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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Silver Bull Resources Inc (QB) | USOTC:SVBL | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.11 | 0.10 | 0.1239 | 0.00 | 13:13:59 |
R
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED
January 31, 2019
.
|
£
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO _________.
|
Nevada
|
91-1766677
|
State or other jurisdiction of incorporation or organization
|
(I.R.S.
Employer Identification No.)
|
Large accelerated filer
☐
|
Accelerated filer
☐
|
|
Non-accelerated filer
☐
|
Smaller reporting company
R
|
|
Emerging growth company
☐
|
|
Page
|
PART I – FINANCIAL INFORMATION
|
1
|
ITEM 1. FINANCIAL STATEMENTS.
|
1
|
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
|
17
|
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
|
24
|
ITEM 4. CONTROLS AND PROCEDURES.
|
24
|
PART II – OTHER INFORMATION
|
25
|
ITEM 1. LEGAL PROCEEDINGS.
|
25
|
ITEM 1A. RISK FACTORS.
|
25
|
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.
|
25
|
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
|
25
|
ITEM 4. MINE SAFETY DISCLOSURES.
|
25
|
ITEM 5. OTHER INFORMATION.
|
25
|
ITEM 6. EXHIBITS.
|
26
|
SIGNATURES
|
27
|
Three Months Ended
January 31,
|
||||||||
2019
|
2018
|
|||||||
REVENUES
|
$
|
—
|
$
|
—
|
||||
EXPLORATION AND PROPERTY HOLDING COSTS
|
||||||||
Exploration and property holding costs
|
458,029
|
174,104
|
||||||
Depreciation
|
7,217
|
7,117
|
||||||
TOTAL EXPLORATION AND PROPERTY HOLDING
COSTS
|
465,246
|
181,221
|
||||||
GENERAL AND ADMINISTRATIVE EXPENSES
|
||||||||
Personnel
|
173,207
|
132,297
|
||||||
Office and administrative
|
125,892
|
98,966
|
||||||
Professional services
|
64,881
|
51,910
|
||||||
Directors’ fees
|
54,465
|
42,014
|
||||||
Provision for uncollectible value-added taxes (Note 6)
|
9,316
|
19,402
|
||||||
TOTAL GENERAL AND ADMINISTRATIVE EXPENSES
|
427,761
|
344,589
|
||||||
LOSS FROM OPERATIONS
|
(893,007
|
)
|
(525,810
|
)
|
||||
OTHER INCOME (EXPENSES)
|
||||||||
Interest income
|
119
|
640
|
||||||
Interest and finance costs
|
—
|
(949
|
)
|
|||||
Foreign currency transaction gain (loss)
|
5,831
|
(2,973
|
)
|
|||||
Change in fair value of stock option liability (Note 11)
|
1,791
|
(8,041
|
)
|
|||||
Change in fair value of warrant derivative liability (Note 12)
|
(114,413
|
)
|
(1,598,344
|
)
|
||||
Miscellaneous income
|
—
|
225
|
||||||
TOTAL OTHER INCOME (EXPENSES)
|
(106,672
|
)
|
(1,609,442
|
)
|
||||
LOSS BEFORE INCOME TAXES
|
(999,679
|
)
|
(2,135,252
|
)
|
||||
INCOME TAX EXPENSE
|
1,672
|
1,326
|
||||||
NET LOSS AND COMPREHENSIVE LOSS
|
$
|
(1,001,351
|
)
|
$
|
(2,136,578
|
)
|
||
BASIC AND DILUTED NET LOSS PER COMMON SHARE
|
$
|
—
|
$
|
(0.01
|
)
|
|||
BASIC AND DILUTED WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
|
234,872,562
|
199,425,252
|
Common Stock | Additional | Other | Total | |||||||||||||||||||||
Number of
Shares
|
Amount |
Paid-in
Capital
|
Accumulated
Deficit
|
Comprehensive
Income
|
Stockholders’
Equity
|
|||||||||||||||||||
Balance, October 31, 2018
|
234,868,214
|
$
|
2,348,682
|
$
|
133,015,768
|
$
|
(125,855,030
|
)
|
$
|
92,248
|
$
|
9,601,668
|
||||||||||||
Issuance of common stock as follows:
|
||||||||||||||||||||||||
- Exercise of warrants at a price of Canadian dollar (“$CDN”) 0.13 per share less costs of $70 (Note 10)
|
400,000
|
4,000
