Subject to disclosure from June 25th 2011 press release
A positive feasibility study ("the "Feasibility Study" or FS"), as defined by National Instrument 43-101 ("NI 43-101"), was released October 7th 2010 for our 100% owned Santa Ana silver deposit located in southern Peru. On January 19th, 2011 Bear Creek announced an update to the silver recovery.
Highlights of the Feasibility Study and update include (all figures are in US dollars):
Project Summary (after update to crushing assumption and increased silver recoveries)
The project has a pre-tax internal rate of return ("IRR") of 29.9%, a net present value of $106.9 million at a 5% discount rate and earnings before interest, taxes, depreciation and amortization ("EBITDA") of $173 million over the 11 year life based upon $14.50 per ounce silver. Recovered silver production in the first six years now averages 5.0 million ounces per year and the project is expected to produce an average of 4.3 million payable ounces of silver per year over the 11 year mine-life. The deposit remains open laterally to the north, northwest, and at depth. Pre-production capital investment in the project is estimated to be $70.8 million and sustaining capital expenditures are estimated at an average $1.4 million per year over the 11-year life of the mine. Based upon a $14.50 silver price, the project achieves payback of capital in approximately 3.0 years and at the spot silver price of $29.22 per ounce, the payback is 1.1 year. The Feasibility Study has been prepared using cost bids and estimates and production forecasts provided by qualified engineering consulting groups.
Preliminary mine plans show that the mine life could be extended on the order of 50%, potentially adding 35.7 million contained silver ounces (30MT @ 37g/t Measured + Indicated Resources) to the current 63 million contained silver ounces of reserve.