Silver Bull Resources, Inc. (OTCQB: SVBL, TSX: SVB) (“Silver Bull”)
is pleased to announce it has entered into an option to purchase
agreement with Copperbelt AG (“Copperbelt”), a private mineral
exploration company registered in Zug, Switzerland, to acquire a
100% interest in their Beskauga copper-gold project located in
North Eastern Kazakhstan.
Highlights of the
Agreement
- On execution of the agreement
Silver Bull paid Copperbelt US$30,000. An additional US$40,000 will
be paid to Copperbelt after due diligence on the Beskauga property
is completed to Silver Bull’s satisfaction. Silver Bull will have a
60 day due diligence period which will commence after the Company
has been able to access the Beskauga property in a matter that
complies with governmental recommendations and advisories with
respect to the global COVID-19 pandemic, among other
conditions.
- Silver Bull will then have 4 years
to conduct exploration on the property. Exploration expenditures on
Beskauga and certain other licenses required to keep the option in
good standing are US$2 million in year one, US$3 million in year
two, US$5 million in year three and US$5 million in year four, for
a total exploration spend of US$15 million over four
years.
- After completing US$15 million in
cumulative exploration expenditures Silver Bull can acquire the
Beskauga property for a US$15 million cash payment.
- In addition Copperbelt may receive
a bonus payment of up to US$32 million should Silver Bull publish a
Bankable Feasibility Study (“BFS”) with a resource of up to 10
million gold equivalent ounces on the main Beskauga prospect and 5
million gold equivalent ounces on an additional prospect. 20% of
the bonus is payable 60 days after publishing a BFS, with the
remaining 80% payable on the commencement of mine construction. Up
to 50% of the bonus is payable in common shares of Silver Bull at
Silver Bull’s election.
- Silver Bull will pay a finders fee
to a third party upon the satisfaction of certain conditions.
Tim Barry, President, CEO and director of Silver
Bull states, “We are extremely pleased to enter into this agreement
with Copperbelt. We believe the Beskauga copper-gold Project
represents one of the best exploration opportunities in the world.
The high quality work that has been completed on the project to
date indicates Beskauga is a huge mineralizing system that has
considerable upside that has yet to be explored. We will be working
closely with our partners from Copperbelt to quickly and
efficiently explore these areas. In addition to the exploration
potential at Beskauga, the project has excellent infrastructure.
Paved road access and, 1100 KVA power lines, heavy rail, and a
highly trained workforce all lie within a 10 kilometer radius. As a
mining jurisdiction Kazakhstan is fast becoming a “go to” place due
to its recently updated mining law and incredible geological
prospectivity. In June 2018 the Kazakhstan government implemented a
new mining code based on the mining code used in Western Australia.
Unlike many Governments around the world today, the Kazakh
Government is very supportive of the mining sector, a view which is
highlighted by the fact that numerous major mining companies have
recently set up an office in the country and acquired exploration
licenses. We expect to provide more details about the Beskauga
project itself as soon as we complete our due diligence on the
project.”
About Kazakhstan
Size: Kazakhstan is the ninth
largest country in the world, covering 2,717,300 km2, and has a
population of 18.2 million people.
Capital City: The capital city
is Nur-Sultan which is located 300 kilometers from the project.
Nur-Sultan has a major international airport allowing for easy
access and administration of the Beskauga Project.
Mining Law: Kazakhstan adopted
a new mining code titled “Code on Surface and Subsoil Use” (the
"SSU Code") on 27 December 2017, and became effective on 29 June
2018. The SSU Code is based on the Western Australian model where
Kazakhstan moved from a contractual regime to a licensing regime
for solid minerals (except for uranium). Coincident with the
updated SSU law, the Kazakhstan government also reduced a
considerable amount of the administrative burdens for subsoil
users.
Tax: Summary of pertinent taxes
related to exploration in Kazakhstan are as follows;
- 20% corporate tax
- 12% VAT is refundable for exploration companies
- 4.7% royalty for Copper
- 5% royalty for gold and silver
Geological Prospectivity:
Kazakhstan is one of the most prospective countries in the world
for a number of metals. According the United States Geological
Survey (USGS) Kazakhstan is;
1st in the world for Uranium production (41% of
world output)2nd in the world for chromite production (18% of world
output)4th in the world for titanium production (6% of world
output)10th in the world for copper production
In addition, Kazakhstan has also has significant
proven reserves (as yet unmined) of gold, silver, lead, zinc tin,
iron ore, nickel, cobalt, and bauxite
The Fraser Institute Annual Survey of Mining
Companies in 2017, ranked Kazakhstan 24th best mining jurisdiction
in the world.