|
35,348
|
—
|
—
|
39,348
|
||||||||||||||||||
Earn-in option agreement (Note 4)
|
—
|
—
|
1,046,000
|
—
|
—
|
1,046,000
|
||||||||||||||||||
Reclassification to additional paid-in capital upon exercise of warrants at price of $CDN 0.13 (Note 12)
|
—
|
—
|
3,032
|
—
|
—
|
3,032
|
||||||||||||||||||
Stock option and warrants activity as follows: | ||||||||||||||||||||||||
- Stock-based compensation for options issued to directors, officers, employees and consultants (Note 11)
|
—
|
—
|
61,911
|
—
|
—
|
61,911
|
||||||||||||||||||
Net loss for the three month period ended January 31, 2019
|
—
|
—
|
—
|
(1,001,351
|
)
|
—
|
(1,001,351
|
)
|
||||||||||||||||
Balance, January 31, 2019
|
235,268,214
|
$
|
2,352,682
|
$
|
134,162,059
|
$
|
(126,856,381
|
)
|
$
|
92,248
|
$
|
9,750,608
|
Three Months Ended
January 31,
|
||||||||
2019
|
2018
|
|||||||
CASH FLOWS FROM OPERATING ACTIVITIES:
|
||||||||
Net loss
|
$
|
(1,001,351
|
)
|
$
|
(2,136,578
|
)
|
||
Adjustments to reconcile net loss to net cash used by operating activities:
|
||||||||
Depreciation
|
7,217
|
7,117
|
||||||
Provision for uncollectible value-added taxes
|
9,316
|
19,402
|
||||||
Foreign currency transaction gain
|
(9,288
|
)
|
(7,518
|
)
|
||||
Change in fair value of warrant derivative liability (Note 12)
|
114,413
|
1,598,344
|
||||||
Change in fair value of stock option liability (Note 11)
|
(1,791
|
)
|
8,041
|
|||||
Stock options issued for compensation
|
61,911
|
31,620
|
||||||
Changes in operating assets and liabilities:
|
||||||||
Value-added tax receivable
|
(29,068
|
)
|
(11,887
|
)
|
||||
Income tax receivables
|
(181
|
)
|
(2,925
|
)
|
||||
Other receivables
|
(6,634
|
)
|
163
|
|||||
Prepaid expenses and deposits
|
86,624
|
(10,995
|
)
|
|||||
Accounts payable
|
(99,449
|
)
|
(17,178
|
)
|
||||
Accrued liabilities and expenses
|
(235,966
|
)
|
(35,395
|
)
|
||||
Income tax payable
|
(3,200
|
)
|
1,000
|
|||||
Net cash used in operating activities
|
(1,107,447
|
)
|
(556,789
|
)
|
||||
CASH FLOWS FROM INVESTING ACTIVITIES:
|
||||||||
Acquisition of property concessions (Note 8)
|
(11,820
|
)
|
(15,541
|
)
|
||||
Net cash used in investing activities
|
(11,820
|
)
|
(15,541
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES:
|
||||||||
Property concessions funding (Note 4)
|
1,046,000
|
—
|
||||||
Proceeds from exercise of warrants, net of costs (Note 10)
|
39,348
|
94,634
|
||||||
Net cash provided by financing activities
|
1,085,348
|
94,634
|
||||||
Effect of exchange rates on cash and cash equivalents
|
2,277
|
6,490
|
||||||
Net decrease in cash and cash equivalents
|
(31,642
|
)
|
(471,206
|
)
|
||||
Cash and cash equivalents beginning of period
|
3,025,839
|
681,776
|
||||||
Cash and cash equivalents end of period
|
$
|
2,994,197
|
$
|
210,570
|
Three Months Ended
January 31,
|
||||||||
2019
|
2018
|
|||||||
SUPPLEMENTAL CASH FLOW DISCLOSURES:
|
||||||||
Income taxes paid
|
$
|
—
|
$
|
1,072
|
||||
Interest paid
|
—
|
949
|
||||||
NON-CASH INVESTING AND FINANCING ACTIVITIES:
|
||||||||
Common stock issuance costs included in accounts payable and accrued liability
|
$
|
—
|
$
|
220
|
Assets:
|
Mexico
|
|||
Cash and cash equivalents
|
$
|
101,000
|
||
Value-added tax receivable, net
|
206,000
|
|||
Other receivables
|
1,000
|
|||
Prepaid expenses and deposits
|
9,000
|
|||
Office and mining equipment, net
|
194,000
|
|||
Property concessions
|
