Mr. Eric Caba reports

BEAR CREEK MINING REPORTS Q2 2024 FINANCIAL AND OPERATING RESULTS

Bear Creek Mining Corp. has released its interim condensed consolidated financial results for the three months ended June 30, 2024 (Q2 (second quarter) 2024).

This news release should be read in conjunction with the company's interim condensed consolidated financial statements and management's discussion and analysis (MD&A) for the three and six months ended June 30, 2024, which are available on SEDAR+ and the company's website. Monetary amounts in this news release are in U.S. dollars unless otherwise stated.

Highlights

Key milestones that occurred during and subsequent to the end of Q2 2024 include:

• Produced 9,304 ounces (oz) of gold and 40,893 oz of silver;
• Appointed Donald McIver to the position of vice-president, exploration and geology;
• Continuing to make technical changes at Mercedes to improve operating performance;
• Enhanced Mercedes's ground control management plan (GCMP) to overcome historical geotechnical challenges and development deficits;
• Completed the north lateral ramp at the Marianas deposit, which includes two important pivots into the north and central ore bodies planned for late 2024 and 2025 production;
• Completed infrastructure projects at the San Martin deposit, including the new ventilation raise. This will allow acceleration of development by adding additional faces for ore extraction.

Eric Caba, president and chief executive officer, states: "Our efforts to optimize fundamental mine processes at Mercedes continued to result in improved gold grades and development metres achieved during Q2 2024. Pivoting development at the Marianas deposit toward driving a new lateral ramp resulted in gold production during the quarter that was lower than the previous two quarters due to restricted available working faces. Operating costs per ounce of gold produced also increased in Q2 2024 despite the effect of improved cost control measures, as a result of higher labour costs accompanying new union agreements settled during the quarter and increased contractor costs. The new Marianas ramp is expected to allow better positioning for ongoing infill drilling and development into other Marianas ore bodies in late 2024 that we anticipate will contribute to production in 2025. We also initiated a near-mine and district-wide exploration program that is combining traditional exploration techniques with machine learning tools to identify new exploration targets. This work has already generated several new near-mine targets under cover that we are actively investigating. We remain convinced of Mercedes's ability to generate consistent, reliable quarterly production results and steady free cash flow."

Selected Q2 2024 financial and production results

Bear Creek's Mercedes gold mine, located in Sonora, Mexico, produced 9,304 ounces of gold and 40,893 ounces of silver during the three months ended June 30, 2024. During this period, 9,155 ounces of gold were sold, of which 825 ounces of gold were delivered under streaming arrangements. Cash cost and all-in-sustaining cost (AISC) per ounce of gold sold were $1,657 and $2,058, respectively.

Mercedes mine, Mexico

The Mercedes mine is a fully mechanized, ramp-access operation that produces gold and silver. Eleven individual deposits have been mined or are in production. Seven additional deposits have been identified and are in the early exploration or drill definition stage. Additional mineralized zones proximal to existing workings have been identified and are at the exploration or drill definition stage.

Exploration

Greenfield exploration drilling continued during Q2 2024. Targets included the San Martin Displacement, Margarita East, Klondike Displacement, Rey de Oro Deep, Diluvio Northwest and Lagunas West targets. Expenditures on this limited program during Q2 2024 totalled $600,000. Delineation infill drilling focused on the Marianas, Diluvio West, Intermediate, GAP and Barrancas deposits. Data obtained from this infill drilling will assist in the estimation of new mineral resources and the conversion of resources to mineral reserves.

Development

The company's focus on improving mine development continued through Q2 2024, with 2,569 metres of development advancement achieved during the period. This is in line with the development metres achieved in Q4 (fourth quarter) 2023 and Q1 (first quarter) 2024, after steady quarterly improvements over the course of the past financial year, from 1,044 metres in Q1 2023. Development at the Rey de Oro deposit advanced during Q2 2024.

With the completion of the vent raise in San Martin, mining progress improved in Q2 2024, with significant advance in infrastructure development, adding additional operating faces to be mined through the remainder of the year. Bear Creek made the strategic decision in Q1 2024 to discontinue development of the central vertical ramp at the Marianas deposit and to drive a new lateral ramp, which development was completed during Q2 2024. The central vertical ramp was situated in the hanging wall of a significant shear zone, which caused poor round conditions contributing to rock stability issues, cost increases and lower production. The new lateral ramp allows for both development to the north ore body of Marianas and for re-establishment of a new central vertical ramp that is offset from the shear zone of the hangingwall. During Q2 2024, both the Marianas North ore body pivot and the new central ore body vertical ramp pivot were established within the lateral ramp.

