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After Acquisition by Adriatic, Canada’s Tethyan Continues Serbian Holdings with Silver-Lead-Zinc Mine Plan

By Chris Deliso

In an 11 May press release, Tethyan Resources Corp., a Vancouver-based mining company with operations in the Balkans, announced that it was being acquired by Adriatic Metals.

Tethyan announced “the execution of a binding letter agreement” with Adriatic, by which the latter would buy 100 percent of Tethyan’s issued shares capital

Among the highlights pointed out in the 11 May press release was that the “exchange ratio of 0.166 Adriatic shares for each Tethyan share represents a premium of 47% to Tethyan’s 20-day Volume Weighted Average Price.” Further, “in conjunction with the Transaction, Adriatic and Tethyan have entered into a convertible loan agreement… whereby Adriatic has agreed to advance to Tethyan a secured convertible loan in the amount of up to €1.3 million in three tranches; Adriatic has advanced the first €1.0 million under the Convertible Loan Agreement”

How will this affect Tethyan’s ongoing operations in the Balkans, where it has several sites? So far, it appears to have no negative effect, and a company official rold that Tethyan is happy with the result.

In the press release, Tethyan’s President and CEO Fabian Baker said that “we are excited that our assets will soon be part of the Adriatic story. Adriatic Metals has built an excellent reputation in the Balkans based on their development capability and positive engagement with local stakeholders. We are confident that the combined assets and team will go forward to bring high quality assets to production in a timely and sustainable manner, ensuring lasting benefits for both our shareholders and the communities in which we operate.”

For his part, Paul Cronin, Adriatic’s Managing Director and CEO commented in the press release that: Tethyan has been “successful in consolidating the Raska district in Serbia, and with the recent addition of the Kizevak and Sastavci licenses, the acquisition presents a unique opportunity for Adriatic to add assets to our portfolio that have the potential, over time, to match the quality of our exceptional Vares Project in Bosnia.”

Leaving the latter operation for another time, we can now move to address in more depth the Tethyan Serbia operations, as they were planned and announced for some time before the latest acquisition by Adriatic.

Details from April 2020

Even before th news broke of new ownership broke, Tethyan had already announced in a 1 April 2020 press release that it is adding to its portfolio, with the acquisition of a former silver-zinc-lead mine in the Raska area of Serbia.

Named for the eponymous Balkan metallogenic belt, Tethyan is a precious and base metals mineral exploration company incorporated in Canada and listed on the TSX Venture Exchange.

Expansion and Consolidation

With the announced ‘arm’s length agreement’ Tethyan will purchase a 100% ownership stake in Serbian company EFPP d.o.o., which holds two exploration licenses at the Kizevak and Sastavci silver-zinc-lead mines in southwestern Serbia. The purpose of this acquisition is to expand Tethyan’s existing exploration potential, as it “would complete the consolidation of a district of known silver-zinc-lead vein-type and copper-gold porphyry deposits, presenting numerous strategic advantages,” according to the press release.

Further, since these are two past-producing open pit silver-zinc-lead mines that host “significant historical mineral resources and reserves,” the licenses are considered by  the company to have excellent brownfield exploration potential. (Maps available on the official website indicate some interesting data about Kizevak’s historic drilling and underground channel sampling). From a business perspective, Tethyan also points out that the “staged acquisition payments” model will allow it to focus funds on drilling.

For his part, company President and CEO Fabian Baker stated in the press release that the acquisition “is a key step in Tethyan’s strategy to consolidate a district of historical mines and exploration prospects in Serbia. The Kizevak project in particular gives Tethyan an immediate drill ready target, and we can now drill the 1.2 kilometres of strike length, reported to host historical resources, between the former open pit mine and Tethyan’s excellent 2018 drilling results. With Kizevak as a cornerstone project the many satellite exploration targets identified by historical drilling, all within a few kilometres of Kizevak, become relevant to a possible district-wide operation. The plan moving forward is for Tethyan to commence drilling of these high-grade silver-zinc-lead targets in parallel with advancing our two copper-gold porphyry projects at Rudnica and Kremice in the Raska district of Serbia.”

Specifics on the Kizevak Project

Run as an open pit mine between 1984 and 2000, Kizevak has historic mineral resources. Tethyan refers to company data from 2018 on drilled mineralization, including 12 meters at 22.03% zinc, 10.29 % lead, 167 g/t silver and 0.18 g/t gold.

The Canadian company also points to a long-experienced local workforce and fairly developed local infrastructure as among the project’s advantages. And, with the existing designatation of the land in question for mining purposes under Serbian state spatial planning, Tethyan does not anticipate any potential problems such as have been known to occur elsewhere in the region.

Sastavci Project Details

Sastavci is another open-pit mine and while smaller, is considered a “priority drilling target” by Tethyan, which collected “65 rock-chip samples across the Sastavci area.” These  returned assays “ranging from trace to >30 % zinc (over range), 7.1% lead, 94.3 g/t silver and 0.47 g/t gold in the Sastavci pit,” the press release notes.

Further, north of Sastavci, Tethyan “has defined a greater than 100 ppb gold in soil anomaly over 800 metres long and 400 metres wide in strongly silica altered volcanic rocks. Rock-chip sample assays range from trace to 3.7 g/t gold, representing a separate epithermal gold exploration target.”

However, Tethyan stresses that “sufficient work to validate the historical estimates” compiled by the former Yugoslav state has not been done, and that older findings do not comply with current international scientific guidelines. Yugoslavia, and some other regional states, used an alphabetical classification system for defining reserves that was ultimately based on a Russian model. However, geologists from other leading mining countries like Canada and Australia have not always found this system accurate. Therefore, “Tethyan is not treating the historical estimates as current mineral resources or reserves. Tethyan has not completed a detailed review of the historical resource or completed a new mineral resource estimate.”


The acquisition of Tethyan and its continued activity in Serbia during the Covid-19 crisis, despite chronc low-grade political instability that will be provoked by upcoming elections, shows again that international companies are prepared to weather some risk when considering the potential rewards of Balkan mining. The coming year will probably show a slower-than-expected development program, largely because of restrictions that could be placed outside of the company’s control (for example restrictions on worker availability or supply chains, in the effect of a new spike in Covid-19 cases), but in the longer term the risk should be mitigated. The value of investment could still however be affected by longer-term trends in the silver price market.


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