Bear Creek hopes to kick off work at $603M Peru silver project next year

Bear Creek Mining (TSXV: BCM) plans to start construction at its Corani silver property in Peru’s Puno region next year, as it continues looking for alternatives to finance the $603-million project.

The Vancouver-based miner invested $5.7 million on the asset between January and September, with $581,000 going to drilling, the latest quarterly release shows. Bear Creek already has streaming deals in place for Cornani’s production, including at 1% net smelter returns (NSR) royalty to Sandstorm Gold ( TSX: SSL; NYSE: SAND).

Chief financial officer Paul Tweddle said recently metallurgical tests at Corani will be completed in the first quarter of 2024, after which financing discussions will resume with a view toward starting construction in the second half.

Bear Creek says its wholly owned Corani deposit is one of the world’s largest fully permitted silver-polymetallic deposits. It consists of 13 mineral concessions that form a contiguous block of ground covering about 55 sq. km. 

The asset’s proven and probable reserves can support average annual payable metal production of 9.6 million oz. of silver, 98 million lb. of lead and 69 million lb. of zinc over a 15-year mine life, according to a feasibility study last updated in 2019.

The company also holds the producing Mercedes gold-silver mine in Sonora, Mexico. It acquired the asset last year from Equinox Gold (TSX: EQX) and recently revised production guidance downwards to 35,000 to 49,000 oz. gold this year, from 65,000 to 75,000 oz. gold.

In its third quarter release, Bear Creek said the mine’s grades had fallen short of expectations and it has been working to improve geological models of Mercedes. It’s also restructured debt agreements with Equinox and Sandstorm to extend current and long-term obligations to 2028.

“We are systematically addressing the short term challenges in front of us to realize the potential in Mercedes and recoup the value lost across the last year,” Eric Caba, Bear Creek’s President and CEO, said. “The restructuring of the debt and stream burden has set Bear Creek up to begin positive cash generation going forward and continue to advance Corani, our cornerstone asset.”