Bear Creek Mining Reports Q1 2025 Financial and Operating Results

Yahoo

27-05-2025

Vancouver, British Columbia--(Newsfile Corp. - May 27, 2025) - Bear Creek Mining Corporation (TSXV: BCM) (OTCQX: BCEKF) (BVL: BCM) ("Bear Creek" or the "Company") reports its interim consolidated financial results for the three months ended March 31, 2025 ("Q1 2025").
This news release should be read in conjunction with the Company's interim consolidated financial statements and management discussion and analysis ("MD&A") for the three months ended March 31, 2025, which are available on SEDAR+ (www.sedarplus.ca) and the Company's website (www.bearcreekmining.com). Monetary amounts in this news release are in United States dollars unless otherwise stated and all capitalized terms herein have the same meaning as defined in the Q1 2025 financial statements.
Highlights
During Q1 2025 and to the date of this release include, the Company:
Produced 8,262 oz of gold and 36,466 oz of silver from its Mercedes mine in Q1 2025.
Issued updated Mineral Resources and Mineral Reserves for the Mercedes Mine and filed a related Technical Report (as defined in NI 43-101).
Completed a brokered private placement on a bought deal basis of 64,445,000 common shares of the Company at a price of C$0.225 per share wherein aggregate gross proceeds totaling $10 million (C$14.5 million) were raised (the "Offering").
Amended agreements with each of Sandstorm Gold Ltd. ("Sandstorm") and Equinox Gold Corp. ("Equinox") to temporarily defer, to December 2025, the payment of interest under certain outstanding debt arrangements otherwise due between February and November 2025. These debt amendments were approved by the TSX Venture Exchange ("TSX-V") on April 10, 2025.
Initiated a strategic review process ("Strategic Review") to explore and evaluate the strategic and financial options available to the Company with the ultimate view of enhancing value. Mr. Christian Milau was engaged as a strategic advisor to the Board to assist with oversight of the Strategic Review. At the date of this MD&A an estimate of the financial effect of such Strategic Review on the Company's interim Q1 2025 financial statements cannot be determined.
Announced the retirements of Mr. Andrew Swarthout and Ms. Sandra Daycock from the Company's board of directors (the "Board") and appointed Peter C. Mitchell and Ian Grundy to the Board.
Announced the issuance of a secured promissory note to a wholly owned subsidiary of Sandstorm (the "2025 Sandstorm Note") in the principal amount of up to US$6.5 million, with Sandstorm committing up to US$600,000 per month of credit to the Company for working capital purposes. The 2025 Sandstorm Note was approved by TSX-V on May 8, 2025. Subsequent to the end of the quarter, funds in the amount of US$1.2 million were drawn down by the Company pursuant to the 2025 Sandstorm Note.
Appointed Mr. Eduardo Flores in the position of Senior Vice President, Business Development.
Selected Q1 2025 Financial and Production Results
Mercedes Operating Highlights
Three Months Ended March 31, 2025
Gold ounces produced
8,262
Silver ounces produced
36,466
Cash costs per gold ounce sold (1)
$2,066
AISC per gold ounce sold (1)
$2,646
Tonnes mined (thousands)
102,886
Tonnes processed (thousands)
105,611
Average gold grade mined (g/t)
3.00
Average gold grade processed (g/t)
2.56
Recovery rate gold
95%
Gold ounces sold
7,870
Average realized gold price (2)
$2,877
Development (meters)
2,469
Financial Results (thousands of dollars, except share and per share amounts)
Three Months EndedMarch 31, 2025
Revenue
$23,685
Comprehensive earnings (loss) after taxes
$(13,355)
Comprehensive earnings (loss) per share (3)
$(0.06)
Cash generated from (used in) operating activities
$(3,172)
Cash generated from (used in) investing activities
$(5,888)
Cash generated from (used in) financing activities
$9,037
Weighted average shares during period
242,051,896
Shares issued and outstanding at end of period
292,175,785
(1) Non-GAAP Measure. Please see "Non-GAAP Measures" below for further information.(2) Inclusive of final settlement adjustments on sales for non-streamed ounces(3) Per share amounts are based on weighted average shares during the period
Eric Caba, President & CEO, states, "Q1 2025 was focused on managing the transition to narrow vein mining at Mercedes, completing the Technical Report associated with the update to the Mineral Resources and Reserves at Mercedes, and launching the Strategic Review. We expect the transition at Mercedes to continue through the second quarter of 2025 as we work to resolve contractor issues and bring Marianas production in line with expectations to fully capitalize on the current robust gold markets. We are very pleased to have recently welcomed Eduardo Flores to the Bear Creek team as SVP, Business Development, and look forward to his contributions to our management team."
