BKB: High grade silver in the USA with a previously producing silver processing plant to be restarted.

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.

We made Black Bear Minerals (ASX:BKB) our 2025 Small Cap Pick Of The Year when it acquired an advanced stage silver project in Texas, USA, a few months ago.

This high grade silver project has an estimated $150M+ in processing and site infrastructure (which last operated as a silver mine in 2012-2013).

We liked the project because we thought the plant could be restarted and BKB could quickly mine and sell silver into a market where the silver price is running hard...

And the silver price sure is running...

Silver trading opened ~60 minutes ago - gapping up to US$83.72 per ounce...

(Source)

We also like that BKB’s silver project is in Texas, USA (but geologically sits on a famous Mexican silver belt).

BKB is drill testing this silver asset right now.

In our Saturday note we wrote about some possible shenanigans by China - attempting a run on the West’s silver over the last couple of days... (read it here) - this is just speculation for now.

The silver spot price appears to be following prices in China - where there are reports on X that physical silver is trading at above US$90+ per ounce...and it looks like the higher prices in China could be vacuuming silver out of Western countries into China (source).

So if the last few days are the start of some sort of “East versus West” silver hoarding battle, it's a good time to be bringing on silver production inside US borders.

(aside from being a precious metal, silver also has many industrial uses, including in military and AI data centers - because of this, the US has officially made silver a critical mineral.)

Silver export controls in China start in three days time - on the 1st of January 2026.

The silver price surge over the last 5 days and China’s imminent export controls even prompted an X post from Elon Musk about silver on Saturday - so who knows...

(Source)

Today, Elon’s post is being picked up by the mainstream media:

(source)

The USA officially declared silver a critical mineral last month. (source)

Then China announced silver export controls will begin January 1st 2026. (source)

As we said above, we think the USA is the place to be for any previously producing, advanced-stage silver asset right now...

BKB owns 100% of an advanced-stage silver project in Texas, USA, that has historically produced ~35 million ounces of silver.

BKB now has one of the highest grade primary silver resources on the ASX - 17.5M ounces of silver (non-JORC) resource estimate, at an average silver grade of 289g/t.

AND processing infrastructure worth an estimated ~$150M in replacement value (source) built in the last silver price surge of 2011 - which should be able to be quickly re-started to sell silver while prices are at record highs:

(Source)

Drilling on the project started a few weeks ago - which BKB CEO Dennis Lindgren discussed in detail in a recent interview here.

He is also pretty quick to point out BKB’s project as the “highest grade silver project” on the ASX:

(Check out the full interview here - source)

BKB recently started drilling its project - which could mean that the high grade primary silver resource gets bigger in the next few months. (Source)

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)

We made BKB our 2025 Small Cap Pick Of The Year because firstly we liked that the company’s 1.37M ounce gold project in Nevada, USA, underpinned the company’s valuation - that’s the asset we first Invested in BKB for.

(Yes, BKB also has a 1M+ ounce gold project, also in the USA - more on that later.)

However the main trigger for making it our Pick Of The Year was the addition of a new silver asset at the right time - just before the current silver price run which we had been predicting would take place.

(We don’t get it right all the time, but this one is looking pretty right now... especially if silver keeps going up... keeping in mind commodities can go down as well as up)

Geologically, BKB’s silver asset sits on Mexico’s famous Sierra Madre Belt, which is home to some of the world’s biggest silver producers, BUT BKB’s project sits just INSIDE US borders in Texas.

Mexico’s Sierra Madre Belt produces most of the world’s silver - however being in the US means BKB’s project benefits from a better fiscal regime (less taxes), and US domestic tailwinds - like silver being added to the US Critical Minerals List.

So Mexican geology in a Texan fiscal and regulatory regime:

(Source)

BKB’s processing plant and infrastructure was built in 2011, and the project has produced ~35 million ounces of silver to date.

The last time the project was operated was back in 2012-2013 when the silver price was trading around ~US$20-30 per ounce.

The project was able to operate in a US$20-30 silver price environment - mostly owing to the very high grades.

(more on why grades matter in a second)

We think that now with a silver price of ~US$83/ounce, BKB can grow its in ground silver resource and get the project back into production fairly quickly.

(quick, relative to exploration assets that are years away from development, are in the middle of nowhere, with no processing infrastructure readily available to them).

BKB’s 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:

(source)

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

We also noticed BKB confirmed that it would be sending drill samples for “full multi-element and gold analysis” too.

(source)

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.

The reason we think those multi-element assays could be material for BKB is because any valuable credit for producing other minerals would make its silver production all in costs even lower.

Just to get an idea of what we mean - the La Encantada mine to the south of BKB, owned by $13BN 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)

BKB’s already has mine restart studies for the project, too

One of the main reasons we made BKB our 2025 Pick of The Year was because we think its silver asset is one of those that could be restarted into a silver price run.

Remembering that the project was mined when silver prices were $20-30 per ounce.

Now silver is at ~US$83 per ounce...

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

Now the silver price is ~377% higher

... which we think will mean the economics of the project look completely different now.

(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.

The 2018 study noted that for every 5% increase in the silver price, the NPV of the project was increasing by ~US$5.5M...

(and the silver price is now ~377% higher than when the study was last done)

Which tells us that the NPV a mine restart scenario could deliver ~US$415M more NPV in addition to that US$42M number from back in 2018.

... So a total somewhere in that US$460M range... 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.

This doesn't include the multi-element assays that are coming, any increases to the resource from this round of drilling, or any other commodities BKB finds on the project.

That old study doesn’t consider the stockpiles on site that BKB recently sampled and got back silver grades up to 1,570g/t, 5% lead and 4.4% zinc - which could make for potential feedstock for the processing plant... We covered that news in detail here.

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

Speaking of the Nevada gold asset that BKB is drilling now...

The recent silver move has really captured the market’s attention because of how quick the price is moving - which can take away some of the attention from silver’s bigger, more famous brother - gold.

Gold has also had a huge 18 months... currently also trading at ALL time highs:

(source)

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

Here is the Financial Times headline from when that Executive Order was signed:

(Source)

And here is where the order explicitly mentioned gold:

(You can read the entire Executive Order here)

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 $171BN Newmont and $116BN Barrick Gold.

(Source)

On November 6th BKB said that drilling on the highest grade targets for this asset would start “next week”.

So drilling should be happening right now.

(Source)

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).

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):

It just so happens to be right near the border of its project and the N.G.M JV too - here’s the view from the top:

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)

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 - it's the first time BKB has drilled the project - and the first time the project will be systematically assayed for anything other than silver. 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 will be drill tested. Previously, those areas were too difficult to get a rig up to. BKB has finished building the roads up there and should be drilling below the 16.6g/t rock chips NOW. 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.

BKB is still an exploration and development company. While it has acquired advanced silver and gold projects in the US, there is no guarantee that it will discover economically viable mineralisation, or that the projects will be successfully taken into production.

The company is also 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.

Commodity price movements also pose a risk. The economics of BKB’s silver and gold projects are exposed to fluctuations in market prices. A sustained drop in silver or gold prices could materially impact project viability and the company’s valuation.

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