VANCOUVER, Dec. 11, 2012 /PRNewswire/ - Bear Creek Mining (TSXV: BCM) / (BVL: BCM) ("Bear Creek" or the "Company") is pleased to announce that the Corani Environmental and Social Impact Assessment ("ESIA") was filed with the Peruvian Ministry of Energy and Mines ("MEM") on December 10, 2012. The ESIA filing marks the beginning of the formal permit process for the development of the Corani project and the ESIA is expected to be approved by the end of 2013.
Earlier ESIA approval in 2013 is possible given the strength of the study, the surrounding community support, and the success of the initial public hearings conducted by the MEM. Importantly, the ESIA incorporates water management features designed to mitigate impacts and improve water quality and availability for the sparse local communities during construction, operation, and closure of the Corani project. Technical observations from the MEM are to be submitted to the Company within 90 days following the formal public hearing which is expected to take place during the first quarter of 2013.
Andrew Swarthout, CEO, states "The ESIA submission represents an important milestone towards building a mine by 2015 producing over 13 million ounces per year silver at negative cash costs for the first 5 years of its 20 year mine life. We have worked closely with central and local authorities to insure that the project design addresses community concerns, including improving water quality, quantity and availability.
Public workshops were successfully held in all of the communities within a 50 km radius, with strong community support. The workshop locations included Macusani, the largest population center located 30 kilometers from the project which will benefit the most from employment and a power substation near the townsite. The project footprint has been tightened and infrastructure modified to further reduce regional impacts and expedite permit approval."
Mr. Swarthout continues "The ESIA is the final piece in taking the project to a bankable feasibility study level. In 2013, we will advance our financing plan which is expected to include discussions with smelters and other off-take parties as well as consideration of project and equipment debt financing or other sources. We believe we have several alternatives which have a high probability of significantly reducing the required equity component for financing the construction of the Corani project. As the ESIA process progresses early in 2013, off-take, financing and metal streaming discussions can be accelerated."
In parallel to the ESIA process, discussions with the government and with local communities at Santa Ana continue towards a negotiated settlement to allow Bear Creek to develop this low capital, low technical risk silver heap leach deposit. The Company remains optimistic that a settlement is achievable, which would reopen additional financing and development alternatives for both projects.
The ESIA is based upon the feasibility study SEDAR filed by the Company on December 22, 2011 entitled "Corani Project, Form 43-101F1 Technical Report, Feasibility Study" (the "FS" or "Feasibility Study") following the completion of the Corani FS (see News Releases dated November 9, 2011 and January 4, 2012) which establishes Corani as having 270 million ounces silver plus 4.8 billion pounds of combined lead and zinc in Proven plus Probable reserves (156 million tonnes grading 53.8 g/t silver, 0.90% lead and 0.49% zinc) contained within an open pit mine having a 1.69:1 stripping ratio and 22,500 tonnes per day processing rate. The FS provides that the Corani project will produce an average of 13.5 million ounces of silver and 250 million pounds of combined lead and zinc per year during the first 5 years into separate, high-quality lead-silver and zinc concentrates beginning in 2015, when it is generally expected that such concentrates will be in short supply. The FS estimates initial capital costs of $574 million.
In response to the high-level of environmental sensitivity to water-related issues raised in Peru since completion of the FS, the Company has further strengthened certain design features, particularly relating to water quality and quantity, which are expected to add between US$30 million and $40 million to the capital requirements once the permits are approved. For example, a fresh water storage facility has been added which will guarantee better quality municipal and agricultural water supplies during dry seasons. In addition, certain infrastructure has been relocated in order to restrict the project to be within a single watershed.
Increases are not expected to negatively impact the project economics including internal rate of return ("IRR") and rapid payback on capital (3.8 years at base case), especially given the base case silver price assumption in the Feasibility Study of $18 per ounce.
SOURCE Bear Creek Mining Corporation