Baker Steel Resources Trust has bought $2.5m of convertible loans to ZAO Argentum and 500 shares in Polar Silver Resources Limited for £ 1.32m. It is paying for this by issuing 2,259,357 new ordinary shares at 58.5p (equivalent to the latest NAV).
Polar Silver is a holding company which holds 100% of ZAO Argentum, which in turn is the holder of a 50% interest in the Prognoz silver project in Russia. An independent consultant reckons that the project has an estimated 5.86m tonnes of ore, grading at 773 g/t silver = 146m ounces of silver (indicated). The consultant also reckoned that a mine could produce an average of 13m ounces of silver per annum over 16 years, with peak production of 24m ounces of silver in year 4 (which is clever as this equates to 208m ounces of production from an indicated resource of 146m ounces).
After this deal, Baker Steel Resources Trust has a potential 21.2% interest in Polar Silver (assuming conversion of the convertible loans they have made to ZAO Argentum and Polar Silver)