Black Bear Raises A$12.5 Million to Advance Shafter Silver Mine Restart Preparations

en.Wedoany.com Reported - On August 28, Black Bear Minerals secured placement commitments totaling A$12.5 million, with funds primarily earmarked for underground drilling, resource conversion, permitting, and restart engineering studies at the Shafter silver mine in Texas, USA. The placement involves the issuance of 22,727,300 new shares at A$0.55 per share, representing a 16% discount to the company's last traded price of A$0.655 on August 25 and a 12.5% discount to the 5-day volume-weighted average price of A$0.628.

Of these, 21,818,200 shares are planned to be issued under the company's existing placement capacity. Executive Chairman Matthew Hayes intends to subscribe for A$500,000, corresponding to 909,100 shares, subject to shareholder approval. The placement is expected to settle on September 3, with the ordinary placement shares issued and commencing trading on September 4. Hayes' subscription proposal is scheduled for consideration at the annual general meeting expected to be held in November. Canaccord Genuity (Australia) is acting as sole lead manager and bookrunner for the placement.

Project expenditure from the proceeds will first be directed toward Shafter's Phase 1 underground drilling. Black Bear is completing operational preparation work at the existing underground mine and plans to enter historical workings to conduct resource extension, resource validation, and infill drilling, providing data for the conversion of the existing foreign mineral resource to JORC standards, while also supplementing underground geological data for mine planning and restart studies. The U.S. Mine Safety and Health Administration has conducted assessments of site safety and operational requirements, with American Mining and Tunnelling involved in the preparation and rehabilitation of underground facilities.

Shafter's existing foreign mineral resource, prepared in accordance with Canadian NI 43-101 standards, comprises 1.89 million tonnes of ore at an average silver grade of 289 g/t, containing 17.57 million ounces of silver, of which measured, indicated, and inferred resources contain 0.89 million, 10.17 million, and 6.51 million ounces of silver, respectively. This resource has not yet been classified under the JORC 2012 Code, and Black Bear is advancing the conversion process through drilling, re-sampling of historical core, and underground mine sampling.

Shafter has two prior production histories. The historical Presidio mine produced approximately 35.2 million ounces of silver from approximately 2.3 million tonnes of ore mined between 1883 and 1942, at an average grade of 521 g/t. The previous operator subsequently restarted the project in 2012 and ceased operations in December 2013. The project currently retains over 160 kilometres of underground workings, as well as a processing plant, refining facilities, warehouse facilities, a Merrill-Crowe recovery system, a 69 kV grid connection, and associated water rights built around 2012. Black Bear estimates the value of existing infrastructure at approximately A$150 million.

In February this year, Black Bear confirmed that the key operating and environmental permits covered by the 2018 preliminary economic assessment remain valid. In June, the company awarded the next phase of restart studies to Ausenco Engineering USA South, with work including process option comparisons, metallurgical test work, mine planning, infrastructure rehabilitation options, long-lead equipment procurement assessment, environmental review, and financial and execution plans. Export Finance Australia has issued a non-binding letter of support regarding potential financing support for Ausenco's involvement in the Shafter project, with any financing still subject to due diligence, eligibility assessment, risk evaluation, and internal approvals.