BKB: Engineering company appointed for “rapid restart” of USA silver mine study as silver rapidly rises to record US$93/oz overnight.

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 1,853,118 BKB Shares and the Company’s staff own 60,923 BKB Shares at the time of publishing this article. The Company has been engaged by BKB to share our commentary on the progress of our Investment in BKB over time. This information is general in nature about a speculative investment and does not constitute personal advice. It does not consider your objectives, financial situation, or needs. Any forward-looking statements are uncertain and not a guaranteed outcome.

Silver is now at US$93 per ounce... up over 7% just overnight.

We made Black Bear Minerals (🇦🇺: BKB | 🇺🇸: BKBMF) our 2025 Small Cap Pick Of The Year after it acquired an advanced-stage, high-grade 17.6Moz silver project in the US.

The project has ~$150M+ of silver mining and processing infrastructure that was last producing silver in 2012-2013 before going into care and maintenance because silver prices fell to ~US$18 per ounce.

Last night, silver touched highs of US$93 per ounce and it’s rising... fast.

(for anyone who watches the silver price daily - what a run, right? Unbelievable - but as always... past performance is not an indicator of future performance)

Our thesis with BKB is to see the company restart its silver processing plant, then start mining and selling silver ASAP while the silver price trades at “new normal” highs.

We wrote this investment thesis a few months back - when silver was US$46, now it's up at US$93.

Which means the read through value of BKB’s silver asset is a fair bit more now...

Today, BKB appointed Ausenco (a global engineering company) to do an operational restart assessment study for the project.

Basically a comprehensive engineering report that will give BKB a reasonable cost estimate for a “rapid restart” of this silver mine.

(source)

At $93 per ounce, the in-ground value of BKB’s silver resource is $1.6BN USD - ($2.4BN AUD).

(of course, all that silver is contained in rocks underground, in a resource ‘estimate’, and needs to be dug up and processed - there are costs involved in mining and processing)

While we wait for the restart assessment, BKB is also drilling to further expand their 17.6M ounce resource estimate and bring it up to JORC compliance.

So that number could actually get bigger over the next few months...

(more on the drilling in a second)

Looking back, it feels like BKB got its silver acquisition away at just the right time...

(what an advanced stage, high grade silver asset would be worth inside the US right now is anyone's guess... remember that the US officially added silver to the critical minerals list 9 weeks ago)

(Source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

We think BKB could be the closest of any ASX small cap to produce silver inside US borders...

Back in October 2025 we named BKB our 2025 Small Cap Pick of the Year.

(Back when silver was US$46/oz - hard to believe this was only ~3 months ago)

“Pick of the Year” is a label we reserve for companies that we think have the highest potential to deliver us outsized returns.

Especially our Next Investors “Small Cap Pick of the Year”.

Our first Next Investors Small Cap Pick of the Year in 2020 was Vulcan Energy Resources - it was up over 8,000% at its peak, it still remains up nearly 1,000%.

Vulcan is probably our best ever Investment result.

Our 2024 Small Cap Pick of the Year, Sun Silver has hit new all time highs this week, up over 1,000%.

(past performance is not an indicator of future performance)

As mentioned earlier, BKB’s project has ~$150M+ of project infrastructure that was last producing in 2012-2013...

BKB’s project has a 17.6M ounce @ 289g/t silver non-JORC resource.

That $150M+ infrastructure we mentioned a few sentences ago, that was built between 2011 and 2012...

(Source)

So we aren’t talking about 50-100 year old “rust bucket” infrastructure, it's actually fairly modern and has been operated before.

After Ausenco have completed their restart assessment study BKB will have:

• A dilapidation study - working out what’s needed to get the infrastructure operation ready, and
• A restart CAPEX estimate - the capital cost to tick off all of the items in the dilapidation study and start operations...

By the end of the study we should know exactly what BKB needs to put up to get its project back into production...

And BKB will have enough to make a Final Investment Decision (FID) on the project to “facilitate a formal restart”.

(source)

BKB can then leverage that $150M+ in infrastructure to quickly come online and produce while the silver price is hot.

Here it is again the glorious overnight move in the silver price:

(source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

At today’s US$93 silver price BKB’s project has ~US$1.6BN in silver in the ground...

... at very high grades averaging ~289g/t.

