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|  | |    Bear Creek's flagship Corani Property, situated in an emerging mineral district of southeastern Peru, is both an advanced bulk-tonnage project positioned for pre-feasibility and metallurgical studies and an exploration project with excellent potential for new silver-rich discoveries. The project consists of three adjacent open-pittable deposits - Main Corani, Minas Corani and Corani Este - that collectively host measured and indicated resources containing 327 million ounces of silver, 3.97 billion pounds of lead and 2.46 billion pounds of zinc, with another 35 million ounces of silver in the inferred category. Bear Creek acquired Corani as a grassroots prospect in early 2005, and reported its first resource estimate in March of 2006, just nine months after collaring the first drill hole. Main Corani, the original discovery outcrop, was intensely drilled in the early stages of exploration, but the focus soon shifted to Corani Este and Minas Corani because of their higher grades. A second estimate increased resources by 27% in July of 2006, and in late 2007 Bear Creek updated its resources for the forth time that year based on assay results from 487 drill holes and 25 surface trenches. This work established Corani as a world-class silver project with robust base-metal credits and strong silver mineralization in the high-grade cores of all three deposits. Bear Creek continues to advance Corani through ongoing exploration programs, which by mid-April, 2007, brought drilling on the project to 76,625 metres in 455 holes. Drilling is focused on expanding known mineralization and testing priority targets under thin cover. Multi-disciplinary studies are providing the necessary elements for a pre-feasibility study, including advanced metallurgical test-work to design the optimum processing flow-sheet, maximize recoveries of silver and other metals, and ensure the production of quality concentrates. Bear Creek's discovery costs at Corani average US$0.04 per ounce of silver, including option payments but excluding base metals, with less than 20% of the 56-square-kilometre project explored to date. This achievement reflects the success of the Company's generative strategy focused on discovering world-class deposits in under-explored regions through advanced exploration techniques and geological concepts. LOCATION AND PROPERTY STATUS The Corani Project is situated midway between the cities of Cusco and Puno in the Department of Puno, and is easily accessible by road from the Cusco or Juliaca airports, both served by commercial airlines. Corani lies within an emerging mineral district and shares geological and mineralogical similarities with other economic silver-rich deposits in nearby regions. Because the high-altitude district is poorly suited for agriculture, local residents have historically supported mining activities and the development of mine-related infrastructure. On January 15th 2008, Bear Creek announced that the final payment of US$3 million, had been made to Rio Tinto Mining and Exploration Ltd. ("Rio Tinto") resulting in Bear Creek owning 70% of the Corani silver and base-metals deposit. According to the terms of the final Option and Shareholders Agreement (the "Agreement") dated March 15th, 2007 upon Bear Creek earning its 70% interest, the parties entered into a joint venture agreement, with Rio Tinto having a 30% interest. However, on March 7th 2008, Bear Creek announced that it had entered into an agreement (the "Purchase Agreement") with its Joint Venture partner Rio Tinto Mining and Exploration Ltd. ("Rio Tinto") to purchase Rio Tinto's remaining 30% interest in the Corani silver and base-metals deposit and extinguish all of Bear Creek's future payment obligations, royalties and Rio Tinto's back-in rights under the existing option agreement. Upon completion of the purchase, Bear Creek will own a 100% interest in the deposit, which contains 327 million ounces of silver in measured and indicated resources (248.2M tonnes @ 40.9 g/t Ag). Bear Creek has agreed to pay Rio Tinto total consideration of US$75 million payable as follows: (i) US$30 million by issue of 3,871,000 Bear Creek common shares at a price of US$7.75 per share (representing approximately 7.5% of Bear Creek post-transaction); (ii) US$20 million in cash payable on the earlier of: December 31, 2008 or 15 business days following a change of control of Bear Creek; and (iii) US$25 million in cash payable on the earlier of: December 31, 2009 or 180 days following a change of control of Bear Creek. Under the terms of the Purchase Agreement, should Rio Tinto wish to dispose of its Bear Creek shares, the Company has certain rights to arrange for purchasers to acquire their shares. In addition, Rio Tinto has agreed, subject to certain limitations, to vote its shares in Bear Creek in favour of matters proposed by management of Bear Creek until the earlier of 12 months from the closing date or change of control of Bear Creek or the disposition by Bear Creek of more than 50% of the Corani or Santa Ana deposits. The closing of the acquisition of the Rio Tinto interest under the Purchase Agreement is subject to, among other things, all necessary regulatory and stock exchange approvals and the absence of material adverse changes in the affairs of Bear Creek. The balance of the purchase price is to be secured by a General Security Agreement in favour of Rio Tinto in addition to a mortgage on the Corani property, subordinated to project financing. GEOLOGY AND MINERALIZATION The emerging Corani District lies within a regional-scale volcanic belt hosting many other deposits in southeastern Peru, and is considered prospective for low-sulphidation epithermal systems. In addition to silver-rich mineralization typically hosted in veins, breccias and stockworks, the Corani Property hosts several gold and antimony zones. These combined features are indicative of the type of epithermal mineralization often associated with distal zoning around a porphyritic intrusion, suggesting potential for large-scale porphyry deposits. Silver at Corani occurs mostly in silver-rich tetrahedrite. Sphalerite