VANCOUVER, April 15, 2013 /PRNewswire/ - Bear Creek Mining (TSX Venture: BCM / BVL: BCM) ("Bear Creek" or the "Company") is pleased to announce that the public hearing required for Environmental and Social Impact Assessment ("ESIA") approval has been successfully completed with strong community support for the project and its benefits. The hearing, run by representatives of the Ministry of Energy and Mines ("MEM") and attended by Company representatives and its consultant, AMEC, was attended by approximately 800 people representing all directly and indirectly affected communities. Following completion of the hearing, MEM comments on the ESIA (submitted by the Company in December 2012) are required within 90 days.
This milestone maintains the Company's guidance for ESIA approval by the end of 2013. Earlier approval is possible given the strength of the study, the surrounding community support, and the successful completion of a life of mine, community investment and support agreement.
Andrew Swarthout, CEO, states "The positive outcome of the public hearing process, held constructively and with strong participation by all parties, met all of our expectations. The strong support for the project reflects the transparency and mutual respect held between Bear Creek and the communities with whom we have worked for over 8 years. Concurrently, the completion of a life of mine investment and support agreement places the project on a solid path for development with predictable social license costs and commitments. This agreement, which establishes an innovative foundation structure for approval and deployment of community investment, exemplifies the trust developed between our communities and Bear Creek."
Life of Mine ("LOM") Investment Agreement- 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. Cessation or interruptions of operations will cause a pro-rata decrease in the annual disbursements.
Investment Trust- As an integral part of the agreement described above, a trust or foundation structure is established for approval of investments and disbursement of funds. Each of the five communities (Corani (Aconsaya), Chacaconiza, Quelcaya, Isivilla, and Aymana) has agreed to the formation of committees which will consider and approve investment projects for the benefit of the communities, such as schools, medical facilities, roads, or other infrastructure. The amounts of the total annual investment to be directed towards each community is agreed to and defined in the agreement. Bear Creek is an oversight member of the trust and will assist in every way towards the success of the projects; however, the Company will have no voting powers. In this transparent structure, Bear Creek's intent is to appoint independent members with community social responsibility experience and credibility in order to provide oversight of the foundation's functions in meeting its commitments to the communities and all of its members.
Mr. Elsiario Antunez de Mayolo, Vice president of Operations and Peru General Manager states, "We are very pleased that Bear Creek has reached such a comprehensive agreement addressing the long-term social license with our communities. We wish to thank our communities for the confidence and trust placed in Bear Creek as we formalized this mutually beneficial agreement. Additionally, we acknowledge our professionals who made it possible to establish the strong bonds necessary in order to build a project which will provide benefits to our communities for decades to come."
Edmundo Caceres, Mayor of Corani states, "This agreement will provide our communities the opportunity to implement long needed social investment projects, which will be used for the development of our entire district. Projects such as education, health and the improvement of alpaca wool (our most important business activity) will become a reality thanks to the use of the proceeds of this agreement. We look forward to working with Bear Creek in partnership as the project advances."
The ESIA is based upon the feasibility study ("FS" or "Feasibility Study") SEDAR filed on December 22, 2011 entitled "Corani Project, Form 43-101F1 Technical Report, Feasibility Study following the completion of the Corani FS (see News Release dated November 9, 2011) which establishes Corani as having 270 million ounces silver plus 4.8 billion pounds of combined lead and zinc in Proven plus Probable reserves contained within an open pit mine having a 1.69:1 stripping ratio and 22,500 tonnes per day processing rate. The project will produce an average of 13.4 million ounces of silver and 250 million pounds of combined lead and zinc per year during the first 5 years at a silver cash cost (net of base metal credits) of negative 45 cents per ounce. At this time Corani remains on schedule for production in 2015 which, according to many industry analysts is a time at which the global supply of high-quality lead-silver and zinc concentrates will be in short supply. Over the life of mine, Corani will produce an average of 8 million ounces silver per year making it one of the largest undeveloped silver mines in the world.
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.
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 Marc Leduc, P. Eng., President and COO and Andrew Swarthout, P.Geo., CEO, who serve as the Qualified Persons under the definitions of NI 43-101. The block model estimate, mine design and schedules were 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 mineral reserves and resources are consistent with the CIM Best Practices Guidelines. 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 metal markets in August 2011.
