Mr. Graham Hill reports

SILVER BEAR PROVIDES MANGAZEISKY SILVER PROJECT AND MANAGEMENT UPDATE

Silver Bear Resources Inc. has provided an update on the Mangazeisky silver project and has entered certain agreements in principle with its major shareholders, A.B. Aterra Resources Ltd. and Inflection Management Corp. Ltd.

Financial and operational update

Silver Bear, Aterra and Inflection have principally agreed a revised financing package and development schedule to increase the company's financial flexibility and enable it to reach commissioning in mid-2017. The company will announce a proposed date for production once permitting and commissioning are completed.

Aterra and Inflection have agreed in principle to increase the previously provided project facilities by a further $15-million (U.S.). This provides an additional working capital buffer of $10-million (U.S.) to meet expenses during the rescheduled ramp-up plus a discretionary $5-million (U.S.) cost overrun facility should that be required.

Aterra and Inflection have also agreed in principle to extend the maturity dates of their outstanding convertible notes from March 31, 2017, to Dec. 31, 2017. The note extension will provide the company with additional time to finalize a beneficial restructuring of Aterra and Inflection's outstanding convertible notes as previously advised and support the company's pursuit of additional equity financing to reduce leverage once the production schedule is certain.

In addition, Silver Bear will reschedule the commissioning of the project by several months to a new commissioning date mid-2017. This will allow for company to complete all outstanding permitting and finalize outdoor construction during the summer months. The company will provide more precise dates once it has more visibility on the final components of the mine permitting process.

The primary drivers of the production reschedule have been the previously announced equipment delays caused by transportation barges being frozen in the river by an early cold spell, which had a knock-on impact on the overall production schedule. The company is still awaiting final grant of its cyanide and certain other permits, and cannot complete ordering and delivery of the cyanide stocks without the permit. As granting of the permit is now likely to occur too late to deliver stocks to site on the winter road, management, along with Aterra and Inflection, deemed it prudent to reschedule the ramp-up to allow the company to finalize the full construction and commissioning and to provide the company with sufficient working capital to execute the revised plan while final permitting is completed.

The project development is currently 65 per cent complete, with major works such as the plant building completed, heating system commissioned, first of the main generators commissioned and the ball mill currently undergoing final alignment checks before being cold commissioned. Leach tank assembly is continuing, and other process equipment is being installed. Work has continued during the winter on fuel and water tanks outside the process plant and on the ore feedbins and conveyors. Waste stripping work has also been continuing from the open pit. The drilling of the water supply wells has been completed, and testing of the wells is due to start. Road construction has also continued during winter, and the completion of the long-term winter road will ensure the project's supply route. Winter road deliveries started in mid-November and will continue until mid-April. The supply of operational materials is part of the continuing logistics challenge, but the company is confident that it will be able to meet the revised schedule as well as the continuing needs of the mine.

The facilities agreement increase and note extension are subject to the approval of the Toronto Stock Exchange and potentially to shareholder approval. The parties will now work to settle definitive agreements with respect to the facilities agreement increase and note extension.

Silver Bear's chief executive officer, Graham Hill, commented: "I am very proud of our team and what they have accomplished over the past year, despite challenges faced with the early onset of winter hindering supply logistics. After deliberation, it has been agreed that the best strategy is to reschedule the project commissioning several months to June, 2017, as this ensures that construction and permitting are fully completed for production ramp-up. In addition, I want to thank our major shareholders for their continued support, and in principle agreements to modify their existing facilities and loan notes to ensure that the company's transition into production can be achieved within a manageable time frame."

Management update

Also, the contract of Derk Hartman, chief financial officer, has, by mutual agreement, not been extended, and Mr. Hartman now intends to leave the company to pursue other opportunities once a suitable replacement has been found.

Mr. Hartman has agreed to remain with the company in his current role until June 30, 2017, in order to ensure a smooth transition following the search and appointment of his replacement.

Mr. Hill commented: "We greatly appreciate Derk's contribution to Silver Bear over the past two years. The company has benefited from Derk's expertise and commitment in navigating the transition from exploration through to project construction and driving the company's organizational changes. While we are saddened to see Derk go, we wish him continued success in the next phase of his career. Silver Bear will make an announcement on appointment of a suitable replacement."

About Silver Bear Resources Inc.

Silver Bear is focused on the development of its wholly owned Mangazeisky silver project, covering a licence area of approximately 570 square kilometres that includes the high-grade Vertikalny deposit (amongst the highest-grade silver deposits in the world), located 400 kilometres north of Yakutsk in the Republic of Sakha within the Russian Federation. The company was granted a 20-year mining licence for the Vertikalny deposit in September, 2013, and recently updated its feasibility study in the fourth quarter of 2016.

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