BKB: Surrounded by the biggest gold mining complex in the world - and this just happened

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 1,815,118 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.

Just buy it already, Barrick.

Nothing like a “we are moving towards actually building it” study to flush out a buyer...

Our 2025 Small Cap Pick of The Year, Black Bear Minerals (ASX:BKB | OTCQX: BKBMF), has a development stage gold project in Nevada, USA.

A ~2.2M ounce gold JORC resource next door to $90BN Barrick and $141BN Newmont's Nevada Gold Mines (NGM) Phoenix Complex.

Yep, literally as “next door” as you can possibly get. We have seen in person just how close - see for yourself in our video from the site a couple of sentences below..

As you can see on this map, BKB’s project is almost completely surrounded by the NGM complex:

(source)

Barrick and Newmont’s NGM JV is the biggest gold mining complex in the world.

It has been producing gold for decades. Last year it produced ~2.6M ounces of gold.

Over decades, most of the shallow gold resources have been mined, leaving $90BN Barrick to start planning an underground mine going after a deposit ~1km below the surface.

We think that backdrop makes any nearby shallow gold resource valuable... like BKB’s.

Especially as a potential supply source for the infrastructure owned by the big miners in Nevada.

Yesterday BKB released a scoping study for ~420K ounces gold equivalent portion of its total 2.2M ounce resource showing:

• A post-tax NPV of ~A$511M - almost 7x BKB's current market cap of $73.9M,
• A ~64% Internal Rate of Return, and;
• A ~1.4 year payback on initial capital of ~A$119M.

Those economics are all based on BKB building its own processing infrastructure.

Remember we said BKB’s project is right next door to N.G.M’s Phoenix mine - below is our video from BKB’s boundary into NGM’s mega mining complex.

(where copious amounts of infrastructure already exists and is producing millions of ounces of gold a year right now):

This is from our site visit - looking at N.G.M’s project from BKB’s ground.

Surely, the economics for BKB’s project would be a lot stronger if the project was fed into all of the existing infrastructure on site a few hundred metres away...

Maybe Keith Wood - BKB’s strategic advisor can have a word to them - he was after all, N.G.M’s Chief geologist and the guy who put together the 10-year roadmap for that mine next door...

(source)

Keith Wood joined BKB as a strategic advisor last year...

Keith’s previous job at the N.G.M complex was to find more gold in nearby, unexplored areas.

Interestingly, BKB’s announcement yesterday said a potential opportunity for the project was:

“commercial arrangements and possible infrastructure synergies with “Nevada Gold Mines”

(source)

Barrick says it's on track to IPO/Spin-out its US assets into a separate company by the end of 2026. (source)

Why is Barrick spinning out North American gold assets into a separate company?

Barrick's “crown jewels” (hehe) are its Tier 1 US assets - the giant Nevada Gold Mines JV (with Newmont) and the high-grade Fourmile discovery.

But those assets sit alongside a global portfolio of assets in more “spicy” locations such as the Dominican Republic, Mali and Pakistan.

Barrick reckons the market is marking down those Nevada assets because they're lumped in with riskier African and emerging-market jurisdictions.

So it wants to spin its North American business into its own US-listed company (as we said above, IPO targeted for late 2026) - betting a "safe jurisdiction" pure play will re-rate at a premium while gold trades near record highs.

This is where the consolidation and M&A of USA projects into the new North American focused entity comes in.

(especially if the project is directly next door to their main crown jewel in Nevada... like BKB is)

As we said above, that mega IPO is targeted for completion by the end of the year... so for us, yesterday’s scoping study from BKB comes at a good time.

(source)

A big part of why we like BKB’s gold project has always been for a scenario where the N.G.M Joint Venture stops competing for capital from its respective owners (Barrick and Newmont).

And instead a management team comes in focusing on USA growth, expansion... and M&A:

(source)

This is all making projects like BKB’s more attractive to a company focused on US growth via M&A.

Especially with N.G.M understanding both parts of BKB’s ~2.2M ounce gold resource:

1. The 1M ounce near surface resource estimate (because it is similar to the material N.G.M’s been mining at its Phoenix pit for years - and the right type of ore to go straight into their processing plants), and
   
2. The ~1.2M ounces at depth averaging 6.29g/t gold (because it’s similar to the type of material that was mined by N.G.M at Phoenix from the Fortitude pit between 1984-1993)

And of course - the exploration upside might interest them too.

