Silver Bow Mining

Silver Bow Mining Signs Term Sheet with Ocean Partners for Potential US$88 Million Funding and Credit Support Package

Silver Bow Mining Signs Term Sheet with Ocean Partners for Potential US$88 Million Funding and Credit Support Package
NYSE American: SBMT

Silver Bow Mining Corp. announced that it has signed a non-binding term sheet with Ocean Partners UK Limited for an integrated funding, credit support, and offtake package with an aggregate total of approximately US$88 million, according to the company. The package, as described by the company, contemplates a US$40 million concentrate prepayment facility linked to ten-year zinc and lead concentrate offtake agreements for the company's Rainbow Block Project in Butte, Montana and the to-be acquired Montana Tunnels Mine within the Jefferson County Metallurgical Complex, approximately US$43.1 million of reclamation bond guarantees at the Rainbow Block and Montana Tunnels Mine, and a US$5 million lead in a future Silver Bow Mining equity investment.

A binding US$5 million pre-closing bridge note, to be funded within five business days of signing, forms part of, and will be credited against, the first tranche of the prepayment facility, the company stated. The company said it previously entered into an agreement to acquire the Complex and is targeting Final Closing of the acquisition in the fourth quarter of 2026, subject to the closing conditions described in the release.

Key Deal Details

Concentrate Prepayment Facility

  • US$40 million concentrate prepayment facility in three tranches: Tranche A of US$10 million available at initial closing, with the US$5 million pre-closing bridge credited against that amount; Tranche B of US$20 million available following a board resolution approving a restart or refurbishment program at either property; and Tranche C of US$10 million available at the company's option after concentrate deliveries have occurred in each of three consecutive months, according to the company.
  • The facility is structured without production-timing covenants, with repayment principally by set-off against concentrate deliveries, the company said.
  • The facility would bear interest at 12-month SOFR plus 6.75% per annum, payable monthly, with a 1.0% arrangement fee deducted from each draw, according to the company. Tranches A and C would have final maturities 36 months after their respective drawdowns, and Tranche B would amortize over 24 months after its amortization start date. Silver Bow Mining may prepay at par plus a 1.0% early repayment fee.
  • The US$5 million pre-closing bridge would bear the same pricing as the contemplated facility and would be supported by a corporate obligation of Silver Bow Mining and an assignment by way of security of the company's rights under the secured note and acquisition agreement relating to the Complex. If Final Closing of the acquisition does not occur, the bridge would become repayable on the long-stop date specified in the bridge note, contemplated to be March 31, 2027, according to the company.

Reclamation Bond Guarantees

  • Ocean Partners would guarantee a surety bond of up to US$40.9 million covering the reclamation obligations of the Complex on a zero cash-collateral basis, and a guarantee of approximately US$2.19 million for the current Rainbow Block reclamation bond, the company said.
  • On placement of the guaranteed bond and its acceptance by the Montana Department of Environmental Quality, the existing cash reclamation bond of approximately US$40.9 million associated with the Complex and approximately US$1.1 million of the company's current US$2.19 million reclamation bond for the Rainbow Block would be released to the company, according to the release.
  • The guarantees would have a 60-month term and carry a fee of 3.0% per annum on amounts actually guaranteed, payable at Silver Bow Mining's option in cash, shares or warrants, subject to applicable securities-law and stock-exchange requirements, the company stated. At the end of the applicable term, Silver Bow Mining would be required to replace the guarantee or provide cash collateral for the relevant bond unless otherwise agreed.

Ten-Year Offtake Agreements

  • Ocean Partners would purchase 100% of any future potential zinc and lead concentrates attributable to the Rainbow Block, 100% of any future potential zinc and lead concentrates attributable to ores from outside the M-Pit at Montana Tunnels, and one-third of future potential zinc and lead concentrates from inside the M-Pit at Montana Tunnels, on benchmark-linked terms with no minimum tonnages and no take-or-pay, according to the company.
  • The company retains priced rights to terminate the offtake contracts at any time, before or after production, and these rights survive a change of control of the company, the release states.
  • Ocean Partners would hold a right of first offer over the offtake of other concentrates, ores and products from the properties, as well as future prepayment, streaming or other offtake-linked funding associated with the properties, according to the company.

Equity Investment Lead

  • Ocean Partners would agree to act as lead investor, with a US$5 million commitment, if and when the company conducts its next round of equity financing on the same terms as other investors, the company said. Silver Bow Mining is not obligated to undertake an equity financing, and any investment would be subject to applicable securities-law and stock-exchange requirements.

