Vancouver, B.C. - Bear Creek Mining (TSX Venture: BCM) (“Bear Creek” or the “Company”) announces that it delivered to the Peruvian Minister of Economy and Finance, on February 6, 2014, a Notice of Intent to Submit a Claim to Arbitration (“Notice of Intent”), under the Free Trade Agreement between Canada and Peru (“Canada-Peru FTA”). The dispute arises out of the enactment by the Peruvian government on June 25, 2011, of Supreme Decree 032 rescinding the Company’s rights to operate the Santa Ana Project and which resulted in a complete stoppage of activities at Santa Ana and significant damages to the Company. Peru’s actions constitute violations of the Canada-Peru FTA, Peruvian and international law.
The Notice of Intent is necessary in order to preserve the Company’s rights to initiate arbitration should a resolution with the Peruvian government not be reached. The filing of the Notice of Intent also initiates a six-month consultation period between the parties during which time they are to continue to attempt to amicably settle the dispute. If no amicable settlement is reached in that six-month period, the Company may then initiate international arbitration proceedings against Peru in accordance with the Canada-Peru FTA.
Based upon outside counsel’s opinion of the strength of the Company’s legal position, and ongoing discussions with the Peruvian government and local communities, the Company remains optimistic that a settlement of the dispute in relation to the Santa Ana Project will be reached to avoid international arbitration. The Ministry of Energy and Mines recently issued a public statement that Peru wants to reach an amicable solution through dialogue with the Company. The Company’s desire is for both parties to reach a mutually acceptable favorable solution, as evidenced by the numerous proposals submitted by Bear Creek to the Peruvian government to date, with a view to allowing the Company to resume its development of the Santa Ana Project for the benefit of our shareholders, the local communities and the Peruvian nation as a whole. If such a solution is not achieved within the next six months, the Company expects it will have no alternative but to pursue its claims before an international tribunal and seek full compensation for damages the Company has suffered as a result of Peru’s acts.
The Santa Ana Project is located in the Puno Region of Peru and contains Proven and Probable Mineral Reserves totaling 63.2 million ounces of silver. Bear Creek acquired the mining concessions in full compliance with Peruvian law, as is confirmed by Supreme Decree 083, enacted by the President of Peru and the Council of Ministers on November 29, 2007. Bear Creek initiated exploration work in early 2008, and undertook a comprehensive Environmental and Social Impact Assessment (“ESIA”) shortly thereafter. The ESIA, which the Peruvian government suspended on June 1, 2011, remains on standby. The Company has stated its willingness to complete the ESIA process, including demonstration of social license, and carry out the other steps required to reach commercial production as quickly as possible. The Santa Ana Project, which is widely supported by the local communities surrounding the proposed mine site, will create 2,500 direct and indirect jobs in the southern Puno Region, and bring important infrastructure improvements to the area. The Santa Ana Project is also expected to provide US$330 million in federal taxes, much of which benefit local communities.
The Company’s Corani silver-lead-zinc project (the “Corani Project”) enjoys continued strong community support, and remains on track for advancement following the approval of its ESIA in September 2013. Numerous public statements by the President of Peru and Cabinet Ministers have expressed strong support for the advancement of the Corani Project and the government has worked in concert with the Company in order to fund local infrastructure projects. However, the successful resolution of the Santa Ana dispute is a critical component to the Company’s ability to raise financing for, and ultimately the potential success of, the Corani Project.
Recent media in Peru have reported false accusations by an individual distant from our communities wherein Bear Creek Mining officials supposedly paid locally elected officials based on an alleged document showing an agreement between the company and politicians in the Corani District. The alleged document is falsified from our duly registered, official agreement as disclosed in April, 2013 (see news release dated April 14, 2013). Police in Peru are investigating these claims and Bear Creek has both encouraged and is cooperating fully in this process. We continue to work with our partner communities under the legal agreement executed in April 2013 and for which the Company is extremely proud of its transparent foundation structure that delivers long-term benefits to our communities. This is the only agreement to make social payments to our local communities or its members that exists and, in the interest of transparency; we have posted the agreement in both Spanish and English to the Bear Creek website. http://www.bearcreekmining.com/s/corani_project.asp?ReportID=622470
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.
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 with respect to (i) the Company’s plans to continue discussions with the Peruvian government and local communities for a settlement of the dispute in relation to the Santa Ana Project, (ii) the Company’s plans to pursue any claims with regard to its projects in Peru, including, without limitation, any claims before an international tribunal, (iii) the Company’s intentions to complete any environmental and social impact assessment, and (iv) the planned development of the Corani and Santa Ana projects, including the timing thereof. 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.
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 timing and to 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, 2012 and in the feasibility study entitled “Corani Project, Form 43-101F1 Technical Report, Feasibility Study” filed by the Company on December 22, 2011 filed on the SEDAR website in Canada (available at www.sedar.com). 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.
All scientific and technical information contained in this news release has been reviewed and approved by Andrew Swarthout, P.Geo., the President and Chief Executive Officer of the Company, who serves as the “qualified person” within the meaning of National Instrument 43-101 (“NI 43-101”). The block model estimate, mine design and schedules for the Santa Ana Feasibility Study were prepared by Independent Mining Consultants of Tucson Arizona, with John Marek, P.E. acting as the independent qualified person under NI 43-101. Additionally, the methods used in determining and reporting the mineral reserves and resources in the Feasibility Study are consistent with the CIM Best Practices Guidelines.
Following is a table setting forth mineral reserve estimates from the Santa Ana Feasibility Study announced on October 7, 2010:
Bear Creek Mining, Santa Ana Project Silver Zone
|October 7, 2010 Mineral Reserves, Cutoff Grade, Variable 27 to 24 g/t Silver by Year|
Please refer to the Company’s news release dated October 7, 2010 for further details of the Santa Ana Feasibility Study, as well as the feasibility study itself filed on SEDAR (www.sedar.com) on October 21, 2010.