/THIS NEWS RELEASE IS INTENDED FOR DISTRIBUTION IN CANADA ONLY AND IS NOT
INTENDED FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR
DISSEMINATION IN THE UNITED STATES/
TORONTO, March 10 /CNW/ - Silver Bear Resources Inc. (TSX:SBR) - ("Silver
Bear" or the "Company") today announced financial results for the year ended
December 31, 2007, prepared in accordance with Canadian generally accepted
accounting principles ("GAAP"). All dollar amounts are stated in Canadian
dollars unless otherwise indicated.
"Silver Bear has made excellent progress toward further delineating the
high grade silver mineralization at our Mangazeisky Project," said Mr. Randall
Oliphant, President and Chief Executive Officer. "Based on the encouraging
results from the 2007 drilling program, we believe the Mangazeisky Project has
the potential to become a world class silver deposit."2007 Silver Bear Highlights
---------------------------
- Discovered high grade silver in drilling and trenching
- Strengthened management team in Russia
- Drilled 19 drill holes at the Vertikalny Vein (3,172 metres) and
completed 6,069 cubic metres of trenching
- Assayed silver grades of up to 8,887 grams of silver over 6.0 metres
- Identified native silver in both drill holes and trenching
- Completed Initial Public Offering December 2007Outlook for 2008
----------------
The exploration and logistics teams in Yakutsk are currently mobilizing
an additional camp, fuel supply, and the second of two Boart Longyear drill
rigs on the ice road to the site for start up of exploration in May 2008. More
than 100 personnel will be at the project site during the 2008 season. Three
drill rigs will be on site to conduct more than 16,000 metres of core drilling
in the Vertikalny Vein and several newly identified targets - more than twice
as much drilling than has been conducted to date. Over 20,000 metres of
trenching will be completed during the year with the majority of the trenching
at Vertikalny to provide detailed surface samples along with the diamond drill
core.
"2008 will be an exciting year for Silver Bear," said Mr. Raymond
Threlkeld, Chief Operating Officer. "We are focused on defining a NI 43-101
compliant resource of 150 million ounces of silver at the Vertikalny Vein by
the end of this year and demonstrate the potential for 200 million to
250 million ounces of silver over its 5.1 kilometre strike length."(1)
Vertikalny is one of 16 prospects on the Mangazeisky concession that has
sampled values ranging from 600 grams/tonne to over 8,800 grams/tonne
(Vertikalny Vein). Historical Russian P1 and P2 "resources" have been
estimated to more than 900 million ounces of potential at the Mangazeisky
license area.(2)
Silver Bear's management team in Russia is headed by J. Randolph Lewis,
Managing Director. Mr. Lewis has five years of construction management
experience in Russia. The Silver Bear exploration program will be headed up by
Ms. Vivian Park, Project Director, Silver Bear Resources. Ms. Park recently
joined Silver Bear and has more than 15 years of exploration and project
management experience and over five years of experience working in Russia.(1) The reader is cautioned that the targets expressed above are based on
Silver Bear's assessment of the geological data currently available
and is conceptual in nature. There has been insufficient exploration
with respect to this target to define any estimates of quantities.
There is no guarantee that the targeted estimates will be delineated
through additional exploration. These are objectives set by the
Company and are not estimates of quantities as contemplated by
section 2.3 of NI 43-101. There is no assurance that these objectives
will materialize.
(2) The discussions related to the resource estimates above refer to
historical estimates only. The resource estimates discussed were
conducted according to the accepted Russian resource classification
definitions for the period to which they relate. However, they do not
comply with the current Canadian Institute of Mining, Metallurgy and
Petroleum ("CIM") standards and definitions for estimating resources
and reserves as required by NI 43-101 and as such should not be
relied upon. The Russian historical resources discussed above are for
information purposes regarding the historical background of the
Mangazeisky Project only. The exact date of the estimates above pre-
date February 1, 2001, but their exact date is unrecorded. The source
of these estimates is the 2004 Western Service Report. See Silver
Bear's Prospectus dated December 10, 2007 and Silver Bear's Technical
Report on the Mangazeisky Project for further information.Financial Results
-----------------
Silver Bear incurred a net loss for the year ended December 31, 2007 of
$12.9 million or $0.52 per share. This compares to a loss of $9.0 million or
$0.50 per share for the year ended December 31, 2006. Exploration costs were
$7.6 million in the year ended December 31, 2007 compared with $5.2 million in
the year ended December 31, 2006. The Mangazeisky Project accounted for
$4.1 million of these costs, which primarily related to four months of
drilling activity with local crews, logistics costs, and maintaining the
Company's Yakutsk administrative office. Costs at Avlayakan were approximately
$3.4 million during the year ended December 31, 2007 and related to the costs
of Vostok's drilling crews and the Boart Longyear crew that started operations
in late April 2007, logistics costs and license fees. Russian administrative
costs were $0.1 million for the year ended December 31, 2007. Silver Bear's
non-controlling interest partner's portion of the Avlayakan project expenses
resulted in a $0.7 million reduction to overall costs for the year ended
December 31, 2007 compared to $nil for the year ended December 31, 2006.
