing part of or all of their investment in the Company.

Beyond the Working Capital Period and in addition to the shortfall of US\$17.6 million in the Working Capital Period, if the Capital Raising completes but the Orion Debt Financing or alternative financing providing a similar amount of funding to the Company has not been secured by the Company, the Company anticipates an additional funding requirement of at least US\$54.3 million before Commercial Production of the Vares Silver Project is achieved. However, as noted above, unless the Company was able to secure the Orion Debt Financing or alternative financing providing a similar amount of funding to the Company (if any such alternative financing were available to the Company, which it may not be) by the end of Q1 2022, then a decision to delay the construction of the Vares Silver Project would be taken.

16. Principal terms of the Capital Raising

The purpose of the Capital Raising is to raise equity funds in connection with the proposed development of the Vares Silver Project.

Placing

On 12 October 2021 the Company announced a conditional Placing of 25,159,000 Placing Shares on a non-pre-emptive basis to existing and new institutional or other qualifying investors. Pursuant to the Placing, the Company will issue 25,159,000 Placing Shares at the Issue Price of £1.5174 (AU\$2.80) per Placing Share. The Placing is being underwritten by the Joint Bookrunners as to settlement risk.

The Company and the Joint Bookrunners have entered into the Placing Agreement relating to the Placing pursuant to which, subject to certain conditions, each of the Joint Bookrunners has agreed severally to use its reasonable endeavours to procure placees for the Placing Shares to be issued by the Company. Each Joint Bookrunner has agreed that if any Placee procured by that Joint Bookrunner fails to take up any or all of the Placing Shares which have been allocated to it and which it has agreed to acquire at the Issue Price, each Joint Bookrunner agrees to severally to itself subscribe on its own account and pay for such Placing Shares at the Issue Price in its agreed proportion. Each of the Joint Bookrunner's obligations are subject to certain conditions in the Placing Agreement.

The Placing Agreement is conditional, inter alia, on:

• a. the Placing Agreement becoming wholly unconditional (save as to Admission) and not having been terminated in accordance with its terms prior to Admission;
• b. the Equity Subscription Agreement not having been amended, terminated or lapsed in accordance with its terms prior to Admission;
• c. the Orion Equity Subscription proceeds having been received by the Company or deposited into escrow at least 48 hours prior to Admission;
• d. the Resolution being passed (without amendment) at the General Meeting; and
• e. Admission occurring by 8am on 1 November 2021 (or such later date as the Company and the Joint Bookrunners may agree, being not later than 30 November 2021).

The Joint Bookrunners are entitled, at any time before Admission of the New Ordinary Shares, to terminate the Placing Agreement by giving notice to the Company if, inter alia:

• a. the Company fails to comply with, or is in breach of, any of its obligations or undertakings under the Placing Agreement or under the terms of the Placing or Admission and, in any such case, any of the Joint Bookrunners, acting in good faith, consider such breach to be material in the context of the Placing or Admission;
• b. there shall have been any changes or developments in relation to the Orion Debt Financing, including, but not limited to, termination of the Orion Debt Financing term sheet, which any of the Joint Bookrunners, acting in good faith, consider to be material in the context of the Placing or Admission;;
• c. any condition under the Placing Agreement becomes incapable of being satisfied in all material respects at the required time(s) (if any), and has not been waived as provided for pursuant to the terms of the Placing Agreement;
• d. there has been a breach by the Company of any of the warranties, undertakings or covenants contained in or given pursuant to the Placing Agreement or any of the warranties contained in the Placing Agreement is not or has ceased to be, true, accurate and not misleading and, in each case, the effect, in the opinion of any of the Joint Bookrunners, acting in good faith, is singly or in the aggregate material in the context of the Placing, and/or is such as to make it impracticable or inadvisable to proceed with the Placing, Admission or to market or enforce contracts for sale of any New Ordinary Shares (or CHESS Depositary Interests representing New Ordinary Shares);
• e. any statement contained in any offer document (or any amendment or supplement thereto) is or has become untrue, inaccurate or misleading, or any matter has arisen which would, if the Placing were made at that time, constitute an omission from the offer documents, or any of them (or any amendment or sup-plement to any of them), which any of the Joint Bookrunners, acting in good faith, consider to be material in the context of the Placing or Admission;
• f. there shall have occurred a material adverse change (as such term is defined in the Placing Agreement); and
• g. in the opinion of any of the Joint Bookrunners there shall have occurred a material adverse change any major financial market in the United Kingdom, Australia, the United States, Bosnia & Herzegovina, Serbia, any member state of the European Union or in other international financial markets, which the Joint Bookrunners, acting in good faith, consider to be so material in the context of the Placing and Admission as to make it impractical or inadvisable to proceed with the Placing or which may adversely impact dealings in the New Ordinary Shares (or CHESS Depositary Interests representing New Ordinary Shares) following Admission.

Further details of the Placing Agreement are set out in paragraph 13.1 of Part VIII (Additional Information) of this prospectus.

Sandfire Resources has entered into a block trade agreement with the Joint Bookrunners pursuant to which Sandfire Resources has agreed to sell its entire shareholding in the Company of 34,600,780 Ordinary Shares (representing approximately 16.1 per cent. of the issued ordinary share capital of the Company) at the Issue Price (the "Sandfire Shares") (the "Sandfire Sale"). The completion of the Sandfire Sale is conditional on, inter alia, the passing of the Resolution at the General Meeting and the Placing Agreement becoming wholly unconditional and not being terminated. Completion of the Sandfire Sale is expected to occur on or around 1 November 2021. None of the proceeds of the Sandfire Sale will be for the account of the Company. Under the block trade agreement, Sandfire Resources has given lock-up commitments in favour of the Joint Bookrunners for a period of 90 days from the date of completion of the Sandfire Sale. The lock-up does not apply where the Joint Bookrunners have given prior written consent or to the sale of the Sandfire Shares pursuant to the block trade agreement.

The Company has received an irrevocable undertaking from Sandfire Resources to not vote against the Resolution in respect of its aggregate shareholdings as at the time of the General Meeting and to vote in favour of the Resolution (to the extent it is not precluded from doing so by any law or listing rules of any exchange upon which the Company's securities are quoted for trading).

Sandfire Resources has undertaken not to exercise its anti-dilutive rights under the Collaboration and Partnership Deed in respect of the Capital Raising and such anti-dilutive rights will fall away on and subject to completion of the Sandfire Sale. Further particulars of Sandfire Resources' anti-dilutive rights under the Collaboration and Partnership Deed, are set out in paragraphs 13.9 and 13.12 of Part VIII (Additional Information) of this prospectus.

Concurrent with the Capital Raising, Paul Cronin (the Company's Managing Director and CEO) has also agreed to sell up to 3,000,000 Ordinary Shares at the Issue Price, which represents up to approximately 12.8 per cent. of his fully diluted holding in the Company (the "Cronin Shares") (the "Cronin Sale"). The completion of the Cronin Sale is conditional on, inter alia, the passing of the Resolution at the General Meeting and the Placing Agreement becoming wholly unconditional and not being terminated. Completion of the Cronin Sale is expected to occur on 1 November 2021. None of the proceeds of the Cronin Sale will be for the account of the Company. Mr Cronin is not subject to a lock-up commitment. Following completion of the Cronin Sale, Mr Cronin's interests in the issued ordinary share capital of the Company will be approximately 5.5 per cent. (assuming the full amount of the Cronin Shares is sold and Admission occurs as expected).

Orion Equity Subscription

On 12 October 2021, the Company entered into the Equity Subscription Agreement with Orion. Pursuant to the Equity Subscription Agreement, the Company will issue 24,191,000 Subscription Shares at the Issue Price of AU\$2.80 per Subscription Share to Orion.

The Equity Subscription Agreement is conditional, inter alia, on:

• a. none of the warranties being breached or untrue or inaccurate or misleading at the date of the Equity Subscription Agreement and (except in the case of warranty 1.6 in Part B of Schedule 1 to the Equity Subscription Agreement) there being no change of circumstance such that when repeated by the applicable warrantor at the date of Admission by reference to the facts and circumstances subsisting at such time any of the warranties would be breached or untrue or inaccurate or misleading;
• b. none of the undertakings given by Orion or by the Company having been breached between the date of the Equity Subscription Ahreement and the date of Admission;
• c. the Captial Raising raising net proceeds to the Company of at least US\$90 million;
• d. the Resolution being passed at the General Meeting; and
• e. Admission occurring at or before 8.00 a.m. on 9 November 2021 (or such later date as the Company and Orion may agree).

Orion is entitled at any time before Admission of the New Ordinary Shares, to terminate the Equity Subscription Agreement by giving notice to the Company if, inter alia:

• a. there has been a breach of any of the warranties or any failure to perform any of the undertakings or agreements in the Equity Subscription Agreement, in each case where such breach or failure is material in the context of the Orion Equity Subscription;
• b. any of the conditions in the Equity Subscription Agreement have not been satisfied or (to the extent capable of being waived) waived by the required time(s) (if any) or have become incapable of satisfaction;
• c. if admission to listing or trading of the Ordinary Shares on the London Stock Exchange or the ASX has been withdrawn, or the listing or trading in the Ordinary Shares has been suspended or limited by the FCA, the London Stock Exchange, or the ASX or trading generally on the London Stock Exchange, the ASX or the New York Stock Exchange has been suspended or limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the regulatory authorities of the United Kingdom, Australia or the United States, or any other governmental or self-regulatory authority, or a material disruption has occurred in commercial banking or shares settlement or clearance services in the United Kingdom, Australia, the United States or in any member state of the EEA, in each such case where the same makes completion of the Orion Equity Subscription impossible or impracticable;
• d. if a banking moratorium has been declared by the authorities of any of the United Kingdom, Australia, the United States or the State of New York or any member state of the EEA, in each such case where the same makes completion of the Orion Equity Subscription impossible or impracticable; or
• e. there shall have occurred a material adverse change in the financial markets in the United Kingdom, Australia, the United States or any member state of the EEA, or the international financial markets, any outbreak or escalation of hostilities, war, act of terrorism, declaration of emergency or martial law, pandemic, epidemic or other calamity or crisis or event or any change or development involving a prospective change in national or international political, financial, economic, monetary or markets conditions or currency exchange rates or controls, in each case, where the same makes completion of the Orion Equity Subscription impossible or impracticable.

Further details of the Equity Subscription Agreement are set out in paragraph 13.2 of Part VIII (Additional Information) of this prospectus.

General

The New Ordinary Shares, which are the subject of this prospectus, are being offered (a) by the Joint Bookrunners to a limited number of institutional and other investors in the Placing; and (b) to Orion only pursuant to the Orion Equity Subscription.

The New Ordinary Shares are not being offered to the public and this prospectus does not constitute or relate to any offer to sell to the public, or an invitation to the public to subscribe for, or solicitation to the public to offer to subscribe for or to buy, New Ordinary Shares and there will be no intermediaries offer of the New Ordinary Shares.

The New Ordinary Shares will, upon issue, rank pari passu with the Existing Ordinary Shares. If Admission does not proceed, the Capital Raising will not proceed, and all monies paid will be refunded to the applicants.

Applications will be made to the FCA for the New Ordinary Shares to be admitted to the standard listing segment of the Official List maintained by the FCA and to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on the London Stock Exchange's main market for listed securities. Subject to the passing of the Resolution at the General Meeting, it is expected that Admission of the New Ordinary Shares will become effective, and dealings in the New Ordinary Shares on the London Stock Exchange's main market for listed securities will commence, at 8.00 a.m. on 1 November 2021.

Application will also be made for CHESS Depositary Interests representing the New Ordinary Shares to be admitted to trading on the ASX which is expected to become effective (and it is expected that dealings in the New Ordinary Shares, in the form of CDIs, on the ASX will commence) at 8.00 a.m (AEST) on 2 November 2021. No application has been made or is currently intended to be made for New Ordinary Shares to be admitted to listing or trading on any other exchange other that the London Stock Exchange and ASX.

General Meeting

The allotment and issue of the New Ordinary Shares in the Capital Raising requires the approval of Shareholders in accordance with ASX Listing Rule 7.1. Accordingly, the allotment and issue of the New Ordinary Shares will be conditional, inter alia, on the passing of the Resolution at the General Meeting. The Company will make an appropriate announcement via a Regulatory Information Service when the circular convening the General Meeting is posted to Shareholders.

The Board intends to convene the General Meeting to be held on 29 October 2021. At the General Meeting, a Resolution to the following effect, inter alia, will be proposed:

That Shareholders approve the issue of the New Ordinary Shares pursuant to the Capital Raising (comprised of the Placing and the Orion Equity Subscription), pursuant to and in accordance with ASX Listing Rule 7.1 and for all other purposes, on the terms and conditions in the explanatory circular accompanying the notice of General Meeting.

If the Resolution is passed, and the other conditions are satisfied or waived, the New Ordinary Shares will be allotted and issued, conditionally on Admission as soon as practicable following the close of the General Meeting.

If the Resolution is not passed at the General Meeting then the Capital Raising will not proceed, the New Ordinary Shares will not be issued and no funds will be raised under the Capital Raising, but the Company would still incur some of the advisory and other abortive costs of the Capital Raising.

Dilution

Shareholdings immediately prior to Admission will be diluted by approximately 18.7% as a result of New Ordinary Shares issued pursuant to the Capital Raising.

The New Ordinary Shares subscribed for in the Capital Raising at the Issue Price will represent approximately 18.7% of the Enlarged Share Capital.

Proceeds and expenses of the Capital Raising

The net proceeds of the Capital Raising, after deduction of expenses, will be approximately £72.2 million (c.US\$97.8 million) on the basis that the gross proceeds of the Capital Raising are approximately £75.3 million (c.US\$102.0 million).

The total expenses of the Capital Raising and Admission are estimated to be approximately £3.1 million (c.US\$4.2 million) (exclusive of VAT). Investors will not be charged expenses by the Company in respect of the Capital Raising.

Use of proceeds of the Capital Raising

The net proceeds of the Capital Raising are expected to be £72.2 million (approximately US\$97.8 million and will be used to commence construction of the Vares Silver Project.

The Company has existing cash resources of approximately US\$22.4 million as at the Last Practicable Date available for general corporate purposes, for debt servicing and further exploration at the Vares Silver Project and Raska Project.

17. Proposed key terms of the Senior Secured Debt and Copper Stream

The Company has entered into a project finance term sheet with Orion for a total financing of US\$142.5 million comprising the the Senior Secured Debt for US\$120 million and the Copper Stream for US\$22.5 million. Completion of the Senior Secured Debt and the Copper Stream remains conditional, inter alia, upon Orion's ongoing due diligence and the parties entering into definitive legal documentation. The expected terms of the documentation are described below, but these terms may change as a result of further negotiations and due diligence. There can be no assurance that the Orion Debt Financing will be entered into on these terms, or at all. The Company has also entered into the Orion Break Fee Letter with Orion, pursuant to which, the Company has agreed, subject to completion of the Orion Equity Subscription, to pay Orion a break fee of US\$1.0 million if the definitive legal documentation relating to the Senior Secured Debt and the Copper Stream is not entered into by the Company and Orion by 31 December 2021 (or such later date as the Company and Orion may agree) as a result of the Company failing to negotiate the definitive documents in good faith and consistent with the terms of the term sheet.

The Senior Secured Debt will be subject to Eastern Mining and Orion agreeing and entering into a definitive facility agreement which is expected to include, inter alia, terms to the following effect:

• The Senior Secured Debt is expected to be made available to Eastern Mining in four equal tranches of US\$30 million, with each drawdown being subject to Eastern Mining meeting customary conditions precedent and no default of the facility agreement having occurred.
• The Senior Secured Debt is expected to have a maturity period of four and a half years and bear interest at a rate of US\$ LIBOR +7.5%. per annum, subject to a minimum US\$ LIBOR rate of 0.5%. It is expected that interest will accrue on each loan tranche from the date of drawdown and be capitalised on a quarterly basis in arrears until the earlier to occur of (a) the passing of certain economic and operating 90-day tests; and (b) a longstop date (to be agreed). Thereafter, it is expected that principal plus all capitalised interest shall amortise and be payable in 10 quarterly installments and interest will be payable on a quarterly basis. The Senior Secured Debt is subject to an original issue discount of 2.0%, which shall be earned on each successive tranche.
• The Senior Secured Debt is expected to be secured by first ranking security over the Group's interest in Eastern Mining and any assets of the Group relating to the Vares Silver Project and by guarantees from the Company and each member of the Group owning directly or indirectly the Vares Silver Project.
• Drawdown and financial close will be subject to satisfaction of customary conditions precedent.

