• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Bear Creek provides project update: Engineering studies rapidly advancing to completion at Corani and Santa Ana silver deposits

Posted on: Wednesday, 1 April 2009, 08:30 CDT

VANCOUVER, April 1 /PRNewswire-FirstCall/ - Bear Creek Mining (TSX Venture: BCM) ("Bear Creek" or the "Company") is pleased to provide an update on the status of project development work. Following successful renegotiation of its obligations with respect to the purchase of the remaining interest in the Corani silver project, the Company has sufficient funds to complete all needed development activities through 2010 while maintaining its aggressive generative exploration programs.

The work completed to date on the Corani prefeasibility study ("PFS") demonstrates that the project has favorable development characteristics and metallurgical behavior that make for a straight-forward mining project with robust economics. Engineering and development work on Corani and Santa Ana has continued and will be accelerated now that the Rio Tinto obligation has been restructured and precious metals prices are improving. Importantly, in the face of strengthening silver prices, the Company now holds 410 million ounces of silver in measured and indicated resources along with a large base metal resource containing another 204 million ounces of equivalent silver.

Andrew Swarthout, President and CEO, states, "We are very excited with the advanced status of the engineering studies being performed by a widely recognized group of independent mining consultants and testing laboratories. We believe that these important milestones, the Corani prefeasibility study as well as the Santa Ana scoping study/preliminary economic assessment ("PEA") will demonstrate the high quality of our silver assets and enhance shareholder value by establishing that these projects are among the best undeveloped silver assets in the world. The engineering studies will further define how each of the projects can be developed in a low capital cost manner with initial production coming from the higher grade portions of each deposit at a very attractive cost per ounce."

Corporate Funding -----------------

The Company has a strong cash position with US$12 million on hand at the end of March, 2009. These funds are sufficient to complete the Corani PFS and the Santa Ana PEA and to continue its grassroots exploration programs in an environment where many new opportunities will arise as less well-funded companies are forced to release mining claims or to seek joint venture partners. The Company maintains this strong commitment to grassroots exploration by keeping three teams of experienced exploration geologists in the field in Peru exploring for new precious metal discoveries.

Project Development ------------------- Corani

The Company's flagship asset continues to be the Corani silver-lead-zinc deposit. The Corani PFS commenced in mid-2008 with the work being performed by Vector Engineering, Samuel Engineering and Independent Mining Consultants. Prior to initiating this study, the project was "right-sized" in order to focus on the higher-grade cores of the deposits at an optimum throughput rate with reduced capital and operating costs (see news release dated 2 Sept. 2008). These design criteria are:

- 15,000 tonne per day flotation process plant focusing on processing the higher grade and higher recovery sulfide ores early in the mine life - Conventional flotation technology producing high-quality commercial silver-lead and zinc concentrates - Recoveries of 80% silver, 60% lead, and 75% zinc; more precise recoveries to be defined upon incorporating optimized test results with mine-sequencing in the PFS - Capital expenditures expected to be in the range of $300M - Targeting the average head grade at 70g/t Ag, 1.1% Pb and 0.6% Zn, equivalent to 127 g/t Ag, for life of the project. - Schedule higher-grade pits yielding silver production of 10-14 million ounces per year during the first 7 years - Schedule the approximately 100 million tonnes of the resource that contains 210 million higher-grade ounces of silver within mining pits having a low strip ratio (1.4:1) - Establish cash costs per ounce silver (net of base metals) of $3.50/ounce in the first 7 years of operation (updated to current metals prices) - Evaluate the opportunity to increase future silver production with limited additional capital by either mine expansion and/or extension of mine life for processing the remaining 150 million ounces in resource; leverage to future silver prices. Note: Certain statements particularly with respect to expectations on capital and operating costs are subject to change pending completion of the Corani PFS

The vast majority of the field studies were completed during 2008 and the engineering groups are now focusing on final processing design and costing studies. Additional cost to complete the pre feasibility is approximately US$1.3M and, as metallurgical test work is in the final stages and no further drilling is required to convert resources to reserve categories, the study is expected to be completed in the third quarter, 2009.

Metallurgical testing - During the past six months, activities have focused on extensive metallurgical testing at SGS Vancouver. Final testing is in progress on two "master" composite samples under optimized reagent and grinding conditions to conclude testing for the PFS. Test results are summarized as follows:

- 13 Locked cycle tests have been completed on different ore composites and blends. - Marketable concentrates were produced in all tests. Average concentrate grades are 56% lead, 1.9 kgs silver (lead concentrates) and 53% zinc, 470 g silver (zinc concentrates) with concentrate grades of 79% lead and 2.2 kgs being obtained on coarser sulfide ores. - No bulk concentrate will be produced, thus enhancing smelter payment terms. - Blending of sulfide ore with transitional ore shows that recoveries are basically additive. This represents a significant breakthrough as mine sequencing and stockpiling can be largely simplified with no adverse effect on overall recoveries. - Silver reports predominantly to the lead concentrate which optimizes smelter payment terms. - Recent addition of scavenger circuits in the test work has improved concentrate grades significantly with no detrimental effects to overall recoveries. Scavenger circuits are a low-capital cost common technology. - Leach optimization test work completed on two oxide ore composites which shows average silver recovery of 86%, with cyanide consumption of 1.5 kg/t. These excellent leach test results will be used to evaluate the treatment of lower grade oxide material in the outer deposit areas (later years) as well as potential treatment of oxide ores encountered during early mine-life, and possibly converting internal waste to ore, thus further reducing the stripping ratio - All material types contained within the deposits are now demonstrated to have a conventional metallurgical extraction process at recoveries in line with similar operating mines worldwide.

