Bear Creek Completes Purchase of the Mercedes MineBy Paloma Duran | Tue, 04/26/2022 - 15:44
Bear Creek announced that it has completed the acquisition of the Mercedes gold-silver mine, formerly owned by Equinox Gold. Additionally, the royalty company that previously sought to cancel the agreement between Bear Creek and Equinox Gold withdrew its request for arbitration.
Bear Creek acquired the mine for a cash payment of US$75 million, the issuance of 24,730,000 Bear Creek shares, a deferred cash payment of US$25 million due in six months and a 2 percent net smelter return on Mercedes’ production. Bear Creek explained that under the agreement, Equinox will continue to participate in the development of the project located in Sonora, which possesses a prolific epithermal gold belt. The mine comprises 43 mining concessions and covers 69,285ha.
“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,” said Anthony Hawkshaw, President and CEO, Bear Creek.
Meanwhile, Christian Milau, CEO, Equinox Gold, thanked the Mercedes team for their work and achievements in the mine and emphasized Equinox Gold will continue to promote the project. “As a significant shareholder of Bear Creek Mining, we look forward to participating in the success of Mercedes and future development of Bear Creek Mining’s Corani silver-lead-zinc deposit, one of the largest fully-permitted silver deposits in the world,” said Milau.
In April 2021, Equinox Gold acquired the mine, as part of its large-scale acquisition of Premier Gold’s Mines and the Greenstone Gold Project. However, the company did not consider it to be a main asset, as in 2021 it only represented 5 percent of its production guidance and 2 percent of its resources. According to the latest data from Equinox Gold, around 5.84 million tonnes grading 4.42g/t gold and 49.5g/t silver were processed at the mine in 2020, with total production of 781,800oz of gold and 3,356,200oz of silver.
For its part, Bear Creek believes that the acquisition of the Mercedes mine will take the company to the next level, enabling it to transition from a development-stage company to a precious metals producer.
Previously, Bear Creek reportted that Trident Royalties’ subsidiary, TRR Offtakes, requested an arbitration with the aim to prohibit the closing of the deal due to a conflict of interest. Trident argued that it was within its rights, since in Jan. 2022 it entered in a Non-Material Contract with Equinox Gold subsidiaries. Nevertheless, on April 14, Trident announced that it reached a new agreement with Equinox, which removes the Mercedes mine from the previous contract. Under the new agreement, Trident is no longer affected, for which the request for arbitration has been withdrawn.