Silver Bear Announces 2010 Year End Results and Updates Mineral Resource Estimate
TORONTO, March 28 /CNW/ --
TORONTO, March 28 /CNW/ - Silver Bear Resources Inc. ('Silver Bear' or the 'Company') (TSX:SBR) today announces financial results for the year ended December 31, 2010,
prepared in accordance with Canadian generally accepted accounting
principles ('GAAP'). All dollar amounts are stated in Canadian dollars
unless otherwise indicated.
The Company today also announces an updated mineral resource estimate on
its 100% owned Mangazeisky silver project in Russia completed by
Wardrop, a Tetra Tech Company ('Wardrop'). The Company has also engaged
Wardrop to complete a preliminary economic assessment ('PEA') on the
project. In addition, the Company is pleased to announce the
appointment of Denis Alexandrov to its Board of Directors.
-- Indicated mineral resource of 1.1 million tonnes averaging 514
grams per tonne of silver totaling 18 million ounces, and an
additional
-- Inferred mineral resource of 1.7 million tonnes averaging 554
grams per tonne of silver totaling 31 million ounces
-- PEA results anticipated in second quarter of 2011
'With the combination of our high grade silver resource and the
continued strength in the silver price, we want to complete a PEA on
our project,' stated Randall Oliphant, Chief Executive Officer. 'While
we will continue our strategic review of all options available to us,
the PEA should provide an even more solid basis from which to move
forward.'
Updated Mineral Resource Estimate
The updated mineral resource estimate on Silver Bear's 100% owned
Mangazeisky silver project in Russia has been completed by Wardrop and
reflects an increase in the silver price assumption and related change
in the cut-off grade. The estimate, as of February 25, 2011, is based
on a long term silver price of US$16.50 per ounce (previously US$10.84
per ounce), a cut-off grade of 160 grams per tonne (previously 240
grams per tonne) and anticipates that the mineralized zone would be
mined by selective underground methods at a minimum mining width of 1.2
metres.
Mr. P. Gribble, FIMMM C.Eng, of Wardrop, is the independent qualified
person who prepared the mineral resource estimates disclosed herein.
Wardrop has completed a NI 43-101 Technical Report supporting the
mineral resource estimate. The Technical Report has been filed on www.sedar.com.
Summary of Resource Estimate as of February 25, 2011
_____________________________________________________________________________________
| | Mangazeisky Mineral Resources |
|___________|_________________________________________________________________________|
| | Indicated Resources | Inferred Resources |
|___________|____________________________________|____________________________________|
| Silver | | |Silver| | | |Silver| |
| Price |Cut-off| Tonnes | | Ounces |Cut-off| Tonnes | | Ounces |
| (US$/oz) | (g/t) |(millions)|Grade |(millions)| (g/t) |(millions)|Grade |(millions)|
| | | |(g/t) | | | |(g/t) | |
|___________|_______|__________|______|__________|_______|__________|______|__________|
|Sensitivity| | | | | | | | |
| Estimate | 130 | 1.1 | 506 | 18.1 | 130 | 1.8 | 532 | 31.1 |
| 20.00 | | | | | | | | |
|___________|_______|__________|______|__________|_______|__________|______|__________|
| Current | | | | | | | | |
| Estimate | 160 | 1.1 | 514 | 18.0 | 160 | 1.7 | 554 | 30.6 |
| 16.50 | | | | | | | | |
|___________|_______|__________|______|__________|_______|__________|______|__________|
| Previous | | | | | | | | |
| Estimate | 240 | 1.0 | 558 | 17.5 | 240 | 1.5 | 596 | 29.0 |
| 10.84 | | | | | | | | |
|___________|_______|__________|______|__________|_______|__________|______|__________|
While the silver ounces in the Indicated resource category did not
change materially, the increase in the long term price assumption
increased the Inferred resource by approximately 6% or 1.6 million
ounces.
