News Releases
| Thu Jan 17, 2008 Bear Creek Announces Positive Scoping Study And Updated Resource Estimate At Corani Deposit | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vancouver, B.C. - Bear Creek Mining Corporation (TSX Venture: BCM) ("Bear Creek" or the "Company") is very pleased to announce the results of a positive scoping study, incorporating a preliminary economic assessment (PEA) as defined by NI-43-101 based on the latest resource estimate update for the Corani silver-lead-zinc deposit located in southern Peru. Highlights of these studies include:
Recovered silver production in the first two years is 22.0 million ounces/year and the project will produce an average of 15.2 million payable ounces of silver, 123 million pounds of lead and 66 million pounds of zinc annually over a 12.5 year mine-life. Cash cost per ounce of silver is $2.49, net of base metals credits. Pre-production capital investment in the project is estimated to be $428M and total capital expenditures are estimated at $592M over the 12.5-year life of the mine. Based upon the aforementioned metals prices, the project achieves payback of capital in less than two years. The scoping study has been prepared using cost estimates and production forecasts provided by qualified engineering consulting groups and the economic analysis was done in conjunction with Bear Creek's financial advisor, Scotia Capital. Andrew Swarthout, President and CEO, states, "We are very pleased that the scoping study demonstrates that Corani has the capacity to become a large, robust silver and base metals producer. Using current metals prices, Bear Creek's 70% interest in Corani has an NPV of approximately $614M and a 60% IRR at a 7% discount rate. The progress made in metallurgical recoveries during the past six months have given us the confidence to produce a compelling plan for developing the value of Corani, supported by the work of several of the preeminent engineering and metallurgical testing firms involved in major mining project development. Importantly, the study has considered current capital and operating cost escalations recently affecting mine development. Corani shows strong financial returns at assumed prices, costs, and operating assumptions with several upside opportunities which will be examined and optimized in the upcoming prefeasibility study." The new resource estimate on which the PEA is based, updated as of November 2007 by Independent Mining Consultants (IMC), Tucson, AZ, shows significant growth of measured and indicated resources. Additionally, the new model increased the certainty of the resource estimate by converting an additional 23% of the total tonnes from inferred into measured and indicated categories. The continued conversion of inferred resource into measured and indicated categories supports the continuity of the mineralization and suggests that large, well-established reserves will be possible with very limited in-fill drilling. 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 $614M and a 60% IRR. The scoping study determines that the project has a number of favorable characteristics:
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 Mineral Resource Based on $9.35/tonne NSR cut-off and Prudent Open Pit Constraints November 16, 2007
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 High Grade Core Contained in Smaller Open Pit Shapes NSR Cut-off grade $19.60/tonne 16 November 2007
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 High Grade Zinc Areas at 1% Zinc cut-off of Global Resource 16 November 2007
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release. - End - Andrew Swarthout - President and CEO, or Patrick De Witt - Investor Relations Phone: 604-685-6269 Direct: 604-628-1111 E-mail: info@bearcreekmining.com For further information, please visit the Company's website (www.bearcreekmining.com) 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 David Volkert, P.Geo., Bear Creek's Vice President of Exploration and/or Marc Leduc, P. Eng., Vice President of Technical Services 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 was 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 resources are consistent with the CIM Best Practices Guidelines for the estimation of mineral resources and mineral reserves. 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 current metal markets, assumptions used in the resource model by IMC. Actual results will vary based upon completion of metallurgical testing: Silver Price= $12.00/oz; Zinc Price= $1.19/lb; Lead Price= $0.93/lb; Silver Recovery= 80%; Zinc Recovery= 60%; Lead Recovery= 60%; Smelter charges: Silver= $0.35 per ounce; Zinc= $0.1989 per pound; Lead= $0.178 per pound; Mining Costs per tonne= $1.25; Process cost per tonne= $8.50; G&A per processed tonne= $0.85; Pit Slopes= 42 degrees in mineralized tuff and 50 degrees in post-mineralized tuff. High grade cores defined in a floating cone using $5.90/oz Ag, $0.46/lb. Pb and $0.59/lb. Zn; all other variables were consistent with the global resource calculation. 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. Certain disclosure in this release, including management's assessment of Bear Creek's plans and projects, constitutes forward-looking statements that are subject to numerous risks, uncertainties and other factors relating to Bear Creek's operation as a mineral exploration company that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Readers are cautioned not to place undue reliance on forward-looking statements. Bear Creek expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||