Market Note: Concentrate Prepayment and Bond Guarantee Structures

According to the release, the Ocean Partners financing is structured to rank subordinate to future senior project debt financing for both the Rainbow Block and the Complex, which the company said is intended to preserve its ability to put conventional project financing in place as the properties advance. The company also stated that further details, including the security package and the terms of the company's termination and buy-out rights, will be disclosed if and when the definitive agreements are finalized and executed.

Timing, Conditions, and Binding Effect

The parties will target signing of definitive agreements concurrently with, or as soon as practicable after, Final Closing of the company's previously announced acquisition of the Complex, which the company is targeting for the fourth quarter of 2026, with the bond guarantee facility and the first tranche of the prepayment facility available at that time, according to the company. Completion is subject to customary conditions, including negotiation and execution of definitive agreements, Final Closing of the Complex acquisition, security documentation, satisfactory due diligence, approval of the board of directors of Ocean Partners and the company, and surety terms and DEQ acceptance of the guaranteed surety bond satisfactory to the company.

Completion of the company's acquisition of the Complex remains subject to the conditions described in the company's news release of August 24, 2026 announcing the definitive agreement, including approval of the shareholders of Silver Bow Mining, approval of the NYSE American LLC, certain other governmental approvals, if deemed necessary, and the absence of material adverse changes or litigation materially affecting the acquired assets, according to the company. The company stated there can be no assurance that Final Closing will occur within the targeted timeframe or at all.

Other than the pre-bridge financing note and customary provisions relating to exclusivity, expenses, communications and governing law, the term sheet is non-binding and its terms remain subject to change in the course of negotiating the definitive agreements, the company said. There can be no assurance that definitive agreements will be entered into or that the transactions described will be completed on the terms described or at all. The company said it will file a Current Report on Form 8-K and issue a further news release if and when the definitive agreements are executed and delivered.

Management Commentary

"This proposed Ocean Partners funding and offtake package is designed to strengthen Silver Bow Mining's liquidity and financial flexibility as we advance the Rainbow Block Project and work toward completing the acquisition of the Jefferson County Metallurgical Complex," said Travis Naugle, Chairman and Chief Executive Officer, according to the release. "The release of roughly US$42 million of cash from behind the reclamation bonds at the Complex and Rainbow Block, together with the US$40 million concentrate prepayment facility that carries no production deadlines, would put the Company in a strong position heading into Final Closing on the Complex. It would also provide us the balance sheet to advance the high-grade Rainbow Block through its next technical, permitting and strategic planning steps on our own timetable. Once this package is in place, we do not envision any short-term need for equity financing as we advance these efforts. We intend to preserve the Company's flexibility throughout, including conditional rights to exit the proposed offtake agreements, and we look forward to working with Ocean Partners and their smelter relationships as we continue to explore these Montana assets and move towards development decisions."

"Silver Bow Mining is advancing two significant historic Montana zinc-lead-silver assets, and we are pleased to support the Company with a flexible financing structure linked to future concentrate deliveries," said Brent Omland, Chief Executive Officer of Ocean Partners, according to the release. "The contemplated prepayment facility and bond guarantees would provide the Company the balance sheet to advance the Properties, while a ten-year offtake for Butte and Montana Tunnels concentrates gives us a long-term, high-quality US-origin supply to place with our smelter partners. We look forward to a long relationship with Travis and the Silver Bow Mining team."

About Ocean Partners

Ocean Partners UK Limited is part of the Ocean Partners group, a leading international trader of base and precious metal concentrates. Headquartered in the United Kingdom, with offices across North America, Europe, Asia and Latin America, Ocean Partners provides marketing, logistics, blending and warehousing, and financing services to metal producers worldwide.

About Silver Bow Mining Corp.

Silver Bow Mining Corp. is a minerals exploration company advancing its Butte Project, including the Rainbow Block, located in the Butte Mining District of Montana. The Company is targeting a broad suite of U.S.-designated Critical Minerals, including silver, copper, zinc, lead, manganese, germanium, gallium, antimony, bismuth and indium, alongside gold. The Company holds approximately 4,210 acres of patented mineral claims and approximately 1,427 acres of surface lands across multiple claim blocks in this historically prolific district, including the flagship Rainbow Block.

Read the full press release here.

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