Highlander Silver Corp. press release
Highlander Silver and Bear Creek Mining Combine to Create Leading Growth Company in the Silver Sector
TSX - Toronto Stock Exchange · Silver · Gold · Lead · Zinc · Copper · Canada
All monetary amounts are expressed in Canadian dollars, unless otherwise indicated.
Toronto, Ontario--(Newsfile Corp. - December 19, 2025) - Highlander Silver Corp. (TSX: HSLV) ("Highlander Silver") and Bear Creek Mining Corporation (TSXV: BCM) (OTCQX: BCEKF) (BVL: BCM) ("Bear Creek") are pleased to announce that they have entered into a definitive agreement (the "Arrangement Agreement") whereby Highlander Silver and Bear Creek have agreed to combine their respective businesses by way of a plan of arrangement under the _Business Corporations Act_(British Columbia) (the "Arrangement"). The combined company will be managed by the Highlander Silver executive team, supported by key Bear Creek personnel.
Corporate Highlights
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Creates a leading growth company in the silver sector by adding the Corani silver project (the "Corani Project"), one of the largest primary silver deposits in the world, to a foundation supported by the bonanza grade San Luis gold-silver project
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Leading management team with proven expertise in delivering rapid growth while advancing projects in South America in partnership with community and government stakeholders
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Combined company's strong shareholder base includes global institutions and strategic shareholders, Augusta Capital, the Lundin family and Eric Sprott; Highlander's balance sheet remains well-capitalized and debt free post-transaction
Flagship Assets
San Luis Gold-Silver Project - Ancash, Peru
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Hosts Indicated Mineral Resources of 356 koz gold ("Au") at 24.4 g/t Au and 8.4 Moz silver ("Ag") at 579 g/t Ag, ranking among the 10 highest grade projects globally in both gold and silver categories
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Rapidly growing Bonita zone discovery has returned robust drilling results, recently including 23.9m of 20.82 g/t Au and 31.53 g/t Ag (BOD-023); 23.6m of 15.56 g/t Au and 74.49 g/t Ag (BOD-021); 23.4m of 11.70 g/t Au and 26.10 g/t Ag (BOD-022)1
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Geophysics and drilling plans to be released in the New Year and set the stage for the next phase of growth at Bonita while permitting advances
Corani Project - Puno, Peru
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One of the largest primary silver deposits in the world, with permitting well advanced and supporting community agreements in place
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2019 Feasibility Study (as defined below) using US$18/oz silver: US$532m NPV5% and 22.9% after-tax IRR; 9.6 Moz average annual silver production over LOM at AISC2of US$4.55/oz silver
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Proven & Probable reserves of 229 Moz silver; measured and indicated mineral resources (inclusive of mineral reserves) of 323 Moz silver, and additional inferred mineral resources of 84 Moz silver
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Growth opportunity that has not seen exploration drilling in the last decade with exploration opportunities to the north, northeast and south, and a related gold zone and porphyry target to pursue
Mercedes Gold-Silver Mine - Sonora, Mexico
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Operating underground mine with underutilized 2,000 tpd processing plant and associated infrastructure; 2024 production of 40,220 oz gold and 217,676 oz silver
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Large and highly prospective land package of 69,284 ha within prolific belt; main corridor of veins open under cover for over 6km of largely untested prospective strike, with numerous other targets to pursue across multiple styles of mineralization
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Represents an attractive gold asset with significant upside that Highlander will seek to align with a well-funded responsible operator which can prioritize investing in its long-term future
Daniel Earle, President and CEO of Highlander Silver, commented, "I am delighted to present this transaction to our shareholders, which allows us to scale into the emerging structural bull market for silver beyond our bonanza grade San Luis project. The Corani Project is already one of the largest primary silver deposits in the world yet still offers robust growth and discovery potential. To Bear Creek Shareholders, I'd like to extend a warm welcome and commit to honour the legacy of your company as a trailblazer in Peruvian silver exploration by surfacing the full potential of the Corani Project within our portfolio."
Eric Caba, President and CEO of Bear Creek, commented, "I am extremely excited to realize the combination of Bear Creek with Highlander Silver, which will result in a robust, silver-focused enterprise with a significant mineral inventory, a clean balance sheet and a clear path to growth lead by our flagship Corani Project."
