Silver Bull Resources, Inc 10-Q for FY2022 Q1
Silver Bull Resources, Inc. (SVBL)
About this 10-Q
Silver Bull Resources, Inc filed this 10-Q on March 16, 2022, covering the quarter ended January 31, 2022 (FY2022 Q1).
Headline figures
Quarter ended January 31, 2022, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $330K
- compared with a net loss of $858.39K a year earlier
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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FOR THE QUARTERLY PERIOD ENDED |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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FOR THE TRANSITION PERIOD FROM _________ TO _________. |
Commission File Number:
(Exact name of registrant as specified in its charter)
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State or other jurisdiction of incorporation or organization |
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(I.R.S. Employer Identification No.) |
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(Address of principal executive offices, including zip code) | ||
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Registrant’s telephone number, including area code: ( | ||
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Securities registered pursuant to Section 12(b) of the Act: | ||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer ☐ |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No
As of March 16, 2022, there were
SILVER BULL RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
TABLE OF CONTENTS
Page
| PART I – FINANCIAL INFORMATION | 3 |
| ITEM 1. FINANCIAL STATEMENTS. | 3 |
| ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. | 19 |
| ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. | 26 |
| ITEM 4. CONTROLS AND PROCEDURES. | 26 |
| PART II – OTHER INFORMATION | 26 |
| ITEM 1. LEGAL PROCEEDINGS. | 26 |
| ITEM 1A. RISK FACTORS. | 26 |
| ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. | 26 |
| ITEM 3. DEFAULTS UPON SENIOR SECURITIES. | 26 |
| ITEM 4. MINE SAFETY DISCLOSURES. | 26 |
| ITEM 5. OTHER INFORMATION. | 26 |
| ITEM 6. EXHIBITS. | 27 |
| SIGNATURES | 28 |
[The balance of this page has been intentionally left blank.]
2
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
SILVER BULL RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED BALANCE SHEETS
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January 31, 2022 |
October 31, 2021 | |||||||
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(Unaudited) | ||||||||
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ASSETS | ||||||||
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CURRENT ASSETS | ||||||||
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Cash and cash equivalents |
$ |
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$ |
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Value-added tax receivable, net of allowance for uncollectible taxes of $ (Note 7) |
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Other receivables |
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Prepaid expenses and deposits |
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Investments (Note 5) |
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Total Current Assets |
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Value-added tax receivable, net of allowance for uncollectible taxes of $ |
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Office and mining equipment, net (Note 8) |
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Property concessions (Note 9) |
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Goodwill (Note 10) |
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TOTAL ASSETS |
$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
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CURRENT LIABILITIES | ||||||||
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Accounts payable |
$ |
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$ |
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Accrued liabilities and expenses |
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Income tax payable |
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Total Current Liabilities |
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Loan payable (Note 11) |
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TOTAL LIABILITIES |
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COMMITMENTS AND CONTINGENCIES (Note 16) | ||||||||
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STOCKHOLDERS’ EQUITY (Notes 6, 12, 13 and 14) | ||||||||
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Common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
( |
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( |
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Other comprehensive income |
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Total Stockholders’ Equity |
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TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
$ |
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$ |
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The accompanying notes are an integral part of these interim condensed consolidated financial statements.
3
SILVER BULL RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
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Three Months Ended January 31, | |||||||||
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2022 |
2021 | ||||||||
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REVENUES |
$ |
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$ |
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EXPLORATION AND PROPERTY HOLDING COSTS | |||||||||
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Exploration and property holding costs |
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Depreciation (Note 8) |
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TOTAL EXPLORATION AND PROPERTY HOLDING COSTS |
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GENERAL AND ADMINISTRATIVE EXPENSES | |||||||||
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Personnel |
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Office and administrative |
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Professional services |
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Directors’ fees |
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Provision for uncollectible value-added taxes (Note 7) |
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TOTAL GENERAL AND ADMINISTRATIVE EXPENSES |
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LOSS FROM OPERATIONS |
( |
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( |
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OTHER EXPENSES | |||||||||
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Interest income |
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Foreign currency transaction loss |
( |
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( |
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TOTAL OTHER EXPENSES |
( |
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( |
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LOSS BEFORE INCOME TAXES |
( |
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( |
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INCOME TAX EXPENSE |
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NET AND COMPREHENSIVE LOSS |
$ |
( |
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$ |
( |
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BASIC AND DILUTED NET LOSS PER COMMON SHARE |
$ |
( |
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$ |
( |
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BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING |
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The accompanying notes are an integral part of these interim condensed consolidated financial statements.
4
SILVER BULL RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
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Common Stock | ||||||||||||||||||||||||
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Number of Shares |
Amount |
Additional Paid-in Capital |
Accumulated Deficit |
Other Comprehensive Income |
Total Stockholders’ Equity | |||||||||||||||||||
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Three months ended January 31, 2022 | ||||||||||||||||||||||||
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Balance, October 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Net loss for the three-month period ended January 31, 2022 |
— |
— |
— |
( |
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— |
( |
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Balance, January 31, 2022 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Common Stock | ||||||||||||||||||||||||
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Number of Shares |
Amount |
Additional Paid-in Capital |
Accumulated Deficit |
Other Comprehensive Income |
Total Stockholders’ Equity | |||||||||||||||||||
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Three months ended January 31, 2021 | ||||||||||||||||||||||||
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Balance, October 31, 2020 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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Issuance of common stock as follows: | ||||||||||||||||||||||||
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- for cash at a price of $ |
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— |
— |
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Earn-in option agreement (Note 4) |
— |
— |
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— |
— |
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Net loss for the three-month period ended January 31, 2021 |
— |
— |
— |
( |
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— |
( |
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Balance, January 31, 2021 |
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$ |
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$ |
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$ |
( |
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$ |
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$ |
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The accompanying notes are an integral part of these interim condensed consolidated financial statements.
5
SILVER BULL RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
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Three Months Ended January 31, | ||||||||
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2022 |
2021 | |||||||
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CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
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Net loss |
$ |
( |
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$ |
( |
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Adjustments to reconcile net loss to net cash used by operating activities: | ||||||||
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Depreciation |
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Provision for uncollectible value-added taxes |
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Foreign currency transaction loss (gain) |
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( |
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Changes in operating assets and liabilities: | ||||||||
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Value-added tax receivable |
( |
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( |
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Income tax receivables |
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( |
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Other receivables |
( |
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Prepaid expenses and deposits |
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Accounts payable |
( |
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( |
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Accrued liabilities and expenses |
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Income tax payable |
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( |
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Net cash used in operating activities |
( |
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( |
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CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
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Proceeds from sale of investments (Note 5) |
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Purchase of equipment |
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( |
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Loan receivable |
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( |
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Net cash provided by (used in) investing activities |
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( |
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CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
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Property concessions funding (Note 4) |
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Proceeds from loan financing (Note 11) |
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Proceeds from issuance of common stock, net of offering costs (Note 12) |
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Net cash provided by financing activities |
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Effect of exchange rates on cash and cash equivalents |
( |
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Net increase (decrease) in cash and cash equivalents |
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( |
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Cash and cash equivalents beginning of period |
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Cash and cash equivalents end of period |
$ |
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$ |
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The accompanying notes are an integral part of these interim condensed consolidated financial statements.
6
SILVER BULL RESOURCES, INC.
(AN EXPLORATION STAGE COMPANY)
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (CONTINUED)
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Three Months Ended January 31, | ||||||||
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2022 |
2021 | |||||||
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SUPPLEMENTAL CASH FLOW DISCLOSURES: | ||||||||
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Income taxes paid |
$ |
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$ |
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Interest paid |
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$ |
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NON-CASH INVESTING AND FINANCING ACTIVITY: | ||||||||
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Offering costs included in accounts payable and accrued liabilities |
$ |
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$ |
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The accompanying notes are an integral part of these interim condensed consolidated financial statements.
