Silver Bull Resources Inc (SVBL)

[basserdan]

Silver Bull Announces Completion Of Distribution Of Arras Minerals Shares To Silver Bull Shareholders

Vancouver, British Columbia – September 27, 2021 - Silver Bull Resources, Inc. (OTCQB: SVBL, TSX: SVB) (“Silver Bull” or the “Company”) is pleased to announce the completion of the previously announced distribution of shares of Arras Minerals Corp. (“Arras”) to Silver Bull shareholders (the “Distribution”).

The Distribution was effective as of September 24, 2021. Pursuant to the Distribution, shareholders of Silver Bull common stock as of September 10, 2021 were entitled to receive one common share of Arras for each share of Silver Bull common stock held as of that date.

In connection with the Distribution, Silver Bull’s shareholders were issued a total of 34,547,838 common shares of Arras, collectively representing approximately 84% of Arras, on a non-diluted basis. Silver Bull continues to own approximately 4% of Arras, on a non-diluted basis. The remaining approximately 12% of Arras is held by those who participated in Arras’ private placement in April 2021.

Registered Silver Bull shareholders holding physical share certificates or shares in book-entry form with the Company’s transfer agent (Olympia Trust Company) were issued Arras shares in book-entry form. Silver Bull shareholders who hold their shares of Silver Bull stock through a bank, broker or other nominee had or will have their Arras shares credited to their accounts by their bank, broker or other nominee. For questions relating to the transfer or mechanics of the Distribution, please contact Olympia Trust Company by telephone at 1-833-684-1546 (toll free in North America) or by online inquiry at [e-mail].

Arras is not currently listed on a public stock exchange but will report under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), as a non-U.S. company with foreign private issuer status. The Arras shares distributed to Silver Bull shareholders, though freely transferable in the United States, may be illiquid until such time as the shares are listed or a trading market develops, if at all. The Distribution of Arras shares by Silver Bull constitutes a distribution of securities that is exempt from the prospectus requirements of Canadian securities legislation. As such, the first trade in Arras shares in Canada will be a distribution for the purposes of Canadian securities laws and subject to prospectus requirements unless certain conditions are satisfied. Until such conditions are satisfied, Arras shares may only be resold in Canada pursuant to an exemption from prospectus requirements. Silver Bull warrants and options will also be adjusted pursuant to the Distribution. For further details regarding the Canadian resale restrictions on the Arras shares distributed by Silver Bull and the adjustments being made to Silver Bull warrants and options in connection with the Distribution, please refer to the Registration Statement on Form 20-F of Arras filed on September 1, 2021 with the U.S. Securities and Exchange Commission (the “SEC”) on EDGAR at www.sec.gov/edgar (the “20-F”).

Tax Implications

The following discussion is qualified in its entirety by the discussion of tax matters set forth in the 20-F. Silver Bull shareholders who were entitled to receive the Distribution of Arras shares should make reference to that discussion for further details regarding the tax consequences of the Distribution.

For U.S. federal income tax purposes, the receipt of Arras common shares by Silver Bull shareholders should be treated as a distribution of property in an amount equal to the fair market value of the common shares received. The Distribution of Arras common shares should be treated as dividend income to the extent considered paid out of Silver Bull’s current and accumulated earnings and profits. Distributions in excess of Silver Bull’s current and accumulated earnings and profits will be treated as a non-taxable return of capital to the extent of the holder’s basis in its Silver Bull shares and thereafter as capital gain. Silver Bull will not be able to determine the amount of the Distribution that will be treated as a dividend until after the close of the taxable year of the Distribution because its current year earnings and profits will be calculated based on its income for the entire taxable year in which the Distribution occurs. However, based on current projections, it is reasonably expected that a portion of the Distribution of Arras common shares should be treated as a return of capital rather than a dividend. Silver Bull’s tax year-end is October 31, and as such, the Company expects to advise shareholders of these determinations by no later than January 31, 2022.

For Canadian tax purposes, the Distribution of Arras shares is considered a dividend in kind on the Silver Bull shares to shareholders resident in Canada. Such shareholders will be required to include in computing their income for a taxation year the amount of such dividend (equal to the fair market value of the Arras shares received). A dividend in kind of the Arras shares paid in respect of the Silver Bull shares to a shareholder who is not a resident of Canada will not be subject to Canadian withholding tax or other income tax under the Income Tax Act (Canada).

Management Focus

Silver Bull is continuing to focus on the Sierra Mojada asset and surrounding area in Mexico and managing the joint venture option with South32. It continues to trade under the symbol “SVB” on the TSX and “SVBL” on the OTCQB. The current management and board are remaining in place to continue to run the Company.

Arras is focused on the Beskauga deposit located in Kazakhstan along with additional exploration licenses held or under application in the country. In addition, current Silver Bull management and directors have been appointed as management and directors of Arras, along with G. Wesley Carson as an additional independent director.

Both companies remain headquartered in Vancouver.

On behalf of the Board of Directors
“Tim Barry”

Tim Barry, CPAusIMM
Chief Executive Officer, President and Director

INVESTOR RELATIONS:
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https://silverbullresources.com/news/silver-bull-announces-completion-of-distribution-of-arras-minerals-shares-to-silver-bull-shareholders/