_________________________________________________________________
| | Inferred Silver Resource |
|________|________________________________________________________|
| |Silver price |Cut-off | Tonnes | Silver | Ounces |
| | (US$/oz.) | (g/t) |(millions)|Grade (g/t)|(millions)|
|________|_____________|________|__________|___________|__________|
|Current | $16.50 | 160 | 1.7 | 554 | 30.6 |
|estimate| | | | | |
|________|_____________|________|__________|___________|__________|
|Previous| $10.84 | 240 | 1.5 | 596 | 29.0 |
|estimate| | | | | |
|________|_____________|________|__________|___________|__________|
No Measured Mineral Resources or Mineral Reserves have been estimated at
this stage for the deposit. Additional infill drilling is required to
upgrade those parts of the resource in the Inferred category, and to
better understand the short range variation in the mineralization. More
studies will be required to determine detailed technical, economic,
legal, environmental, socio-economic and governmental factors. These
modifying factors are normally included in a mining feasibility or
pre-feasibility study and are a prerequisite for conversion of
resources to, and reporting of, Mineral Reserves. For more detailed
technical information with respect to the Mangazeisky property, refer
to the technical report entitled 'Technical Report for the Mangazeisky Project, Republic of Sakha
(Yakutia), Russian Federation' dated February 25, 2011 at www.SEDAR.com.
Preliminary Economic Assessment
Silver Bear has engaged Wardrop to complete a PEA based on the currently
defined resource to assess the viability of advancing the project
towards production based on its current scale. The PEA is intended to
provide the Company with Wardrop's views on the following: geology,
mine planning, metallurgy, infrastructure, environmental, capital and
operating costs and an overall financial analysis. Wardrop is familiar
with the Mangazeisky Project, having visited the property and completed
the three NI 43-101 compliant resource updates that have been done on
the property to date. The Company will use the PEA to assist in
evaluating the strategic alternatives available. It is anticipated that
the PEA should be completed by the end of the second quarter of 2011.
License Extension
To convert its exploration license, which expires December 31, 2011, to
a mining license, Silver Bear will complete a Russian Feasibility Study
('RFS') and register this report, along with a Russian reserve
estimate, with the Russian government. Upon registration of the Russian
reserve estimate, Silver Bear will apply for a certificate of discovery
which will enable the Company to obtain the mining license. Silver Bear
expects this process to be completed by year end, but in the event it
is not, there is a mechanism available to extend the exploration
license for a short period to allow Silver Bear to complete the license
conversion. The Company is currently in discussion with various Russian
engineering firms to commence the RFS process.
Update to Board of Directors
Silver Bear is pleased to announce the appointment of Mr. Denis
Alexandrov to its Board of Directors. Mr. Alexandrov is currently
Managing Director of A1 Investment Company, which is part of the Alfa
Group. The Alfa Group is a 19.5% shareholder in Silver Bear. During his
career, Mr. Alexandrov has worked with numerous Russia-focused
companies in a financial and strategic capacity. Mr. Alexandrov
replaces Mr. Alexey Mikhaylovskiy, who was previously one of the Alfa
Group's representatives on the Board. The Company would like to thank
Mr. Mikhaylovskiy for his hard work and stewardship since he joined the
Board in June of 2008.
Financial Results
Silver Bear incurred a net loss for the year ended December 31, 2010 of
$2.6 million, or $0.07 per share. This compares to a loss of $13.3
million or $0.35 per share for the year ended December 31, 2009.
Exploration costs were $1.5 million in the year ended December 31, 2010
compared with $8.5 million in the year ended December 31, 2009, as the
Company reduced exploration expenditures to preserve cash. General and
administrative expenses for the year ended December 31, 2010 were $1.6
million compared with $2.4 million in the prior year as the Company
reduced corporate office and salary related costs. Non-cash items for
the year ended December 31, 2010 were $1.0 million compared with $2.5
million in the year ended December 31, 2009; the reduction of $1.5
million is mainly a result of decreased stock based compensation and
foreign exchange expenses. Interest income for the year ended December
31, 2010 was $0.1 million compared with $0.1 million in the prior year.
The Company has received a refund of Value Added Tax ('VAT') in the
Russian Federation from prior periods of $1.4 million in 2010, which is
included in other income.
