Silver Bull Provides Update On The Sierra Mojada Project August 31, 2020
Vancouver, British Columbia – Silver Bull Resources, Inc. (OTCQB: SVBL, TSX: SVB) (“Silver Bull”) announces Sociedad Cooperativa de Exploracin Minera Mineros Norteos, S.C.L. (“Mineros Norteos”), the group which is illegally blocking the Sierra Mojada Project, has filed an appeal in the recently reopened Mexican courts to try and overturn a favourable ruling for Silver Bull on their lawsuit against the Company filed in 2014.
Silver Bull expects a final ruling on the case, which cannot be appealed by Mineros Norteos if won by Silver Bull, to be handed down from the courts within the next 6 months.
Tim Barry, President, CEO and director of Silver Bull states,
“We are extremely disappointed to see Mineros Norteos have filed an appeal against the third favorable ruling the Company has received on the frivolous law suit they filed back in 2014. The last favorable ruling was delivered to us in March of this year, but unfortunately due to the rapid spread of the Corona Virus in Mexico, the court system in Mexico has been shut down until very recently, which has caused a significant delay in potentially settling this case once and for all. Should Mineros Norteos lose this appeal then Silver Bull will win the case outright. We strongly believe the law suit filed by Mineros Norteos is without merit and is largely being driven by their lawyer, who stands to gain a considerable contingency payment if successful, and a small radical group of approximately 10 Mineros Norteos members who do not accurately reflect the sentiment of the much larger Mineros Norteos group. According to our employees who live in the community, the illegal blockade on the Sierra Mojada project is manned by this small group and is an attempt to try and force the Company into making a settlement on a lawsuit that is frivolous. We remain committed to good faith dialogue with the Mineros Norteos group, many of whom have worked for Silver Bull, to find a solution, but to date any proposal put forward by Silver Bull has been rejected, and any counter proposals from Mineros Norteos have been completely unrealistic.
Whilst working on trying to find a settlement at Sierra Mojada, Silver Bull continues its due diligence on the Beskauga Project announced on 17 August 2020. The next step in the due diligence process will be a visit to site when travel safely allows.” Summary of the law suit filed by Mineros Norteos: Silver Bull has an agreement with Mineros Norteos on two small mineral licences which cover the eastern part of the Sierra Mojada deposit. These licences are subject to a 2% production royalty to Mineros Norteos capped at US$6.875 million (the “Royalty”) should a mine go into production.
Since 2014, Silver Bull has been fighting a law suit by Mineros Norteos seeking payment of the Royalty, including interest at a rate of 6% per annum since August 30, 2004, even though no revenue has been produced from the applicable mining concessions. Mineros Norteos also sought payment of wages to the Mineros Norteos members since August 30, 2004 under this agreement, even though a mineral processing plant was never built and none of the individuals were hired or performed work for Silver Bull under this agreement and Silver Bull did not commit to hiring them. On October 4, 2017, the court ruled that Mineros Norteos was time barred from bringing the case. On October 19, 2017, Mineros Norteos appealed this ruling. On July 31, 2019, the Federal Appeal Court upheld the original ruling. This ruling was subsequently challenged by Mineros Norteos and in March 2020 the Federal Appeals Court upheld the original ruling. Mineros Norteos may challenge the ruling for a final time at the Federal Circuit Court. In an attempt to force Silver Bull into making a settlement, Mineros Norteos has undertaken to illegally block access to the project since September 2019. To ensure the safety of all involved, Silver Bull has elected to halt all operations on the project until a resolution can be found.
The joint venture option with South32 remains in good standing but under a force majeure pause.
South32 Joint Venture Option In June 2018 Silver Bull signed an agreement with a wholly owned subsidiary of South32 whereby Silver Bull has granted South32 an option to form a 70/30 joint venture with respect to the Sierra Mojada Project. To maintain the option in good standing, South32 must contribute minimum exploration funding of US$10 million ("Initial Funding") during a 4 year option period with minimum aggregate exploration funding of US$3 million, US$6 million and US$8 million to be made by the end of years 1, 2 and 3 of the option period respectively. South32 may exercise its option to subscribe for 70% of the shares of Minera Metalin S.A. De C.V. ("Metalin"), the wholly owned subsidiary of Silver Bull which holds the claims in respect of the Sierra Mojada Project, by contributing US$100 million to Metalin for Project funding, less the amount of the Initial Funding contributed by South32 during the option period. During the period of force majeure the year 2 completion date has been extended by the period of force majeure.
About Silver Bull: Silver Bull is a mineral exploration company whose shares are listed on the Toronto Stock Exchange and trade on the OTCQB in the United States, and is based out of Vancouver, Canada. Silver Bull owns the Sierra Mojada Project which is located 150 kilometers north of the city of Torreon in Coahuila, Mexico, and is highly prospective for silver and zinc.
About the Sierra Mojada deposit: Sierra Mojada is an open pittable oxide deposit with a NI43-101 compliant measured and indicated "global" resource of 70.4 million tonnes grading 3.4% zinc and 38.6g/t silver at a $13.50 NSR cutoff giving 5.35 billion pounds of zinc and 87.4 million ounces of silver. Included within the "global" resource is a measured and indicated "high grade zinc zone" of 13.5 million tonnes with an average grade of 11.2% zinc at a 6% cutoff, giving 3.336 billion pounds of zinc, and a measured and indicated "high grade silver zone" of 15.2 million tonnes with an average grade of 114.9g/t silver at a 50g/t cutoff giving 56.3 million ounces of silver. Mineralization remains open in the east, west, and northerly directions. Approximately 60% of the current 3.2 kilometer mineralized body is at or near surface before dipping at around 6 degrees to the east.
The technical information of this news release has been reviewed and approved by Tim Barry, a Chartered Professional Geologist (CPAusIMM), and a qualified person for the purposes of National Instrument 43-101.
On behalf of the Board of Directors
"Tim Barry" Tim Barry, CPAusIMM Chief Executive Officer, President and Director
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