Silver Bear Resources Plc (“Silver Bear” or the “Company”) (TSX:
SBR) announces the filing its unaudited financial results for the
three and nine-month period ended 30 September 2020 today,
including development highlights from its Mangazeisky silver
project in Far East Russia.
For complete details of the unaudited Interim
Consolidated Financial Statements and associated Management’s
Discussion and Analysis please refer to the Company’s filings on
SEDAR (www.sedar.com) or the Company’s website
(www.silverbearresources.com).
Q3
2020 QUARTER HIGHLIGHTSDuring the nine-month
period ended 30 September 2020 the Group production statistics
included:
- Mined a total of
89,703 tonnes of ore, processed 80,748 tonnes of ore at an average
grade of 677 g/t of silver, producing a total of 1,501,123 ounces
of silver;
- Sold a total of
1,514,374 ounces of silver totalling production revenue of US$
28,410,544 and reported a total comprehensive loss of $42,468,501
and an accumulated deficit of $232,055,475.
- In August 2020,
the Group has started its 2020 exploration drilling activities,
about 4,000 metres of core drilling program is expected to test the
both flanks of Vertikalny deposit where previous work has
identified possible additional resources, to further test the
Porfirovy deposit to the south and also additional infill drilling
at the Mangazeisky North resource; and
- As of the date
of this report, the Group confirms there have been no major
disruptions at either sites or to the Group’s planned production
and operations due to the COVID-19 pandemic.
MANGAZEISKY SILVER PROJECT COMMERCIAL
PRODUCTIONThe Group achieved first pre-commercial silver
production in 1 April 2018 through its commissioning activities at
the Mangazeisky Silver Project as construction of the processing
plant and associated infrastructure was completed. The Group
achieved commercial production at the beginning of the third
quarter of year 2019. The table below details the production
highlights for the three and nine-month period ended 30 September
2020 and 2019.
|
Three-months ended30 Sept 2020 |
Three-months ended30 Sept 2019 |
Nine-months ended30 Sept 2020 |
Nine-months ended30 Sept 2019 |
Operating Data |
|
|
|
|
Ore
Mined (tonnes) |
14,289 |
27,577 |
89,703 |
87,230 |
Ore
processed (tonnes) |
25,859 |
26,576 |
80,748 |
71,789 |
Head
grade (g/t Ag) |
677 |
832 |
677 |
670 |
Recovery
(%) |
85.6 |
70.7 |
86.5 |
70.5 |
Silver
ounces produced |
466,841 |
502,134 |
1,501,123 |
1,074,848 |
|
|
|
|
|
Financial Data |
|
|
|
|
Silver
ounces sold |
448,997 |
400,877 |
1,514,374 |
1,027,574 |
Average
realized price (US$/oz) |
23.92 |
16.98 |
18.76 |
15.91 |
Production and pre-production revenues, US$ |
10,739,432 |
6,806,711 |
28,410,544 |
16,345,990 |
|
|
|
|
|
Development & Operational
ActivitiesDuring the first quarter, the Group’s 2020
winter road procurement and transportation delivered approximately
14,000 tonnes of supplies, including new drill rig, excavator and
the new XRT processing equipment. The winter road was closed on
30th of April this year, and accomplished delivery of all the
Group’s demand for gas condensate and diesel fuel. Deliveries for
the summer and fall months are now via cargo flights using the
Group’s newly completed airstrip.
During the second quarter, in May 2020,
following a prescribed quarantine period, the XRT consultants
arrived at site and completed the final commissioning. The XRT
equipment is now fully operational. The flotation facility
construction project design development phase was completed in the
second quarter.
During the third quarter, the Group began the
construction on the foundation for the new flotation plant, that is
designed to process the primary sulphide ores at the Vertikalny
deeper pit and underground mining operations. It is expected that
the new flotation plant will be completed in early 2022.
As of the date of this report there are no
construction contractors and approximately 200 Prognoz employees at
site. There are also 63 contractors, namely catering, process
consultants, and construction workers. As of 30 September 2020,
there was no lost time recorded accident at site. In light of the
World Health Organization (“WHO”) declaring COVID-19 a global
pandemic in March of this year, the Group has developed and
implemented a response and mitigation plan for both its Yakutsk
head office and Mangazeisky mine site. At the date of this report
the Group has had no major disruptions at either sites or to our
planned production and operations, however we continue to monitor
the situation ensuring we keep the safety of our work force our
main priority.
Corporate & Financing
ActivitiesOn 27 May 2020, the Group announced that it has
further amended its existing facilities agreement (the “Facilities
Agreement”) with Inflection Management Corporation Limited
(“Inflection”), a major shareholder of the Company, and Unifirm
Limited (“Unifirm”), an affiliate of A.B. Aterra Resources Ltd.
(“Aterra”), also a major shareholder of the Company. The amendments
to the Facilities Agreement (the “Facilities Agreement
Amendments”): (i) reduce the interest payable on all funds drawn
under the Facilities Agreement from 9% to 7% per annum; and (ii)
extend the first interest period under the Facilities Agreement and
revise the interest capitalization date to 1 April 2020.
