Silver Bear Announces Update to Mangazeisky PEA
TORONTO, ONTARIO--(Marketwired - Feb 27, 2014) - Silver Bear
Resources Inc. ("Silver Bear" or the "Company") (TSX:SBR)
- Project Internal Rate of Return of 63% (Post Tax) @ $20/oz long
term silver forecast price
- Estimated Initial Capital Cost of $39 Million
- Project Net Present Value US $129.9 million using 5% discount
rate
- Projected average head grade for first 5 years of 911 g/t
Ag
- Average production during first five years of 2.6Moz Ag/yr
- Investor Conference call scheduled for Monday, March 3, 2014,
10 am EST
Silver Bear
Resources Inc. ("Silver Bear" or the "Company") (TSX:SBR) has
completed an updated Preliminary Economic Analysis ("PEA") on its
Mangazeisky Silver Project in Yakutia, Russia. The PEA was prepared
by Tetra Tech Inc., Global Mining Practice of Swindon, UK.
Silver Bear
management is hosting an investors' conference call on March 3,
2014 at 10:00 a.m. EST to review the preliminary results of the
PEA. To register or listen to the call please dial:
Call
in number |
|
Toronto |
416-695-7806 |
North America |
1
888-789-9572 |
Overseas |
800-4222-8835 |
Pass
Code |
7250957 |
Mark Trevisiol,
President and CEO of Silver Bear commented, "We are very excited
about the preliminary results. We believe there are few mining
projects in the industry today that have the potential for such a
quick return to the investor. Preliminary numbers indicate the
potential to start operations quickly and expedite cash generation
on a quality high grade Silver property like the Mangazeisky
project. Further, we will continue to work to expand the mineral
resource estimate and increase projected production rates."
Key Highlights of
the PEA are as follows and include:
- Internal Rate of Return (IRR) = 63% at $20/oz long term silver
forecast price
- Initial Project Capital US $39 Million
- Sustaining Project Capital of US$51 million
- Net present Value (NPV) at 5% discount of US $129.9
Million
- In first 5 years of operation
- Average Silver Grade processed = 911 g/tonne Silver
- Recovered Silver Cash Cost for first five years1 = $5.55/oz
Silver (excludes by product credits)
- Approximate mining processing rate rate per day = 300 tonnes
per day (tpd)
- Average Payable Silver per year = 2.6 Million oz/yr
- 19 year mine life
- Open pit mining method for first 10 years
- Underground operation extends mine life to 19 years
- All mineralised material is sourced from Silver Bear's
Vertikalny deposit alone
- Silver Bear expects construction of the facility to take
approximately 18 to 24 months following the completion of a
feasibility study and the receipt of required permits.
The nature of the
Vertikalny deposit allows Silver Bear to take full advantage of the
high grade silver zones near surface (see press release dated
November 26, 2013) which present a significant opportunity to
generate cash quickly using cost effective open pit mining methods,
thereby creating the potential to realize an internal rate of
return of 63%.
1 Cash cost per
ounce of silver constitutes a non-GAAP measure. See Cautionary
Notes.
Table 1 below
highlights the project economics at various Silver selling prices
in US $/oz.
Table 1 -
Preliminary Economic Highlights of the PEA:
Tetra Tech Inc. Preliminary PEA Financial
Outcomes |
|
Silver Bear Resources - Elevated Silver Price
Scenarios |
|
PEA BASE CASE |
US$ 20 /Oz Silver |
|
$25/oz Silver |
$30/oz Silver |
Pre Tax Economics |
|
|
|
|
Internal Rate of Return (IRR %) |
67% |
|
94% |
119% |
NPV 5% discount |
$157,773,041 |
|
$264,916,403 |
$372,059,765 |
NPV 10% discount |
$112,137,956 |
|
$191,091,673 |
$270,045,391 |
|
Post Tax Economics |
|
|
|
|
Internal Rate of Return (IRR %) |
63% |
|
91% |
116% |
NPV 5% discount |
$129,885,192 |
|
$226,158,714 |
$322,464,061 |
NPV 10% discount |
$94,437,686 |
|
$167,278,609 |
$239,981,380 |
|
Initial Capital |
$38,799,032 |
|
$38,799,032 |
$38,799,032 |
Sustainig Capital |
$51,047,265 |
|
$51,047,265 |
$51,047,265 |
LOM Capital |
$89,846,298 |
|
$89,846,298 |
$89,846,298 |
|
Op Cost LOM (U.S. $/ounce) |
|
|
|
|
|
Recoverable Silver |
$9.01 |
|
$9.01 |
$9.01 |
|
Accountable Silver |
$9.49 |
|
$9.49 |
$9.49 |
|
Op Cost (U.S. $/ounce) First 5 yrs |
|
|
|
|
|
Recoverable Silver |
$5.55 |
|
$5.55 |
$5.55 |
|
Accountable Silver |
$5.85 |
|
$5.85 |
$5.85 |
Assumptions:
- Greenfields
- Open pit and underground mining
- Cyanide leach direct electrowinning to dore production
- Dry stacked tailings disposal
- A nominal processing capacity of 300 t/d
- Diesel power generation
- Major transport via ice road access during winter months
- Predominantly local labour
- A value of 20% contingency is included in the initial capital
cost
- Tax calculation completed by PWC in Moscow to include tax
incentives
- All dollar amounts are in U.S. dollars
Since acquiring the
exploration rights, Silver Bear has drilled 47,000 meters on its
Mangazeisky lease, of which the Vertikalny deposit forms part.
