Black Bear Minerals Ltd (ASX:BKB)

Investment Memo:

Black Bear Minerals Ltd (ASX:BKB)

- LIVE

Opened: 02-Oct-2025

Shares Held at Open: 1,952,950

What does BKB do?

Black Bear Minerals (ASX:BKB) has two advanced precious metals assets:

A 1.37M ounce gold project in Nevada, USA. and
A high grade 17.57M ounce silver project in Texas, USA.

What is the macro theme?

BKB has exposure to:

Gold - a precious metal which is often seen as an insurance against inflation, uncertain markets and as a reserve asset. Gold is trading at all time highs at the time of this memo.
Silver - an industrial and precious metal, widely used in electronics, solar panels, and medical applications. Silver often moves in tandem with gold but can have more volatility. Silver is approaching the all time high of near US$50 from 2011.

Our Big Bet for BKB

“BKB re-rates to a +$300M market cap by expanding its large US gold resource and moving into development studies and/or attracting a takeover bid at multiples of our Initial Entry Price”

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 a lot of work to be done, many risks involved - just some of which we list in our BKB Investment Memo. Success will require a significant amount of luck. There is no guarantee that our Big Bet will ever come true.

Why did we invest in BKB?

BKB’s silver project has an estimated 17.57M ounces at very high grades (289g/t)

BKB’s silver project in Texas has a 17.5M ounce foreign resource estimate at an average silver grade of 289g/t.

Those grades are on par with some of the highest-grade operating mines in this part of the world.

For context - $9BN First Majestic Silver’s operating La Encantada mine which is just over the US/Mexico border has a 15.3M ounce resource with average silver grades of 208g/t.

BKB’s silver project has ~A$150M of existing project infrastructure

BKB’s project has A$150M+ in infrastructure, including mine shafts, a 3,000tpd processing plant and even a power substation.

The project is also partially permitted.

We think BKB’s gold project backstops its $94M current valuation

BKB has a 1.37M ounce (estimate) gold project next door to N.G.M’s (Barrick and Newmont JV) Phoenix pit in Nevada - one of the biggest gold mines in the world.

At today’s gold prices, we think that gold resource estimate can grow, and based on current numbers, it backstops BKB’s valuation.

We like gold and silver (especially in the US)

Gold is currently trading at all time highs (US$3,850 per ounce), and we think it could continue running against a backdrop of ever increasing debt and fiat currency depreciation.

We also think silver will follow gold and run to new all time highs.. Silver is currently at 14 year highs (US$47 per ounce).

(No guarantees of course - commodity prices are hard to predict and can go down as well as up.)

BKB has the same team and backers as our 2024 Small Cap Pick of the Year SS1

Board, management, corporate advisors and top 20 shareholders are very similar across BKB and SS1 (our 2024 Small Cap Pick of the Year that IPO’d at 20c and hit over $1.18 within nine months).

We are backing the same group to deliver more wins with BKB.

(Past performance is not an indicator of future performance.)

Nevada/Texas are some of the best jurisdictions for mining assets

BKB’s two main assets are now in Nevada and Texas, USA.

Nevada was ranked as the best mining jurisdiction in the world in 2022 by the Fraser Institute and has ranked in the top 3 every year for the past 10 years.

Texas is among the most business friendly states in the US - just ask Elon Musk.

BKB’s gold project is surrounded by low cost heap leach mines on similar geology

BKB’s gold project is surrounded by some of the lowest cost gold mining operations in the world. Barrick and Nemont’s Nevada Gold Mines JV has pits operating with AISC (all in sustaining cost) to produce at below ~US$1,000 per ounce.

BKB’s gold project had a previous Preliminary Economic Assessment (PEA) completed

BKB’s gold project had a PEA completed in 2022 which showed 32,050 ounces of gold per year for 6 years at an all-in sustaining cost of US$1,078 per ounce.

By our back of the napkin, that is US$121M in revenues per year, assuming a US$3,800 ounce gold (without considering an upgrade to the project’s resource since then).

(of course we are not financial analysts here - we are ignoring all costs in the above calculation and any discount on the future value of money.)

BKB is a well-known retail stock with potential to re-rate

BKB appears to have a large retail following and the potential for share price re-rates on good news.

