Mr. Eric Caba reports

BEAR CREEK MINING RESTRUCTURES SANDSTORM OBLIGATIONS TO IMPROVE NEAR TERM CASH FLOW

Bear Creek Mining Corp. is restructuring its current stream and debt obligations with Sandstorm Gold Ltd. and its subsidiaries, which will be effected by way of a restructuring agreement. The restructuring agreement will improve the Mercedes mine's ability to produce free cash flow in the near term through (i) a reduction in near-term gold and silver stream delivery obligations and (ii) the refinancing and extension of Bear Creek's debt with Sandstorm. Bear Creek expects these amendments will deliver incremental value for shareholders and the company's streaming counterparties over the long term.

Eric Caba, president and chief executive officer of Bear Creek, states: "The restructuring agreement is a major milestone for Bear Creek. Together with our recent agreement with Equinox Gold to refinance the Mercedes deferred payment, we have removed all near-term debt maturities through September, 2028. This greatly improves Mercedes' ability to reinvest in the long-term success of the mine via the exploration potential that we see at Mercedes and return our focus to the advancement of the company's Corani project in Peru, our cornerstone asset. We thank Sandstorm for its continued flexibility as a strategic partner and are pleased to welcome them as our largest shareholder." For more information regarding the Mercedes deferred payment, please see the company's news releases dated Sept. 13, 2023, and July 5, 2023.

Key terms of the amended stream agreements

Mercedes currently has two stream obligations with Sandstorm: the Sandstorm gold stream established upon the company's acquisition of Mercedes (originally announced on Dec. 17, 2021, and amended on May 11, 2023) and the Nomad silver stream, which applied to Mercedes prior to its acquisition by the company. As announced by Bear Creek on Sept. 28, 2023, the company has made the final gold delivery under a gold prepay streaming agreement. The Nomad gold stream has now been fully completed and no further quarterly gold payments are due in respect thereof. The current and pro-forma terms of these agreements are summarized in an attached table.

Under the restructuring agreement, effective Jan. 1, 2024, gold deliveries pursuant to the Sandstorm gold stream will be reduced from 600 ounces (oz) per month to 275 oz per month and silver deliveries pursuant to the Nomad silver stream will be fully suspended until April,2028, (a reduction of 75,000 oz per quarter, approximately half of which the company is currently required to purchase due to silver production shortfalls). Completion of the Nomad gold stream results in the further availability of approximately 300 oz of gold on a monthly basis.

The net effect of the reduction in deliverable gold ounces under the Sandstorm gold stream, the suspension of the Nomad silver stream and the conclusion of the Nomad gold stream is, starting Jan. 1, 2024, a monthly decrease of 958 gold equivalent ounces (calculated on the basis of a silver to gold ratio of 75 to one) deliverable under current stream agreements, representing a roughly 78-per-cent decrease from historic monthly deliveries.

Consideration to Sandstorm in exchange for the stream amendments will consist of:

• A 1-per-cent net smelter returns (NSR) royalty on Corani, which contains one of the world's largest fully permitted silver deposits;
• Payment of up to $10-million (U.S.) in the form of common shares of Bear Creek, provided that Sandstorm will own no more than 19.99 per cent of Bear Creek's issued and outstanding common shares on a postclosing basis.

If the value of the Bear Creek common shares issued to Sandstorm as consideration under the restructuring agreement is less than $10-million, then Sandstorm has agreed to increase the principal amount of refinanced sandstorm note, such that the total value of the issued Bear Creek common shares and the incremental increase in principal amount equals $10-million.

Debt refinancing

Sandstorm has further agreed to restructure its debt financing arrangements with Bear Creek. Pursuant to the restructuring agreement:

• Sandstorm will refinance its $22.5-million (U.S.) convertible debenture into a five-year convertible promissory note bearing interest at 7 per cent per year and convertible into common shares of Bear Creek at a strike price of 73 cents per share. The refinanced sandstorm note will have a maturity date of Sept. 22, 2028, and be secured by first lien pledges on the assets of Mercedes, Bear Creek's equity interests in Mercedes and Corani;
• Sandstorm will refinance its $9-million (U.S.) secured loan that was acquired by a wholly owned subsidiary of Sandstorm into a second five-year convertible promissory note on the same terms as the refinanced Sandstorm note. As disclosed above, the principal amount of this promissory note will be increased by the amount of the consideration shortfall, if any.

In connection with the restructuring agreement, Sandstorm has agreed to make up to $8-million (U.S.) in additional credit available to Bear Creek under the Sandstorm secured loan prior to Aug. 31, 2024, subject to certain conditions. Any amounts drawn from the interim credit will be added to the principal amount of the second refinanced sandstorm note.

Closing conditions

The restructuring agreement is expected to take effect on closing, which is subject to the following conditions:

• Bear Creek's completion of an equity financing to raise gross proceeds of at least approximately $9.5-million, as described in further detail below;
• Customary stock exchange approvals as outlined below.

The proceeds of the equity financing are intended to be used to support additional development work at Mercedes, expand on recent positive drill results of up to 62.6 grams per tonne (g/t) of gold over 5.2 metres (see Bear Creek news release dated Aug. 30, 2023) and for general working capital purposes, the latter of which includes approximately 30 per cent (approximately $2.1-million (U.S.)) intended to be used to decrease trade payables to a normalized level over the next two quarters.

The transactions disclosed in this news release including the equity financing, the restructuring agreement and the transactions under the restructuring agreement, including the consideration shares, the NSR, the refinanced sandstorm note, the second refinanced sandstorm note, the interim credit, and the amendments to the Sandstorm gold stream and the Nomad silver stream are subject to TSX Venture Exchange approval.

National Instrument 43-101 disclosure

The scientific and technical information contained in this news release has been reviewed and approved by Andrew Swarthout, AIPG certified professional geologist and director of the company, who is a qualified person as defined in National Instrument 43-101 (Standards of Disclosure for Mineral Projects).

We seek Safe Harbor.