Adriatic Metals : Quarterly Activities Report & Cashflow

29 JULY 2022

onlyABOUT ADRIATIC METALS (ASX:ADT, LSE:ADT1,

OTCQX:ADMLF)

Adriatic Metals Plc is focused on the development of the use100%-owned, Vares high-grade silv r project in Bosnia &

Herzegovina, and exploration at the Raska base & precious metals project in Serbia.

personalDIRECTORS

Mr Michael Rawlinson

NON-EXECUTIVE CHAIRMAN

Mr Paul Cronin

MANAGING DIRECTOR & CEO

Mr Peter Bilbe

NON-EXECUTIVE DIRECTOR

Mr Julian Barnes

NON-EXECUTIVE DIRECTOR

Ms Sandra Bates

NON-EXECUTIVE DIRECTOR

Ms Sanela Karic

NON-EXECUTIVE DIRECTOR

Foradriaticmetals.com

QUARTERLY ACTIVITIES REPORT

For the three months ended 30 June 2022

("Q2" or "Quarter")

HIGHLIGHTS IN THE QUARTER

Vares Silver Project, Bosnia & Herzegovina:

• Vares Silver Project construction activities update:
• • Contracting and mobilisation of the Mining Contractor
  • Upper Decline Portal complete
  • Lower Decline development commenced, with improving ground conditions and advance rates
  • Rupice access roads 65% complete, Section 1 of haul road, stockpile pad and paste & backfill pad under construction
  • Approximately 66% of capital expenditure awarded, pending award or recently quoted
  • Commencement of foundations at Vares Processing Plant
• Potential life of mine increase from both Rupice Northwest exploration drilling and confirmation drilling
• Staff count at 162 and growing. Contractor count at 158

Corporate

• Cash balance as at 30 June 2022 of US $83.4 million
• Inflationary pressures under control, Project remains on time for concentrate production in Q2 2023

Adriatic Metals PLC, Regent House, 65 Rodney Road, CheltenhamGL50 1HX United Kingdom

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

"Despite the challenges posed to us by global macroeconomic conditions, the team have continued to progress the Vares Project to schedule. Elevated diesel prices have caused some project cost variances, but these have been largely offset by design and construction changes where cost saving opportunities were identified by our team here in BiH.Consequently, we see no reason that the project construction cannot be delivered on time,and a relatively small increase in construction costs can be funded out of existing treasury.In parallel to our construction efforts, our exploration team is making great progress, identifying a new Rupice style zone of mineralisation, which should add significant mine life to the project"

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 June 2022 ("Q2" or "Quarter").

1. EXPLORATION, CONFIRMATION AND DEFINITION DRILLING AT RUPICE

Rupice Northwest ("Rupice NW")

Recent drilling at Rupice NW, an extension to the existing orebody, continues to intercept thick, high- grade, massive sulphide mineralisation up-dip from previous intersections.

The current exploration drilling campaign at Rupice NW was designed to confirm whether the high- grade mineralisation at the existing Rupice Mineral Resource ("Rupice") continues along strike to the Northwest. The intercepts announced are assay results from three exploration holes out of five holes completed in the year to date (assays pending).

Figure 1: Plan view map of Rupice and location of recent drilling activity

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Drillholes BR-01-22,BR-02-22 and BR-03-22, located 90 metres northwest of the existing Rupice Mineral Resource and drilled up-dip of previously reported holes BR-16-21 (7.1m @ 1,123g/t AgEq) and BR-19-21 (15.8m @ 508g/t AgEq), intercepted:

• BR-03-22- 30.9 metres at 851g/t AgEq, 27.4% ZnEq (233g/t Ag, 9.0% Zn, 6.1% Pb, 1.3g/t Au, 0.5% Cu, 67% BaSO4 & 0.1% Sb) from 239.5 metres

Including 23.5 metres at 993g/t AgEq, 31.9% ZnEq (269g/t Ag, 11.0% Zn, 7.3% Pb, 1.6g/t Au, 0.6% Cu, 68% BaSO4 & 0.1% Sb) from 245.0 metres

• BR-01-22- 24.5 metres at 794g/t AgEq, 25.5% ZnEq (343g/t Ag, 5.5% Zn, 3.7% Pb, 1.4g/t Au, 0.2% Cu, 75% BaSO4, 0.1% Sb) from 250.5 metres

Including 17.5 metres at 915g/t AgEq, 29.4% ZnEq (386g/t Ag, 6.8% Zn, 4.4% Pb, 1.7g/t Au, 0.3% Cu, 77% BaSO4 & 0.1% Sb) from 256.0 metres

• BR-02-22- 23.0 metres at 831g/t AgEq, 26.7% ZnEq (281g/t Ag, 8.1% Zn, 5.7% Pb, 1.3g/t Au, 0.8% Cu, 38% BaSO4, 0.1% Sb) from 229.5 metres

Including 15.6 metres at 1,176g/t AgEq, 37.8% ZnEq (408g/t Ag, 11.5% Zn, 8.2% Pb, 1.8g/t Au, 1.1% Cu, 52% BaSO4 & 0.1% Sb) from 233.5 metres

