Adriatic Metals (ADT) M&A Announcement summary

Deal rationale and strategic fit

• Acquisition of Adriatic Metals for $1.3 billion creates a premier, diversified precious metals producer with immediate production growth, mine life extension, and cash flow diversification, leveraging operational expertise in the Balkans.

• Adriatic shareholders gain exposure to a larger, more diversified group with enhanced growth prospects and continued participation via new shares.

• The asset complements existing regional operations, leveraging decades of experience and relationships in the Balkans.

• DPM intends to optimize Adriatic's assets, particularly Vareš, and maintain strong community and stakeholder engagement.

Financial terms and conditions

• Adriatic shareholders receive 0.159 DPM shares and 93 pence in cash per share, with options for all-cash, all-shares, or a mix, subject to proration and a mix and match facility.

• The offer values Adriatic at up to AUD 5.56, GBP 2.68, or $1.3 billion, representing a 50.5% premium to LSE closing price and 47.8% to ASX closing price.

• Consideration mix is 34.7% cash (£321 million) and 65.3% new DPM shares (54.9 million shares); DPM will fund the cash portion from existing resources.

• Adriatic shareholders will own about 25% of the combined entity post-transaction.

• Irrevocable undertakings received from Adriatic directors and major shareholders representing 37.2% of issued share capital.

Synergies and expected cost savings

• Operational and corporate synergies expected from combining regional assets, leveraging technical expertise, and optimizing production and capital allocation.

• DPM's strong balance sheet will fund Vareš ramp-up, new mine construction, and accelerated exploration, avoiding dilution from third-party financing.

• Additional capital investment ($76 million) to address ramp-up challenges, improve grade control, and enhance geotechnical understanding.

• Opportunities identified to reduce mine waste, transportation costs, and optimize tailings storage.

• Integration of Adriatic's mining personnel is expected to de-risk DPM's Čoka Rakita Project.