Silver Bow Mining (SBMT) M&A announcement summary

Deal rationale and strategic fit

• Acquisition of the Jefferson County Metallurgical Complex secures significant processing infrastructure 55 miles from Rainbow Block, supporting development flexibility and high-grade silver-gold-zinc-lead resources.

• The deal aligns with the strategy to advance Rainbow Block while expanding the asset base in Montana and focusing on responsible mining and critical minerals.

• The complex's polymetallic processing capabilities are relevant to Rainbow Block's mineralization profile.

• Acquiring a brownfield site with a long operating history reduces the need to build new facilities from scratch.

• The transaction provides long-term optionality through the inclusion of the Montana Tunnels M-Pit.

Financial terms and conditions

• Initial closing requires $28.6 million in cash, including $20.8 million to Montana DEQ and $4.27 million to Jefferson County, to satisfy obligations.

• Final closing includes issuance of 3.5 million contingent value rights (CVRs), convertible into common shares after 180 days, subject to approvals.

• An additional 11.5 million deferred CVRs are tied to future M-Pit development and production milestones.

• Other contingent interests include a 2% net smelter return royalty (with $10 million buyback), toll-milling, and net profits interests on future activities.

• The facility's replacement value is estimated at $350 million, but future capital investment will be needed for refurbishment and permitting.

Synergies and expected cost savings

• Ownership of existing infrastructure may reduce future capital requirements compared to building new facilities.

• Existing milling and flotation circuits, including a 1,000-tpd circuit, offer processing flexibility and development synergies for Rainbow Block.

• Having constructed tailings and processing capacity nearby offers a significant advantage for Rainbow Block development.