Bear Creek eyes 49% gold production increase

Bear Creek Mining Corp. [BCM-TSXV, Lima] shares advanced Friday after the company released production forecasts for its Mercedes Gold Mine in Sonora Mexico.

The company said it expects Mercedes to produce 65,000-70,000 ounces of gold this year at an average cash gold of US$830 to US$940 per ounce. The all-in-sustaining cost is forecast at between US$1,120 and US$1,290 an ounce.

“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,’’ said Bear Creek President and Chief Operating Officer Eric Caba.

The shares advanced on the news, rising 3.0% or $0.02 to 68 cents in late morning trading Friday after hitting 70 cents. The shares are currently trading in a 52-week range of $1.32 and 37 cents.

Bear Creek is a precious metals producer with assets in Mexico and Peru.

The company’s wholly-owned Corani silver-lead-zinc deposit in Peru is the one of the largest, fully-permitted silver deposits in the world, one that is highlighted by its substantial base metal credits, its location in a mining friendly jurisdiction and overwhelming community support.

As a result, the company is highly leveraged not only to the price of silver, but also to the price of lead and zinc.

The Mercedes Mine was acquired in April, 2022. Mercedes is a cash-flow generating gold mine with a strong track record of reserve replacement and blue sky potential, the company has said.

The mine sits on 43 mineral concessions covering 69,284 hectares located 250 kilometres northeast of Hermosillo and 300 kilometres south of Tucson, Arizona.

Mercedes has been in continuous operation since 2011, with the exception of a brief Covid 19-related shutdown imposed by the Mexican government on all mining operations in 2020. In 2021, the mine produced 42,000 ounces of gold and 123,000 ounces of silver.

“We are pleased with the progress at Mercedes,’’ Caba said.  “Turning around an operation requires dedication and focus by the entire management team. Improvements in mine production, dilution control and maintenance are being realized and approaching targeted levels, thereby creating confidence that we will realize the potential at Mercedes.’’

In a January 4, 2023 press release, Bear Creek said it produced 13,710 ounces of gold and 40,222 ounces of silver from the Mercedes Mine in the fourth quarter of 2022, and discovered a new high-grade gold vein at the Marianas zone.

That marked a 23% increase from production levels reached in the third quarter of 2022 (11,169 ounces).

The company has said recent discoveries at Mercedes confirm the thesis that bonanza grades exist within easy reach of the mine’s infrastructure.

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