Bear Creek acquires Mercedes mine from Equinox

In addition, Equinox will receive a 2% NSR payable on metal production from the Mercedes mining concessions.

The C$75 million cash payment will be funded by C$15 million from Bear Creek’s treasury and C$60 million from Sandstorm Gold, which has entered into a gold purchase agreement with the company on the Mercedes mine (C$37.5 million) as well as a debt financing agreement (C$22.5 million).

The Mercedes mine is located in the state of Sonora, approximately 300 km northeast of the city of Hermosillo. It has been in continuous operation since commencing production in 2011.

Throughout Mercedes’ production history, gold-silver ore has been produced from five deposit areas, of which two (Diluvio and Lupita) are currently being mined.

Up until the end of 2020, about 5.84 million tonnes grading 4.42 g/t gold and 49.5 g/t silver have been processed at Mercedes, with a total of approximately 781,800 ounces of gold and 3,356,200 ounces of silver produced.

The underground mine was previously acquired by Equinox as part of its takeover of Premier Gold Mines last December.

“Moving from a development stage company into a precious metals producer is an important step in Bear Creek’s evolution,” Anthony Hawkshaw, Bear Creek’s president and CEO, stated in Friday’s news release.

“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.”

The company also says the Mercedes acquisition will provide a source of funding for future construction of its Corani silver mine, considered to be one of the largest fully permitted silver-polymetallic deposits in the world.

According to estimates, Corani has sizeable proven and probable reserves that will support average annual payable metal production of 9.6 Moz of silver, 98 Mlb of lead and 69 Mlb of zinc over a 15-year mine life.

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