Bear Creek estimates Corani has $586M (U.S.) capex
GMI INGENIEROS Consultores SA has provided Bear Creek Mining Corp. with the results of the phase 1 detailed engineering work at the Corani silver-lead-zinc project in Peru that commenced in November, 2016.
GMI’s phase 1 detailed engineering incorporates further optimizations and trade-offs to the Corani mine plan described in the feasibility study dated effective May 30, 2015. The report will form the backbone of the company’s application for a construction permit for the Corani project, submission of which is anticipated during Q4 2017. Approval of the construction permit is expected during Q1 2018.
With the completion of the report, Bear Creek’s evolution toward becoming an emerging producer is progressing. In order that this corporate transition be steered by an experienced and successful mine builder, Andrew Swarthout has elected to step down from his position as president and chief executive officer of Bear Creek to as-
sume the role of executive chairman, effective Oct. 1, 2017. Catherine McLeod-Seltzer, current chairman, will continue to serve as a director. Anthony Hawkshaw was selected to replace Mr. Swarthout in the position of president and CEO.
Key updates and project metrics (in U.S. dollars unless otherwise noted)
The phase 1 detailed engineering uses a contract mining fleet to operate the Corani mine, rather than an owner-operated fleet as in the 2015 Corani feasibility study. As a result, initial capex is reduced to $585-million and sustaining capex is reduced to $400,000 (from $625-million and $39-million, respectively).
Metal prices used to calculate the Corani project economics were revised to $18 per ounce silver, 95 cents per pound lead and $1.10 per pound zinc.
At the metal prices quoted above, the optimizations, trade-offs and revised cost inputs considered in the phase 1 detailed engineering result in an after-tax net present value (NPV) (at a 5-per-cent discount rate) of $402-million, an internal rate of return (IRR) of 15.4 per cent and a payback period of 3.5 years.
The Corani project retains its exceptional leverage to metal prices, with an approximate $112-million difference in Corani NPV (after tax, at a 5-per-cent discount rate) for every $1 movement in the silver price, with proportional changes in lead and zinc prices.
(See BCM Table 1 on page 4)
The company has engaged financial consultants to assess project financing alternatives and gauge interest amongst prospective participants in a project finance structure for the Corani mine. Feedback during this assessment phase has been positive, and the company expects these efforts to escalate in the coming months.
Pending receipt of the construction permit, Bear Creek anticipates consideration of a production decision for the Corani project in the first half of 2018, depending on favourable market conditions and firm interest from project finance participants.
We seek Safe Harbor.
Karen Baxter condensed this news release (email@example.com).
David Eric De Witt, Catherine A McLeod-Seltzer, Kevin Robert Morano, Andrew Todd Swarthout, Frank R Tweddle, Nolan Allan Watson
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