Source: Streetwise Reports 12/06/2018
A major partnership with an Australian mining and metals company that is funding exploration is paying off with a large increase in the resource estimate this explorer released.
Silver Bull Resources Inc. (SVB:TSX; SVBL:NYSE.MKT), a Canada-based mineral exploration company, released at the end of October an updated resource for the Sierra Mojada project, located in Coahuila, Mexico. Recent measurements showed 5.35 billion pounds of zinc and 87.4 million ounces of silver.
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Sierra Mojada Resource Update Highlights |
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● An open pittable, measured and indicated “High Grade Zinc Zone” of 13.5 million tonnes at an average grade of 11.2% Zinc at a 6% cutoff for 3.336 billion pounds of zinc. |
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● An open pittable, measured and indicated “High Grade Silver zone” of 15.2 million tonnes at an average grade of 114.9 g/t at a 50g/t cutoff for 56.3 million ounces of silver. |
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● Total Measured & Indicated Global Resource 70.4 million tonnes at 38.6 g/t Ag and 3.4% Zn that contain 5.354 billion pounds Zn and 87.4 million ounces Ag. |
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● The updated resource was modelled using a silver price of US$15 per ounce, and a zinc price of US$1.20 per pound. |
Source: Silver Bull Resources
“This resource update models the mineralization defined at Sierra Mojada to zinc and silver prices realistic of the current market conditions,” stated Tim Barry, president, CEO and director of Silver Bull. “Sierra Mojada is one of only a handful of projects with any appreciable zinc resources and is one of the largest undeveloped silver-zinc projects in Mexico. It has excellent infrastructure; it is located three hours from an international airport with a paved road right to site; it has a functioning railway right to site; runs on grid power; and it has a skilled mining work force to draw upon in the immediate local area. This resource provides excellent leverage to both zinc and silver prices and has the potential to be scaled in size depending on metal prices.”
In June, Silver Bull Resources signed a joint venture with South32, a large, Australia-based miner.
CEO Tim Barry noted how aggressive South32 is in the acquisition and joint venture arena, “The company recently took out Arizona Mining of US$1.6 billion. It also formed a joint venture with a company called Trilogy in Alaska, and has numerous other projects.”
Silver Bull Resources’ deal with South32 is a 70/30 joint venture for the Sierra Mojada project, in which South32 must contribute minimum exploration funding of US$10 million 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.”
If South32 chooses to exercise its option to subscribe for 70% of the shares of Minera Metalin S.A. De C.V., the wholly owned subsidiary of Silver Bull that holds the claims in respect of the project, it will contribute $US100 million to Metalin for project funding (less the amount of the initial funding contributed by South32 during the option period).
Barry said the South32 joint venture “validates the significant success the company has had in identifying high-grade sulphide zones at the Sierra Mojada project.”
On November 20, Silver Bull Resources announced the completion of its 5,297-line kilometer airborne geophysical survey on the Sierra Mojada project. The survey also included a Versatile Time Domain Electromagnetic (VTEM) survey, which is recognized as a “successful exploration tool in other carbonate replacement deposit (CRD) systems in Mexico and around the globe.”
The company explained, “The VTEM survey was conducted as part of the work program under the South32 joint venture. . .The survey will aid in refining the design of an upcoming drill program expected to commence in the first quarter of 2019.”
Private Placements
In late June 2018, the company announced a private placement of US$3 million.
Shortly after, the company confirmed the closing of its initial tranche of the private placement. “The initial tranche consisted of 21,776,317 units (the “Units”) of the Company at a price of US$0.13 per Unit for aggregate gross proceeds of US$2,830,921.”
Exploration Capital Partners 2005 Limited Partnership, a fund managed by one of the Sprott Group of Companies, purchased 8,100,000 of those units.
In late August 2018, Silver Bull announced the completion of its second (and final) tranche for the private placement. Under the second tranche of the private placement, Silver Bull issued 7,365,555 units of the company at a price of US$0.13 per unit for aggregate gross proceeds of US$957,522.
The private placement brings for a total of $3,788,443 in proceeds. Silver Bull Resources plans to use the proceeds for general working capital purposes.
Barry noted, “The company is well financed. It has four exploration programs underway right now at Sierra Mojada. There is $7 billion worth of gross metal in the ground.”
The company has caught the attention of industry observers. Ron Struthers marked this stock as a “Strong Buy.” In the June 5 Struthers Resource Stock Report, Struthers noted, “Sierra Mojada already has a 43-101 open pittable oxide deposit containing 90.3 million ounces silver and 4.57 billion pounds of zinc. Judging by all the drilling and channel sampling, it appears the sulphide deposit could end up being much larger and probably have better metallurgy. I am sure it is this potential and the very high grades of silver and zinc that has attracted South32 to commit up to $100 million to get a piece of the action.”
Silver Bull has a total of 234.8 million outstanding shares, with about 7 million held by directors and management.
SVB shares currently sit at CA$0.12.
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Additional disclosure:
Ron Struthers: I, or members of my immediate household or family, own shares of the following companies mentioned in this article: Silver Bull Resources. I personally am, or members of my immediate household or family are, paid by the following companies mentioned in this article: None. My company has a financial relationship with the following companies mentioned in this article: Silver Bull Resources is an advertiser on playstocks.net.
( Companies Mentioned: SVB:TSX; SVBL:NYSE.MKT,
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