Equinox Gold’s Mine Sold for US$100 Million in Cash

Bear Creek Mining Corporation will acquire the Mercedes gold-silver project from Equinox Gold in Sonora. Under the new agreement, Equinox Gold will become a major shareholder of Bear Creek and will continue to participate in the development of the Mercedes mine and other major projects like Corani in Peru.

The Canadian-based junior miner Bear Creek will pay US$100 million in cash for the Mercedes project, of which US$75 million will be paid upon closing the transaction. In addition, it will issue 24,730,000 common shares, make a deferred cash payment of US$25 million and provide a 2 percent NST payable on metal production.

In a press release, the company explained that it was decided to specifically develop the Mercedes mine as it is an attractive asset that will provide free cash flow, which will be used to develop the company's Corani silver deposit and carry out exploration work in Sonora. Anthony Hawkshaw, President and CEO, Bear Creek, said the acquisition of Mercedes will be an important driver for the company, as it will allow it to move the company from a development stage to a producer of precious metals. “The acquisition of Mercedes provides our shareholders a cash flowing asset with expansion potential and participation in a land package with an exciting exploration outlook,” said Hawkshaw.

In a previous press release, Equinox Gold explained that it decided to sell the Mercedes project to strengthen its balance sheet, as the company seeks to focus on growth through the expansion and development of its main assets. However, with the transaction, Equinox Gold will become a shareholder of Bear Creek, allowing it to continue to participate in the Mercedes mine and Corani’s development, one of the largest fully permitted deposits in the world.

The Mercedes gold-silver mine is located in Sonora, within a prolific epithermal gold belt. The mine comprises 43 mining concessions and covers 69,285 ha. In April 2021, Equinox Gold acquired the mine as part of its large-scale acquisition of Premier Gold Mines and the Greenstone Gold Project. However, the mine was not considered as one of Equinox Gold's main assets, as in 2021 it only represented 5 percent of its production guidance and 2 percent of its resources. According to the latest data provided by Equinox Gold, until the end of 2020, “around 5.84 million tons grading 4.42 g/t gold and 49.5 g/t silver” were processed at the mine, with total production of 781,800oz of gold and 3,356,200oz of silver.