Projects

Project Status

A positive Pre-Feasibility Study (September 2009) examined a 15,000-tonne-per-day mine with average annual production of 10 million ounces silver for the first six years, or 6.4 million ounces silver annually over a 27-year mine life, plus by-product lead and zinc. Initial capital costs are estimated at US$339 million, with payback in less than three years. The study was based only on proven and probable reserves containing 258 million ounces of silver, plus 2.9 billion pounds of lead and 1.4 billion pounds of zinc. Cash costs of US$1.06 per ounce of silver are projected for the first 10 years, or US$2.87 per ounce life-of-mine, net of base metal credits. The study recommends that Corani proceed to a Bankable Feasibility Study.

Current Reserves and Resources

Mineral Reserves, $9.10 NSR cut-off

					Contained Metal			Equivalent Ounces
Category	Ktonnes	Silver Gm/t	Lead %	Zinc %	Silver Million Ozs	Lead Million Lbs	Zinc Million Lbs	Eq. Silver Million Ozs	Eq. Silver Gm/t
Proven	27,957	70.2	1.08	0.59	63.1	665.7	363.6	115.0	127.9
Probable	111,666	54.3	0.90	0.43	194.9	2,215.6	1,058.6	360.3	100.4
Proven + Probable	139,623	57.5	0.94	0.46	258.0	2,881.3	1,422.2	475.3	105.9

Mineral Resources in Addition to Reserves, $7.85 NSR cut-off

					Contained Metal			Equivalent Ounces
Category	Ktonnes	Silver Gm/t	Lead %	Zinc %	Silver Million Ozs	Lead Million Lbs	Zinc Million Lbs	Eq. Silver Million Ozs	Eq. Silver Gm/t
Measured	10,791	16.7	0.43	0.45	5.8	102.3	107.1	16.2	46.8
Indicated	99,626	20.6	0.45	0.39	66.0	988.4	856.6	158.2	49.4
Measured + Indicated	110,417	20.2	0.45	0.40	71.8	1,090.7	963.7	174.4	49.1
Inferred	34,215	32.4	0.54	0.34	35.6	407.3	256.5	69.0	62.7

Regulatory Footnotes

All of Bear Creek's exploration programs and pertinent disclosure of a technical or scientific nature are prepared by or prepared under the direct supervision of Marc Leduc, P. Eng., Senior Vice President of Engineering and Development and the President and CEO, Andrew Swarthout, P.Geo., who serve as the Qualified Persons under the definitions of NI 43-101. The block model estimate, mine design and schedules were prepared by Independent Mining Consultants of Tucson Arizona. John Marek P.E. acted as the independent qualified person as defined by Canada's National Instrument 43-101. Additionally the methods used in determining and reporting the mineral reserves and resources are consistent with the CIM Best Practices Guidelines. The method used in the resource calculation is equivalent to the method used in the resource calculation shown in our August 23, 2006 Press Release. For this resource estimate we have used metal prices based on a 3-year backward average and a 2-year forward price based on the metal markets in July 2009.

Assumptions used in the mineral reserve and PFS model by IMC are: Silver Price=$13.00/oz; Zinc Price=$0.65/lb; Lead Price=$0.70/lb; Mixed Sulfide Material Silver Recovery=62% to lead con and 16% to the zinc con, Zinc Recovery=75% to zinc con and Lead Recovery=76% to lead con; Transitional Material Silver Recovery= 56% to lead con and 5% to the zinc con, Zinc Recovery= 20% to zinc con and Lead Recovery= 52% to lead con. Average smelter charges against saleable metal: Silver= $0.68 per ounce; Zinc= $0.348 per pound; Lead= $0.286 per pound; Mining Costs per tonne= $1.25; Process cost per tonne= $7.00; G&A per processed tonne= $0.85; Pit Slopes= 42 degrees in mineralized tuff and 46 degrees in post-mineralized tuff. The resulting mineral reserve cutoff is $9.10/tonne ore NSR. The mineral reserves are contained within a practical mining plan that utilized the 'floating-cone" method as an initial guide for design.

