Bear Creek Mining Corp.

Bear Creek Mining Corp.'s Corani and Santa Ana projects contain more than 500 Moz silver, including more than 330 Moz in reserves, providing near-term production potential and excellent leverage to silver prices. The feasibility study for the flagship Corani project estimates average annual production of over 13 Moz silver (plus lead and zinc credits) for the first five years of a 20-year mine-life, with extremely low cash costs and fast payback of capital costs. The project is proceeding towards permitting and construction.

Expert Comments:

"Bear Creek Mining Corp. operates in Peru. It has one of the best-quality assets of any silver junior. It has a very large silver reserve—over 500 Moz—relative to its market cap of $86M. It has two projects. Santa Ana was frozen by the Peruvian government. This is now the subject of an international arbitration, one that I believe Bear Creek has a very good chance of winning. Its second project is Corani. This has Proven and Probable reserves of 228 Moz silver, 2.77 Blb lead and 1.47 Blb zinc, at a grade of 51.6 g/t silver. According to its June feasibility study, it has a 20.9% after-tax internal rate of return and a $660M net present value. Mine life is forecast to be 18 years, and the sustaining capital expenditure is $667M. In this market, finding financing will be a challenge. I think Corani will need to wait for a more positive view of the future price of silver." read more >

Don Blyth, Paradigm Capital (6/4/15)
"Bear Creek Mining Corp. released a substantial update to its Corani project feasibility study. . .the project economics have improved (we estimate its internal rate of return at 20.8%, up from our previous estimate of 16.9%), and the smaller overall environmental impact footprint should be beneficial as the project proceeds through permitting. We continue to view Corani as a world-class silver deposit, which would be one of the top 10 largest silver mines (by annual production) as envisioned by the current feasibility study. . .an excellent cornerstone asset that could launch the company into the silver producers or an attractive acquisition target."

Chris Thompson, Raymond James (6/2/15)
"We are maintaining our Outperform 2 rating. . .following the tabling of a revised feasibility study on Bear Creek Mining Corp.'s 100%-owned Corani project (approximately 90% of our net asset value for the company). . .the revised feasibility study reflects a modest improvement in the project's economics (with enhanced efficiencies). . .we view Bear Creek as a CA$90M market capitalization call option on silver (and lead and zinc) reflected by Corani's potential to deliver significant average life-of-mine annual production of 18 Moz Ag eq over a long mine life. This, with Bear Creek's attractive valuation and strong balance sheet ($30M cash), underpins our Outperform 2 rating."

Andrew Kaip, BMO Capital Markets (6/2/15)
"Bear Creek Mining Corp. announced the results of a revised feasibility study for the Corani project in Peru. . .assuming the development of a dry-stack tailings system, incorporating equipment leasing and removing transitional ore with lower silver recoveries from the mine plan. . .the company will present a modified Environmental and Social Impact Assessment (ESIA) to the Peruvian government by Q3/15 and advance toward a construction permit by H1/16. . .the revised feasibility study highlights reduced life-of-mine capital requirements and enhanced silver recoveries."

"Bear Creek Mining Corp. is running an arbitration process with the government of Peru over the license to operate the Santa Ana project, its 47 Moz silver project. Just to clarify, the government did not expropriate the project but revoked the license to operate in a border zone. All foreign companies need this permit to start a project. Barring a resolution, this dispute will be adjudicated in Washington, D.C., in September 2016. The legal experts will testify in favor of Bear Creek, but the decision to seize Santa Ana was a political one, and a decision to give it back would have political consequences. I expect a good result for Bear Creek, perhaps by the end of 2015, which would be a good omen for the mining community in Peru. Santa Ana is an excellent project, with an after-tax net present value of $80.2M and an internal rate of return of 24.9%. Its capex is low, only $70.8M, and can start production very quickly.

We should see the feasibility study of Bear Creek's other Peruvian silver project, Corani, real soon. This will be an update of the 2011 feasibility. That showed a resource of 270 Moz silver, 3.1 Blb lead and 1.7 Blb zinc. It showed an initial capex of $574M, an after-tax NPV of $463 and a 17.6% IRR. The updated feasibility will adapt Corani to current market conditions and lower the capex. Bear Creek is talking to several parties and examining several strategies about financing for Corani. There are various alternatives: streaming and offtake agreements, joint ventures. I'm pretty sure a combination of these will finance Corani. . .any small company with well-advanced projects—meaning good assets—could face hostile takeover attempts. Bear Creek is one example." read more >

Hebba Investments, Seeking Alpha (4/12/15)
"Bear Creek Mining Corp. has two catalysts that could be a big boost for the company. The updated feasibility study is due out soon, and we think that Bear Creek's decision to dry stack tailings can help boost the internal rate of return over the important 20% mark."

More Expert Comments

Experts Commenting on This Company

Alberto Arispe, Gerente General – Kallpa Securities S.A.B.
Don Blyth, Analyst – Paradigm Capital
Ricardo Carrión, Mng Dir Corp Finance & Cap Mkts – Kallpa Securities S.A.B.
Andrew Kaip, Analyst – BMO Capital Markets
Andrey Litvin, Analyst – Edison Investment Research
David Morgan, Publisher – Silver Investor
Chris Thompson, Mining Analyst – Raymond James
Trevor Turnbull, Analyst – Scotia Capital
Amanda van Dyke, Managing Director, Europe – Palisade Capital
Eric Zaunscherb, Analyst – Canaccord Genuity

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