Bear Creek Mining Signs Agreement with Peru Ministry of Energy and Mines for Accelerated Recovery of IGV Tax
TSX VENTURE: BCM
VANCOUVER, May 25, 2017 /CNW/ - Bear Creek Mining Corporation (TSX Venture: BCM) ("Bear Creek" or the "Company") has signed an agreement (the "IGV Contract") with the Peru Ministry of Energy and Mines ("MEM") and ProInversion (an agent for the Government of Peru) that allows the Company to recover, at its discretion and on an accelerated basis, the 18% IGV taxes applied to engineering and construction costs associated with future development of the proposed Corani silver-lead-zinc mine in Puno, Peru.
The IGV Contract applies to Corani Initial CapEx costs and covers an approximately three-year development period during which detailed engineering, permitting, construction, commissioning and project ramp-up is expected to occur. The IGV Contract is retroactively applicable to costs incurred as of the application date of November 2016, and allows the Company to request modifications with respect to both expenditure amounts and timelines. Initial CapEx requirements for development and construction of the Corani mine, as outlined in the Company's Final Optimized Feasibility Study for the Corani Project filed on SEDAR on July 20, 2015 (available at www.sedar.com) is estimated to total approximately US $625 million (inclusive of the net impact of the IGV Contract).
Andrew Swarthout, President and CEO of the Company, states "We are very pleased to be working in cooperation with the Peruvian government and we appreciate the confidence shown in Bear Creek and the Corani Project by the Ministries of Finance, the MEM and ProInversion in approving the IGV Contract. The IGV Contract will streamline anticipated cash flow and capital requirements as the Corani operation is developed by allowing the Company to periodically recoup IGV taxes payable on capital expenditures as they are made rather than after construction is completed."
Phase 1 Detailed Engineering at the Corani project (see news release dated November 14, 2016) is advancing well and is on schedule for completion in June 2017. This phase of detailed engineering will provide key documentation for the Construction Permit application, which the Company anticipates submitting during Q3 2017. Concurrently, the Company and its outside advisors are investigating and assembling Corani project financing alternatives so that we are ready to move forward rapidly as the anticipated improvements in metal prices acelerate. Pending receipt of the Construction Permit, solidification of a project financing plan, and favorable commodity and market conditions, the Company's board of directors hopes to consider a construction decision for the Corani project by year-end 2017.
Mr. Swarthout continues, "We are very pleased that the Corani mine sequences and metal recoveries continue to be further optimized during the Phase 1 Detailed Engineering and that commodity prices and market conditions continue to stabilize or even further improve. We believe that 2017 will be a transformational year for Bear Creek."