7
NOTE 1 – ORGANIZATION, DESCRIPTION OF BUSINESS AND GOING CONCERN
Silver Bull Resources, Inc. (the “Company”) was incorporated in the State of Nevada on November 8, 1993 as the Cadgie Company for the purpose of acquiring and developing mineral properties. The Cadgie Company was a spin-off from its predecessor, Precious Metal Mines, Inc. On June 28, 1996, the Company’s name was changed to Metalline Mining Company. On April 21, 2011, the Company’s name was changed to Silver Bull Resources, Inc. The Company’s fiscal year-end is October 31. The Company has not realized any revenues from its planned operations and is considered an exploration stage company. The Company has not established any reserves with respect to its exploration projects and may never enter into the development stage with respect to any of its projects.
The Company engages in the business of mineral exploration. The Company currently owns a number of property concessions in Mexico (collectively known as the “Sierra Mojada Property”). The Company conducts its operations in Mexico through its wholly-owned subsidiary corporations, Minera Metalin S.A. de C.V. (“Minera Metalin”) and Minas de Coahuila SBR S.A. de C.V. (“Minas”). On August 26, 2021, the Company’s wholly-owned Mexican subsidiary, Contratistas de Sierra Mojada S.A. de C.V. (“Contratistas”) merged with and into Minera Metalin.
On April 16, 2010, Metalline Mining Delaware, Inc., a wholly-owned subsidiary of the Company incorporated in the State of Delaware, was merged with and into Dome Ventures Corporation (“Dome”), a Delaware corporation. As a result, Dome became a wholly-owned subsidiary of the Company. Dome has a wholly-owned subsidiary Dome Asia Inc., which is incorporated in the British Virgin Islands.
On August 12, 2020, the Company entered into an option agreement (the “Beskauga Option Agreement”) with Copperbelt AG, a corporation existing under the laws of Switzerland (“Copperbelt Parent”), and Dostyk LLP, an entity existing under the laws of Kazakhstan and a wholly-owned subsidiary of Copperbelt (the “Copperbelt Sub,” and together with Copperbelt Parent, “Copperbelt”), pursuant to which the Company has the exclusive right and option to acquire Copperbelt’s right, title and
On February 5, 2021, Arras Minerals Corp. (“Arras”) was incorporated in British Columbia, Canada, as a wholly-owned subsidiary of the Company. On March 19, 2021, pursuant to an asset purchase agreement with Arras, the Company transferred its right, title and interest in and to the Beskauga Option Agreement, among other things, to Arras in exchange for
The Company’s efforts and expenditures have been concentrated on the exploration of properties, principally in the Sierra Mojada Property located in Coahuila, Mexico. The Company has not determined whether its exploration properties contain ore reserves that are economically recoverable. The ultimate realization of the Company’s investment in exploration properties is dependent upon the success of future property sales, the existence of economically recoverable reserves, and the ability of the Company to obtain financing or make other arrangements for exploration, development, and future profitable production activities. The ultimate realization of the Company’s investment in exploration properties cannot be determined at this time.
8
Going Concern
Since its inception in November 1993, the Company has not generated revenue and has incurred an accumulated deficit of $
These interim condensed consolidated financial statements have been prepared on a going concern basis and do not include any adjustments to the amounts and classification of assets and liabilities that may be necessary in the event the Company can no longer continue as a going concern. Such adjustments could be material.
NOTE 2 – BASIS OF PRESENTATION
The Company’s interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) and applicable rules of the U.S. Securities and Exchange Commission (the “SEC”) regarding interim reporting. All intercompany transactions and balances have been eliminated during consolidation. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. The consolidated balance sheet at October 31, 2021 was derived from the audited consolidated financial statements. Accordingly, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company’s Annual Report on Form 10-K for the year ended October 31, 2021.
All figures are in United States dollars unless otherwise noted.
The interim condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements, except for the recent accounting pronouncements adopted as disclosed in Note 3. In the opinion of management, the interim condensed consolidated financial statements furnished herein include all adjustments, all of which are of a normal recurring nature, necessary for a fair statement of the results for the interim periods presented. Uncertainties with respect to estimates and assumptions are inherent in the preparation of the Company’s interim condensed consolidated financial statements. Accordingly, operating results for the three months ended January 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending October 31, 2022 or any future period.
NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies are defined in the Company’s Annual Report on Form 10-K for the year ended October 31, 2021 filed with the SEC on January 14, 2022, except as follows.
Recent Accounting Pronouncements Adopted in the Three-Month Period Ended January 31, 2022
On November 1, 2021, the Company adopted the Financial Accounting Standards Board’s (“FASB”) Accounting Standards Updated (“ASU”) 2020-01, “Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” ASU 2020-01 is effective for interim and annual periods beginning after December 15, 2020. The adoption of this update did not have a material impact on the Company’s financial position, results of operations or cash flows and disclosures.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the SEC did not or are not expected to have a material impact on the Company’s present or future consolidated financial statements.
9
NOTE 4 – SOUTH32 OPTION AGREEMENT
On June 1, 2018, the Company and its subsidiaries Minera Metalin and Contratistas entered into an earn-in option agreement (the “South32 Option Agreement”) with South32 International Investment Holdings Pty Ltd (“South32”), a wholly-owned subsidiary of South32 Limited (ASX/JSE/LSE: S32), whereby South32 is able to obtain an option to purchase
Upon exercise of the South32 Option, Minera Metalin is required to issue common shares to South32. Pursuant to the South32 Option Agreement, following exercise and until a decision has been made by the board of directors of Minera Metalin to develop and construct a mine on the Sierra Mojada Project, each shareholder holding greater than or equal to 10% of the shares may withdraw as an owner in exchange for a 2% net smelter royalty on products produced and sold from the Sierra Mojada Project. Any shareholder whose holdings are reduced to less than 10% must surrender its interest in exchange for a 2% net smelter royalty.
The Company has determined that Minera Metalin is a variable interest entity and that the South32 Option Agreement has not resulted in the transfer of control of the Sierra Mojada Project to South32. The Company has also determined that the South32 Option Agreement represents non-employee share-based compensation associated with the collaborative exploration program undertaken by the parties. The compensation cost is expensed when the associated exploration activity occurs. The share-based payments have been classified as equity instruments and valued based on the fair value of the cash consideration received, as it is more reliably measurable than the fair value of the equity interest. If the South32 Option is exercised and shares are issued prior to a decision to develop a mine, such shares would be classified as temporary equity as they would be contingently redeemable in exchange for a net smelter royalty under circumstances that are not wholly in control of the Company or South32 and are not currently probable.
No portion of the equity value has been classified as temporary equity as the South32 Option has no intrinsic value.
On October 11, 2019, the Company and its subsidiary Minera Metalin issued a notice of force majeure to South32 pursuant to the South32 Option Agreement. Due to a blockade by a cooperative of local miners called Sociedad Cooperativa de Exploración Minera Mineros Norteños, S.C.L. (“Mineros Norteños”), the Company has halted all work on the Sierra Mojada Property. The notice of force majeure was issued because of the blockade’s impact on the ability of the Company and its subsidiary Minera Metalin to perform their obligations under the South32 Option Agreement. Pursuant to the South32 Option Agreement, any time period provided for in the South32 Option Agreement will generally be extended by a period equal to the period of delay caused by the event of force majeure. As of March 16, 2022, the blockade by Mineros Norteños at, on and around the Sierra Mojada Property is ongoing.