A summary of the
mineral resource estimates prepared in accordance with National
Instrument 43-101 ("NI 43-101") for the Mangazeisky Silver Project
is presented in Table 2 below. For the purpose of the PEA, only the
mineral resource estimates listed in the Vertikalny Central and
Northwest Zones were used.
A technical report
in relation to the PEA, prepared in accordance with NI 43-101, will
be filed on SEDAR on or before March 31, 2014.
In September 2013,
Silver Bear received its mining license on its Mangazeisky property
for the Vertikalny deposit. The term of the license extends for 20
years to 2033.
Also in 2013, Silver
Bear completed all necessary drilling and trenching requirements
for the Mangazeisky exploration license. Silver Bear drilled over
3,000 meters and completed over 7000 cubic meters of trenching by
December 2013. Silver Bear is in the process of obtaining assay
results from its 2013 exploration program and expects to receive
all assays by Q2, 2014.
Table 2 -Estimated
Mineral Resources Prepared in accordance with NI 43-101
|
Cut-Off |
Indicated |
Inferred |
Area |
Grade (g/t) |
Tonnes |
Ag |
Ag |
Tonnes |
Ag |
Ag |
|
|
(Mt) |
(g/t) |
(Moz) |
(Mt) |
(g/t) |
(Moz) |
Vertikalny Deposit, Central |
|
|
|
|
|
|
|
Zone |
180 |
1.1 |
518 |
17.9 |
1.1 |
649 |
23.8 |
Vertikalny Deposit, Northwest |
180 |
0 |
0 |
0 |
0.5 |
379 |
6.6 |
Zone |
|
|
|
|
|
|
|
Nizhny Endybal Deposit |
75 |
0 |
0 |
0 |
3.2 |
133 |
13.5 |
Total |
- |
1.1 |
518 |
17.9 |
4.8 |
282 |
43.9 |
- Notes: Mineral resources that are not mineral reserves do
not have demonstrated economic viability. Due to the uncertainty of
measured, indicated or inferred mineral resources, these mineral
resources may never be upgraded to proven and probable mineral
reserves. Mr. Rob Davies Geologist of Tetra Tech Inc., is the
independent qualified person who has verified the mineral resource
estimates originally signed-off in 2011 and 2013 as current. The
mineral resource estimates are disclosed above in Table 2. Cut-off
grades for the Vertikalny resource and Nizhny Endybal resource are
180 g/t Ag and 75 g/t Ag respectively. Other notes:
- Vertikalny - to be operatied initially as open pit then an
underground mine with 1.2 m minimum mining width, in-situ density
of 3.45 t/m3 for mineralized material, long term Silver price of
$22.74/ounce Ag. The effective date of the estimated Vertikalny
mineral resource is February 23, 2011.
- Nizhny Endybal - to be operated by open pit methods,
in-situ density of 2.9 t/m3 for mineralized material, long term
silver price of $22.0/oz. The effective date of Nizhny Endybal
estimated mineral resource is September 20, 2012.
- Mineral resources may be subject to legal, political,
environmental, social and other risks that may significantly affect
the potential development of the mineral resources. See Cautionary
Notes.
Silver Bear Resources Inc.