The Copper Stream will be subject to Eastern Mining and Orion agreeing and entering into a definitive streaming agreement which is expected to include, inter alia, terms to the following effect:

• Eastern Mining shall sell to Orion, and Orion shall purchase from Eastern Mining an amount of LME copper warrants equal to 100% of the copper payable (assuming a fixed payability of 24.5%) in the silver-lead concentrate from the Rupice and Veovaca mines for the life of the mines.
• Orion shall pay 30% of the per tonne of copper warrants delivered under the Copper Stream based on the LME Official Settlement Price for copper on the delivery day.
• Orion is expected to pay a deposit to Eastern Mining of US\$22.5 million to be funded in one tranche subject to satisfying customary conditions precedent.
• Eastern Mining will be responsible for all offtake arrangements in relation to the Copper Stream.
• The Copper Stream is expected to be secured by first ranking security over the Group's interest in Eastern Mining and any assets of the Group relating to the Vares Silver Project and by guarantees from the Company and each member of the Group owning directly or indirectly the Vares Silver Project. This security will, once the Senior Secured Debt is drawn, rank second to the security for the Senior Secured Debt.
• After an agreed multiple of the US\$22.5 million deposit has been recouped by Orion, the Copper Stream will be unsecured, provided there is no other secured debt in the Company.
• Completion of the Copper Stream will be subject to satisfaction of customary conditions precedent.

In connection with the Senior Secured Debt and the Copper Stream, it is also anticipated that Eastern Mining will establish an advisory committee, with members of its management, Orion's management and Orion's independent engineer in order to monitor the Vares Silver Project.

As set out above, the expected terms of the Copper Stream and the Senior Secured Debt may change as a result of negotiations and further due diligence. There can be no guarantee that the Orion Debt Financing will be entered into on these terms or at all.

If the Senior Secured Debt and Copper Stream elements of the Orion Financing are not completed, alternative forms of financing such as mezzanine debt, bonds or equity-linked securities would be considered. However, as at the date of this prospectus, discussions are progressing satisfactorily and the Directors remain confident that the Orion Debt Financing will be completed in a form acceptable to the Company by the end of Q4 2021, and the Directors are not pursuing or formed a preference for these alternative forms of debt finance.

The Capital Raising is not conditional on the Senior Secured Debt and the Copper Stream being secured by the Company prior to Admission and accordingly, there could be circumstances where the Capital Raising proceeds, but the Orion Debt Financing does not.

18. Securities trading policy

In order to comply with the Market Abuse Regulation and DTRs and the ASX Listing Rules, the Company has adopted a Securities Trading Policy in relation to the Ordinary Shares, CDIs and other securities in the Company.

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.

19. Continuous disclosure policy

The Company has adopted 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.

20. 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 New Ordinary Shares to be admitted to CREST with effect from Admission and it is expected that the New Ordinary Shares will be admitted with effect from that time. Accordingly, settlement of transactions in the New 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 New Ordinary Shares in uncertificated form if such Shareholder is a system-member (as defined in the Regulations) in relation to CREST.

21. 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 New Ordinary Shares through the CHESS system, and pursuant to the depositary arrangements established by the Company, the Depositary will hold the New Ordinary Shares and issue dematerialised CDIs representing the underlying New 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 CDI 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 subregisters 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 I 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.

PART II

INDUSTRY OVERVIEW

Industry Overview

The Vares Silver Project is based on the Rupice polymetallic orebody, containing five identified economic commodities: silver, zinc, lead, gold and copper.

The quoted prices for these commodities as at 13 October 2021 and average prices for the years 2016 – 2020 and year to date 2021 are set out in the following table:

Price History	Unit	2016	2017	2018	2019	2020	2021 YTD	As at 13 October 2021
Silver	US\$/oz	17	17	16	16.35	20.67	25.63	22.51
Zinc	US\$/t	2,096	2,894	2,920	2,526	2,283	2,902	3,158
Lead	US\$/t	1,871	2,317	2,241	2,001	1,833	2,163	2,143
Gold	US\$/oz	1,250	1,259	1,269	1,401	1,776	1,799	1,759
Copper	US\$/t	4,865	6,165	6,520	6,035	6,203	9,257	9,536

Sources: LME, FactSet, US Geological Survey, S&P CapitalIQ

As detailed in the DFS, the life of mine average revenue split by commodity for the Vares Silver Project is estimated to be as follows:

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 2020. Other large producers are Peru (14%) 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.

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 refined zinc production in 2020 was estimated at 13.6 million tonnes, compared to global consumption estimated at approximately 12.98 million tons, resulting in a slight surplus of 0.62 million tons. Approximately 35% of 2020 global mine production was from China, with other major producing countries including Australia (11%), Peru (10%), 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 (92% of consumption in the USA) for vehicles, backup power sources for essential services, and load-levelling systems for utility companies.

Global refined lead production in 2020 was estimated at 11.7 million tonnes, of which 4.4 million tonnes came from mine production. Production from China accounted for 43.2% of total mine production. Secondary lead production is mostly recycling from old lead-acid batteries. Consumption in 2020 was estimated at 11.4 Mt, resulting in a slight surplus.

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 3,240 tonnes of gold was produced in 2020, the largest proportion coming from China (11%). Other large gold producing countries include Australia (10%), Russia (9%), USA (6%) and Canada (5%).

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 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 for its corrosion resistant properties in the building construction, consumer durables and utilities sectors. The arrival and rapid growth of 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 2020 was estimated at 20 million tonnes.

PART III

BOSNIA AND HERZEGOVINA AND SERBIA OVERVIEW AND REGULATORY FRAMEWORK

SECTION A – BOSNIA AND HERZEGOVINA

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 344,000 out of a total country population of approximately 3.8 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: Bosnian, 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 and wastewater.

Mining Regulatory Framework

The exploration and exploitation of minerals in Bosnia and Herzegovina is primarily governed by the following federal 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;
• 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.

Concessions for exploration and exploitation of mineral resources within the Federation are granted in line with the applicable cantonal law on concessions. In the case of the Company the relevant cantonal law on concessions is the Concessions of Zenica-doboj canton (No. 05/3). In general, each canton has jurisdiction to grant concessions for exploration and exploitation of metallic and nonmetallic mineral resources in respect of the relevant licence area. Federal law, on the other hand, governs other matters regarding concessions and the exploitation of mineral resources such as roads, railways, hydroelectric power plants and the exploitation of forest land.

The above laws are applied at both the federal level and by the individual cantons, and are supported by various 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 metallic mineral resources 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 concessions have instead been granted by individual cantons, subject to the concessionaire satisfying the technical and financial qualifying criteria.

Once the concession has been granted by the relevant canton, the concessionaire may apply 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 for 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 the Law on Concessions, but are set out in a concession agreement and subject to agreement with the canton. Likewise, minimum work programs, expenditure on exploration activities, and royalty rates and tariffs are not fixed by the legislation but are specified in the concession agreement (subject to any applicable cantonal government decision on minimum concession fees).

Fiscal regime

Overview

Bosnia and Herzegovina consists of two entities: Federation of Bosnia and Herzegovina ("FBiH") and Republika Srpska ("RS"), with Brčko District ("BD") as third, separate region. Direct taxes are imposed at the entity/district level, while indirect taxes are imposed at the state level. Corporate Income Tax ("CIT") systems in Bosnia and Herzegovina have been partially harmonised in the past few years, but significant differences remain. The Zenica-Doboj Canton, within which Adriatic's Vares Silver Project is located, is administered by the FBiH.

The FBiH, RS and BD are taxing resident companies on a worldwide basis. Non-residents are taxed on income realised in the FBiH, RS, and BD territories. The CIT rate is 10% in all three jurisdictions.

Corporate Income Tax

The CIT rate in FBiH is 10%. Tax losses may be carried forward for 5 years. The carryback of tax losses is not allowed. VAT

The VAT rate in BiH is 17%. VAT is due on supply of goods and services in the territory of BiH, as well as on import of goods in BiH. The VAT incurred on import of goods from foreign suppliers is deductible provided that the goods will be used for further supplies subject to VAT. In that case, import VAT is not a cost to the purchaser.

Withholding Taxes

The levying of withholding taxes ("WHT") is dependent on the region; in the FBiH WHT is paid at the rate of 5% on dividend payments and 10% for interest, royalties, service fees and other payments, if not reduced under a tax treaty.

There is no WHT on foreign supplies of goods.

Double Taxation Treaties ("DTT") are in place between BiH and a number of countries, including the United Kingdom (the "UK DTT") which was originally concluded between the UK and the Former Yugoslavia. Although there are various administrative requirements to obtain the benefits of the UK DTT, it provides that technical, consulting and advisory services provided from UK suppliers should not be subject to FBiH WHT.

SECTION B – SERBIA

Republic of Serbia Country Overview

The Republic of Serbia is a land-locked state in south-eastern Europe. It is the centre of the Balkanpeninsula and borders with Hungary in the north, Romania and Bulgaria in the east, North Macedonia, Albania and Kosovo in the south and Bosnia, Croatia and Montenegro in the west. Belgrade is the capital of the country with 1.34m inhabitants out of 6.9m total population in the country. Other notable cities are Novi Sad, Niš, Kraguejevac and Subotica.

Serbia's recent history is strongly defined by its role as the largest constituent of the former Yugoslavian state and the conflict that followed the declaration of independence by Slovenia, Croatia and Bosnia until the Dayton Peace Accord of 1995. At the end of the 1990s increasing civil unrest in the predominantly ethnic Albanian province of Kosovo led to the Kosovo war. After NATO intervention forced Serbian withdrawal from large parts of the province, it remains a disputed territory to this day.

Following a referendum on independence in Montenegro in 2006, Montenegro also seceded from the recently formed state of "Serbia and Montenegro".

The ethnic composition of Serbia's population is variable across the country's regions. Over 83.3% of inhabitants identify as ethnic Serbians, with the remaining being composed mostly of Hungarians (3.5%), Romani (2%) and Bosniaks (2%).

The country is characterised by two distinct geographic zones divided by the Sava and Danube rivers: the Vojvodina, a lowland plain to the north; and to the south: the Šumadija mountain range in the central region, the Dinaride mountains in the west towards Bosnia and the Balkan mountains to the south east. Serbia has a continental climate with warm humid summers and cold winters. Average annual precipitation is around 741mm.

Serbia's economy is dominated by the services sector, accounting for around 51.2% of GDP followed by the industrial sector (including mining) at approximately 25.6%, manufacturing at approximately 13.7% and agriculture at approximately 6.0%. GDP was estimated at US\$7,600 per capita and unemployment in Serbia stood at 13.3% in 2020. The country's currency is the Dinar. Serbia is a member of the Black Sea Economic Cooperation, the Central European Free Trade Agreement (CEFTA) and the European Free Trade Association (EFTA) and has trade agreements with Russia, Kazakhstan, Belarus and Turkey. Serbia has observer status with the WTO and therefore is in the process of accession.

Serbia is a parliamentary democracy currently governed by the national conservative SNS (Serbian Progressive Party) under President Aleksandar Vucic. The country has been an EU membership candidate since 2012 with key difficulties in the process being the normalisation of relations with Kosovo and rule of law reforms.

Serbia's infrastructure is on par with countries in the region and other former Yugoslavian member states (General Infrastructure ranking 75/137 – Global Competitiveness Index 2017/18). The main airport in Belgrade serves many international destinations and the country has a good network of road and rail as a key transit state in the Balkan area.

Mining Regulatory Framework

Mining legislation in Serbia is regulated primarily by the Law on Mining and Geological Exploration adopted in 2015 which was recently updated in 2021 ("Mining Law"). Regulation of the mining sector is overseen by the Ministry of Mining and Energy (the "Ministry").

Exploration periods have a duration of 8 years which is divided into two terms of three years each and one further term of two years. Therefore, there are two possible extensions of the licence in addition to the initial period of three years. Terms for extension are clearly and precisely defined in the Mining Law.

In order to obtain a licence, along with the licence application, the applicant must submit a scope of geological exploration works that it intends to carry out within the exploration period, which is over an initial period of 3 years. Therefore, the initial scope of the exploration works is determined by the applicant. If the applicant fails to complete at least 75% of the exploration works put forward, its application for extension of the exploration period will be rejected and the applicant will likely have any rights to the licence terminated. However, if the applicant determines that it will not be able to complete 75% of the exploration works or otherwise wants to increase the scope of the exploration works, it may do so within the first two years by way of requesting from the Ministry an annex to the original licence. In the third and final year of the exploration period, it is not permitted to decrease the scope of the exploration works.

After the exploration phase is completed, a licence holder may proceed to apply for an exploitation licence. A holder of an exploration licence has a right of first priority over the relevant exploration area ("Retention Right") whilst the documentation is prepared to obtain an exploitation licence. In order to obtain an exploitation licence the licence holder must prepare and submit a document referred to as an elaborate of reserves ("Elaborate of Reserves"), the primary component of which is a mineral resource calculation and a technical economic assessment completed according to the Pan-European Reserves & Resources Reporting Committee (PERC) standards. Once the Elaborate of Reserves receives approval, the Mining Ministry issues a certificate of reserves. At the end of the exploration period, or when the licence holder has completed its exploration work programme, the licence holder will benefit from the Retention Right which can have a duration of two or three years. The law allows using historical elaborates of reserves for the application for an exploitation licence.

An exploitation licence contains 3 permits:

• exploitation field permit;
• mining facilities and mining works permit; and
• permit to use mining facilities.

As regards the exploitation field permit, once the Ministry has issued the certificate of reserves, an applicant may then proceed with the preparation and submission of the additional documentation required to complete the final two steps in the licencing process. The second step in the process primarily involves the preparation and approval of a Serbian compliant Feasibility Study and Environmental Impact Assessment, resulting in the issuance of an "Approval of Exploitation Field".

During the exploration phase, if the exploration license holder intends to perform exploration works on land belonging to a third party, it must first obtain the consent of the landowner. Similar consent is also necessary for works carried out during the exploitation phase. In such circumstances, license holders must enter into a formal contractual arrangement with the relevant landowner. If for whatever reason, the license holder is unable to reach agreement with the landowner, the relevant government body may determine the price between the landowner and the licence holder. Such intervention by the government is only possible in respect of minerals which are of strategic importance to the Republic of Serbia and which are set out in Article 4 of the Mining Law, being lead, zinc, copper, gold and silver, amongst others.

Royalty rates in Serbia for processed mineral resources is set at 5% of NSR. NSR is calculated as 5% of the generated revenue from the sale of the refined product, less the costs of smelting, refining, transport, transhipment, insurance and sales.

PART IV

FURTHER TERMS OF THE PLACING

1. Introduction

The Company and the Joint Bookrunners have entered into the Placing Agreement relating to the Placing pursuant to which, subject to certain conditions, each of the Joint Bookrunners has agreed to use its reasonable endeavours to procure Placees for the Placing Shares to be issued by the Company. Each Joint Bookrunner has agreed that if any Placee procured by that Joint Bookrunner fails to take up any or all of the Placing Shares which have been allocated to it and which it has agreed to acquire at the Issue Price, each Joint Bookrunner agrees to severally to itself subscribe on its own account and pay for such Placing Shares at the Issue Price in its agreed proportion.

Each of the Joint Bookrunner's obligations are subject to certain conditions in the Placing Agreement.

The Placing Agreement is conditional, inter alia, on:

• a. none of the warranties set out in the Placing Agreement being untrue or inaccurate or misleading at the date of the Placing Agreement or becoming untrue or inaccurate or misleading at any time between the date of the Placing Agreement and Admission, by reference to the facts and circumstances from time to time subsisting;
• b. there not having occurred, in the opinion of any of the Joint Bookrunners, acting in good faith, a material adverse change in the Group at any time prior to Admission (whether or not foreseeable at the date of this agreement);
• c. the net proceeds of the Capital Raising to the Company totalling not less than US\$90 million;
• d. the Equity Subscription Agreement not having been amended, terminated or lapsed, in each case prior to Admission;
• e. the Resolution being passed at the General Meeting (without amendment); and
• f. Admission occurring by 8.00 a.m. on 1 November 2021 (or such later date as the Company and the Joint Bookrunners may agree).

If any of the conditions are not satisfied or, if applicable, waived, or if the Placing Agreement is terminated, then the Placing will not take place. In such circumstances, Placees' application monies will be returned without payment of interest, as soon as practicable thereafter.

Each of the Joint Bookrunners, for itself in its capacity as joint bookrunner, is entitled, in its absolute discretion, at any time before Admission, to terminate the Placing Agreement by giving notice to the Company in certain circumstances, including (but not limited to) where (a) any of the relevant conditions in the Placing Agreement are not satisfied in all material respects at the required times (unless waived), and (b) there has been a breach by the Company of any of the warranties, undertakings or covenants in the Placing Agreement, and in each case, the effect, in the good faith opinion of any of the Joint Bookrunners, is material in the context of the Capital Raising and/or is such as to make it impracticable or inadvisable to proceed with the Capital Raising or Admission.

Any exercise by the Joint Bookrunners of any right to terminate the Placing Agreement or of other rights or discretions under the Placing Agreement shall be within the Joint Bookrunners' absolute discretion and the Joint Bookrunners shall have no liability to any Placee whatsoever in relation to any decision to exercise or not to exercise any such right or the timing thereof.

