Bellhaven Copper & Gold Inc. (TSX VENTURE:BHV) ("Bellhaven" or the "Company") is
pleased to announce the results of the preliminary economic assessment study
(the "PEA Study') for its wholly-controlled La Mina gold-(copper, silver)
project ("La Mina", the "La Mina Project", or the "Project") located in the
Department of Antioquia, Colombia.
The PEA Study defines a standard, truck-and-shovel, open-cut mining operation to
produce gold-copper-silver commercial concentrates by conventional milling and
concentrating. The PEA concludes that the Project is financially robust with an
estimated NPV@ 8% of US$262 million/$172 million (before/after tax) and an
internal rate of return ("IRR") of 33.5%/26.4% (before/after tax). A key
highlight of the Study is the $408/oz total cash cost (net of by-product
credits, life of mine), making La Mina one of the lowest cost gold development
projects in the Americas. Project highlights are summarized in Table 1 below.
Table 1. Project Production and Financial Highlights
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Resource and Production
----------------------------------------------------------------------------
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Whittle Pit Resource and Avg. Gold & Copper 42.5 Mt @ 0.74 g/t Au, 0.24%
Grades Cu
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Mine Life 9.7 years
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Milling Rate (Plant Capacity) 12,500 mtpd
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Total Gold / Copper Production 907,400 oz Au / 200.4 million
lbs Cu
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Average Annual Gold / Silver Production 93,409 oz Au / 80,367 oz Ag
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Average Annual Copper Production 20.6 million lbs Cu
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Costs, Revenues, and Profits (based on $1400/oz gold, $20/oz silver, and
$3.25/lb copper prices)
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Total Cash Cost (net credits): 1st 5 Yrs & LOM
Avg. $178/oz gold / $408/oz gold
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Initial Capital Expenditures including
Contingency $320.00 million
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Average Annual Gross Revenue(i) $189.40 million
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Average Annual After-Tax Net Profit(i) $32.99 million
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Financial Summary (based on $1400/oz gold, $20/oz silver, and $3.25/lb
copper prices)
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NPV @ 8% discount rate (before taxes/ after
taxes) $262 million / $172 million
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IRR (before-tax/after-tax) 33.5% / 26.4%
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Payback (years)(ii) 4.57 years
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(i) for periods with sales revenue; (ii) from start of mine construction;
All $are US$; Mt = million metric tonnes; mtpd = metric tonnes per day.
Julio Benedetti, Bellhaven's CEO and Chairman, commented as follows:
"The Preliminary Economic Assessment on Bellhaven's La Cantera and Middle Zone
deposits at La Mina marks a significant turning point for the Project. The
financial results outlined in the PEA are highly encouraging, demonstrating the
economic robustness of the existing resource, even in a low metal price
environment. These results support our belief that La Mina has potential to
develop into one of the lowest cost gold producers in the Americas and to be a
significant gold producer in Colombia. The total cash cost of $178/oz (net of
by-product credits) in the first five years of production makes this project
very attractive and highly competitive."
"The Project still has outstanding potential to increase its existing resources
and improve the project economics by drilling the nearby La Garrucha prospect
where recent results have been very positive (see press releases of June 5th,
June 27th, July 10th and September 10th). Bellhaven will soon focus on
commencing a pre-feasibility study, which will expand upon the PEA and examine
opportunities for optimization. Additionally, we look forward to pursuing our
exploration program at La Garrucha with the goal of adding new ounces to the
mineral resources at La Mina."
Introduction
The Company's flagship project is the 100%-controlled La Mina porphyry
gold-(copper) porphyry deposit in the Middle Cauca belt of Colombia. Bellhaven
holds an option to acquire a 100% interest in La Mina. The La Mina resource
contains 1.6 Moz gold and 419 million pounds of copper (or 2.55 Moz gold
equivalent) contained in sulphide at two prospects, La Cantera and Middle Zone,
located within 0.5 km of each other. The average grade of 1.0 g/t gold
equivalent makes La Mina one of the highest grade gold-(copper, silver) porphyry
deposits in the Americas.
