Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Released Environmental & Social Impact Assessment (ESIA) for the Vares Project, the first ever ESIA produced by a private company in Bosnia & Herzegovina.
• Established the Adriatic Foundation, a Bosnian-registered charitable organisation focused on improving education, healthcare, and the environment in communities surrounding the Vares Project.

Social Achievements

• Adriatic Foundation received donations of more than €500,000.
• 27 financial scholarships for students from Vares, Breza and Kakanj municipalities were provided.
• Maintained robust and rigorous COVID-19 prevention measures throughout the year with minimal disruption to operations.

Governance Achievements

• Board evaluation exercise completed.
• Corporate risk register updated to reflect the transition to construction.
• Remuneration policy overhauled in preparation for becoming a producer.

Climate Goals & Targets

Environmental Challenges

• Development risk due to no producing assets and reliance on the Vares Project for near-term earnings.
• Supply chain fragility and increased shipping rates/delays due to the ongoing COVID-19 pandemic.
• Geo-political tensions between Europe and Russia impacting diesel and electricity costs.
• Potential opposition from environmental groups, local residents, or others.
• Civil unrest in and around the mine site, processing plant, and supply routes.
• Reliance on adequate infrastructure (roads, rail, port facilities, power, water).
• Reliance on third-party contractors for construction and operation.
• Uncertainty regarding continued exploration success.
• Potential delays in obtaining required approvals, licenses, and permits.
• Environmental risks and compliance requirements.
• Climate change risks (increased temperatures, flooding, landslides).
• Health and safety risks inherent in mining and construction.
• Fluctuations in commodity prices.
• Foreign exchange risk.
• Concerns regarding the Historic Tailings Storage Facility.
• In-country risks in Bosnia & Herzegovina and Serbia (political, sovereign, economic risks).

Mitigation Strategies

• Working with internationally recognised technical consultants and experienced staff/contractors.
• Monitoring geo-political tensions and energy crisis.
• Maintaining active dialogue with communities through the Public Liaison Committee and Information Centre.
• Developing alternative sourcing strategies.
• Implementing robust risk management and internal controls.
• Securing project finance package of approximately US$244.5 million.
• Commissioning an independent expert appraisal of the Historic TSF.
• Developing a Land Acquisition Resettlement and Compensation Policy.
• Implementing anti-bribery and corruption training for all staff.
• Effective engagement with relevant stakeholders (government, communities).
• Key person insurance in respect of the Directors.
• Routinely monitoring commodity pricing trends, exploration results, and technical study outcomes.
• Holding the majority of cash in various currencies.
• Implementing a strong health & safety focused workplace culture.

Supply Chain Management

Responsible Procurement

• Responsible sourcing initiatives.
• Requiring suppliers to adopt similar standards.
• Allocating resources to help smaller, local suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Increased temperatures
• Increased rainfall runoff
• Flooding
• Landslides
• Forest fires

Opportunities

• Development of energy-efficient products and processes
• Improved energy efficiency of machinery

Reporting Standards

Frameworks Used: EBRD Performance Requirements, Equator Principles, IFC Performance Standards

Environmental Metrics

ESG Focus Areas

• Occupational Health & Safety
• Training & professional development
• Diversity & equal opportunity
• Culture & values
• Community Health, Safety and Security
• Community development
• Local employment
• Local supply chain
• Climate change resilience
• Greenhouse gas emissions
• Biodiversity care, rehabilitation and land use
• Wastewater management
• Strong governance and stewardship

Environmental Achievements

• Zero non-compliance incidents in line with environmental laws and regulations
• Recycled 300kg of paper and cardboard and 400kg of plastic
• Installed a 23kW solar facility on the roof of the Tisovci administration building

Social Achievements

• Opened the Eurofarm Polyclinic in Vareš for employees and the community
• Donated funds for the renovation of the children’s playground in Vareš
• Established the Adriatic Foundation to support local communities
• Introduced a formalised HR system and team
• Employee survey outcome: 91% of respondents were proud to work for the Company and 89% would recommend Adriatic as a great place to work.

Governance Achievements

• Applied the Quoted Company Alliance’s (QCA) Corporate Governance Code
• Established a Sustainability Committee
• Paid over £1.5million in concession fees, insurance and taxes in 2022

Climate Goals & Targets

Environmental Challenges

• Potential climate vulnerabilities related to increased temperature and increased snowfall
• Lack of sufficient healthcare provision in the region
• Scarcity of employment opportunities for locals lacking relevant experience
• Potential environmental impacts on a local river course (Vruci Potok) due to haul road construction

Mitigation Strategies

• Developed mitigation strategies for preserving integrity of soil stockpiles, minimizing tree felling, using energy-efficient equipment, and installing solar facilities
• Opened the Eurofarm Polyclinic in Vareš
• Established the Adriatic Foundation and implemented a Sustainable Community Development Plan (SCDP)
• Developed outreach processes to support local suppliers and build capacity
• Supported EBRD's investigation into allegations regarding haul road construction and provided clarification

Supply Chain Management

Supplier Audits: 422 new suppliers screened in total, with 179 screened in 2022

Responsible Procurement

• Supplier Code of Conduct
• Rigorous due diligence and screening of new suppliers
• Prioritization of local procurement

Climate-Related Risks & Opportunities

Physical Risks

• Increased temperature
• Increased snowfall
• Forest fires
• Flooding

Transition Risks

• Energy supply for powering mining and processing activities
• Fuel types for powering the mobile fleet
• Carbon taxes

Opportunities

• Use of renewable energy
• Energy-efficient equipment
• Fuel-efficient vehicles
• Improved vehicle use optimization
• Upgrading of energy-intensive machinery

Reporting Standards

Frameworks Used: GRI, TCFD, ICMM, CDP, SBTi

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Health & Safety
• Sustainability
• Community Engagement
• Gender Diversity

Environmental Achievements

• Updated Environmental & Social Management System (ESMS) to include water and wastewater management plan, revised Biodiversity Action Plan, operational plan for impact on nature, and traffic management plan.
• Prepared an environmental monitoring plan for 2023 to track water, noise, air, soil, and biodiversity parameters.

