Bear Creek Optimistic Regarding Fraught Mine Acquisition

Although a royalty company aims to cancel Bear Creek’s deal to acquire the Mercedes gold-silver project in Sonora, the company said it remains optimistic about its ability to purchase Equinox Gold’s project as the request to forbid the purchase is unfounded.

In January 2022, Bear Creek announced it would acquire the Mercedes mine from Equinox Gold. Under the current agreement, the latter will become a major shareholder of Bear Creek and will continue to participate in the development of the project located in Sonora, within a prolific epithermal gold belt. The mine comprises 43 mining concessions and covers 69,285ha.

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 as 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 tons 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.

Bear Creek highlighted its enthusiasm regarding the acquisition of the Mercedes mine, stating it would take the company to the next level and allow it to transition from a development stage company to a precious metals producer. However, Trident Royalties’ subsidiary, TRR Offtakes, has requested an arbitration order prohibiting the closing of the deal. Trident argued that it is within its rights, since in January 2022 it entered a Non-Material Contract with Equinox Gold subsidiaries. However, Bear Creek believes the request to be unfounded.

In addition, Bear Creek noted that Trident would be responsible for all losses and damages that the company may suffer due to its interference and seeks to get Bear Creek's potential earnings across Mercedes' production life published, in the improbable event that an injunction is granted.

“It is disappointing that Trident did not meaningfully engage with us prior to initiating an arbitration to disrupt an ordinary course mining transaction. However, we look forward to a timely resolution of their dispute with Equinox. Bear Creek has valued relationships with a number of well-established royalty and streaming companies as both commercial partners and shareholders and looks forward to strengthening those relationships,” said Anthony Hawkshaw, President and CEO, Bear Creek. The acquisition remains subject to antitrust approval, which is expected by April 2022.