VANCOUVER, Nov. 9, 2011 /CNW/ - Bear Creek Mining Corporation
("Bear Creek" or the "Company") is pleased to announce the results
of a positive Feasibility Study (the "FS" or "Feasibility Study"),
as defined by Canadian Securities Administrators National
Instrument 43 - 101, for its 100%-owned Corani
silver-lead-zinc deposit located in southern Peru. Highlights
of the FS include (all figures in US dollars): -- The study defines
a significant undeveloped silver deposit containing proven and
probable mineral reserves of 270 million ounces of silver, 3.1
billion pounds of lead and 1.7 billion pounds of zinc. -- The base
case after-tax net present value ("NPV") is $463 million at a 5%
discount rate with an internal rate of return ("IRR") of 17.6%
($18/oz silver, $0.85/lb lead and $0.85/lb zinc). On a pre-tax
basis, the base case NPV at a 5% discount rate is $907 million with
an IRR of 29.7%. -- At spot metals prices ($34.64/oz silver,
$0.89/lb zinc, $0.90/lb lead on November 8, 2011, the date of the
FS), Corani has an after-tax NPV of approximately $1.5 billion at a
5% discount rate and a 38% IRR ($2.7 billion NPV and 60% IRR on a
pre-tax basis). -- Average annual payable silver production is 13.4
million ounces per year for the first five years and 8 million
ounces per year over the life-of-mine ("LOM"). On a silver
equivalent ounce basis, average annual payable production is 23.0
million ounces per year for the first five years and 14.7 million
ounces per year over the LOM. -- Cash cost is a negative $(0.49)
per ounce of silver for the first five years, with a LOM cash cost
of $3.68 per ounce of silver (net of base metal credits at $0.85/lb
lead and $0.85/lb zinc). -- Project produces marketable Lead and
Zinc concentrates. Metallurgical testing has established
conventional flotation recoveries. -- Initial capital cost is $574
million with capital payback of 3.8 years at base case metal
prices, and 2.0 years at metal prices on November 8, 2011, the date
of the FS. -- Mine life is 20 years. -- Mill capacity is 22,500
tonnes per day. -- Stripping ratio is 1.69:1 (waste:ore). -- 89
million of measured and indicated silver resource ounces represent
potential future reserve conversion. Additional new mineralization
was intersected in recent drilling near perimeter of proposed
tailings dam. Conference Call and Webcast Information Bear Creek
will host a conference call and webcast on Thursday, November
10(th), 2011 at 6:00 a.m. (Pacific) or 9:00 a.m. (Eastern) to
discuss the results. Call-in and webcast information is provided at
the bottom of this release. Project Summary - Under the Feasibility
Study, the Corani project has an after-tax IRR of 17.6% and a NPV
of $463 million at a 5% discount rate based on metal prices of
$18/oz silver, $0.85/lb lead and $0.85/lb zinc. The financial
model incorporates the tax and royalty legislation recently
approved by the Peruvian government. Payable silver production in
the first five years averages 13.4 million ounces per year. The
project will produce an average of 8 million payable ounces of
silver, 105 million payable pounds of lead and 37 million payable
pounds of zinc annually over a 20 year mine life. Total cash cost
for the first five years is a negative $(0.49)/oz silver, with a
life-of-mine cash cost of $3.68/oz silver, net of base metals
credits. The initial capital investment on the project is
estimated to be $574 million with sustaining capital expenditures
during mine operations averaging $7.2 million per year over the
20 year mine life. The project achieves payback of initial
capital in 3.8 years using base case metal prices. The Feasibility
Study has been prepared using cost bids, estimates and production
forecasts provided by qualified engineering consulting groups led
by M3 Engineering, Tucson, Arizona. The economic analysis was
performed by M3 Engineering. Andrew Swarthout, CEO, states, "We are
very pleased that the Feasibility Study confirms Corani as one of
the world's largest undeveloped silver and base metals deposits. We
intend to advance the project to development with permitting
applications to be submitted in the first half of 2012 with
production scheduled to start-up in early 2015. Using metals prices
on November 8, 2011 the date of the FS, of $34.64/oz silver,
$0.89/lb zinc and $0.90/lb lead, Corani has an after-tax NPV of
$1.5 billion at a 5% discount rate reflecting robust economics with
strong leverage to rising metals prices. The Feasibility Study
establishes that the project can be built using conventional mining
and processing technology. The Feasibility Study maximizes the
value of the project by defining a very large primary silver mine
that leverages the base metal credits resulting in very low cash
costs per ounce of silver for the first five years. Additionally,
the production of high-quality lead and zinc concentrates (126,000
tonnes per year) provides for excellent financing alternatives in
the form of concentrate off-take agreements." Mr. Swarthout
continues, "Importantly, the feasibility engineering and
metallurgical studies have resolved earlier issues regarding
recoveries using conventional flotation. Corani will produce
two high quality concentrates. Based upon final metallurgical
test work and mine planning, we have established optimized,
conventional flotation treatment options for all ores processed in
the Feasibility Study mine plan. As a result of this
optimization, there was a reduction in zinc recoveries in the lower
grade zinc zones of the ore body and a corresponding reduction in
silver contained in the zinc concentrate causing a decrease in
payable silver of approximately 8% and payable zinc by 19% compared
to the 2009 Prefeasibility Study. However, silver contained in the
zinc concentrate is only 50% payable after deductions; therefore,
the decrease in payable silver is only 4% on an economic
basis. More importantly, the recoveries to the lead circuit,
having far better terms for silver payment, remain unchanged.