Which we hope means BKB can produce silver with relatively low costs...

Just to get an idea of what we mean - the La Encantada mine to the south of BKB, owned by $14.5BN First Majestic Silver, produced silver with average grades of ~100g/t in Q3 of 2025 (source).

(Source)

First Majestic’s guidance for all-in sustaining costs for the asset were around the ~US$28-30 per ounce mark.

(Source)

BKB’s foreign resource estimate has grades more than double that at 289g/t silver - which could mean lower costs when the asset is put back into production.

(and remember that’s without any new drilling and without assaying for anything else)

Again, it's worth mentioning that the asset was producing when silver was trading at ~US$20-30 per ounce, so it SHOULD be economically viable to operate it with silver where it is today.

There is actually a 2018 mine restart study for the project contemplating a restart which gives us clues as to how economic - more on this in a second.

(Source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

BKB’s mine was placed on care and maintenance due to operating at low silver prices before the mine could get into full scale commercial operations.

So most of the infrastructure is fairly new (~10-15 years old) and barely been used at full tilt.

Which we hope means that dilapidation study makes for light reading and the costs are fairly manageable to get the project back online.

We are not mine engineers and are always surprised by how much things cost when getting projects back online, but the infrastructure looks pretty good to us in those photos:

(Source)

With silver now on the US critical minerals list (source) and even Elon Musk talking about it on X (source).

We think BKB is one of the few stocks on the ASX that could have a project in production in the US during this silver bull run...

It’s also one of few with both a silver and gold asset in one entity...

(yes we haven’t mentioned it yet in today’s note but BKB also own a 1.4M ounce gold asset in Nevada, right next door to gold supermajors Barrick and Newmont - more on this project later in today’s note).

What might a restart mean in terms of numbers?

Back in 2018, a mining restart study was completed on BKB’s project which showed a Net Present Value (NPV) for the project of US$42M using a US$22/ounce silver price.

The study also noted that for every 5% increase in the silver price, the NPV of the project would increase by ~US$5.5M...

The silver price is now 322% higher (using US$93/oz) than when the study was last done.

Which tells us that the NPV of a mine restart scenario could deliver ~US$354M more NPV in addition to that US$42M number from back in 2018.

So a total somewhere in that US$396M range... Or around ~AU$592M

For BKB capped at just ~AU$150M.

Note this is not a guarantee - a number of assumptions would likely have changed since that 2018 study, that’s why BKB is doing more work to make sure it understands the geology and the economics in 2025.

Here is how everything looks overlaid against a 10 year silver chart:

(Source)

The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

That old study doesn't include any by-products BKB might produce either...

BKB’s project has in the past produced gold - but none of the previous drilling was ever assayed for it...

Any gold credits to go with the silver resource could be a good side story for the asset.

Especially with the gold price doing what it's doing right now (trading near all time highs).

Also, who knows what else BKB could find when those re-assays are done.

For context - sampling from stockpiles has returned silver grades up to 1,570g/t, 5% lead and 4.4% zinc. (source)

The stockpiles could make for nice starter feedstock to get the processing plant going...

Then there is the potential upgrades to come from the drilling program too...

BKB is drilling right now to grow its resource

Before we get to that old mine restart study, its worth pointing out that BKB’s resource could actually grow from the 17.5M ounces its at today.

BKB recently started drilling its project. (Source)

So BKB’s resource could actually grow from the 17.5M ounces silver it sits at today.

And ultimately, a bigger resource (and a running silver price) will make restarting the project's processing plant a lot easier (financing a restart with a big high grade resource when silver is running).

(source)

The project has over 4km of outcropping east-west that is largely untested and there is known mineralisation that sits outside of the current foreign resource estimate.

(source)

With the current first round of drilling, BKB has 11 diamond holes planned - with a few different goals

So we should find out a lot more about BKB’s project after this round of drilling is complete and we get assays back.

Oh and of course BKB’s Nevada gold asset (which we think, alone, underpins BKB’s valuation).

BKB also owns a 1.4M ounce gold project in Nevada, USA

BKB owns 100% of a 1.37M ounce gold resource (estimate) in Nevada, USA - next door to N.G.M.

N.G.M is a joint venture between two giants of the gold industry - the $188BN Newmont and $128BN Barrick Gold.