The Company is currently working to advance and to grow these resources through
mine development and exploration. One of the exploration prospects located
within one km of the La Cantera/Middle Zone resource is La Garrucha where
Bellhaven recently announced a 271-m long intercept averaging 1.03 g/t gold and
0.13% copper (1.23 g/t gold equivalent; see press release of September 10,
2013).
The PEA Study
Bellhaven commissioned InterPro Development Inc, Lakewood, Colorado ("InterPro")
under the direction of Mr. Gregory Chlumsky to prepare a preliminary economic
assessment of its 100%-controlled La Mina gold-(copper, silver) project located
in Antioqua, Colombia. The PEA Study is based on the mineral resource estimate
prepared in 2012 by Scott E. Wilson Consulting, Inc (now Metal Mining
Consultants) in accordance with the definitions in Canadian National Instrument
43-101 ("NI 43-101") (see press release dated July 9, 2012). InterPro undertook
the other aspects of the PEA including potential environmental and community
impacts (Dr. Terry Brown), geotechnical, metallurgy, flow sheets, process plant,
project infrastructure, capital/operating costs and financial analysis (Mr.
Gregory Chlumsky) to complete the Study.
An updated National Instrument 43-101 Technical Report will be filed on SEDAR
within 45 days of this press release which will include a summary of the PEA
Study.
Mineral Resources
The mineral resource estimate was prepared in accordance with National
Instrument 43-101 by Scott E. Wilson Consulting, Inc and was previously
announced on July 9th, 2012. The resource used in this PEA Study is unchanged
from the July, 2012 resource (see Table 2).
Table 2. Total Inferred Resources for the La Mina Project (Cut-off Grade: 0.3
g/t Au)
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Contained
Tonnes Au Cu AuEq Contained Cu lbs Contained
Deposit ('000) (g/t) (%) (g/t) Au Oz ('000) AuEq Oz
----------------------------------------------------------------------------
La Cantera 40,560 0.77 0.31 1.26 1,009,000 279,800 1,639,000
----------------------------------------------------------------------------
Middle Zone 39,310 0.47 0.16 0.72 594,000 139,400 913,500
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Total 79,870 0.62 0.24 0.99 1,603,000 419,300 2,553,000
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Mine Plan / In-Pit Resources
The mine plan is based upon developing two open pits over La Mina's La Cantera
and Middle Zone deposits that extract a total of 42.5 Mt of mill feed and 239.8
Mt of waste over an initial 9.7-year mine operating life based on a $1,200 gold
price (see Table 3). Additional mineral resources remain within the two
deposits. As well, there may be future resources at the exploration prospect
called La Garrucha located 0.5 km away.
Table 3. Mine Plan / In-Pit Resources for La Mina Project, Colombia
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In-Situ Grades Contained Metal
---------------------------------------------------------
Metric Au Ag Cu AuEq Cu lbs
Deposit Tonnes (g/t) (g/t) (%) (g/t) Au Oz Ag Oz ('000)
----------------------------------------------------------------------------
La
Cantera 24,224,688 0.87 2.06 0.32 1.36 678,122 1,601,417 171,539,26
----------------------------------------------------------------------------
Middle
Zone 18,257,147 0.57 1.70 0.14 0.78 333,808 1,000,310 54,521,347
----------------------------------------------------------------------------
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Total 42,481,835 0.74 1.91 0.24 1.11 1,011,930 2,601,727 226,060,60
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Cautionary Statement: The PEA Study is preliminary in nature and includes
Inferred Mineral Resources that are considered too speculative geologically to
have the economic considerations applied to them that would enable them to be
categorized as Mineral Reserves. There is no certainty that the conclusions
reached in the PEA Study will be realized. Mineral Resources that are not
Mineral Reserves do not have demonstrated economic viability.