The company promotes well, it was a hot IPO back in September of 2023, when James Bay lithium stocks were popular amongst investors and right before the lithium sentiment crash.

It's been responding to newsflow on its gold asset too.

As a result, we think that if the company can deliver material news on its silver and gold projects, there will be enough eyeballs on the stock for the share price to re-rate.

BKB has protected its capital structure well over the years.

Even after today’s $30M capital raise and the silver project being acquired, BKB will have only ~145M shares on issue and no options overhang.

We have seen a similar style clean structure for SS1 which has so far worked out well for investors.

A clean structure with no options overhang allows for the company’s share price to rise off the back of strong positive news.

What do we expect BKB to deliver?

Objective #1: Drilling at BKB’s US silver project

We want to see BKB drill out, extend and then define a JORC resource estimate over its silver project in Texas, USA.

Milestones

not done Sampling to identify drill targets

not done Drilling commenced

not done Assay results

Objective #2: Maiden JORC resource estimate at US silver project

We want to see BKB upgrade and convert its 17.5M ounce foreign resource estimate at its US silver project into JORC compliance. We are looking for the resource to get bigger during the conversion process, whilst maintaining a relatively high grade.

Milestones

not done Maiden resource estimate

not done Increase to the resource size

Objective #3: Resource upgrade on US gold project

We want to see BKB drill out and upgrade the resource at its US gold project in Nevada.

Milestones

complete Drilling started

in-progress Assay results

in-progress Resource upgrade

Objective #4: Permitting and feasibility studies on both projects

Ultimately, we want to see BKB take both assets through the permitting process and into development. For the US gold project we want to see permitting and economic studies. For the silver project we want to see full permitting and a mine restart study get completed.

Milestones

not done Permitting for US silver project

not done Permitting for US gold project

not done Economic studies on US gold project

not done Economic studies on US silver project

What could go wrong?

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.

JBY - Our 2025 Small Cap Pick of the Year - USA gold and silver - now to list on US stock exchange... [09-Oct-2025]
JBY: +95% gold recoveries from high grade “skarn” resource [31-Oct-2025]
Our 2025 Small Cap Pick of the Year: Black Bear Minerals (ASX: BKB) (company name/code change from JBY) [27-Nov-2025]

Delay risk

BKB plans to drill both its gold and silver assets this year.

There is a risk there is some slippage in these timelines and IF BKB were to have big enough delays, it could lead to the market losing interest in the stock.

Significant delays could be negative for BKB’s share price as it would burn down the company’s cash balance and bring the company to a position where it needs to raise more capital and dilute existing shareholders.

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.

As a small pre revenue company , BKB is dependent on capital markets to fund ongoing drilling and development.

That could come at discounted prices and further dilute existing shareholders.

Market risk

Broader market sentiment could deteriorate, and shares as an investment class trade lower, taking BKB’s share price with it.

Alternatively, there could be further sector specific pain ahead where junior explorers suffer a lot more than the broader market.

Development/permitting risk

BKB’s projects are now becoming fairly advanced.

This means BKB will eventually need to seek larger funding rounds as well as permitting to develop the projects.

Any delays to permitting or in forecast development timelines could hurt BKB’s share price.

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.

What is our investment plan?

We are Invested in BKB to see it expand its precious metals resources and progress both of its assets into development.

Our plan is to hold the majority of our position in BKB for 3 to 5 years which we hope is enough time to see BKB to move towards development (see “our long term bet” above).

We have been Invested in BKB since November 2024 and typically we start to apply our standard de-risking strategy after holding for ~12 months.

We may look to sell up to 20% of our holding if the company delivers on one or more of our Investment Memo objectives and/or the share price materially re-rates (or if the silver price runs really hard).

Any sell downs will be in accordance with our trading and hold policy disclosure.

You can see our current holdings in any stock at any time here.

Disclosure: Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 1,952,950 BKB Shares and the company's staff own 64,257 BKB Shares at the time of publishing this Investment Memo. 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.

Investment Memo:

Black Bear Minerals Ltd (ASX:BKB)

- LIVE

Opened: 25-Nov-2024

Shares Held at Open: 1,979,167

What does BKB do?

James Bay Minerals (ASX:JBY) is a gold explorer developing its project in Nevada, USA.

JBY also owns lithium exploration assets in Quebec, Canada.

What is the macro theme?