Catherine McLeod-Seltzer, Chair, and Peter Mitchell, Special Committee Chair of Bear Creek, respectively, add, "The Highlander Arrangement is a comprehensive solution that first and foremost provides exciting future opportunities for Bear Creek Shareholders to realize value from the Corani Project and participate in Highlander's San Luis project, and secondly provides an elegant solution that eliminates their substantial exposure to Bear Creek's liquidity and debt issues. After a thorough and disciplined strategic review process, engaging with numerous potential counterparties and carefully considering multiple alternative offers, we are extremely pleased to have negotiated the Arrangement with Highlander Silver, which provides the best path forward for our shareholders."
Bill Heissenbuttel, President and CEO of Royal Gold, commented, "With this transaction, Corani is moving into the hands of a well-capitalized company with a management team that has experience advancing large-scale projects in Latin America. I am pleased to see this transaction materialize, as it increases Royal Gold's exposure to the potentially large-scale and long-life Corani Project, and also furthers our objective of simplifying the portfolio we acquired with Sandstorm Gold by converting non-core assets into interests that fit our business model."
Bear Creek Strategic Review and Benefits of the Arrangement to Bear Creek Shareholders
Bear Creek undertook a formal comprehensive and thorough strategic review process (the "Strategic Review") over the past nine months to explore and evaluate the strategic and financial options available to Bear Creek with the ultimate view of restoring balance sheet strength and enhancing value for shareholders. Bear Creek's Special Committee, with the assistance of its legal and financial advisors, engaged with more than 100 parties and carried out an exhaustive analysis of multiple incoming proposals including joint venture, asset and corporate transactions. The Special Committee determined the Highlander Arrangement to be the superior offer in the best interests of the shareholders of Bear Creek (the "Bear Creek Shareholders").
Benefits to Bear Creek Shareholders
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_Continued Exposure to the Corani Project:_Creates a near-term and executable pathway to construction and operation of the Corani Project - one of the world's largest fully permitted silver polymetallic deposits with 229 million ounces of silver and 4.4 billion pounds combined lead and zinc in proven and probable mineral reserves - unlocking long-underappreciated value for Bear Creek Shareholders.
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_Complementary Assets:_Combines the Corani Project's substantial silver mineral reserves with Highlander's rapidly-advancing San Luis gold-silver development property to establish a top tier precious and base metal inventory and an organic pipeline of projects in Peru providing near and long term growth.
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_Stabilizes Bear Creek's Working Capital:_Private Placement (as defined below) in the common shares of Bear Creek ("Bear Creek Shares") by Highlander Silver provides immediate liquidity and demonstrates Highlander Silver's confidence in the Arrangement.
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_Sound Financial Footing:_Participation in a financially robust pro-forma company with a strong cash position, no debt, and a strong group of supportive shareholders including the Augusta Group, the Lundin family and Eric Sprott. The Arrangement eliminates Bear Creek's debt and stream burden (totaling US$121 million as at September 30, 2025) and significantly reduces liquidity and going concern risk for Bear Creek Shareholders.
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_Enhanced Capital Markets Profile:_Participation in a growth-oriented company with increased critical mass, having a combined equity market capitalization of approximately $625 million, which will benefit from increased liquidity and the potential to amplify market exposure and normalize price to net asset value ratios.
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_Insider Support:_All directors and officers of Bear Creek, as well as Bear Creek's largest shareholders, Royal Gold, Inc. ("Royal Gold") and Equinox Gold Corp. ("Equinox"), have signed voting support agreements in favour of the Arrangement, representing approximately 34% of the outstanding Bear Creek Shares.
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_Debt Restructuring: _Outstanding debt obligations with Equinox and affiliates of Royal Gold are restructured in a manner which preserves Bear Creek Shareholders' exposure to the Corani Project.
Details of the Arrangement
Bear Creek and Highlander Silver entered into a definitive Arrangement Agreement on December 18, 2025, pursuant to which Highlander Silver will acquire all of the issued and outstanding Bear Creek Shares by way of a statutory plan of arrangement under the _Business Corporations Act _(British Columbia).
Bear Creek Shareholders will receive 0.1175 common shares in the capital of Highlander Silver (the "Highlander Shares", and such ratio being the "Exchange Ratio") in exchange for each Bear Creek Share held immediately prior to the effective time of the Arrangement. Upon completion of the Arrangement, existing holders of Highlander Shares ("Highlander Shareholders") and former Bear Creek Shareholders will own approximately 82% and 18% of the total issued and outstanding Highlander Shares, respectively, on a fully-diluted basis.