Capital Costs
InterPro prepared a detailed equipment list for the mine and the processing
plant based upon delivering 42.5 Mt to a 12,500 mtpd processing pit over a
9.7-year initial mine life (see Table 4). All estimates are based on consultant
experience with similar projects and are not definitive estimates based on
vendor quotes.
Table 4. Estimated Capital Costs for La Mina Project, Colombia
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Total Capital Expenditures US$ millions
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Initial Capital
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Mine $43.00
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Processing Plant $242.00
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Tailings Ponds $11.00
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Owner's Cost & Contingency $24.00
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Total Initial Capital $320.00
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Sustaining Capital $31.68
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Closure (Environmental / Reclamation) Costs $27.50
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Total Life-of-Mine Capital $379.18
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Mining and Production
Resource material from the La Cantera and the Middle Zone pits will be treated
in a moderately-sized conventional concentrator to produce a commercial copper
concentrate containing gold and silver (see Table 5). The concentrator will
initially treat a nominal 12,500 mtpd of resource material supplied from the
higher grade La Cantera pit to be followed by resource material received from
the Middle zone pit.
Table 5. Estimated Production and Mill Recoveries for La Mina Project, Colombia
----------------------------------------------------------------------------
Production LOM Avg / Yr
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Mining
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Total Tonnes Mined (Ore + Waste) 282,300,000 mt 29,050,000 mt
----------------------------------------------------------------------------
Total Ore Mined 42,500,000 mt 4,375,000 mt
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Total Waste 239,800,000 mt 24,675,000 mt
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Stripping Ratio (waste to ore) 5.6 5.6
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Mill Recoveries
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Gold Recovery 90% 90%
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Copper Recovery 88% 88%
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Silver Recovery 30% 30%
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Metal Production
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Gold in Concentrate 907,400 oz 93,409 oz
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Copper in Concentrate 200,368,886
lbs 20,626,209 lbs
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Silver in Concentrate 780,703 oz 80,367 oz
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Operating-, Total Cash-, and All-In Costs
Table 6. Estimated Operating Costs for La Mina Project, Colombia
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Mine-Site Operating Costs US$ / mt
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Operating Costs
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Mining $1.90
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Milling / Processing $5.87
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G/A (Mine Site) $0.92
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Total Operating Costs $8.69
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Mine-site operating costs are summarized in Table 6. The concentrate will be
trucked from the La Mina mine site to Puerto Buenaventura or Cartagena. From
these coastal locations in Colombia the concentrate will be shipped to smelters
located either in Peru or Mexico (see Table 7).
The La Mina concentrate is very clean, containing very low amounts of arsenic,
antimony, lead, and other deleterious elements and thus no deductions or
penalties were applied to the concentrate terms.
Table 7. Estimated Concentrate Terms and Transportation Costs
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Concentrate Commercial Terms
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Payable Gold (%) 95%
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Payable Copper (%) 96%
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Payable Silver (%) 92%
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Treatment Charge $70/mt
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----------------------------------------------------------------------------
Refining Charge - Gold $5.50/o
z
----------------------------------------------------------------------------
Refining Charge - Copper $0.07/l
b
----------------------------------------------------------------------------
Refining Charge - Silver (1% of metal price) $2.00/o
z
----------------------------------------------------------------------------
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Concentrate Transportation
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Concentrate Trucking and Port Handling $32/mt
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Concentrate Shipping $45/mt
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Table 8. Royalty, Taxes and Exploration Deductable
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Royalty Amount
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Gold 4%
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Copper 5%
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Silver 4%
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Tax Rates
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Colombian Tax Rate 33%
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Applicable Canadian Tax Rate 0%
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Exploration Deductible $33
million
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Estimated royalties payable to the Republic of Colombia are shown in Table 8. It
is anticipated that all income tax will be paid to Colombia with no income taxes
payable to Canada. Colombia allows for exploration costs to be deducted against
income and these accrued expenditures will be expensed in the first year of
production.