(source)

Gold prices look ready to move?

Another positive from yesterday’s scoping study was that BKB didn’t use any outrageous gold prices in its study.

The study used a gold price of US$4,250 per ounce - only ~5% higher than current spot prices.

And right now, to us it feels like gold wants to go on another big run again...

Anyone who follows the big media channels would have seen this over the last few days:

(source)(source)(source)

And this sneaky photo taken of US Treasury Secretary - Scott Bessent - at a US cabinet meeting where he has noted down to “Buy $5-10BN in Japanese Yen”:

(source)

Yes, that image above is real - it isn’t AI...

Without going deep on macroeconomics - all of this relates to the US Treasury intervening in currency markets to prop up the Japanese Yen and prevent it from depreciating.

Without going deep into why... (we could be writing for days on this one)

Here’s the short version:

US buying yen = US selling/printing dollars = weaker dollar + a signal that the US wants the US dollar weaker = gold's two favourite things at once.

The US Treasury is buying Japanese Yen to stop its devaluation and is signalling to the market it will do whatever it takes to stop the Yen decline.

Which could mean more USD gets printed and pumped into the system.

Which is bullish gold - more USD printing SHOULD mean gold does well.

Of course we could be wrong - markets work in mysterious ways and the opposite to what we think is always very possible (even likely).

Legendary “gold royalty” pioneer Pierre Lassonde reckons gold is going to US$17,500 per ounce - but hey, he is always bullish so assume he could be incorrect.

“I Could Not Be More Bullish”: Pierre Lassonde’s $17,250 Gold Target

Maybe the currency market intervention is the first of many similar catalysts to take it there?

Looking at the gold chart it does look like the price has come to a point where it picks either up or down - so who knows:

(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 also has an advanced silver project we also like

We continue to be convinced that the silver price is going to run again.

After breaking through its all time highest prices EVER and now having spent over six full months trading well above the two previous historical highest points it briefly touched over the last 100 years - we think the next run is incoming.

(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 owns a very high grade silver project in Texas...

... with existing processing infrastructure on-site with a replacement value of ~A$150M and a 17.6 million ounce silver foreign resource estimate at 289g/t silver.

BKB’s silver asset is the one that helped us make BKB our 2025 Small Cap Pick of the Year back in November.

Because those are seriously high grades especially when compared to other primary silver mines operating globally.

For example ~$11BN First Majestic Silver’s assets ~300km to the southeast on the same belt operates with grades below ~289g/t silver.

(source)

The project has in the past produced ~35 million ounces of silver between 1883 and 1942 at an average grade of 521 g/t Ag.

And then more silver when it was last in production in 2012–2013 - until silver prices below US$18 per ounce forced the asset into care and maintenance.

A big reason we like the project is that it already has A$150M of existing on-site infrastructure, including:

• plant + refinery (built 2011-2012)
• A modern 24,000 sq. ft. warehouse
• An assay lab
• Existing power lines + an on-site substation
• Full water rights
• 160km of existing underground workings
• Four production shafts

(source)

All of that infrastructure is only ~10-15 years old, and was barely used at full capacity before being put on care and maintenance.

We think that this is the type of asset that can get back into production quickly (because of all that infrastructure on site) in a higher silver price environment.

Then, because of those grades they operate with strong margins...

The project last produced silver in 2012-2013 when silver was at US$18 per ounce.

Today the silver price is ~US$58 per ounce.

Another big part of why we like the silver asset is because there is a realistic pathway to bringing the project back into production while silver prices are high.

(hopefully IF/When the first silver bar is being poured by BKB, the silver price is even higher than where it is today)

BKB has engaged Ausenco (one of the world's leading mining engineering firms) to deliver a "rapid restart" study on Shafter.

By the end of that study, BKB should have:

• A dilapidation study - working out exactly what's needed to get the existing infrastructure operation-ready, and
  
• A restart CAPEX estimate - an order-of-magnitude capital cost estimate for equipment refurbishment and facility restart.

Potentially a fully costed pathway toward restarting BKB’s silver project.

Together, that will be enough information to commence a formal Scoping Study and move toward a Final Investment Decision (FID) on a restart.

And with all major permits already confirmed active and in good standing (BKB locked that down earlier this year), restart financing discussions should be a lot smoother.

BKB is also in the middle of an 11 hole diamond drill program across three target zones, including the historic mine area.