The primary business
of the Company is the evaluation, acquisition, exploration and
development of silver properties in the Russian Federation. The
Company's principal focus is the Mangazeisky exploration lease and
the Vertikalny Deposit, over which Silver Bear has exclusive
exploration/mining rights. It is located approximately 400
kilometres north of Yakutsk in the Republic of Sakha, Yakutia in
the Russian Federation.
Silver Bear
Resources Inc. is listed on the Toronto Stock Exchange and its
common shares trade under the ticker symbol "SBR". Silver Bear has
94,917,170 issued and outstanding common shares. Other information
relating to Silver Bear is available on SEDAR at www.sedar.com as
well as on the Company's website at
www.silverbearresources.com.
QUALIFIED PERSON
The Preliminary
Economic Assessment discussed herein was prepared under the
supervision of Jacques du Toit, Robert Davies, and Mike Mclaughlin
from Tetra Tech and Anton Von Wielligh of ABG Mining of Australia
all of whom are independent qualified persons as defined in
National Instrument 43- 101. Mark Trevisiol P.Eng, President and
CEO of Silver Bear is a qualified person under National Instrument
43-101 and has reviewed and approved the scientific and technical
information in this press release.
Cautionary Notes
The PEA is
preliminary in nature and is based on a number of assumptions that
may be changed in the future as additional information becomes
available. Mineral resources that are not mineral reserves do not
have demonstrated economic viability. The PEA includes inferred
mineral resources that are considered too speculative geologically
to have the economic considerations applied to them that would
enable them to be categorized as mineral reserves, and there is no
certainty that the PEA will be realized.
This release and
subsequent oral statements made by and on behalf of the Company may
contain forward-looking statements, which reflect management's
expectations. Wherever possible, words such as "intends",
"expects", "scheduled", "estimates", "anticipates", "believes" and
similar expressions or statements that certain actions, events or
results "may", "could", "would", "might" or "will" be taken, occur
or be achieved, have been used to identify these forward-looking
statements. Without limitation to the foregoing, the following are
forward looking statements: the PEA, including without limitation
projected initial capital, sustaining costs, IRR, NPV, average
grade processed, mining rate, expected mine life, expected
construction period, mineral resources and pay back period.
Although the forward- looking statements contained in this release
reflect management's current beliefs based upon information
currently available to management and based upon what management
believes to be reasonable assumptions, Silver Bear cannot be
certain that actual results will be consistent with these
forward-looking statements. A number of factors could cause events
and achievements to differ materially from the results expressed or
implied in the forward-looking statements. Such risks factors
include but are not limited to uncertainties inherent to
preliminary economic assessments, which are based on many
assumptions that might not be realized, risks with respect to
operating in Russia, downward fluctuations in silver prices,
regulatory risks, including with respect to obtaining all required
permits, corruption and other risks factors identified by Silver
Bear in its continuous disclosure filings filed from time to time
on SEDAR. These factors should be considered carefully and
prospective investors should not place undue reliance on the
forward-looking statements. Forward-looking statements necessarily
involve significant known and unknown risks, assumptions and
uncertainties that may cause Silver Bear's actual results, events,
prospects and opportunities to differ materially from those
expressed or implied by such forward-looking statements. Although
Silver Bear has attempted to identify important risks and factors
that could cause actual actions, events or results to differ
materially from those described in forward-looking statements,
there may be other factors and risks that cause actions, events or
results not to be as anticipated, estimated or intended. There can
be no assurance that forward-looking statements will prove to be
accurate, as actual results and future events could differ
materially from those anticipated in such statements. Accordingly,
prospective investors should not place undue reliance on
forward-looking statements. These forward-looking statements are
made as of the date of this release, and Silver Bear assumes no
obligation to update or revise them to reflect new events or
circumstances, unless otherwise required by law.
Cash costs per ounce
of silver are non-GAAP measures. Cash costs per ounce of silver
presented do not have a standardized meaning prescribed under IFRS
and may not be comparable to similar measures presented by other
companies. This measure is presented to serve as a key indicator of
a company's potential ability to generate revenue and cash flow
from its mining operations. This measure should not be considered
in isolation as a substitute for measures of performance prepared
in accordance with IFRS and is not necessarily indicative of
operating costs that would presented under IFRS.
For further details,
please visit www.silverbearresources.com.
Silver Bear Resources Inc.Mark TrevisiolPresident and Chief
Executive
Officer+1-416-861-5893mtrevisiol@silverbearresources.comwww.silverbearresources.comSilver
Bear Resources Inc.Robin BirchallExecutive ChairmanUK +44 771 131
3019
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