Bear Creek diversifiziert sich Richtung Mexiko durch den Erwerb einer Mine von Equinox
Bear Creek Mining to Acquire Mercedes Mine in Sonora, Mexico
(All dollar amounts are in United States dollars unless otherwise specified)
Vancouver, British Columbia--(Newsfile Corp. - December 17, 2021) - Bear Creek Mining Corporation (TSXV: BCM) (OTCQX: BCEKF) (BVL: BCM) ("Bear Creek" or the "Company") is very pleased to announce it has entered into a definitive agreement with Equinox Gold Corp. ("Equinox") to acquire a 100% interest in the Mercedes gold-silver mine ("Mercedes") located in Sonora, Mexico.
The Mercedes acquisition will transform Bear Creek into a precious metal producer and provide a source of funding for future construction of the Company's world class Corani silver mine.
Benefits of the Mercedes acquisition to Bear Creek shareholders
The Mercedes acquisition will:
Add a high quality, low cost, cash flowing asset to Bear Creek's project portfolio
Provide a source of free cash flow to help fund development and construction of the Corani silver mine
Offer excellent near-mine and regional exploration upside
Diversify Bear Creek's asset base with mix of jurisdictions, project stages and commodities while retaining a precious metals focus
Create an opportunity for re-rating of the Company's shares to align with junior precious metals producers
Enhance the Company's share registry and market profile with the addition of two new strategic stakeholders
"Moving from a development stage company into a precious metals producer is an important step in Bear Creek's evolution," states Anthony Hawkshaw, President and CEO of the Company. "The acquisition of Mercedes provides our shareholders a cash flowing asset with expansion potential and participation in a land package with an exciting exploration outlook. Furthermore, the financial and technical support provided by Sandstorm reinforces management's conviction that Mercedes will be a positive contributor to each of our treasuries; a positive contribution that for Bear Creek will, in large part, be directed to the continuing development of Corani."
Strategic Rationale
The Mercedes acquisition adds an attractive operating asset that provides free cash flow, which the Company will use as a non-dilutive source of funding to develop the Company's world-class Corani silver deposit, and to explore the Mercedes property. With a strong track record of exploration success, consistent historical replacement of ore reserves, and vast areas of the property unexplored, management believes the Mercedes property offers exploration upside with the potential to expand known reserves and extend the mine life beyond current projections, with ample spare mill capacity for expansion of production.
Key Acquisition Terms
Payment to Equinox will consist of:
A cash payment of $75 million and issuance of 24,730,000 Bear Creek common shares on the closing of the acquisition (the "Closing Date")
A deferred cash payment of $25 million due within six months of the Closing Date
A 2% NSR payable on metal production from the Mercedes mining concessions
The $75 million cash payment on the Closing Date will be funded by $15 million from the Company's treasury and $60 million from Sandstorm Gold Ltd. ("Sandstorm") as described below.
The Mercedes acquisition is expected to close during the first quarter of 2022 subject to customary closing conditions including approval of the TSX Venture Exchange and Mexican authorities.
Sandstorm Stream and Debt Financing
Bear Creek and Sandstorm have entered into a gold purchase agreement (the "Gold Purchase Agreement ") and a debt financing agreement, each of which are subject to customary closing conditions.
Under the Gold Purchase Agreement, Sandstorm will provide the Company with $37.5 million and in exchange Bear Creek will sell to Sandstorm 600 ounces of refined gold per month for 42 months (a total of 25,200 ounces) at a price equal to 7.5% of the spot gold price at the time of delivery. Thereafter, the Company will sell to Sandstorm 4.4% of gold produced by Mercedes at a price equal to 25% of the spot price at the time of delivery. Sandstorm will also be granted a right of first refusal on any royalties, streams or similar transactions with respect to production from Mercedes.
On the Closing Date, Sandstorm will pay the Company $22.5 million (the "Principal Amount") to subscribe for a 6%, three-year Convertible Debenture. Interest will be paid quarterly on the outstanding Principal Amount. The Principal Amount may be reduced by conversion of debt to common shares of the Company during the term. Otherwise, the Principal Amount is due on the third anniversary of closing. The Principal Amount is convertible, in whole or in part, into common shares of the Company at any time prior to maturity at the greater of a 35% premium to the closing price per common share of the Company on the closing date of the acquisition or as otherwise permitted by the TSX-V.
Borden Ladner Gervais LLP is acting as legal advisor to Bear Creek in the Mercedes acquisition.
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