Mr. Eric Caba reports

BEAR CREEK MINING REPORTS Q3 2023 FINANCIAL AND OPERATING RESULTS

Bear Creek Mining Corp. has released its interim condensed consolidated financial results for the three and nine months ended Sept. 30, 2023 (Q3 2023). Monetary amounts in this news release are in United States dollars unless otherwise stated.

This news release should be read in conjunction with the company's interim condensed consolidated financial statements and management discussion and analysis (MD&A) for the three and nine months ended Sept. 30, 2023, which are available on SEDAR+ and the company's website.

Overview -- corporate developments and technical results

Bear Creek's efforts to improve the performance of the Mercedes gold mine in Sonora, Mexico, and to improve the company's financial condition continued during Q3 2023. Most notably, the company entered into two significant restructuring agreements to refinance and extend current and near-term debt obligations to 2028 and to improve Mercedes's ability to produce free cash flow through a significant reduction of gold and silver stream obligations. The company also completed two equity raises during and subsequent to the end of Q3 2023. These transactions include:

• A restructuring agreement with Equinox Gold Corp. to convert a $26-million current liability into a non-current obligation by issuing a five-year convertible promissory note (the EQX P-note) at a competitive interest rate. The EQX P-note was approved by shareholders of the company at a meeting held on Sept. 21, 2023, and the EQX P-note was issued subsequent to the end of Q3 2023. Final approval from the TSX Venture Exchange is pending.
• A restructuring agreement with Sandstorm Gold Ltd. and its subsidiaries to reduce near-term Mercedes gold and silver stream delivery obligations and refinance and extend debt owed to Sandstorm. Closing of the Sandstorm restructuring is subject to TSX-V approval.
• Completion of a private placement financing to raise an aggregate of approximately $8.2-million (Canadian) in July, 2023, and completion of a $9.5-million (Canadian) bought deal financing in October, 2023.

Additional details regarding these transactions are provided below and in the company's news releases dated July 5, Sept. 13, Sept. 21, Sept. 28, Oct. 5, Oct. 12 and Oct. 19, 2023.

The Mercedes mine has been inconsistent in achieving the anticipated gold grades projected in the mine plans and geological models the company inherited upon its acquisition of Mercedes in April, 2022. The company has identified underlying factors and taken steps to improve the geological model, increase development, decrease costs, eliminate operating inefficiencies and improve staffing at Mercedes. While these efforts have been largely successful, deficiencies in development and poor ground conditions in certain workings continued to impact Mercedes's operations during Q3 2023. Subsequent to the end of the quarter, Bear Creek revised its gold production guidance for 2023 to 39,000 to 45,000 ounces. No other guidance was revised. Efforts to identify and overcome remaining barriers are continuing and the company has taken steps to shorten its response time as it continues to work to further increase underground development, improve processing grades and reduce dilution. Included in these operational changes is a dedicated effort to assemble a skilled team that shares the company's focus on Mercedes's profitability. Bear Creek's board of directors and management believe Mercedes has the elements necessary to improve annual production, discover additional mineralization, lower costs and contribute significant free cash flow, and the company is working relentlessly to provide the strategic operational tools and sufficient financial resources to make these improvements come to fruition.

The company announced the appointment of two new directors to the board, Sandra Daycock and Susan Toews, and a new chief operating officer, Brian Peer, on Nov. 11, 2023. Ms. Daycock and Ms. Toews will contribute their cumulative financial, legal, strategic and governance expertise to the direction of the company, and with over three decades of hands-on experience at mining operations throughout the Americas, while Mr. Peer is a welcome addition to the company's senior management team. During Q3 2023 Erfan Kazemi retired from the board to concentrate on his other business obligations, and on Sept. 11, 2023, the company announced that Tony Hawkshaw, former chief executive officer of the company, had retired from the board for medical reasons. Mr. Hawkshaw passed away on Nov. 4, 2023.

Eric Caba, Bear Creek's president and CEO, stated: "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. 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. We are building a management and technical team, supported by the board, that is focused on increasing margins as well as production. These technical and managerial changes are starting to make a difference at Mercedes and we continue to be excited about the long term."

Mercedes gold mine, Mexico

Safety

The Mercedes mine had one lost time incident (LTI), one restricted work incident and no medical treatment incidents during Q3 2023. No reportable environmental incidents occurred during Q3 2023.

Mine plan and development

The changes in mining methods initiated during Q2 2023, from cut and fill at the Marianas and San Martin deposits to room and pillar mining at San Martin and sublevel caving and sublevel stoping at Marianas, have proven beneficial with an increase in efficiency of the development work as more tons of ore become available per metre of development. However, due to the poor rock quality in some areas of the Marianas deposit, the mining methods currently in use continue to be evaluated in an effort to minimize excessive dilution. These rock quality issues required the unplanned development of a bypass ramp and parallel ventilation ramp, which manifested in lower grades available to be processed during the quarter. Despite these challenges, Q3 2023 mine development continued to improve throughout the quarter, yielding a 31-per-cent increase in development metres (from 1,364 metres during Q2 2023 to 1,791 metres during Q3 2023).