Gold price is trading near all time highs and looks like it wants to go higher against a backdrop of high inflation and global uncertainty.

Nevada is home to some of the world’s biggest, lowest cost operating gold mines with gold majors like Barrick and Newmont active in the region.

JBY also has lithium projects in Canada which gives us a chance to pick up lithium exposure during the lithium winter. We think these projects can come good when sentiment improves.

Our Big Bet for BKB

“BKB re-rates to a +$300M market cap by expanding its large US gold resource and moving into development studies and/or attracting a takeover bid at multiples of our Initial Entry Price”

Why did we invest in BKB?

JBY has a 1.18Moz gold and 7.6Moz silver resource with exploration upside.

JBY already has a foreign resource estimate of 1.18Moz gold, 7.6Moz silver. Inside this sits a 796Koz high-grade component (3.8Mt at 6.53g/t gold). The current resource is open at depth and in all directions with scope to upgrade that resource number. Right now, we think it is cheaper and lower risk to Invest in “already discovered” ounces in the ground - provided there is enough exploration upside at the project as well.

JBY has the same team and backers as our 2024 Small Cap Pick of the Year SS1.

Board, management, corporate advisor and top 20 shareholders are very similar across JBY and SS1 (our 2024 Small Cap Pick of the Year that IPOd at 20c and hit over $1.18 within nine months). We have observed them to be very hard workers and good holders so far - We are backing the same group to deliver a win with JBY. They also have a knack for securing quality, advanced projects on good deal terms, and maintaining good tight cap structures with no options overhang.

We like the gold macro thematic for 2025 and beyond.

Gold is currently trading at all time highs and we think it will continue running. We are yet to see a wave of new production being brought online during this cycle, our expectations is that a lot more projects will get into production and start producing gold while spot prices are high. We are hoping JBY’s project is one that gets into production during this gold bull market window OR they build a resource big enough to be taken out by a bigger player in the region.

Nevada a top 3 Fraser Institute mining jurisdiction every year for the past 10 years.

Nevada was ranked as the best mining jurisdiction in the world in 2022 by the Fraser Institute. Nevada has also consistently ranked in the top 3 every year for the past 10 years.

We have success in Nevada in silver with SS1, JBY’s project is similar, but for gold.

Nevada is home to some of the biggest gold and silver mines in the world, including Barrick's “Goldstrike” project which was the asset that put the company on the map. The gold and silver deposits in Nevada are known for being easy to mine and process at a low cost. We have had success in Nevada with SS1, we are hoping that JBY can replicate this success.

JBY is right next door to a mine operated by Barrick and Newmont.

JBY’s project sits right in the middle of Barrick and Newmont’s Phoenix Joint Venture. Barrick and Newmont have sunk billions of dollars into mine infrastructure and are currently producing gold from the project. Barrick and Nemont have both committed to growing production at the Phoenix operation and there is always a chance that they look at a bolt on acquisition with a project like JBY.

JBY is surrounded by low cost heap leach mines with same geology

JBY’s project is surrounded by some of the lowest cost gold mining operations in the world. Barrick and Nemont’s Nevada Gold Mines JV has pits operating with AISC (all in sustaining cost) to produce at below ~US$1,000 per ounce. $19BN Kinross’ Bald Mountain asset operated with a cost of sales of ~US$1,241 per ounce in 2023. Great margins at the current spot price of ~US$2,700 per ounce.

Previous owners spent >US$25M on this project and have completed a Preliminary Economic Assessment (PEA)

JBY’s project has had over US$25M in capital spent to get the project to where it is today. The project also has a 2022 PEA which showed 32,050 ounces of gold per year for 6 years at an all-in sustaining cost of US$1,078 per ounce. By our calcs that is US$86M in revenues per year assuming a US$2,700 ounce gold price. That PEA only covered a small portion of JBY’s existing foreign resource, excluding the high grade skarn which contains a resource of 796Koz ounces of gold.

Note this rough calculation doesn’t take into account capex or opex etc and assumes a gold price that could move down (or up).

Clean, tight cap structure, ~89M shares post transaction, no options overhang

We like JBY’s capital structure because there are no option overhangs and only 89m shares on issue. We have seen a similar style clean structure for SS1 which has so far worked out well. A lot of the top 20 shareholders are the same across both companies and they appear to be stable long term holders so far. A clean structure with no options overhang allows for the company’s share price to rise off the back of strong positive news.