Table 9. Estimated Total Cash Costs (Net of Credits) for La Mina Project, Colombia
----------------------------------------------------------------------------
Cash Costs Years 1-5 Life of Mine
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US$/oz US$ million US$/oz US$ million
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Mining $ 514 $ 268.9 $ 622 $ 536.4
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Milling / Processing $ 245 $ 128.4 $ 289 $ 249.5
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G/A (Mine Site) $ 38 $ 19.9 $ 46 $ 39.3
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Transportation $ 30 $ 15.8 $ 27 $ 23.3
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Smelting & Refining
(TCRC) $ 52 $ 27.0 $ 47 $ 40.3
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Cash Operating Costs $ 879 $ 460.0 $ 1,031 $ 888.8
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Copper & Silver
Credits $ (817) $ (427.3) $ (734) $ (633.00)
----------------------------------------------------------------------------
Cash Operating Costs
(Net of Credits) $ 62 $ 32.7 $ 297 $ 255.8
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Royalties $ 116 $ 60.5 $ 111 $ 95.9
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Total Cash Costs $ 995 $ 520.5 $ 1,142 $ 984.7
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Total Cash Costs (Net of
Credits) $ 178 $ 93.2 $ 408 $ 351.7
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The estimated total cash costs ($408/oz, net of credits) and all-in costs
($1083/oz, net of credits) for the La Mina Project are very low and place the
project in the lowest decile of estimated 2013 gold production (see Tables 9 and
10). In fact, in a research report published on June 4th of this year, BMO
Capital Markets estimates that less than 5% of the 69 gold producers and
developers followed by BMO Research boast all-in costs below the spot gold price
(spot gold as of June 4th was approx. US1,406/oz).
Table 10. Estimated All-In Costs (Net of Credits) for La Mina Project, Colombia
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Cash Costs Years 1-5 Life of Mine
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US$/oz US$ million US$/oz US$ million
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Total Cash Costs (Net of
Credits) $ 178 $ 93.2 $ 408 $ 351.7
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Corporate G/A $ 61 $ 31.8 $ 73 $ 62.9
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Sustaining Capital $ 30 $ 15.9 $ 37 $ 31.7
----------------------------------------------------------------------------
Closure Capital $ 27 $ 14.2 $ 32 $ 27.5
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All-In Sustaining Costs $ 1,113 $ 582.4 $ 1,284 $ 1,106.8
----------------------------------------------------------------------------
All-In Sustaining Costs (Net
of Credits) $ 296 $ 155.1 $ 550 $ 473.8
----------------------------------------------------------------------------
Income-Tax Expense $ 162 $ 84.6 $ 161 $ 139.1
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Initial (Development)
Capital $ 612 $ 320.0 $ 371 $ 320.0
----------------------------------------------------------------------------
All-In Costs $ 1,886 $ 986.9 $ 1,817 $ 1,565.9
----------------------------------------------------------------------------
All-In Costs (Net of
Credits) $ 1,070 $ 599.6 $ 1,082 $ 932.9
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The qualities of the Project contributing to the low-cost profile include
significant by-product copper and silver credits, low initial strip (mineralized
zones crop out on the surface at both La Cantera and Middle Zone), favourable
metallurgical recoveries, and relatively low labour costs.
Financial Analysis
InterPro developed a cash-flow valuation model using long-term forecast metal
prices of US$1,400/oz gold, US$3.25/lb copper, and US$20/oz silver (see Table
11). All financial projections are calculated in constant US dollars with no
inflation assumed to affect the capital amounts, the costs, metal prices, or NPV
discount rates. No leverage has been assumed-numbers reflect a 100% equity
basis.
