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Silver Bear Completes a Private Placement Financing of US$20 Million in Non-Convertible Notes and Provides Corporate Update

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Silver Bear Completes a Private Placement Financing of US$20 Million in Non-Convertible Notes and Provides Corporate Update

 

 

 

 

 

Silver Bear Resources Inc. (TSX:SBR) is pleased to announce that the Company’s major shareholders, A.B. Aterra Resources Ltd. and Inflection Management Corporation Limited have agreed to provide the Company with loans in the aggregate principal amount of US$20,000,000. It is the view of the Company’s management and directors that the Financing will enable Silver Bear to maintain its development activities at the Company’s Mangazeisky silver project located in Yakutia, Russia, as the Company seeks the remaining project financing.

 

 

Silver Bear’s CEO, Graham Hill commented: “Once again we would like to thank our major shareholders for their continued support. We appreciate the confidence that they have placed in the development of the Mangazeisky project. The closing of this bridge financing ensures that the Company can take full advantage of the winter road supply route which has a tight and intensive delivery window. Over the past two months, the Company has transported construction materials, fuel and mine supplies over the winter road and has mobilized contractors to the Mangazeisky site for installation and building of a fuel storage area. In addition, the NI 43-101 feasibility study is nearing completion and the Russian studies and detailed engineering remain on track for completion during the next quarter. The objective remains to target silver commissioning in late 2016. Geological modelling using exploration results from 2015 is also progressing and results are expected during the second quarter of 2016. In the meantime, we continue to negotiate our final project financing and it is my expectation that we will be in position to provide a detailed operational update early in the second quarter.”

 

 

As part of the Financing, Silver Bear has issued unsecured contingent non-convertible promissory notes to each of Inflection and Aterra in the principal amounts of US$14,500,000 and US$5,500,000, respectively, for a total of US$20,000,000 (together, the “Contingent Non-Convertible Notes“), which notes will mature and will be due and payable on December 31, 2016. Details of the terms of the Contingent Non-Convertible Notes are discussed below.

 

 

The Company intends to use the gross proceeds from the Financing to finance further construction and development of the Mangazeisky property and for general working capital purposes.

 

 

The Contingent Non-Convertible Notes pay no interest until such time as the Company obtains disinterested shareholder approval (as required under the TSX Company Manual) for the payment of interest thereon. If the Contingent Non-Convertible Notes receive the Shareholder Approval, the notes will bear interest at a rate of 15% per annum. The Toronto Stock Exchange has conditionally approved the issuance of the Contingent Non-Convertible Notes, subject to, among other things, receipt of the Shareholder Approval. The Company intends to call and hold an annual general and special meeting of its shareholders on or before June 30, 2016 to, among other things, seek the required Shareholder Approval. The Contingent Non-Convertible Notes were approved by the board of directors of Silver Bear with Mr. Alexey Sotskov and Mr. Boris Granovsky abstaining from participating in the vote as a result of their respective relationship with Inflection and Aterra, respectively.

 

 

The Financing was conducted on a non-brokered basis. No fee is payable by the Company in respect of the issuance of the Contingent Non-Convertible Notes.

 

 

Corporate Update

 

 

This recent financing continue to support the Company’s infrastructural construction and development work at its Mangazeisky silver project located in Yakutia, Russia. Further to the update in press release of January 13, 2016 the Company is pleased to announce the following developments at site:

 

  • Leasing agreements signed with Caterpillar Finance for the main power generating station, mining loaders and ancillary generators for the water supply pipeline. Favourable terms with CAT Finance helps to reduce CAPEX costs;
  • At this time, all CAT equipment has arrived in Yakutsk, ready for delivery to site via winter road;
  • Drilling and Blasting contractor are currently mobilising to site;
  • Contracts agreed for main civil and steel erection works and mobilisation to site is in progress and deliveries to site of the structural steel for plant building near completion;
  • Contract agreed for final accommodation camp dormitory;
  • Additional fuel storage capacity constructed on site and now being filled;
  • Major items of imported equipment, ball mill, pressure filters, agitators on final leg of journey within Russia Federation; and
  • Strengthened team with experienced Project Manager and process for the recruitment for permanent operation staff has begun.

 

 

Filing Year-End Financial Statements, Notes and Management, Discussion and Analysis

 

 

In addition, the Company is pleased to announce that it will be filing today its financial results for the fourth quarter and the year ended December 31, 2015, effective March 29, 2016. For the full December 31, 2015 year-end financial statements and Management’s Discussion and Analysis, please refer to the Company website at www.silverbearresources.com and under the Company’s profile at the SEDAR website at www.sedar.com.

 

 

About Silver Bear

 

 

Silver Bear is focused on the development of its wholly-owned Mangazeisky Silver Project, covering a licence area of ~570 sq. km that includes the high grade Vertikalny deposit (amongst the highest grade silver deposits in the world) located 400 km north of Yakutsk in the Republic of Sakha (Yakutia) within the Russian Federation. The Company was granted a 20-year mining licence for the Vertikalny deposit in September 2013 and completed a Preliminary Economic Assessment in February 2014. The Feasibility Study, scheduled for completion in 1Q 2016, is contracted to Tetra Tech in the UK with SRK and ERM as subcontractors for the mining and environmental studies respectively.

 

Posted March 30, 2016

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