Project Status

Bear Creek Mining has concluded optimization studies at its Corani Silver-Lead-Zinc deposit resulting in an updated Feasibility Study. The optimization studies, involving three engineering firms led by Global Resource Engineering of Denver, Colorado, have been underway for over six months and trade-off studies have identified several design modifications enhancing the project performance that will now be carried forward into the detailed engineering. The project optimizations do not require a new Environmental and Social Impact study and it is expected that the Corani project can be moved forward with modifications to the ESIA approved in September 2013. For more information refer to the news release page.


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. In May of 2015 the Government of Peru announced a $20 million investment program into infrastructure in the Corani District.


The Corani Project is 100% owned by Bear Creek Mining.

Optimized Processing

Dry-stacking of tailings: The change to dry-stacking of concentrator tailings is the most significant optimization in the 2015 Corani Feasibility Study and had a substantial effect on the project economics as well as the physical and environmental footprint of the proposed operation. Dry-stacking eliminates the need for the tailings dam and one of the fresh water storage dams, and co-disposal of the tailings and waste-rock eliminates one of the waste rock dump sites envisioned in the 2011 Corani Feasibility Study. Dry-stacking involves filtering the tailings to remove water, which is then recycled to the concentrator, reducing the water requirements. The filtered tailings are then mixed with waste rock and stacked in "lifts" within already-approved waste rock disposal sites. Dry-stacking technology is used successfully at various mining operations world-wide, including the Cerro Lindo silver-base metal mine in Peru. Not only does dry-stacking create a smaller, more efficient project footprint and reduce the total capital requirements for Corani (see "Capital and All-In Sustaining Costs", below), elimination of the tailings dam and reduction of the project footprint will save time and lower the engineering costs associated with securing a mine permit.

Primary Crusher and grinding mills: The selection of the primary crusher, from a gyratory to a jaw reduced the amount of earthwork and the footprint required, which resulted in capital expenditure ("CapEx") savings. The sizes for both the Semi-Autogenous Grinding ("SAG") and ball mills remained relatively unchanged, however, the size of the motors for both mills increased from 5,500 kW to 7,000 kW due to the additional grinding test work results.

Flotation: The elimination of the 3rd cleaner scavenger and the change of the 2nd cleaner mechanical cells to one column cell, reduced the equipment footprint and also provided CapEx savings for both lead and zinc circuits. The change to a column cell for the 2nd stage cleaners will also allow to maximize lead and zinc grades in each circuit respectively.

Regrind mills: The change of the regrind mills from ball mills to tower mills, reduced the footprint of the equipment and resulted in additional CapEx savings.

Optimized Mine Sequence and Improvements in Recoveries

Mine Sequencing: The mine sequencing plan has been modified in order to complete mining from the Corani Este pit in the 6th year to begin accepting co-disposal of waste rock and filtered tailings. This allows for shorter haul distances and eliminates or reduces the size of the waste dump facilities, which is expected to result in lower operating costs, easier permitting and reduced final mine closure costs. Although the revised mine sequencing adds approximately $17 M in pre-production stripping, this capital expenditure is far outweighed by the expected operating and capital cost benefits.

Metallurgy and Recoveries: Significant improvements were made in the understanding of metal recovery stemming from a thorough analysis of the metallurgical test work data and the associated geochemical data base. Previously ore within each metallurgical type was treated fairly homogenously. The new method allowed for the estimation of recovery in a distinct and predictable metallurgical manner, resulting in continuous recovery model that was applied to each block of the block model based on geology and mineralogy. Ultimately, this predictive model resulted in higher-confidence in metallurgical recoveries that led to improvements in mine planning.

Average Recoveries (Life of Mine) and Payable Metals
    2015 Corani Feasibility Study 2011 Corani Feasibility Study
Lead Concentrate Lead 62.80% 71.11%
Silver 67.10% 60.29%
Zinc Concentrate Zinc 60.10% 51.58%
Silver 4.83% 3.90%
Total Silver 71.93% 64.19%
Lead 62.80% 71.11%
Zinc 60.10% 51.58%
Total Payable Metals Silver 151 Moz 160 Moz
Lead 1,652Mlbs 2,102 Mlbs
Zinc 910 Mlbs 743 Mlbs

Overall, expected silver and zinc recoveries increased by approximately 8% each and lead recoveries decreased by 8% from those cited in the 2011 Corani Feasibility Study. Because of the better understanding of metallurgical recoveries, some of the transitional materials (mixed oxide and sulfide) were eliminated from the mine plan as a result of low estimated flotation recovery, reducing the silver reserves by approximately 15.5% (see "2015 Corani Reserve and Resource Estimates" below) but only reducing the payable silver by 5.6% from 160 M oz in the 2011 Corani Feasibility Study to 151 M oz in the 2015 Corani Feasibility Study, thus achieving the objective of higher efficiencies in mining and processing.

Optimized Layout

The 2015 Corani Feasibility Study optimizations include various layout modifications that benefit the project economics. The crusher was relocated to create shorter and more efficient haul profiles. As mentioned previously, one waste dump (the East Dump) has been eliminated and pit backfilling has accelerated. Additionally, the South Water pond is no longer necessary due to reduction in water consumption with the dry tailings disposal method.

Importantly, as a result of the optimized layout, the Corani mine and processing infrastructure is entirely located on land to which Bear Creek owns 100% of the surface rights.

Key Financial and Technical Metrics

The 2015 Corani Feasibility Study was prepared using cost bids, estimates and production forecasts provided by qualified engineering consulting groups led by M3 with significant contributions by GRE and Tom Shouldice (metallurgical consultant). A Technical Report supporting the results presented herein will be prepared and filed, in compliance with National Instrument 43-101, within 45 days of the date of this release.

