Silver Elephant Mining Corp.

Silver Elephant signed a binding letter of intent to transfer 45% of Mega Thermal Coal, owner of the Ulaan Ovoo and Chandgana coal mines in Mongolia, to Battery Metals Royalties for 15,000,000 Battery shares and 3,000,000 Flying Nickel shares, valued at $6.3 million. It planned to distribute the remaining 55% to its shareholders, with closing expected July 15, 2022.

drilling result

Two programs in one filing. Regional drilling of 9 holes for 3,251 metres within 3 km of the Tajo vein system produced one narrow hit, 2 metres at 299 g/t silver 1.5 km north of the vein. At Paca, 8 holes for 1,717 metres: the four testing geophysical anomalies to the east returned close to nothing - PND119 gave 39.0 metres at 5 g/t silver - while PND123, testing the northern extension, cut 27.0 metres at 159 g/t silver from 3 metres depth including 1.5 metres at 565 g/t, in near-surface oxide.

drilling result

The British Columbia court approved the arrangement, effective 14 January 2022. Every ten Silver Elephant shares become one consolidated Silver Elephant share plus one share each of Flying Nickel and Nevada Vanadium and two of Battery Metals Royalties. What remains inside Silver Elephant is Pulacayo and El Triunfo in Bolivia plus a minority holding in the royalty company: a ten-to-one consolidation and four tickers where there had been one.

business combination

Shareholders approved the break-up almost unanimously, 99.44% of votes cast in favour of the arrangement, but only 150 holders voting 30,168,028 shares turned up against roughly 193 million shares outstanding, and 4,732,800 of those were excluded as interested on the resolution approving the Flying Nickel financing.

business combination

Flying Nickel closed the full $8.6 million: 10,094,033 non-flow-through subscription receipts at $0.70 and 1,992,437 flow-through receipts at $0.77, held in escrow pending release conditions.

capital raising announcement

Flying Nickel's raise was upsized from $7.0 million to $8.6 million on a $2.975 million lead order from Blackstone Minerals, an ASX-listed battery-metals processor. The subsidiary is raising more in one financing than its parent managed in three tranches over the same autumn.

capital raising announcement

The Minago spinout begins raising its own money before it is even separated: Flying Nickel Mining Corp., with Red Cloud as lead agent and Canaccord Genuity alongside, seeks up to $7.0 million in subscription receipts at $0.70 for the non-flow-through units.

capital raising announcement

The Gibellini assessment: an open-pit heap leach with a 25.4% after-tax return and $260.8 million of cumulative after-tax cash flow, initial capital of $147 million, 10.2 million lb of vanadium pentoxide a year at an all-in sustaining cost of $6.04/lb and a strip ratio of 0.18 to 1. Those figures assume US$10.00/lb; the European price three days before publication was $9.60.

resource reserve update

The company will break itself into four. A plan of arrangement moves existing royalties into a new subsidiary, Battery Metals Royalties Corp., then spins out Minago, Gibellini and Battery Metals as separate companies, with shareholders receiving one share of each of the first two and two of the third for every Silver Elephant share held. Everything bought since mid-2020 except the Bolivian ground is on its way out of the company.

business combination

The Minago estimate lands five months after the acquisition: 722 million lb of contained nickel measured and indicated and 319 million lb inferred, grading 0.74% nickel, effective 2 July 2021. That grade is well above the 0.52% of the historic estimate the company bought, and the project has already absorbed more than $40 million of exploration, study and permitting spending by earlier owners since 2000.

resource reserve update

Wood and Mine Technical Services are commissioned to write a preliminary economic assessment for Gibellini, described again as part of the spinout strategy. Vanadium pentoxide had risen 52% since January to US$8.2/lb.