10
The combined approximate carrying amount of the assets and liabilities of Minera Metalin (consolidated with its wholly-owned subsidiary) are as follows at January 31, 2022:
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Assets: |
Mexico | |||
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Cash and cash equivalents |
$ |
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Value-added tax receivable, net |
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Prepaid expenses and deposits |
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Office and mining equipment, net |
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Property concessions |
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Total assets |
$ |
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Liabilities: |
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Accounts payable |
$ |
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Accrued liabilities and expenses |
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Payable to Silver Bull Resources, Inc. to be converted to equity upon exercise of the South32 Option |
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Total liabilities |
$ |
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Net advances and investment in the Company’s Mexican subsidiary |
$ |
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The Company’s maximum exposure to loss at January 31, 2022 is $
NOTE 5 – INVESTMENTS
On August 12, 2020, the Company entered into the Beskauga Option Agreement with Copperbelt pursuant to which it had the exclusive right and option to acquire Copperbelt’s right, title and
On September 24, 2021, pursuant to a Separation and Distribution Agreement, the Company distributed to its shareholders one Arras common share for each Silver Bull share held by such shareholders, or
At the time of the Distribution, the Company determined that Arras was no longer a controlled subsidiary due to the dilution of its interest in Arras and the fact that Arras became a stand-alone company at the time of the Distribution. On the date control was lost, the Company recorded its interest retained in Arras at carrying value without gain or loss.
The Company determined that the Company’s retained interest in Arras is accounted for using the fair value method for the period from September 24, 2021, onwards, and its investments in Arras is presented as an investment.
On December 6, 2021, the Company sold
A summary of the changes in investments for the year ended October 31, 2021 and the three months ended January 31, 2022 is as follows:
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Equity security – October 31, 2020 |
$ |
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Carrying value of investment on deconsolidation |
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Gain on investment |
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Equity security – October 31, 2021 |
$ |
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Sale of investment |
( |
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Foreign currency translation adjustment |
( |
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Equity security – January 31, 2022 |
$ |
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Changes in the fair value of the Company’s investments in equity securities are recognized each period in the interim condensed consolidated financial statement primarily using fair value method if the observable quoted market prices are not available.
11
NOTE 6 – NET LOSS PER SHARE
The Company had stock options and warrants outstanding at January 31, 2022 and 2021 that upon exercise were issuable into
NOTE 7 – VALUE-ADDED TAX RECEIVABLE
Value-added tax (“VAT”) receivable relates to VAT paid in Mexico. The Company estimates that net VAT of $
A summary of the changes in the allowance for uncollectible VAT for the three months ended January 31, 2022 is as follows:
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Allowance for uncollectible VAT – October 31, 2021 |
$ |
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Provision for VAT receivable allowance |
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Foreign currency translation adjustment |
( |
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Allowance for uncollectible VAT – January 31, 2022 |
$ |
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NOTE 8 – OFFICE AND MINING EQUIPMENT
The following is a summary of the Company’s office and mining equipment at January 31, 2022 and October 31, 2021, respectively:
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January 31, |
October 31, | |||||||
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2022 |
2021 | |||||||
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Mining equipment |
$ |
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$ |
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Vehicles |
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Buildings and structures |
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Computer equipment and software |
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Well equipment |
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Office equipment |
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Less: Accumulated depreciation |
( |
) |
( |
) | ||||
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Office and mining equipment, net |
$ |
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$ |
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NOTE 9 – PROPERTY CONCESSIONS
The following is a summary of the Company’s property concessions for the Sierra Mojada Property as at January 31, 2022 and October 31, 2021:
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Property concessions – January 31, 2022 and October 31, 2021 |
$ |
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12
NOTE 10 – GOODWILL
Goodwill represents the excess, at the date of acquisition, of the purchase price of the business acquired over the fair value of the net tangible and intangible assets acquired. On April 30, 2021, the Company elected to perform a qualitative assessment to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. Based on this assessment, management determined it is not more likely than not that the fair value of the reporting unit is less than its carrying amount. The Company performs its annual goodwill impairment test as of April 30th of each fiscal year.
The following is a summary of the Company’s goodwill balance as at January 31, 2022 and October 31, 2021:
|
Goodwill – January 31, 2022 and October 31, 2021 |
$ |
|
NOTE 11 – LOAN PAYABLE
In June 2020, the Company received $
In January 2021, the Company received an additional $
The balance of the CEBA loan is fully repayable on or before the end of the Extended Term, if not repaid on or before the end of the Initial Term. The Company anticipates repaying the CEBA loan prior to the Initial Term date. An income will be recognized in the period when the CEBA loan is forgiven.
|
|
Loan payable – October 31, 2021 |
$ |
| ||
|
Foreign currency translation adjustment |
( |
) | |||
|
Loan payable – January 31, 2022 |
$ |
|
NOTE 12 – COMMON STOCK
No shares of common stock were issued during the three months ended January 31, 2022.
On November 9, 2020, the Company completed the second and final tranche of a two-tranche private placement (the “Private Placement”) for
13
NOTE 13 – STOCK OPTIONS
The Company has one stock option plan under which equity securities are authorized for issuance to officers, directors, employees and advisors: the 2019 Stock Option and Stock Bonus Plan (the “2019 Plan”). Under the 2019 Plan, the lesser of (i)
Options are typically granted with an exercise price equal to the closing market price of the Company’s stock at the date of grant, have a graded vesting schedule over
No options were granted or exercised during the three months ended January 31, 2022 and 2021.
The following is a summary of stock option activity for the three months ended January 31, 2022:
|
Options |
Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Life (Years) |
Aggregate Intrinsic Value | |||||||||
|
| |||||||||||||
|
Outstanding at October 31, 2021 |
|
$ |
|
|
$ |
| |||||||
|
Outstanding at January 31, 2022 |
|
|
|
$ |
| ||||||||
|
Exercisable at January 31, 2022 |
|
$ |
|
|
$ |
| |||||||
Summarized information about stock options outstanding and exercisable at January 31, 2022 is as follows:
|
Options Outstanding |
Options Exercisable | |||||||||||||
|
Exercise Price |
Number Outstanding |
Weighted Average Remaining Contractual Life (Years) |
Weighted Average Exercise Price |
Number Exercisable |
Weighted Average Exercise Price | |||||||||
|
$ |
|
|
|
$ |
|
|
$ |
| ||||||
NOTE 14 – WARRANTS
A summary of warrant activity for the three months ended January 31, 2022 is as follows:
|
Warrants |
Shares |
Weighted Average Exercise Price |
Weighted Average Remaining Contractual Life (Years) |
Aggregate Intrinsic Value | |||||||||
|
| |||||||||||||
|
Outstanding and exercisable at October 31, 2021 |
|
$ |
|
|
$ |
| |||||||
|
Outstanding and exercisable at January 31, 2022* |
|
$ |
|
|
$ |
| |||||||
*
14
No warrants were issued or exercised during the three months ended January 31, 2022.
No warrants were exercised during the three months ended January 31, 2021.
During the three months ended January 31, 2021, the Company issued
Summarized information about warrants outstanding and exercisable at January 31, 2022 is as follows:
|
Warrants Outstanding and Exercisable | |||||||||||||
|
Exercise Price |
Number Outstanding |
Weighted Average Remaining Contractual Life (Years) |
Weighted Average Exercise Price | ||||||||||
|
$ |
|
|
|
$ |
| ||||||||
NOTE 15 – FINANCIAL INSTRUMENTS
Fair Value Measurements
All financial assets and financial liabilities are recorded at fair value on initial recognition. Transaction costs are expensed when they are incurred, unless they are directly attributable to the acquisition of financial assets or the assumption of liabilities carried at amortized cost, in which case the transaction costs adjust the carrying amount.
The three levels of the fair value hierarchy are as follows:
|
Level 1 |
Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities; | |
|
|
| |
|
Level 2 |
Quoted prices in markets that are not active, or inputs that are observable, either directly or indirectly, for substantially the full term of the asset or liability; and | |
|
|
| |
|
Level 3 |
Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (supported by little or no market activity). |
Under fair value accounting, assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company’s financial instruments consist of cash and cash equivalents, investments, accounts payable and loan payable.
The carrying amounts of cash and cash equivalents and accounts payable approximate fair value at January 31, 2022 and October 31, 2021 due to the short maturities of these financial instruments. Investments and loan payable are classified as Level 2 in the fair value hierarchy.
Credit Risk
Credit risk is the risk that the counterparty to a financial instrument will cause a financial loss for the Company by failing to discharge its obligations. To mitigate exposure to credit risk on financial assets, the Company has established policies to ensure liquidity of funds and ensure that counterparties demonstrate acceptable levels of creditworthiness.
