Silver Bow Mining has entered into a non-binding term sheet with Ocean Partners UK for a potential funding, credit support and offtake package valued at around $88m (£66.09m).
The arrangement covers funding and concentrate offtake agreements involving Silver Bow Mining’s Rainbow Block Project in Butte, Montana, US, and the Montana Tunnels Mine, which Silver Bow Mining has agreed to acquire.
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The financing proposal features a $40m prepayment facility against future deliveries of zinc and lead concentrates over a ten-year period.
It would be linked to production from the Rainbow Block, ores external to the M-Pit at Montana Tunnels and one-third of production from the M-Pit itself.
The offtake terms do not specify minimum tonnages or require take-or-pay commitments, and Silver Bow Mining retains the right to terminate the agreements at any time.
In addition, Ocean Partners would provide guarantees for replacement surety bonds of up to $43.1m, supporting the release of around $42m in cash currently held as reclamation bond collateral for both projects.
The $40m prepayment facility is structured in three instalments: an initial $10m upon closing, $20m on approval of a restart or refurbishment programme; and a further $10m following consistent concentrate deliveries.
The facility would carry a 12-month secured overnight financing rate of interest plus 6.75% per annum.
Ocean Partners has also agreed to act as lead investor for a $5m commitment in any future Silver Bow Mining equity financing, on the same terms as other investors, although there is no obligation for the company to undertake such a fundraising.
Silver Bow Mining targets completion of the definitive agreements alongside the final closing of its Montana Tunnels Mine acquisition, which is anticipated in the fourth quarter of 2026.
The agreement is subject to negotiation of final terms, project acquisition completion, regulatory approvals and due diligence.
Silver Bow Mining noted there is no assurance that closing will occur within the planned time frame or at all.
Silver Bow Mining chairman and CEO Travis Naugle said: “This proposed Ocean Partners funding and offtake package is designed to strengthen Silver Bow Mining’s liquidity and financial flexibility as we advance the Rainbow Block Project and work toward completing the acquisition of the Jefferson County Metallurgical Complex.”