(source)(source)

So in the near term we could also see:

• More drilling results, and
  
  
• A resource upgrade - where we hope to see the first JORC compliant resource estimate (and hopefully an upgrade in size/grade)

We also want to see BKB cover the first of two US$4.25M payment installments to the project vendor by September 29th.

BKB had ~$5M cash in the bank at 30 June, so unless its share price goes above 70c within the next 60 days, BKB may need to raise some cash to fund that payment.

(more on this in the risks section in today’s note)

BKB’s project has an existing restart study

There is an existing 2018 restart study for the project which we covered in detail in our last BKB note here: Australian Government funding USA mining projects? All hands on deck for this urgent national security issue.

Our back of the envelope calculations (just plugging in different silver prices and changing nothing else - bush maths) has the silver projects NPV sits somewhere in the US$265M range using a US$70 silver price.

(We think silver is going a lot higher - more on this later)

BKB’s also been resampling the silver and the grades are coming back ~50% higher too:

(source)

Despite being a silver project first and foremost, BKB’s project has in the past produced gold.

But, no one ever drilled or assayed for gold... (or any other minerals)

One of the holes had 0.7g/t gold, 1.1% lead and 3.4% zinc.

(source)

Putting the lead and zinc aside.

That 0.7g/t gold may not sound like much but for every tonne of ore mined that's ~US$92 of gold to go with the ~US$350 of silver (181g/t silver grade).

So in theory it adds ~27% in value to every tonne of ore mined where that intercept came from.

Depending on where gold and silver are trading at any given time, that small portion of gold could even pay for the costs of mining out the ore in total...

Especially with ~A$150M of existing on-site infrastructure ready to process everything.

Long story short - inside ~$74M capped BKB we get exposure to two potential company making assets.

• A 2.2M ounce gold equivalent JORC resource estimate - surrounded by two of the biggest gold miners in the world (Barrick and Newmont), AND
  
• A high grade silver asset with all of the processing infrastructure in place to go mining while the silver price is hot.

We think both of BKB’s assets are potential company makers

BKB’s current market cap sits at ~A$74M.

We think the market is only valuing one of BKB’s two assets and two scenarios:

Scenario A: Assuming the US gold project is the main story in which case BKB has:

• A 2.2Moz gold equivalent JORC Mineral Resource estimate
• Exploration upside (open along strike and at depth in every direction)
• NPV of ~A$511M post-tax on just ~420k ounces of its resource.
• Adjacent to the N.G.M Phoenix mine complex ($90BN Barrick and $141BN Newmont)
• Inside N.G.M's Plan of Operations Area

IF the market thinks of BKB like this then we are getting a “free option” on the silver asset (with its estimated A$150M of infrastructure and 17.6Moz at 289g/t).

Scenario B: Assuming the US silver project is the main story, in which case BKB has:

• A 17.6Moz silver foreign resource estimate at 289g/t
• A$150M of existing processing infrastructure (built in 2011-2012)
• A 2018 restart study with a Net Present Value of US$42M at US$22/oz silver.
• A rapid restart study underway right now
• Non-binding Letter of Support from Export Finance Australia for potential project financing
• Drilling underway right now

And in this scenario, we get a “free option” on the gold asset (with its 2.2Moz AuEq next door to NGM).

We are bullish on BOTH gold AND silver.

So we're more than happy to hold the majority of our BKB position and let either story play out (or both).

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.

In the rest of today’s note we will cover:

• More details on the gold project and why we like it.
• Our take on silver and why we think it could go on a run
• What we want to see next from BKB

More on BKB’s gold project and why we like it

As mentioned earlier, BKB's gold project literally sits inside Nevada Gold Mines' Plan of Operations Area.

That means it’s inside all of the permitting frameworks N.G.M have put in place for their operation.

It could also mean faster integration of the project into whatever N.G.M wants to do with its assets.

(source)

We have actually been on site and hiked up to the border of BKB’s ground and the giant pit N.G.M is operating.

When you stand on top of that hill and look in one direction, you see BKB's project and on the other side the massive pit being mined by N.G.M:

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

We are not mining engineers - but it feels like BKB’s near surface resource could be mined using conventional heap leach processing and an open-pit, then once that’s exhausted an underground decline to access that deeper resource:

Alternatively... the owners of the mine next door - (Barrick and Newmont’s) N.G.M - could just come in and incorporate BKB’s project into its mine plan.

Especially if that Barrick spin-out/IPO ends up happening...