Well-known retail stock with potential to re-rate.

JBY appears to have a large retail following and the potential for share price re-rates on good news. The company promotes well, it was a hot IPO back in September of 2023, when James Bay lithium stocks were popular amongst investors and right before the lithium sentiment crash. As a result, we think that if the company can deliver material news on their gold project, there will be enough eyeballs on the stock for the share price to re-rate.

Our full JBY Investment Memo is at the end of this note, including objectives we want to see JBY achieve, risks we have identified and accepted and our Investment plan.

What do we expect BKB to deliver?

Objective #1: Complete acquisition of gold project in Nevada, USA

We want to see JBY complete the acquisition of its gold project. The AGM is set for 29th November after which we hope to see the transaction close.

Milestones

JBY completes acquisition of gold project

Objective #2: Convert foreign resource estimate into a JORC resource

We want to see JBY convert its existing foreign resource estimate into a JORC resource.

JBY announces 1.37M ounces of gold maiden JORC resource - more drilling starting in the coming weeks… and it’s in the USA [05-Mar-2025]

Milestones

complete JORC conversion commenced

JORC resource estimate completed

JBY announces 1.37M ounces of gold maiden JORC resource - more drilling starting in the coming weeks… and it’s in the USA [05-Mar-2025]

Objective #3: Upgrade existing resource estimate

We want to see JBY run an extensional drill program to expand its existing resource beyond the 1.18m ounce gold & 7.6m ounce silver resource.

Milestones

complete Drilling commenced

in-progress Drilling results

not done Resource upgrade

Objective #4: Identify lithium drilling targets on Canadian projects

We want to see JBY identify and rank high-priority lithium drill targets. We want to see JBY have these targets ready when lithium prices increase, and the market is rewarding drilling success again.

Milestones

in-progress Geochemical work

in-progress Geophysical work

not done Drill targets identified

What could go wrong?

Exploration risk

There is no guarantee that JBY can increase its existing resource estimate through exploration drilling. There is always a chance that drill programs fail to find any economic mineralisation that may not add to the project’s overall resource estimate.

JBY gold hit: 520 metre extension to gold mineralisation? [05-Feb-2025]
JBY announces 1.37M ounces of gold maiden JORC resource - more drilling starting in the coming weeks… and it’s in the USA [05-Mar-2025]
How high will the gold price go? How big is JBY’s USA gold resource? [23-Apr-2025]

Resource risk

At the moment, JBY’s project has a “foreign resource estimate”. This means it is built on a different set of assumptions & guidelines relative to the JORC code that we are more accustomed to seeing on the ASX. There is no guarantee that JBY can convert all of its foreign resources into a JORC resource. If this risk were to materialise it may have a negative impact on the company's share price.

Funding risk/dilution risk

JBY is a small cap that is not generating any revenues at the moment. As a result, the company is reliant on access to financing from the market. If there is any negative news (macro or fundamental) then JBY may be forced to raise capital at lower share prices. Capital raises at lower valuations could dilute the ownership of existing shareholders and cap the upside potential of the company’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 prices fall there could be a negative impact on JBY’s share price.

Market risk

There is always the possibility that broader market sentiment gets worse and shares as a whole trade lower. In this scenario we would expect JBY’s share price to re-rate lower. Given JBY is pre-revenue and considered a lot riskier than revenue generating companies, JBY’s share price could be impacted the most in a “risk-off” market.

Development/delay risk

Should any or all of the above risks materialise, JBY could wind up stuck in “development purgatory” where newsflow dries up and the project remains stagnant for a prolonged period of time, hurting the share price.

What is our investment plan?

We are Invested in JBY to see it expand its resource and progress its project into development.

Our plan is to hold the majority of our position in JBY for 3 to 5 years which we hope is enough time to see JBY to move towards development (see “our long term bet” above).

After 12 months we will apply our standard de-risking strategy.

We may look to sell up to 20% of our holding if the company delivers on one or more of our Investment Memo objectives and/or the share price materially re-rates.

Any sell downs will be in accordance with our trading and hold policy disclosure.

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 1,979,167 JBY shares at the time of publishing this article. The Company has been engaged by JBY to share our commentary on the progress of our Investment in JBY over time.