Site visit: First two holes including 25g/t AuEq support SCPe 15g/t AuEq

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1 06 July 2018 Ticker: ADT AU (Net) cash: A$10m Project: Rupice & Veovaca Market cap: A$66m Price: A$0.50/sh Country: Bosnia and Hercegovina Site visit: First two holes including 25g/t AuEq support SCPe 15g/t AuEq Adriatic s Bosnia and Hercegovina projects are near the mining town of Vareš, an hour s drive from Sarajevo on sealed roads. Key projects are (i) Veovaca, an old mine closed ahead of 1990s civil war with a historic resource 0.8% Pb, 1.5% Zn (incl. 6.3% ZnEq), and (ii) Rupice, an exploration project ~15km away. Rupice hosts two targets; Rupice with 59 historic holes and Brestic-Jurasevac where historic workings existed but no drilling was undertaken. At acquisition, 22 significant intercepts averaged 5.7% ZnEq base metals (Zn, Pb, Cu) at Rupice, excluding precious metals (assayed in less than one-third of the holes). A single stand out hole hit 16.7% ZnEq, with most intercepts grading <5% Pb+Zn. The formation mechanism is unclear - polymetallic ores are non-exhalative sedimentary-hosted, potentially similar to MVT/Irish type, but with local structural controls such as cross-faulting. Post-acquisition, pre-ipo, Adriatic completed seven holes at Rupice, four of which averaged 23% ZnEq (16g/t AuEq). At that time, the orientation / true thickness wasn t clear, and the potential restart of the lower-grade Veovaca project was a key focus of the IPO. A major development came in recent weeks with the first two post-ipo holes, including 25.2g/t AuEq and 17.7g/t AuEq (~50/50 precious and base) down-plunge of previous drilling. These 80m step-outs showed that the ore body thickens and increases in grade at depth. Chargeability data supports further extensions or pods along strike from Rupice, and more speculative upside over undrilled historic workings at Brestic-Jurasevac, now being drilled. Adriatic is well funded with net cash of A$10m to cover a two-year 15,000m diamond drill programme focused at Rupice/Brestic, including 1,000m of infill at Veovaca for a 1Q19 resource to incorporate precious metals. Two rigs are currently drilling on site and two more are expected to arrive on site in the coming weeks. The company will also expand its land position and conduct IP and gravity surveys. Figure 1. Long-section of Rupice showing improving grades and thickness at depth

2 Our view: SCPe >600koz at 15g/t AuEq, with >300koz AuEq per 100m down-plunge growth In short, we think Rupice has Tier 1 potential, with a high-grade core of SCPe 15g/t AuEq defined by current drilling alone. This excludes barite credits, and by value is ~30% Ag, 20% Au, 25% Zn, 20% Pb, and 5% Cu. Beyond this we see good, albeit more speculative, potential for a multi-million-ounce upside including; (i) down-plunge extensions at Rupice, (ii) along-strike IP features NW and SE, including the IP anomaly at Brestic-Jurasevac with historic workings, and (ii) regional / satellite upside. In more detail, the post-ipo highlight of 25g/t AuEq (US$950/t in situ rock value at spot) is broadly in line pre-ipo 17.5g/t AuEq. However, the inclination of the new hit indicates the ore body could widen at depth and improve in grade. As importantly, the growing dataset of modern drilling with precious and base assays is consistently showing that old holes could have % greater value from un-assayed precious metals. For example, 10.7g/t AuEq (base only) is likely to grow to >20g/t AuEq when including precious metals. On this basis, to make a rough estimate of a drill-defined high-grade core at Rupice to date, we correct for missing Au/Ag assays in historic drilling and estimate tonnage from drilled areas alone. The weighted average of 16 intercepts in the high-grade core shows 9.5g/t AuEq from base, and 8.8g/t AuEq from precious metals, i.e. +0.9g/t AuEq precious for each 1g/t AuEq base. Adding precious to historic baseonly intercepts gives a weighted average 15g/t AuEq in the high-grade core across all old and new holes. Dropping this by 30% for true thickness and using the surface footprint of this high-grade zone (Figure 2), multiplied by an SG of 4 (semi-massive sulphide and 4.5g/cm 3 barite), gives 1.5Mt or 690koz AuEq, or 587koz payable AuEq at 85% payability (Table 1). This will likely need to be adjusted for lower overall recovery typical to polymetallic deposits. That said, positives may include high resource-reserve conversion and cheap mining given the thick ore zones and potential barite credits too. HISTORIC ADRIATIC Table 1. SCPe high-grade core estimates ASSAYS CALCULATED FINAL Hole Width (m) Au (g/t) Ag (g/t) Cu (%) Pb (%) Zn (%) Base AuEq Prec AuEq AuEq (g/t) g/t x m BR ,110 Metal prices BR ,259 Au (US$/oz) BR Ag (US$/oz) BR ,532 Cu (US$/t) BR ,593 2,385 Pb (US$/t) BR ,788 Zn (US$/t) Wt avg base (AuEq) / precious (AuEq): * BR SCPe high-grade core BR ,000 area (m 2 ) BR thickness (m) BR density (g/cm 3 ) BR ,479 tonnes (kt) BR grade (g/t AuEq) BR ounces (koz AuEq) BR % Payability BR Payable (koz AuEq) BR Average 31 SCPe 70% true width Avg. grade Avg. g-m Source: SCP estimates; *average base-to-precious ratio in Adriatic holes Risks: The above rough calculation of course comes with risks. A single hole down-dip of the main ore body returned no material intercept (Figure 2: BR-2-17). Similarly, the thickness (true or apparent) of the ore zone appears variable, so while it appears to widen at depth, it could also represent local structural thickening. Also, there appears to be an element of cross-faulting and/or structural control, which could limit the strike extent of the ore body. Similarly the IP at Brestic (Figure 3b) has a much stronger signature than at Rupice given Rupice is a positive massive sulphide hit, this could mean Brestic s signature is non-sulphide related. Page 2