5,032,000
|
|||
Total assets
|
$
|
5,543,000
|
Liabilities:
|
||||
Accounts payable
|
2,000
|
|||
Accrued liabilities and expenses
|
65,000
|
|||
Payable to Silver Bull Resources, Inc. to be converted to equity upon exercise of the Option
|
3,376,000
|
|||
Total liabilities
|
$
|
3,443,000
|
||
Net advances and investment in the Company’s Mexican subsidiaries
|
$
|
2,100,000
|
Allowance for uncollectible VAT – October 31, 2018
|
$
|
98,414
|
||
Provision for VAT receivable allowance
|
9,316
|
|||
Foreign currency translation adjustment
|
5,666
|
|||
Write-off of VAT receivable
|
717
|
|||
Allowance for uncollectible VAT – January 31, 2019
|
$
|
114,113
|
January 31,
|
October 31,
|
|||||||
2019
|
2018
|
|||||||
Mining equipment
|
$
|
358,513
|
$
|
358,513
|
||||
Vehicles
|
73,287
|
73,287
|
||||||
Buildings and structures
|
185,724
|
185,724
|
||||||
Computer equipment and software
|
74,236
|
74,236
|
||||||
Well equipment
|
39,637
|
39,637
|
||||||
Office equipment
|
47,597
|
47,597
|
||||||
778,994
|
778,994
|
|||||||
Less: Accumulated depreciation
|
(584,725
|
)
|
(577,508
|
)
|
||||
Office and mining equipment, net
|
$
|
194,269
|
$
|
201,486
|
Property concessions –October 31, 2018
|
$
|
5,019,927
|
||
Acquisitions
|
11,820
|
|||
Property concessions – January 31, 2019
|
$
|
5,031,747
|
Goodwill – January 31, 2019 and October 31, 2018
|
|
$
|
2,058,031
|
Options
|
Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Life (Years)
|
Aggregate Intrinsic Value
|
||||||||||||
Outstanding at October 31, 2018
|
18,950,000
|
$
|
0.11
|
3.48
|
$
|
429,158
|
||||||||||
Cancelled
|
(183,334
|
)
|
0.10
|
|||||||||||||
Outstanding at January 31, 2019
|
18,766,666
|
$
|
0.11
|
3.19
|
$
|
546,447
|
||||||||||
Exercisable at January 31, 2019
|
12,375,000
|
$
|
0.12
|
2.61
|
$
|
395,396
|
Options Outstanding
|
Options Exercisable
|
|||||||||||||||||||||
Exercise Price
|
Number
Outstanding
|
Weighted Average Remaining Contractual Life (Years)
|
Weighted Average Exercise Price
|
Number Exercisable
|
Weighted Average Exercise
Price
|
|||||||||||||||||
$
|
0.06
|
4,075,000
|
2.06
|
$
|
0.06
|
4,075,000
|
$
|
0.06
|
||||||||||||||
0.10
|
11,716,666
|
4.09
|
0.10
|
5,325,000
|
0.10
|
|||||||||||||||||
0.16
|
350,000
|
4.05
|
0.16
|
350,000
|
0.16
|
|||||||||||||||||
0.19 – 0.26
|
2,625,000
|
0.81
|
0.25
|
2,625,000
|
0.25
|
|||||||||||||||||
$
|
0.06 – 0.26
|
18,766,666
|
3.19
|
$
|
0.11
|
12,375,000
|
$
|
0.12
|
Stock option liability at October 31, 2018:
|
$
|
25,116
|
||
Change in fair value of stock option liability
|
(1,791
|
)
|
||
Stock option liability at January 31, 2019
|
$
|
23,325
|
Warrants
|
Shares
|
Weighted Average Exercise Price
|
Weighted Average Remaining Contractual Life (Years)
|
Aggregate Intrinsic Value
|
||||||||||||
Outstanding and exercisable at October 31, 2019
|
36,300,230
|
$
|
0.13
|
1.16
|
$
|
254,068
|
||||||||||
Exercised
|
(400,000
|
)
|
$
|
0.10
|
||||||||||||
Outstanding and exercisable at January 31, 2019
|
35,900,230
|
$
|
0.13
|
0.91
|
$
|
367,831
|
||||||||||
Warrant derivative liability at October 31, 2018:
|
$
|
405,500
|
||
Change in fair value of warrant derivative liability
|
114,413
|
|||
Reclassification to additional paid-in capital upon exercise of warrants
|
(3,032
|
)
|
||
Warrant derivative liability at January 31, 2019
|
$
|
516,881
|
|
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).
