Silver Bow Mining Corp. Announces Agreement to Acquire Montana Tunnels Assets

What Happened
Silver Bow Mining Corp. (SBMT) announced on August 24, 2026 that its wholly owned subsidiary Silver Bow Tunnels Corp. (SBTC) entered an asset purchase agreement (APA) to acquire certain assets of Montana Tunnels Mine and the Diamond Hill Mill from Montana Tunnels Mining, Inc. (MTMI) and Montana Goldfields, Inc. (MTGF). The deal is being completed through MTMI’s Chapter 11 process (MTMI filed July 27, 2026) and is expected to proceed under Section 363 of the U.S. Bankruptcy Code subject to U.S. Bankruptcy Court approval. On August 24, 2026 the company funded an escrow of approximately $28.6 million to cover specified creditor claims; those funds will be released at the initial court-approved closing or returned if the court Final Order is not issued by September 30, 2026.

Key Details

• Escrow funding: ~$28.6 million funded Aug 24, 2026 (≈ $20.8M to Montana DEQ; ≈ $4.27M to Jefferson County). Escrow released at First Closing or returned if no Final Order by Sept 30, 2026.
• Structure & consideration: At First Closing excess escrow cash (if any) becomes a Cash Payment for which MTGF will issue a senior secured promissory Note (no interest except 10% on unpaid principal at maturity) and related security documents; prior $1.0M secured note will be extinguished and credited. Note matures on certain defaults, MTGF breach, or Nov 30, 2026 at 5:00 p.m. Denver time.
• Contingent equity: Company will issue 3,500,000 Final Closing CVRs and 11,500,000 Deferred Compensation CVRs (total 15,000,000 CVRs). Final Closing CVRs convert to shares 180 days after Final Closing; Deferred CVRs convert on specified M‑Pit feasibility, construction or commercial production milestones (conversion triggers and anti‑dilution rules apply). CVRs issued under Section 4(a)(2) exemption (unregistered).
• Royalties and agreements: 2% NSR on lode production (MTGF) with one‑time buyout right of $10M (half of buydown price can expire under timing conditions); toll‑milling agreement for up to 7,019 tons/week at Diamond Hill Mill (fee = direct costs + tailings costs + amortized tailings capital + 15%); tailings and Clancy Creek net profits interests with staged profit splits (25% until 1.5x return, then higher percentages).
• Work programs & approvals: SBMT commits $5M toward an M‑Pit Feasibility Study and $3M for Clancy Creek bypass engineering. Final Closing requires Bankruptcy Court Final Order, necessary governmental approvals, shareholder approval of CVR issuance and NYSE American approval.

Why It Matters
This is a material acquisition that would add the Montana Tunnels mine assets and milling capacity to Silver Bow’s portfolio and creates immediate financial commitments (the ~$28.6M escrow and secured Note) plus contingent equity and royalty obligations. Key near‑term events for investors include Bankruptcy Court approval, shareholder vote to approve CVR issuance, and NYSE American clearance — any of which could affect timing or completion. The CVRs create potential future dilution tied to project milestones rather than immediate share issuance; royalties and tolling arrangements will affect future revenue share and processing economics if production resumes. Investors should watch the court process, the results and timing of the M‑Pit Feasibility Study, and the shareholder/NYSE approvals described in the filing.