Vancouver, B.C. - Bear Creek Mining (TSX Venture: BCM / BVL: BCM) (“Bear Creek” or the “Company”) is pleased to announce that the Corani Environmental and Social Impact Assessment (“ESIA”) was filed with the Peruvian Ministry of Energy and Mines (“MEM”) on December 10, 2012. The ESIA filing marks the beginning of the formal permit process for the development of the Corani project and the ESIA is expected to be approved by the end of 2013.
Earlier ESIA approval in 2013 is possible given the strength of the study, the surrounding community support, and the success of the initial public hearings conducted by the MEM. Importantly, the ESIA incorporates water management features designed to mitigate impacts and improve water quality and availability for the sparse local communities during construction, operation, and closure of the Corani project. Technical observations from the MEM are to be submitted to the Company within 90 days following the formal public hearing which is expected to take place during the first quarter of 2013.
Andrew Swarthout, CEO, states “The ESIA submission represents an important milestone towards building a mine by 2015 producing over 13 million ounces per year silver at negative cash costs for the first 5 years of its 20 year mine life. We have worked closely with central and local authorities to insure that the project design addresses community concerns, including improving water quality, quantity and availability. Public workshops were successfully held in all of the communities within a 50 km radius, with strong community support. The workshop locations included Macusani, the largest population center located 30 kilometers from the project which will benefit the most from employment and a power substation near the townsite. The project footprint has been tightened and infrastructure modified to further reduce regional impacts and expedite permit approval.”
Mr. Swarthout continues “The ESIA is the final piece in taking the project to a bankable feasibility study level. In 2013, we will advance our financing plan which is expected to include discussions with smelters and other off-take parties as well as consideration of project and equipment debt financing or other sources. We believe we have several alternatives which have a high probability of significantly reducing the required equity component for financing the construction of the Corani project. As the ESIA process progresses early in 2013, off-take, financing and metal streaming discussions can be accelerated.”
In parallel to the ESIA process, discussions with the government and with local communities at Santa Ana continue towards a negotiated settlement to allow Bear Creek to develop this low capital, low technical risk silver heap leach deposit. The Company remains optimistic that a settlement is achievable, which would reopen additional financing and development alternatives for both projects.
The ESIA is based upon the feasibility study SEDAR filed by the Company on December 22, 2011 entitled “Corani Project, Form 43-101F1 Technical Report, Feasibility Study” (the “FS” or “Feasibility Study”) following the completion of the Corani FS (see News Releases dated November 9, 2011 and January 4, 2012) which establishes Corani as having 270 million ounces silver plus 4.8 billion pounds of combined lead and zinc in Proven plus Probable reserves (156 million tonnes grading 53.8 g/t silver, 0.90% lead and 0.49% zinc) contained within an open pit mine having a 1.69:1 stripping ratio and 22,500 tonnes per day processing rate. The FS provides that the Corani project will produce an average of 13.5 million ounces of silver and 250 million pounds of combined lead and zinc per year during the first 5 years into separate, high-quality lead-silver and zinc concentrates beginning in 2015, when it is generally expected that such concentrates will be in short supply. The FS estimates initial capital costs of $574 million.
In response to the high-level of environmental sensitivity to water-related issues raised in Peru since completion of the FS, the Company has further strengthened certain design features, particularly relating to water quality and quantity, which are expected to add between US$30 million and $40 million to the capital requirements once the permits are approved. For example, a fresh water storage facility has been added which will guarantee better quality municipal and agricultural water supplies during dry seasons. In addition, certain infrastructure has been relocated in order to restrict the project to be within a single watershed. Increases are not expected to negatively impact the project economics including internal rate of return (“IRR”) and rapid payback on capital (3.8 years at base case), especially given the base case silver price assumption in the Feasibility Study of $18 per ounce.
All scientific and technical information contained in this news release has been reviewed and approved by Marc Leduc, P. Eng., President and COO and Andrew Swarthout, P.Geo., the Chief Executive Officer of the Company, who serve as the “qualified persons” within the meaning of National Instrument 43-101 (“NI 43-101”).
Andrew Swarthout - CEO, or Lisa May- Investor Relations
Phone: 604-685-6269 Direct: 604-628-1111
For further information, please visit the Company’s website (www.bearcreekmining.com)
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Please refer to the NI 43-101 technical report dated December 22, 2011 entitled “Corani Project, Form 43-101F1 Technical Report, Feasibility Study” available under the Company’s profile at www.sedar.com, as well as the Company’s news releases dated November 9, 2011 and January 4, 2012, for further details of the mineral reserves, mineral resources and the feasibility study in respect of the Company’s Corani project.
