Bear Creek Mining Corporation announces it produced 9,158 ounces of gold and 34,929 ounces of silver from the Mercedes Mine (“Mercedes”) during the three months ended September 30, 2023 (“Q3 2023”).
Eric Caba, President and CEO of Bear Creek, states, “Mercedes did not achieve the level of gold production that we had anticipated for Q3 2023. While the efforts we have made at Mercedes to increase development, decrease costs, eliminate operating inefficiencies, and improve staffing have been largely successful, it is taking longer than anticipated for these measures to be reflected in production. As a result, we are revising our gold production guidance for 2023 to 39,000 – 45,000 ounces. We are taking additional action to identify and overcome remaining barriers and are compressing our response time as we continue to work to further increase underground development, improve processing grades and reduce dilution. We are also making progress assembling a skilled team that shares our focus on Mercedes’ profitability. We believe Mercedes has the elements necessary to improve annual production, discover additional mineralization, lower costs and contribute significant free cash flow and we are working relentlessly to provide sufficient bandwidth, both operationally and financially, to make these improvements come to fruition.”
Production and development results for the quarter ended September 30, 2023 are as follows:
|Q3 2023||Q2 2023||Q1 2023|
|Ore Mined (tonnes)||123,505||121,490||133,621|
|Ore Processed (tonnes)||125,208||125,135||134,487|
|Gold recovery (%)||94.03||94.54||95.56|
|Gold grade processed (gpt)||2.42||2.41||2.91|
|Gold ounces produced||9,158||9,199||12,025|
|Silver ounces produced (1)||34,929||39,841||40,105|
|Gold ounces sold (2)||6,298||6,458||9,304|
|Gold ounces streamed (3)||2,720||3,063||3,182|
(2) Gold ounces sold at market prices.
(3) Gold ounces sold at contracted gold stream prices.
The pace of development at Mercedes continues to accelerate as we prepare the Marianas deposit and associated infrastructure to support increased mine production.
While the San Martin mine plan is being reliably executed, limitations on equipment and infrastructure kept the pace of increases in tonnage slower than expected through much of the quarter. However, tonnage produced from San Martin is now approaching 600 of the planned 800 tonnes per day, and the grade of material being mined is increasing as mining faces drive into the heart of this deposit. This trend toward higher production from San Martin is expected to increase as infrastructure continues to be developed and San Martin is expected to be a significant contributor to production during Q4 2023.
Delineation drilling at the Marianas deposit during 2023 has resulted in the discovery of a number of new high-grade veins and the intersection of zones of intense structural complexity, including hydrothermal breccias that contain gold mineralization at significantly higher grades than the current reserve grade, including up to 62.6 g/t gold over 5.2 m true width (see Bear Creek news releases dated February 22 and August 30, 2023). This style of mineralization is presenting both opportunities and challenges. The higher grades and structural complexity may point to a closer proximity to the source structures of mineralization in the Mercedes district and bode well for future exploration potential, however, the intense structural complexity also creates complications with respect to ground control and it is proving difficult to control dilution using the sub-level caving mining method at Marianas. As a result, the gold grade per tonne of ore mined from Marianas has been lower than planned during Q3 2023. The Company is continuing to evaluate this methodology and how best to extract the Marianas mineralization to optimize the gold grade and maximize production.
Bear Creek has recently entered into restructuring agreements with Equinox Gold Corp. and Sandstorm Gold Ltd. to refinance and extend the maturity date of near term debt and to significantly reduce the number of gold and silver ounces payable monthly under Mercedes’ stream obligations. These agreements will improve the Company’s financial condition and generate additional cash flow, which along with funds raised in the Company’s recent equity financing, will allow the Company to re-invest in the near- and long-term success of Mercedes. Specifically, Bear Creek will deploy funds on underground and surface exploration to increase the density of delineation drilling at the Marianas and Rey de Oro deposits and to further test brownfield and greenfield exploration targets where low angle, listric/detachment faults intersect the near-vertical veins that dominate the Mercedes district. These structural intersections are important as they provide the structural preparation for bulkier orebodies and the initial focus of this planned surface exploration will be the northern extensions of the Mercedes vein trend, which is open to for 4.5 km to the northwest of the Marianas deposit.
Details regarding the debt and stream restructuring agreements and the equity financing are available in the Company’s news releases dated May 29, July 5, September 2, September 28, and October 5, 2023.
On behalf of the Board of Directors,
President and Chief Executive Officer
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NI 43-101 Disclosure
Scientific and technical information in this news release is based on work programs and initiatives conducted under the supervision of, and/or has been reviewed and approved by, Andrew Swarthout, AIPG Certified Professional Geologist, a director of the Company who is a Qualified Person (“QP”) as defined in NI 43-101.