The changes to mining methods during Q2 2023 significantly and positively impacted mining costs from May, 2023, onward. Average mining costs at Mercedes have decreased from $80.84 per tonne of ore mined during the first four months of the year to $68.37 per tonne of ore mined during the period May 1 to Sept. 30, 2023; a decrease of approximately 15 per cent. Mining costs per tonne of ore mined are expected to continue to decline during the final quarter of 2023 as mining methods are further optimized and the company implements more rigorous controls and supervision over blasting and ground control practices. Additional details regarding the decrease in mining costs per tonne, which are a non-IFRS (international financial reporting standars) measurement, and their reconciliation to production costs, are provided in the company's MD&A for the three and nine months ended Sept. 30, 2023.

Exploration

Delineation drilling focused on advances within the Marianas, San Martin, Rey de Oro, Diluvio and Lupita deposits at Mercedes increased during Q3 2023. Results from delineation drilling at Mercedes announced during Q3 2023 included numerous intercepts with gold grades substantially higher than the currently defined resources, including up to 62.6 grams per tonne gold over 5.2 m true width at the Marianas deposit. This drilling also encountered zones of intense structural complexity, including hydrothermal breccias, that in combination with higher gold and silver grades may point to a closer proximity to the source structures of mineralization in the Mercedes district and bode well for future exploration potential. Full details of drill results issued during Q2 2023 are provided in the company's news release dated Aug. 3, 2023.

Outlook

The company has undertaken to update and revise Mercedes geological modelling, reserve block modelling, mining methodology optimization and mine sequencing, all of which continue to progress. Aggressive underground delineation drilling is continuing, providing the company with the means to convert resources to reserves while continuing with production. The company expects that the impact of the drilling results, mining methodology optimization, implementation of increased supervision, and controls to improve blasting and ground control will support final 2023 production of 39,000 to 45,000 ounces as announced on Oct. 20, 2023. Exploration drilling focused on the Marianas Deep, Marianas Extension and San Martin Displacement targets is scheduled to restart in Q4 2023.

The Marianas deposit has contributed significantly to Mercedes production during 2023 which trend is expected to continue into 2024. Marianas is also a vital component of the company's longer-term plans for Mercedes. Marianas is located on the prolific Mercedes structural trend, which has contributed over 3.5 million tonnes of ore and over 580,000 ounces of gold to the mine's historical production since 2011. Bear Creek's understanding of the deposit is evolving with additional delineation drilling and projected surface exploration drilling stepping out both along strike and below the existing Marianas workings.

Tonnes mined from the San Martin deposit increased from 400 to almost 600 tonnes daily during Q3 2023, and improvements in both tonnage (to over 800 tonnes per day) and grade are expected in Q4 2023 as the available working faces increase and as development enters into the higher-grade core of the orebody.

The company is also advancing the development of the Rey de Oro mine. Delineation drilling and the appointment of a development contractor are under way. Production from Rey de Oro is expected to commence during Q4 2023.

Overview of results of operations, liquidity and capital resources results of operations

For the three months ended Sept. 30, 2023, the company recorded revenue of $18.8-million from the sale of gold and silver. The company sold a total of 9,815 GEOs (gold equivalent ounces) at an average price of $1,916/GEO. The cost of goods sold was $14.3-million, and depletion, amortization and depreciation amounted to $11.2-million.

The gross loss from Mercedes operations was $6.8-million during Q3 2023. Operations and operating costs were negatively impacted by poor ground conditions in some working areas of the mine, and by inflationary pressures, mainly reflecting increased prices for diesel and certain consumables such as tires, lubricants, explosives and steel products, and the effect of similar inflationary impacts on the company's third party suppliers. Spending on the Corani property totalled $2.2-million during Q3 2022, comprising direct project expenditures and corporate overhead costs. After all operating expenses, other income and expenses, tax expenses, and recoveries, the company recorded a comprehensive net loss of $9.8-million (six cents per share) for the three months ended Sept. 30, 2023.

Management has assessed impairment indicators on the company's property and equipment. The company concluded that impairment indicators on the Mercedes mine exist as of Sept. 30, 2023, and therefore was required to update the estimate of the recoverable amount of the Mercedes mine. As the recoverable amount of the Mercedes mine exceeded the carrying value as at Sept. 30, 2023, no impairment charge was taken.

Liquidity

On Sept. 30, 2023, the company held cash and cash equivalents and short-term investments in the amount of $1.7-million (not including $1.7-million in restricted cash), a decrease of $1.8-million from Dec. 31, 2022. For the nine months ending Sept. 30, 2023, operating activities resulted in a cash inflow of $2-million, investing activities used $12.2-million and financing activities provided $8.4-million in cash. Cash flow for the nine months ended Sept. 30, 2023, was impacted by higher-than-normal investment in mine development and equipment made during Q3 2023 to improve Mercedes's future production.

