Silver Bow Mining Signs Definitive Agreement to Acquire the Jefferson County Metallurgical Complex in Montana
NYSE American: SBMT
Silver Bow Mining Corp. announced that it has entered into a definitive asset purchase agreement with Montana Goldfields, Inc. ("MTGF") and Montana Tunnels Mining, Inc. to acquire an integrated metallurgical complex containing two distinct mineral processing circuits, together with the historic Montana Tunnels M-Pit, collectively referred to as the Jefferson County Metallurgical Complex, located in Jefferson County, Montana, according to the company.
According to the company, the Jefferson County Metallurgical Complex is located approximately 55 miles by road northeast of Butte and includes 15,000-tpd and 1,000-tpd mineral processing circuits, crushing and ore storage facilities, tailings facilities, and associated infrastructure within an approximate 5,000-acre land position. The company stated that the 1,000-tpd circuit is expected to be suitable for processing the high-grade silver-gold-zinc-lead mineralization comprising the Company's Rainbow Block resource.
Key Transaction Details
Initial Closing Funding Obligation
According to the company, the Company will fund approximately US$28.6 million to satisfy specified creditors associated with the acquired assets, including approximately US$4.27 million to satisfy amounts owing to Jefferson County and approximately US$20.8 million to satisfy specified obligations owing to the Montana Department of Environmental Quality ("Montana DEQ"). In consideration for the funding, at the Initial Closing, Montana Tunnels Mining, Inc. will issue to the Company a senior secured note secured against the real property interests, fixtures and tangible personal property at the Jefferson County Metallurgical Complex, according to the company.
Final Closing Consideration
Following receipt of necessary approvals, at Final Closing, Silver Bow Mining will issue 3,500,000 contingent value rights ("Final Closing CVRs"); each Final Closing CVR converts into one common share of Silver Bow Mining 180 days following Final Closing, subject to certain terms and limitations as set forth in the Final Closing CVR terms, according to the company. The issuance of the Final Closing CVRs, the Deferred Compensation CVRs and the underlying shares of Silver Bow Mining are subject to the approval of the shareholders of Silver Bow Mining, the approval of the NYSE American and other required approvals.
Deferred M-Pit Milestone Consideration
The Agreement also provides for the issuance to MTGF of 11,500,000 additional deferred compensation CVRs, representing potential future consideration contingent on future milestones, including potential M-Pit exploration, development and commercial production, according to the company. Of these, 6,250,000 Deferred Compensation CVRs will convert into 6,250,000 common shares of Silver Bow Mining upon the earlier of (i) a positive construction decision on the M-Pit Expansion or (ii) nine months following completion of an M-Pit feasibility study which demonstrates positive economics for the project. The remaining 5,250,000 Deferred Compensation CVRs will convert upon the earlier of (i) the achievement of the M-Pit commercial production milestone or (ii) 36 months following a construction decision by Silver Bow Mining on the M-Pit Expansion, subject to specified extensions, per the company.
CVR Restrictions
According to the company, all CVRs will be subject to certain eligibility and transfer restrictions under the CVR Agreement, including restrictions intended to prevent persons who are ineligible under Montana Code Annotated §82-4-360 from converting CVRs into Silver Bow Mining common shares. Section 82-4-360 limits the ability of certain persons to engage in hard-rock mining or exploration activities in Montana, according to the company.
Other Contingent Economic Interests
According to the company, the transaction includes certain contingent economic interests in favor of MTGF that are dependent upon future activity, production, or net profits from the acquired assets. These include: (i) a 2% net smelter return royalty on future production from the M-Pit, subject to a US$10 million full buyback right in favor of Silver Bow Mining; (ii) a toll-milling arrangement for material from MTGF's Golden Dream and Diamond Hill projects, subject to satisfaction of all applicable State of Montana permitting and eligibility requirements; (iii) a 50% net profits interest ("NPI") related to potential future tailings reprocessing at the Complex; and (iv) a 75% NPI in potential future Clancy Creek placer production at the Complex. According to the company, these NPI arrangements apply only to the specified future activities and become relevant solely if those activities are permitted under applicable State of Montana requirements, are determined to be economically viable, are undertaken, and generate net profits after recoupment of capital investment.
Post-Closing Work Commitments
Following Final Closing, the Company has agreed to undertake specified technical work programs associated with the acquired Complex, according to the company. These include a US$5 million work program directed toward completion of a Feasibility Study on the M-Pit Expansion, and a US$3 million program to advance detailed engineering and regulatory work associated with the Clancy Creek Bypass Channel. The Agreement provides for completion of the M-Pit Feasibility Study within nine months following Final Closing, subject to specified extensions for certain technical matters that may require additional assessment or verification, per the company.