Planning for a new tailings storage facility (TSF3) continued during Q2 2024. A land use permit for TSF3 was issued during Q1 2024, however, final permitting has been impacted by bureaucratic delays in the implementation of Mexico's new mining law announced in 2023. Contingency plans for the deposition of tailings are being developed.

Production

Mercedes' Q2 2024 production comprised contributions from three main deposit areas: San Martin, Diluvio and Lupita. Q2 2024 production totalled 93,093 tonnes of ore mined at an average mining grade of 3.30 grams per tonne (g/t) gold, with 95,727 tonnes of ore processed at an average grade of 3.23 g/t gold. The average gold grade of ore processed during Q2 2024 was largely in keeping with the last two quarters, continuing the improvement in grade in comparison with the 2023 average of 2.77 g/t.

The Mercedes mine had two lost-time incidents and no reportable environmental incidents during the three months ended June 30, 2024.

Outlook

San Martin is expected to continue to contribute meaningfully to Mercedes's gold production through the remainder of 2024. Additional contributions are expected from the Rey de Oro, Diluvio and Gap deposits, as well as continuing production from Marianas.

Work on new geological and block models continued to progress during Q2 2024, and is being prepared for review by external experts, which is expected to occur during Q4 2024. The continued focus on development, as well as delineation and exploration drilling, combine to support the company's plans for medium- and long-term production. Updates to estimates of mineral reserves and mineral resources are tentatively expected before the year-end, pending completion of the first phase of the exploration and infill drilling campaign, and approval of the models described above.

The company has commenced a program to delineate new prospects, with the potential to lead to new mineral resources proximal to Mercedes's current operations, to be followed by a second phase of work aimed at expanding the existing interpretation of the remainder of the Mercedes concessions with a view to defining key mineralized systems and new mineralization models. This holistic program integrates machine learning tools, aeromagnetic survey data, ground-based geochemistry and geological observations with concomitant interpretations. Additionally, specialized geological consultants have been contracted to better understand the complex structural environment of precious metal deposition at Mercedes and more precisely guide continuing exploration efforts. Several new possible mineralized structures have been identified, including a possible parallel structure to the primary Mercedes vein.

As a result of anticipated variability in Mercedes's production rates for the remainder of 2024, Bear Creek is not providing 2024 production guidance for the Mercedes mine.

Corani project

Activities at the Corani property during the three months ended June 30, 2024, focused primarily on community support initiatives and on progressing a geometallurgical test program. The company maintains and continues excellent working relationships with local communities.

The Corani geometallurgical program, which commenced in 2023, involved drilling nine holes totalling approximately 1,231 meters, and logging, sampling and assaying the drill core. Assay results were substantially in line with the existing Corani block model. A selection of samples for metallurgical test work were shipped to Base Metallurgical Laboratory in Canada in late 2023, with additional samples sent subsequent to the end of Q2 2024. Final metallurgical results on all submitted samples are expected to be received in late Q3 (third quarter) 2024. The purpose of the geometallurgical program is to establish updated data as the company prepares to resume Corani project financing efforts.

Pending receipt of the results of the geometallurgical test program and if and as Peruvian investment conditions improve, the company plans restart its efforts to seek the financing necessary to construct the proposed Corani mine. In the meantime, the company is continuing to focus on maintaining the Corani permits and the strong social licence of the project.

Overview of results of operations, liquidity and capital resources

The company recorded revenue of $22.1-million from the sale of gold and silver during the three months ended June 30, 2024 (compared with $19.9-million for the comparative period of 2023). The cost of goods sold was $15.8-million, and depletion, amortization and depreciation amounted to $8.9-million during Q2 2024.

The company recorded a gross loss from operations of $2.6-million for the three months ended June 30, 2024 (compared with a gross loss of $2.8-million the same period a year earlier). Mercedes's Q2 2024 operating costs were negatively impacted by: strengthening of the Mexican peso against the U.S. dollar; increases in labour costs (20 per cent higher than Q2 2023) as a result of the biennial union agreement negotiations that took place during Q2 2024, as well as severance payments due to a reduction in staff; and increases in contractor costs (41 per cent higher than Q2 2023) due to the engagement of additional operations contractor services focused on accelerating mine development and reducing dilution. These cost increases were partially offset by lower material costs, lower cement consumption and lower maintenance costs stemming from the company's cost reduction efforts.