Base Case Assumptions

The following key assumptions were used in the 2015 Corani Feasibility Study:

Metal prices used to estimate Mineral Reserves $20/oz Ag, $0.95/lb Pb, $1.00/lb Zn
Metal prices used to estimate Mineral Resources $30/oz Ag, $1.425/lb Pb, $1.50/lb Zn
Metal prices used for Economic Analysis $20/oz Ag, $0.95/lb Pb, $1.00/lb Zn
Average Annual Ore Production Life of Mine 7,650,000 tonnes
Overall Silver Recovery (into lead and zinc concentrate) 71.9%
Overall Lead Recovery (into lead concentrate) 62.8%
Overall Zinc Recovery (into zinc concentrate) 60.1%
Total Processed tonnes 137,698,000
Average Mill Silver Grade 51.6 g/t
Average Mill Lead Grade 0.91%
Average Mill Zinc Grade 0.59%
Payable oz of Silver (net of smelter payment terms) 151,049,000
Payable lbs of Lead (net of smelter payment terms) 1,651,849,000
Payable lbs of Zinc (net of smelter payment terms) 910,942,000
Overall stripping ratio (waste:ore) 1.68:1
Life of Mine (ore extraction and processing years) 18

Project Economics and Sensitivity

Case IRR NPV (1) @5% (000’s) NPV (1) @0% (000’s)
Base Case (2) 20.9% $659,677 $1,236,632
Recoveries + 10% 24.7% $862,821 $1,558,926
Recoveries -10% 16.8% $456,132 $913,705
Metal Prices +10% 25.3% $898,216 $1,616,060
Metal Prices -10% 16.1% $420,083 $855,417
Initial Capital Cost +10% 18.5% $607,115 $1,188,245
Initial Capital Cost -10% 23.7% $710,167 $1,279,366
Spot Metal Prices (3) 14.9% $372,170 $783,250
  1. Net Present Value after tax
  2. Base Case calculated using metal prices of $20/oz Silver, $0.95/lb Lead and $1.00/lb Zinc
  3. Spot prices on June 1, 2015 were $16.71/oz Silver, $0.87/lb Lead and $0.98/lb Zinc

The operating efficiencies resulting from the optimized Corani mine design and mine plan had a significant effect on the economics of the project. The Net Present Value (after tax and at a 5% discount rate) increased by 43% from $463 M in the 2011 Corani Feasibility Study to $660 M in the 2015 Corani Feasibility Study, and the Internal Rate of Return increased from 17.6% in 2011 to 20.9% today. The financial model is based on silver, lead and zinc prices of $20.00/oz, $0.95/lb and $1.00/lb respectively, which represent the three-year backward and two-year forward metal prices, weighted 60:40, in keeping with the Company's policy and industry standards, and takes into account current Peruvian tax and royalty rates. (Metal prices used in the 2011 Corani Feasibility Study were $18.00/oz silver, $0.85/lb lead and $0.85/lb zinc.)

Capital and All-In Sustaining Costs

  2015 CoraniFeasibility Study 2011 CoraniFeasibility Study
Initial Capital $625 M $574 M
Sustaining Capital $39 M $144 M
Total Capital Expenditures $664 M $718 M
AISC (1) per ounce of Silver(by-product basis), Years 1-5 $(0.23) $(0.09)
AISC (1) per ounce Silver (by-product basis), Life of Mine $3.85 $4.56
AISC (1) per ounce of Silver, (co-product basis) Life of Mine $11.13 $10.69
  1. All-In Sustaining Costs ("AISC") are per payable oz, and are calculated as cash operating costs + sustaining capital costs + reclamation and closure costs + social costs

Initial capital costs are estimated at $625 M in the 2015 Corani Feasibility Study compared with $574 M in the 2011 Corani Feasibility Study. The increase in estimated initial capital is primarily a result of cost escalation and increased expenditures related to construction of roads, a power line and the mine camp, as well as increases in the cost of mine construction (including additional pre-production stripping), partially offset by capital savings stemming from elimination of the tailings dam. Sustaining capital costs were substantially reduced to $39 M in the 2015 Corani Feasibility Study compared to $144 M in the 2011 Corani Feasibility Study. Decreases in ongoing mining costs (as a result of leasing of equipment), ongoing process plant and tailings dam capital requirements contributed to this significant reduction in sustaining capital. The net effect of these changes is a decrease in total capital requirements of $54 M.

All-in sustaining costs per ounce of silver (net of base metal credits) are estimated in the 2015 Corani Feasibility Study to be $(0.23) for the first five years of the operation and $3.85 over the 18 year mine life. In the 2011 Corani Feasibility Study these metrics were ($0.09) and $4.56 respectively. On a co-product basis, the all-in sustaining costs, as calculated in the 2015 Corani Feasibility Study, are well below both the base case metal prices used herein and the spot silver, lead and zinc prices on June 1, 2015.


On April 15, 2013, the Company entered into a life of mine agreement with the District of Carabaya, five surrounding communities, and relevant, ancillary organizations specifying investment commitments over the 23 year project life, including the pre-production period. The agreement and a resolution by the communities stating their agreement to the terms has been duly signed and registered by the required elected officials. Under the agreement, annual payments are to be made into a trust designed to fund community projects totaling S/4M nuevos soles per year (approximately US$1.6M per year), beginning with installments payable in 2013. Payments will remain constant throughout the pre-development phase and during production.