3 Figure 2. Rupice Adriatic plan map showing IP high along lower-grade outcrop, and mineralization outline dipping to the NE. SCP estimate of surface footprint of high-grade from drilling in blue. Upside Source: SCP estimated block sizes adapted from Adriatic Metals plan and drill map Rupice down-plunge: Most importantly, the above rough estimate includes nothing down-dip to the east or down-plunge to the north of the two recent intercepts, 25g/t AuEq and 18g/t AuEq. As per the plan map in Figure 2, the high-grade body follows a north-south plunge with a shorter east-west (downdip) dimension. Projecting the current metal endowment to the north, we estimate that every 100m downplunge extension adds koz AuEq at these grades. It is impossible to predict at this stage how far the high-grade mineralization will extend, especially as Adriatic does not (yet) have reliable geophysical data at depth. Strike extensions: the chargeability anomaly at Rupice continues off-licence to the northwest and points to the stronger Brestic-Jurasevac anomaly to the southeast. The IP feature at Brestic has coincident Pb in soils (Figure 3) and historic high-grade Pb-Zn-Cu-Au-Ag workings on the southern edge. Adriatic has started drilling at Brestic-Jurasevac; no assays have been released yet. Northwest of Rupice, the company is expanding its land position and will conduct a multi-line IP survey for depth penetration and a gravity survey where the sulphides and barite (SG 4.5) should stand out from host sediments. Geologic data is sparse overall and becomes even less well-constrained at depth; on the plus side, carbonate-hosted Pb-Zn-Ba mineralization is known to produce high-grade high-tonnage deposits, including MVT-type and Irish-type deposits (Navan, Page 3

4 Lisheen); on the negative side, structural complexity poses a risk to continuity / local thickening only as the regional geology characterized by thin-skinned thrust-faulting and associated tight folding. Figure 3. Pb in soils (LHS) and IP chargeability (RHS) over Rupice with Brestic-Jurasevac anomaly Regional upside: this style of dolomite-breccia-hosted Pb-Zn-Au-Ag-Ba mineralization has been recognized in multiple locations regionally (Figure 4). Most importantly, 1.2Mt of similar material was historically mined at Adriatic s Veovaca project before it shut down. The company s land position is currently modest at ~300ha but management have indicated that under Bosnian law, third parties cannot stake ground within a 5km radius of these licences without Adriatic s approval, effectively giving the company a ROFR over ~150km 2. In Bosnia, exploration licences are granted for 5-year terms at an upfront cost of 70k/km 2 (management guidance) explaining why Adriatic started small. With A$10m cash on the balance sheet, the company is wellfunded to expand its holding this year. Figure 4. Regional geology Page 4

5 History and tenure: The projects were held by parastatal Energoinvest since the 1940s, but that company was dissolved in the 1990s. Historic work at Veovace included ~8,000m of drilling between 1967 and 1979, and 600m of underground development, with 6,000m of drilling and 700m of underground development at Rupice. ASX listed Balamara Resources first acquired the project in 2012 after winning a tender for A$1.5m cash and A$1.9m in shares. In 1Q13 a mining concession was granted for 25 years, which requires exploitation of at least 100ktpa of ore to commence within 5 years, ie by 1Q18. Although that deadline can only be extended by force majeure, the company did agree to extend it until 2Q20 earlier this year. Infrastructure: The nearby town is supplied by 6-8c/kWh grid power and lies 230km from a deep-water port by existing rail. Bosnia has an attractive mining code with just US$0.90/t ore royalty, no minority interest and 10% corporate tax. That said, the country isn t mature as a mining jurisdiction, which creates risks to smooth operations, and granting of requisite permits / landholdings for mining, offset by early-mover advantages. Why we like Adriatic 1. High-grade mineable inventory potentially already defined (SCPe 15g/t AuEq) 2. Near-term share price catalyst with down-plunge drilling of best mineralization to date 3. Underexplored, underappreciated belt with apparent Tier 1 potential 4. Bosnia s combination of excellent infrastructure + logistics and low opex, royalties, taxes Catalysts 3Q18: First assays from Brestic-Jurasevac 2H18: Potential land holding expansion : Ongoing 14,000m exploration drill programme 1Q19: Maiden Rupice resource, updated Veovaca resource Mid-2019: Scoping study for combined Veovaca-Rupice operation Brock Salier Partner, Sprott Capital Partners T: M: bsalier@sprott.com Felix Waechter Associate, Sprott Capital Partners T: M: fwaechter@sprott.com Sprott Capital Partners is a division of Sprott Private Wealth LP. Sprott Private Wealth UK Limited is an appointed representative of PillarFour Securities LLP which is authorized and regulated by the Financial Conduct Authority. Sprott Capital Partners produces this publication and it does not constitute a research report. This commentary is for information purposes only and does not contain investment advice. Sprott makes no representations or warranties with respect to the accuracy, correctness or completeness of such information and they should not be relied upon as such. Page 5