resource reserve update

Silver Elephant suspended its instalment payments on Sunawayo nine months after agreeing to buy it, notifying the vendors that they had breached disclosure representations in the August 2020 purchase agreement over the property's title and environmental permit status. Only US$300,000 had been paid and the company says it has no further obligation unless it chooses to continue. The project it had called a greenfield silver discovery is now "a small, non-material part" of its strategy.

material agreement termination

Mercator, AGP and Stantec are commissioned to produce the first current resource estimate for Minago, expected in June, and the release says in its own headline that it is being prepared to support spinning the project out into a subsidiary, Flying Nickel Mining Corp.

resource reserve update

The Minago purchase closed. The project covers 197 km2 in Manitoba's Thompson Nickel Belt, and its Nose deposit carries a historic estimate of 790 million lb of nickel in 68.7 million tonnes at 0.52% - which the release states plainly is not a current mineral resource and which no qualified person has yet verified.

business combination

Silver Elephant agreed to buy the Minago nickel project in Manitoba from Victory Nickel for US$11.675 million, of which US$6.675 million is settled by cancelling secured debt Victory Nickel already owed Silver Elephant, and US$5 million is in shares issued over a year; C$2 million more in shares falls due if nickel exceeds US$10/lb before the end of 2023. Silver Elephant also agreed to buy 40,000,000 Victory Nickel shares at $0.025 for C$1 million, so it was lender, buyer and incoming shareholder in the same counterparty.

business combination

The maiden El Triunfo drill program returned wide, low-grade gold carrying useful base metals. TR007 cut 98.9 metres at 0.37 g/t gold, 22.71 g/t silver, 0.74% zinc and 0.58% lead (1.04 g/t AuEq) from 13 metres, including 48.9 metres at 1.45 g/t AuEq; TR008 gave 6.4 metres at 1.60 g/t gold and 56.49 g/t silver (3.05 g/t AuEq). The gold-equivalent figures assume 100% metallurgical recovery, which no operation achieves.

drilling result

The offering closed at C$9.2 million, 23,000,000 shares at C$0.40 with the over-allotment exercised in full - more than the C$5.52 million BMO deal of November 2018 and over four times the placement completed in May.

capital raising announcement

The company announced it had filed both the Pulacayo technical report and a preliminary short-form prospectus for the bought deal, which had grown to 20,000,000 shares at C$0.40 from the 15,000,000 announced a week earlier.

resource reserve update

Silver Elephant filed a preliminary prospectus for a C$8 million offering of 20 million shares at $0.40, sold through underwriters Mackie, Canaccord and Sprott, with a 6% cash commission, an option for 3 million more shares, and compensation options over 1.2 million shares at $0.40. Closing is expected 12 November 2020. This is the start of the financing that later raised C$9.2 million; the filing itself is a preliminary document and not yet a completed sale.

regulatory community update

A C$6.0 million bought deal at C$0.40 a share with Mackie Research leading, alongside Canaccord Genuity and Sprott Capital Partners, announced eight days after the new resource estimate. The share price is triple the $0.13 units sold in May.

capital raising announcement

The rebuilt Pulacayo Project estimate reports 106.7 million oz of indicated silver with 1,384.7 million lb zinc and 693.9 million lb lead in 48.04 million tonnes, plus 13.1 million oz inferred. The leap from the 30.4 million indicated oz of the 2017 estimate comes from re-cutting the deposit as an open pit at a 30 g/t silver-equivalent cut-off and adding Paca alongside Pulacayo: the Pulacayo sulphide in-pit indicated block is 24.6 million tonnes at 76 g/t silver, 1.63% zinc and 0.70% lead, against 455 g/t silver, 3.19% zinc and 2.18% lead in the 2017 underground estimate. Three and a half times the ounces at roughly a sixth of the grade.

resource reserve update

Infill drilling inside the Pulacayo deposit, rather than step-outs, and it worked: PUD283 returned 102.0 metres grading 145 g/t silver, 1.05% lead and 2.56% zinc (255 g/t AgEq), including 5.0 metres at 1,565 g/t silver, 8.25% lead and 3.85% zinc. PUD284 gave 66.7 metres at 182 g/t AgEq. True widths are estimated at about 72% and 57% of core length respectively.