|
January 31, 2019
|
||||||||||||
Liability
|
Level 1
|
Level 2
|
Level 3
|
|||||||||
Stock option liability
|
$
|
—
|
$
|
—
|
$
|
23,325
|
||||||
Warrant derivative liability
|
$
|
—
|
$
|
—
|
$
|
516,881
|
For the Three Months Ended
|
||||||||
January 31,
|
||||||||
2019
|
2018
|
|||||||
Mexico
|
$
|
(469,000
|
)
|
$
|
(201,000
|
)
|
||
Canada
|
(532,000
|
)
|
(1,936,000
|
)
|
||||
Net Loss
|
$
|
(1,001,000
|
)
|
$
|
(2,137,000
|
)
|
|
Canada
|
Mexico
|
Total
|
|||||||||
Cash and cash equivalents
|
$
|
2,893,000
|
$
|
101,000
|
$
|
2,994,000
|
||||||
Value-added tax receivable, net
|
-
|
206,000
|
206,000
|
|||||||||
Other receivables
|
17,000
|
1,000
|
18,000
|
|||||||||
Prepaid expenses and deposits
|
141,000
|
10,000
|
151,000
|
|||||||||
Office and mining equipment, net
|
-
|
194,000
|
194,000
|
|||||||||
Property concessions
|
-
|
5,032,000
|
5,032,000
|
|||||||||
Goodwill
|
-
|
2,058,000
|
2,058,000
|
|||||||||
|
$
|
3,051,000
|
$
|
7,602,000
|
$
|
10,653,000
|
|
Canada
|
Mexico
|
Total
|
|||||||||
Cash and cash equivalents
|
$
|
2,993,000
|
$
|
33,000
|
$
|
3,026,000
|
||||||
Value-added tax receivable, net
|
-
|
175,000
|
175,000
|
|||||||||
Other receivables
|
11,000
|
1,000
|
12,000
|
|||||||||
Prepaid expenses and deposits
|
226,000
|
11,000
|
237,000
|
|||||||||
Office and mining equipment, net
|
-
|
202,000
|
202,000
|
|||||||||
Property concessions
|
-
|
5,020,000
|
5,020,000
|
|||||||||
Goodwill
|
-
|
2,058,000
|
2,058,000
|
|||||||||
|
$
|
3,230,000
|
$
|
7,500,000
|
$
|
10,730,000
|
· |
Future payments that may be made by South32 under the terms of the Earn-In 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 2019 and beyond, including with respect to exploration and drilling, metallurgical studies, surveys and other testing activities, and expenditures;
|
· |
Whether any part of the Sierra Mojada Project will ever be confirmed or converted into SEC Industry Guide 7-compliant “reserves”;
|
· |
Testing of the impact of the fine bubble flotation test work on the recovery of minerals;
|
· |
The impact of recent accounting pronouncements on our financial position, results of operations or cash flows and disclosures;
|
· |
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 changes to current state or federal laws and regulations on estimated capital expenditures, the economics of a particular project and/or our activities;
|
· |
Our expectations regarding future recovery of value-added taxes (“VAT”) paid in Mexico;
|
· |
The period during which unrecognized compensation expense is expected to be recognized;
|
· |
Whether using major financial institutions with high credit ratings mitigates credit risk;
|
· |
The impact of changing economic conditions on interest rates;
|
· |
The possible impact of events in Mexico on the Company’s operations; and
|
· |
The merits of any claims in connection with, and the expected timing of any, ongoing legal proceedings.
|
· |
The continued funding by South32 of amounts required under the Earn-In 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;
|
· |
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;
|
· |
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 and 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.
|
(a) |
Evaluation of Disclosure Controls and Procedures.
|
(b) |
Changes in
Internal Control over Financial Reporting
|
101.LAB*
|
XBRL Labels Linkbase Document
|
X
|
101.PRE*
|
XBRL Presentation Linkbase Document
|
X
|
||||||
X
|
Filed herewith
|
|||||||
XX
|
Furnished herewith
|
SILVER BULL RESOURCES, INC.
|
||
Dated: March 15, 2019
|
By:
|
/s/ Timothy Barry
|
|
Timothy Barry
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President and Chief Executive Officer
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(Principal Executive Officer)
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Dated: March 15, 2019
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By:
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/s/ Sean Fallis
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Sean Fallis
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||
Chief Financial Officer
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||
(Principal Financial Officer and Principal Accounting Officer)
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1 Year Silver Bull Resources (QB) Chart |
1 Month Silver Bull Resources (QB) Chart |
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