15
The Company maintains its U.S. dollar and Canadian dollar cash and cash equivalents in bank and demand deposit accounts with major financial institutions with high credit standings. Cash deposits held in Canada are insured by the Canada Deposit Insurance Corporation (“CDIC”) for up to $CDN
The Company also maintains cash in bank accounts in Mexico. These accounts are denominated in the local currency and are considered uninsured. As of January 31, 2022, and October 31, 2021, the U.S. dollar equivalent balance for these accounts was $
Interest Rate Risk
The Company holds substantially all of its cash and cash equivalents in bank and demand deposit accounts with major financial institutions. The interest rates received on these balances may fluctuate with changes in economic conditions. Based on the average cash and cash equivalent balances during the three months ended January 31, 2022, a 1% decrease in interest rates would have resulted in a reduction of approximately $
Foreign Currency Exchange Risk
The Company is not subject to any significant market risk related to foreign currency exchange rate fluctuations.
Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices such as investments in Arras common shares. The Company does not hold or issue derivatives for trading or speculative purposes.
NOTE 16 – COMMITMENTS AND CONTINGENCIES
Compliance with Environmental Regulations
The Company’s exploration activities are subject to laws and regulations controlling not only the exploration and mining of mineral properties but also the effect of such activities on the environment. Compliance with such laws and regulations may necessitate additional capital outlays or affect the economics of a project, and cause changes or delays in the Company’s activities.
Property Concessions in Mexico
To properly maintain property concessions in Mexico, the Company is required to pay a semi-annual fee to the Mexican government and complete annual assessment work.
Royalty
The Company has agreed to pay a
Litigation and Claims
Mineros Norteños Case
On May 20, 2014, Mineros Norteños filed an action in the Local First Civil Court in the District of Morelos, State of Chihuahua, Mexico, against the Company’s subsidiary, Minera Metalin, claiming that Minera Metalin breached an agreement regarding the development of the Sierra Mojada Property. Mineros Norteños sought payment of the Royalty, including interest at a rate of
16
Valdez Case
On February 15, 2016, Messrs. Jaime Valdez Farias and Maria Asuncion Perez Alonso (collectively, “Valdez”) filed an action before the Local First Civil Court of Torreon, State of Coahuila, Mexico, against the Company’s subsidiary, Minera Metalin, claiming that Minera Metalin had breached an agreement regarding the development of the Sierra Mojada Property. Valdez sought payment in the amount of $
From time to time, the Company is involved in other disputes, claims, proceedings and legal actions arising in the ordinary course of business. The Company intends to vigorously defend all claims against the Company and pursue its full legal rights in cases where the Company has been harmed. Although the ultimate outcome of these proceedings cannot be accurately predicted due to the inherent uncertainty of litigation, in the opinion of management, based upon current information, no other currently pending or overtly threatened proceeding is expected to have a material adverse effect on the Company’s business, financial condition or results of operations.
COVID-19
Global outbreaks of contagious diseases, including the December 2019 outbreak of a novel strain of coronavirus (COVID-19), have the potential to significantly and adversely impact our operations and business. On March 11, 2020, the World Health Organization recognized COVID-19 as a global pandemic. Pandemics or disease outbreaks such as the currently ongoing COVID-19 outbreak may have a variety of adverse effects on our business, including by depressing commodity prices and the market value of our securities and limiting the ability of our management to meet with potential financing sources. The spread of COVID-19 has had, and continues to have, a negative impact on the financial markets, which may impact our ability to obtain additional financing in the near term. A prolonged downturn in the financial markets could have an adverse effect on our business, results of operations and ability to raise capital.
17
NOTE 17 – SEGMENT INFORMATION
The Company operates in a single reportable segment: the exploration of mineral property interests. The Company has mineral property interests in Sierra Mojada, Mexico.
Geographic information is approximately as follows:
|
For the Three Months Ended | ||||||||
|
January 31, | ||||||||
|
2022 |
2021 | |||||||
|
| ||||||||
|
Net loss | ||||||||
|
Canada |
$ |
( |
) |
$ |
( |
) | ||
|
Mexico |
( |
) |
( |
) | ||||
|
Kazakhstan |
|
( |
) | |||||
|
Net Loss |
$ |
(330,000 |
) |
$ |
(858,000 |
) | ||
The following table details the allocation of assets included in the accompanying balance sheet at January 31, 2022:
|
Canada |
Mexico |
Total | ||||||||||
|
Cash and cash equivalents |
$ |
|
$ |
|
$ |
|
| |||||
|
Other receivables |
|
|
17,000 |
| ||||||||
|
Prepaid expenses and deposits |
|
|
78,000 |
| ||||||||
|
Investments |
|
|
670,000 |
| ||||||||
|
Value-added tax receivable, net |
|
|
120,000 |
| ||||||||
|
Office and mining equipment, net |
|
|
159,000 |
| ||||||||
|
Property concessions |
|
|
5,020,000 |
| ||||||||
|
Goodwill |
|
|
2,058,000 |
| ||||||||
|
$ |
|
$ |
|
$ |
8,338,000 |
| ||||||
The following table details the allocation of assets included in the accompanying balance sheet at October 31, 2021:
|
Canada |
Mexico |
Total | ||||||||||
|
Cash and cash equivalents |
$ |
|
$ |
|
$ |
| ||||||
|
Value-added tax receivable, net |
|
|
121,000 | |||||||||
|
Other receivables |
|
|
7,000 | |||||||||
|
Prepaid expenses and deposits |
|
|
196,000 | |||||||||
|
Investments |
|
|
1,167,000 | |||||||||
|
Office and mining equipment, net |
|
|
164,000 | |||||||||
|
Property concessions |
|
|
5,020,000 | |||||||||
|
Goodwill |
|
|
2,058,000 | |||||||||
|
$ |
|
$ |
|
$ |
8,923,000 | |||||||
The Company has significant assets in Coahuila, Mexico. Although Mexico is generally considered economically stable, it is always possible that unanticipated events in Mexico could disrupt the Company’s operations. The Mexican government does not require foreign entities to maintain cash reserves in Mexico.
The following table details the allocation of exploration and property holding costs for the exploration properties:
|
For the Three Months Ended | ||||||||
|
January 31, | ||||||||
|
2022 |
2021 | |||||||
|
Exploration and property holding costs for the year | ||||||||
|
Mexico |
$ |
( |
) |
$ |
( |
) | ||
|
Kazakhstan |
|
( |
) | |||||
|
$ |
(114,000 |
) |
$ |
(344,000 |
) | |||
NOTE 18 – SUBSEQUENT EVENTS
On February 17, 2022, the Company granted options to acquire
On February 17, 2022, the Company issued
On March 3, 2022, the Company granted options to acquire
18
| ITEM 2. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
When we use the terms “Silver Bull,” “we,” “us,” or “our,” we are referring to Silver Bull Resources, Inc. and its subsidiaries, unless the context otherwise requires. We have included technical terms important to an understanding of our business under “Glossary of Common Terms” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021.
