Silver BULL Announces Record Date and Distribution Date IN Connection with Distribution to Silver BULL Shareholders of Shares of Arras Minerals, a Strategically-Focused Company with Kazakh Exploration Projects
September 1, 2021 OTCQB: SVBL, TSX: SVB
SILVER BULL ANNOUNCES RECORD DATE AND DISTRIBUTION DATE IN
CONNECTION WITH DISTRIBUTION TO SILVER BULL SHAREHOLDERS
OF SHARES OF ARRAS MINERALS, A STRATEGICALLY-FOCUSED
COMPANY WITH KAZAKH EXPLORATION PROJECTS
Vancouver, British Columbia – Silver Bull Resources, Inc. (OTCQB: SVBL, TSX: SVB) ( “Silver Bull” or the
“Company”) is pleased to announce the timing and additional details regarding the previously
announced distribution (the “Distribution”) to Silver Bull s hareholders of shares of Arras Minerals Corp.
(“Arras”).
Pursuant to the Distribution, shareholders of Silver Bull common stock as of September 10, 2021 (the
“Record Date”) will be entitled to receive one common share of Arras for each share of Silver Bul l
common stock held as of that date . The Distribution is scheduled to occur on September 24, 2021 (the
“Distribution Date”).
Immediately following completion of the Distribution, Silver Bull’s shareholders w ill be issued shares in
Arras so that, collectively, they will own approximately 84% of Arras, on a non -diluted basis, and Silver
Bull will own approximately 4% of Arras , on a non -diluted basis . The remaining approximately 12% of
Arras will be held by those who participated in Arras’ private placement in April 2021.
In connection with the approval of the Distribution by the board of directors of Silver Bull, Silver Bull and
Arras entered into a separation and distribution agreement, dated August 31, 2021, setting forth the
principal actions to be taken in connection with the Distribution and provid ing a framework for the
relationship between the parties after the Distribution.
The Toronto Stock Exchange (the “TSX”) has decided to implement “due bill” trading in connection with
the Distribution. Each “due bill ” will represent an ent itlement to an Arras share to be distributed
pursuant to the Distribution and will attach to each Silver Bull share between the opening of trading on
September 9, 2021 and the closing of trading on September 24, 2021, allowing Silver Bull shares to carry
the value of the entitlement to the Arras share until the Distribution is made . As such, Silver Bull
shareholders who sell Silver Bull shares up to the end of trading on the Distribution Date (i.e., when
Silver Bull shares trade with an attached “due bill ” representing an entitlement to Arras shares to be
distributed pursuant to the Distribution) will be selling their right to receive Arras common shares in the
Distribution. “Ex-distribution” trading (i.e., where Silver Bull shares trade without an entitlement to
Arras shares to be distributed pursuant to the Distribution) will commence at the opening of trading on
September 27, 2021. The due bill redemption date (i.e., the date when holders of due bill entitlements
are expected to settle their entitlements) will be September 28, 2021. It is expected that the OTCQB
marketplace will also implement “due bills” trading.
Most Silver Bull shareholders hold their Silver Bull shares through a bank or brokerage firm. In such
cases, the bank or brokerage firm would be said to hold the shares in “street name, ” and ownership
would be recorded on the bank ’s or brokerage firm ’s books. If a Silver Bull shareholder holds Silver Bull
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shares through a bank or brokerage firm, the bank o r brokerage firm will credit the shareholder ’s
account for the Arras common shares that the shareholder is entitled to receive in the Distribution. If
Silver Bull shareholders have any questions concerning the mechanics of having shares held in “street
name,” they should contact their bank or brokerage firm.