Sierra Mojada Update
Silver Bull’s Sierra Mojada project remains
under an illegal blockade organized by a Cooperative of local
Miners called Sociedad Cooperativa de Exploración Minera Mineros
Norteños, S.C.L. (“Mineros Norteños”).
Silver Bull has an agreement with Mineros
Norteños on two small mineral licences which cover the eastern part
of the Sierra Mojada deposit. These licences are subject to a 2%
production royalty to Mineros Norteños capped at US$6.875 million
(the “Royalty”) should a mine go into production.
Since 2014, Silver Bull has been fighting a law
suit by Mineros Norteños seeking payment of the Royalty, including
interest at a rate of 6% per annum since August 30, 2004, even
though no revenue has been produced from the applicable mining
concessions. Mineros Norteños also sought payment of wages to the
Mineros Norteños members since August 30, 2004 under this
agreement, even though none of the individuals were hired or
performed work for Silver Bull under this agreement and Silver Bull
did not commit to hiring them. On October 4, 2017, the court ruled
that Mineros Norteños was time barred from bringing the case. On
October 19, 2017, Mineros Norteños appealed this ruling. On July
31, 2019, the Federal Appeal Court held the original ruling. This
ruling was subsequently challenged by Mineros Norteños and in March
2020 the Federal Appeals Court held the original ruling. Mineros
Norteños may challenge the ruling for a final time at the Federal
Circuit Court. Due to COVID-19 the Mexican court system remains
closed and the timing of reopening is uncertain. In an attempt to
force Silver Bull into making a settlement, Mineros Norteños has
undertaken to illegally block access to the project since September
2019. To ensure the safety of all involved, Silver Bull has elected
to halt all operations on the project until a resolution can be
found.
Silver Bull remains committed to good faith
dialogue with Mineros Norteños, many of whom have worked for Silver
Bull, to find a solution that is acceptable to both parties.
The joint venture option with South32 remains in
good standing but under a force majeure pause.
South32 Joint Venture
Option
In June 2018 Silver Bull signed an agreement
with a wholly owned subsidiary of South32 whereby Silver Bull has
granted South32 an option to form a 70/30 joint venture with
respect to the Sierra Mojada Project. To maintain the option in
good standing, South32 must contribute minimum exploration funding
of US$10 million ("Initial Funding") during a 4 year option period
with minimum aggregate exploration funding of US$3 million, US$6
million and US$8 million to be made by the end of years 1, 2 and 3
of the option period respectively. South32 may exercise its option
to subscribe for 70% of the shares of Minera Metalin S.A. De C.V.
("Metalin"), the wholly owned subsidiary of Silver Bull which holds
the claims in respect of the Sierra Mojada Project, by contributing
US$100 million to Metalin for Project funding, less the amount of
the Initial Funding contributed by South32 during the option
period. During the period of force majeure the year 2 completion
date has been extended by the period of force majeure.
About Silver Bull: Silver Bull
is a mineral exploration company whose shares are listed on the
Toronto Stock Exchange and trade on the OTCQB in the United States,
and is based out of Vancouver, Canada. Silver Bull owns the Sierra
Mojada Project which is located 150 kilometers north of the city of
Torreon in Coahuila, Mexico, and is highly prospective for silver
and zinc.
About the Sierra Mojada
deposit: Sierra Mojada is an open pittable oxide deposit
with a NI43-101 compliant measured and indicated "global" resource
of 70.4 million tonnes grading 3.4% zinc and 38.6g/t silver at a
$13.50 NSR cutoff giving 5.35 billion pounds of zinc and 87.4
million ounces of silver. Included within the "global" resource is
a measured and indicated "high grade zinc zone" of 13.5 million
tonnes with an average grade of 11.2% zinc at a 6% cutoff, giving
3.336 billion pounds of zinc, and a measured and indicated "high
grade silver zone" of 15.2 million tonnes with an average grade of
114.9g/t silver at a 50g/t cutoff giving 56.3 million ounces of
silver. Mineralization remains open in the east, west, and
northerly directions. Approximately 60% of the current 3.2
kilometer mineralized body is at or near surface before dipping at
around 6 degrees to the east.
