Silver Bow Mining Targets Montana Processing Complex to Boost Rainbow Block Strategy

Silver Bow Mining said it has entered into a definitive agreement to acquire the Jefferson County Metallurgical Complex in Montana, a past-producing processing site located about 55 miles by road from the company’s Rainbow Block project in Butte. Chairman and Chief Executive Officer Travis Naugle said the proposed acquisition is intended to add processing infrastructure and development flexibility while leaving the Rainbow Block as the company’s primary focus. The transaction remains subject to bankruptcy court approval, shareholder approval, NYSE American approval, governmental approvals, permit transfers and other closing conditions. The assets are being acquired through a Chapter 11 and Section 363 sale process involving Montana Tunnels Mining Inc. Naugle said an initial closing is expected around Sept. 8, subject to bankruptcy court approval, while final closing would occur after the remaining conditions are met. The Jefferson County complex includes a 15,000-ton-per-day crushing, grinding and flotation plant designed for polymetallic ores, as well as a 1,000-ton-per-day gold mill, tailings facilities and associated infrastructure. Naugle said the company believes the complex may be suitable for mineralization from Rainbow Block, which contains silver, gold, zinc and lead. Silver Bow said it will need to complete technical, engineering, metallurgical, environmental and regulatory work before determining whether and how the facility could be incorporated into a future Rainbow Block development plan. President Doug Stiles said the site is not a fully permitted, turnkey facility and would require rehabilitation and additional permitting before processing Rainbow Block material. “The metallurgical facility is largely intact,” Stiles said. “There will be some refurbishment necessary in order to make it operational,” including work on control systems, wiring and lighting. He added that the mill has not been stripped and that its primary components remain in place. Naugle cited an independent fairness opinion that assigned the facility and associated infrastructure an estimated replacement value of approximately $350 million. He cautioned that this figure does not mean the facilities can be immediately restarted or that the acquisition eliminates future capital requirements. Rainbow Block currently hosts an inferred mineral resource of approximately 11.48 million tons grading 4.3 ounces per ton of silver, 0.05 ounces per ton of gold, 4.6% zinc and 1.3% lead, according to Naugle. He said the resource is not a mineral reserve and does not have demonstrated economic viability. The company is conducting a 25,000-foot surface drilling program, rehabilitating the Chief Joseph portal and underground decline, and advancing geological, en...