(Source)

On November 27th BKB said that it was four holes into drilling the Rebel peak targets.

We have been looking forward to this round of drilling the most with BKB’s Nevada asset.

Mainly because it's where the highest grade rock chips have been sampled for the project and because it would be shallow, near surface mineralisation (if drilling comes in).

(source)

We were on site earlier in the year and we hiked up to where BKB was sampling the highest gold grades (16.6g/t in rock chips).

Here is us hiking up to the top of the hill (where BKB would be drilling now):

Check out our site visit for BKB’s gold project here - BKB is surrounded by one of the world’s biggest gold mines - here’s what we saw on site.

We are looking forward to the results from this round of drilling because it could bring BKB’s US assets into play from an M&A perspective.

IF BKB hits more gold in the shallow sections of its deposit - neighbours N.G.M could start to look at the project very differently (as a fast way of bringing more production into their mine plan).

We already know BKB’s project sits inside their “Plan of operation area” so it wouldn’t surprise us.

(Source)

We think this is another project that could benefit from the pro-precious metals sentiment in the US right now...

Gold was explicitly mentioned by US President Donald Trump in an Executive Order signed in March to boost domestic mineral production - including gold...

Here is where the order explicitly mentioned gold:

(You can read the entire Executive Order here)

Two catalysts from BKB in the next few weeks

So BKB will have two sets of results we can look forward to over the coming weeks/months:

1. Silver drilling in Texas - drilling got underway recently and it's the first time BKB has drilled the project. Surprise high grade silver hits or multi-element assays could be a catalyst for BKB’s share price.

(happening while silver prices go exponential)

2. Gold drilling in Nevada - the first time the area with the highest grade rock chips on site has been drilled and assays could be due soon with drill holes having been completed in November. Any surprise here could be material for BKB.

(happening while the gold price keeps hitting new all time highs)

Ultimately we want to see BKB hit our Big Bet which is as follows:

Our BKB Big Bet:

“We want to see BKB drill, extend and grow the resources on both its gold and silver projects to the point of the projects being development ready (or to the point of a major buying out the assets). At that point, we hope to see BKB’s market cap trade at $750M+”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is no guarantee that our Big Bet will ever come true. There is a lot of work to be done, many risks involved, including development risk, market risk and commodity price risk - just some of which we list in our BKB Investment Memo.

Success will require a significant amount of luck. Past performance is not an indicator of future performance.

What are the risks?

In the short term, the key risks to our BKB Investment Thesis are “exploration risk” and “Commodity price risk”.

Exploration risk because BKB is drilling both its gold and silver assets right now.

Any poor results from the drill programs could lead to a sell off in the company's share price.

Commodity price is also a risk here because gold is trading at all time highs and silver has now started an exponential rally to new highs...

Any pullback in either commodity price could lead to a sell off in BKB’s share price.

Commodity price risk

The performance of commodity stocks are often closely linked to the value of the underlying commodities they are seeking to extract. Should gold or silver prices fall, this could hurt BKB’s share price. We have already seen this happen with the lithium price and what it meant for BKB’s Canadian lithium assets in the past.

Source: “What could go wrong?” - BKB Investment Memo 2 October 2025

Other risks

Like any stock market investment, investing in BKB carries a variety of risks which may affect the value of the company, some of which cannot be predicted (this is the nature of risks).

Here we aim to identify a few more risks.

The company is sensitive to time delays. Drilling, permitting, and mine restart studies may not occur on schedule. Significant delays could reduce market interest, increase cash burn, and force BKB to raise capital under potentially dilutive conditions.

BKB is highly reliant on capital markets to fund ongoing exploration and development. Any future capital raises could dilute existing shareholders.

Finally, broader market and sector conditions could negatively impact BKB’s share price, even if the company continues to make operational progress.

Investors should carefully consider these risks and seek professional advice tailored to their personal circumstances before investing.

Our new BKB Investment Memo

Our Investment Memo provides a short, high-level summary of our reasons for Investing.

We use this memo to track the progress of all our Investments over time.

In our BKB Investment Memo, you can find the following:

• What does BKB do?
• The macro theme for BKB
• Our BKB Big Bet
• What we want to see BKB achieve
• Why we are Invested in BKB
• The key risks to our Investment Thesis
• Our Investment Plan