The mineral resource portion of the project is contained in a larger pit than the PFS design pit, which was a floating cone using the following input assumptions: Silver Price=$13.85/oz; Zinc Price=$0.693/lb; Lead Price=$0.746lb; Mixed Sulfide Material Silver Recovery=68% to lead con and 17% to the zinc con, all other recoveries remained the same. The Mineral Resource cut-off was $7.85/tonne which represents the internal process cutoff. All metallurgical material types were included in the resource. Silver Equivalency calculation represents the contained equivalent silver ounces sent to concentrate and is based on the resource metal prices assumptions of $13.00/oz Ag, 0.70/lb Pb and 0.65/lb Zn and recoveries to concentrate of 74.5% for silver and 71.7% for lead and 71.3% for zinc. The calculation does not take into account the net smelter payment terms for the different metals in the two separate concentrates. The resulting equivalency is 1 oz Ag = 19.3 lb Pb and 1 oz Ag = 20.9 lb Zn.

All diamond drilling has been performed using HQ diameter core with recoveries averaging greater than 95%. Core is logged and split on site under the supervision of Bear Creek geologists. Sampling is done on two-meter intervals and samples are transported by Company staff to Juliaca, Peru for direct shipping to ALS Chemex, Laboratories in Lima, Peru. ALS Chemex is an ISO 9001:2000-registered laboratory and is preparing for ISO 17025 certification. Silver, lead, and zinc assays utilize a multi-acid digestion with atomic absorption ("ore-grade assay method"). The QC/QA program includes the insertion every 20th sample of known standards prepared by SGS Laboratories, Lima. A section in Bear Creek's website is dedicated to sampling, assay and quality control procedures.

Location

The flagship Corani Project is situated midway between the cities of Cusco and Puno in the Department (Province) of Puno and is easily accessible by road from the Cusco or Juliaca airports, both served by commercial airlines. Local communities have historically supported the development of mines and mining-related infrastructure as the high-altitude district is poorly suited for agriculture.

Infrastructure

The project has favorable infrastructure. Access will be via a new 63 km road to be built over flat topography resulting in low construction costs. The new road will connect to the Interoceanic Highway; a two-lane, paved highway connecting to the port of Matarani. The mine is 30 km from a new high-voltage power line with abundant capacity to meet the project needs. The project has an excellent site for tailings storage resulting in a very low capital and operating cost as the plant will be located immediately adjacent to the tailings pond. The site is also located in the upper part of the Atlantic drainage and as such there are several surface and underground water source alternatives.

Ownership

The Corani Project is 100% owned by Bear Creek Mining. In 2008 the company purchased the remaining 30% of the project it did not already own with a series of scheduled payments, the payments extending out to the third quarter of 2012.
The remaining payments are:

• US$10M cash payable Dec 31, 2010
• US$10M cash payable Sept 30, 2011
• US$15M cash payable June 30, 2012

Metallurgy

The company has performed extensive metallurgical tests and modeling to prove the metallurgical response of the different ore types found at Corani. The testing establishes that 82% of the ore-respond very well to conventional flotation producing two separate, highly commercial concentrates with good metal recoveries. The remaining 18% of the material is a transitional ore that has moderate flotation response. To establish the metallurgical behaviors Bear Creek performed variability tests on the different materials to establish the appropriate treatment methods and the mineralogical makeup of the ores. Bear Creek geologists then used this information to re-log all the core and establish the locations of all the different ore types in the deposit. From this information a 3D model of the ore distribution was constructed and used for mine planning. Locked-cycle tests were then designed and performed to match the expected blend of material to the concentrator according to the mine sequence. The results of this test work is being carried forward into the Feasibility Study.

There is a minor component of oxide material at Corani that is suitable for a leach recovery method; the prefeasibility study did not include this material in the operation plan but Bear Creek is looking at a test program to bring this material into the operation plan by using a heap leach or an oxide mill to recover the silver.