Following Admission, the Placing Agreement will not be subject to any condition or right of termination or rescission (including in respect of statutory withdrawal rights). For further details of the Placing Agreement, please see paragraph 13.1 of Part VIII (Additional Information) of this document.

2. Participation in the Placing

Each of the Joint Bookrunners is acting as a joint bookrunner and agent of the Company in connection with the Placing.

Participation in the Placing is only be available to persons who may lawfully be, and have been, invited to participate in the Placing by the Joint Bookrunners.

Each Placee which has confirmed its agreement (whether orally or in writing) to one or more of the Joint Bookrunners to subscribe for Placing Shares pursuant to the Placing is bound by the terms and conditions of the Placing as set out in the announcement published by the Company on 12 October 2021 (the "Launch Announcement").

Each Placee has given a series of customary representations and warranties to the Joint Bookrunners and the Company, including as to the Placee's ability to lawfully participate in the Placing and compliance with all applicable laws and regulations.

Placees' commitments have been made solely on the basis of their own assessment of the Company, the Placing and the Placing Shares based on information contained in the Launch Announcement and any information publicly announced to a Regulatory Information Service or the ASX by or on behalf of the Company on or prior to the date of the Launch Announcement.

Each Placee, by accepting participation in the Placing, has confirmed that:

• a. it has neither received nor relied on any other information, representation, warranty, or statement made by or on behalf of the Company or the Joint Bookrunners or any other person and none of the Company or Joint Bookrunners or any of their respective affiliates or any of their respective representatives will be liable for any Placee's decision to participate in the Placing based on any other information, representation, warranty or statement which the Placee may have obtained or received; and
• b. it has relied on its own investigation of the business, financial or other position of the Company in accepting a participation in the Placing.

3. Registration and settlement

Settlement of transactions in the Placing Shares following Admission will take place within the CREST system, subject to certain exceptions. In the event of any difficulties or delays in the admission of the Placing Shares to CREST or the use of CREST in relation to the Placing, the Company and the Joint Bookrunners may agree that the Placing Shares should be issued in certificated form. The Joint Bookrunners and the Company reserve the right to require settlement for and delivery of the Placing Shares (or a portion thereof) to Placees in certificated form or by such other means as they deem necessary if delivery or settlement is not possible or practicable within the CREST system or would not be consistent with the regulatory requirements in the Placee's jurisdiction.

Settlement of CHESS Depositary Interests representing Placing Shares will occur through the CHESS system on a delivery versus payment basis. Further terms and conditions of settlement of CHESS Depositary Interests representing Placing Shares through the CHESS system are contained in the confirmation letters provided to Placees in respect of such CHESS Depositary Interests.

Interest is chargeable daily on payments not received from Placees on the due date in accordance with the arrangements set out above at the rate of two percentage points above LIBOR as determined by the Joint Bookrunners.

PART V

FINANCIAL INFORMATION ON THE GROUP

SECTION A – HISTORICAL FINANCIAL INFORMATION

The audited consolidated financial statements for the Group for the six months ending 31 December 2020 and for the financial year ended on 30 June 2020 (together with the audit reports and notes in respect of each such financial period) and the unaudited consolidated financial statements of the Group as at and for the six months ended 30 June 2021, are incorporated by reference into this Section A (Historical Financial Information) of Part V, as described in Part IX (Documents Incorporated by Reference) of this prospectus.

There are no qualifications in the auditor's reports on the Group's financial statements for the six months ending 31 December 2020 and for the financial year ended on 30 June 2020.

SECTION B – CAPITALISATION AND INDEBTEDNESS

The table below sets out the unaudited cash and cash equivalents, indebtedness and capitalisation of the Group as at 30 June 2021 and updated for 31 August 2021.

	30 June 2021 £	31 August 2021 £
Total Current Debt
Guaranteed	-	-
Secured	-	-
Unguaranteed/Unsecured	31,542	327,754
Total Non-Current Debt
Guaranteed	-	-
Secured	-	-
Unguaranteed/Unsecured	12,305,263	12,303,416
Shareholder Equity
Share capital	2,848,842	2,857,080
Legal reserves	53,314,390	54,036,231
Other reserves	(5,202,986)	(5,243,232)
Total	63,297,051	64,281,249

The following table shows the Group's net indebtedness as at 30 June 2021 and updated for 31 August 2021:

		30 June 2021 £	31 August 2021 £
A.	Cash	20,836,983	17,740,975
B.	Cash equivalent	-	-
C.	Other current financial assets	-	-
D.	Liquidity (A + B+ C)	20,836,983	17,740,975
E.	Current financial debt	-	-
F.	Current portion of non-current financial debt	31,542	327,754
G.	Current financial indebtedness (E + F)	31,542	327,754

H.	Net current financial indebtedness (G - D)	(20,805,441)	(17,413,221)
I.	Non-current financial debt	12,305,263	12,303,416
J.	Debt instruments	-	-
K	Non-current trade and other payables	-	-
L.	Non-current financial indebtedness (I + J + K)	12,305,263	12,303,416
M.	Total financial indebtedness (H + L)	(8,500,178)	(5,109,805)

The Company does not have any indirect or contingent indebtedness.

Financial debt above includes liabilities related to leases as follows:

	30 June 2021 £	31 August 2021 £
Current	31,542	44,421
Non-current	241,892	232,611

The 30 June 2021 information above is derived from the Interim Report and Condensed Consolidated Financial Statements of the Group for the Six Months Ended 30 June 2021.

The 31 August 2021 information above has been derived from the Company's internal monthly management accounts (unaudited).

The only material change between 30 June 2021 to 31 August 2021 related to net cash outflows in the ordinary course of business and legal reserves increasing in relation to the exercise of warrants.

PART VI

TAXATION

The following statements are intended to apply only as a general guide to certain UK and Australian tax considerations in relation to the New Ordinary Shares and do not constitute tax advice. Prospective holders of New Ordinary Shares who may be subject to tax in a jurisdiction other than the UK or Australia or who may be unsure as to their tax position should seek their own professional advice.

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 prospectus (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 2021/2022. 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.

The Government has announced that from April 2022 tax on dividend income will increase by 1.25 per cent., and this rate increase is expected to apply to each of the above rates.

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

All dividends received from the Company by an individual Shareholder who is resident and domiciled in the UK will, except to the extent that they are earned through an ISA, self-invested pension plan or other regime which exempts the dividend from tax, form part of the Shareholder's total income for income tax purposes. 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 an accumulation or 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 an accumulation or discretionary trust do not benefit from the annual Nil Rate Amount allowance.

UK resident corporate Shareholders which are not "small companies" for the purposes of Chapter 2 of Part 9A of the Corporation Tax Act 2009 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). Shareholders within the charge to UK corporation tax which are such "small companies" will generally not be subject to UK corporation tax on any dividend received provided certain conditions are met (including an anti-avoidance condition).

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. (25 per cent. from 1 April 2023, unless the small profits rate of 19 per cent. applies). 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 2021/2022 may apply to up to £12,300 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 of "settled property" (for the purposes of chargeable gains tax) 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 differs depending on the type of settlement but for tax year 2021/2022 is generally £6,150.

Corporate Shareholders resident in the UK will be taxed to corporation tax on chargeable gains at

19 per cent. for tax year 2021/2022 (25 per cent. from 1 April 2023, unless the small profits rate of 19 per cent. applies), subject to any available reliefs or exemptions. No indexation allowance will be available.

A gain accruing to a Corporate Shareholder on a disposal of Ordinary Shares may qualify for the substantial shareholding exemption if certain conditions regarding the amount of shareholding, the length of ownership and the company invested in are fulfilled. If the substantial shareholding exemption applies, gains are exempt from tax and losses do not accrue.

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, to persons connected with depositary arrangements or clearance services, who may be liable at a higher rate or to any Ordinary Shares registered on the Australian branch register.

The allotment 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 Ordinary 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 Ordinary 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 the due stamping thereof following, where applicable, a corresponding payment of stamp duty).

Australian Taxation

Australian taxation implications of acquiring Ordinary Shares or CHESS Depositary Interests (CDIs)

Adriatic is a company incorporated in the United Kingdom and registered as a foreign company in Australia and has been 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 following comments do not take into account CDI holders who are subject to the Taxation of Financial Arrangements regime or who have made elections for certain tax treatment under those rules.

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).

It is anticipated that there will be no withholding tax arising in the UK in connection with the payment of dividends, and therefore, Australian resident CDI holders should not be entitled to any foreign income tax offset for Australian income tax purposes.

To the extent a CDI holder is an Australian incorporated company that holds 10% or more of the ordinary shares on issue by the Company, the dividends may be exempt from Australian income tax (referred to in Australia as non-assessable, non-exempt income).

To the extent the CDI holder is an Australian incorporated company and subsequently makes a conduit foreign income (CFI) declaration, it can distribute the CFI to its foreign resident shareholders as unfranked dividends, free of Australian dividend withholding tax. The CDI holders would need to maintain a CFI account in order to determine the amount of unfranked distribution that can be paid free of dividend withholding tax. The CFI regime broadly applies to exempt foreign branch income, capital gains that either are non-assessable non-exempt under the foreign branch income rules or non-assessable non-exempt foreign non-portfolio dividends (broadly dividends from a foreign company where there is at least a 10% equity interest in the foreign company) or reduced under the non-resident participation exemption rules.

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 be assessed under the ordinary income provisions on revenue account and not be subject to the Capital Gains Tax (CGT) provisions (by virtue of the rules that prevent a taxable capital gain from arising where an amount has already been included in assessable income as a revenue gain). In such a case, 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 (such as brokerage costs and the costs of any legal or financial advice in relation to 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 non-assessable 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 (excluding the date of acquisition and the date of 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 or Australian companies. To the extent the CDI holder has any carry forward capital losses, any capital gain arising would need to be offset by these losses prior to the application of the CGT discount.

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 required to reduce any 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 will 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;
• II. a single Australian company (together with its associates) has not less than 40% interest in the Company and no one else controls the Company; or
• III. 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 Company (and its controlled subsidiaries) 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 VII

CONSEQUENCES OF A STANDARD LISTING

Application will be made for the New Ordinary Shares to be admitted to on the standard listing segment of 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. Companies with a Standard Listing are only required to appoint a sponsor if they wish to transfer their listing to the Premium Listing;
• 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, however, any dealings in the Company's securities are subject to other general restrictions, including those set out in MAR;
• Chapter 13 of the Listing Rules regarding the form and content of circulars to be sent to Shareholders; and
• the UK Corporate Governance Code.

Companies with a Standard Listing are not required to obtain the approval of shareholders for the cancellation of the listing and are not eligible for inclusion in the UK series of FTSE indices.

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

• the forwarding of circulars and other documentation to the FCA 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 FCA 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 addition, as a company whose securities are admitted to trading on a regulated market, the Company is required to comply with MAR and the Disclosure Guidance and Transparency Rules.

It should be noted that the FCA does not have the authority to (and does not) monitor the Company's compliance with any of the Listing Rules which the Company has indicated 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 noncompliance 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 VIII

ADDITIONAL INFORMATION

1. RESPONSIBILITY

The Directors, whose names appear on page 28 of this prospectus, 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 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. The Company is 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 (and the New Ordinary Shares will be 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 Ground Floor, Regent House, 65 Rodney Road, Cheltenham, Gloucestershire GL50 1HX. The Company's telephone number is +44 (0) 20 799 3006. 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. As at the Last Practicable Date, there are 214,344,843 Ordinary Shares in issue, all of which have been fully paid up.
• 3.2. The Company has only Ordinary Shares in issue and no shares which do not represent capital.
• 3.3. No Ordinary Shares are held by or on behalf of the Company (in treasury or otherwise) or by any subsidiary of the Company.
• 3.4. The Existing Ordinary Shares are listed on the standard listing segment of the Official List maintained by the FCA and traded on the London Stock Exchange's main market for listed securities. The Existing Ordinary Shares are also listed on the Australian Securities Exchange.

4. OUTSTANDING RIGHTS TO SUBSCRIBE FOR OR ACQUIRE ORDINARY SHARES

4.1. As at 30 June 2021, the following options and performance rights are outstanding:

Options

Grant date	Options outstanding	Exercise price	Weighted average remaining contractual life (Years)	Expiry date	Number exercisable
27 April 2018	9,000,000	A\$0.20	2.5	1 July 2023	9,000,000
29 November 2019	1,000,000	A\$1.00	1.9	28 November 2022	1,000,000
29 November 2019	1,000,000	A\$1.25	1.9	28 November 2022	1,000,000
8 October 2020	16,600	GBP £0.88	0.6	16 August 2021	16,600

8 October 2020	27,666	GBP £0.85	1.0	21 December 2021	27,666
8 October 2020	88,533	GBP £1.06	1.9	5 December 2022	88,533
8 October 2020	29,880	GBP £1.06	2.0	3 January 2023	29,880
8 October 2020	91,300	GBP £1.80	3.2	28 February 2024	39,010
8 October 2020	24,900	GBP £2.22	3.2	7 March 2024	2,490
8 October 2020	24,900	GBP £1.20	3.6	19 August 2024	2,490
6 November 2020	1,000,000	A\$2.20	2.9	7 November 2023	1,000,000
	12,303,779				12,206,669

Performance rights

Grant date	Performance rights outstanding	Weighted average remaining contractual life (Years)	Expiry date	Number exercisable
29 November 2019	1,160,000	1.9	28 November 2022	410,000
12 June 2020	250,000	4.0	6 January 2025	-
6 August 2020	1,000,000	3.0	31 December 2023	-
6 August 2020	500,000	4.0	31 December 2024	-
18 November 2020	325,000	2.0	31 December 2022	-
4 April 2021	218,659	1.9	28 November 2022	218,659
30 June 2021	100,000	2.0	31 December 2022	-
30 June 2021	50,000	2.2	31 March 2023	-
30 June 2021	100,000	3.2	31 March 2023	-
	3,703,659			628,659

• 4.2. On exercise, holders of performance rights are required to pay £0.013355 for each performance right exercised, being the nominal value of one Ordinary Share.
• 4.3. With the exception of options granted to non-executive directors that vested immediately and were granted under standalone option agreements (of which 3,000,000 remain outstanding as at 30 June 2021), all options and performance rights have both market and non-market vesting conditions and have been granted under the Company's option plans. Non-market vesting conditions include group and individual performance targets such as permitting milestones, exploration drilling rates or completion of business improvement projects. Once vested or exercisable, the options or performance rights may be exercised by the holder serving written notice of exercise and paying the applicable exercise price to the Company.
• 4.4. In accordance with the Tethyan Arrangement, on 8 October 2020, the Company issued 4,128,633 warrants (constituted pursuant to the Warrant Instrument of the Company dated 8 October 2020, further details of which are set out in paragraph 13.10(d) below) to Tethyan warrant holders as follows, of which the following are outstanding as at 30 June 2021:

Expiry date	Exercise price	Number
16 August 2021	£1.23	452,436
30 January 2024	£0.88	2,858,520
		3,310,956

• 4.5. As at 30 June 2021, all of the Convertible Notes (aggregate principal amount of US\$20,000,000) were outstanding. The Convertible Notes are convertible into Ordinary Shares at the initial conversion price of AU\$2.7976 per Ordinary Share (the conversion price being subject to customary adjustments). If the Company completes the Senior Secured Debt and Copper Stream components of the Orion Financing, the Company intends to redeem the Convertible Notes, if not converted by QRC.
• 4.6. Under the RAS Metals Acquisition Agreement, the Company has agreed to issue 498,000 Ordinary Shares as part of the deferred consideration for the acquisition of RAS Metals (further details of which are set out in paragraph 13.4(a) below), of which 166,000 Ordinary Shares

were issued on 24 August 2021. The remaining 332,000 Ordinary Shares will be issued in two equal tranches on or around 22 February 2022 and 22 August 2022.

4.7. Save as set out in this paragraph 4, as at 30 June 2021 the Company had outstanding no convertible securities, exchangeable securities or securities with warrants or any outstanding acquisition rights or obligations in respect of Ordinary Shares or other undertakings to issue share capital.