Jefferson County Metallurgical Complex and Rainbow Block
Silver Bow Mining stated that ownership of the Jefferson County Metallurgical Complex can provide an important strategic option as the Company advances evaluation of development alternatives for the Rainbow Block. The Complex includes separate 15,000-tpd and 1,000-tpd milling and flotation circuits, together with extensive associated infrastructure. The Company believes the 1,000-tpd milling and flotation circuit, with certain upgrades, will be suitable for processing the high-grade silver-gold-zinc-lead mineralization comprising the Rainbow Block resource. Together with Silver Bow Mining's existing Butte Mining District claims, the proposed acquisition would add processing capacity and related infrastructure in Jefferson County to the Company's Montana asset base, according to the company.
Silver Bow Mining is actively exploring its Butte Project assets including the Rainbow Block Project, which hosts an Inferred Mineral Resource estimate of 11.48 million tons grading 14.8 ounces per short ton silver equivalent ("AgEq") (4.28 opt Ag, 0.05 opt Au, 4.59% Zn, and 1.25% Pb) containing 170 million AgEq ounces (49.26 million ounces silver, 0.55 million ounces gold, 1.05 billion pounds of zinc, and 287 million pounds of lead), per the company's news release dated June 30, 2025.
Following completion of the transaction, the Company intends to continue advancing its technical evaluation of the processing infrastructure and its potential integration into potential future Rainbow Block development, according to the company.
Approvals and Closing Conditions
The Jefferson County Metallurgical Complex is being acquired through a Chapter 11 sale process involving Montana Tunnels Mining, Inc., which filed for bankruptcy protection on July 27, 2026, according to the company. The transaction is expected to proceed pursuant to Section 363 of the U.S. Bankruptcy Code and remains subject to approval by the U.S. Bankruptcy Court for the District of Montana, together with other required approvals and customary closing conditions, including governmental approvals, approval of the shareholders of Silver Bow Mining and approval of the NYSE American, LLC.
Completion of the Final Closing is subject to customary closing conditions, including approval by the Company's shareholders of the issuance of the CVRs and the common shares underlying the CVRs, as required under the rules of the NYSE American, approval by the NYSE American for the listing of such underlying common shares, certain other governmental approvals, if deemed necessary, the absence of material adverse changes affecting the acquired assets and the absence of litigation materially affecting the acquired assets, according to the company. The Company intends to call a Special Meeting of Shareholders to seek the required approval and to solicit proxies in connection with the meeting.
The Company has sufficient cash resources to satisfy its closing obligations and continue its current planned operations while it is evaluating a range of financing alternatives, with a preference for structures that minimize dilution to existing shareholders, in order to preserve financial flexibility as it advances its broader exploration and, if warranted, development plans, according to the company.
The Company states there can be no assurance that the transaction will close on the terms described, or at all.
Market Note: Section 363 Bankruptcy Sales and Contingent Value Rights
According to the press release, the acquisition is structured as a sale under Section 363 of the U.S. Bankruptcy Code, a process used to purchase assets from a company operating under Chapter 11 bankruptcy protection, in this case Montana Tunnels Mining, Inc., which filed for bankruptcy protection on July 27, 2026. The transaction also involves contingent value rights (CVRs), securities that may convert into common shares of Silver Bow Mining only upon satisfaction of specified future milestones described in the release, such as an M-Pit construction decision, completion of a feasibility study, or achievement of commercial production. Per the company, the CVRs and underlying shares have not been registered under the U.S. Securities Act of 1933 and will be issued in reliance on available exemptions from registration applicable to private offerings of securities.
Advisors
According to the company, Joseph Gunnar & Co., LLC, Cantor Fitzgerald & Co., and Research Capital Corporation are acting as financial advisors to Silver Bow Mining in connection with the transaction. Dorsey & Whitney LLP and Crowley Fleck PLLP are acting as transaction counsel to Silver Bow Mining. Lucosky Brookman LLP is acting as transaction counsel to Montana Goldfields, Inc. and Montana Tunnels Mining, Inc.
Webcast
Silver Bow Mining hosted a live webcast to discuss the acquisition of the Jefferson County Metallurgical Complex on August 24, 2026, at 4:00 p.m. ET, according to the company.
Management Commentary
"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," said Travis Naugle, Chairman and Chief Executive Officer of the Company. "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. As we expand our footprint in a state with a proud mining history, we are pleased to be able to settle all non-MTGF-affiliated creditors, notably including the Montana DEQ and Jefferson County, as we build on our commitment to responsible mining in Montana. While further technical evaluation, site work, and permitting will be required, we believe this acquisition provides Silver Bow Mining with valuable infrastructure and optionality as we evaluate the most efficient path to advancing the Rainbow Block and creating long-term value for our shareholders."
About Silver Bow Mining Corp.
Silver Bow Mining is a minerals exploration company advancing the high-grade Rainbow Block Silver-Zinc Project in Montana's historic Butte Mining District, while targeting a broader suite of U.S.-designated Critical Minerals including copper, manganese, germanium, gallium, indium, antimony, and bismuth. The Company holds approximately 4,210 acres of patented mineral claims and approximately 1,427 acres of surface lands across multiple claim blocks, including the flagship Rainbow Block, which hosts 11.48 million tons of inferred resources grading 14.8 opt AgEq (4.28 opt Ag, 0.05 opt Au, 4.59% Zn, and 1.25% Pb).
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