drilling result

Silver Elephant agreed to buy the El Triunfo gold-silver-lead-zinc project in Bolivia's La Paz district for $1,100,000, with $100,000 paid on signing and $1,000,000 due on or before 15 June 2025. Until closing it owes $50,000 each June from 2021 to 2024, and the vendor keeps a 5% profit interest that can be bought back for $300,000.

business combination

The complete results show the step-out program was largely a miss. Sixteen holes for 2,598 metres produced one material intercept, PUD267, already announced in January; PUD268 returned 2 metres at 20 g/t silver and PUD274 2 metres at 93.5 g/t. The company attributes the poor returns to geology and estimates PUD267 extends the resource about 80 metres west. The standing indicated resource it is stepping out from is 30.4 million oz at 455 g/t silver, 3.19% zinc and 2.18% lead.

drilling result

The first hole drilled at Pulacayo since 2012, PUD267, cut 10 metres grading 147 g/t silver, 9.8% zinc and 2.0% lead (539 g/t AgEq) inside 35.5 metres at 230 g/t AgEq from 31.5 metres. It sits 83 metres west of a 2008 hole that returned only 15.1 g/t silver at similar depth, so the company reads it as extending the deposit westward. A previous operator had already put 268 holes into Pulacayo between 2008 and 2012.

drilling result

The company's centre of gravity moves to Bolivia. First-phase drilling at the Paca silver deposit returned PND110 with 89.0 metres of core length grading 279 g/t silver, 1.28% zinc and 1.17% lead (378 g/t silver equivalent) from 9 metres depth, including 12.0 metres at 1,085 g/t silver from 16 metres. PND107 gave 54.0 metres at 238 g/t AgEq and PND109 28.0 metres at 281 g/t AgEq. True widths are estimated at about 77% of the reported core lengths.

drilling result

Prophecy announced a non-brokered private placement of 10 million shares at $0.40 for $4.0 million on 7 October 2019, the same day it announced the Bolivian mining contract. Management and directors were to buy 400,000 shares, and John Lee signed as executive chairman.

capital raising announcement

The Bolivian mining production contract with COMIBOL was signed on 3 October 2019, giving Prophecy the exclusive right to develop and mine the Pulacayo and Paca concessions for up to 30 years - the Bolivian equivalent of a mining licence, and the legal basis for everything that follows there. The company puts prior spending by its Bolivian subsidiaries at $25 million and drilling at over 80,000 metres.

material agreement

After meeting regulators in late April 2019, Prophecy gave a target timetable for Gibellini: notice to start the environmental impact review in Q1 2020, a federal decision no later than Q1 2021, construction starting in 2021 and vanadium production by Q4 2022. The company says it will seek project financing in the meantime; Mike Doolin is named as COO and interim CEO in the text, while the sign-off block calls him Chief Executive Officer.

regulatory community update

Prophecy reports that its Ulaan Ovoo coal mine in Mongolia restarted in March with about 21,000 tonnes produced and sold. The company does not operate it: under an October 2018 lease an arm's-length Mongolian lessee funds all capital and operating costs and pays Prophecy US$2 a tonne shipped. Nameplate capacity is 2 million tonnes a year from a 40 to 80 metre seam outcropping at surface. It is the only producing asset anywhere in this company's cached record, and it produces a royalty rather than a mine margin.

production update

Prophecy agreed a C$5.5 million bought deal with BMO Capital Markets, 12,000,000 shares at $0.46, to fund exploration, development and permitting of the Gibellini vanadium project in Nevada - at this point the company's only stated focus. Gibellini's May 2018 assessment carried 22.95 million tons at 0.286% vanadium pentoxide in the measured and indicated categories.

capital raising announcement