February 09, 2022 (Source) — Silver Bullet Mines Corp. (TSXV: SBMI) (“SBMI” or “the Company”) announces its intention to proceed with a non-brokered accretive financing of units. Each unit will be priced at $0.40 (forty cents) per unit and will consist of one common share and one full warrant of 60 cents (sixty cents) with a term of 24 months, each warrant exercisable into one common share (the “Funding”). We remind readers that the qualifying transaction that made SBMI a reporting issuer in December 2021 was completed at $0.30 per share.
“As we have repeatedly revealed, the global supply chain has been a problem for us,” said MA John Carter, CEO of SBMI. “The inevitable third-party delays, particularly through the Port of Long Beach, caused the company to consume working capital that otherwise would not have been consumed. Additionally, over time, we have experienced related increases to the pandemic cost of parts, logistics, fuel and supplies. All of this has put pressure on the Treasury. While SBMI continues to have considerable cash in its account, conducting financing is now a combination of “Assurance and guarantee that SBMI can execute its revised plans for 2022 in both Arizona and Idaho better than expected. It’s the responsible thing to do.”
The minimum and maximum gross proceeds of the Financing will be $500,000 (five hundred thousand dollars) and $2,000,000 (two million dollars), respectively. The minimum and maximum number of Units to be issued following the Financing are 1,250,000 and 5,000,000, respectively. Units will be allotted on a first-come, first-served basis, although SBMI reserves the right to accept or reject subscription agreements in its sole discretion.
SBMI has two principal orders on the Financing, one for C$180,000 and the other for US$200,000, from two existing shareholders who are qualified investors, each of whom has committed to participate in the Financing without knowing the modalities. Other existing shareholders have also expressed their interest in participating in the Financing without knowing the terms and conditions.
Net proceeds from the financing, assuming the minimum, will be used to fund operations in Arizona until the Buckeye silver mine begins generating revenue, most likely in May 2022 (see SBMI press release dated February 7, 2022 for details on the generation revenue schedule). Net proceeds from the financing, assuming the maximum, will be used to fund and expand operations in Arizona until the Buckeye silver mine begins generating revenue (up to approximately $800,000), to fund the development of the Washington mine in Idaho (up to approximately $500,000), and to fund exploration and development of the McMorris mine in Arizona (up to approximately $500,000). In either case, a portion of the proceeds will fund financing, working capital and overhead costs. The amount of financing costs will vary depending on the amount paid as a referral fee, which is unknown at this time.
SBMI purchased the Washington mine in Idaho in December 2020. The company planned to store this property until the Buckeye silver mine began to generate revenue, so it was allocated a minimum allowance in SBMI’s 2021 or 2022 budget. However, preliminary work at the Washington mine revealed that it may be able to generate revenue in the short term, leading to the January 18, 2022 press release disclosing assay results from a sample in mixed bulk of 55.5 oz/t silver. Management wants to accelerate work at the Washington mine, which will require some of the capital raised as part of the financing.
The usual prospectus exemptions will be invoked for the financing, including the “Accredited Investor” exemption and the “Distributions to Existing Securityholders” exemption pursuant to section 2.9 of the Ontario Securities Commission. Rule 45-501 (the “Existing Securityholder Exemption”). Management believes this is a democratic way to fundraise.
Investors subscribing for Units under the exemption for existing securityholders must comply with certain conditions set out in Rule 45-501. The Company has set Monday, February 7, 2022 as the record date. Subscribers who purchase Units under the Existing Shareholder Exemption will be required to represent in writing that they satisfy certain requirements of the Existing Shareholder Exemption, including that they were, as of such record date, a common shareholder of the Company and that they are still a shareholder at closing. Dated. The aggregate acquisition cost to a Subscriber under the Existing Shareholder Exemption cannot exceed $15,000 during the 12-month period immediately preceding the closing of the financing, unless such Subscriber has obtained the advice from a registered investment dealer regarding the suitability of the investment. There is no minimum subscription amount. Any SBMI shareholder may subscribe, subject to the above conditions and the subscription contract.
Referral fees may be paid to arm’s length persons in connection with the issuance of Units. Other than the subscription agreement, no other offering documents will be provided to existing securityholders or other persons connected with the financing. The subscription contract is available on the Company’s website https://www.silverbulletmines.com/technical-corporatedocuments. The Financing is subject to regulatory approval.
For more information, please contact:
Silver Bullet Mines Corp., CEO
+1 (905) 302-3843
Pierre M. Clausi
Silver Bullet Mines Corp., Vice President of Capital Markets
+1 (416) 890-1232
Cautionary and forward-looking statements
This press release contains certain statements that constitute forward-looking statements with respect to SBMI and its subsidiaries. Forward-looking statements are not historical facts, but represent management’s current expectations regarding future events, and can be identified by words such as “believe”, “expect”, “will”, “have the ‘intend to’, ‘plan’, ‘projects’, ‘anticipate’, ‘estimate’, ‘continue’ and similar expressions. Although management believes that the expectations expressed in these forward-looking statements are reasonable, there can be no assurance that they will prove to be correct.
By their nature, forward-looking statements involve assumptions and are subject to inherent risks and uncertainties that could cause actual future results, conditions, actions or events to differ materially from those contained in the forward-looking statements. If and when forward-looking statements are set forth in this new release, SBMI will also disclose the material risk factors or assumptions used in making the forward-looking statements. Except as expressly required by applicable securities laws, SBMI undertakes no obligation to update or revise any forward-looking statements. Future results related to forward-looking statements may be influenced by many factors, including, but not limited to: the impact of SARS CoV-2 or any other global virus; reliance on key personnel; the rigor of its QA/QA procedures; the continuity of the global supply chain for materials that SBMI will use in the production and processing of ore; shareholder and regulatory approvals; activities and attitudes of local communities at the location of SBMI properties; the risks of future legal proceedings; income tax matters; fires, floods and other natural phenomena; inflation rate; funding availability and terms; distribution of securities; commodity prices; currency movements, particularly between the USD and the CDN; effect of market interest rates on the price of securities; and, potential dilution. SARS CoV-2 and other potential global viruses create risks that, at this time, are immeasurable and impossible to define.