Bear Creek Mining, Corani Project Silver Zone
Average Recoveries and Concentrate Grades of the Life of the Project

Average Recovery And Con Grades LOM
	Lead Con			Zinc Con
	Pb	Zn	Ag	Pb	Zn	Ag
Recovery	71.7%	8.7%	60.8%	5.0%	71.3%	13.7%
Average Con Grades	56.8%	3.4%	2.9 kg/t	6.9%	52.3%	1.3 kg/t

Project History and Milestones

Bear Creek acquired Corani as a grassroots prospect in early 2005, and reported its first resource estimate (250 million ounces of silver) in March of 2006, just nine months after collaring the first drill hole. Subsequent drilling programs totaling 100,000 meters continued to expand resources within three adjacent open-pittable deposits: Main Corani, Minas Corani and Corani Este. This work established Corani as a world-class silver project with robust base metal credits and high-grade silver mineralization in the cores of all three deposits. An early 2008 preliminary assessment or scoping study demonstrated a robust large-scale (30,000 tonnes per day) project, however changing commodity and capital markets led to a subsequent decision to examine a smaller-scale (15,000 tonnes per day) optimized project (higher-grade) with reduced capital and operating costs.

The Pre-Feasibility Study released in mid-September 2009 was based only on proven and probable reserves containing 258 million ounces of silver, plus 2.9 million pounds of lead and 1.4 billion pounds of zinc, or 475.3 silver-equivalent ounces. The project also hosts another 107.4 million ounces of resources in all categories, or 243.4 million silver-equivalent ounces. (See reserve and resource tables section.)

The proposed 15,000-tonne-per-day mine is projected to produce 10 million ounces of salable silver per year for the first six years of operation, or 6.4 million ounces per year over the proposed 27-year mine life. Initial capital costs are estimated at a modest US$339 million, with capital payback in less than three years.
Cash production costs are projected to average US$1.06 per ounce silver for the first 10 years, and US$2.87 per ounce over the mine life, net of base metal credits. The net present value is US$348 million at a 5% discount rate and the after-tax internal rate of return for the project is 25%. Metal price assumptions used in the Study are US$13 per ounce of silver, US$0.70 for lead and US$0.65 for zinc.

Corani will be an open-pit mine with a stripping ratio of 1.56:1 waste-to-ore and a high-grade core for fast capital payback. Processing will be by conventional flotation recovery methods, producing high-value separate lead-silver and zinc concentrates. Concentrates will be trucked over a new 63-km road to be built over flat topography, resulting in low construction costs. This road will connect with the Interoceanic Highway, a paved two-lane highway connecting to the Pacific Ocean port of Matarani, an existing concentrate loading port utilized by Cerro Verde and Tintaya.

The Pre-Feasibility Study recommended advancing Corani to a Bankable Feasibility Study based on its positive economics and excellent upside exposure to silver and base metal prices. Other positive features are favorable infrastructure for access, tailings storage, available local water and power supply and well-defined permitting path. The Company has forged strong relationships with its Peruvian neighbors and is pleased that the Corani Project has strong support from local communities.

Prefeasibility Study & Project Economics

The reserve and resource estimates were updated for the Pre-Feasibility Study ("PFS") by Independent Mining Consultants (IMC), Tucson, AZ. Samuel Engineering, Denver, Colorado and Vector Engineering, Lima, Peru co-lead the study with support from Resource Development Inc.(RDI) (Metallurgy), and SGS Vancouver (Metallurgical Testing). All are independent preeminent engineering and metallurgical testing firms with recent mine development and operating experience in Peru.

The PFS, which is dated effective Monday September 14th, 2009, is based upon mining assumptions derived from mine planning sequences completed by IMC and metallurgical test work performed by SGS Laboratories and G&T Metallurgical. The mining sequence primarily derives ore from the higher-grade starter pits in the early years and moves to lower-grade areas in the later years of production. Operations are to be 27 years based on current reserves. Only measured and indicated resources were used when defining the operations plan when converting resource to reserves. Note that in the mine sequence, only 258 million ounces contained within 139.6M tonnes have been used as reserve in this plan. An additional 110.4M additional tonnes of measured and indicated resource (containing 71.8 million ounces of silver) and 34.2 million tonnes of inferred resource (containing 35.6 million ounces of silver) remain that could be included in later plans of operations should metals prices and/or operating parameters (recoveries) improve.

