Adriatic Metals (ADT) Q3 2024 & Investor Update earnings summary

Operational progress and production guidance

• Vares Silver Project is transitioning from project spend to revenue generation, targeting commercial production by end of 2024 and stable production in 2025.

• 2024 mine tonnage guidance is set at approximately 180,000 tonnes due to H1 delays, with 2025 guidance reaffirmed at 750,000-800,000 tonnes.

• Q3 2024 saw 63,100 tonnes ore mined at 289g/t Ag, 2.9g/t Au, 7.5% Zn, 5.1% Pb, with ore tonnes milled up 123% quarter-over-quarter.

• Development rates reached 318 meters in August, with first stopes in production and consistent rates above 300 meters/month.

• Stockpile management optimizes mill feed grade, with current stockpiles supporting blended plant feed.

Processing and concentrate sales

• Processing plant ramped up from three to five days a week, with 24/7 operations expected in November and recoveries improving toward 70%.

• Q3 metal recoveries: Zn 69%, Pb 68%, Ag above 80%, Au above 60%; head grades and concentrate grades remain strong.

• Concentrate sales are progressing well, with increasing shipment volumes and first full train shipment completed in September.

• Spot treatment charges for zinc are negative, benefiting sales; fixed and spot contracts optimize returns.

• Antimony byproduct sales provide a small revenue uplift, with potential for more if prices remain high.

Financial position and cost outlook

• Cash on hand at end of September 2024 was $23.8 million, with a $25 million undrawn facility and $20 million in stockpile value.

• $120 million of senior secured debt drawn, with first $18 million repayment due 31 December 2024.

• Net cash outflow for Q3 was $36.4 million, with 1.3 quarters of funding available; expenditures expected to decrease and revenues to increase in Q4.

• CapEx was about 15% higher than DFS; OpEx is expected to be 20%+ higher, but operation remains first quartile cost producer.

• No additional financing is expected to be required due to anticipated revenue growth.