Highlander Silver expects to issue an aggregate of approximately 34,450,672 Highlander Shares to the Bear Creek Shareholders, based on the Bear Creek Shares outstanding as at the date of this announcement. Highlander Silver may also issue up to approximately 346,253 additional Highlander Shares subject to, as part of the Arrangement, the conversion into Bear Creek Shares of certain convertible securities of Bear Creek at the effective time of the Arrangement. In-the-money stock options (as determined to be "in-the-money" as at the date of the Arrangement Agreement), restricted share units (the "RSUs") and deferred share units (the "DSUs") of Bear Creek outstanding immediately prior to the effective time of the Arrangement will (whether vested or unvested) immediately vest and be converted, as a step in the Arrangement, into Bear Creek Shares and the holders thereof will receive the number of Highlander Shares to which they are entitled for such Bear Creek Shares under the Arrangement based on the Exchange Ratio. Out-of-the-money options of Bear Creek (as determined to be "out-of-the-money" as at the date of the Arrangement Agreement) will be cancelled without any payment and such out-of-the-money optionholders will cease to have any rights under such cancelled options.
The outstanding warrants of Bear Creek will be treated in accordance with their terms and are expected to continue to trade on the TSX Venture Exchange ("TSXV") under the symbol "BCM.WT". After giving effect to the Arrangement, Bear Creek warrants will become exercisable into Highlander Shares.
In addition, Highlander Silver has also entered into agreements with affiliates of Royal Gold and Equinox to settle all of Bear Creek's outstanding indebtedness owing to such parties, subject to the completion of the Transaction (the "Debt Settlement Arrangements" and together with the Arrangement, the "Transaction").
The Transaction is expected to close in the first quarter of 2026, subject to the receipt of all required court, regulatory and stock exchange approvals. Following completion of the Arrangement, the Highlander Shares will remain listed on the Toronto Stock Exchange and the Bear Creek Shares will be delisted from the TSXV.
Debt Settlement Arrangements
Highlander Silver has entered into definitive agreements to: (i) settle outstanding debt obligations owing by Bear Creek to Equinox and certain affiliates of Royal Gold; and (ii) terminate the gold and silver stream obligations between Bear Creek and an affiliate of Royal Gold under the Mercedes streaming arrangement.
Royal Gold will receive cash consideration of US$6.2 million, an incremental 1.75% secured net smelter return royalty on the Corani Project and an unsecured 2% net smelter return royalty on the Mercedes mine, together with certain parent guarantees from Highlander Silver. Royal Gold's existing 1% secured net smelter return royalty on the Corani Project will remain in place, such that Royal Gold will hold an aggregate 2.75% secured net smelter return royalty on the Corani Project (the "Corani NSR"). Highlander Silver will be permitted to buy back 0.5% of the Corani NSR for US$25 million until the earlier of: (i) January 1, 2033; and (ii) the date that is 6 months after a final investment decision ("FID") is made. If the FID is obtained before December 31, 2028, Highlander Silver will be permitted to buy back 0.75% of the Corani NSR for US$30 million.
Equinox will receive US$1.6 million of cash consideration and a 0.5% unsecured net smelter royalty on the Corani Project (the "Equinox NSR"). Highlander Silver will be permitted to buy back 0.167% of the Equinox NSR for US$8.3 million until the earlier of: (i) January 1, 2033; and (ii) the date that is 6 months after an FID.
The Debt Settlement Arrangements are conditional upon closing the Arrangement.
Concurrent with execution of the Arrangement Agreement, both Royal Gold and Equinox have agreed to extend the interest accrual period on Bear Creek's convertible debts owing to both parties from December 31, 2025 to the earlier of (i) the closing date of the Arrangement and (ii) the termination of the Arrangement Agreement in accordance with its terms (the "Interest Deferral"). As at September 30, 2025, approximately $3.9 million of interest was accrued and payable to the parties. The fixed gold delivery obligations to Royal Gold under the Mercedes streaming arrangement will continue until the closing of the Arrangement.
Each of Royal Gold and Equinox is a "related party" of the Bear Creek and the Debt Settlement Arrangements and the Interest Deferral constitute "related party transactions" (as each term is defined in the policies of the TSXV and MI 61-101). Bear Creek intends to rely on the specified markets exemption from the formal valuation requirement set forth in subsection 5.5(b) of MI 61-101 and intends to seek approval from disinterested shareholders of Bear Creek, excluding for this purpose the votes held by any person required under MI 61-101 at the Bear Creek Meeting (as defined below).