In connection with the Distribution, all registered Silver Bull shareholders holding physical share
certificates or shares in book -entry form with the Company ’s transfer agent (Olympia Trust Company )
will be issued Arras shares in book -entry form only, which means that no physical share certificates will
be issued. For questions relating to the transfer or mechanics of the Distribution, please contact Olympia
Trust Company by telephone at 1 -833-684-1546 (toll free in North America) or by online inquiry at
Upon the consummation of the Distribution, Arras will not be listed on a public stock exchange but will
report under the U.S. Securities Exchange Act of 1934 , as amended (the “Exchange Act”), as a non -U.S.
company with foreign private issuer status . The Arras shares distributed to Silver Bull shareholders,
though freely transferable in the United States, may be illiquid until such time as the shares are listed or
a trading market develops, if at all. The Distribution of Arras shares by Silver Bull will constitute a
distribution of securities that is exempt from the prospectus requirements of Canadian securities
legislation. As such, t he first trade in Arras shares in Canada will be a distribution for the purposes of
Canadian securities laws and subject to prospectus requirements unless certain conditions are satisfied.
Until such conditions are satisfied, Arras shares may only be resold in Canada pursuant to an exemption
from prospectus requirements. Silver Bull warrants and options will also be adjusted pursuant to the
Distribution. For further details regarding the Canadian resale restrictions on the Arras shares
distributed by Silver Bull and the adjustments being made to Silver Bull warrants and options in
connection with the Distribution, please refer to the Registration Statement on Form 20-F of Arras filed
on September 1, 2021 with the U.S. Securities and Exchange Commission (the “SEC”) on EDGAR at
www.sec.gov/edgar (the “20-F”).
Tax Implications
The following discussion is qualified in its entirety by the discussion of tax matters set forth in the 20-F.
Silver Bull shareholders entitled to receive the Distribution of Arras s hares should make reference to
that discussion for further details regarding the tax consequences of the Distribution.
For U.S. federal income tax purposes, the receipt of Arras common shares by Silver Bull shareholders
should be treated as a distribution of property in an amount equal to the fair market value of the
common shares received. The Distribution of Arras common shares should be treated as dividend
income to the extent considered paid out of Silver Bull ’s current and accumulated earnings and pro fits.
Distributions in excess of Silver Bull ’s current and accumulated earnings and profits will be treated as a
non-taxable return of capital to the extent of the holder ’s basis in its Silver Bull shares and thereafter as
capital gain. Silver Bull will no t be able to determine the amount of the Distribution that will be treated
as a dividend until after the close of the taxable year of the Distribution because its current year
earnings and profits will be calculated based on its income for the entire taxab le y ear in which the
Distribution occurs. However, based on current projections, it is reasonably expected that a portion of
the Distribution of Arras common shares should be treated as a return of capital rather than a dividend.
For Canadian tax purposes , the Distribution of Arras shares will be considered a dividend in kind on the
Silver Bull shares to shareholders resident in Canada. Such shareholders will be required to include in
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computing their income for a taxation year the amount of such dividend ( equal to the fair market value
of the Arras shares received). A dividend in kind of the Arras shares paid in respect of the Silver Bull
shares to a shareholder who is not a resident of Canada will not be subject to Canadian withholding tax
or other income tax under the Income Tax Act (Canada).
The portion of the Distribution treated as a dividend for U.S. federal income tax purposes that is made
to non-U.S. holders will generally be subject to U.S. federal gross -basis income tax at a rate of 30%, or a
lower ra te specified in an applicable income tax treaty. This tax is generally collected by way of
withholding. Because the amount constituting a dividend will not be known at the time of the
Distribution, Silver Bull or the applicable withholding agent is gen erally required to withhold on entire
amount of the Distribution. Silver Bull or the applicable withholding agent may obtain the funds
necessary to remit any such withholding tax by asking the non-U.S. holder to provide the funds, by using
funds in such ho lder’s account with the applicable withholding agent or by selling (on such holder ’s
behalf) the portion of Arras common shares otherwise distributable to such non-U.S. holder needed to
pay that tax, together with associated expenses.
