Bear Creek Mining completes acquisition of Mercedes Mine

Anthony Hawkshaw, President and CEO, comments:

“We are extremely pleased to have acquired a producing gold-silver mine with a strong operating team, underlying assets with a replacement cost exceeding our purchase price and what we believe to be exciting ‘blue sky’ exploration potential.”

Mercedes was acquired pursuant to a share purchase agreement dated 16 December 2021 among the company, Equinox Gold and Premier Gold Mines Ltd, the company acquired, directly and indirectly, all of the issued and outstanding shares of certain of Equinox Gold’s indirect wholly-owned subsidiaries which in turn own a 100% interest in Mercedes, for total consideration payable to Equinox Gold of:

• A cash payment of US$75 million.
• Issuance of 24.7 million Bear Creek common shares.
• A deferred cash payment of US$25 million due within six months of the date hereof.
• A 2% net smelter return payable on metal production from the Mercedes mining concessions.

The cash payment was funded by US$15 million from the company’s treasury and US$60 million pursuant to a financing arrangement with Sandstorm Gold Ltd.

The Sandstorm Financing comprises:

• A previously announced gold purchase agreement whereby Sandstorm advanced to the company US$37.5 million and in exchange Bear Creek agreed to sell to Sandstorm 600 ounces of refined gold per month for 42 months (a total of 25 200 oz) at a price equal to 7.5% of the spot gold price at the time of delivery. Thereafter, the company agreed to 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 was also granted a right of first refusal on any royalties, streams, or similar transactions with respect to production from Mercedes.
• A previously announced debt financing agreement whereby Sandstorm advanced to the company US$22.5 million to subscribe for a 6%, three-year convertible debenture. Interest will be paid quarterly on the outstanding principal amount. The principal amount is due on 21 April 2025. The principal amount is convertible, in whole or in part, into common shares of the company at any time prior to maturity at a conversion price to be determined as the greater of a 35% premium to the closing price per common share of the company on the date hereof, or CAN$1.51, pursuant to the policies of the TSX Venture Exchange.

The issuance of common shares upon conversion of the convertible debenture is subject to the final acceptance of the TSX Venture Exchange. The consideration shares are subject to a four-month hold period pursuant to applicable Canadian securities laws.

Read the article online at: https://www.globalminingreview.com/mining/25042022/bear-creek-mining-completes-acquisition-of-mercedes-mine/