31 October 2022

ADRIATIC METALS PLC

(ASX:ADT, LSE:ADT1, OTCQX:ADMLF)

QUARTERLY ACTIVITIES REPORT

For the three months ended 30 September 2022
("Q3" or "Quarter")

Q3 HIGHLIGHTS

Vares Silver Project, Bosnia & Herzegovina:

·    Vares Silver Project construction activities update:

·    Project construction 45% complete and progressing rapidly

·    Lower Decline development advancing well, 207m already completed

·    Upper Decline development well underway, with improving ground conditions and advance rates, 100m completed to date

·    Approximately 72% of capital expenditure awarded, pending award or quoted

·    Staff headcount at 177 and growing; contractor count at 188

·    First concentrate production on track for Q3 2023, as anticipated.

Corporate

· Final Project cost estimate marginally increased to $173m

· Cash balance as at 30 September 2022 of US $65.8 million

Updates Post Period

·   Site visit by 30 investors and analysts from 10 - 11 October 2022

·   Commencement of building portals at Vares Processing Plant underway

·   Continuing high-grade thick massive sulphide intercepts at Rupice Northwest

·   Drawdown condition precedents closing, the Company anticipates being in a position to drawdown from November as required

Paul Cronin, Adriatic's Managing Director and CEO commented:

"I am delighted to report excellent construction progress continued at our Vares Silver Project over the quarter. Surface infrastructure and decline development at Rupice is rapidly progressing and remains firmly on schedule, while works have finished to maintain continuous operations throughout the coming winter months.

"Pleasingly, we are nearing the halfway completion mark at Vares, which is an important milestone for the Company, with 72% of the total construction capital committed, to date.

"Like most industries, we have experienced some cost inflation, however management does not envisage the total capex for the Vares Project to increase materially. The current estimate to completion is $173 million, which is well within our contingencies and an impressive feat in the current economic climate. With global supply chains under stress, we are taking a prudent approach with production scheduled to commence in Q3 2023."

"Given the continued supply chain, inflationary and economic challenges globally, I am enormously proud of our team's huge achievements to date, which are indicative of our absolute determination to deliver the Vares Project successfully in 2023."

Adriatic Metals PLC (ASX:ADT, LSE:ADT1, OTCQX:ADMLF) ("Adriatic" or the "Company"), a well-funded development and exploration company building the world-class Vares Silver Project, is pleased to provide the following Quarterly Activities Report ("QAR") that summarises the progress made and reported during the three months ended 30 September 2022 ("Q3" or "Quarter").

1.     EXPLORATION, CONFIRMATION AND DEFINITION DRILLING AT RUPICE

The Company continues to progress parallel programs focused on resource/reserve infill and resource extensions to the northwest of the current Rupice Mineral Resource Estimate ("Resource"). 2022 has seen success across each program, resulting in the clear potential to extend mine life and optimise the mine plan ahead of first production in 2023. The level of knowledge gained to date at Rupice Northwest and Rupice is at the level where accurate targeting has produced successful results from the majority of holes. This highlights the robustness and continuity of the mineralisation system.

Over 7,000m of resource infill drilling has been completed this year, with encouraging results that continue to confirm grade thickness and continuity within the existing Resource. Resource extension drilling to the northwest of Rupice has intersected mineralisation with similar tenor, thickness and continuity as seen in the Resource. Over 5,700m in 15 exploration holes have been completed on Rupice Northwest this year, with assays pending imminently (released subsequent to the quarter). This year's successful results will feed into an updated Mineral Resource Estimate that will be completed for Q1 2023 and will include Rupice Northwest.

Looking ahead, the Company expects to drill through winter, with a continued focus on Rupice Northwest and extension opportunities around the existing Resource. Near-mine exploration will be supplemented by underground grade control drilling that will commence in early Q1 2023. This will provide improved orebody definition, minimise ore dilution, and geotechnical data to inform ground conditions in planned development.

On regional exploration, a ground gravity survey has generated very promising results at the Semizova Ponikva (SP1 and SP2) targets that correlate with surface geochemical anomalies. First pass drilling is planned for next year at these potential Rupice analogies.

Click on, or paste the following link into your web browser, to view the announcement in full.

http://www.rns-pdf.londonstockexchange.com/rns/5783E_1-2022-10-30.pdf