In a large pot or Dutch oven, heat the olive oil over medium heat. Fry the diced bacon until golden brown and crispy. Remove the bacon and set aside on a plate.
Season the beef chuck with salt and pepper, dredge in flour, and sear in the rendered bacon fat until browned on all sides.
Add the sliced onions and carrots to the pot and sauté for 5 minutes, or until softened.
Stir in the minced garlic and tomato paste, then pour in the red wine. Mix well, scraping up any browned bits from the bottom of the pot, and bring to a simmer.
Return the bacon and beef to the pot. Add the thyme sprigs and bay leaves. Reduce the heat to low, cover, and simmer for 2-3 hours, or until the beef is fork-tender.
Meanwhile, in a separate skillet, melt the butter and sauté the sliced mushrooms until golden brown. Set aside.
About 20 minutes before the end of the cooking time, add the sautéed mushrooms to the pot and let the flavors meld.
Serve the Beef Bourguignon hot with fresh baguette, mashed potatoes, or cooked pasta. Garnish with fresh thyme.
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