— Photo courtesy Bear Creek Mining Corporation. Vancouver-based Bear Creek Mining (TSX Venture: BCM) ("Bear Creek" or the "Company") is pleased to a
— Photo courtesy Bear Creek Mining Corporation.
Vancouver-based Bear Creek Mining (TSX Venture: BCM) ("Bear Creek" or the "Company") is pleased to announce that the Lima First Constitutional Court rendered its ruling regarding the action brought by the Company against the Peruvian government on July 13, 2011, challenging the constitutionality of the Supreme Decree N° 032-2011-EM, which rescinded the Company's rights to operate on its Santa Ana mineral concessions.
The decision states unequivocally and unconditionally that:
- Bear Creek's constitutional rights were violated;
- The Company's rights are unconditionally returned as stipulated under Supreme Decree N° 083-2007-EM, which originally granted the right to Bear Creek, as a foreign company, to operate the Santa Ana concessions, located within the 50 kilometer border zone of Peru;
- Bear Creek is recognized as title holder of the Santa Ana's mining concessions and therefore, is enabled to perform all the rights arising from said titles; and
- The Court reaffirms that the Santa Ana project is in National interest.
The Company is very pleased that the decision acknowledges its rights and firmly believes that the court's ruling is consistent with the facts of the case and the law. This represents a milestone in reinstating the Company's rights towards operating the Santa Ana Project and further strengthens the Company's standing in other legal matters and negotiations that the Company has been pursuing in an effort to amicably resolve the dispute. In the event the government appeals the decision, the parties have until August 7, 2014 to reach a negotiated resolution of the dispute when the required six-month period for negotiation of an amicable resolution under the Peru-Canada Free Trade Agreement ("FTA") ends, following which the Company intends to initiate formal arbitration proceedings under the FTA (see news release dated February 7, 2014). The Company continues to negotiate with the Peruvian government in order to reach a mutually acceptable resolution to the Santa Ana dispute to the benefit of all stakeholders. Management continues to be optimistic that a resolution is achievable which benefits our local communities, our shareholders, and the local and central Peruvian government.
While the court's decision is considered final and is posted on the Peruvian Judiciary website, formal notification of the parties can take up to two weeks under the Peruvian service of process procedures. The ruling is subject to appeal upon formal notification.
The Santa Ana Project is located in the Puno Region of Peru and contains Proven and Probable Mineral Reserves totaling 63.2 million ounces of silver. The 2010 Feasibility Study identifies life of mine at 11 years which could easily be expandable to 18 years, producing 75 million ounces of silver. This conventional heap leach project has low capital costs of US$70 million with a cash cost per ounce of US$8.72 with a payback period of 15 months at US$21 per ounce silver.
Bear Creek acquired the mining concessions in full compliance with Peruvian law, as is confirmed by Supreme Decree 083-2007-EM, enacted by the President of Peru and the Council of Ministers on November 29, 2007. Bear Creek initiated exploration work in early 2008, and undertook a comprehensive Environmental and Social Impact Assessment ("ESIA") shortly thereafter. The ESIA, which the Peruvian government suspended on June 1, 2011, remains on standby. The Company has stated its willingness to complete the ESIA process, including demonstration of social license, and carry out the other steps required to reach commercial production as quickly as possible. The Santa Ana Project, which is widely supported by the local communities surrounding the proposed mine site, will create 2,500 direct and indirect jobs in the southern Puno Region, and bring important infrastructure improvements to the area. The Santa Ana Project is also expected to provide US$330 million in federal taxes, much of which benefit local communities.
For further information, please visit the Company's website.
Following is a table setting forth mineral reserve estimates from the Santa Ana Feasibility Study announced on October 7, 2010:
Bear Creek Mining, Santa Ana Project Silver Zone
Mineral Reserves
Please refer to the Company's news release dated October 7, 2010 for further details of the Santa Ana Feasibility Study, as well as the feasibility study itself filed on SEDAR on October 21, 2010.
SOURCE: Bear Creek Mining Corporation