Cautionary Note regarding Forward-Looking Statements:
This document contains “forward-looking information” within the meaning of Canadian securities legislation and “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. This information and these statements, referred to herein as “forward-looking statements”, are made as of the date of this news release or as of the date of the effective date of information described in this news release, as applicable. Forward-looking statements relate to future events or future performance and reflect current estimates, predictions, expectations or beliefs regarding future events and include, without limitation, statements in this news release (or documents referred to herein) with respect to the following in relation to the Company’s Corani project: (i) the filing, planned approval and timing of the ESIA; (ii) the planned development of the project including the timing thereof; (iii) the amount of mineral reserves and mineral resources; (iv) the amount of future production over any period; (v) net present value and internal rates of return of the proposed mining operation; (vi) capital costs, including start-up, sustaining capital and reclamation/closure costs; (vii) operating costs, including credits from the sale of silver, lead and zinc; (viii) strip ratios and mining rates; (ix) expected grades and payable ounces and pounds of metals and minerals; (x) expected processing recoveries; (xi) expected time frames; (xii) prices of metals and minerals; and (xiii) mine life. In addition, forward-looking statements in this news release include statements with respect to plans for a negotiated settlement with applicable authorities in relation to the Santa Ana project. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as “expects”, “anticipates”, “plans”, “projects”, “estimates”, “envisages”, “assumes”, “intends”, “strategy”, “goals”, “objectives” or variations thereof or stating that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved, or the negative of any of these terms and similar expressions) are not statements of historical fact and may be forward-looking statements.
All forward-looking statements are based on the Company’s or its consultants’ current beliefs as well as various assumptions made by and information currently available to them. These assumptions include, without limitation, the following in relation to the Corani project: (i) the presence of and continuity of metals at the project at modeled grades; (ii) the capacities of various machinery and equipment; (iii) the availability of personnel, machinery and equipment at estimated prices; (iv) exchange rates; (v) metals and minerals sales prices; (vi) appropriate discount rates; (vii) tax rates and royalty rates applicable to the proposed mining operation; (viii) financing structure and costs; (ix) anticipated mining losses and dilution; (x) metals recovery rates, (xi) reasonable contingency requirements; and (xiii) receipt of regulatory approvals on acceptable terms and in the timeframes expected by the Company, including, without limitation, in relation to the ESIA. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. Many forward-looking statements are made assuming the correctness of other forward-looking statements, such as statements of net present value and internal rate of return, which are based on most of the other forward-looking statements and assumptions herein. The cost information is also prepared using current values, but the time for incurring the costs will be in the future and it is assumed costs will remain stable over the relevant period.
By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks exist that estimates, forecasts, projections and other forward-looking statements will not be achieved or that assumptions do not reflect future experience. We caution readers not to place undue reliance on these forward-looking statements, as a number of important factors could cause the actual outcomes to differ materially from the beliefs, plans, objectives, expectations, anticipations, estimates, assumptions and intentions expressed in such forward-looking statements. These risk factors may be generally stated as the risk that the assumptions and estimates expressed above do not occur, but specifically include, without limitation, risks relating to variations in the mineral content within the material identified as mineral reserves and mineral resources from that predicted; variations in rates of recovery and extraction; developments in world metals and minerals markets; risks relating to fluctuations in the Canadian dollar relative to other currencies; increases in the estimated capital and operating costs or unanticipated costs; difficulties attracting the necessary work force; increases in financing costs or adverse changes to global market conditions and the terms of available financing, if any; tax rates or royalties being greater than assumed; changes in development or mining plans due to changes in logistical, technical or other factors; changes in project parameters as plans continue to be refined; risks relating to timing and receipt of regulatory approvals; adverse changes to government approval processes; the effects of competition in the markets in which the Company operates; operational and infrastructure risks; and the additional risks described in the Company’s Annual Information Form, annual financial statements and management’s discussion and analysis for the year ended December 31, 2011 and in the Corani Feasibility Study referred to above. The foregoing list of factors that may affect future results is not exhaustive.
When relying on our forward-looking statements, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. The Company does not undertake to update any forward-looking statement, whether written or oral, that may be made from time to time by the Company or on behalf of the Company, except as required by law.