The new entity, which is expected to complete an IPO in late 2026 at a ~US$42BN valuation would already hold:

• 61.5% stake in Nevada Gold Mines (the JV with Newmont - includes Phoenix, Cortez, Carlin, Goldstrike, Turquoise Ridge)
  
  
• 100% Fourmile (Barrick's wholly-owned Nevada discovery), AND
  
• Barrick’s 60% stake in Pueblo Viejo (Dominican Republic)

For the first time in decades, Nevada will be home to a pure-play, listed US gold producer whose management can focus 100% of its time and capital on the US.

No more competing inside Barrick for capital that gets allocated to copper projects in Pakistan, gold in Mali, or African expansion.

Which we think means more capital flowing into its US based assets for growth.

IF only there was an asset that had a 2.2M ounce gold equivalent JORC resource...

Sat right next door to one of NewCo’s assets..

AND actually sat inside one of NewCo’s existing mine plans:

(source)

We think the Barrick spin-out will be good for all gold assets in Nevada.

But especially good for BKB’s asset.

BKB’s project currently has:

• 1.2M ounces near-surface across ~1.5km of strike, and
• 1.0M ounces at depth with an average grade of 6.29g/t gold

(source)

We already know that the at surface mineralisation is similar to the stuff that N.G.M’s been mining at its Phoenix pit for years - and the right type of ore to go straight into their processing plants.

Here is what we said in our BKB site visit note from last year:

(source - our site visit article)

And here is that reference to the Carlin plants processing “third-party ores” from Phoenix.

(source)

We also know that BKB’s deeper resource is the same type of material that was mined at N.G.M’s Phoenix operation at the Fortitude pit between 1984-1993.

That pit produced ~2.1Moz of gold at ~6.68g/t Au at over 90% recoveries.

Almost identical grades to BKB’s current resource (BKB's deeper resource is 6.29g/t Au) and Interestingly the metallurgy looks similar...

BKB’s shown that it could have 95.9% gold recovery (per BKB metallurgical testwork).

So from a processing perspective, N.G.M would know exactly what needs to be done with BKB’s project too.

For now, we want to see BKB do a Pre-Feasibility Study and push its project closer toward being development ready... IF N.G.M or anyone else decided to come in for the asset we would like to see BKB run that process from a position of strength.

And finally... What's going on with the silver price right now?

We think silver is currently going through that big washout that happens after a first big rally.

We think that fundamentally, nothing has changed with silver.

It could start next week or in three years’ time, no one knows - but we think that at some point inside the next 2-3 years silver will go on a big run again.

Forecasts are for a sixth year in a row the world uses more silver than it produces. (source)

No guarantees of course. Commodity prices are very hard to forecast.

A few weeks ago on one of the biggest podcasts in the world (the All-In Podcast) - fund manager Dan Dreyfus laid out the bull case well saying:

• The world uses ~1.2 billion ounces of silver a year
• It only produces ~1 billion ounces a year
• That leaves a ~200M ounce hole every year - pulled from above-ground stocks
• And he reckons there’s only ~600M ounces of accessible above-ground inventory left

So Dan’s call is for an “above-ground” shortage at some point within the next three years.

On silver, he also said:

1. The China export cutoff list:

"Samarium, gadolinium, terbium, dysprosium, lutetium, scandium, yttrium, erbium, silver, just cut it off ."

2. The main silver block (one continuous passage, late in the talk):

"We're going to be short silver, for example, to build these solar panels, especially if we start launching data centers in space, right? These are going to consume incredible amounts of silver. But right now the silver supply demand dynamic is we consume 1.2 billion ounces a year. We supply a billion ounces a year. So there's a 200 million ounce deficit per year and we only have 600 million of above ground inventory left. So the clock's ticking. We got three years left guys before we just stock out. And then the solar story is where do you get the silver for the photovoltaic cells?"

3. His closing allocation comment:

"So for our kids and for the country generation tool belt for us allocating, get some exposure to copper, silver, minerals and then there's a bunch of service providers in and around that area that we should be investigating over the next year."

Check out Dan’s full pitch here: Dan Dreyfus: America’s Critical Minerals Crisis is Here

Dan’s thesis is pretty simple and based on above ground inventories being run down due to that deficit between production and demand.

We think there is pressure on the demand side too...

