Bear Creek Mining Signs Contract with Peru for Accelerated Recovery of IGV Tax
VANCOUVER, May 25, 2017 /PRNewswire/ - Bear Creek Mining Corporation (TSX Venture: BCM) ("Bear Creek" or the "Company") has signed an agreement (the "IGV Contract") with the Peru Ministry of Energy and Mines ("MEM") and ProInversion (an agent for the Government of Peru) that allows the Company to recover, at its discretion and on an accelerated basis, the 18% IGV taxes applied to engineering and construction costs associated with future development of the proposed Corani silver-lead-zinc mine in Puno, Peru.
The IGV Contract applies to Corani Initial CapEx costs and covers an approximately three-year development period during which detailed engineering, permitting, construction, commissioning and project ramp-up is expected to occur. The IGV Contract is retroactively applicable to costs incurred as of the application date of November 2016, and allows the Company to request modifications with respect to both expenditure amounts and timelines. Initial CapEx requirements for development and construction of the Corani mine, as outlined in the Company's Final Optimized Feasibility Study for the Corani Project filed on SEDAR on July 20, 2015 (available at www.sedar.com) is estimated to total approximately US $625 million (inclusive of the net impact of the IGV Contract).
Andrew Swarthout, President and CEO of the Company, states "We are very pleased to be working in cooperation with the Peruvian government and we appreciate the confidence shown in Bear Creek and the Corani Project by the Ministries of Finance, the MEM and ProInversion in approving the IGV Contract. The IGV Contract will streamline anticipated cash flow and capital requirements as the Corani operation is developed by allowing the Company to periodically recoup IGV taxes payable on capital expenditures as they are made rather than after construction is completed."
Phase 1 Detailed Engineering at the Corani project (see news release dated November 14, 2016) is advancing well and is on schedule for completion in June 2017. This phase of detailed engineering will provide key documentation for the Construction Permit application, which the Company anticipates submitting during Q3 2017. Concurrently, the Company and its outside advisors are investigating and assembling Corani project financing alternatives so that we are ready to move forward rapidly as the anticipated improvements in metal prices acelerate. Pending receipt of the Construction Permit, solidification of a project financing plan, and favorable commodity and market conditions, the Company's board of directors hopes to consider a construction decision for the Corani project by year-end 2017.
Mr. Swarthout continues, "We are very pleased that the Corani mine sequences and metal recoveries continue to be further optimized during the Phase 1 Detailed Engineering and that commodity prices and market conditions continue to stabilize or even further improve. We believe that 2017 will be a transformational year for Bear Creek."
On behalf of the Board of Directors,
Andrew Swarthout
President and CEO
Regulatory Footnotes
Bear Creek's exploration programs are overseen by, and disclosure of a technical or scientific nature has been reviewed and approved by, Andrew Swarthout, AIPG Certified Professional Geologist, President and CEO of the Company and a Qualified Person as defined in NI 43-101. Mr. Swarthout has read, verified and approves such information disclosed in this release.
This news release contains forward-looking information and forward-looking statements related to: the financial impact of the IGV Contract on cash flow and capital requirements; terms and conditions of the IGV contract that may be revised; the timing of completion of the Phase I Detailed Engineering; the outcome of Corani project financing efforts; and, the timing of a possible Corani Project construction decision. Certain of these forward-looking statements are contingent upon various assumptions, including that the Phase 1 Detailed Engineering results will provide sufficient information for the Construction Permit application; and upon future events transpiring, including that the Company can obtain all necessary permits and secure project financing for the Corani project. This forward-looking information is provided as of the date of this news release and reflects current estimates, predictions, expectations or beliefs regarding future events and is based on the Company's or its consultants' beliefs at the time the statements were made, as well as various assumptions made by and information currently available to them. Although management considers these assumptions to be reasonable based on information available to it, they may prove to be incorrect. 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 on which they are based 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 expectations expressed in them. These risk factors may be generally stated as the risk that the assumptions and estimates used to make such forward-looking statements do not occur and the additional risks described in the Company's most recent Annual Information Form. 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.
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.
SOURCE Bear Creek Mining Corporation
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