5. DETAILS OF THE NEW ORDINARY SHARES

5.1. Description of type of securities

• (a) The New Ordinary Shares will be fully paid ordinary shares with a nominal value of 1.3355 pence each. On Admission, the New Ordinary Shares will be registered with an ISIN of GB00BL0L5G04 and the SEDOL code BL0L5G0.
• (b) The New Ordinary Shares will be traded on the main market for listed securities of the London Stock Exchange under the ticker symbol "ADT1". It is expected that Admission of the New Ordinary Shares will become effective and that dealings in the New Ordinary Shares on the London Stock Exchange's main market for listed securities will commence at 8.00 a.m. on 1 November 2021 and on the ASX at 8.00 a.m. (AEST) on 2 November 2021 for CDIs representing New Ordinary Shares.
• (c) The New Ordinary Shares will be issued under the Companies Act.
• (d) The New Ordinary Shares will be freely transferable and there will be no restrictions on the transfer of New Ordinary Shares in the United Kingdom.
• (e) The Directors may refuse to register a transfer of Ordinary Shares which are certificated if (i) the share if not fully paid; (ii) the transfer is not lodged at the company's registered office or such other place as the Directors have appointed (iii) 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 (iv) the transfer is in favour of more than four transferees.
• (f) 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.
• (g) All New Ordinary Shares will, when issued and fully paid, rank pari passu in all respects with the Existing Ordinary Shares, including the right to receive all dividends and other distributions made, paid or declared after the date of issue of the New Ordinary Shares.
• (h) Subject to the provisions of the Companies Act, the Company may from time to time declare dividends and make other distributions on the Ordinary Shares.
• (i) The capital and assets of the Company on a winding-up or other return of capital shall be applied first in repaying to the holders of Ordinary Shares the amounts paid up or credited as paid up on such shares and subject thereto shall belong to and be distributed according to the number of such Ordinary Shares held by them respectively. However, they have no rights of redemption.
• (j) Shareholders shall have the right to receive notice of, and to attend and vote at, general meetings of the Company. On a show of hands at general meetings of the Company, every Shareholder who is present in person and every person holding a valid proxy shall have one vote and on a poll every Shareholder present in person or by proxy shall have one vote per Ordinary Share.

5.2. Form and currency of the New Ordinary Shares

• (a) The New Ordinary Shares will be in registered form and may be held in either certificated form or uncertificated form (in CREST or by way of CHESS Depositary Interests).
• (b) The New Ordinary Shares will be admitted to the standard listing segment of the Official List and traded on the Main Market of the London Stock Exchange. CDIs representing the New Ordinary Shares will also be admitted to trading on the ASX.
• (c) 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 (or New Ordinary Shares) to listing or trading on any other stock exchange or securities market.
• (d) The Registrar of the Company is Computershare Investor Services PLC and the Australian Registrar of the Company is Computershare Investor Services Pty Limited.
• (e) The New Ordinary Shares are, and on Admission will be, denominated in Pounds Sterling.
• (f) Title to the certificated New Ordinary Shares will be evidenced by entry in the register of members of the Company and title to uncertificated New Ordinary Shares will be evidenced by entry in the operator register maintained by the Registrar (which will form part of the register of members of the Company).
• (g) In Australia, the Company also operates a branch register of Ordinary Shares and an uncertificated issuer sponsored sub-register of CDIs and an uncertificated CHESS subregister 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 (CHESS Depositary Nominees Pty Limited, a subsidiary of ASX, acting in its capacity as 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.

6. AGM AUTHORITIES AND PRE-EMPTION RIGHTS

• 6.1. Pursuant to ordinary and special resolutions of the Shareholders passed at the AGM of the Company convened and held on 20 May 2021:
  • (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"):
    • (i) up to an aggregate nominal amount of £931,329 (representing 69,736,353 Ordinary Shares); and
    • (ii) comprising equity securities up to a nominal amount of £1,862,658 (subject to reductions from any allotments or grants made under sub-paragraph (i) above) in connection with an offer by way of a rights issue to holders of Ordinary Shares in proportion (as nearly as may be practicable) to their existing holdings and to holders of other equity securities as required by the rights of those securities or, if the Directors otherwise consider it necessary, as permitted by the rights of those securities, and so that the Directors may impose any limits or restrictions and make any arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal, regulatory, or practical problems in, or under the laws of, any territory or any other matter;
  • (b) the Directors were empowered in accordance with section 570 of the Companies Act to allot equity securities of the Company for cash pursuant to the general authorities conferred on them by the resolution referred to at paragraph (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 and sale of treasury shares for cash in connection with an offer of, or invitation to apply for equity securities (but in the case of an authority granted under sub-paragraph (a)(ii) above, by way of a rights issue only) to ordinary shareholders (excluding any shareholder holding shares as treasury shares) in proportion (as nearly as may be practicable) to their existing holdings of ordinary shares and to holders of other equity securities, as required by the rights of those securities, or as the Directors otherwise consider necessary, and so that the Directors may impose any limits or restrictions and make any such arrangements which they consider necessary or appropriate to deal with treasury shares, fractional entitlements, record dates, legal and regulatory or practical problems in, or under the laws of, any territory or any other matter; and
    • (ii) in the case of the authority granted pursuant to paragraph (a)(i) above, and/or in the case of any sale of treasury shares for cash (otherwise than pursuant to (a)(i) above) of equity securities or sale of treasury shares up to a nominal amount of £768,346 (representing 57,532,459 Ordinary Shares),

provided that the authorities shall expire at the conclusion of the AGM of the Company to be held in 2022 or, if earlier, 20 August 2022, save that, in each case, the Company may during this period make offers and enter into agreements which would, or might, required equity securities to be allotted (and/or treasury shares to be sold) after such expiry, and the Directors may allot equity securities (and/or sell treasury shares) in pursuance of such an offer or agreement as if the power conferred by the resolutions had not expired.

• 6.2. Pursuant to a special resolution of the Shareholder passed at the AGM of the Company convened and held on 20 May 2021, the Directors were also authorised generally and unconditionally in accordance with section 701 of the Companies Act to make market purchases (as defined in section 693(4) of the Companies Act) of its Ordinary Shares, limited to:
  • (a) a maximum number of Ordinary Shares with an aggregate nominal value of £262,050; and
  • (b) by the condition that the Company does not pay less (excluding expenses) for each Ordinary Share than the nominal value of such share, and that the maximum price which may be paid for an ordinary share (excluding expenses) is the higher of:
    • (ii) 105 per cent. of the average of the closing middle-market quotations of an Ordinary Share for the five business days immediately preceding the date on which the Company agrees to buy the share concerned, based on share prices published in the Daily Official List of the London Stock Exchange; and
    • (iii) the price of the last independent trade and the highest current independent purchase bid at the time on the trading platform here the purchase is carried out,

provided that such authority shall expire at the conclusion of the AGM of the Company to be held in 2022 or, if earlier, 20 August 2022, provided that if the Company has agreed before such expiry to purchase Ordinary Shares, and where these purchases will or maybe executed (either wholly or in part) after the authority terminates, the Company may complete such a purchase as if the authority conferred by the resolution had not expired.

6.3. The Company's Collaboration and Partnership Deed with Sandfire Resources contains an antidilution 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' 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' 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. Further particulars of the Collaboration and Partnership Deed are set out in paragraph 13.12 of this Part VIII. The Settlement Deed (particulars of which are set out in paragraph 13.9 of this Part VIII) made certain clarifications as to the price payable by Sandfire Resources in exercising its anti-dilution rights and the notice periods applicable to the Company when issuing new securities and applicable to Sandfire in responding to such notices.

7. DIVIDENDS

The Company has not declared or paid a dividend for the financial year ended 30 June 2020. The Company does not anticipate paying a dividend in the near future.

8. OTHER RELEVANT LAWS AND REGULATIONS

8.1. Mandatory bid

• (a) Takeover Code applies to the Company. 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,

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.

• (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.

8.2. 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.

8.3. 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.

8.4. 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.

8.5. 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 is not required pursuant to 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.

9. INFORMATION ON THE DIRECTORS AND SENIOR MANAGERS

9.1. The Directors and the Senior Managers have not held any directorships of any company outside the Group or partnerships during the five years prior to the publication of this prospectus, except as set forth below:

Directors

Michael Rawlinson

Current Past

Capital Limited Hochschild Mining Plc Neighbrook Estates (partnership) Neighbrook Consulting (partnership)

African Gold Acquisition Corp

Paul Cronin

Current	Past
Black Dragon Gold Corp. Swellcap Limited Taruga Minerals Limited	Anatolia Energy Limited Global Atomic Corp
Julian Barnes
Current	Past
Thor Explorations Limited Zinc of Ireland NL RSG SRL	-
Sandra Bates
Current	Past
Aldeia International Limited Pensana plc	Fladgate LLP Stikeman Elliot LLP Pillsbury Winthrop Shaw Pittman LLP
Peter Ross Bilbe
Current	Past
Horizon Minerals Ltd IGO Limited	-
Sanela Karic
Current	Past
Prevent Halog d.o.o., Lenart Slovenia Prevent Nadomestni deli d.o.o., Lenart Slovenia. Salona Forte d.o.o. Split, Croatia	-
Senior Managers
Geoff Eyre
Current	Past
GPE Consulting Limited Explora One Limited	AAA Exploration Burkina Limited AAA Resources Limited Afro Anglo American Resources Inc. Amethyst Ex BV Aquamarine Ex BV Atmaca Services Liberia Inc. Avesoro Holdings Limited Avesoro Jersey Limited Avesoro Resources Inc. Avesoro Services (Jersey) Limited Avesoro Services UK Limited Bea Mountain Mining Corporation Caymen Burkina Mines Limited

88

Emerald Ex BV

Jasper Ex BV

Environminerals East Africa Limited

Jersey Bopolu Exploration Limited Jersey Netiana Mining Limited

MNG Gold Exploration Limited MNG Gold Liberia Inc. NurtureEx BV NurtureEx Services Limited Onyx Ex BV Ruby Ex BV Sapphire Ex BV Thani Stratex Djibouti Limited Topaz Ex BV

Dominic Roberts

Current	Past
Poseidon Croatia Ltd Poseidon Securities Limited Poseidon Serbia Ltd Westwood & Bower Limited	-
Graham Hill
Current	Past
Shamrock Consulting Ltd	Silver Bear Resources
Phil Fox
Current	Past
Zaga Geo Usluge Adnan Teletovic	-
Current	Past
TFK Trading Pty Ltd	Athabasca Investment d.o.o. DZU Moneta a.d. Podgorica Optimal Property Solutions d.o.o. Zeljezara Iijas d.d.

• 9.2. 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.
• 9.3. There a no family relationships between any of the Directors or the Senior Managers.
• 9.4. There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any Director or Senior Manager was selected.

9.5. 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.

10. MAJOR SHAREHOLDERS

10.1. 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 Existing Ordinary Shares or voting rights:

Shareholder	No. of Ordinary Shares on Last Practicable Date	Percentage of Existing Ordinary Shares on Last Practicable Date
Sandfire Resources Limited	34,600,780	16.1%
Mr Paul Cronin*	17,601,332	8.2%
Mr Milos Bosnjakovic	14,300,000	6.7%
Datt Capital	8,786,101	4.1%
Sprott Asset Management	8,757,824	4.1%
Mr Eric De Mori	8,302,808	3.9%
Helikon Investments	6,491,922	3.0%

* Includes 14,351,132 Ordinary Shares held by Dwellstone Limited, a company wholly owned and controlled by Paul Cronin.

• 10.2. Save as set out in paragraph 10.1, the Directors are not aware of any person who, directly or indirectly, has an interest in three per cent. or more of the Existing Ordinary Shares or voting rights of the Company as at the Last Practicable Date.
• 10.3. 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.
• 10.4. None of the Shareholders identified in paragraph 10.1 above do not have any different voting rights from other holders of Ordinary Shares. Sandfire Resources has certain anti-dilutive rights under the Collaboration and Partnership Deed, further particulars of which are set out in paragraph 13.12, below.

11. NO SIGNIFICANT CHANGE

There has been no significant change in the financial position or financial performance of the Group since 30 June 2021, being the date of the end of the last financial period for which financial information has been published to the date of this prospectus.

12. LITIGATION

• 12.1. In July 2020, Sandfire Resources commenced legal proceedings in the Supreme Court of Western Australia against the Company, claiming that Adriatic had breached the Collaboration and Partnership Deed, and seeking specific performance of the deed, damages, interest and costs. On 2 November 2020, the Company and Sandfire Resources entered into the Settlement Deed pursuant to which the dispute was settled and the legal proceedings discontinued. Further details of the deed of settlement and release are set out in paragraph 13.9, below.
• 12.2. Save as set out in paragraph 12.1, 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 prospectus, a significant effect on the Company and/or the Group's financial position or profitability.

13. MATERIAL CONTRACTS

The following contracts are outside the ordinary course of business and either: (a) have been entered into by the Group within two years immediately preceding the date of this prospectus; 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 prospectus.

;

13.1. Placing Agreement

On 12 October 2021 the Company entered into the Placing Agreement with the Joint Bookrunners. Pursuant to the terms and conditions of the Placing Agreement, the Joint Bookrunners have agreed severally, subject to certain conditions, to use reasonable endeavours to procure Placees for the Placing Shares at the Issue Price. Each Joint Bookrunner has agreed that if any Placee procured by that Joint Bookrunner fails to take up any or all of the Placing Shares which have been allocated to it and which it has agreed to acquire at the Issue Price, each Joint Bookrunner agrees to severally to itself subscribe on its own account and pay for such Placing Shares at the Issue Price in its agreed proportion. Each of the Joint Bookrunner's obligations are subject to certain conditions in the Placing Agreement.

In consideration of their services under the Placing Agreement, and subject to their obligations under the Placing Agreement having become unconditional and the Placing Agreement not being terminated, the Company has agreed to pay to the Joint Bookrunners (i) a commission of 4.5 per cent. based on the aggregate value of Placing Shares subscribed by Placees introduced by the Joint Bookrunners; and (ii) a commission of 1.5 per cent. of the aggregate value of the Placing Shares subscribed by Placees in the Placing, payable to the Joint Bookrunners in such proportions as the Company in its absolute discretion shall determine.

The Placing Agreement is conditional only upon certain requirements being satisfied and obligations not being breached including, among others:

• (a) the passing of the Resolution (without amendment) at the General Meeting;
• (b) none of the warranties set out in the Placing Agreement being untrue or inaccurate or misleading at the date of the Placing Agreement or becoming untrue or inaccurate or misleading at any time between the date of the Placing Agreement and Admission, by reference to the facts and circumstances from time to time subsisting;
• (c) there not having occurred, in the opinion of any of the Joint Bookrunners, acting in good faith, a material adverse change in the Group at any time prior to Admission (whether or not foreseeable at the date of this agreement);
• (d) the net proceeds of the Capital Raising to the Company totalling not less than US\$90 million;
• (e) the Orion Equity Subscription proceeds having been received by the Company or deposited into escrow at least 48 hours prior to Admission;
• (f) the Equity Subscription Agreement not having been amended, terminated or lapsed, in each case prior to Admission; and
• (g) Admission occurring by not later than 8.00 a.m. on 1 November 2021 or such later time and/or date as the Company and the Joint Bookrunners may agree, being no later than 30 November 2021.

The Joint Bookrunners may terminate the Placing Agreement in its entirety in certain circumstances prior to Admission, including, among other things, (i) if there has been a material adverse change in the Group (whether or not foreseeable at the date of the Placing Agreement), (ii) if there has been a breach by the Company of any of the warranties, representations or undertakings given by the Company under the Placing Agreement or any of the warranties contained in the Placing Agreement is not or has ceased to be, true, accurate and not misleading and, in each case, the effect, in the opinion of any of the Joint Bookrunners, acting in good faith, is singly or in the aggregate material in the context of the Capital Raising, and/or is such as to make it impracticable or inadvisable to proceed with the Capital Raising, Admission or to market or enforce contracts for sale of any New Ordinary Shares (or CHESS Depositary Interests representing New Ordinary Shares), or (iii) a force majeure event has occurred. Neither the Company nor the Joint Bookrunners may terminate the Placing Agreement following Admission.

The Company has given customary representations and warranties to the Joint Bookrunners, including as its business, assets and financial information. The Company has given a customary capital markets indemnity in favour of the Joint Bookrunners and certain indemnified persons, and has also given certain customary undertakings.

13.2. Equity Subscription Agreement

On 12 October 2021, the Company and Orion entered into the Equity Subscription Agreement pursuant to which Orion has conditionally agreed to subscribe for the Subscription Shares at the Issue Price. The Equity Subscription Agreement is conditional only upon certain requirements being satisfied and obligations not being breached including, among others:

• (a) the passing of the Resolution at the General Meeting;
• (b) none of the warranties being breached or untrue or inaccurate or misleading at the date of the Equity Subscription Agreement and (except in the case of warranty 1.6 in Part B of Schedule 1 to the Equity Subscription Agreement) there being no change of circumstance such that when repeated by the applicable warrantor at the date of Admission by reference to the facts and circumstances subsisting at such time any of the warranties would be breached or untrue or inaccurate or misleading;
• (c) none of the undertakings given by Orion or by the Company having been breached between the date of the Equity Subscription Ahreement and the date of Admission;
• (d) the Captial Raising raising net proceeds to the Company of at least US\$90 million; and
• (e) Admission occurring at or before 8.00 a.m. on 9 November 2021 (or such later date as the Company and Orion may agree in writing).

Under the Equity Subscription Agreement, the Company has given customary representations and warranties to Orion, including as its business, assets and financial information and has given customary undertakings in favour of Orion.