Concurrent Non-Brokered Private Placement
Concurrently with the entering into of the Arrangement Agreement, Highlander Silver has entered into a subscription agreement with Bear Creek pursuant to which Highlander Silver will subscribe for 50,000,000 Bear Creek Shares at a price of $0.36 per Bear Creek Share for gross proceeds of $18 million to acquire approximately 14.6% ownership stake in Bear Creek (the "Private Placement"). The proceeds from the Private Placement will be used by Bear Creek for bonding, site investigation, exploration and studies at the Corani Project and for general working capital purposes at Mercedes. Closing of the Private Placement is expected to be completed on December 30, 2025 and is not contingent on the completion of the Arrangement.
The Private Placement is subject to the approval of the TSXV and other customary regulatory approvals. No finder's fee is payable in connection with the Private Placement. The Bear Creek Shares issued under the Private Placement will be subject to a statutory four month and one day hold period, pursuant to securities laws in Canada. The Bear Creek Shares issued under the Private Placement have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act"), or the securities laws of any state of the United States. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any securities of Bear Creek, nor shall there be any offer or sale of any securities of Bear Creek in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.
Pursuant to the Arrangement, Bear Creek Shares held by Highlander Silver will be cancelled in accordance with the terms of the Arrangement Agreement and no Highlander Shares or other compensation will be issued in connection with such cancellation.
Transaction Conditions and Timing
The Arrangement will be effected by way of a court-approved plan of arrangement under the _Business Corporations Act _(British Columbia) and will require the approval of: (i) at least 66⅔% of votes cast by Bear Creek Shareholders, (ii) 66⅔% of the votes cast by the Bear Creek Shareholders and holders of the stock options, RSUs and DSUs (collectively, the "Bear Creek Securityholders"), voting together as a single class, and, if required, (iii) a simple majority of the votes cast by disinterested shareholders of Bear Creek, excluding for this purpose the votes held by any person required under Multilateral Instrument 61-101 - Protection of Minority Security Holders in Special Transactions.
The Arrangement will require approval of a simple majority of votes cast by Highlander Shareholders.
The Arrangement Agreement includes customary representations and warranties for a transaction of this nature as well as customary interim period covenants regarding the operation of Highlander Silver's and Bear Creek's businesses. The Arrangement Agreement also includes customary deal protections in favour of each of Highlander Silver and Bear Creek. With respect to Highlander Silver, these protections include fiduciary-out provisions, non-solicitation covenants, and a right to match any superior proposals. With respect to Bear Creek, these protections include a fiduciary-out provision. The Arrangement Agreement includes a termination fee of $8 million payable by Bear Creek in the event the Arrangement Agreement is terminated in certain circumstances and a reverse-termination fee of $8 million payable by Highlander Silver in the event the Arrangement Agreement is terminated in certain circumstances.
In addition to securityholder and court approvals, the Arrangement is subject to applicable regulatory approvals, stock exchange approvals and the satisfaction of certain other closing conditions customary in transactions of this nature. The Arrangement is expected to close in the first quarter of 2026.
None of the securities to be issued pursuant to the Arrangement have been or will be registered under the U.S. Securities Act, or any state securities laws, and any securities issuable in the Arrangement are anticipated to be issued in reliance upon available exemptions from such registration requirements pursuant to Section 3(a)(10) of the U.S. Securities Act and applicable exemptions under state securities laws. This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities.
Further details of the Arrangement, will be included in separate management information circulars to be prepared by each of Bear Creek (the "Bear Creek Circular") and Highlander Silver (the "Highlander Circular") that will be delivered to Bear Creek Shareholders and Highlander Shareholders, respectively, in advance of the meeting of Bear Creek Securityholders (the "Bear Creek Meeting") and the meeting of Highlander Shareholders (the "Highlander Meeting"), each of which are anticipated to be held in February 2026. A copy of the Arrangement Agreement will be made available on Bear Creek's and Highlander Silver's SEDAR+ profiles at www.sedarplus.ca. The Bear Creek Circular and Highlander Circular will also be made available on Bear Creek's and Highlander Silver's SEDAR+ profiles in advance of the Bear Creek Meeting and the Highlander Meeting.