On June 30, 2023, the company's net working capital deficiency was $66.1-million (compared with $57.7-million on June 30, 2023, $60-million on March 31, 2023, and $51.2-million on Dec. 31, 2022). Significant amounts contributing to the Sept. 30, 2023, net working capital deficiency are current amounts owing in relation to $26-million Mercedes deferred payment, accounts payable and deferred revenue plus streams.

Subsequent to the end of Q3 2023, the company closed a bought deal equity financing pursuant to which 27.2 million units were sold at a price of 35 Canadian cents per unit for gross proceeds of $9.5-million (Canadian). Each unit comprised one common share and one common share purchase warrant of the company. Each warrant will be exercisable to acquire one share at an exercise price of 42 Canadian cents per warrant share until Oct. 5, 2028. Additional information is provided in the company's news releases dated Sept. 28, Oct. 5 and Oct. 12, 2023.

Restructuring of deferred payment

As described above and in the company's news releases dated May 30, 2023, and July 5, 2023, Bear Creek entered into a restructuring agreement with Equinox Gold to convert a $26-million current liability into a non-current obligation by issuing the EQX P-note. On Sept. 21, 2023, the company held a special meeting at which shareholders were asked to consider and, if thought fit, to pass an ordinary resolution to approve the: (i) issuance of the EQX P-note; and (ii) creation of Equinox Gold, and/or any affiliates of Equinox Gold, as a new control person (as defined in the policies of the TSX-V) of the company. Fifty-seven per cent of shares eligible to be voted at the special meeting were cast and the resolution was passed by 88.9 per cent of votes cast. The EQX P-note in the amount of $26.6-million was issued on Oct. 19, 2023, but remains subject to final approval by the TSX-V. The EQX P-note matures on the fifth anniversary of the issuance date, with all of outstanding, accrued and unpaid interest due on this date. Interest will accrue monthly on the unpaid balance at a rate equal to 7 per cent per annum. The company is required to make monthly interest payments in the amount of $160,000 to Equinox Gold with the balance of the principal and accrued interest payable in full on the maturity date. Additional details are provided in the company's MD&A for the three and nine month periods ended Sept. 30, 2023.

Short-term Loan

On Sept. 13, 2023, the company entered into a short-term loan via a promissory note with Equinox Gold in the amount of $1.3-million, effective Sept. 7, 2023. The loan bears interest at 13 per cent with interest calculated daily and the outstanding balance (interest and principal) is payable on Jan. 7, 2023. Additional information is available in the company's news release dated Sept. 13, 2023.

Conclusion of Nomad gold stream

As part of its acquisition of Mercedes on April 21, 2022, the company assumed a gold prepay agreement with Nomad Royalty Co. Ltd. with 5,400 ounces remaining to be delivered at a rate of between 900 and 1,100 ounces of gold per quarter, depending on the price of gold. The Nomad gold stream was fully completed on Sept. 27, 2023, with no further quarterly gold payments due. As a result, over 300 additional ounces of gold produced at Mercedes per month are available for sale by the company.

Restructuring of stream and debt obligations

On Sept. 28, 2023, the company announced a restructuring of its current stream and debt obligations with Sandstorm that is expected to be effected by way of the restructuring agreement. Under the restructuring agreement, effective Jan. 1, 2024, gold deliveries pursuant to the Sandstorm gold stream are expected to be reduced from 600 oz per month to 275 oz per month and silver deliveries pursuant to the Nomad silver stream are expected to be fully suspended until April, 2028. Together with the retirement of the Nomad gold stream, the stream burden on Mercedes will be reduced by 78 per cent commencing Jan. 1, 2024.

Consideration to Sandstorm in exchange for the stream amendments will consist of a 1-per-cent net smelter return (NSR) royalty on Corani, and payment of up to $10-million in the form of shares of Bear Creek, provided that Sandstorm will own no more than 19.99 per cent of Bear Creek's issued and outstanding shares on a postclosing basis. The restructuring agreement requires approval by the TSX-V and the restructuring agreement, including the issuance of the consideration shares, will occur once this approval is received.

Pursuant to the restructuring agreement, Sandstorm is expected to refinance its $22.5-million 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 Canadian cents per share. The refinanced Sandstorm note is expected to 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; and Sandstorm is also expected to refinance its $9-million secured loan that was acquired by a wholly owned subsidiary of Sandstorm (previously the Auramet loan), into a second five-year convertible promissory note on the same terms as the refinanced Sandstorm note.

Additional information related to the restructuring agreement is available in the company's MD&A for the three- and nine-month periods ended Sept. 30, 2023, and news release dated Sept. 28, 2023.

Going concern

The company's Q3 2023 interim condensed consolidated financial statements were prepared following accounting principles applicable to a going concern, which assumes the company will be able to continue in operation for at least 12 months from Sept. 30, 2023, and will be able to realize its assets and discharge its liabilities in the ordinary course of operations. While the July, 2023, private placement, October equity financing, EQX P-note, restructuring agreement and other developments outlined above improve the company's liquidity, uncertainty remains in relation to the ability of the company to achieve the operating results and necessary cash flow generation from the Mercedes mine to avoid seeking additional financing, which may give rise to significant doubt about the company's ability to continue as a going concern.

We seek Safe Harbor.