Orion is entitled at any time before Admission of the New Ordinary Shares, to terminate the Equity Subscription Agreement by giving notice to the Company if, inter alia:

• (a) there has been a breach of any of the warranties or any failure to perform any of the undertakings or agreements in the Equity Subscription Agreement, in each case where such breach or failure is material in the context of the Orion Equity Subscription;
• (b) any of the conditions in the Equity Subscription Agreement have not been satisfied or (to the extent capable of being waived) waived by the required time(s) (if any) or have become incapable of satisfaction;
• (c) if admission to listing or trading of the Ordinary Shares on the London Stock Exchange or the ASX has been withdrawn, or the listing or trading in the Ordinary Shares has been suspended or limited by the FCA, the London Stock Exchange, or the ASX or trading generally on the London Stock Exchange, the ASX or the New York Stock Exchange has been suspended or limited, or minimum or maximum prices for trading have been fixed, or maximum ranges for prices have been required, by any of said exchanges or by such system or by order of the regulatory authorities of the United Kingdom, Australia or the United States, or any other governmental or self-regulatory authority, or a material disruption has occurred in commercial banking or shares settlement or clearance services in the United Kingdom, Australia, the United States or in any member state of the EEA, in each such case where the same makes completion of the Orion Equity Subscription impossible or impracticable;if a banking moratorium has been declared by the authorities of any of the United Kingdom, Australia, the United States or the State of New York or any member state of the EEA, in each such case where the same makes completion of the Orion Equity Subscription impossible or impracticable; or

(d) there shall have occurred a material adverse change in the financial markets in the United Kingdom, Australia, the United States or any member state of the EEA, or the international financial markets, any outbreak or escalation of hostilities, war, act of terrorism, declaration of emergency or martial law, pandemic, epidemic or other calamity or crisis or event or any change or development involving a prospective change in national or international political, financial, economic, monetary or markets conditions or currency exchange rates or controls, in each case, where the same makes completion of the Orion Equity Subscription impossible or impracticable.

Neither the Company nor Orion may terminate the Equity Subscription Agreement following Admission.

13.3. Orion Break Fee Letter

On 12 October 2021, the Company and Orion entered into the Orion Break Fee Letter pursuant to which, the Company has agreed, subject to completion of the Orion Equity Subscription, to pay Orion a break fee of US\$1.0 million if the definitive legal documentation relating to the Orion Debt Financing is not entered into by the Company and Orion by 31 December 2021 (or such later date as the Company and Orion may agree) as a result of the Company failing to negotiate the definitive documents in good faith and consistent with the terms of the term sheet between the Company and Orion relating to the Orion Debt Financing.

13.4. RAS Metals Acquisition

(a) RAS Metals Acquisition Agreement

On 26 August 2020, Tethyan (as buyer) and Cuprum Plus Ltd and Igor Papic (as sellers) entered into the RAS Metals Acquisition Agreement pursuant to which Tethyan agreed to acquire the 90 per cent. of the shares in RAS Metals not already owned by Tethyan in consideration for: (i) paying €1,375,000 in cash; (ii) granting to the sellers a 2 per cent. net smelter return over Kizevak and Sastavci; (iii) issuing a total of 4,000,000 new shares in the capital of Tethyan (1,000,000 to be issued on closing and the balance of 3,000,000 to be issued in three equal tranches every six months commencing on closing); and (iv) paying a deferred cash payment of €500,000 on the second anniversary of closing. The RAS Metals Acquisition Agreement contains customary representations and warranties by the sellers, relating to RAS Metals and its business, assets and financial and tax affairs, and customary representations and warranties by Tethyan. The RAS Metals Acquisition Agreement also contains customary covenants by the sellers applicable to the period between signing and closing, and covenants by Tethyan applicable to the same period and following completion, to keep the Kizevak and Sastavci licences in good standing and to carry out certain exploration works as required under the licences. The RAS Metals Acquisition Agreement is governed by the laws of the Republic of Serbia.

On 22 February 2021, the Company, Tethyan, Cuprum Plus Ltd and Igor Papic entered into an assignment and amendment agreement, pursuant to which Tethyan assigned its rights under the RAS Metals Acquisition Agreement to the Company, the Company agreed to assume the obligations of Tethyan under the RAS Metals Acquisition Agreement (including with the effect that any obligations of Tethyan to issue any consideration shares were replaced with obligations of the Company to issue new Ordinary Shares of equivalent value as consideration shares), and certain consequential and other amendments to the RAS Metals Acquisition Agreement were made. The assignment and amendment agreement is governed by the laws of the Republic of Serbia.

The Company's obligation to pay the deferred consideration under RAS Metals Acquisition Agreement and to progress exploration works in respect of the licences is secured by pledge agreements dated 22 February 2021 in favour of the sellers over 100 per cent. of the shares in RAS Metals. The pledges will remain in force until: (i) all deferred consideration under the RAS Metals Acquisition Agreement has been paid; and (ii) both of the Kizevak and Sastavci licences (currently expiring on 16 October 2022) have been extended. The pledge agreements are governed by the laws of the Republic of Serbia.

(b) Kizevak and Sastavci Participation Agreements

As part of the consideration payable by the Company under the RAS Metals Acquisition Agreement, on 22 February 2021, the Company and RAS Metals entered into participation rights agreements on the same terms with each of Cuprum Plus Ltd and Igor Papic in terms of which each of Cuprum Plus Ltd and Igor Papic (as grantees) were granted a 1 per cent. net smelter return over the Kizevak and Sastavci licences by the Company. In the event that RAS Metals wishes to abandon or surrender either of Kizevak and Sastavci licences, the grantee has the right to request that the relevant licence be re-assigned to the grantee for €1.00. Any expanded areas or additional licences will not be subject to the participation rights granted. In the event of a change of control of the Company or RAS Metals, the grantee is entitled to require that the acquiror of the Company's or RAS Metals' shares (as applicable) purchases the participation rights for cash at a valuation to be determined by an independent valuer. In the event that the grantee wishes to sell all or a portion of its interest in the participation right ("Offered Interest") to a third party and has received a bona fide written offer from such an arm's length third party, the Company has a right of first refusal to acquire the Offered Interest on the same terms as the third party offer. The participation rights agreements are governed by the laws of the Province of British Columbia, Canada.

13.5. QRC Convertible Bond Subscription Agreement

The convertible bond subscription agreement (the "QRC Subscription Agreement") dated 30 November 2020 was entered into between Adriatic and QRC pursuant to which Adriatic agreed to issue, and QRC agreed subscribe for, the Convertible Bonds for a price of US\$20 million (less agreed deductions and expenses) subject to the provisions of the QRC Subscription Agreement. Completion of the QRC Subscription Agreement was conditional, inter alia, on the Convertible Bonds having been constituted by Adriatic, and certain other conditions precedent which are customary for a transaction of this nature.

Under the QRC Subscription Agreement, Adriatic gave certain customary (for a transaction of this nature) representations, warranties and undertakings to QRC concerning, inter alia, matters relating to its business, its title and interest in the Vares Concession and its authority to enter into and perform the obligations under the QRC Subscription Agreement. Each of Adriatic and QRC also represented and agreed to comply with selling restrictions in relation to the Convertible Bonds, including, inter alia, restrictions on making offers, selling or otherwise making the Convertible Bonds available to any retail investor in the European Economic Area and the United Kingdom. Adriatic's liability for breaches of the warranties under the QRC Subscription Agreement is limited to US\$10 million in respect of all claims brought within 18 months from the date of the QRC Subscription Agreement (the "Liability Period"). Adriatic is not liable for any breach of warranty claims brought after the Liability Period. Adriatic's liability for any breach of warranty claim does not extend to any indirect, reflective or consequential losses or any direct or indirect punitive damages.

The QRC Subscription Agreement is governed by the laws of England and Wales.

13.6. Convertible Bond Instrument

On 30 November 2020, the Company executed the Convertible Bond Instrument as a deed of covenant in favour of the persons from time to time registered as holders of the Convertible Bonds. Pursuant to the Convertible Bond Instrument the Company undertook to use the proceeds of the issue of the Convertible Bonds to fund the exploration and development of the Vares Silver Project and for general corporate purposes of the Company.

The Convertible Bonds bear interest from and including 1 December 2020 (the "Issue Date") at a rate of 8.5 per cent. per annum calculated by reference to the principal amount outstanding of the Convertible Bonds at the time. The Convertible Bonds are subject to the terms and conditions set out in the Convertible Bond Instrument and shall remain, inter alia, equal with all the Company's other present and future unsecured, conditional and unsubordinated obligations.

The bondholders may elect to convert the Convertible Bonds into Ordinary Shares or CHESS Depositary Interests (but not a combination of both) in the Company at any time prior to the fourth anniversary of the Issue Date ("Conversion Rights") at an initial conversion price of AU\$2.7976 per Ordinary Share ("Conversion Price"). The Convertible Bonds are subject to normal provisions for adjustment of the Conversion Price, and include standard undertakings for this type of convertible bond, including customary financial covenants given by the Company not to create or permit any mortgage, charge, pledge or other form of encumbrance or security interest, other than a permitted encumbrance. Subject to certain limitations, Conversion Rights may be exercised at the option of the bondholder at any time (subject to applicable law) from the Issue Date to and including the business day immediately prior to the fourth anniversary of the Issue Date (the "Maturity Date"). The Company reserves a right to redeem all of the Convertible Bonds prior to the Maturity Date on at least 30 days' notice at their principal amount with accrued interest if (i) the volume weighted average price of the Ordinary Shares (as derived from the ASX) for 20 consecutive dealing days has exceeded 125 per cent. of the Conversion Price; (ii) such redemption takes place after the third anniversary of the Issue Date; or (iii) a project financing has been completed by the Company to fully fund the development of the Vares Silver Project ("Qualifying Project Financing"). The bondholders are entitled to require the Company to redeem the Convertible Bonds on a change of control in relation to the Company ("Change of Control Event"), at (i) 130 per cent. of the principal amount (if the Change of Control Event occurs on or prior to the second anniversary of the Issue Date; and (ii) 115 per cent. of the principal amount if the Change of Control Event occurs after the secondary anniversary of the Issue Date (in either case together with accrued and unpaid interest). The bondholders are also entitled to require the Company to redeem the Convertible Bonds following the completion of a Qualifying Project Financing.

The Convertible Bonds may be transferred during the term, subject to bondholders complying with certain customary registration requirements and provided that the transfer involves a transfer of all of the Convertible Bonds owned by the bondholder at that time to a single transferee and provided that (i) the transfer is to a wholly owned affiliate of the bondholder or to a financial institution, investment fund or other investor which customarily invests in mining companies provided that the Company gives its prior written consent to the transfer to any nonaffilate of the bondholder (such consent not to be unreasonably withheld, conditioned or delayed); or (ii) the transfer is to a Shareholder or to any person engaged in the business of mining, mining exploration or related activity provided that the Company gives its prior written consent to the transfer (which may be withheld at the Company's absolute discretion). The Convertible Bonds are in registered form in principal amounts of US\$200,000 each.

The Convertible Bond Instrument is governed by the laws of England and Wales.

13.7. EBRD Subscription Agreement

On 26 October 2020 the Company and the EBRD entered into a conditional subscription agreement (the "EBRD Subscription Agreement") pursuant to which the EBRD subscribed for 5,276,595 Ordinary Shares at a price of £1.175 per share for aggregate gross proceeds of £6,200,000 ("Subscription Amount"). The EBRD Subscription Agreement contains certain customary covenants, representations and warranties given by the Company. The maximum liability of the Company in respect of any of the representations and warranties under the EBRD Subscription Agreement is limited to the Subscription Amount. The Company's liability for breaches of the representations and warranties under the EBRD Subscription Agreement is limited to an amount equal to the Subscription Amount in respect of all claims brought within 12 months from the date of the subscription request being 2 November 2020 (the "Liability Period"). Adriatic is not liable for any breach of warranty claims brought after the Liability Period.

The EBRD Subscription Agreement is governed by the laws of England and Wales.

13.8. EBRD Project Support Agreement

On 26 October 2020 the Company, the EBRD and Eastern Mining entered into a project support agreement (the "PSA"). Pursuant to the terms of the PSA, the Company and Eastern Mining have committed to comply with the EBRD's environmental and social requirements including undertaking an international environmental and social assessment for the Vares Silver Project. The PSA contains certain customary covenants, representations and warranties given by the Company. In addition, the Company has also agreed not to implement any material change to the business or operations of Eastern Mining without the prior written consent of the EBRD. The Company's liability for breaches of the representations and warranties under the PSA is limited to an amount equal to the Subscription Amount in respect of all claims brought within 12 months from the date of the subscription request being 2 November 2020 (the "Liability Period"). Adriatic is not liable for any breach of warranty claims brought after the Liability Period. The PSA shall continue in effect until the later of the date on which EBRD ceases to own any shares in the Company and if a dividend has been declared in respect of any shares owned by EBRD, the date on which all moneys and properties or other assets payable to EBRD have been fully paid.

The PSA is governed by the laws of England and Wales.

13.9. Deed of settlement and release with Sandfire Resources

On 2 November 2020, the Company and Sandfire Resources entered into a deed of settlement and release ("Settlement Deed") as a result of both parties having agreed to settle a dispute brought by Sandfire Resources against Adriatic in the Supreme Court of Western Australia and to dismiss the proceedings.

The Settlement Deed also made certain clarifications as to the calculation of the cash consideration payable by Sandfire Resources when exercising its anti-dilution right under the Collaboration and Partnership Deed (described in paragraph 13.12 below) to acquire new Ordinary Shares (or CDIs), such that the cash consideration is to be calculated as follows:

• (a) in respect of an issue of Ordinary Shares for a cash sum: the cash subscription price;
• (b) in respect of an issue of Ordinary Shares upon the conversion of performance rights to directors and/or employees of the Group, where performance hurdles are attached and the exercise price is nil or nominal: the volume weighted average market price ("VWAP") of CDIs on the ASX for the 20 trading-day period preceding the date of issue of the Ordinary Shares;
• (c) in respect of an issue of Ordinary Shares on the exercise of warrants or options: the exercise price of such warrants or options;
• (d) in respect of an issue of Ordinary Shares on conversion of convertible debentures, notes or similar convertibles: the conversion price under the terms of issue of the relevant instrument;
• (e) in respect of an issue of Ordinary Shares as consideration for the acquisition of shares or assets: the VWAP of CDIs on the ASX for the 20 trading-day period preceding the date of issue of the Ordinary Shares (or if there are multiple issues in connection with the same transaction, the average of those issue prices);

The Settlement Deed further clarifies that; (i) in the case of issues of Ordinary Shares falling into category (a) or (e) above, the Company must give Sandfire Resources three business days' prior notice of the intended issue and Sandfire Resources must advise the Company if it intends to exercise its anti-dilution right by no later than three business days from the receipt of the Company's notice; and (ii) in the case of issues of Ordinary Shares falling into category (b), (c) or (d) above, the Company must use reasonable endeavours to give Sandfire Resources as much prior notice as possible of the intended issue and Sandfire Resources must advise the Company if it intends to exercise its anti-dilution right by no later than five business days from date of issue of the relevant Ordinary Shares.

In connection with the settlement, and pursuant to Sandfire Resources' anti-dilution right under the Collaboration and Partnership Deed, on 24 December 2020 the Company allotted 4,830,156 new Ordinary Shares to Sandfire Resources for which Sandfire Resources paid the Company A\$8,649,360.35 in cash.

13.10. Tethyan Acquisition

(a) Tethyan Letter Agreement

On 10 May 2020, the Company and Tethyan entered into a binding letter agreement (the "Tethyan Letter Agreement") in terms of which the Company agreed in principle to acquire 100 per cent. of the issued and outstanding share capital of Tethyan, by way of a Plan of Arrangement under the Business Corporations Act (British Columbia). Under the Tethyan Letter Agreement the parties agreed to cooperate in the implementation and completion of the Tethyan Arrangement and agreed to negotiate in good faith and to enter into the Tethyan Arrangement Agreement. The Tethyan Letter Agreement contains certain customary representations and warranties by each party. The Tethyan Letter Agreement also contains customary non-solicitation provisions and rights to match competing or superior offers, a break fee of C\$700,000 and costs and expenses of Adriatic up to C\$150,000 payable by Tethyan to Adriatic under certain circumstances, and a break fee of C\$350,000 payable by Adriatic to Tethyan under limited circumstances. The Tethyan Letter Agreement is governed by the laws of the Province of British Columbia, Canada.

The Tethyan Letter Agreement was replaced and superseded in its entirety by the Tethyan Arrangement Agreement.

(b) Convertible Loan Agreement

In conjunction with the Letter Agreement, on 10 May 2020, the Company (as lender), Tethyan (as borrower) and Tethyan Resources Limited (as guarantor) entered into a convertible loan agreement (the "Convertible Loan Agreement"), pursuant to which the Company agreed to advance to Tethyan a secured convertible loan in the amount of up to €1.3 million in three tranches, to be used by Tethyan to finance first closing under the EFPP Acquisition Agreement (described in paragraph 13.11 below), to commence confirmation drilling at Kizevak and to meet the expenses and costs of Tethyan in completing the Tethyan Arrangement. Interest on the loan accrues at a rate of 10 per cent. per annum, compounded monthly. The Company was entitled to elect to convert the outstanding amount of the loan into shares in the capital of Tethyan.