is the only source of zinc mineralization, while lead is found primarily in galena, and to a lesser degree as a lead phosphate. These sulphide minerals all respond well to conventional flotation recovery methods. EXPLORATION AND RESOURCE DEVELOPMENT Bear Creek was attracted to the Corani Property by the presence of gold-silver anomalies within a large area of intense alteration that together suggested potential for bulk-tonnage precious-metals deposits. A successful early-stage exploration program in early 2005 was followed by a first-phase drilling program in June of that year. Nine months later, Bear Creek released its first resource estimate of 250 million ounces of silver within three adjacent open-pittable deposits, with Corani Este alone hosting half the total resource (in all categories). By July of 2006, total resources had increased 27% to 257 million ounces of silver, 2.8 billion pounds of lead and 1.58 billion pounds of zinc in the measured and indicated categories, with another 60 million ounces of silver in the inferred category. At this stage, drilling had also confirmed the presence of high-grade cores in all three deposits. At year-end 2006, Bear Creek updated its resource estimate for the third time that year, which include resources for the high-grade cores, which lie within a computer-generated pit-shape that could be mined at a waste-to-ore stripping ratio of 1.85:1 or less. These cores provide potential for faster payback of capital and improved project economics. SCOPING STUDY AND PRELIMINARY ECONOMIC ASSESSMENT The PEA is based upon mining assumptions derived from mine planning sequences completed by IMC and metallurgical test work performed by SGS Laboratories, G&T Metallurgical, and Dawson Metallurgical. The mining sequence primarily derives ore from the higher-grade starter pits (see Resource Estimate section below) in Years 1-6 and increases production from the global resource in later years. Mine-life will likely extend well beyond the 12.5 year depending on ongoing metallurgical test work and future silver prices. All resource categories were used, including Inferred resources. Note that in the mine sequence, only 131.5M tonnes of the 248.4M contained in the global resource tonnes are mined.
Resource prices determined in the resource model of November '07 utilizing three-year backward and two-year forward metals prices weighted 60:40 were maintained for the PEA base case. Using January 14 metals prices, Bear Creek's 70% interest in Corani has an NPV of $878M and a 59.5% IRR. The scoping study determines that the project has a number of favorable characteristics:
Note: in accordance with NI43-101, mineral resources that are not mineral reserves do not have demonstrated economic viability. The preliminary assessment includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary assessment will be realized. RESOURCE ESTIMATE The Scoping Study/PEA is based upon an updated resource estimation and mine sequencing performed in Dec '07 by IMC based upon 86,299 meters of drilling in 487 diamond drill holes completed through Nov. '07. Previous resource estimates used a silver cut-off value to establish the lower limit of the resource. The company now employs a Net Smelter Return (NSR) method to determine the break between ore and waste. For the global resource, metal prices in the assumptions noted below were employed. To determine the final pit limits for the production schedule used in the Scoping Study metal prices of $8.50 per ounce for silver, $0.50 per pound for lead and $0.75 per pound for zinc were used. This results in a production plan that generates higher grades and less tonnes than the global resource. Therefore, the sequencing assumptions used in the PEA are felt to be conservative and significant silver, lead, and zinc contained in the global resource represent up-side potential as process recoveries are improved and/or metals prices continue to strengthen. The following assumptions were used in the global resource estimates:
Bear Creek Mining, Corani Project Silver Zone
Higher-grade cores- Similarly to previous resource estimates, the Corani resource continues to have minable high grade cores. In the current resource estimate 54% of the silver, 49% of the lead and 38% of the zinc contained within the Measured and Indicated categories are found in the high grade core that represents 29% of the Measured and Indicated tonnes. Importantly, 98% of the higher-grade resource silver ounces are contained in Measured and Indicated resources. Bear Creek Mining, Corani Project Silver Zone
Higher-grade zinc cores- the higher-grade zinc occurs in discrete pods. The current resource estimate shows that in the measured and indicated categories 43% of the zinc occurs in 10% of the tonnes. The zinc extraction has been designed in the mine sequencing in order to optimize zinc recoveries from the higher-grade pods where recoveries are markedly greater. Bear Creek Mining, Corani Project
METALLURGICAL AND ENGINEERING STUDIES Over 300 flotation and leach tests have been performed on material specifically chosen form the deposit to reflect the different grades and rock types seen at Corani. These tests have shown that over 95% of the deposit is amenable to conventional flotation and/or leach recovery methods. For processing the ore the following process scheme is envisioned and is illustrated in a simplified flow below:
 The results of ongoing metallurgical studies have provided an important component for the project scoping study, which has already satisfactorily addressed other aspects of a proposed mine, including power, access, transportation, water, community relations and infrastructure. The Corani Project is advancing to the pre-feasibility stage, which will include environmental and socio-economic studies and programs. Corani has been transformed from a grassroots prospect into one of the most important undeveloped silver deposits in the world within several years, yet still has excellent potential for resource expansion and new discoveries through ongoing exploration and development programs. MAPS AND SECTIONS
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