Highlander Silver and Bear Creek agree to combine operations
Highlander Silver Corp. [HSLV-TSX, HLSCF-OTC] and Bear Creek Mining Corp. [BCM-TSXV, BCEKF-OTCQX, BCM-BVL] have struck a definitive deal to combine their operations by way of a plan of arrangement.
Bear Creek shares advanced on the news, rising 13.6% or $0.065 to 54 cents. The shares trade in a 52-week range of 76 cents and 15 cents. Highlander Silver jumped 16.8% or 64 cents to $4.44 and trades in a 52-week range of $4.62 and 94 cents.
The combined company will be managed by the Highlander Silver executive team, supported by Bear Creek personnel.
Highlander Silver, backed by the Augusta Group and the Lundin Family, is focused on the discovery of silver-gold-polymetallic projects in the Central Andes. The company is currently developing the La Estrella and Alta Victoria projects in central Peru, while advancing the San Luis gold-silver project in Peru, an asset it acquired last year from SSR Mining Inc. [SSRM-TSX, NASDAQ- SSRM].
Bear Creek’s key assets include the Corani Project in Puno, Peru, which ranks as one of the largest fully permitted silver deposits in the world with 229 million ounces of silver and 4.4 billion pounds of combined lead zinc in proven and probable reserves. The company’s Mercedes mine in Sonora, Mexico is a cash flow generating gold mine.
Under the agreement Highlander Silver will acquire all of the issued and outstanding shares of Bear Creek. Bear Creek shareholders will receive 0.1175 common shares of Highlander in exchange for each Bear Creek share held immediately prior to the effective time of the arrangement. Highlander Silver expects to issue approximately 34.4 million shares to Bear Creek shareholders.
Highlander Silver has agreed to settle outstanding debt obligations owing by Bear Creek to Equinox Gold Corp. [EQX-TSX, EQX-NYSE] and certain affiliates of Royal Gold Inc. [RGLD-NASDAQ], and to terminate the gold and silver stream obligations between Bear Creek and an affiliate of Royal Gold under the Mercedes streaming arrangement.
As a result, Royal Gold will receive a cash consideration of US$6.2 million, an incremental 1.75% secured net smelter return royalty on the Corani Project and an unsecured 2.0% NSR royalty on the Mercedes mine together with certain parent guarantees from Highlander Silver.
Royal Gold’s existing 1.0% secured NSR royalty on the Corani project will remain in place, such that Royal Gold will hold a 2.75% secured NSR royalty on Corani.
Equinox will receive US$1.6 million in cash and a 0.5% unsecured NSR royalty on Corani. However, Highlander will be permitted to buy back 0.167% of the NSR for US$8.3 million.
Concurrently, Highlander Silver will subscribe for 50 million Bear Creek shares at 36 cents per share for gross proceeds of $18 million, leaving it with a 14.6% ownership stake in Bear Creek. Proceeds will be used by Bear Creek for bonding, site investigation, exploration and studies at the Corani Project. Closing is expected to occur on December 30, 2025.