Non-cash stock option compensation expense for the year ended December 31,
2007 was $1.7 million compared with $1.1 million in the year ended December
31, 2006; 1,408,326 options were awarded in 2007, giving rise to high front
end amortization expense. General and administrative expenses for the year
ended December 31, 2007 were $4.3 million compared with $2.7 million in the
prior year. General and administrative expenses consisted of $1.5 million in
management salaries, ($0.9 million 2006) $0.9 million of amortization of
property plant and equipment ($0.9 million 2006), $0.6 million for penalty
shares ($nil 2006) $0.4 million for professional fees ($0.6 million 2006),
$0.2 million of foreign exchange loss ($nil 2006) and $0.7 million of general
and administrative costs ($0.3 million 2006).
Liquidity and Capital Resources
-------------------------------
At the start of 2007, Silver Bear had cash of $2.0 million. In order to
complete the purchase of the 70% equity interest in Avlayakan for
U.S. $4.1 million and to fund 2007 planned spending on exploration at the
Mangazeisky and Avlayakan Properties and corporate costs, on March 20, 2007
Silver Bear completed a private placement of 6,195,555 common shares at a
price of $3.00 per common share for net proceeds of $17.3 million. This
successful share issue enabled the Company to increase its 2007 exploration
program at Mangazeisky. On December 19, 2007 Silver Bear completed an initial
public offering of 10,000,000 common shares at a price of $3.00 for net
proceeds of $27.3 million. At December 31, 2007, Silver Bear had cash of $30.3
million, an amount sufficient to sustain its 2008 operations. On January 18,
2008 the Company completed the sale of 700,000 common shares at a price of
$3.00 per common share pursuant to the exercise in part of an over-allotment
option by an underwriting syndicate co-led by RBC Capital Markets and Merrill
Lynch & Co., and including GMP Securities L.P. and Wellington West Capital
Markets Inc. The over-allotment option was granted by the Company to the
underwriters in connection with the Company's initial public offering.
Update on Yakutian Proceedings
------------------------------
ZAO Prognoz has received notice of an application by the Yakutia
Inter-district Tax Office No. 5 of the Federal Tax Service to the Arbitration
Court of the Republic of Sakha (Yakutia) claiming that documentation filed in
connection with the registration of ZAO Prognoz in 2003 was signed by a person
holding an improperly delegated power of attorney. On that ground, the
application requests the Yakutia Arbitration Court to order the liquidation of
ZAO Prognoz. ZAO Prognoz is investigating this claim, but, on the basis of
advice received from its Russian Federation legal advisors, ZAO Prognoz is of
the view the ground for the claim is a breach of a formality, and not a gross
irremediable violation of the law, as required by the governing statute to
support a claim for liquidation. A preliminary hearing was held on March 3,
2008 to determine what evidence is necessary to proceed with the case and
resolve procedural petitions of the parties. The judge postponed the case for
at least three months and stated that a written ruling would be issued within
five days. The judge agreed with the respondent's petition to include Silver
Bear Holdings Ltd. as a third party to the case and to require the Tax
Inspectorate to deliver to the respondent and Silver Bear Holdings Ltd. all
attachments identified in the statement of the claim.
Silver Bear Resources Inc.
--------------------------
The primary business of the Company is the evaluation, acquisition,
exploration and development of silver and gold properties in the Russian
Federation. The exploration strategy of the Company is to focus on the
discovery of silver and precious metal deposits in Russia. The Company has not
yet earned revenue and is considered to be in the exploration stage. The
Company's principal asset is the Mangazeisky Project, located approximately
400 kilometres north of Yakutsk in the Republic of Sakha, Yakutia, Russia. The
Company was granted the exploration license for the Mangazeisky Project in
September 2004 for an initial term of five years.
Silver Bear Resources Inc. is listed on the Toronto Stock Exchange and
trades under the symbol SBR. Other pertinent information on the Company is
available on SEDAR at www.sedar.com as well as on the Company's web site at
www.silverbearresources.com.
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 regarding Silver Bear's future growth, results of operations
(including, without limitation, future production and capital expenditures),
performance (both operational and financial) and business prospects (including
the timing and development of new deposits and the success of exploration
activities) and opportunities. Wherever possible, words such as "plans",
"expects", or "does not expect", "budget", "scheduled", "estimates",
"forecasts", "anticipate" or "does not anticipate", "believe", "intend" 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 actual results,
performance, or achievements to differ materially from the results expressed
or implied in the forward-looking statements including those listed in the
"Risk Factors" section of the Prospectus filed on December 10, 2007 and other
documents filed by Silver Bear on www.sedar.com. 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, performance, prospects and
opportunities in future periods 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, except where
required by applicable law.
Mr. Wes Hanson, qualified person under NI 43-101, supervised the
preparation of the technical information contained in this news release. Mr.