Cautionary Statement Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q includes certain statements that may be deemed to be “forward-looking statements” within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the U.S. Private Securities Litigation Reform Act of 1995, and “forward-looking information” within the meaning of applicable Canadian securities legislation. We use words such as “anticipate,” “continue,” “likely,” “estimate,” “expect,” “may,” “will,” “projection,” “should,” “believe,” “potential,” “could,” or similar words suggesting future outcomes (including negative and grammatical variations) to identify forward-looking statements. Forward-looking statements include statements we make regarding:
- The sufficiency of our existing cash resources to enable us to continue our operations for the next 12 months as a going concern;
- Future payments that may be made by South32 under the terms of the South32 Option Agreement;
- Prospects of entering the development or production stage with respect to any of our projects;
- Our planned activities at the Sierra Mojada Project in 2022 and beyond;
- Whether any part of the Sierra Mojada Project will ever be confirmed or converted into “proven or probable mineral reserves” as defined under Item 1300 of Regulation S-K;
- The requirement of additional power supplies for the Sierra Mojada Project if a mining operation is determined to be feasible;
- Our ability to obtain and hold additional concessions in the Sierra Mojada Project areas;
- The timing, duration and overall impact of the COVID-19 pandemic on the Company’s business;
- Whether we will be required to obtain additional surface rights if a mining operation is determined to be feasible;
- The possible impact on the Company’s operations of the blockade by a cooperative of miners on the Sierra Mojada property;
- The potential acquisition of additional mineral properties or property concessions;
- Testing of the impact of the fine bubble flotation test work on the recovery of minerals and initial rough concentrate grade;
- The impact of recent accounting pronouncements on our financial position, results of operations or cash flows and disclosures;
- The impact of changes to current state or federal laws and regulations on estimated capital expenditures, the economics of a particular project and/or our activities;
- Our ability to raise additional capital and/or pursue additional strategic options, and the potential impact on our business, financial condition and results of operations of doing so or not;
- The impact of changing foreign currency exchange rates on our financial condition;
- Whether using major financial institutions with high credit ratings mitigates credit risk;
- The impact of changing economic conditions on interest rates;
- Our expectations regarding future recovery of value-added taxes (“VAT”) paid in Mexico; and
- The merits of any claims in connection with, and the expected timing of any, ongoing legal proceedings.
| 19
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These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions, expected future developments and other factors we believe are appropriate in the circumstances. Such statements are subject to a number of assumptions, risks and uncertainties, and our actual results could differ from those expressed or implied in these forward-looking statements as a result of the factors described under “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021, including without limitation, risks associated with the following:
- The continued funding by South32 of amounts required under the South32 Option Agreement;
- Our ability to obtain additional financial resources on acceptable terms to (i) conduct our exploration activities and (ii) maintain our general and administrative expenditures at acceptable levels;
- Our ability to acquire additional mineral properties or property concessions;
- Results of future exploration at our Sierra Mojada Project;
- Worldwide economic and political events affecting (i) the market prices for silver, zinc, lead, copper and other minerals that may be found on our exploration properties (ii) interest rates and (iii) foreign currency exchange rates;
- Outbreaks of disease, including the COVID-19 pandemic, and related stay-at-home orders, quarantine policies and restrictions on travel, trade and business operations;
- The amount and nature of future capital and exploration expenditures;
- Volatility in our stock price;
- Our inability to obtain required permits;
- Competitive factors, including exploration-related competition;
- Timing of receipt and maintenance of government approvals;
- Unanticipated title issues;
- Changes in tax laws;
- Changes in regulatory frameworks or regulations affecting our activities;
- Our ability to retain key management, consultants and experts necessary to successfully operate and grow our business; and
- Political and economic instability in Mexico and other countries in which we conduct our business, and future potential actions of the governments in such countries with respect to nationalization of natural resources or other changes in mining or taxation policies.
| 20
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These factors are not intended to represent a complete list of the general or specific factors that could affect us.
All forward-looking statements speak only as of the date made. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the cautionary statements. Except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which it is made or to reflect the occurrence of anticipated or unanticipated events or circumstances. You should not place undue reliance on these forward-looking statements.
Cautionary Note Regarding Exploration Stage Companies
We are an exploration stage company and do not currently have any known reserves and cannot be expected to have reserves unless and until a feasibility study is completed for the Sierra Mojada concessions that shows proven and probable reserves. There can be no assurance that our concessions contain proven and probable reserves, and investors may lose their entire investment. See the sections titled “Risk Factors” in this Form 10-Q and in our Annual Report on Form 10-K for the fiscal year ended October 31, 2021.
Business Overview
Silver Bull, incorporated in Nevada, is an exploration stage company, engaged in the business of mineral exploration. Our primary objective is to define sufficient mineral reserves on the Sierra Mojada Property to justify the development of a mechanized mining operation. We conduct our operations in Mexico through our wholly-owned Mexican subsidiaries, Minera Metalin S.A. de C.V. (“Minera Metalin”) and Minas de Coahuila SBR S.A. de C.V. On August 26, 2021, our wholly-owned Mexican subsidiary, Contratistas de Sierra Mojada S.A. de C.V. (“Contratistas”) merged with and into Minera Metalin. However, as noted above, we have not established any reserves at the Sierra Mojada Property, we are in the exploration stage, and we may never enter the development or production stage.
On August 12, 2020, we entered into an option agreement (the “Beskauga Option Agreement”) with Copperbelt AG, a corporation existing under the laws of Switzerland (“Copperbelt Parent”), and Dostyk LLP, an entity existing under the laws of Kazakhstan and a wholly-owned subsidiary of Copperbelt Parent (the “Copperbelt Sub,” and together with Copperbelt Parent, “Copperbelt”), pursuant to which we have the exclusive right and option (the “Beskauga Option”) to acquire Copperbelt’s right, title and 100% interest in the Beskauga property located in Kazakhstan (the “Beskauga Property”), which consists of the Beskauga Main project (the “Beskauga Main Project”) and the Beskauga South project (the “Beskauga South Project,” and together the Beskauga Main Project, the “Beskauga Project”). The transaction contemplated by the Beskauga Option Agreement closed on January 26, 2021.
On February 5, 2021, Arras Minerals Corp. (“Arras”) was incorporated in British Columbia, Canada, as a wholly-owned subsidiary of Silver Bull. On March 19, 2021, pursuant to an asset purchase agreement with Arras, we transferred our right, title and interest in and to the Beskauga Option Agreement, among other things, to Arras in exchange for 36,000,000 common shares of Arras. On September 24, 2021, we distributed to our shareholders one Arras common share for each Silver Bull share held by such shareholders, or 34,547,838 Arras common shares in total (the “Distribution”). Upon completion of the Distribution, we retained 1,452,162 Arras common shares, or approximately 4% of the outstanding Arras common shares, as a strategic investment, and Arras became a stand-alone company. We have included the financial results of Arras in our consolidated statement of operations for the period from February 5, 2021 to September 24, 2021, the date of the Distribution.
Our principal office is located at 777 Dunsmuir Street, Suite 1610 Vancouver, BC, Canada V7Y 1K4, and our telephone number is 604-687-5800.
| 21
|
Recent Developments
South32 Option Agreement
On June 1, 2018, we and our subsidiaries Minera Metalin and Contratistas entered into an earn-in option agreement (the “South32 Option Agreement”) with South32 International Investment Holdings Pty Ltd (“South32”), a wholly owned subsidiary of South32 Limited (ASX/JSE/LSE: S32), whereby South32 is able to obtain an option to purchase 70% of the shares of Minera Metalin and Contratistas (the “South32 Option”). As noted above, Contratistas has since merged with and into Minera Metalin. Minera Metalin owns the Sierra Mojada Property located in Coahuila, Mexico (the “Sierra Mojada Project”) supplies labor for the Sierra Mojada Project. Under the South32 Option Agreement, South32 earns into the South32 Option by funding a collaborative exploration program on the Sierra Mojada Project. Upon the terms and subject to the conditions set forth in the South32 Option Agreement, in order for South32 to earn and maintain its four-year option, South32 must have contributed to Minera Metalin for exploration of the Sierra Mojada Project at least $3 million by the end of Year 1, $6 million by the end of Year 2, $8 million by the end of Year 3 and $10 million by the end of Year 4 (the “Initial Funding”). Funding is made on a quarterly basis based on the subsequent quarter’s exploration budget. South32 may exercise the South32 Option by contributing $100 million to Minera Metalin (the “Subscription Payment”), less the amount of Initial Funding previously contributed by South32. The issuance of shares upon notice of exercise of the South32 Option by South32 is subject to antitrust approval by the Mexican government. If the full amount of the Subscription Payment is advanced by South32 and the South32 Option becomes exercisable and is exercised, we and South32 will be obligated to contribute funding to Minera Metalin on a 30/70 pro rata basis. If South32 elects not to continue with the South32 Option during the four-year option period, the Sierra Mojada Project will remain 100% owned by us. The exploration program will be initially managed by us, with South32 being able to approve the exploration program funded by it. We received funding of $3,144,163 from South32 for Year 1 of the South32 Option Agreement. In April 2019, we received a notice from South32 to maintain the South32 Option Agreement for Year 2 by providing cumulative funding of $6 million by the end of such period. We received funding of $1,502,831, which included payments of $319,430, $1,100,731 and $82,670 received during the years ended October 31, 2019, 2020 and 2021, respectively, from South32 for Year 2 of the South32 Option Agreement, the time period for which has been extended by an event of force majeure described in more detail below. As of January 31, 2022, we had received cumulative funding of $4,646,994 under the South32 Option Agreement. During the three months ended January 31, 2022, we received $nil payment for the extended Year 2 time period due an event of force majeure. If the South32 Option Agreement is terminated by South32 without cause or if South32 is unable to obtain antitrust authorization from the Mexican government, we are under no obligation to reimburse South32 for amounts contributed under the South32 Option Agreement.
