Bear Creek Mining Corporation (TSXV: BCM, OTCQX: BCEKF) has just released its operational results for the second quarter of 2025, showing a blend of operational hurdles and tactical adjustments at its flagship Mercedes Mine. As the company weighs its next steps in a changing gold market, the story unfolding at Mercedes reflects both the complexity and uncertainty that can define junior mining operations.
In the three months ended June 30, Bear Creek produced 7,973 ounces of gold and 33,932 ounces of silver at Mercedes. These numbers represent a slight decline compared to the first quarter, which saw 8,262 ounces of gold and 36,466 ounces of silver poured from the Sonora, Mexico-based underground operation. The company processed 89,488 tonnes of ore in Q2, down from 105,611 tonnes in the prior quarter, with gold grades improving from 2.56 grams per tonne to 2.88 grams per tonne and gold recovery ticking up to 96 percent from 95 percent over the same period.
A large part of this downturn is rooted in ongoing issues with a mining contractor brought in late last year to ramp up activities at the narrow-vein Marianas deposit, now central to Bear Creek’s 2025 production outlook. The contractor struggled to keep pace with operational targets, forcing Bear Creek to part ways in May. The company has since moved to bring a new contractor on board, aiming to restore operational continuity at Marianas, which is expected to deliver the lion’s share of Mercedes’ output for the remainder of the year.
The impact of these changes is already visible in the mine’s development statistics. Total development for the quarter was 1,828 meters, well below the 2,469 meters advanced in Q1. The slow handover at Marianas, coupled with delays on a new ventilation shaft due to poor ground conditions, contributed to a shortage of available mining faces, which in turn reduced mined and processed tonnages.
Some relief was provided by the accelerated removal of pillars at the now-fully mined San Martin deposit. That effort helped offset lost production at Marianas, though it is not a sustainable solution moving forward since San Martin’s resource is now depleted.
Looking beyond the short-term production hiccups, Bear Creek is also in the midst of a formal strategic review, a process first announced on March 4, 2025 and still active. The company says it is exploring a wide range of possibilities, from recapitalization to the sale (in part or whole) of its assets, a merger, joint venture, or business combination. No outcomes or timelines are being promised at this stage, leaving considerable uncertainty about Bear Creek’s next move or even its long-run structure.
From a financial perspective, the company took another step this month to bolster working capital. On July 14, Bear Creek drew US$2.4 million from its 2025 Sandstorm Note, a secured promissory note issued to a Sandstorm Gold Ltd. subsidiary. The principal of this facility is capped at US$6.5 million, with Bear Creek able to access up to US$600,000 per month, subject to lender approval. Including the recent draw, US$3.6 million had been tapped as of mid-July, leaving US$2.9 million available for future needs. The note comes at a 7 percent annual interest rate and matures on September 22, 2028, with interest payments set to resume at year end after being deferred for six months.
The funds from this facility are earmarked for general working capital, providing Bear Creek crucial breathing room as it attempts to resolve Mercedes’ operational issues and pursue strategic alternatives. Nevertheless, this additional debt adds to the company’s financial commitments, which, combined with fluctuating output, could be a key focal point for stakeholders as the review process moves forward.
There’s never a straight path in mining, and Bear Creek’s recent quarters highlight just how quickly operational setbacks can impact both the pace of production and the scope of future options. Whether the urgent fixes at Mercedes and the ongoing strategic review will unlock new value or simply stabilize the business remains to be seen.
