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SILVER NEWS

RIGHT MIX OF WORLD CLASS SILVER, LEAD & ZINC
Two world class silver projects make Bear Creek takeover target - Haywood

With a game plan that would see two new major silver mines commencing production in 2013, Vancouver junior Bear Creek may offer the right mix of near-term world-class silver, lead and zinc production.

Author: Dorothy Kosich
Posted: Monday , 19 Oct 2009

RENO, NV -

With the potential of mining 10 million silver ounces and 4.5 million silver ounces respectively annually, Haywood Securities says Vancouver junior Bear Creek would potentially operate two of the world's top 10 primary silver mines.

In a recent analysis, Haywood metals analysts Chris Thompson and Colin Healey said, "With an updated economic assessments for Corani and Santa Ana plus a game plan that will see both producing in 2013-Bear Creek offers the right mix of near-term world class silver, lead and zinc production."

"By advancing two significant silver-lead-zinc projects through to final feasibility, Bear Creek offers leverage to the silver, lead and zinc price," the analysts said. "With tentative feelings of optimism sweeping throughout the metals markets, driven by buoyant precious metals prices and supported by firm and strengthening base metal prices, Bear Creek offers a compelling asset base of development stage projects worthy of note."

Thompson and Healey estimate the US$345 million open pit mine at Corani would yield 192.3 million ounces of silver, 2.1 billion pounds of lead and 1 billion pounds of zinc over a 26-year mine life, using convention flotation recovery methods. The analysts assume production will begin in the third quarter of 2013.

Haywood estimates an average 7.4 million ounces of silver production annually for the life of the mine. Life-of-mine cash costs of US$7.62 per ounce have been estimated. The project is located between the cities of Cusco and Puno in the Puno District of southeastern Peru.

"With the ability of producing 10 million ounces of silver, before lead and zinc credits, Corani comfortably ranks at a top five silver mine (by annual production)" alongside Aquiline's Navidad project and Silver Standard's Pirquitas mine, both in Argentina; Coeur d'Alene Mines' San Bartolome mine in Bolivia and Silver Standard's Pitarrilla project in Mexico.

A former Rio Tinto property, the Corani Project is situated midway between the cities of Cusco and Puno in the Department of Puno in Peru.

With a low capex of US$58.4 million and low-cost heap leaching 70% silver recoveries, Haywood suggests, "Santa Ana's economics are attractive in a buoyant market for silver." Haywood estimates a LOM cash cost of US$7.62 per silver equivalent ounce.

"Up against heavy weights such as the San Cristobal project in Bolivia (Sumitomo), the Navidad project in Argentina (Aquiline Resources), and the Pitarrilla Project in Mexico (Silver Standard) Corani features notably amongst other 300 million oz silver deposits, before its base metals credit are recognized," the analysts said. "Even Santa Ana which hosts a respectable 97 million oz of silver in measured and indicated resource categories...qualify as a significant silver deposit."

The analysts claimed Bear Creek could become an acquisition target.

"The recent announcement of Pan America Corp's proposed friendly takeover of Aquiline Resources highlights the attractiveness of silver projects supported by large resource bases and the ability to deliver +10 million ounce production profiles. Corani matches these attributes and serves (with potentially Santa Ana) as potential acquisition targets for silver mines looking to ratchet their production profiles higher, especially if those ounces are cheap to deliver and come with attractive base metal credits."

Among potential acquirers of Bear Creek, as suggested by Haywood, are Pan American Silver, Coeur Hecla Mining and Silver Wheaton.

http://www.mineweb.co.za/mineweb/view/mineweb/en/page32?oid=90935&sn=Detail