Hanson is an officer of the Company. For complete and additional information
regarding the technical aspects discussed in this news release, including
disclosure about the properties' geology, data verification, sample and
analysis, and quality assurance programs of the Company, the reader is
referred to Silver Bear's Prospectus filed December 10, 2007 and the
corresponding technical reports available at www.sedar.com.Silver Bear Resources Inc.
(an exploration stage enterprise)
Consolidated Balance Sheet
(Canadian dollars)
(unaudited)
December 31, December 31,
------------- -------------
2007 2006
Assets $ $
Current Assets
Cash and cash equivalents 30,314,667 1,978,930
Related party receivable 31,052 36,320
Non-controlling interest receivable 151,592 -
Inventories 628,196 449,739
Prepaid expenses 2,305,284 600,619
Miscellaneous receivables 50,232 29,850
------------- -------------
33,481,023 3,095,458
Capital assets
Mineral properties 6,812,524 1,842,210
Property, plant and equipment 887,425 1,513,146
------------- -------------
41,180,972 6,450,814
------------- -------------
------------- -------------
Liabilities
Current liabilities
Accounts payable and accrued liabilities 1,327,743 983,212
Long-term liabilities
Asset retirement obligation 245,360 -
Non-controlling interest 127 -
Shareholders' equity
Capital stock 67,991,311 22,908,566
Warrants 273,575 89,567
Contributed surplus 6,835,085 5,100,703
Deficit (35,492,229) (22,631,234)
------------- -------------
39,607,742 5,467,602
------------- -------------
------------- -------------
41,180,972 6,450,814
------------- -------------
Silver Bear Resources Inc.
(an exploration stage enterprise)
Consolidated Statement of Operations and Comprehensive Loss and Deficit
(Canadian dollars)
(unaudited)
Year Ended December 31,
---------------------------
2007 2006
$ $
Income
Interest income 242,683 71,079
------------- -------------
Expenses
Exploration costs 7,593,272 5,172,812
Stock option compensation 1,734,382 1,068,501
Salaries and benefits 1,518,853 933,858
Amortization 958,450 926,883
General and administrative 665,877 435,017
Penalty shares 647,233 -
Professional fees 447,428 582,843
Foreign exchange loss 199,593 47,936
Adjustment to inventory valuation reserve 54,400 (52,928)
Gain on disposal of property, plant and
equipment (11,034) (61,642)
------------- -------------
13,808,454 9,053,280
------------- -------------
Non-controlling interest (704,776) -
Loss and Comprehensive Loss for the year (12,860,995) (8,982,201)
Deficit - Beginning of the year (22,631,234) (13,649,033)
------------- -------------
Deficit - End of the year (35,492,229) (22,631,234)
------------- -------------
------------- -------------
Weighted average number of common shares
outstanding 24,661,988 18,130,040
Loss per share (0.52) (0.50)
Silver Bear Resources Inc.
(an exploration stage enterprise)
Consolidated Statement of Cash Flows
(Canadian dollars)
(unaudited)
Year Ended December 31,
---------------------------
2007 2006
$ $
Cash provided by (used in)
Operating activities
Loss for the year (12,860,995) (8,982,201)
Items not affecting cash:
Amortization 958,450 926,883
Stock option compensation 1,734,382 1,068,501
Penalty shares issued 647,233 -
Gain on sale of property, plant and
equipment (11,034) (29,081)
Exploration cost liability satisfied through
sale of capital assets - 234,826
Net change in non-cash working capital (1,823,097) (231,769)
------------- -------------
(11,355,061) (7,012,841)
------------- -------------
Financing activities
Issuance of common shares 44,737,319 4,551,071
Non-controlling interest 127 -
------------- -------------
44,737,446 4,551,071
------------- -------------
Investing activities
Project acquisition costs - Mine Avlayakan (4,724,953) (1,127,900)
Proceeds on sale property, plant and
equipment (343,589) (178,366)
Proceeds on sale of fixed assets 21,894 374,550
------------- -------------
(5,046,648) (931,716)
------------- -------------
Increase (decrease) in cash and cash
equivalents during the year 28,335,737 (3,393,486)
Cash and cash equivalents - Beginning of
the year 1,978,930 5,372,416
------------- -------------
Cash and cash equivalents - End of the year 30,314,667 1,978,930
------------- -------------
------------- -------------
Supplementary disclosure of non-cash financing
and investing activities
Issuance of warrants 184,008 89,567
Expenses of common share issue (184,008) (89,567)
Issuance of penalty shares 647,233 -
Expenses of penalty share issue (647,233) -
Related costs of issue of common shares 117,798 -
For further information: please visit www.silverbearresources.com, or
contact: Randall Oliphant, President and Chief Executive Officer, (416)
324-6000, roliphant@silverbearresources.com; Raymond Threlkeld, Chief
Operating Officer, (416) 324-6005, r_threlkeld@silverbearresources.com; Brian
Penny, CFO, VP Finance and Corporate Secretary, (416) 324-6002,
bpenny@silverbearresources.com; Julie Taylor Pantziris, Director, Regulatory
Affairs and Investor Relations, (416) 324-6015,
jtaylor@silverbearresources.com