Upon exercise of the South32 Option, Minera Metalin is required to issue common shares to South32. Pursuant to the South32 Option Agreement, following exercise and until a decision has been made by the board of directors of Minera Metalin to develop and construct a mine on the Sierra Mojada Project, each shareholder holding greater than or equal to 10% of the shares may withdraw as an owner in exchange for a 2% net smelter royalty on products produced and sold from the Sierra Mojada Project. Any shareholder whose holdings are reduced to less than 10% must surrender its interest in exchange for a 2% net smelter royalty.
We have determined that Minera Metalin is a variable interest entity and that the South32 Option Agreement has not resulted in the transfer of control of the Sierra Mojada Project to South32. We have also determined the South32 Option Agreement represents non-employee share-based compensation associated with the collaborative exploration program undertaken by the parties. The compensation cost is expensed when the associated exploration activity occurs. The share-based payments have been classified as equity instruments and valued based on the fair value of the cash consideration received, as it is more reliably measurable than the fair value of the equity interest. If the South32 Option is exercised and shares are issued prior to a decision to develop a mine, such shares would be classified as temporary equity as they would be contingently redeemable in exchange for a net smelter royalty under circumstances that are not wholly in control of the Company or South32 and are not currently probable.
| 22
|
On October 11, 2019, we and our subsidiary Minera Metalin issued a notice of force majeure to South32 pursuant to the South32 Option Agreement. Due to a blockade by a cooperative of local miners called Sociedad Cooperativa de Exploración Minera Mineros Norteños, S.C.L. (“Mineros Norteños”), we have halted all work on the Sierra Mojada Property. The notice of force majeure was issued because of the blockade’s impact on the ability of us and our subsidiary Minera Metalin to perform our obligations under the South32 Option Agreement. Pursuant to the South32 Option Agreement, any time period provided for in the South32 Option Agreement will generally be extended by a period equal to the period of delay caused by the event of force majeure. As of March 16, 2022, the blockade by Mineros Norteños at, on and around the Sierra Mojada Property is ongoing.
Properties Concessions and Outlook
Sierra Mojada Property
The focus of our 2022 calendar year at the Sierra Mojada Property will be to resolve the blockade and to maintain our property concessions in Mexico. Upon resolution of the blockade, we will work with South32 to approve an updated exploration program.
Results of Operations
Three Months Ended January 31, 2022 and January 31, 2021
For the three months ended January 31, 2022, we experienced a net loss of $330,000, or approximately $0.01 per share, compared to a net loss of $858,000, or approximately $0.03 per share, during the comparable period last year. The $528,000 decrease in net loss was primarily due to a $230,000 decrease in exploration and property holding costs, a $299,000 decrease in general and administrative expenses and a $2,000 increase in other expenses compared to the same period last year as described below.
Exploration and Property Holding Costs
Exploration and property holding costs decreased $230,000 to $114,000 for the three months ended January 31, 2022, compared to $344,000 for the comparable period last year. This decrease was mainly due to finder’s fees due and exploration activities in relation to the Beskauga Option Agreement recorded, offset by a reversal of a $56,000 supplier provision that was no longer necessary, in the three months ended January 31, 2021. There were no comparable expenses in the current three-month period.
General and Administrative Expenses
We recorded general and administrative expenses of $211,000 for the three months ended January 31, 2022 as compared to $510,000 for the comparable period last year. The $299,000 decrease was mainly the result of a $49,000 decrease in personnel costs, a $94,000 decrease in office and administrative costs, a $142,000 decrease in professional services, an $11,000 decrease in directors’ fees and a $2,000 decrease in the provision for uncollectible VAT as described below.
Personnel costs decreased $49,000 to $92,000 for the three months ended January 31, 2022 as compared to $141,000 for the comparable period last year. This decrease was mainly due to a $41,000 decrease in salaries due to revised agreements with the Company’s management, which reduced compensation compared to the same period last year.
Office and administrative costs decreased $94,000 to $35,000 for the three months ended January 31, 2022 as compared to $129,000 for the comparable period last year. This decrease was mainly due to investor relations activities relating to the special meeting of shareholders in December 2020.
Professional fees decreased $142,000 to $59,000 for the three months ended January 31, 2022 compared to $201,000 for the comparable period last year. This decrease is mainly due to legal fees incurred in relation to the special meeting of shareholders in December 2020 and the incorporation of Arras in early 2021.
Directors’ fees decreased $11,000 to $19,000 for the three months ended January 31, 2022 as compared to $31,000 for the comparable period last year. This decrease was primarily due to an $11,000 decrease in directors fee compensation as a result of revised chairman fees compared to the same period last year.
We recorded a $6,000 provision for uncollectible VAT for the three months ended January 31, 2022 as compared to a $9,000 provision for uncollectible VAT in the comparable period last year. The allowance for uncollectible VAT was estimated by management based upon a number of factors, including the length of time the returns have been outstanding, responses received from tax authorities, general economic conditions in Mexico and estimated net recovery after commissions.
| 23
|
Other Expenses
We recorded other expenses of $4,000 for the three months ended January 31, 2022 as compared to other expenses of $2,000 for the comparable period last year. The significant factors contributing to other expenses were a $4,000 foreign currency transaction loss compared to a $2,000 foreign currency transaction loss for the comparable period last year.
Material Changes in Financial Condition; Liquidity and Capital Resources
Cash Flows
During the three months ended January 31, 2022, we primarily utilized cash and cash equivalents to fund general and administrative expenses and exploration activities at the Sierra Mojada Property. During the three months ended January 31, 2022, we received proceeds of $470,000 from the sale of 600,000 Arras common shares at a price of $CDN 1.00 per share. As a result of the cash proceeds received from the sale of Arras common shares, which were partially offset by exploration activities and general and administrative expenses, cash and cash equivalents increased from $190,000 at October 31, 2021 to $216 ,000 at January 31, 2022.
Cash flows used in operating activities for the three months ended January 31, 2022 were $436,000, as compared to $823,000 for the comparable period in 2021. This decrease was mainly due to due diligence and exploration activities at the Beskauga Property in the comparable period last year and decreased general and administrative expenses, which was offset by the timing of certain payments.
Cash flows provided by investing activities for the three months ended January 31, 2022 were proceeds of $470,000 from sale of 600,000 Arras common shares at a price of $CDN 1.00 per share. Cash flows used in investing activities for the three months ended January 31, 2021 were $410,000 for loans made to Ekidos Minerals LLP (made while the Beskauga Project was being consolidated by the Company) and purchases of equipment.
Cash flows provided by financing activities for the three months ended January 31, 2022 were $nil, as compared to $231,000 for the same period last year. The cash flows provided by financing activities for the three months ended January 31, 2021 were comprised of the net proceeds from the second tranche of the Private Placement, funding from South32 and the CEBA loan.
