Bear Creek Mining estimates capex for Peruvian project could rise to US$700mn

Canadian firm Bear Creek Mining is focused on advancing its Corani silver project in the Puno region of Peru and is seeking financing as it expects capex as high as US$695 million.

“We've decided to start doing the costs again this year and, as there have been changes in the economy, our investment of US$579mn will grow by an additional 20% in the worst case,” Andrés Franco, VP and manager general of Bear Creek Mining Perú, said in a streamed conference hosted by Peru's institute of mining engineers (IIMP).

According to the executive, Corani is attractive to investors because its production costs will be low in the first few years, at US$1.36/oz of silver in the first three years and US$4.55/oz for the entire mine life, and because the internal rate of return will be high.

“We expect a return of 22.9% [in a period of 2.4 years], and we're working with a conservative price of US$18/oz ounce of silver. Today it's around US$28-29/oz, but we're using the other figure considering the behavior in the last 20 years. At current prices and with capex adjustment, the return would be 36.5% [in a period of 1.6 years]," the executive added.

THE PROJECT

According to Bear Creek, Corani is a polymetallic project as it will also produce lead and zinc. It has an estimated mine life of 15 years and will process 27,000t of ore per day. According to Franco, production will be much higher in the first three years before normalizing.

Metal	Production (years 1-3)	Lifetime production
Silver	16.3Moz	9.6Moz
Lead	125Mlb	98Mlb
Zinc	103Mlb	69Mlb

Source: Bear Creek

“We're going to carry out a process of three open pits that will last five years each. In the first we hope to produce the largest amount of silver, while in the other two the level will drop. However, we aren't ruling out surprises. We're starting out with very conservative grades,” the executive added.

Although no updates were provided on when construction of the project will begin, the latest information available indicates that early work will begin between November and December this year, given that all the necessary permits and social approvals have been obtained.