As is common in these ore bodies, we expect additional optimization
regarding zinc and silver recoveries during commercial operation."
FEASIBILITY STUDY The reserve and resource estimates were updated
in the FS by Independent Mining Consultants the ("IMC"), Tucson,
Arizona. M3 Engineering of Tucson, Arizona led the FS with
support from Blue Coast Metallurgy and Global Resource Engineering
(the "GRE") for tailings and geotechnical engineering. All
are independent engineering and metallurgical testing firms with
recent project development experience in Peru. The FS is based upon
assumptions derived from mine planning sequences completed by IMC
and metallurgical test work performed by SGS Laboratories in
Vancouver, BC and reviewed by Blue Coast Metallurgy. The mining
sequence primarily derives ore from the higher-grade starter pits
in the early years and moves to lower-grade areas in the later
years of production. Operations are for 20 years based on
current reserves. Only measured and indicated resources were
used to establish the operations plan when converting resources to
reserves. In the mine sequence, only 270 million ounces contained
within 156 million tonnes have been used as reserves in this
plan. An additional 134 million tonnes of measured and
indicated resource (containing 88.7 million ounces of silver at
20.5 g/t) and 49.8 million tonnes of inferred resource (containing
48.0 million ounces of silver at 30 g/t) remain that could be
included in later plans of operations. About 89% of these
resources are mixed sulfide and transition material peripheral to
the reserve pit. About 11% are contained within oxide
mineralization, which outcrops at surface.
_____________________________________________________________________
| Key Assumptions for the Corani Project - Base Case |
|_____________________________________________________________________|
| | |
|_______________________________________________________|_____________|
|Annual ore production - years 1 to end of life (tonnes)| 7,875,000
|
|_______________________________________________________|_____________|
|Overall process recovery - silver - into both lead and | 64.2% |
|zinc cons | |
|_______________________________________________________|_____________|
|Overall process recovery - lead - into lead cons | 71.1% |
|_______________________________________________________|_____________|
|Overall process recovery - zinc - into zinc cons | 51.6% |
|_______________________________________________________|_____________|
|Total processed tonnes | 156,130,000 |
|_______________________________________________________|_____________|
|Average silver grade (g/t) | 53.8 g/t |
|_______________________________________________________|_____________|
|Average lead grade (%) | 0.90% |
|_______________________________________________________|_____________|
|Average zinc grade (%) | 0.49% |
|_______________________________________________________|_____________|
|Payable ounces of silver net of smelter payment terms |160.2
million| |(total) | |
|_______________________________________________________|_____________|
|Payable pounds of lead net of smelter payment terms | 2.1 billion
| |(total) | |
|_______________________________________________________|_____________|
|Payable pounds of zinc net of smelter payment terms | 745 million
| |(total) | |
|_______________________________________________________|_____________|
|Overall stripping ratio | 1.69 to 1 |
|_______________________________________________________|_____________|
|Life-of-mine (mining only) years | 18 |
|_______________________________________________________|_____________|
|Life-of-mine (processing) years | 20 |
|_______________________________________________________|_____________|
Reserves are based on metal prices of $18.00/oz silver and $0.85
per pound for both lead and zinc. For the resources, metal
prices of $30.00/oz for silver and $1.00/lb for both lead and zinc
were used, representing the three-year backward and two-year
forward metal prices weighted 60:40 from August 2011 which is
consistent with the Company's policy and industry standards. The
positive Feasibility Study recommends proceeding with project
development based on: -- Robust economics at the base case
assumptions with excellent exposure to up-side silver and base
metals prices; -- Well-defined resources open to expansion and
conversion to reserves; -- A solid metallurgical process producing
highly marketable, separate lead and zinc concentrates; --
Favorable infrastructure for tailings storage, power and access, --
Available local water supply; -- Well-defined permitting process;
and -- Local community acceptance and support
PROJECT
ECONOMICS Sensitivities to various parameters are summarized below