EACH REGISTERED HOLDER OF SILVER BULL COMMON STOCK THAT IS A NON -U.S. HOLDER WILL HAVE
THE OPTION TO PROVIDE THE FUNDS NECESSARY TO REMIT ANY APPLICABLE WITHHOLDING TAX TO
THE IRS. IF SUCH FUNDS, TOGETHER WITH ANY OTHER REQUIRED DOCUMENTATION TO BE PROVIDED
FROM SUCH HOLDER, ARE NOT RECEIVED BY SEPTEMBER 17, 2021, THEN, IF APPLICABLE, A PORTION OF
THE ARRAS COMMON SHARES OTHERWISE DISTRIBUTABLE TO SUCH HOLDER WILL BE WITHHELD AND
SOLD (ON SUCH HOLDER’S BEHALF) IN ORDER TO PAY ANY APPLICABLE WITHHOLDING TAX.
As this Distribution, as described above, is reasonably expected to result in a taxable dividend , the
Company or an applicable withholding agent generally will be required to withhold with respect to
the Distribution being made to certain non-U.S. holders. The Company implo res shareholders who
have not yet provided proof of their tax residency to do s o by filing the appropriate forms with their
bank, brokerage firm or for those who hold physical share certificates or in book entry form with the
Company’s transfer agent, Olympia Trust Company, prior to the Record Date.
Benefits of the Transaction
The Distribution is expected to:
• provide investors with the potential for greater value than a single company , by unlo cking a
premium value for the Beskauga and Sierra Mojada projects separately;
• create two separate companies that have clear commodity and region al demarcation, allowing
for targeted branding and marketing;
• allow each company flexibility in allocating resources and deploying capital in a manner
consistent with the separate business strategies;
• broaden the appeal of the potential investor base for both companies, with Kazakhstan
appealing to European and Middle East ern investors and Mexico potentially appealing to North
American investors; and
• facilitate the ability of the companies to separately finance the Beskauga and Sierra Mojada
projects based on the unique characteristics of each project and jurisdiction.
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Tim Barry, President, CEO and director of Silver Bull states, “We continue to believe greater value will be
created with two independent companies compared to the value that would be achieved by keeping the
two sets of assets in a single company. Both the Beskauga and Sierra Mojada projects have NI 43-101
compliant resources as well as exploration upside and we believe the split will allow each company to
execute its own unique business strategy and achieve a premium for any success in resource
development and exploration. With continued strong metal prices and demand for commodities , we are
confident that now is the right time to separate the projects in different companies.”
Beskauga Deposit, Kazakhstan: The Beskauga deposit is an open pittable gold-copper-silver deposit
with a NI 43 -101 compliant “Indicated” Mineral Resource of 207 million tonnes grading 0.35 g /t gold,
0.23% copper and 1.09 g/t silver for 2.33 million ounces of contained gold, 476.1 thousand tonnes of
contained copper, and 7.25 million ounces of contained silver and an “Inferred” Mineral Resource of 147
million tonnes grading 0.33 g/t gold, 0.15 % co pper and 1.02 g/t silver for 1.56 million ounces of
contained gold, 220.5 thousand tonnes of contained copper, and 4.82 million ounces of contained silver.
The constraining pit was optimised and calculated using a NSR cut -off based on a price of: $1,50 0/oz for
gold, $2.80/lb for copper, $17.25/oz for silver, and with an average recovery of 81.7% for copper and
51.8% for both gold and silver. Mineralization remains open in all directions as well as at depth.