The loan is secured by a general security agreement over all assets of Tethyan, an equitable mortgage of shares over the issued shares of Tethyan Resources Limited (Tethyan's whollyowned subsidiary), a debenture creating a floating security over all assets of Tethyan Resources Limited and a pledge of shares over the issued capital of Taor d.o.o. (Tethyan's wholly-owned Serbian subsidiary).

The Convertible Loan Agreement contains the usual and customary events of default for an agreement of the nature of the Convertible Loan Agreement. On an event of default, the Company may declare the loan immediately due and payable.

The Convertible Loan Agreement is governed by the laws of the Province of British Columbia, Canada.

On 8 October 2020, the Convertible Loan Agreement was amended and restated, inter alia, to remove the equity conversion option, to increase the maximum principal amount that can be borrowed and to permit loans to be advanced in Pounds Sterling.

(c) Tethyan Arrangement Agreement

On 12 June 2020, the Company and Tethyan entered into the Tethyan Arrangement Agreement, pursuant to which the Company and Tethyan agreed that, subject to the terms and conditions set forth in the Tethyan Arrangement Agreement, the Company would acquire all of the issued and outstanding shares in the capital of Tethyan at the ratio of 0.166 of one Ordinary Share in exchange for each common share in the capital of Tethyan held ("Exchange Ratio").

The Tethyan Arrangement Agreement contains certain representations and warranties by each of the parties, including relating to their businesses, assets, financial statements, properties and mineral rights. The representations and warranties expired on completion of the Tethyan Acquisition.

Each of Tethyan and the Company gave usual and customary mutual covenants for an agreement of the nature of the Tethyan Arrangement Agreement, including to use all reasonable commercial efforts to satisfy, or cause to be satisfied, all conditions precedent to its obligations including, to obtain all necessary consents, approvals and authorisations in relation to the Tethyan Arrangement and to co-operate with the other party in connection with the performance by it of its obligations under the Tethyan Arrangement Agreement.

Tethyan also gave the customary interim covenants to conduct its business in the usual and ordinary course and not to undertake certain actions without the prior written consent of the Company. The Tethyan Arrangement Agreement was conditional, inter alia, on the shareholders of Tethyan approving the Tethyan Arrangement in a general meeting and the sanction of the Supreme Court of British Columbia.

Tethyan further undertook not to encourage or solicit any competing or other offers for Tethyan. The Tethyan Arrangement Agreement also contains rights for the Company to match any offer for Tethyan considered by the Tethyan board in good faith to be a superior offer to the Tethyan Arrangement. The Tethyan Arrangement Agreement also contains a break fee of C\$700,000 and costs and expenses of Adriatic up to C\$150,000 payable by Tethyan to Adriatic under certain circumstances, and a break fee of C\$350,000 payable by Adriatic to Tethyan under limited circumstances.

The Tethyan Arrangement Agreement is governed by the laws of the Province of British Columbia, Canada.

The Tethyan Arrangement was approved by Tethyan's shareholders at an annual general and special meeting held on 17 August 2020. The British Columbia Supreme Court issued a final order approving the Tethyan Arrangement on 20 August 2020. The Tethyan Arrangement Agreement and thereby the Tethyan Acquisition was completed on 8 October 2020.

(d) Warrant Instrument

In connection with the Tethyan Arrangement Agreement and the Tethyan Arrangement, which required that the outstanding share warrants held by warrant holders of Tethyan be exchanged for corresponding share warrants in the Company, on 8 October 2020, the Company executed a warrant instrument constituting four series of warrants (and an aggregate of 4,128,633 warrants) of which only the Series D warrants are unexpired. Each warrant confers the right on the holder to subscribe for one new Ordinary Share on the following terms:

Series	Subscription price (£)	Expiry date	Aggregate number warrants	of
Series A	1.23	20 April 2021	413,642
Series B	1.23	29 June 2021	328,671
Series C	1.23	16 August 2021	527,800
Series D	0.88	30 January 2024	2,858,520

The warrants are in registered form and are freely transferable. The warrants are not listed or admitted to trading on any exchange. The Warrant Instrument is governed by the laws of England and Wales.

13.11. EFPP Acquisition Agreement

On 31 January 2020, Tethyan (as buyer) and Cuprum Plus Ltd and Igor Papic (as sellers) entered into the EFPP Acquisition Agreement pursuant to which Tethyan agreed to acquire 10 per cent. of the shares of EFPP, together with an option to acquire the remaining 90 per cent. Under the EFPP Acquisition Agreement, Tethyan agreed to acquire EFPP in two steps, an initial 'first closing' whereby Tethyan acquired 10 per cent. of the shares of EFPP and management control of EFPP, and a 12 month period in which to decide, in its sole discretion, whether to proceed to a 'second closing' pursuant to which Tethyan would have the right to acquire the remaining 90 per cent. of the shares of EFPP. On 14 May 2020, Tethyan completed the first closing under the EFPP Acquisition Agreement, paying the sellers a total of €625,000 in cash to complete the first closing. At any time within 12 months of the first closing, Tethyan was entitled to elect to acquire the remaining 90 per cent. of shares of EFPP by (i) paying €1,375,000 in cash; (ii) granting to the sellers a 2 per cent. net smelter return over Kizevak and Sastavci; (iii) issuing a total of 4,000,000 new shares in the capital of Tethyan; and (iv) paying a deferred cash payment of €500,000 on the second anniversary of the first closing. The EFPP Acquisition Agreement contained customary representations and warranties by the sellers, relating to EFPP and its business, assets and financial and tax affairs, and customary representations and warranties by Tethyan. The EFPP Acquisition Agreement also contained customary covenants by the Sellers applicable to the period between signing and first closing and the period between first closing and second closing, and covenants by Tethyan applicable during the period between first closing and second closing, to keep the Kizevak and Sastavci licences in good standing and to carry out certain exploration works as required under the licences. The EFPP Acquisition Agreement is governed by the laws of the Republic of Serbia.

Prior to the completion of the Tethyan Acquisition, as a condition precedent to the Arrangement Agreement, the Kizevak and Sastavci licences (which were held by EFPP at the time that the EFPP Acquisition Agreement was entered into) were transferred to a newly formed company, RAS Metals, in which Tethyan also held a 10 per cent. equity interest and, pursuant to the RAS Metals Acquisition Agreement, the right to acquire the remaining 90 per cent. equity interest. Accordingly, on 22 February 2021, Tethyan, Cuprum Plus Ltd and Igor Papic entered into a termination agreement relating to the EFPP Acquisition Agreement and a transfer deed, in terms of which Tethyan transferred its 10 per cent. equity stake in EFPP back to Cuprum Plus Ltd and Igor Papic (pro rata) for a nominal amount, and the EFPP Acquisition Agreement was terminated.

13.12. Collaboration and Partnership Deed with Sandfire Resources

On 1 May 2018, the Company and Sandfire Resources entered into the Collaboration and Partnership Deed.

The Collaboration and Partnership 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 is maintained, provided that Sandfire Resources' 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 any non-cash consideration paid by third parties. The anti-dilution right shall cease to apply on the earlier to occur of Sandfire Resources' 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 Collaboration and Partnership 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' 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' 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 Collaboration and Partnership 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.

14. MINING LICENCES

The following mining concessions and licences are held by the Group as at the Last Practicable Date.

14.1. Vares Concession and Annexes

On 12 March 2013, Eastern Mining entered into the Vares Concession with the Zenica-Doboj Canton in relation to the Vares Silver Project which is situated in the Municipality of Vares.

The Vares Concession was 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 Vares Concession is for a period of 25 years from 12 March 2013. Eastern Mining is required to pay a concession fee every quarter, calculated on the basis of tonnes 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 tonnes of exploitation ore, even if the amount exploited is less. On 14 November 2018, Eastern Mining entered into Annexure 3 to the Vares Concession with the Ministry of Economy for Zenica-Doboj Canton, which expanded the size of the Vares Concession Area. Further, Eastern Mining entered into Annexure 4 to the Vares Concession with the Ministry of Economy for Zenica-Doboj Canton on 29 January 2020. Annex 4 of the Vares Concession ("Annex 4") clarified Eastern Mining's right regarding mineral rights to precious metals. Annex 4 also increased the minimum annual concession fee from BAM 1.50 per tonne to BAM 3.90 (€1.99) per tonne ROM, increasing the minimum payment from the date exploitation was granted but prior to commencement of production, to €199,325 per annum.

As security for the quarterly concession fees payable, Eastern Mining has issued a bill-ofexchange with a value of BAM 300,000 to the Zenica-Doboj Canton. A letter from the Ministry of Economy dated 18 October 2019 clarified that Eastern Mining was not under an obligation to meet any such concession payment obligations prior to 25 May 2020, as codified in Annex 4 of the Vares Concession.

On 3 December 2020, Eastern Mining and the Zenica-Doboj Canton entered into Annexure 5 of the Vares Concession ("Annex 5"). Annex 5 extended the exploration and exploitation area of the Vares Concession in respect of Orti-Seliste-Mekuse-Barice-Smajlova suma-Macak (being a total area of 1933 ha), Droskovac-Brezik (being a total area of 288 ha) and Borovica-Semizova Ponikva (being a total area of 991 ha). The period of this extension runs for 30 years from 3 December 2020.

The Zenica-Doboj Canton may terminate the Vares 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 Vares Concession. The Zenica-Doboj Canton must provide Eastern Mining at least 30 days to remedy a breach under the Vares Concession.

14.2. Exploration Permit for Expanded Concession Area

On 03 June 2021, the Federation of Bosnia And Herzegovina Ministry of Energy, Mining and Industry granted Eastern Mining a permit to conduct exploration for lead, zinc and barite ores, and accompanying mineral components in the 32 km2 of expanded prospecting areas, consisting of Droškovac-Brezik, Borovica - Semizova Ponikva and Orti-Selište-Mekuše-Barice-Smajlova šuma- Mačak in the Municipality of Vares. The term of the Expanded Concession Area exploration permit is for an initial 7 years, with the option to extend for a further 7 years.

The expanded prospecting areas are in addition to the already permitted concession areas of Rupice-Juraševac-Brestić and Rupice-Borovica and Vevaca.

14.3. Exploitation Permit for Veovaca

On 25 January 2021, the Federation of Bosnia And Herzegovina Ministry Of Energy, Mining And Industry approved Eastern Mining's application to undertake surface mining and processing of complex lead, zinc, and barite mineral ore at Veovaca, within the Municipality of Vares.

Eastern Mining is required by 25 January 2023, in line with the provisions of the Law on the Mining Industry of the Federation of Bosnia and Herzegovina, its environmental permit, and its urban planning permit, to develop the main mining design for surface mining at Veovaca and the processing of complex lead, zinc, and barite ore at the Vares Processing Plant, as well as obtain the necessary permits required to carry out such works, failing which the Exploitation Permit may be terminated unless Eastern Mining is able to provide satisfactory reasons and evidence as to any delays and agree an extension with the Federation of Bosnia And Herzegovina Ministry Of Energy, Mining And Industry.

Assuming the terms are complied with, this Veovaca Exploitation Permit remains valid for the term of the Vares Concession and expires on 12 March 2038. Eastern Mining is also required to perform remediation and reclamation of excavated areas and of any other areas affected by its mining operations.

The Veovaca Exploitation Permit may be terminated upon the occurrence of certain limited events of default described in the Law on the Mining Industry of the Federation of Bosnia and Herzegovina, including the termination of the Vares Concession, and accordingly the Veovaca Exploitation Permit would terminate in the same circumstances as the Vares Concession.

14.4. Exploitation Permit for Rupice

On 16 July 2021, the Federation of Bosnia and Herzegovina Ministry of Energy, Mining and Industry approved Eastern Mining's application to undertake underground mining of the complex lead, zinc, and barite mineral ore and accompanying mineral components at Rupice, within the Municipality of Vares.

Eastern Mining is required by 16 July 2022, in line with the provisions of the Law on the Mining Industry of the Federation of Bosnia and Herzegovina, its environmental permit, its urban planning permit, and its water permit (relating to rights to draw and discharge water as part of mining activities) to develop the main mining design for the construction of a plant for underground mining at Rupice of complex lead, zinc, and barite mineral ore and accompanying mineral components, as well as obtain the necessary permits required to carry out such works.

Eastern Mining is also obliged to make a hydrogeological study and conduct tests aimed at establishing the possible underground connections between the exploitation field and water occurrences, facilities, and watercourses in the Bukovica basin and setting up continuous quantitative and qualitative monitoring of springs in the Bukovacki potok basin.

This Rupice Exploitation Permit remains valid for the term of the Vares Concession and expires on 12 March 2038. Eastern Mining is also required to perform remediation and reclamation of excavated areas and of any other areas affected by its mining operations.

The Rupice Exploitation Permit may be terminated upon the occurrence of certain limited events of default described in the Law on the Mining Industry of the Federation of Bosnia and Herzegovina, including the termination of the Vares Concession, and accordingly the Rupice Exploitation Permit would terminate in the same circumstances as the Vares Concession.

14.5. Exploration Licences in Serbia

RAS Metals is the holder of the following exploration permits granted by the MMERS in Serbia:

• (a) a right to conduct geological exploration for lead, zinc, copper and associated polymetallic mineralization granted on 7 October 2019 for an exploration period of 3 years expiring on 16 October 2022 in the area of Sastavci near Raska, located within the territory of the Raska municipality, with a licence area of 1.44km² ; and
• (b) a right to conduct geological exploration for lead, zinc, copper and associated polymetallic mineralization granted on 3 October 2019 for an exploration period of 3 years expiring on 16 October 2022 in the area of Kizevak near Raska, located within the territory of the Raska municipality, with a licence are of 1.84 km² .

The exploration permits can be extended for a first extension period of 3 years and a for second extension period of a further 2 years, if at least 75 per cent. of the exploration works referred to in the approved exploration project have been completed and certain other conditions are met. Thereafter, the permit holder may exercise a retention right of up to 2 years in order to prepare the necessary documentation to apply for an exploitation permit.

15. RELATED PARTY TRANSACTIONS

Save for the related party transactions set out in the Historical Financial Information and the related party transactions set out in the table below, there are no related party transactions that were entered into by the Group during the periods covered by the Historical Financial Information and up to and including the Last Practicable Date.

Related party transactions entered into by the Group between 1 July 2021 and the Last Practicable Date:

Related Party	Received from / (paid to) £	Amount receivable £	Nature of Transaction
Blackdragon Gold Corp (1)	3,599	1,840	Corporate Office Facilities and Services
Adriatic Foundation (2)	(9,477)	-	Sanela Karic's pledged Board Fees March to June 2021
Adriatic Foundation (2)	(85,955)	-	Initial donation to the Foundation

Notes:

(1) Blackdragon Gold Corp, an entity of which Paul Cronin is the CEO and Managing Director.

(2) The Adriatic Foundation, a charitable trust created in Bosnia & Herzegovina with the objective of supporting the communities around the Vares Silver Project. The Company has the ability to appoint the Board of Trustees of the Foundation and hence transactions between the Company and the Foundation have been classified as related party on the basis of the company yielding significant influence.

16. REGULATORY DISCLOSURES

The Company regularly publishes announcements via the RNS system and its website. Below is a summary of the information disclosed in accordance with the Company's obligations under the Market Abuse Regulation over the 12 months prior to the date of this prospectus which are relevant as at the date of this prospectus. In addition to the RNS system, full announcements can be accessed on the webpage of the Company at

https://www.adriaticmetals.com/investors/lse-announcements/

16.1. Financing under the Convertible Bonds and EBRD Subscription Agreement

On 27 October 2020, the Company announced its entry into binding agreements for a US\$28 million financing comprising of a US\$20 million private placement of Convertible Bonds to QRC and a subscription by the EBRD for £6.2 million (~US\$8million) in Ordinary Shares.

On 1 December 2020, the Company announced that it had completed the subscription of Convertible Bonds by QRC, raising gross proceeds of US\$20 million.

16.2. Updates on the Vares Silver Project

Pre-feasibility study for the Vares Silver Project

On 15 October 2020, the Company announced its pre-feasibility study results for the Vares Silver Project. The results confirmed, inter alia, the following:

• a post-tax NPV of US\$1,040 million (at an 8% discount rate), an IRR of 113%, low upfront capital of US\$173 million and a 1.2 year payback;
• an average annual EBITDA of US\$251 million within years 1-5;
• 45.3% of revenues from silver and gold; and
• 11.1mt of probable ore reserves mined over a 14-year mine life with a design annual throughput of 800kt.

Veovaca & Rupice Permitting

On 19 November 2020, the Company announced that it had received its urban planning permit for the Veovaca project area (open pit, plant and tailings areas).