• BR-01-22- 7.9 metres at 851g/t AgEq, 27.4% ZnEq (380g/t Ag, 2.9% Zn, 5.5% Pb, 1.5g/t Au, 0.6% Cu, 77% BaSO4 & 0.4% Sb) from 141.4 metres

Including 5.0 metres at 1,127g/t AgEq, 36.2% ZnEq (546g/t Ag, 4.4% Zn, 7.0% Pb, 1.9g/t Au, 0.8% Cu, 76% BaSO4 & 0.5% Sb) from 144.0 metres

Figure 2: Cross-section(A-A') through BR-01-22,BR-02-22 and BR-03-22

Adriatic Metals plc Regent House, 65 Rodney Road, CheltenhamGL50 1HX United Kingdom

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A further 7,500m of exploration step-out drilling at Rupice NW is scheduled in the remainder of the year, ahead of a planned Mineral Resource Estimate update in Q4 2022.

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2. VARES PROJECT CONSTRUCTION ACTIVITIES UPDATE

Construction of the Vares Silver Project has gathered momentum over the quarter. Nova Mining & Construction d.o.o., the Main Mining Contractor ("MMC"), commenced decline development in June. Daily advance rates are improving as the decline moves towards the orebody. Foundation preparation is near completion at the Vares Processing Plant and Section 1 of the Haul Road development has commenced. Long lead items delivery times have generally come in longer than those allowed within the 2021 DFS. However, we are still anticipating first concentrate production at the end of Q2 2023. While not immune to inflation, particularly of diesel, the Project expenditure to date is under budget. However, the final Project cost estimate is anticipated to be approximately $170m vs a 2021 DFS budget of $168.2m primarily as a result of the increased diesel costs associated with the remaining Rupice civil works and the Haul Road construction.

Definition/Confirmation drilling, targeting the first two years of scheduled production, is proceeding well with indications of a potential re-classification of inferred to indicated resources and the inclusion of previously undeclared additional mineralisation as additional inferred resources.

Decline Development

In the quarter the MMC mobilised to site, incorporated a local operating company and started hiring, inducting and training local staff. In June development of the lower decline commenced. Initially operating on a single day shift, this has now increased to three shifts per day and is averaging 4m of advance per day. The ground conditions immediately following the portal were as expected, and ground support consisting of steel arch sets bolting, meshing and fibre-crete were required. However, as the MMC has advanced away from the weathered, near surface ground, into more competent rock, advance rates have increased and the need for extensive ground support has decreased. It is anticipated that the current ground conditions will continue for the remainder of the decline development. The upper decline portal construction was largely completed during the quarter and in early August the MMC will commence development of this second decline.

Advancing the Lower Decline first, at 485m compared to the Upper Decline at 285m in length, allows for the two to reach the ore body simultaneously in late October, after which initial development on the orebody footwall drives and the stope cross-cuts in ore will prepare for the opening of the first stopes towards the end of Q1 2023, which will enable a sufficient stockpile to be established prior to the VPP plant commissioning in Q2 2023. Commissioning of the Rupice crushing facility is planned for late Q1 2023 in preparation for the supply of cement-aggregate-fill (CAF) for the initial support of the mined-out stopes. Engineering studies completed in the Quarter have determined that, after production starts in Q2 2023, only paste-aggregate-fill (PAF) will be required for underground backfill.

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Figure 3: Lower Decline Portal and Underground Development (July 2022)

Earthworks

The civil works at Rupice continue, making rapid advancement during the long, dry summer months. Internal access roads are 65% complete, with work now focussing on levelling the locations for the ROM stockpile, backfill plant and the remaining area of the Upper Portal pad, where the main mining operating services will be located. At the end of the quarter there were 48 excavators as well as supporting trucks and ancillary plant equipment working on site.

Haul Road

Construction of Section 1 of the Haul Road, that is located within the Exploitation Area boundaries, commenced in June. The construction permit for the remainder of Section 1 has been submitted and approval is expected imminently.

Confirmation/Definition Drilling

The resource definition and in-fill drilling programmes are still progressing well, and once complete, all three drill rigs will then be available to focus on the Rupice NW area and other planned exploration targets within close-proximity to the Rupice orebody.

With the new drilling contractor delivering results with significantly improved advance rates, the Company plans to complete approximately 22,000m of exploration and infill drilling by the end of the year, with a continued focus on adding to the existing 10 years of mine life by systematically exploring around Rupice and the greater Vares project.

Update on geo-metallurgicalTest-work

Continued test-work and analysis, using core from the first two years of mine operation, further validates the assumptions made in the DFS; that there is one dominant geological domain at Rupice characterised as high barite with high Pb-Zn-Ag+/-Cu mineralization. This domain makes up the central zone of the resource and contains the majority of the high-grade mineralization. There are

Adriatic Metals plc Regent House, 65 Rodney Road, CheltenhamGL50 1HX United Kingdom

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