Capital Resources
As of January 31, 2022, we had cash and cash equivalents of $216,000 , as compared to cash and cash equivalents of $190,000 as of October 31, 2021. The increase in our liquidity was primarily the result of proceeds from sale of investments, which were partially offset by general and administrative expenses and exploration activities at the Sierra Mojada Property.
Since our inception in November 1993, we have not generated revenue and have incurred an accumulative deficit of $134,500,000. Accordingly, we have not generated cash flows from operations, and since inception we have relied primarily upon proceeds from private placements and registered direct offerings of our equity securities, warrant exercises, sale of investments, and funding from South32 as the primary sources of financing to fund our operations. As of January 31, 2022, we had cash and cash equivalents of $216,000 . Based on our limited cash and cash equivalents, and history of losses, there is substantial doubt as to whether our existing cash resources are sufficient to enable us to continue our operations for the next 12 months as a going concern. Management plans to pursue possible financing and strategic options, including but not limited to obtaining additional equity financing and selling its investments in Arras. However, there is no assurance that we will be successful in pursuing these plans.
Any future additional financing in the near term will likely be in the form of payments from proceeds from an issuance of equity securities, which will result in dilution to our existing shareholders. Moreover, we may incur significant fees and expenses in the pursuit of a financing or other strategic transaction, which will increase the rate at which our cash and cash equivalents are depleted.
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Capital Requirements and Liquidity; Need for Additional Funding
Our management and board of directors monitor our overall costs, expenses, and financial resources and, if necessary, will adjust our planned operational expenditures in an attempt to ensure that we have sufficient operating capital. We continue to evaluate our costs and planned expenditures, including for our Sierra Mojada Property as discussed below.
The continued exploration of the Sierra Mojada Property will require significant amounts of additional capital. In December 2021, our board of directors approved a calendar year 2022 exploration budget of $0.3 million for the Sierra Mojada Property and $0.8 million for general and administrative expenses for calendar year 2021. As of February 28, 2022, we had approximately $0.1 million in cash and cash equivalents. The continued exploration of the Sierra Mojada Property ultimately will require us to raise additional capital, identify other sources of funding or identify another strategic partner.
For information about our current strategic partnership with South32, see Note 4 – South32 Option Agreement in our financial statements. If South32 exercises its option to purchase 70% of the equity of Minera Metalin, under the terms of the South32 Option Agreement, we will retain a 30% ownership in Minera Metalin be obligated to contribute 30% of subsequent funding toward the development of the Sierra Mojada Project. If we fail to satisfy our funding commitment, our interest in Minera Metalin will be diluted. We do not currently have sufficient funds with which to satisfy this future funding commitment, and there is no certainty that we will be able to obtain sufficient future funds on acceptable terms or at all. If South32 terminates the South32 Option Agreement, our funding obligations for the Sierra Mojada Property would increase, likely resulting in a reduction in exploration work on the Sierra Mojada Property.
We will continue to evaluate our ability to obtain additional financial resources, and we will attempt to reduce or limit expenditures on the Sierra Mojada Property as well as general and administrative costs if we determine that additional financial resources are unavailable or available on terms that we determine are unacceptable. However, it may not be possible to reduce costs, and even if we are successful in reducing costs, we still may not be able to continue operations for the next 12 months as a going concern. If we are unable to fund future operations by obtaining additional financial resources, including an equity offering or other strategic transaction, we do not expect to have sufficient available cash and cash equivalents to continue our operations for the next 12 months as a going concern. Equity financing may not be available to us on acceptable terms, if at all. Equity financing, if available, may result in substantial dilution to existing shareholders. If we are unable to fund operations by obtaining additional financial resources, there is substantial doubt as to whether we can continue our operations through the end of the current fiscal year as a going concern.
Critical Accounting Policies
The critical accounting policies are defined in our Annual Report on Form 10-K for the year ended October 31, 2021 filed with the SEC on January 14, 2022.
Recent Accounting Pronouncements Adopted in the Three-Month Period Ended January 31, 2022
On November 1, 2020, we adopted the Financial Accounting Standards Board’s (the “FASB’s”) Accounting Standards Updated (“ASU”) 2020-01, “Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions between Topic 321, Topic 323, and Topic 815.” This ASU is effective for interim and annual periods beginning after December 15, 2020. The adoption of this update did not have a material impact on our financial position, results of operations or cash flows and disclosures.
Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the SEC did not or are not expected to have a material impact on our present or future consolidated financial statements.
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| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
Not applicable.
| ITEM 4. | CONTROLS AND PROCEDURES. |
| (a) | Evaluation of Disclosure Controls and Procedures. |
Under the supervision and with the participation of our Chief Executive Officer and our Chief Financial Officer, we have carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of January 31, 2022. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) were effective as of January 31, 2022.
Our disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
| (b) | Changes in Internal Control over Financial Reporting |
During the quarter ended January 31, 2022, there have not been any changes in the Company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
PART II – OTHER INFORMATION
| ITEM 1. | LEGAL PROCEEDINGS. |
See Note 16 – Commitments and Contingencies to our financial statements (Part I, Item 1 of this Quarterly Report on Form 10-Q) for information regarding legal proceedings in which we are involved.
| ITEM 1A. | RISK FACTORS. |
There have been no material changes from the risk factors included in our Annual Report on Form 10-K for the year ended October 31, 2021.
| ITEM 2. | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. |
Recent Sales of Unregistered Securities
No sales of unregistered equity securities occurred during the period covered by this report.
Purchases of Equity Securities by the Company and Affiliated Purchasers
No purchases of equity securities were made by or on behalf of Silver Bull or any “affiliated purchaser” within the meaning of Rule 10b-18 under the Exchange Act during the period covered by this report.
| ITEM 3. | DEFAULTS UPON SENIOR SECURITIES. |
None.
| ITEM 4. | MINE SAFETY DISCLOSURES. |
Not applicable.
| ITEM 5. | OTHER INFORMATION. |
None.
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| ITEM 6. | EXHIBITS. |
| X | Filed herewith | |||||||
| XX |
Furnished herewith
|
|||||||
| + | Indicates a management contract or compensatory plan, contract or arrangement. | |||||||
| * | The following financial information from Silver Bull Resources, Inc.’s Quarterly Report on Form 10-Q for the three months ended January 31, 2022, is formatted in XBRL (Extensible Business Reporting Language): Interim Condensed Consolidated Balance Sheets, Interim Condensed Consolidated Statements of Operations and Comprehensive Loss, Interim Condensed Consolidated Statements of Stockholders’ Equity, Interim Condensed Consolidated Statements of Cash Flows. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| SILVER BULL RESOURCES, INC. | ||
| Dated: March 16, 2022 | By: | /s/ Timothy Barry |
| Timothy Barry | ||
| President and Chief Executive Officer | ||
|
(Principal Executive Officer)
| ||
| Dated: March 16, 2022 | By: | /s/ Christopher Richards |
| Christopher Richards | ||
| Chief Financial Officer | ||
| (Principal Financial Officer and Principal Accounting Officer) | ||
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Exhibit 4.1
DESCRIPTION OF CAPITAL STOCK
The following is a description of each class of securities of Silver Bull Resources, Inc. (“Silver Bull” or the “Company”) that is registered under Section 12 of the Securities Exchange Act of 1934, as amended, and does not purport to be complete. For a complete description of the terms and provisions of such securities, refer to the Company’s articles of incorporation and the Company’s bylaws, which are incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on April 21, 2021 and Exhibit 3.1.2 to the Company’s Annual Report on Form 10-K filed with the SEC on January 14, 2011, respectively. This summary is qualified in its entirety by reference to these documents.
Common Stock
Silver Bull’s articles of incorporation authorize Silver Bull to issue 150,000,000 shares of common stock, $0.01 par value per share. As of March 16, 2022, 35,055,652 shares of Silver Bull common stock were issued and outstanding. The rights of the holders of Silver Bull common stock are governed by Chapter 78 of the Nevada Revised Statutes, Silver Bull’s articles of incorporation and Silver Bull’s bylaws.