On 28 January 2021, the Company announced that it had received the exploitation permit for Veovaca from the Federal Ministry for Energy, Mining and Industry which would initiate the formal exploitation period of up to 30 years. The Company confirmed that the exploitation permit would apply to the Veovaca open pit and plant areas, as well as the Rupice underground mine areas. The Company confirmed that the Permit would enable it to complete Veovaca's main mining project, open pit mine, flotation plan, and tailings management facility at a detailed engineering level, with projected construction to commence in Q3 2021. The Company also confirmed that the exploitation permit required to commence works at the underground development at Rupice, was expected in Q2 2021 and that the application for the exploitation permit would be made following the issue of the environmental and urban planning permits for Rupice.

Rupice Environmental Permit Update

On 8 February 2021, the Company announced that the Federal Ministry of Environment and Tourism had issued Eastern Mining with a positive record of declaration ("RoD"), one of the key approvals required for the issue of the Rupice exploitation permit.

On 3 June 2021, the Company announced it had secured the urban planning permit for Rupice, a major milestone towards the completion of the Vares Silver Project's permitting requirements, which had been received within the expected timeline and established, inter alia, the conditions for obtaining the Rupice exploitation permit that would give Eastern Mining the right to mine and process ore from the Rupice and Veovaca deposits in accordance with the Vares Concession. In the same announcement, the Company confirmed it would immediately apply to the Federal Ministry of Energy, Mines and Instructure for the Rupice exploitation permit.

Rupice Exploitation Permit

On 19 July 2021, the Company announced that it had received the exploitation permit for the Rupice underground deposit from the Federal Ministry for Energy, Mining and Industry and confirmed that the Rupice exploitation permit is the final permitting requirement for construction of the Vares Silver Project.

Definitive Feasibility Study

On 19 August 2021, the Company announced the results of a DFS for the Vares Silver Project. The results confirmed, inter alia, the following:

• a post-tax NPV of US\$1,062 million (at an 8% discount rate), an IRR of 134%, low upfront capital of US\$168 million and a 0.7 year payback;
• 48% of revenues from silver and gold; and
• 7.3mt of probable ore reserves mined over a 10-year mine life with a design annual throughput of 800ktpa.

16.3. Updates on the Raska Project

Raska Project Update – March 2021

On 22 March 2021, the Company announced a drilling update for the Kizevak Prospect, including, inter alia, the drilling results from hole KZDD-051. Highlights of the results included an intercept of 15.0 metres at 2.5 % zinc, 1.7 % lead, 26 g/t silver, 0.3 g/t gold (4.6% ZnEq) from 7.0 metres, including 6.1 metres at 4.6 % zinc, 3.4 % lead, 41 g/t silver, 0.5 g/t gold (8.2% ZnEq) from 9.9 metres.

Drilling results for hole KZDD-042 were also highlighted including an intercept of 10.2 metres at 2.1 % zinc, 1.0 % lead, 12 g/t silver, 0.4 g/t gold (3.5% ZnEq) from 70.8 metres, including 4.3 metres at 3.3 % zinc, 1.6 % lead, 22 g/t silver, 0.6 g/t gold (5.6% ZnEq) from 71.7 metres.

Raska Project Update – January 2021

On 27 January 2021, the Company announced that drilling at the Kizevak and Sastavci prospects continued to deliver thick intercepts of mineralisation near surface, including, inter alia, an intercept for hole KZDD-030 of 38 metres at 2.7 % zinc, 2.2 % lead, 30 g/t silver and 0.6 g/t gold from 100 metres, including 5 metres at 6.2 % zinc, 3.3. % lead, 66 g/t silver and 1.1 g/t gold.

Hole KZDD-025 was noted as having discovered a new, well mineralised sub-parallel structure from surface, located more than 100 metres northeast of the main mineralised trend, with an intercept of 29 metres at 2.6 % zinc, 1.2 % lead, 15 g/t silver from 2 metres, including 15 metres at 4.3 % zinc, 1.9 % lead, 24 g/t silver.

Further, the Company confirmed that mineralisation in the central-south eastern part of the Kizevak licence had been identified, occurring as an array of sub-parallel, near surface vein zones with high-grade intercepts in several holes, including:

• 17 metres at 2.1 % zinc, 1.3 % lead, 12 g/t silver from 39 metres (KZDD-037),
• 17 metres at 2.6 % zinc, 1.1 % lead, 11 g/t silver from 94 metres (KZDD-037), including 8 metres at 3.4 % zinc, 1.8 % lead, 19 g/t silver
• 24 metres at 2.0 % zinc, 0.6 % lead, 4 g/t silver from 81 metres (KZDD-024), including 2 metres at 11 % zinc, 3.0 % lead, 21 g/t silver; and
• 26 metres at 1.5 % zinc, 0.9 % lead, 10 g/t silver from 127 metres (KZDD-031)

Raska Project Update – December 2020

On 3 December 2020, the Company announced a drilling update for the Raska Project, including, inter alia, assay results from seven diamond core holes at Kizevak and the Company's first drill hole at Sastavci.

The Company announced that drilling results for the Kizevak Prospect continued to define broad, sub-parallel, near-surface zones of mineralisation and holes KZDD-017 and KZDD-020 proved significant mineralisation outside of the historically defined resource limits.

Hole KZDD-020 has reported as having intercepted a broad, high-grade zone of mineralisation down dip and outside the historically defined mineralisation, intersecting 53 metres at 4.2% zinc, 2.0% lead, 21g/t silver and 0.4/t gold from 100 metres, including 18 metres at 9.0% zinc, 4.1% lead, 43g/t silver and 0.6g/t gold.

Hole KZDD-018 intercepted two broad and high-grade mineralised zones, demonstrating excellent grade continuity between previously reported, widely spaced holes:

22 metres at 4.3% zinc, 1.7% lead, 28g/t silver and 0.4g/t gold from 48m, including 5 metres at 8.4% zinc, 2.9% lead, 59g/t silver and 0.7g/t gold, and 4 metres at 9.4% zinc, 3.6% lead, 57g/t silver and 0.6g/t gold; and

33.5 metres at 3.0% zinc, 1.5% lead, 23g/t silver and 0.2g/t gold from 106m, including 14.4 metres at 5.1% zinc, 2.7% lead, 45g/t silver and 0.2g/t gold

Hole KZDD-017 was collared in mineralisation and intercepted two mineralised zones near surface in an area with no historic drilling:

• 18.5 metres at 2.4% zinc, 0.2% lead from 2m; and
• 34.5 metres at 2.2% zinc, 1.1% lead, 13g/t silver and 0.1g/t gold from 30.5m, including 7 metres at 4.9% zinc, 2.7% lead, 31g/t silver and 0.2g/t gold

Hole KZDD-021 intercepted a narrow, but high-grade structure along strike to the southeast from KZDD-017: 5.9 metres at 4.5% zinc, 2.2% lead, 26g/t silver and 0.3g/t gold from 29.5 metres

Raska Project Update – March 2021

On 22 March 2021, the Company announced a technical update on the exploration drilling at Sastavci, including, inter alia, the continued presence of numerous sub-parallel polymetallic veins, which occurred from the surface.

Hole SSDD-006 intercepted two thick zones of mineralisation that are both sub-parallel to the historically mined vein zone and are open to the northwest:

• 15.8 metres at 3.8 % zinc, 1.5 % lead, 28 g/t silver and 0.2 g/t gold (5.2% ZnEq) from 122.5 metres, including 8.8 metres at 6.5 % zinc, 2.6 % lead, 48 g/t silver and 0.2 g/t gold (8.9% ZnEq) from 129.5 metres; and
• 13.3 metres at 1.3 % zinc, 0.7 % lead, 9 g/t silver and 0.3 g/t gold (2.4% ZnEq) from 153.7 metres.

Hole SSDD-007 intercepted a broad, well mineralised zone from surface:

• 36.0 metres at 3.7 % zinc, 1.4 % lead, 21 g/t silver and 0.2 g/t gold (4.9% ZnEq) from surface, including 8.4 metres at 8.1 % zinc, 1.9 % lead, 30 g/t silver and 0.3 g/t gold (9.4% ZnEq) from 4.6 metres, and
• 8.0 metres at 6.3 % zinc, 3.1 % lead, 49 g/t silver and 0.2 g/t gold (9.0% ZnEq) from 21.3 metres

The Company also announced the deployment of a third diamond drill rig, which, as part of the 25,000 metres of diamond drilling planned at the Raska Project for 2021, would involve a third drill rig deployed to focus on regional exploration.

Raska Project Update – January 2021

On 27 January 2021, the Company announced drilling updates for the Sastavci prospect, with the results from holes SSDD-003 and SDD-004 noted as having the presence and location of mineralisation. The Company confirmed, inter alia, that its recent discovery of mineralisation at Sastavci was of a similar style to Kizevak, which was composed of high-grade carbonatequartz-sphalerite-galena veins, with mineralisation present from the surface and remaining open in all directions. The Company also confirmed that gold mineralisation had been discovered in pyrite-arsenopyrite veins, occurring separately to the lead-zinc-silver mineralisation.

Raska Project Update – December 2020

On 3 December 2020, the Company announced that hole SSDD-002 had confirmed the presence of near-surface polymetallic mineralisation reported historically, as well as a newly discovered, gold-bearing sheeted pyrite-arsenopyrite vein zone at depth. Near-surface polymetallic mineralisation was also said to have occurred over a broader interval than reported historically, and represented an excellent exploration target. Reported intercepts for hole SSDD-002 included:

• 9 metres at 4.4% zinc, 1.2% lead, 18g/t silver and 0.4g/t gold from 6m, including 1.9 metres at 12.5% zinc, 4.8% lead, 72g/t silver and 1.7g/t gold;
• 10 metres at 3.0% zinc, 1.0% lead, 17g/t silver and 0.5g/t gold from 28 metres, including 1.8 metres at 10.7% zinc, 3.8% lead, 64g/t silver and 0.4g/t gold; and

31 metres at 1.3 g/t gold from 279 metres, including 1.0 metre at 13.6 g/t gold.

16.4. RAS Metals Acquisition

On 23 February 2021, the Company announced that it had completed the acquisition of RAS Metals, providing the Company with an interest in various exploration licences relating to the Raska Project.

16.5. Sandfire Litigation

On 2 November 2020, the Company announced that it had entered into the Settlement Deed with Sandfire Resources to settle litigation proceedings initiated by Sandfire Resources in the Supreme Court of Western Australia against the Company (as had been announced by the Company on 31 July 2020.

16.6. Launch of Adriatic Foundation

On 9 June 2021, the Company announced that it had established the Adriatic Foundation as a charitable trust registered in the Federation of Bosnia and Herzegovina, with the objective of supporting the communities around the Vares Silver Project through initiatives designed to create a positive long-term legacy, as well as alignment between the Company and the communities that the Adriatic Foundation supports. The initiatives are specifically focused on improving education, healthcare and environmental protection. The Company announced that it will provide and in initial sum of €100,000 to the Adriatic Foundation and a commitment of 0.25 per cent. of profits from the Company's operations in Bosnia and Herzegovina. Further, the announcement confirmed that certain Directors of the Company had pledged a proportion of cash and shares respectively to assist the funding objectives of the Foundation and that the Adriatic Foundation had received additional soft commitments of €400,000.

16.7. Capital Raising

On 12 October 2021, the Company issued the Launch Announcement setting out details of the the Capital Raising and the Orion Financing.

On 13 October 2021, the Company announced the results of the Capital Raising confirming that it has conditionally raised US\$102 million (before expenses) pursuant to the Capital Raising.

On 13 October 2021, the Company announced the posting of the Circular to Shareholders.

17. ASX LISTING RULES CONFIRMATIONS

• 17.1. This prospectus will be made available on the ASX market announcements platform in accordance with the requirements of ASX Listing Rule 3.10.4. The prospectus therefore must comply with the requirements of the ASX Listing Rules. Chapter 5 of the ASX Listing Rules governs the reporting of, amongst other things, mining and exploration activities.
• 17.2. ASX Listing Rule 5.22 requires that the first time an ASX-listed entity reports exploration results, a mineral resource estimate or an ore reserve estimate, it must include a "competent person statement" in its market announcement which addresses the requirements of that rule. ASX Listing Rule 5.23 provides that a competent person statement is only required the first time an ASX-listed entity reports exploration results, a mineral resource estimate or an ore reserve estimate. In subsequent announcements, the entity may cross refer to the previous announcement containing the competent person statement and confirm in the subsequent announcement that the entity is not aware of any new information or data that materially affects the information included in the previous announcement and, the case of estimates of mineral resources or ore reserves, that all material assumptions and technical parameters underpinning the estimates in the previous market announcement continue to apply and have not materially changed.
• 17.3. The exploration results, mineral resource estimates and ore reserve estimates referred to in this prospectus have all previously been reported by the Company and included a competent person statement in accordance with the requirements of ASX Listing Rule 5.22. Accordingly, the Company is relieved from the obligation in ASX Listing Rule 5.22 and instead makes the confirmations in accordance with ASX Listing Rule 5.23.
• 17.4. ASX Listing Rule 5.16 outlines certain disclosure requirements an ASX-listed entity must provide when disclosing a production target in relation to its mineral resources and ore reserve holdings. Similarly, ASX Listing Rule 5.17 outlines certain disclosure requirements an ASXlisted entity must provide when disclosing forecast financial information derived from such a production target. ASX Listing Rule 5.19 relevantly provides that the requirements of ASX Listing Rules 5.16 and 5.17 only apply the first time the entity discloses the relevant production

target and forecast financial information. In subsequent announcements, the entity may cross refer to the previous announcement containing the relevant disclosures and confirm in the subsequent announcement that all the material assumptions underpinning the production target and forecast financial information derived from a production target in the previous announcement continue to apply and have not materially changed.

• 17.5. The production targets and forecast financial information derived from such production targets referred to in this prospectus have all previously been reported by the Company in accordance with the disclosure requirements in ASX Listing Rules 5.16 and 5.17. Accordingly, the Company is relieved from the obligation to repeat such disclosures and instead makes the confirmations in accordance with ASX Listing Rule 5.19.
• 17.6. In accordance with ASX Listing Rule 5.23, the Company confirms that:
  • (a) the exploration results disclosed in this prospectus were first disclosed in accordance with ASX Listing Rule 5.7 in the Company's announcements dated 29 May 2018, 12 June 2018, 16 July 2018, 29 August 2018, 28 September 2018, 21 January 2019, 16 January 2020, 21 January 2020, 11 May 2020, 2 September 2020, 3 December 2020, 27 January 2021, 22 March 2021 and 10 August 2021. The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous announcements;
  • (b) the mineral resource estimate for the Rupice underground deposit comprising part of the Vares Silver Project was announced in accordance with ASX Listing Rule 5.8 on 1 September 2020. The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous announcement and that all material assumptions and technical parameters underpinning the estimate in the previous announcement continue to apply and have not materially changed; and
  • (c) the ore reserve estimate for the Rupice deposit was announced in accordance with ASX Listing Rule 5.9 on 19 August 2021. The Company confirms that it is not aware of any new information or data that materially affects the information included in the previous announcement and that all material assumptions and technical parameters underpinning the estimate in the previous announcement continue to apply and have not materially changed.
• 17.7. In accordance with ASX Listing Rule 5.19, the Company confirms that the production targets and forecast financial information for the Vares Silver Project disclosed in this prospectus were first disclosed in accordance with ASX Listing Rules 5.16 and 5.17 in the Company's announcement dated 19 August 2021. The Company confirms that all the material assumptions underpinning the production target and the forecast financial information in the previous announcement continue to apply and have not materially changed.

18. JORC CONFIRMATION

All exploration results, mineral resources and ore reserves included in this prospectus comply with the JORC Code.

19. GENERAL

• 19.1. The auditors of the Company for the six months ended on 31 December 2020 and for the financial year ended on 30 June 2020 were BDO LLP of 55 Baker Street, London W1U 7EU, who are registered to carry out audit work by the Institute of Chartered Accountants in England and Wales and the Financial Reporting Council.
• 19.2. Tamesis is acting as the Company's financial adviser in relation to the Orion Equity Subscription and the Placing. Tamesis has given and not withdrawn its written consent to the inclusion in this prospectus of its name and the references to it in the form and context in which they appear.
• 19.3. The 2021 Interim Financial Statements have not been audited.
• 19.4. Save for the remuneration payable in respect of its role as auditor to the Company, BDO LLP 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 the Capital Raising and Admission are approximately £3.1 million.
• 19.6. The holding of Ordinary Shares of a Shareholder who is not a Placee, as a percentage of the Enlarged Share Capital, will be diluted by 18.7 per cent. as a result of the Capital Raising.
• 19.7. The net asset value per Ordinary Shares as at 30 June 2021 as set out in the consolidated statement of financial position of the Group in the 2021 Interim Financial Statements is 85.2 per cent. lower than the Issue Price of £1.5174 per New Ordinary Share.
• 19.8. 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.
• 19.9. Save as disclosed in this prospectus, there are no investments in progress and there are no further investments on which the Directors have already made firm commitments which are significant to the Company.