for the after-tax case:
_____________________________________________________ | Case | IRR
|NPV @ 5%|NPV @ 0%|
|_____________________________|_____|________|________| |Base Case
|17.6%| $463 M| $947 M|
|_____________________________|_____|________|________| |Recovery
+10% |20.7%| $604 M|$1,176 M|
|_____________________________|_____|________|________| |Recovery
-10% |14.2%| $319 M| $710 M|
|_____________________________|_____|________|________| |Metal
Price +10% |21.7%| $658 M|$1,268 M|
|_____________________________|_____|________|________| |Metal
Price -10% |12.9%| $261 M| $610 M|
|_____________________________|_____|________|________| |Initial
Capital Cost +10% |15.6%| $424 M| $912 M|
|_____________________________|_____|________|________| |Initial
Capital Cost -10% |20.0%| $502 M| $981 M|
|_____________________________|_____|________|________| |Operating
Cost +10% |16.1%| $386 M| $809 M|
|_____________________________|_____|________|________| |Operating
Cost -10% |19.0%| $537 M|$1,077 M|
|_____________________________|_____|________|________| |Metal
Prices November 8, 2011|37.7%|$1,497 M| $2,617M|
|_____________________________|_____|________|________| Note: Base
case prices are $18.00/oz Silver, $0.85/lb Lead, $0.85/lb Zinc;
Spot prices are from November 8, 2011 (the date of the FS) and were
$34.64/oz Ag, $0.90/lb Pb and $0.89/lb Zn. The financial analysis
prepared for the Feasibility Study utilizes the tax regime recently
enacted by the Peruvian government. For the base case
assumptions, the project is expected to generate $636 million of
income related taxes (including mandatory workers profit
sharing). At metal prices on November 8, 2011 (the date of
the FS), the project would generate $1.8 billion in taxes.
RESERVE
and RESOURCE ESTIMATE
Bear
Creek Mining, Corani Project Silver Zone
Mineral
Reserves and Resources
November
8, 2011
_________________________________________________________________________
| Mineral Reserves, $10.54 NSR cut-off |
|_________________________________________________________________________|
| | Contained Metal | Equivalent | | | | Ounces |
|__________________________________|_______________________|______________|
|Category |Ktonnes|Silver|Lead|Zinc|Silver | Lead | Zinc | Eq. |
Eq. | | | | G/t | % | % |Million|Million|Million|Silver |Silver| |
| | | | | Ozs | Lbs | Lbs |Million| G/t | | | | | | | | | | Ozs | |
|_________|_______|______|____|____|_______|_______|_______|_______|______|
| | | | | | | | | | |
|_________|_______|______|____|____|_______|_______|_______|_______|______|
|Proven | 30,083| 66.6|1.04|0.60| 64.4| 690.4| 399.9| 115.7| 119.6|
|Probable |126,047| 50.7|0.87|0.47| 205.6|2,422.6|1,297.7| 381.5|
94.1| |Proven + |156,130| 53.8|0.90|0.49| 270.0|3,113.0|1,697.6|
497.2| 99.1| |Probable | | | | | | | | | |
|_________|_______|______|____|____|_______|_______|_______|_______|______|
| | | | | | | | | | |
|_________|_______|______|____|____|_______|_______|_______|_______|______|
| Mineral Resources in Addition to Reserves, $9.20 NSR cut-off |
|_________________________________________________________________________|
| | Contained Metal | Equivalent | | | | Ounces |
|__________________________________|_______________________|______________|
|Category |Ktonnes|Silver|Lead|Zinc|Silver | Lead | Zinc | Eq. |
Eq. | | | | G/t | % | % |Million|Million|Million|Silver |Silver| |
| | | | | Ozs | Lbs | Lbs |Million| G/t | | | | | | | | | | Ozs | |
|_________|_______|______|____|____|_______|_______|_______|_______|______|
| | | | | | | | | | |
|_________|_______|______|____|____|_______|_______|_______|_______|______|
|Measured | 10,878| 17.5|0.38|0.33| 6.1| 91.1| 79.1| 13.9| 39.6|
|Indicated|123,583| 20.8|0.38|0.29| 82.6|1,035.3| 790.1| 166.7|
42.0| |Measured |134,461| 20.5|0.38|0.29| 88.7|1,126.4| 869.2|
180.6| 41.8| |+ | | | | | | | | | | |Indicated| | | | | | | | | |
|_________|_______|______|____|____|_______|_______|_______|_______|______|
| | | | | | | | | | |
|_________|_______|______|____|____|_______|_______|_______|_______|______|
|Inferred | 49,793| 30.0|0.46|0.28| 48.0| 509.4| 305.2| 86.2| 53.9|
|_________|_______|______|____|____|_______|_______|_______|_______|______|
Note: See regulatory footnotes for calculation methods used
for the reserve and resource and the silver equivalency
calculation. The FS incorporates an updated resource estimation and
mine design performed in October 2011 by IMC based upon 93,577
meters of drilling and sampling in 544 diamond drill holes and
trenches completed through May of 2009. The Company employs a
Net Smelter Return (the "NSR") method to determine ore and waste,
with the cutoff NSR being $10.54 per tonne. Measured and
