Mr. Graham Hill reports

SILVER BEAR RECEIVES US$42.9 MILLION ON ITS TRANCHE DRAWDOWN UNDER THE FACILITIES AGREEMENT

Silver Bear Resources Inc. and closed joint stock company Zao Prognoz, the company's indirect wholly owned Russian subsidiary, have received $42,924,995 (U.S.) on drawdown of the tranche A proceeds under the previously announced facilities agreement dated Sept. 5, 2016, with the company's major shareholders, Inflection Management Corp. Ltd. and A.B. Aterra Resources Ltd., with respect to the financing of the final development, construction and commissioning of the company's Mangazeisky silver project.

The tranche A term loan facility of approximately $42.9-million (U.S.) consisted of approximately $30.44-million (U.S.) provided by Inflection and $12.47-million (U.S.) provided by Aterra. A total of $32.9-million (U.S.) of the tranche A proceeds was made available to the company, and $10-million (U.S.) of the tranche A proceeds was made available to Prognoz. On drawdown, the company used approximately $32.9-million (U.S.) of the tranche A proceeds to repay, by means of set-off, the principal and accrued interest on certain outstanding promissory notes previously issued by the company to Inflection and Aterra, as required under the terms of the facilities agreement. The remaining $10-million (U.S.) of the tranche A proceeds will be used by Prognoz for final development, construction and commissioning of the Mangazeisky silver project, and for general administrative and corporate expenses.

The facilities agreement provides for the drawdown of three tranches as follows:

• Tranche A -- a term loan facility of approximately $42.9-million (U.S.), being the tranche A proceeds, which the company received on Sept. 22, 2016;
• Tranche B -- a working capital facility of $10-million (U.S.);
• Tranche C -- a contingent facility of $2-million (U.S.).

The company expects that, after the repayment, by means of set-off, of certain outstanding promissory notes previously issued by the company, the secured loan financing will result in net new financing to the company and Prognoz of approximately $22-million (U.S.).

Please see the material change report of the company dated Sept. 15, 2016, available on SEDAR for additional details on the facilities agreement.

About Silver Bear

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, 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 completed a feasibility study in the second quarter of 2016. The company is implementing a fast-track execution plan to complete major construction of the Mangazeisky silver project by the end of 2016, with steady-state production planned to start in the first quarter of 2017.

We seek Safe Harbor.