20. THIRD PARTY SOURCES

• 20.1. 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 the section of this prospectus entitled Risk Factors.
• 20.2. 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

With the exception of the documents expressly incorporated by reference into this prospectus which will be made available on the Company's website, the contents of the websites of the Company (including any materials which are hyper-linked to such websites) do not form part of this prospectus and have 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 Ground Floor, Regent House, 65 Rodney Road, Cheltenham, Gloucestershire GL50 1HX 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 documents incorporated by reference into this prospectus, as described in Part IX (Documents Incorporated by Reference); and
  • (c) 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: 14 October 2021

PART IX

DOCUMENTS INCORPORATED BY REFERENCE

The table below sets out the documents of which certain parts are incorporated by reference into, and form part of, this prospectus. Only the parts of the documents identified in the table below are incorporated into, and form part of, this prospectus. The parts of these documents which are not incorporated by reference are either not relevant for investors or are covered elsewhere in this prospectus. To the extent that any information incorporated by reference itself incorporates any information by reference, either expressly or by implication, such information will not form part of this prospectus for the purposes of the Prospectus Regulation Rules, except where such information is stated within this prospectus as specifically being incorporated by reference or where the document is specifically defined as including such information.

Information incorporated by reference into this prospectus	Reference document	Page numbers in such document
The following sections from the Company's Annual Report for the Year Ended 30 June 2020, together with the notes thereto and auditor's report thereon ("30 June 2020 Annual Report"):
Chairman's Statement	30 June 2020 Annual Report	4-5
Director's Report	30 June 2020 Annual Report	53-55
Statement of Director's Responsibilities	30 June 2020 Annual Report	56
Independent Auditor's Report	30 June 2020 Annual Report	58-62
Statement of Financial Position	30 June 2020 Annual Report	63
Statement of Comprehensive Income	30 June 2020 Annual Report	64
Statement of Changes in Equity	30 June 2020 Annual Report	65
Statement of Cash Flows	30 June 2020 Annual Report	88
Notes to the Company's Financial Statements	30 June 2020 Annual Report	89-93
The following sections from the Company's Annual Report for the Six Months Ended 31 December 2020, together with the notes thereto and auditor's report thereon ("31 December 2020 Annual Report"):
Chairman's Statement	31 December 2020 Annual Report	3-4
Director's Report	31 December 2020 Annual Report	64-68
Statement of Director's Responsibilities	31 December 2020 Annual Report	69
Independent Auditor's Report	31 December 2020 Annual Report	71-77
Statement of Financial Position	31 December 2020 Annual Report	78
Statement of Comprehensive Income	31 December 2020 Annual Report	79
Statement of Changes in Equity	31 December 2020 Annual Report	80
Statement of Cash Flows	31 December 2020 Annual Report	81
Notes to the Company's Financial Statements	31 December 2020 Annual Report	114-118

The following sections from the Interim Report and Condensed Consolidated Financial Statements of the Group for the Six Months Ended 30 June 2021, together with the notes thereto ("2021 Interim Financial Statements"):
Directors' report	2021 Interim Financial Statements	4-16
Statement of Financial Position	2021 Interim Financial Statements	18-19
Statement of Comprehensive Income	2021 Interim Financial Statements	20
Statement of Changes in Equity	2021 Interim Financial Statements	21-22
Statement of Cash Flows	2021 Interim Financial Statements	23

2021 Interim Financial Statements 24-42

Notes to the Company's Financial

Statements

109

PART X

DEFINITIONS

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

"2020 Financial Statements"	the audited consolidated financial statements of the Group as at and for the year ended 30 June 2020, together with the notes thereto and auditor's report thereon;
"December 2020 Financial Statements"	the audited consolidated financial statements of the Group as at and for the 6 months ended 30 December 2020, together with the notes thereto and auditor's report thereon;
"2021 Interim Financial Statements"	the unaudited consolidated financial statements of the Group as at and for the six months ended 30 June 2021, together with the notes thereto;
"Admission"	admission of the New Ordinary Shares to the standard listing segment of the Official List and to trading on the Main Market of the London Stock Exchange;
"AEST"	Australian Eastern Standard Time;
"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;
"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;
"A\$" or "AUD"	Australian dollars, the lawful currency of Australia;
"Ausenco"	Ausenco Engineering Canada Inc;
"Australian Registrar"	Computershare Investor Services Pty Limited (ACN 078 279 277);
"BAM"	Bosnia-Herzegovina Convertible Mark;
"BQR"	Bluequest Resources AG;
"Business Day"	any day (other than a Saturday or Sunday) or an English bank or public holiday;
"C\$"	Canadian dollars, the lawful currency of Canada;
"Canaccord"	Canaccord Genuity Limited;
"Capital Raising"	the Orion Equity Subscription and the Placing;
"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);
"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;
"Commercial Production"	the completion of ramp-up from commissioning to name plate capacity of the Vares Processing Plant;
"Companies Act"	the Companies Act 2006 (UK);
"Company" or "Adriatic"	Adriatic Metals plc, a company incorporated in England and Wales with registered number 10599833;
"Convertible Bonds"	the US\$20,000,000 8.5 per cent. convertible bonds due 2024 convertible into equity securities of the Company and constituted under the Convertible Bond Instrument;
"Convertible Bond Instrument"	the deed of covenant of the Company dated 30 November 2020 pursuant to which the Convertible Bonds were constituted;
"Collaboration and Partnership Deed"	the collaboration and partnership deed between Sandfire Resources and the Company dated 1 May 2018;
"Copper Stream"	the proposed grant by Eastern Mining of the right for Orion to purchase the LME copper warrants equivalent to the copper production from the Rupice and Veovaca mines, as part of the Orion Financing;
"Corporations Act"	the Australian Corporations Act 2001 (Cth);
"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 instruments;
"Depositary"	CHESS Depositary Nominees Pty Limited, a subsidiary of ASX, acting in its capacity as depositary;
"DFS"	the definitive feasibility study in relation to the Vares Silver Project;
"Directors" or "Board"	the directors of the Company, whose names appear in the section of this prospectus entitled Directors, Secretaries, Registered Office & Advisers, 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, a wholly owned subsidiary of the Company;
"EBRD"	the European Bank for Reconstruction and Development;

"EEA"	the European Economic Area;
"EEA Member States"	the member states of the EEA;
"EFPP"	EFPP d.o.o, a company incorporated in Serbia;
"EFPP Acquisition Agreement"	the agreement for the purchase of shares in EFPP between Tethyan, Cuprum Plus Ltd. and Igor Papic dated 31 January 2020, as amended;
"EFTA"	The European Free Trade Association;
"Energoinvest"	Energoinvest, d.d. Sarajevo;
"Enlarged Share Capital"	the expected issued ordinary share capital of the Company immediately following the issue of the New Ordinary Shares;
"Equity Subscription Agreement"	the equity subscription agreement dated 12 October 2021 between the Company and Orion details of which are set out in paragraph 13.2 of Part VIII (Additional Information) of this prospectus;
"ESHIA"	Environmental, Social and Health Impact Assessment, being prepared by Wardell Armstrong International;
"EU"	the European Union;
"Euroclear"	Euroclear UK & Ireland Limited;
"EUWA"	the European Union (Withdrawal) Act 2018, as amended;
"Existing Ordinary Shares"	the Ordinary Shares of 1.3355 pence each in the capital of the Company in issue immediately prior to the Capital Raising;
"FCA"	the UK Financial Conduct Authority;
"Finance Act"	the UK Finance Act 1986;
"FSMA"	the UK Financial Services and Markets Act 2000;
"G&A"	general and administrative;
"general meeting"	a meeting of the Shareholders of the Company or a class of Shareholders of the Company (as the context requires);
"General Meeting"	the general meeting of the Company proposed to be held at the Company's registered office address at 8.30 a.m. on 29 October 2021 to approve, among other things, the Resolution;
"GM Circular"	the Company's circular to shareholders dated 13 October 2021;
"Group"	the Company and its subsidiary undertakings from time to time;
"Historical Financial Information"	the historical financial information relating to the Group set out in Section A of Part V of this prospectus;
"Historic TSF"	the historic tailings storage facility, located near Tisovci. The tailings were from processed material out of the Veovaca open pit, which ceased operations in the late 1980s;
"HMRC"	Her Majesty's Revenue & Customs;
"IFRS"	International Financial Reporting Standards, as adopted by the EU;

"Initial Capital Cost"	the capital investment required, as defined in the DFS, for the construction and commissioning of the Vares Silver Project up to Commercial Production;
"IRR"	Internal Rate of Return;
"Issue Price"	£1.5174 (AU\$2.80) per New Ordinary Share;
"Issued Share Capital"	214,344,843 Ordinary Shares of nominal value 1.3355 pence each in the capital of the Company in issue as at the date of this prospectus;
"Joint Bookrunners"	Canaccord, RBC and Stifel;
"Kizevak Prospect"	the licence for geological exploration no. 310-02-1721/2018-02 dated October 3, 2019 held by RAS Metals in respect of the area known as Kiževak;
"Last Practicable Date"	12 October 2021, being the latest practicable date prior to publication of this prospectus;
"Launch Announcement"	the announcement published by the Company on 12 October 2021 in connection with the Capital Raising, including the terms and conditions of the Placing;
"LEI"	legal entity identifier;
"Listing Rules"	the listing rules made by the FCA under section 73A of FSMA;
"LME"	The London Metal Exchange;
"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 as it forms part of UK domestic law by virtue of the EUWA;
"Mineral Resources"	has the meaning given under the JORC Code;
"MMERS"	the Ministry of Mining and Energy of the Republic of Serbia;
"New Ordinary Shares"	the Placing Shares and the Subscription Shares;
"Notice of General Meeting"	the notice of General Meeting set out in the GM Circular;
"NPV8%"	Net Present Value using an 8 per cent. discount rate;
"Official List"	the official list maintained by the FCA;
"Option"	the option to acquire Ordinary Shares in the Company;
"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;
"Ore Reserves"	has the meaning given under the JORC Code;

"Orion"	OMF Fund III (F) Ltd (and includes other funds managed by Orion Resources Partners LP or Orion Resource Partners (UK) LLP);
"Orion Break Fee Letter"	the letter agreement dated 12 October 2021 between the Company and Orion details of which are set out in paragraph 13.3 of Part VIII (Additional Information) of this prospectus;
"Orion Debt Financing"	the Senior Secured Debt and the Copper Stream compenents of the Orion Financing;
"Orion Equity Subscription"	the conditional subscription for the Subscription Shares by Orion, for gross proceeds of US\$50.0 million, on the terms and subject to the conditions contained in the Equity Subscription Agreement;
"Orion Financing"	the financing package to be made available by Orion, comprising the Orion Equity Subscription, the Senior Secured Debt and the Copper Stream;
"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;
"Placee"	any person that has conditionally agreed to subscribe for Placing Shares in the Placing;
"Placing"	the conditional placing of the Placing Shares, on the terms and subject to the conditions contained in the Placing Agreement;
"Placing Agreement"	the placing agreement dated 12 October 2021 between the Company and the Joint Bookrunners details of which are set out in paragraph 13.1 of Part VIII (Additional Information) of this prospectus;
"Placing Shares"	the 25,159,000 new Ordinary Shares placed by the Joint Bookrunners pursuant to the Placing;
"PRA"	the UK Prudential Regulation Authority;
"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;
"QRC"	Queen's Road Capital Investment Ltd;
"Qualified Investors"	persons who are "qualified investors" within the meaning of Article 2(e) of the UK Prospectus Regulation;
"Raska Project"	the exploration permits located east of the town of Raska in Southern Serbia, which include the Sastavci and Kizevak Prospects;
"RAS Metals"	RAS Metals d.o.o. (Serbia), a wholly owned subsidiary of the Company;
"RAS Metals Acquisition	the agreement for the purchase of shares in RAS Metals

Agreement"	between Tethyan, Cuprum Plus Ltd. and Igor Papic dated 26 August 2020, as amended;
"RBC"	RBC Europe Limited;
"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;
"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;
"Resolution"	the resolution relating to the Capital Raising to be proposed at the General Meeting (inter alia), details of which are set out in paragraph 16 of Part I of this prospectus;
"Restricted Jurisdiction"	the United States, Canada, Japan and the Republic of South Africa;
"ROM"	Run of Mine – unprocessed raw ore;
"Rupice"	the deposit referred to as Rupice located within the Vares Concession and forming part of the Vares Silver Project;
"Rupice Surface Infrastructure"	the location next to the portal of the Rupice Underground Mine, where ROM is stockpiled, crushed and blended ahead of transportation to the Vares Processing Plant;
"Rupice Underground Mine"	the underground mine located beneath the Rupice Surface Infrastructure;
"Sandfire Resources"	Sandfire Resources Limited (ACN 105 154 185);
"Sastavci Prospect"	the licence for geological explorations no. 310-02-1722/2018-02 dated October 7, 2019 held by RAS Metals in respect of the area known as Sastavci;
"Securities Act"	US Securities Act of 1933;
"Senior Secured Debt"	the proposed senior secured debt facility of US\$120 million expected to be made available by Orion to the Group as part of the Orion Financing;
"Settlement Deed"	the deed of settlement and release dated 2 November 2020 between the Company and Sandfire Resources, details of which are set out in paragraph 13.9 of Part VIII (Additional Information) of this prospectus;
"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.;
"Subscription Shares"	the 24,191,000 new Ordinary Shares to be issued and allotted pursuant to the Orion Equity Subscription;
"Standard Listing"	a standard listing under Chapter 14 of the Listing Rules;
"Stifel"	Stifel Nicolaus Europe Limited;

"Takeover Code"	the City Code on Takeovers and Mergers;
"Takeover Panel"	the UK Panel on Takeovers and Mergers;
"Tamesis"	Tamesis Partners LLP, a private independent financial advisory boutique with a specialism in global natural resources;
"Tethyan"	Tethyan Resource Corp.;
"Tethyan Acquisition"	the Company's acquisition of Tethyan, pursuant to the Tethyan Arrangement;
"Tethyan Arrangement"	the court approved plan of arrangement under the Business Corporations Act (British Columbia, Canada) in terms of which the Company acquired all of the common shares of Tethyan;
"Tethyan Arrangement Agreement"	the agreement between the Company and Tethyan dated 12 June 2020 relating to the Tethyan Arrangement;
"Tisovci"	the village, above the town of Vares, near the site of the Vares Processing Plant;
"UK Corporate Governance Code"	the UK Corporate Governance Code published by the Financial Reporting Council in July 2018, as amended from time to time;
"UK Prospectus Regulation"	UK version of Regulation (EU) 2017/1129 as it forms part of UK domestic law by virtue of the EUWA, as amended;
"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, its territories and possessions, any State of the United States and the District of Columbia;
"US\$" or "USD"	US dollars, the lawful currency of the United States of America;
"US Investment Company Act"	US Investment Company Act of 1940, as amended;
"US Securities Act"	US Securities Act of 1933, as amended;
"US Person"	any person who is a US person as defined in Regulation S under the US Securities Act;
"Vares Concession"	the concession agreement, No. 04-18-21389-1/13 dated 12 March 2013 between the Zenica-Doboj Canton and Eastern Mining (as amended);
"Vares Concession Area"	the area covered by the Vares Concession;
"Vares Processing Plant"	the processing plant for the Vares Silver Project, located near Tisovci;
"Vares Project TSF"	the Tailings Storage Facility for the Vares Silver Project;
"Vares Railhead"	the location between the town of Vares and Vares Majdan, where concentrates will be loaded onto rail;
"Vares Silver Project"	the Rupice Underground Mine and associated surface infrastructure, Vares Processing Plant, Vares Project TSF,

"Working Capital Period"	the period of 12 months from the date of this prospectus; and
"VAT"	(a) within the UK, any value added tax imposed by the Value Added Tax Act 1994 and legislation and regulations supplemental thereto; (b) within the EU, any tax imposed in compliance with the council directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and (c) any other tax of a similar nature to the taxes referred to in paragraph (a) or paragraph (b) above, whether imposed in the UK or a member state of the EU State in substitution for, or levied in addition to, the taxes referred to in paragraph (a) or paragraph (b) above or imposed elsewhere;
"Veovaca"	the deposit referred to as Veovaca located within the Vares Concession and forming part of the Vares Silver Project;
"Veovaca Exploitation Permit"	the exploitation permit, No. 06-14-2-658/20 dated 25 January 2021 granted by the Federal Ministry for Energy, Mining and Industry to Eastern Mining and conferring exploitation rights for Veovaca;
	Vares Railhead, and the exploration potential within the wider Vares Concession Area;

"£" or "GBP" Pounds Sterling, the lawful currency of the United Kingdom.

References to an Ordinary Share, New Ordinary Share, Placing Share or Subscription Share shall include, unless the context requires otherwise, a reference to CDIs representing such shares.

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 XI

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.
Costeans	Trench completed for geological mapping and sampling.
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 XII

ABBREVIATIONS AND UNITS OF MEASUREMENT

%	percent
°C	degrees Celsius
Ag	silver
Au	gold
BaSO4	barite
Cu	copper
dmt	dry metric tonne
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
ktpa	thousand tonnes per annum
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
wmt	wet metric tonne
Zn	zinc