Assumptions used in the mineral reserve and FS model by IMC are: Silver Price=$18.00/oz; Zinc Price=$0.85/lb; Lead Price=$0.85/lb; Mixed Sulfide Material Silver Recovery is fixed at 62% to lead con and an additional14% to the zinc con when zinc head grade is greater than 0.7%, 10.4% Ag recovery when zinc head grade is from 0.7% to 0.5%, 6.3% recovery of silver to the zinc con when zinc head grade is from 0.5% to 0.3% and no silver recovery to the zinc con when zinc head grades are less than 0.3%. Zinc Recovery=67.5% to zinc con when the zinc head grade is greater than 0.7%, 50% Zn recovery when zinc head grade is from 0.7% to 0.5%, 30% recovery of zinc to the zinc con when zinc head grade is from 0.5% to 0.3% and no zinc recovery to the zinc con when zinc head grades are less than 0.3%. Lead Recovery=75% to lead con. For Transitional Material Silver Recovery= 38.5%+.2*Ag Grade (g/t) (Maximum 70% recovery) to lead con and 0% to the zinc con, Zinc Recovery= 0% to zinc con and Lead Recovery= 38%+10.9*Lead Grade (%) (Maximum 65% recovery) to lead con. Average smelter charges including Treatment Charges and Refining Charges ("TCRC") and metal deducts against saleable metal: Silver= $1.52 per ounce; Zinc= $0.62 per pound; Lead= $0.41 per pound; Mining Costs per tonne= $1.34; Process cost per tonne= $8.00; G&A per processed tonne= $1.20; Pit Slopes= 42 degrees in mineralized tuff and 46 degrees in post-mineralized tuff. The resulting mineral reserve cutoff is $10.54/tonne ore NSR. The mineral reserves are contained within a practical mining plan that utilized the 'floating-cone" method as an initial guide for design.
The mineral resource portion of the project is contained in a larger pit than the FS design pit, which was a floating cone using the following input assumptions: Silver Price=$30.00/oz; Zinc Price=$1.00/lb; Lead Price=$1.00/lb; Mixed oxide material that was given 0% recovery for the reserves was assumed to have an 85% recovery of silver, all other recoveries remained the same. The Mineral Resource cut-off was $9.20/tonne which represents the internal process cutoff. All metallurgical material types were included in the resource.
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.
The FS was prepared by a team of independent engineering consultants. The mining and block model portion was prepared by Independent Mining Consultants of Tucson Arizona, John Marek, PE acting as QP. The process plant design was prepared by M3 Engineering, Dan Neff, PE acting as QP. Metallurgy and Process design criteria developed by Blue Coast Metallurgy Ltd. Chris Martin, CEng acting as QP. And geotechnical, environmental, infrastructure, waste stockpile and tailings designs were prepared by Global Resource Engineering Ltd., Chris Chapman, PE acting as the QP. Each of these individuals has read and approves the respective scientific and technical disclosure contained in this news release. Silver Equivalency calculation represents the contained equivalent silver ounces contained in the ground and is based on the resource metal prices assumptions of $18.00/oz Ag, 0.85/lb Pb and 0.85/lb Zn and recoveries to concentrate of 64.2% for silver and 71.1% for lead and 51.6% for zinc. The calculation does not take into account the net smelter payment terms for the different metals in the two separate concentrates. The resulting equivalency is 1 oz Ag = 19.1 lb Pb and 1 oz Ag = 26.3 lb Zn.
Total cash cost per ounce of silver is calculated in accordance with a standard approved by The Silver Institute, a nonprofit international association that draws its membership from across the breadth of the silver industry. Adoption of the standard is voluntary and the cost measures presented may not be comparable to other similarly titled measures of other companies. Total cash cost includes mine site operating costs such as mining, processing, administration, and treatment and refining charges, but is exclusive of amortization, reclamation, capital, exploration costs and taxes on income. Total cash costs are reduced by lead and zinc by-product revenues, and then divided by silver ounces sold to arrive at total cash cost of per ounce of silver, net of by-product revenues. Previously, the Company included reclamation costs as a component of its total cash cost per ounce of silver.
The Company has elected to follow the Silver Institute's cash cost standard, and has therefore excluded reclamation costs from its calculation of total cash cost per ounce of silver.
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 amount of mineral reserves and mineral resources; (ii) the amount of future production over any period; (iii) net present value and internal rates of return of the proposed mining operation; (iv) capital costs, including start-up, sustaining capital and reclamation/closure costs; (v) operating costs, including credits from the sale of silver, lead and zinc; (vi) strip ratios and and mining rates; (vii) expected grades and payable ounces and pounds of metals and minerals; (viii) expected processing recoveries; (ix) expected time frames; * prices of metals and minerals; and (xi) mine life. 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: (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; * metals recovery rates, (xi) reasonable contingency requirements; and (xiii) receipt of regulatory approvals on acceptable terms. 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 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 receipt of regulatory approvals; 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 PFS and FS 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.
SOURCE Bear Creek Mining Corporation