According to Andrew Swarthout, President and CEO, "The Corani PFS is very advanced and test results aimed at specific operating criteria demonstrate that Corani is a buildable, robust project. Two of the most significant inputs have now been addressed; marketable concentrates are achievable with no bulk concentrate production envisioned, and blending of material-types during mining is viable while maintaining recoveries and product quality. We are now in a position to quickly wrap up the PFS and demonstrate that Corani has all the attributes to be a major, operating silver-base metals mine."

Santa Ana

Drilling continued at the Santa Ana silver heap leach project up to the end of the drilling season in October 2008. Fifty-two remaining drill holes will be incorporated into the third resource estimate to be released in April and a preliminary economic assessment ("PEA") will be commenced, with expected completion in the second quarter, 2009. The additional drilling extended the known area of mineralization and filled in several areas of higher grade mineralization. Importantly, the deposit remains open, especially to the north where strong intercepts containing 74m @ 51.4 g/t Ag and 22m @ 123.9 g/t Ag were found in the northern-most drill holes to date (see news release dated 22 January 2009. For the PEA the Company will be focusing on the higher grade areas of the deposit which are expected to average greater than 55 g/t Ag while developing a production plan that focuses on a low-capital cost and quick to develop heap leach silver mine.

Highlights of the Santa Ana project are summarized below and are subject to further definition upon completion of the PEA:

- Low cost, open pit mining methods with low stripping ratios. - Mine sequencing in progress to optimize low-cash cost/ounce, particularly in early mine-life. - Metallurgical test work indicating 70% silver recoveries under heap leach conditions are completed for the PEA (see news release dated 21 July 2008). - Mine sequencing focusing on higher grade (55g/t Ag plus) silver pits over an up to 10 year mine life. - Low capital costs expected to be less than $50 million through the use of mobile crushers and contract mining - Annual production in the range of 4-6 million ounces silver at a 10,000 tpd throughput. - Favorable infrastructure and straight-forward permit path. - High leverage to silver prices with excellent opportunity to quickly access lower grade material in the event of higher silver prices. - Resource growth potential as under the expected plan only approximately one half of the total resource would be mined and untested exploration targets exist in the district. Note: Certain statements particularly with respect to expectations on capital and operating costs are subject to completion of the Santa Ana PEA. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Mr. Swarthout summarizes as follows: "In short, Bear Creek's two silver deposits contain 410 million ounces of silver in the Measured and Indicated categories. Both projects are advancing to completion of their respective engineering studies by the middle of this year, placing Bear Creek's shareholders in a position to benefit from recently strong silver markets as these studies outline the economics of mining what we believe are amongst the best undeveloped silver deposits in the world."

RESOURCE TABLES Corani Deposit $9.35/tonne NSR cut-off and Prudent Open Pit Constraints; December 2007 ------------------------------------------------------------------------- Eq. Silver Lead Zinc Silver Mill- Mill- Mill- Mill- Eq. Silver Lead Zinc ion ion ion ion Silver Category Ktonnes Gm/t % % Ozs Lbs Lbs Ozs Gm/t ------------------------------------------------------------------------- Meas+Ind 248,421 40.9 0.73 0.45 327.1 3,976.8 2,467.7 531.2 66.5 ------------------------------------------------------------------------- Inferred 33,152 32.6 0.54 0.37 34.8 398.2 271.2 55.8 52.3 ------------------------------------------------------------------------- Note: Silver Equivalency calculated on 28/1/09 metal prices ($12.00/oz Ag, 0.51/lb Pb and 0.50/lb Zn. Recoveries of 80% for silver and 60% for both lead and zinc also assumed in the calculation. 1 oz Ag = 31.37 lb Pb and 1 oz Ag = 32.00 lb Zn. Silver equivalency only applied to Corani base metal resources. Santa Ana Deposit Based on 20 g/t Ag Cutoff and Prudent Open Pit Constraints; September 2008 ------------------------------------------------------------------------- Silver Lead Zinc Silver Lead Zinc Million Million Million Category Ktonnes Gm/t % % Ozs Lbs Lbs ------------------------------------------------------------------------- Measured 10,385 48.1 0.36 0.64 16.1 82.4 146.5 ------------------------------------------------------------------------- Indicated 45,592 45.1 0.33 0.56 66.1 331.7 562.9 --------- ------ ---- ---- ---- ---- ----- ----- ------------------------------------------------------------------------- Measured + Indicated 55,977 45.7 0.34 0.57 82.2 414.1 709.4 ------------------------------------------------------------------------- Inferred 23,333 50.3 0.32 0.51 37.7 164.6 262.3 ------------------------------------------------------------------------- Resource estimate was based on 47,436 meters of drilling in 260 diamond drill holes completed through July 2008 and was prepared by Independent Mining Consultants (IMC) of Tucson Arizona, with John Marek, P.E. acting as the Independent Qualified Person under NI 43 101 The TSX Venture Exchange does not accept 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., Senior Vice President of Engineering and Development and the President and CEO, Andrew Swarthout, P.Geo., who serve as the Qualified Persons under the definitions of NI 43-101. 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 or Cusco, 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.

Certain disclosure in this release, including management's assessment of Bear Creek's plans and projects, constitutes forward-looking statements that are subject to numerous risks, uncertainties and other factors relating to Bear Creek's operation as a mineral exploration company that may cause future results to differ materially from those expressed or implied in such forward-looking statements. These risks, uncertainties and other factors are disclosed in Bear Creek's continuous disclosure filings with Canadian securities regulators including its most recent annual information form, available on www.sedar.com. Bear Creek expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

SOURCE Bear Creek Mining Corporation

Source: PR Newswire

More News in this Category