March 10, 2023, Vancouver, British Columbia - Bear Creek Mining Corporation (TSXV: BCM) (OTCQX: BCEKF) (BVL: BCM) (“Bear Creek” or the “Company”) is pleased to announce that, further to its news release dated October 26, 2022, it has revised the terms (the “Revised Terms”) of the heads of agreement with Equinox Gold Corp. (“Equinox Gold”) to amortize over a two-year period payment of the final US$25 million purchase price installment (the “Deferred Payment”) for the Mercedes Gold Mine (“Mercedes”) in Sonora, Mexico. Pursuant to the agreement to acquire Mercedes, the Deferred Payment, as previously amended, was due to be made on October 26, 2022 (see Bear Creek news releases dated December 17, 2021, April 21, 2022 and October 24, 2022).
The Revised Terms provide for converting the Deferred Payment into a secured interest bearing promissory note (the “Note”). The Note bears a nominal rate of interest equal to 12.5% per annum plus the greater of (i) 90-day average Secured Overnight Financing Rate and (ii) 2.50% per annum, and matures after a term of two years on October 21, 2024 (the “Maturity Date”). Commencing March 3, 2023, the Note will amortize at a fixed rate of US$700,000 per month during the first year until March 3, 2024 and thereafter at an amount per month equal to the greater of (i) US$700,000 and (ii) 50% of the free cash flow generated from Mercedes.
The Company may prepay, without penalty, any portion of the Note at any time prior to the Maturity Date. The Note will be secured by a first lien (pari passu with certain security held by Bear Creek’s existing creditors) and certain second lien pledges of Bear Creek’s equity interests in the holding companies through which Bear Creek holds Mercedes and the Corani silver-lead-zinc deposit in Puno, Peru.
In addition to the Note, the Company will issue to Equinox Gold 2,750,000 common shares of the Company (the “Bonus Shares”). Issuance of the Note and Bonus Shares are subject to completion of definitive documentation and approval of the TSX Venture Exchange (“TSXV”).
About Bear Creek Mining
Bear Creek Mining is a precious metals producer with a world-class development asset. Our Mercedes mine in Sonora, Mexico is a cash flow generating gold mine with operational upside, a strong track record of reserve replacement and exciting exploration potential. Our Corani silver-polymetallic deposit in Puno, Peru is one of the largest fully permitted silver deposits in the world and is highlighted by its substantial reserves and resources, long projected mine life, lost estimated operating costs and overwhelming community support.
On behalf of the Board of Directors,
Chief Executive Officer