Mercedes Mine, Mexico
The Mercedes mine is a fully mechanized, ramp-access operation that produces gold and silver. Eleven individual deposits have been mined or are in production. Seven additional deposits have been identified and are in the early exploration or drill definition stage. Additional mineralized zones proximal to existing workings have been identified and are at the exploration or drill definition stage.
Exploration
During Q1 2025, the Company continued with its Mineral Resource delineation and infill drilling program with a particular focus on the Marianas deposit, as well as ongoing work at Diluvio West, San Martin, and Neo. This drilling is intended to provide increased confidence in the Mineral Resource classification categories, ultimately reducing risk during Mineral Resource to Reserve conversion and subsequent mine planning stages.
Through the first quarter the 2025 brownfields Mineral Resource surface exploration and extension drilling program commenced on Diluvio Northwest. In parallel, underground Mineral Resource delineation and/or conversion drilling began at the Marianas, Diluvio West, San Martin, and Neo deposits. Mineral Resource delineation and/or conversion drilling expenditures were $0.4 million during the quarter.
Mineral Resource and Mineral Reserve Updates
Updated and improved geological and block models prepared by the Company in 2024 formed the basis of updated Mercedes Mineral Resource and Mineral Reserve estimates (the "2024 Estimates") announced by the Company on January 29, 2025 and supported by the Technical Report entitled "NI 43-101 Technical Report, Mercedes Gold - Silver Mine, Sonora State, Mexico", dated effective September 30, 2024 and filed on March 14, 2025, both of which are available on the Company's website and on SEDAR+.
Development
During Q1 2025, 2,469 meters of development were achieved at the Mercedes Mine. The management team has finalized ventilation designs for the Marianas deposit and the installation of a ventilation raise is expected to be completed during the third quarter of 2025.
Production
Mercedes' production during Q1 2025 was primarily garnered from the San Martin deposit, with lesser contributions from Marianas, Diluvio, Rey de Oro Alta and Barrancas.
The reduced ore throughput in Q1 2025, as compared with previous periods, is primarily a result of significant underperformance by a contractor engaged in late 2024 to provide specialized narrow vein mining equipment (to reduce dilution) and personnel. This contractor underperformance delayed advancement of the Marianas and Rey de Oro deposits planned for the Q1 2025, which negatively impacted the grade and tonnes mined during the quarter. The lower than planned Q1 2025 ore production from Marianas was partially offset by accelerated pillar recovery at the San Martin deposit.
The Mercedes Mine had no fatalities, no lost time incidents, and no reportable environmental incidents during the quarter ended March 31, 2025.
As of the date of this news release, Bear Creek has not provided production guidance for the Mercedes Mine for 2025.
Corani Project
Activities at the Corani Property during Q1 2025 focused primarily on assessment of the Oxides opportunity, continuation of a geometallurgical test program, and ongoing community support initiatives.
Oxides Opportunity
The Company believes the Oxides - near-surface, silver-rich oxidized material that occurs within the Este, Main and Minas deposits at Corani as outlined in the 2019 Corani Report - provide an exciting opportunity to add silver resources to the Corani mineral inventory, and potentially extend the anticipated Corani mine life, but that additional work is required to fully develop the scope of this opportunity. Subsequent to the quarter-end, the Company announced that as it is engaged in its Strategic Review process, such additional work will not be undertaken at this time, and hence it will not proceed with completion of an economic study related to the Oxides.