Table 1. Pit-constrained Mineral Resource estimate for the Beskauga copper-gold project
CATEGORY TONNAGE (MT) CU % AU G/T AG G/T AU (MOZ) CU (KT) AG (MOZ)
Indicated 207 0.23 0.35 1.09 2.33 476.1 7.25
Inferred 147 0.15 0.33 1.02 1.56 220.5 4.82
For a full summary of the Beskauga resource please refer to the Company ’s press release dated
January 28, 2021 and filed on the Company ’s profile at www.SEDAR.com, or by visiting the following
link:
https://www.silverbullresources.com/news/silver-bull-announces-maiden-ni-43-101-resource-of-2.33-
million-ounces-of-gold-476-thousand-tonnes-of-copper-in-the-indicated/
Sierra Mojada deposit , Mexico : Sierra Mojada is an open pittable oxide deposit with a NI 43-101
compliant Measured and Indicated “global” Mineral Resource of 70.4 million tonnes grading 3.4% zinc
and 38.6 g/t silver for 5.35 billion pounds of contained zinc and 87.4 million ounces of contained silver.
Included within the “global” Mineral R esource is a Measured and Indicated “high grade zinc zone ” of
13.5 million tonnes with an average grade of 11.2% zinc at a 6% cutoff, for 3.336 billion pounds of
contained zinc, and a Measured and Indicated “high grade silver zone ” of 15.2 million tonnes with an
average grade of 114.9 g/t silver at a 50 g/t cutoff for 56.3 million contained ounces of silver.
Mineralization remains open in the east, west, and northerly directions.
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The constraining pit was optimised and calculated using a NSR cut -off based on a silver price of
US$15/oz, and a zinc price of US $1.20/lb and assumed a recover y for silver of 75% and a recovery for
zinc of 41% . Approximately 60% of the current 3.2 kilometer mineralized body is at or near surface
before dipping at around 6 degrees to the east.
CATEGORY TONNES (MT) AG (G/T) CU (%) PB (%) ZN (%) AG
(MOZS)
CU
(MLBS)
PB
(MLBS)
ZN
(MLBS)
MEASURED 52.0 39.2 0.04% 0.3% 4.0% 65.5 45.9 379.1 4,589.3
INDICATED 18.4 37.0 0.03% 0.2% 1. 9% 21.9 10.8 87.0 764.6
TOTAL M&I 70.4 38.6 0.04% 0.3% 3.4% 87.4 56.8 466.1 5,353.9
INFERRED 0.1 8.8 0.02% 0.2% 6.4% 0.02 0.04 0.4 10.7
For a full summary of the Sierr a Mo jada resource, please refer to the Company ’s press release dated
October 31, 2018 and filed on the Company ’s profile at www.SEDAR.com, or by visiting the following
link:
https://www.silverbullresources.com/news/silver-bull-resources-announces-5.35-billion-pounds-zinc-
87.4-million-ounces-silver-in-updated-sierra-mojada-measured-and/
Sierra Mojada is currently under an illegal blockade from a group called Sociedad Cooperativa de
Exploración Minera Mineros Norteños, S.C.L. (“Mineros Norteños”).
In 2014, Mineros Norteños filed a lawsuit aga inst Silver Bull’s Mexican subsidiary “Minera Metalin”. In
the lawsuit, Mineros Norteños sought payment of a capped 2% production royalty, including interest at
a rate of 6% per annum since August 30, 2004, even though no revenue has been produced from the
applicable mining concessions. Mineros Norteños also sought payment of wages to the Mineros
Norteños members since August 30, 2004 under this agreement, even though a mineral processing plant
was never built and none of the individuals were hired or perfo rmed work for Silver Bull under this
agreement and Silver Bull did not commit to hiring them.
To date, Mineros Norteños has lost three separate rulings on its lawsuit. In an attempt to force Silver
Bull into making a settlement, Mineros Norteños has under taken to illegally block access to the project
since September 2019. To ensure the safety of all involved, Silver Bull has elected to halt all operations
on the project until a resolution can be found.
Post-Distribution of Arras Shares
Following the Distribution, Silver Bull will focus on the Sierra Mojada asset and surrounding area in
Mexico and continue to manage the joint venture option with South32. It will continue to trade under
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the symbol “SVB” on the TSX, and “SVBL” on the OTCQB. The current management and board are
expected to remain in place to continue to run the Company.