indicated resources contained within the Feasibility Study design
pit were used to determine final pit limits and thus converted into
proven and probable reserves, respectively. The additional
resource material is mostly measured and indicated resource that
occurs outside of the Feasibility Study pit but which meets the CIM
definition of mineral resource. Comparing the reserve and resource
presented in the 2009 Pre-Feasibility Study (the "PFS") with the
Feasibility Study, the silver reserve ounces have increased by 5%,
the measured and indicated reserves have increased by 24% and the
inferred resources have increased by 35%. While this is largely the
result of higher metals prices, it is important to note that
current drilling in the district is intersecting new mineralization
indicating significant exploration upside that could potentially
increase resources as well. Metallurgical Testing - The Company has
completed two phases of metallurgical optimization tests in order
to define recoveries for the purposes of the FS reserve
calculation. The results show that the Corani ore body can be
divided into two types of ore; mixed sulfide and transitional
ores. The mixed sulfide ore, which constitutes 84% of the
mill feed, is a conventional polymetallic ore that uses standard
processing methods and produces good quality concentrates.
The remaining mill feed (16%) is transitional ore which is also
treated using standard flotation but has reduced recovery of
approximately 5% for silver and 15% for lead. The
transitional ore also produces a lower grade concentrate; however,
as it only constitutes 16% of the mill feed tonnes, the FS plan
effectively blends the transitional ore to produce overall high
quality concentrates. Variance From PFS - The FS more accurately
determines the recoveries into the zinc concentrate based upon
final metallurgical test work. The recovery of zinc and
silver varies with the feed grade of the ore, therefore reducing
the recovered zinc and silver at lower zinc head grades (0.3% to
0.7% Zn) from those predicted in the PFS. Importantly, the
lead portion of the recovery circuit and the recovery of silver in
the lead circuit, where the best silver in concentrate commercial
terms are obtained, is not affected by the reduced silver
recoveries into the zinc concentrate. The Company believes
that improved performance of the zinc circuit and continued
improvement of silver recoveries into the lead concentrate at lower
zinc feed grades represent opportunities during commercial
operation. Average Recoveries and Concentrate Grades of the
Life of the Project
_________________________________________________________ | Average
Recovery And Con Grades LOM |
|_________________________________________________________| | |
Lead Con | Zinc Con |
|__________________________|_______________|______________| | | Pb
| Ag | Zn | Ag |
|__________________________|______|________|______|_______|
|Recovery |71.70%| 60.30% |51.60%| 3.90% |
|__________________________|______|________|______|_______|
|Average Concentrate Grades|56.60%|2.9 kg/t|53.00%|437 g/t|
|__________________________|______|________|______|_______| MINING
AND MILLING Mining will be performed using conventional open pit
methods using 135 tonne trucks and a mixture of hydraulic
excavators and wheel loaders mining on eight meter high
benches. The mine requires minimal pre-production waste
stripping of 16.2 million tonnes. Processing of the ore will be by
conventional flotation recovery methods. The ore will be
crushed close to the mine and the material conveyed to the
processing plant which will be approximately 500m from the
mine. The ore will be ground to 80% passing 90 microns in a
SAG/Ball mill circuit. The material will then be floated with
the rougher concentrates being reground to 80% passing 30 microns
prior to cleaning to produce high-value separate lead-silver and
zinc concentrates. Concentrates will be trucked to the port of
Maturani for ocean shipment to smelters. CAPITAL COSTS The
project capital cost estimate has been prepared by three
independent engineering companies. The mining costs were
prepared by Independent Mining Consultants of Tucson, Arizona, the
process and portions of the infrastructure capital cost have been
prepared by M3 Engineering of Tucson, Arizona and the Tailings
Storage Facility (the "TSF") and remaining infrastructure costs
have been prepared by Global Resource Engineering (the
"GRE"). The initial startup capital is estimated to be $574
million and the sustaining capital cost is estimated to be $7.2
million annually over the life of mine. The capital costs
include detailed long-term plans for tailing dam expansions as well
as ongoing capital (i.e. mine fleet replacement) and mine closure.
