Bear Creek Forecasts a 49% Production Increase in 2023
Bear Creek Mining announced that the production guidance for its Mercedes gold mine in Sonora has increased due to its operations improvement program, which created a solid foundation for 2023.
Bear Creek Mining highlighted that it will produce from 65,000oz to 75,000oz of gold in 2023, up 49% from 2022's output. Average cash costs per oz of gold are anticipated to range between US$830/oz and US$940/oz, with all-in sustaining costs between US$1,120/oz-US $1,290/oz.
The company noted that the ambitious forecast is due to Mercedes' operations improvement program, which was initiated after acquiring the property. As part of the program, a GAP analysis was conducted to identify potential improvements in mine planning, operations and material usage. The goal of the program was to achieve a minimum production of 70,000oz/y.
“Our expectation is for a 49% increase in gold production this year relative to 2022, driven by mine development work we conducted in 2022 and are continuing this year. Improvements in mine production, dilution control and maintenance are being realized and approaching targeted levels, thereby creating confidence that we will realize the potential of Mercedes,” said Eric Caba, President and COO, Bear Creek Mining.
Under the company's direction, the Mercedes mine is moving more toward higher-grade orebodies using cut-and-fill mining methods. These methods are expected to significantly increase production in 2023. In addition, the company reported that infrastructure development is returning to safe levels and will also significantly increase mill feed grade.
Moreover, the Marianas and San Martin deposits began contributing to Mercedes' output in January, boosting mine performance. According to the company, Mercedes will produce around 74,000oz-86,000oz of gold production annually, with sustained costs of around US$1,000/oz throughout 2H23.
In April, Bear Creek announced that it acquired the Mercedes mine, formerly owned by Equinox Gold. The project was acquired 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. Equinox explained that it decided to sell the mine because it did not consider it to be a key asset, as it only represented 5 percent of its production guidance and 2 percent of its resources in 2021. However, Bear Creek believes that the acquisition of the Mercedes mine has taken the company to the next level, enabling it to transition from a development-stage company to a precious metals producer.