Dividend Rights
Holders of Silver Bull common stock will be entitled to receive dividends when, as and if declared by the Company’s board of directors, and out of funds legally available for their payment. At the present time, the Company does not anticipate paying dividends, cash or otherwise, on Silver Bull common stock in the foreseeable future. Future dividends will depend on the Company’s earnings, if any, the Company’s financial requirements and other factors.
Redemption Rights
Silver Bull common stock is not redeemable or convertible.
Voting Rights
Each holder of Silver Bull common stock is entitled to one vote per share, and all voting rights are vested in the holders of shares of Silver Bull common stock. Holders of shares of common stock will have noncumulative voting rights, which means that the holders of more than 50% of the shares voting for the election of directors will be able to elect 100% of the directors, and the holders of the remaining shares voting for the election of directors will not be able to elect any directors.
Election of Directors
The Company’s directors are elected by a majority vote in a meeting at which a quorum is present. A director candidate that receives a majority of the votes in favor of such candidate will be elected to serve on the Company’s board of directors.
In February 2016, the Company’s board of directors adopted a majority voting policy stipulating that stockholders shall be entitled to vote in favor of, or withhold from voting for, each individual director nominee at a stockholders’ meeting. If the number of shares “withheld” for any nominee exceeds the number of shares voted “for” such nominee, then, notwithstanding that such director was duly elected as a matter of corporate law, he or she shall tender his or her written resignation to the chair of the board. The Corporate Governance and Nominating Committee will consider such offer of resignation and will make a recommendation to the board of directors concerning the acceptance or rejection of the resignation after considering, among other things, the stated reasons, if any, why certain stockholders “withheld” votes for the director, the qualifications of the director and whether the director’s resignation from the board would be in the best interests of the Company. The board of directors must take formal action on the Corporate Governance and Nominating Committee’s recommendation within 90 days and announce its decision by a press release. According to the majority voting policy, the affected director cannot participate in the deliberations of the Corporate Governance and Nominating Committee or the board of directors regarding his or her resignation. The majority voting policy applies only in circumstances involving an uncontested election of directors, meaning an election in which the number of nominees is equal to the number of directors to be elected.
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Liquidation Rights
In the event of the Company’s voluntary or involuntary liquidation, dissolution or winding up, the holders of Silver Bull common stock will be entitled to share equally in any of Silver Bull’s assets available for distribution after the payment in full of all debts and distributions.
No Preemptive or Similar Rights
Under Nevada law, a stockholder of a corporation does not have a preemptive right to acquire the corporation’s unissued shares unless there is a provision to the contrary in the articles of incorporation. The Company’s articles of incorporation do not provide the Company’s stockholders with any preemptive or similar rights.
Transfer Agent
The transfer agent and registrar for Silver Bull common stock is Olympia Trust Company, located at 925 West Georgia Street, Suite 1900, Vancouver, British Columbia V6C 3L2, Canada.
Warrants
As of March 16, 2022, the Company had issued and outstanding warrants to purchase 1,971,289 shares at $0.59 per share, exercisable on October 27, 2020 and expiring on October 27, 2025. In accordance with the terms of the Separation and Distribution Agreement between Silver Bull and Arras, the Company will receive $0.34 of the proceeds from the exercise of each of these warrants and the remaining proceeds will be paid to Arras.
The number of shares of Silver Bull common stock to be received upon the exercise of each warrant may be adjusted from time to time upon the occurrence of certain events, including but not limited to (i) a declaration of a dividend or other distribution in respect of Silver Bull common stock; (ii) a subdivision, redivision or change to the outstanding shares of Silver Bull common stock into a greater number of shares of Silver Bull common stock; (iii) a reduction, combination or consolidation of Silver Bull common stock into a lesser number of shares of Silver Bull common stock; (iv) a rights offering to subscribe for or purchase Silver Bull common stock or securities convertible into or exchangeable for Silver Bull common stock; and (v) a reorganization, reclassification, consolidation, amalgamation, arrangement or merger of the Company with or into any other corporation or entity, or a sale, lease, exchange or transfer of substantially all of the undertaking of assets of the Company, or similar event.
Anti-Takeover Provisions in the Company’s Articles of Incorporation and Bylaws
The Company’s articles of incorporation and bylaws also contain provisions that the Company describes in the following paragraphs, which may delay, defer, discourage, or prevent a change in control of the Company, the removal of the Company’s existing management or directors, or an offer by a potential acquirer to the Company’s stockholders, including an offer by a potential acquirer at a price higher than the market price for the stockholders’ shares.
Among other things, Silver Bull’s articles of incorporation and bylaws:
| · | provide that vacancies on the board of directors may be filled by the vote of a two-thirds (2/3) majority of the directors then in office or in the case of a vacancy by resignation or death, by the majority of directors then in office; |
| · | establish advance notice procedures with regard to stockholder proposals relating to the nomination of candidates for election as directors or new business to be brought before meetings of the Company’s stockholders. These procedures provide that notice of stockholder proposals must be timely given in writing to the Company’s corporate secretary prior to the meeting at which the action is to be taken. Generally, to be timely, notice must be received at the Company’s principal executive offices not less than 120 days prior to the first anniversary of the prior year’s annual meeting (or, in the case of a special meeting, a reasonable time before the Company begins to print and send its proxy materials). The Company’s bylaws specify the information that must be included in a stockholder’s notice. These requirements may prevent stockholders from bringing matters before the stockholders at an annual or special meeting; |
| · | provide that stockholders may not act by written consent in lieu of a meeting; |
| · | provide that stockholders are not permitted to call special meetings of stockholders. Only the board of directors, by a two-thirds (2/3) majority vote, and the Company’s president are permitted to call a special meeting of stockholders; and |
| · | provide that the Company’s board of directors, by a two-thirds (2/3) majority vote, may amend or repeal the Company’s bylaws without further stockholder approval unless otherwise required by law, and provide that a stockholder amendment to the bylaws requires a favorable vote of sixty-six and two-thirds percent (66 2/3%) of the Company’s outstanding voting shares then entitled to vote at an election of directors. |
Exhibit 31.1
Certification
of CEO Pursuant to Exchange Act Rules 13a-14 and 15d-14,
as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, Timothy Barry, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Silver Bull Resources, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Dated: March 16, 2022 | By: | /s/ Timothy Barry |
|
Timothy Barry, Chief Executive Officer (Principal Executive Officer) | ||
Exhibit 31.2
Certification
of CFO Pursuant to Exchange Act Rules 13a-14 and 15d-14,
as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, Christopher Richards, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q of Silver Bull Resources, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Dated: March 16, 2022 | By: | /s/ Christopher Richards |
|
Christopher Richards, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | ||
Exhibit 32.1
CERTIFICATION OF CEO PURSUANT TO 18 U.S.C.
SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), the undersigned officer of Silver Bull Resources, Inc. (the “Company”) does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the quarterly period ended January 31, 2022 (the “Report”) that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: March 16, 2022 | By: | /s/ Timothy Barry | ||
|
Timothy Barry, Chief Executive Officer (Principal Executive Officer) | ||||
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code). It shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (15 U.S.C. Section 78r) or otherwise subject to the liability of that section. It shall also not be deemed incorporated by reference into any filing under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, except to the extent that the Company specifically incorporates it by reference.
Exhibit 32.2
CERTIFICATION OF CFO PURSUANT TO 18 U.S.C.
SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code), the undersigned officer of Silver Bull Resources, Inc. (the “Company”) does hereby certify with respect to the Quarterly Report of the Company on Form 10-Q for the quarterly period ended January 31, 2022 (the “Report”) that:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Dated: March 16, 2022 | By: | /s/ Christopher Richards | ||
|
Christopher Richards, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | ||||
The foregoing certification is being furnished solely pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350 of Chapter 63 of Title 18 of the United States Code). It shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934 (15 U.S.C. Section 78r) or otherwise subject to the liability of that section. It shall also not be deemed incorporated by reference into any filing under the Securities Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, except to the extent that the Company specifically incorporates it by reference.