Silver Bear incurred a net loss for the three-month period ended
December 31, 2010 of $0.9 million or $0.03 per share. This compares to
a loss of $1.8 million or $0.04 per share for the three-month period
ended December 31, 2009. Exploration costs were $0.3 million in the
three-month period ended December 31, 2010 compared with $0.4 million
in the three-month period ended December 31, 2009. General and
administrative expenses for the three-month period ended December 31,
2010 were $0.3 million compared with $0.5 million in the three
month-period ended December 31, 2009. Non-cash items for the
three-month period ended December 31, 2010 was $0.3 million compared
with $0.9 million in the three-month period ended December 31, 2009.
During the quarter the Company has received an additional VAT refund
from prior periods of $0.1 million, and has recorded this amount as
other income in the quarter.
Liquidity and Capital Resources
At December 31, 2010, Silver Bear had cash and cash equivalents of $11.1
million. The Company has no debt outstanding. Silver Bear anticipates
that it has a sufficient amount of cash and cash equivalents to meet
its short term objectives. Silver Bear has budgeted for a 5,000 cubic
metre trenching program in 2011 at a cost of $1.6 million, completion
of the PEA for $0.2 million and the RFS for $0.6 million, with an
additional $1.4 million of corporate costs. Upon successful conversion
to a mining license, the Company will be required to pay a license fee,
for which Silver Bear has budgeted $0.3 million. Additional funding
may be required in the longer term.
Silver Bear Resources Inc.
The primary business of the Company is the evaluation, acquisition,
exploration and development of silver properties in the Russian
Federation. The Company's principal asset is its 100% owned Mangazeisky
Project, located approximately 400 kilometres north of Yakutsk in the
Republic of Sakha, Yakutia in the Russian Federation.
Silver Bear is currently evaluating strategic alternatives available to
the Company in an effort to maximize shareholder returns. This may
include: continued exploration/development of the Mangazeisky Project,
joint venture of the Project, or combination with another mineral
focused company.
Silver Bear Resources Inc. is listed on the Toronto Stock Exchange and
its common shares trade under the symbol 'SBR'. Silver Bear has
37,935,569 issued and outstanding common shares. Other information
relating to Silver Bear is available on SEDAR at www.sedar.com as well as on the Company's website at www.silverbearresources.com.
Silver Bear
Resources Inc.
Consolidated Statements of Operations and
Comprehensive Loss and Deficit
(Canadian
dollars)
(unaudited)
Three-month periods Ended Year Ended
December 31, December 31, December 31, December 31,
2010 2009 2010 2009
Income
Interest 25,783 11,119 70,799 99,759
income
Other income 73,587 - 1,405,273 -
99,370 11,119 1,476,072 99,759
Expenses
Exploration 333,946 396,126 1,484,517 8,545,160
costs
General and 332,732 537,782 1,566,869 2,390,332
administrative
Stock based 30,981 28,776 108,742 353,811
compensation
Amortization 202,455 202,853 794,903 765,067
Accretion 9,504 9,500 38,016 38,014
expense
Loss on
disposal of
property, - 598,572 2,882 610,203
plant and
equipment
Foreign 73,213 84,565 94,213 684,601
exchange loss
Expenses from 982,831 1,858,174 4,090,142 13,387,188
operations
Loss and
Comprehensive (883,461) (1,847,055) (2,614,070) (13,287,429)
Loss for the
period
Deficit - (53,193,867)
Beginning of the (68,211,905) (64,634,242) (66,481,296)
year
(69,095,366) (66,481,297) (69,095,366) (66,481,296)
Weighted average 37,935,569 37,935,569 37,935,569 37,935,569
number
of common
shares
outstanding
Loss per share (0.03) (0.04) (0.07) (0.35)
Silver Bear Resources Inc.