Social Achievements

• Recorded zero Lost Time Injuries (LTI) in Q4 2022, representing an 80% improvement over 12 months.
• Launched a safety platform using iAuditor software for incident and inspection management.
• Improved emergency and crisis management capabilities by working with Technical Rescue International.
• Finalized performance management program aligning corporate objectives with employee KPIs.
• Completed Operational Readiness Workforce Planning & Organisational Structuring.
• Conducted a company-wide Employee Engagement Survey with 84% participation.
• Exceeded gender diversity target of 25% female employees with 29% female representation.
• Organized Miners' Day celebration with the Municipality of Vares.

Governance Achievements

• Completed the first draft of the 2022 Sustainability Report (planned for release in Q2 2023).
• Working on Task Force on Climate-related Financial Disclosures (TCFDs) and Streamlined Energy and Carbon Reporting (SECR).
• Expected ISO 9001 certification in Q2 2023.

Climate Goals & Targets

Environmental Challenges

• 6% increase in Project costs from $173m to $183m, partly due to foreign exchange movements.
• Potential risks related to rail line upgrades and port operations.

Mitigation Strategies

• Agreed on a FX hedging strategy to mitigate further impacts from US dollar depreciation.
• Purchased two additional Jameson Flotation cells to improve grade recoveries and reduce metallurgical risks.
• Reviewed rail line sections requiring upgrades with BiH Railways and agreed on a schedule of work with port authorities.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: TCFD

Certifications: ISO 9001 (expected Q2 2023)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Community Engagement
• Health & Safety
• Environmental Management
• Responsible Resource Management

Environmental Achievements

• Built water treatment facility with 25 m³/h of treatment capacity
• Reduced fresh water use through recycling (100% recycled water at processing plant)
• Implemented INX Software and Arc GIS for environmental data visualization and monitoring
• Updated Biodiversity Action Plan (BAP) reflecting alterations in haul road design and incorporating findings from the 2022 research
• Established a comprehensive “Green Plan” for afforestation, planting approximately 2,500 seedlings

Social Achievements

• Achieved 27% female staff, surpassing industry average of 15%
• 27,463 total hours of internal and external training
• 80% of employees agree they are proud to work for Adriatic Metals (Employee Engagement Survey)
• Established a Public Liaison Committee (PLC) for community engagement
• 2,987 visits to the Vareš Information Centre
• 72% of spending on local suppliers
• 121 local contractors employed

Governance Achievements

• First stand-alone Sustainability Report published
• Strengthened occupational health and safety systems
• Expanded safety team and integrated health and safety into operational culture
• Improved total recordable incident frequency rate (TRIFR) to 1.40 and zero work-related fatal incidents
• New Directors’ remuneration policy approved by shareholders

Climate Goals & Targets

Environmental Challenges

• Global economic uncertainty, geopolitical insecurity, inflation, currency instability, supply chain issues, and rising interest rates contributed to delays in project completion
• Challenging ground conditions and slow advance rates of underground development and mining
• Difficulties in ramping up the plant and equipment to nameplate capacity
• Potential opposition from environmental groups, local residents, or others
• Potential impact of political instability and civil unrest
• Uncertainties in mining laws and regulations in Bosnia and Herzegovina and Serbia

Mitigation Strategies

• Disciplined approach and careful management of budgets
• Locally sourced materials such as concrete and steel
• Low national power costs in Bosnia and Herzegovina
• Accelerated development improvement plan at Rupice mine
• High-productivity development methodology
• Hiring experienced operators in high-productivity development
• Active, two-way dialogue with communities
• Public Liaison Committee (PLC), Vareš Project Information Centre
• Close monitoring of national political situation
• Good progress in obtaining permits for development and operations

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• 72% of spending on local suppliers
• Engagement with local suppliers through Local Business Development Officer

Climate-Related Risks & Opportunities

Physical Risks

• Flooding
• Heavy rainfall
• Drought
• Variable rainfall patterns
• Increased ambient temperatures
• Forest fires

Transition Risks

• Demand for products
• Increased cost of capital
• Increased regulation and reporting requirements
• Cost of GHG emissions reduction
• Changes in consumer preferences
• Increase in legal cases

Opportunities

• Demand for metals in green technologies
• Opportunities for GHG mitigation and decarbonisation

Reporting Standards

Frameworks Used: GRI Standards, SASB Standards, TCFD Recommendations, UN SDGs, Equator Principles, EBRD Performance Requirements

Certifications: ISO 9001, 14001, and 45001 (in progress)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 7 (Affordable and clean energy)
• Goal 9 (Industry, innovation, and infrastructure)
• Goal 13 (Climate action)
• Goal 8 (Decent work and economic growth)

Production of critical metals for green technologies; infrastructure development; GHG emission reduction initiatives; job creation and community development.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Vareš Project granted status of Project of Special Importance by the Government of Bosnia and Herzegovina