Silver Bow Mining has signed a definitive asset purchase agreement to acquire the Jefferson County Metallurgical Complex in Montana, US, from Montana Goldfields and Montana Tunnels Mining.
The agreement covers the purchase of the integrated metallurgical facility, including two mineral processing circuits, relevant infrastructure and the historic Montana Tunnels M-Pit located approximately 55 miles north-east of Butte.
The complex includes separate 15,000 tonne per day (tpd) and 1,000tpd milling and flotation circuits, plus crushing, storage, tailings and related facilities on an approximately 5,000-acre site.
Silver Bow Mining anticipates that the circuit will be suitable for processing high-grade silver-gold-zinc-lead mineralisation from its nearby Rainbow Block resource.
To fund the transaction, the company will pay roughly $28.6m in cash to settle creditor claims.
This includes approximately $4.27m to Jefferson County and $20.8m to the Montana Department of Environmental Quality.
Once all the required approvals have been obtained and the final closing takes place, Silver Bow Mining is set to issue 3,500,000 contingent value rights (CVRs).
Each of these CVRs may be converted into one common share of Silver Bow Mining 180 days after the final closing, in accordance with the specific conditions and restrictions outlined in the terms governing the CVRs.
The complex is being acquired through a Chapter 11 sale by Montana Tunnels Mining and the transaction is subject to approval by the US Bankruptcy Court for the District of Montana.
Additional requirements include shareholder approval for issuing the CVRs and underlying shares, listing approval from the NYSE American and customary closing conditions.
Silver Bow Mining is actively evaluating development options for its Rainbow Block Project, which hosts an inferred mineral resource of 11.48 million tonnes grading 14.8oz/t silver equivalent.
The transaction also includes a 2% net smelter return royalty and 50% net profits interests dependent on future production and the profitability of specified assets.
There is no certainty that the transaction will close as described or at all, said the company.
Silver Bow Mining chairman and CEO Travis Naugle said: "The acquisition of the Jefferson County Metallurgical Complex represents an important strategic opportunity for Silver Bow Mining and supports our primary focus of advancing the high-grade Rainbow Block Project in Butte.
"The complex provides us with existing milling and flotation infrastructure that we believe could offer meaningful processing flexibility and potential development synergies for the Rainbow Block."
"Silver Bow Mining to acquire metallurgical complex in Montana, US" was originally created and published by Mining Technology, a GlobalData owned brand.