Arras will focus on the Beskauga deposit and the exploration licenses held in the surrounding area. In
addition, current Silver Bull management and board have been appointed as management and board of
Arras, along with G. Wesley Carson as an additional independent board member.
Both companies will remain headquartered in Vancouver.
The technical information of this news release has been reviewed and approved by Tim Barry, a
Chartered Professional Geologist (CPAusIMM), and a qualified person for the purposes of National
Instrument 43-101.
On behalf of the Board of Directors
“Tim Barry”
Tim Barry, CPAusIMM
Chief Executive Officer, President and Director
INVESTOR RELATIONS:
+1 604 687 5800 [email protected]
Cautionary Note to U.S. Investors concerning estimates of Measured, Indicated, and Inferred Resources: This press release
uses the terms “measured resources”, “indicated resources”, and “inferred resources” which are defined in, and required to be
disclosed by, NI 43 -101. We advise U.S. investors that these terms are not recognized by the SEC. The estimation of measured,
indicated and inferred resources involves greater uncertainty as to their existence and econom ic feasibility than the estimation
of proven and probable reserves. U.S. investors are cautioned not to assume that measured and indicated mineral resources wil l
be converted into reserves. The estimation of inferred resources involves far greater uncertai nty as to their existence and
economic viability than the estimation of other categories of resources. U.S. investors are cautioned not to assume that
estimates of inferred mineral resources exist, are economically minable, or will be upgraded into measure d or indicated mineral
resources. Under Canadian securities laws, estimates of inferred mineral resources may not form the basis of feasibility or o ther
economic studies.
Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations, however the SEC normally
only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade
without reference to unit measures. Accordingly, the information contained in this press release may not be comparable to
similar information made public by U.S. companies that are not subject NI 43-101.
Cautionary note regarding forward looking statements: This news release contains forward -looking statements regarding
future events and Silv er B ull’s future results that are subject to the safe harbors created under the U.S. Private Securities
Litigation Reform Act of 1995, the Securities Act of 1933, as amended, and the Exchange Act, and applicable Canadian securiti es
laws. Forward-looking st atements include, among others, statements regarding the expected timing, mechanics, income tax
consequences, benefits and other aspects of the proposed Distribution, expected post-Distribution management focus, and the
Mineral Resource estimates for the Beskauga and Sierra Mojada projects. These statements are based on current expectations,
estimates, forecasts, and projections about Silver Bull ’s exploration projects, the industry in which Silver Bull operates and the
beliefs and assumptions of Silver Bul l’s management. Words such as “expects,” “anticipates,” “targets,” “goals,” “projects,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” “continues,” “may,” variations of such words, and similar expressions and
references to future periods, are intend ed to identify such forward -looking statements. Forward-looking statements are subject
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to a number of assumptions, risks and uncertainties, many of which are beyond our control, including such factors as whether
the Distribution is ultimately achieved, in the manner and on the timeline currently contemplated, or at all, whether some or all
of the expected benefits of the Distribution will be achieved, the impact of the Distribution on Silver Bull shareholders, whether
management’s focus will be as described in this news release following the Distribution, the results of exploration activities and
whether the results continue to support continued exploration activities, unexpected variations in ore grade, types and
metallurgy, volatility and level of commodit y prices, the availability of sufficient future financing, and other matters discussed
under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2020 and our Quarterly
Report on Form 10-Q for the interim perio ds ended January 31, 2021, April 30, 2021, and our other periodic and current reports
filed with the SEC and available on www.sec.gov and with the Canadian securities commissions available on www.sedar.com.
Readers are cautioned that forward -looking statem ents are not guarantees of future performance and that actual results or
developments may differ materially from those expressed or implied in the forward -looking statements. Any forward -looking
statement made by us in this release is based only on informa tion currently available to us and speaks only as of the date on
which it is made. We undertake no obligation to publicly update any forward -looking statement, whether written or oral, that
may be made from time to time, whether as a result of new information, future developments or otherwise.