Key Assumptions for the Corani Project -- Base Case
Item
Annual ore production -- years 1 to end of life (tonnes)	5,250,000
Overall Process Recovery -- Silver -- Into both Lead and Zinc Cons	74.5%
Overall Process Recovery -- Lead -- Into Lead Cons	71.7%
Overall Process Recovery -- Zinc -- Into Zinc Cons	71.3%
Total Processed Tonnes	139,623,000
Average Silver Grade (g/t)	57.5 g/t
Average Lead Grade (%)	0.94%
Average Zinc Grade (%)	0.46%
Payable ounces of silver net of Smelter payment terms (total)	173.9 million
Payable pounds of lead net of Smelter payment terms (total)	1.97 billion
Payable pounds of zinc net of Smelter payment terms (total)	856 million
Overall stripping ratio	1.56 to 1
Life of mine (mining only) years	24
Life of mine (processing) years	27

Resource prices determined in the resource model of August 2009 utilizing three-year backward and two-year forward metals prices weighted 60:40 were maintained for the PFS as is consistent with the Company's policy and industry standards.

The Pre-Feasibility Study is based upon an updated resource estimation and mine sequencing performed in August 2009 by IMC based upon 93,577 meters of drilling and sampling in 544 diamond drill holes and trenches completed through August 2009. The Company employs a Net Smelter Return (NSR) method to determine the break between ore and waste, with the cutoff NSR being $9.10 per tonne. Measured and Indicated Resources contained within the pre-feasibility study design pit were used to determine final pit limits and thus converted respectively into Proven and Probable Reserves. Importantly, 71% of the previously reported ounces of silver in resources were converted to reserves in this study. The additional resource material is mostly measured and indicated resource that occurs outside of the pre-feasibility study pit but which meets the CIM definition of mineral resource.

PROJECT ECONOMICS

Sensitivities to various parameters are summarized below:

Case	IRR	NPV @ 5%	NPV @ 0%
Base Case	25%	$348 M	$683 M
Recovery +10%	30%	$466 M	$909 M
Recovery -10%	19%	$229 M	$457 M
Metal Price +10%	30%	$479 M	$936 M
Metal Price -10%	19%	$210 M	$420 M
Initial Capital Cost +10%	22%	$316 M	$636 M
Initial Capital Cost -10%	29%	$379 M	$731 M
Operating Cost +10%	23%	$294 M	$570 M
Operating Cost -10%	27%	$401 M	$797 M
Metal Prices Sep 11, 2009	41%	$757 M	$1,468 M

Note: Base case prices are $13.00/oz Silver, $0.70/lb Lead, $0.65.lb Zinc; Spot prices are from September 11, 2009 and were $16.85/oz Ag, $0.97/lb. Pb and $0.86/lb. Zn

Regulatory Footnotes
The PFS was prepared by a team of independent engineering consultants. The mining and block model portion was prepared by Independent Mining Consultants of Tucson Arizona, John Marek, PE acting as QP. The process plant design was prepared by Samuel Engineering, Kathy Altman, PE acting as QP. Metallurgy and Process design criteria developed by Resource Development Inc. Deepak Malhotra, Ph.D acting as QP. And geotechnical, environmental, infrastructure, waste stockpile and tailings designs were prepared by Vector Peru, Scott Elfen, PE acting as the QP. Each of these individuals has read and approves the respective scientific and technical disclosure contained in this news release. Silver Equivalency calculation represents the contained equivalent silver ounces sent to concentrate and is based on the resource metal prices assumptions of $13.00/oz Ag, 0.70/lb Pb and 0.65/lb Zn and recoveries to concentrate of 74.5% for silver and 71.7% for lead and 71.3% for zinc. The calculation does not take into account the net smelter payment terms for the different metals in the two separate concentrates. The resulting equivalency is 1 oz Ag = 19.3 lb Pb and 1 oz Ag = 20.9 lb Zn.

Prefeasibility Study Corani Project Puno, Peru - NI 43-101 Technical Report

• Corani NI43-101 Technical Report 36MB

Maps & Photos

Pending