• Solar panels alone now eat 200M+ ounces a year - roughly one-fifth of global mine supply (source)
• EVs, power grids, semiconductors and AI data centres all need silver (source)

So demand could be a lot stronger than even Dan is expecting:

(source)

As mentioned earlier, our favourite silver analyst, Michael Oliver is still calling for US$500 silver and US$8,000 gold:

(source)

And billionaire Eric Sprott thinks silver “should be at US$300” and can “easily” get there.

(source)

Hopefully, they are right and silver finds a new base around these current levels and starts to turn.

No one knows where prices go next though, in the short term the silver price will have an effect on how BKB’s share price trades.

We are still bullish silver, we haven’t seen any new projects come online or get development financing and a bull market usually doesn't end until a few projects come online.

And a few big M&A deals get done (some where the buyers are very clearly overpaying).

What's next for BKB?

🔄 Gold project in Nevada

Next we want to see BKB deliver:

• ✅ COMPLETED: Mining study phases on a heap-leach development
• ✅ COMPLETED: Scoping study
• 🔲 DUE NEXT: Metallurgical testwork across all epithermal oxidation states
• 🔲 DUE AFTER: Revised Scoping Study on the full 1.2M ounce shallow resource
• 🔲 DUE LATER: Pre-Feasibility Study

Eventually when drilling is back on the cards we want to see BKB test for the following:

• 🔄 UNDERWAY: Planning for follow-up drilling north of skarn (the 580m gap to WI-002)
• 🔲 DUE NEXT: Drill testing the Rebel Trend (1km of untested strike)
• 🔲 DUE NEXT: Deeper drilling at South Hill (untested stacked lodes)

🔄 Silver project in Texas, USA

Over the next 6 months the main things we want to see are the following:

• 🔄 Rapid restart study (CAPEX estimate)
• 🔄 Drill program - 11 diamond holes
• 🔄 Multi-element gold/zinc/lead assays
• 🔲 Maiden JORC resource
• 🔲 Scoping Study starts
• 🔲 Restart Final Investment Decision (FID)

What could go wrong?

The single biggest risk for BKB right now is "Exploration risk".

BKB is drilling its silver resource - which currently sits as a foreign resource estimate.

IF the drilling and JORC modelling fail to confirm that resource, BKB could deliver results below market expectations and the share price could re-rate down.

The second risk is "Commodity price risk".

BKB's share price moves in line with gold and silver prices.

Both are at or near all-time highs. A meaningful pullback in either would hurt BKB regardless of operational progress.

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 02 October 2025

The third risk to have on the radar right now is "Funding risk".

BKB had ~A$5M in cash as of 31 July.

And it still owes US$8.5M (~A$12M) in deferred payments on the Shafter acquisition split across two instalments of US$4.25M (~A$6M each).

BKB will need to settle the first installment before the 29th of September so there is a ~3 month window where BKB may need to raise cash UNLESS it can renegotiate the terms of the deal...

OR if BKB’s share price goes above 70c per share.

(BKB does have the option to settle the deferred payments in shares - subject to shareholder approval and a A$0.70 floor price)

IF that raise is left to the last minute or is done during a weak patch in the gold/silver market, existing shareholders get diluted at unfavourable prices.

We listed this in our BKB Investment Memo here:

Funding risk/dilution risk

BKB is paying US$9.5M cash for the acquisition and will have another US$8.5M in cash or shares come due (50% in 12 months and the other 50% in 24 months time). The initial outlay will mean a large portion of the just completed $30M capital raise is committed to paying for the asset.

Source: “What could go wrong” - BKB Investment Memo 02 October 2025

Other risks

Like any small-cap resource exploration company, BKB carries significant risk, here we aim to identify a few more risks.

First, a core part of the investment thesis relies on potential corporate M&A or infrastructure synergies with Nevada Gold Mines, which are completely speculative and may never materialise if corporate strategies shift.

Second, BKB faces substantial deferred acquisition liabilities of US$8.5M split in ~2 and ~14 months on its silver asset, creating near-term pressure that could force heavily dilutive equity raises if not renegotiated or funded on favourable terms.

Third, managing two separate advanced development projects across Texas and Nevada simultaneously risks stretching management bandwidth and causing execution delays.

Fourth, while the Texas silver project boasts existing infrastructure, refurbishing aged care-and-maintenance processing plants frequently uncovers unexpected capital expenditure costs or technical bottlenecks.

Finally, BKB remains heavily exposed to broader precious metals market sentiment, where any significant downturn in gold or silver prices would directly hurt project economics and market valuation.

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

Our 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