Spending on the Corani property totalled $1.7-million during the three months ended June 30, 2024, a small decrease compared with the same period a year earlier (Q2 2023: $1.9-million), due to decreased consulting costs and higher cost recovery. The Corani expenditures comprise both direct project expenditures and corporate overhead costs. Exploration costs, including maintenance of the company's Peruvian property interests and exploration at Mercedes, totalled $1.0-million during the quarter (Q2 2023: $300,000). This increase is due to increased exploration drilling at Mercedes.

During Q1 2024, the company closed the Sandstorm restructuring agreement (see the company's news release dated Jan. 22, 2024, and its MD&A for the three months ended March 31, 2024). As a part of the restructuring, the company derecognized deferred revenue associated with Sandstorm gold purchase agreement on Jan. 22, 2024, and determined fair value of the restructured Sandstorm gold stream. Fair value of the restructured silver stream has also been determined as at Jan. 22, 2024. The change in fair value of the company's stream arrangements as at June 30, 2024, of $1.9-million (as compared with $600,000 in Q2 2023) is primarily due to change in metals price, remaining deliveries and discount rates utilized.

The company fair values the conversion feature of its convertible debentures and call options granted as part of notes payable at each period-end, and recorded a loss of $2.1-million (Q2 2023: gain of $1.2-million), presented as a change in fair value of the derivatives embedded into the Equinox note and Sandstorm loan. The major factor impacting this loss was the change in share price of the company during the quarter.

The company fair values the warrant liability associated with financing in Q4 2023 and recorded a loss of $900,000 (Q2 2023: nil), due to the fluctuations in the company's share price.

After operating expenses, other income and expenses, tax expenses, and recoveries the company recorded a comprehensive net loss of $11.2-million (five cents per share) for the three months ended June 30, 2024 (Q2 2023: $7.6-million and five cents per share). The increased comprehensive loss of $3.6-million period over period is primarily due to the $5.5-million loss on the valuation of embedded derivatives, stream arrangements and warrant liabilities, and a $1.7 reduction in tax recoveries, offset by foreign exchange gain of $3.9-million.

At June 30, 2024 the company held cash and cash equivalents and short-term investments totalling $3.4-million, a decrease of $500,000 from Dec. 31, 2023. For the six months ended June 30, 2024, the company had a cash inflow from operating activities of $5.8-million (2023: inflow of $7.5-million), a cash outflow from investing activities of $5.4-million (2023: outflow of $3.4-million) and an outflow of $800,000 from financing activities (2023: outflow of $2.6-million).

The company's interim condensed consolidated financial statements for the three and six months ended June 30, 2024, were prepared following accounting principles applicable to a going concern, which assumes the company will be able to continue operations for at least 12 months from June 30, 2024, and will be able to realize its assets and discharge its liabilities in the ordinary course of operations.

As at June 30, 2024, the company had a working capital (current assets less current liabilities) deficiency of $92.8-million (Dec. 31, 2023: $89.7-million), which was impacted by the amendments to IAS 1, Presentation of Financial Statements (international accounting standards), requiring reclassification of equity-settleable convertible notes and warrant liabilities totalling $56.1-million (Dec. 31, 2023: $47.4-million) from non-current liabilities to current liabilities.

Non-GAAP (generally accepted accounting principles) measures

This news release includes disclosure of certain financial measures or ratios, as such terms are used in National Instrument 52-112, Non-GAAP and Other Financial Measures Disclosure, including cash cost, AISC and adjusted earnings. These Non-GAAP financial measures are not standardized financial measures under IFRS (international financial reporting standards) and might not be comparable with similar measures presented by other companies. The company believes that these measures and ratios provide investors with an improved ability to evaluate the prospects of the company as they provide additional information related to operating performance and are widely used in the mining industry.

NI 43-101 disclosure

Unless otherwise indicated, scientific and technical information in this news release is based on work programs and initiatives conducted under the supervision of, and/or has been reviewed and approved by, Andrew Swarthout, AIPG certified professional geologist, a director of the company, who is a qualified person (QP) as defined in NI 43-101. Additional information related to the Mercedes mine and the Corani project, including the quality assurance and quality control measures applied to the company's sampling and assaying practices, is available in its annual information form for the year ended Dec. 31, 2023, available on the company's website and on SEDAR+.

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