The Facilities Agreement Amendments are a
“related party transaction” under Multilateral Instrument 61-101 –
Protection of Minority Security Holders in Special Transactions
(“MI 61-101”) because Inflection and Aterra, an
affiliate of Unifirm, are related parties to the Company, as its
major shareholders. Pursuant to Section 5.7(f) of MI 61-101, the
Company is exempt from obtaining approval of the Company’s minority
shareholders as a result of the Facilities Agreement Amendments
being an amendment to a loan to the Company (obtained from a
related party on reasonable commercial terms that are not less
advantageous to the Company than if such credit facility was
obtained through an arm’s length lender) that has no equity or
voting component. The Company will file a material change report in
respect of the Facilities Agreement Amendments. The Group filed a
material change report in respect of the Facilities Agreement
Amendments on December 24, 2019.
Exploration ActivitiesDuring
the third quarter 2020, the Group was working on the completion of
the details of its exploration program for the upcoming exploration
season. During the season the Group is planning to target
extensions of existing deposits and new areas of significance with
the intent to grow the Group’s resources and establish future
drilling programs. In August 2020, the Group has started its 2020
exploration drilling activities. About 4,000 metres of core
drilling is expected to test the both flanks of Vertikalny deposit
where previous work has identified possible additional resources,
to further test the Porfirovy mineralization area to the south as
well as additional infill drilling at the Vertikalny and
Mangazeisky North deposits.
OUTLOOK FOR
THE REMAINDER OF YEARIn order to fund
further development operations and maintain rights under licenses
and agreements, the Group has secured funding in the form of
long-term loans of which the principal totals $185 millions and the
Group may be dependent on securing additional financing until such
time that it generates sufficient operating cash flow to meet its
liabilities.
In consideration of the Group’s going concern
and following the initiation of silver production in the second
quarter of 2018 and now achieving full commercial production in the
third quarter of 2019 the Group’s priorities for fourth quarter and
the full year ending 31 December 2020, are as follows:
- Although at the
date of this report COVID-19 has not materially impacted the
Group’s silver production, there is no guarantee that it will not
going forward, as such the forecast for the whole of 2020 has been
revised to approximately 1.9 million ounces of silver;
- Following the
developing of construction documentation for the new flotation
plant at Vertikalny in Q3 2020, In Q4 2020, the Group will start
the construction of the foundation for the new flotation
plant;
- Complete the
2020 exploration program that target extension of existing deposits
and new areas of significance with the intent to grow the Group’s
resources and establish future drilling programs;
- Continue to
monitor all operations to further optimize operating costs and
improve operational efficiencies; and
- Continue to
build up operational capabilities and staffing and introduce new
systems for production monitoring and management accounting.
About Silver BearSilver Bear
(TSX: SBR) is focused on the development of its wholly-owned
Mangazeisky Silver Project, covering a licence area of
approximately 570 km2 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 within the
Russian Federation. As of April 2018, the Company attained first
silver production as a result of commissioning activities and on 1
July 2019 the Company achieved full commercial production. Other
information relating to Silver Bear is available on SEDAR at
www.sedar.com as well as on the Company’s website at
www.silverbearresources.com.
Cautionary NotesThis release
and subsequent oral statements made by and on behalf of the Company
may contain forward-looking statements, which reflect management's
expectations. Wherever possible, words such as "intends",
"expects", "scheduled", "estimates", "anticipates", "believes" and
similar expressions or statements that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur
or be achieved, have been used to identify these forward-looking
statements. Although the forward-looking statements contained in
this release reflect management's current beliefs based upon
information currently available to management and based upon what
management believes to be reasonable assumptions, the Company
cannot be certain that actual results will be consistent with these
forward-looking statements. A number of factors could cause events
and achievements to differ materially from the results expressed or
implied in the forward-looking statements. Such risk factors
include, but are not limited, to the risk factors identified by the
Company in its continuous disclosure filings filed from time to
time on SEDAR. These factors should be considered carefully and
prospective investors should not place undue reliance on the
forward-looking statements. Forward-looking statements necessarily
involve significant known and unknown risks, assumptions and
uncertainties that may cause the Company's actual results, events,
prospects and opportunities to differ materially from those
expressed or implied by such forward-looking statements. Although
the Company has attempted to identify important risks and factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking statements,
there may be other factors and risks that cause actions, events or
results not to be as anticipated, estimated or intended. There can
be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
prospective investors should not place undue reliance on
forward-looking statements. These forward-looking statements are
made as of the date of this release, and the Company assumes no
obligation to update or revise them to reflect new events or
circumstances, unless otherwise required by law.
CONTACT INFORMATION:
Vadim IlchukPresident and Chief Executive OfficerT: +7 985 866
8877info@silverbearresources.com |
|
Judith WebsterInvestor Relations Manager & Corporate
SecretaryT: +416 453
8818jwebster@silverbearresources.com |
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