Additional details regarding the Oxides opportunity are provided in the Company's news release dated September 9, 2024.
Social and Environmental Initiatives
During Q1 2025 the Company continued environmental monitoring of the area around the Corani camp and the within the Corani Property.
New and Restructured Debt
On April 10, 2025, Sandstorm, Equinox and the Company executed agreements to defer the monthly interest payments on the certain existing debt agreements, whereby monthly interest payments payable from and including February 2025 to November 2025, are deferred until December 31, 2025 (the "Deferred Interest"). Interest automatically accrues on the Deferred Interest at the same rate applicable to the principal under the debt agreements, such rate being 7% per annum, compounded monthly, and the Deferred Interest and any accrued and unpaid interest thereon is payable in full on December 31, 2025. All other terms of the debt agreements remain unchanged and in full force and effect.
After receiving TSX-V approval on May 8, 2025, the Company issued a secured promissory note to a wholly owned subsidiary of Sandstorm (the "2025 Sandstorm Note") in the principal amount of up to US$6.5 million (the "Credit Extension"), with Sandstorm committing up to US$600,000 per month of credit to the Company for working capital purposes. The 2025 Sandstorm Note contains substantially similar terms to the Sandstorm Promissory Note, including a maturity date of September 22, 2028, an interest rate of 7% per annum and a conversion price of C$0.73 per common share (or such greater price as may be required by the TSX-V). Additional details regarding the terms of the 2025 Sandstorm Note are available in the Company's news release dated May 8, 2025.
Overview of Results of Operations, Liquidity and Capital Resources
For the three months ended March 31, 2025, the Company recorded revenue of $23.7 million from the sale of gold and silver. The cost of goods sold was $16.3 million and depletion, amortization and depreciation amounted to $9.3 million.
During Q1 2025 the Company had a gross loss of $1.9 million and an operating loss of $5.5 million. After operating expenses, other income and expenses, changes in the fair value of the financial instruments (principally due to higher gold prices), and tax expenses and recoveries, the Company recorded a comprehensive net loss of $13.3 million ($0.06 per share) for Q1 2025
During the three months ending on March 31, 2025, with the focus to improve liquidity, the Company completed the Offering - a bought deal private placement of 64,445,000 common shares at a price of C$0.225 per share for aggregate gross proceeds of $10 million (C$14.5 million). At March 31, 2025 the Company held cash and cash equivalents and short terms investments totaling $6.7 million. During Q1 2025, operating activities used $3.2 million, investing activities used $5.9 million and financing activities generated $9.0 million in cash.
At March 31, 2025, the Company's net working capital deficiency (current assets less current liabilities) was $88.2 million (compared to $97.0 million at December 31, 2024). Significant amounts contributing to the March 31, 2025 net working capital deficiency are $30.0 million in accounts payable, $22.1 million in current portion of Note payable, $8.8 million in current portion of stream arrangements, and $48.8 million in convertible debentures and notes.
The Company's interim consolidated financial statements for the three months ended March 31, 2025 were prepared following accounting principles applicable to a going concern, which assumes the Company will be able to continue in operation for at least twelve months from March 31, 2025 and will be able to realize its assets and discharge its liabilities in the ordinary course of operations. Despite completing the Offering and taking other measures to improve liquidity, material uncertainty remains in relation to the ability of the Company to achieve the operating results and cash flow generation from the Mercedes mine necessary to avoid seeking additional financing, which gives rise to significant doubt about the Company's ability to continue as a going concern. There can be no assurance that the steps management is taking to improve the Company's liquidity will be successful.
The Company's interim condensed consolidated financial statements for the three months ended March 31, 2025 do not include adjustments to the carrying values of the assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used, should the Company be unable to continue as a going concern. These adjustments could be material.