OPERATING COSTS Mining costs were prepared on a year by year basis
with costs varying mostly due to changing haulage distances.
The life-of-mine average mining costs will be $1.42 per tonne of
total waste and ore mined. The process costs are estimated to
be $8.44 per tonne of processed ore and the G&A is estimated to
be $1.40 per tonne of processed ore or $11 million per year.
INFRASTRUCTURE 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. The project has an excellent low environmental
impact site for tailings storage resulting in very low capital and
operating costs, as the plant will be located immediately adjacent
to the mine and the tailings will be pumped to the TSF. The
site is also located in the upper part of drainages with ample
surface water supply and as such there are several surface and
underground water source alternatives. The FS provides for the
construction of a small water storage dam and water capture in the
TSF. SOCIAL AND ENVIRONMENTAL The Company has maintained very good
working relationships with the local communities and has continued
to operate exploration and development activities at Corani without
interruption. The Company owns all the land in the area of the
mine and plant and is currently negotiating the access rights for
the ancillary facilities.The Company's commitment to the local
communities has been further solidified with the recent agreement
to provide $1 million in aid over the next three years. The project
is designed to meet and, in many ways exceed, international
standards of environmental compliance. The TSF has been
designed by GRE to the highest standards of containment and
stability. Importantly, the latest design technology will
facilitate the permitting process. In the TSF, the Feasibility
Study calls for the operation of a sulfide flotation plant that
will capture and segregate the sulfide material in the central part
of the TSF. This will result in the sulfide material never
being exposed to the atmosphere during operations and following
mine closure. This will result in a very large reduction in
the potential for the TSF to produce acid rock drainage and
facilitate the sustainable closure of the TSF; major positive
factors for the permitting process. Furthermore, the waste rock
storage facilities are designed to capture and manage any flows
that may originate from the waste rock. A buffer layer of
inert rock will be placed on the outside of the waste rock piles to
mitigate the acid producing potential of the facilities.
Additionally, the plan calls for partial backfilling of the mining
pits so that long-term pit lakes will not form at closure.
Finally, the closure plan provides for the covering of the tailing
storage and waste rock facilities assuring safe and environmentally
compliant closure of the mine. OPPORTUNITIES The FS defines
significant resources (134 million tonnes of measured and indicated
containing 88.7 million ounces averaging 20.5 g/t Ag and 49.8
million tonnes of inferred resources containing 48 million
ounces of silver averaging 30.0 g/t Ag) that are not included in
the current mine plan. Depending upon future silver prices,
these resources may be converted into reserves and incorporated
into the mine plan. Additionally, numerous opportunities
exist to discover new mineralization by continuing district
exploration. Recent engineering and condemnation drilling has
intercepted mineralization up to five kilometers from the current
ore body in previously unexplored areas (see news release dated
October 11, 2011). CONFERENCE CALL AND WEBCAST INFORMATION Call-in
details for the conference call are: Date: Thursday November 10(th)
2011 Time: 6 a.m. (Pacific) / 9 a.m. (Eastern) Number: (647)
427-7450 Toll Free: (888) 231-8191 To access the webcast:
http://www.newswire.ca/en/webcast/viewEvent.cgi?eventID=3740000 A
replay of this conference call will be available from November
10(th) 2011 until November 24(th) 2011 and will be posted on Bear
Creek's website: www.bearcreekmining.com. The replay numbers are:
Number: 416-849-0833 Toll Free: 1-855-859-2056 Passcode: 26083304
The FS will be filed and available for viewing on SEDAR
(www.sedar.com) within 45 days following the date of this news
release. 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. Regulatory footnotes: 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. 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, 2010 and in the PFS filed on the SEDAR website in Canada
(available at www.sedar.com), as well as in the FS to be filed by
the Company on the SEDAR website within 45 days following the date
of this news release. 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. Bear Creek Mining
Corporation CONTACT: Andrew Swarthout - CEO, or Patrick De Witt -
Investor RelationsPhone: 604-685-6269 Direct: 604-628-1111E-mail:
info@bearcreekmining.comFor further information, please visit the
Company's website(www.bearcreekmining.com)
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