Consolidated Balance Sheets
(Canadian dollars)
(unaudited)
December 31, December 31,
2010 2009
ASSETS
Current assets
Cash and cash equivalents 11,114,277 12,320,095
Accounts receivable 24,117 355,438
Inventories 1,097,946 1,226,195
Prepaid expenses 37,697 90,677
12,274,037 13,992,405
Capital assets
Mineral property 1,265,117 1,265,117
Property, plant and equipment 1,169,474 1,969,181
14,708,628 17,226,703
LIABILITIES
Current liabilities
Accounts payable and accrued liabilities 301,535 352,298
Long-term liabilities
Asset retirement obligation 646,741 608,725
Shareholders' equity
Capital Stock 73,771,289 73,771,289
Contributed surplus 9,084,429 8,975,687
Deficit (69,095,366) (66,481,296)
13,760,352 16,265,680
14,708,628 17,226,703
Silver Bear
Resources Inc.
Consolidated
Statements of
Cash Flows
(Canadian
dollars)
(unaudited)
Three-month periods Year Ended
Ended
December December December 31, December 31,
31, 31,
2010 2009 2010 2009
Cash provided
by (used in)
Operating
activities
Net Loss from (883,461) (1,847,055) (2,614,070) (13,287,429)
operations
Items not
affecting
cash:
Amortization 202,455 202,853 794,903 765,067
Accretion 9,504 9,500 38,016 38,014
expense
Stock based 30,981 28,776 108,742 353,811
compensation
Loss on
disposal of
property, - 598,572 2,882 610,203
plant and
equipment
Net change in
non-cash 1,003,795 (169,032) 461,787 (414,500)
working
capital
Net cash used 363,274 (1,176,386) (1,207,740) (11,934,834)
in operations
Investing
activities
Acquisition
of property, - (28,539) - (260,672)
plant and
equipment
Proceeds
from sale of
property, - 345,578 1,922 345,578
plant and
equipment
- 317,039 1,922 84,906
Decrease in cash
and cash
equivalents 363,274 (859,347) (1,205,818) (11,849,928)
during the
period
Cash and cash
equivalents - 10,751,003 13,179,442 12,320,095 24,170,023
beginning of
the period
Cash and cash
equivalents - 11,114,277 12,320,095 11,114,277 12,320,095
end of the
period
Forward-Looking Information
This release and subsequent oral statements made by and on behalf of the
Company may contain forward-looking statements, which reflect
management's expectations. Wherever possible, words such as 'intends',
'expects', 'scheduled', 'estimates', 'anticipates', 'believes' and
similar expressions or statements that certain actions, events or
results 'may', 'could', 'would', 'might' or 'will' be taken, occur or
be achieved, have been used to identify these forward-looking
statements. Although the forward-looking statements contained in this
release reflect management's current beliefs based upon information
currently available to management and based upon what management
believes to be reasonable assumptions, Silver Bear cannot be certain
that actual results will be consistent with these forward-looking
statements. A number of factors could cause events and achievements to
differ materially from the results expressed or implied in the
forward-looking statements. Such risks factors include but are not
limited to risks factors identified by Silver Bear in its continuous
disclosure filings filed from time to time on SEDAR. These factors
should be considered carefully and prospective investors should not
place undue reliance on the forward-looking statements. Forward-looking
statements necessarily involve significant known and unknown risks,
assumptions and uncertainties that may cause Silver Bear's actual
results, events, prospects and opportunities to differ materially from
those expressed or implied by such forward-looking statements. Although
Silver Bear has attempted to identify important risks and factors that
could cause actual actions, events or results to differ materially from
those described in forward-looking statements, there may be other
factors and risks that cause actions, events or results not to be as
anticipated, estimated or intended. There can be no assurance that
forward-looking statements will prove to be accurate, as actual results
and future events could differ materially from those anticipated in
such statements. Accordingly, prospective investors should not place
undue reliance on forward-looking statements. These forward-looking
statements are made as of the date of this release, and Silver Bear
assumes no obligation to update or revise them to reflect new events or
circumstances, unless otherwise required by law.
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For further details, please visit www.silverbearresources.com, or contact:
Brian Penny
Chief Financial Officer
(416)-324-6002
bpenny@silverbearresources.com
Hannes Portmann
Director, Corporate Development and Investor Relations
(416)-324-6014
hportmann@silverbearresources.com