Silver Bow Mining has signed a definitive agreement to acquire the Jefferson County Metallurgical Complex in Montana through a Chapter 11 sale process, giving the company two mineral processing circuits and infrastructure spanning about 5,000 acres.
Silver Bow will initially fund approximately $28.6 million to satisfy creditors associated with the assets, including approximately $4.27 million owed to Jefferson County and $20.8 million owed to the Montana Department of Environmental Quality.
The complex is located approximately 55 miles northeast of Butte and includes separate 15,000-ton-per-day and 1,000-ton-per-day milling and flotation circuits.
The smaller circuit is expected to be suitable, following certain upgrades, for processing mineralization from Silver Bow’s Rainbow Block silver-gold-zinc-lead resource.
Rainbow Block currently contains an inferred resource of 11.48 million tons grading 14.8 ounces per ton of silver equivalent, representing approximately 170 million silver-equivalent ounces.
At initial closing, Silver Bow’s $28.6 million contribution will result in it receiving a senior secured note backed by assets of the metallurgical complex.
At final closing, Silver Bow will issue 3.5 million contingent value rights that can convert into common shares 180 days later, subject to applicable conditions.
An additional 11.5 million deferred CVRs could convert into shares upon future M-Pit development and production milestones.
Other contingent economics include a 2% net smelter return royalty on future M-Pit production, subject to a $10 million buyback option, plus interests connected to toll milling, tailings reprocessing and potential Clancy Creek production.
Silver Bow has also committed to a $5 million M-Pit feasibility program and a $3 million engineering and regulatory program for the Clancy Creek Bypass Channel.
KEY QUOTE:
“We believe this acquisition provides Silver Bow Mining with valuable infrastructure and optionality as we evaluate the most efficient path to advancing the Rainbow Block and creating long-term value for our shareholders.”
Travis Naugle, Chairman And CEO Of Silver Bow Mining
