Silver Mines has completed the $26 million buyback and extinguishment of two private royalties over its Bowdens Silver Project, paying $18 million in cash and issuing $8 million in shares. The move removes the royalty interests over EL5920 as the project enters its next approvals phase.
- $26 million Bowdens royalty consolidation completed
- $18 million cash and $8 million in shares paid
- Two royalty interests over EL5920 removed
- 55.17 million shares issued at A$0.145 each
- NSW planning hearing is the next major milestone
Silver Mines Limited (ASX:SVL) has completed a $26 million clean-up of the Bowdens Silver Project’s royalty structure, removing two private interests over the key EL5920 tenement. The consideration comprised $18 million in cash and $8 million in newly issued Silver Mines shares, giving the company greater direct exposure to any future economic returns from the project.
Two Bowdens royalties extinguished
The completed transactions cover a 2% net smelter royalty held by Royalco Resources, which reduces to 1% after the first US$5 million of revenue, and a 1% gross revenue royalty held through Asia Metals 4. The latter only begins after the first 20 million ounces of silver has been produced.
Silver Mines paid A$10 million in cash and issued A$7.5 million of shares for the Fitzroy royalty. It paid a further A$8 million in cash and issued A$500,000 of shares to acquire Asia Metals, the company that owns the second royalty. In total, 55,172,414 shares were issued at A$0.145 each using Silver Mines’ existing Listing Rule 7.1 capacity.
Bowdens moves towards planning decision
The royalty consolidation improves the simplicity of Bowdens’ commercial structure, but it does not remove the project’s larger development hurdles. Silver Mines said its Definitive Feasibility Study is complete and that work is continuing through the approvals pathway, with the upcoming NSW Independent Planning Commission public hearing now the immediate focus.
Bowdens is located about 26 kilometres east of Mudgee in central New South Wales. Silver Mines describes it as Australia’s largest undeveloped silver deposit, while the wider project area covers 2,115 square kilometres of titles. Those descriptions speak to the scale of the opportunity, but the filing does not provide an updated project valuation or quantify the present value of the royalty obligations now removed.
Managing Director Jo Battershill called the buybacks a “significant milestone” and said the company was focused on progressing Bowdens through its approvals and development milestones. The next test is therefore less about commercial housekeeping and more about whether the project can clear the planning process and move towards the financing and construction decisions that would give the extinguished royalties practical value.
Bottom Line?
The royalty burden is now simpler, but Bowdens still needs planning approval and subsequent development funding before that greater exposure can translate into production returns.
Questions in the middle?
- What conditions, if any, will the NSW Independent Planning Commission attach to a Bowdens approval?
- How will the extinguished royalties change the project’s updated economic metrics?
- Can Silver Mines fund the remaining development pathway without further material dilution?