Non-GAAP Measures
This news release includes disclosure of certain financial measures or ratios, as such terms are used in National Instrument 52-112 - Non-GAAP and Other Financial Measures Disclosure, including Cash Costs and AISC. These Non-GAAP financial measures are not standardized financial measures under IFRS Accounting Standards, as issued by the International Accounting Standards Board ("IFRS Accounting Standards"), and might not be comparable to similar measures presented by other companies. The Company believes that these measures and ratios provide investors with an improved ability to evaluate the prospects of the Company as they provide additional information related to operating performance and are widely used in the mining industry.
The Company has adopted the practice of calculating a performance measure consisting of the net cost of producing an ounce of gold after deducting revenues gained from silver by-product production.
Cash Cost and AISC are calculated per ounce of gold sold net of credits for realized silver revenues. The Company adds the governmental royalty of 1% for special mining law (0.5% in 2024), third-party net smelter royalties and adjustments for finished goods related to the increase or decrease in remaining inventory to the cost of production. Other adjustments may be made as required. For further information regarding these Non-GAAP financial measures including reconciliations of these measures to the applicable costs items as reported in the consolidated financial statements for the respective periods, please see the information under the heading "Cash Cost and All-in-Sustaining Cost ("AISC") for Mercedes" in the Company's MD&A for the three months ended March 31, 2025 (available on the Company's website and on SEDAR+).
On behalf of the Board of Directors,
Eric CabaPresident and CEO
For further information contact:Barbara Henderson - VP Corporate CommunicationsDirect: 604-628-1111E-mail: [e-mail] to Bear Creek Mining news
NI 43-101 Disclosure
Unless otherwise indicated, scientific and technical information in this news release is based on work programs and initiatives conducted under the supervision of, and has been reviewed and approved by, Donald Mc Iver, Fellow SEG and Fellow Aus-IMM. Mr. Mc Iver is Vice President, Exploration and Geology of Bear Creek Mining Corporation and is a qualified person ("Qualified Person" or "QP") as defined in National Instrument 43-101 - Standards of Disclosure for Mineral Projects. Additional information related to the Mercedes Mine and the Corani Project, including the Quality Assurance and Quality Control measures applied to the Company's sampling and assaying practices, is available in its Annual Information Form for the year ended December 31, 2024, available on its website and on SEDAR+.
Cautionary Statement Regarding Forward-Looking Information
This news release contains forward-looking statements regarding: the deferral of interest payments under the 2025 Debt Arrangements until December 31, 2025; the payment of the Deferred Interest on December 31, 2025; the Credit Extension and the 2025 Sandstorm Note; the Strategic Review process; the purpose and potential outcomes of Mercedes exploration drilling programs; plans for Mercedes; anticipated 2025 Mercedes mining plans and sources of production; Mercedes' 2025 development and capital investment plans; potential benefits and impacts of the Oxides material on the Corani project resources and reserves, forecasted production and mine life; the requirement for additional analysis to fully understand the potential benefits of the Oxides on the Corani project; future resolution and/or recourse related to the contractor underperformance and delays in procurement of equipment and personnel and the delivery of mining services at the Marianas deposit; the Strategic Review; and the Company's ability to remain a going concern. These forward-looking statements are provided as of the date of this news release and reflect predictions, expectations or beliefs regarding future events based on the Company's beliefs at the time the statements were made, as well as various assumptions made by and information currently available to them. In making the forward-looking statements included in this news release, the Company has applied several material assumptions, including, but not limited to, assumptions related to the Company's operating results, business objectives, goals and capabilities. Although management considers the assumptions underlying its forward-looking statement to be reasonable based on information available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and the risk exists that estimates, forecasts, projections, and other forward-looking statements will not be achieved or that assumptions on which they are based do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements as a number of important factors could cause the actual outcomes to differ materially from the expectations expressed in them. These risk factors may be generally stated as the risk that the assumptions expressed above do not occur, but may include additional risks as described in the Company's latest Annual Information Form, and other disclosure documents filed by the Company on SEDAR+. The foregoing list of factors that may affect future results is not exhaustive. Investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by the Company or on behalf of the Company, except as required by law.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/253588