The technical information of this news release
has been reviewed and approved by Tim Barry, a Chartered
Professional Geologist (CPAusIMM), and a qualified person for the
purposes of National Instrument 43-101.
On behalf of the Board of Directors "Tim Barry"
Tim Barry, CPAusIMM Chief Executive Officer,
President and Director
INVESTOR RELATIONS: +1 604 687 5800
info@silverbullresources.com
Cautionary Note to U.S. Investors
concerning estimates of Measured, Indicated, and Inferred
Resources: This press release uses the terms "measured
resources", "indicated resources", and "inferred resources" which
are defined in, and required to be disclosed by, NI 43-101. We
advise U.S. investors that these terms are not recognized by the
United States Securities and Exchange Commission (the "SEC"). The
estimation of measured, indicated and inferred resources involves
greater uncertainty as to their existence and economic feasibility
than the estimation of proven and probable reserves. U.S. investors
are cautioned not to assume that measured and indicated mineral
resources will be converted into reserves. The estimation of
inferred resources involves far greater uncertainty as to their
existence and economic viability than the estimation of other
categories of resources. U.S. investors are cautioned not to assume
that estimates of inferred mineral resources exist, are
economically minable, or will be upgraded into measured or
indicated mineral resources. Under Canadian securities laws,
estimates of inferred mineral resources may not form the basis of
feasibility or other economic studies. Disclosure of "contained
ounces" in a resource is permitted disclosure under Canadian
regulations, however the SEC normally only permits issuers to
report mineralization that does not constitute "reserves" by SEC
standards as in place tonnage and grade without reference to unit
measures. Accordingly, the information contained in this press
release may not be comparable to similar information made public by
U.S. companies that are not subject NI 43-101. Cautionary
note regarding forward looking statements: This news
release contains forward-looking statements regarding future events
and Silver Bull's future results that are subject to the safe
harbors created under the U.S. Private Securities Litigation Reform
Act of 1995, the Securities Act of 1933, as amended (the
"Securities Act"), and the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and applicable Canadian securities
laws. Forward-looking statements include, among others, statements
regarding that Beskauga is a huge mineralizing system that has
considerable upside that has yet to be explored, ability to work
closely with our partners from Copperbelt to quickly and
efficiently explore the Beskauga area, support of the Kazakh
Government of the mining sector, geological prospectivity of
Kazakhstan , ability to complete due diligence, mineral resource
estimates and ability to find a solution to the blockade that is
acceptable to both parties. These statements are based on current
expectations, estimates, forecasts, and projections about Silver
Bull's exploration projects, the industry in which Silver Bull
operates and the beliefs and assumptions of Silver Bull's
management. Words such as "expects," "anticipates," "targets,"
"goals," "projects," "intends," "plans," "believes," "seeks,"
"estimates," "continues," "may," variations of such words, and
similar expressions and references to future periods, are intended
to identify such forward-looking statements. Forward-looking
statements are subject to a number of assumptions, risks and
uncertainties, many of which are beyond our control, including such
factors as the results of exploration activities and whether the
results continue to support continued exploration activities,
unexpected variations in ore grade, types and metallurgy,
volatility and level of commodity prices, the availability of
sufficient future financing, and other matters discussed under the
caption "Risk Factors" in our Annual Report on Form 10-K for the
fiscal year ended October 31, 2019 and our Quarterly Reports on
Form 10-Q for the interim periods ended January 31, 2020 and April
30, 2020, as amended, and our other periodic and current reports
filed with the SEC and available on www.sec.gov and with the
Canadian securities commissions available on www.sedar.com. Readers
are cautioned that forward-looking statements are not guarantees of
future performance and that actual results or developments may
differ materially from those expressed or implied in the
forward-looking statements. Any forward-looking statement made by
us in this release is based only on information currently available
to us and speaks only as of the date on which it is made. We
undertake no obligation to publicly update any forward-looking
statement, whether written or oral, that may be made from time to
time, whether as a result of new information, future developments
or otherwise.
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