Table 11. Key Financial Projections for the La Mina Project, Colombia
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Key Financial Projections LOM Avg / Yr
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Payable Metal
----------------------------------------------------------------------------
Gold 862,030 oz 88,738 oz
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Copper 190,350,441 lbs 19,594,898 lbs
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Silver 718,247 oz 73, 937 oz
----------------------------------------------------------------------------
Gross Revenues (based on $1400/oz gold, $3.25/lb copper, $20/oz silver
prices)
----------------------------------------------------------------------------
Gold $ 1,206.84 $ 124.23
million million
----------------------------------------------------------------------------
Copper $ 618.64 $ 63.68
million million
----------------------------------------------------------------------------
Silver $ 14.36 million $ 1.48 million
----------------------------------------------------------------------------
Total Gross Revenues $ 1,839.85 $ 189.40
million million
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net Project Revenues $ 1,689.95 $ 173.97
million million
----------------------------------------------------------------------------
EBITDA $ 855.10 $ 88.03
million million
----------------------------------------------------------------------------
Net Income (Before Tax) $ 475.92 $ 48.99
million million
----------------------------------------------------------------------------
Income Tax $ 155.41 $ 16.00
million million
----------------------------------------------------------------------------
Net Income (After-Tax) $ 320.50 $ 32.99
million million
----------------------------------------------------------------------------
Table 11 shows that the Project generates average annual net revenues of $174
million, EBITDA of $88 million, and net income (after-tax) of $33 million. The
base-case pre-tax NPV @ 8% is estimated at $262 million with an associated 33.5%
IRR and a payback period of 4.57 years. The base-case after-tax NPV @ 8% is
calculated at $172 million with an associated 26.4% IRR and a payback period of
4.88 years.
Table 12. Pre-Tax NPV, IRR, and Payback Projections at Various Gold Prices for
La Mina, Colombia
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$1000/oz $1,200/oz $1,300/oz $1,400/oz $1,500/oz
Pre-Tax gold gold gold gold gold
----------------------------------------------------------------------------
NPV @ 5% $ 80 $ 204 $ 267 $ 329 $ 391
----------------------------------------------------------------------------
NPV @8% $ 49 $ 155 $ 209 $ 262 $ 315
----------------------------------------------------------------------------
NPV @10% $ 30 $ 127 $ 176 $ 224 $ 273
----------------------------------------------------------------------------
IRR (%) 14.0% 24.6% 29.1% 33.5% 37.6%
----------------------------------------------------------------------------
Payback (Years) 5.77 5.05 4.79 4.57 4.37
----------------------------------------------------------------------------
All NPV values are shown in US$ millions. Figures calculated using constant
$3.25/lb copper and $20/oz silver prices.
Sensitivities were calculated by varying the gold and copper prices (Tables 12,
13, and 14), estimated capital expenditures (Table 15), as well as operating
mining costs (Table 16) and operating processing costs (Table 17). Based on
these figures it is apparent that the Project is most sensitive to gold and
copper prices. The robustness of the project is apparent in Table 12 where even
at a gold price of $1,000/oz, the Project generates a positive return. The
Project continues to generate a positive NPV @ 8% until gold prices reach
$1000/oz and copper prices drop below $3.00/lb (see Table 14). Increases in
capital expenditures do not alter the Project NPV's much as shown in Table 15.
For instance, a 20% increase in capital expenditures still generates a pre-tax
IRR of 27% for the Project. Finally, the NPV and IRR of the Project are not
sensitive to swings in operating mining and processing costs (see Tables 16 and
17).
Table 13. After-Tax NPV, IRR, and Payback Projections at Various Gold Prices for
La Mina, Colombia
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$1,200/o $1,300/oz $1,400/oz $1,500/oz
After-Tax z gold gold gold gold
----------------------------------------------------------------------------
NPV @ 5% (US$ million) $ 140 $ 182 $ 224 $ 265
----------------------------------------------------------------------------
NPV @8% (US$ million) $ 101 $ 136 $ 172 $ 208
----------------------------------------------------------------------------
NPV @10% (US$ million) $ 78 $ 111 $ 143 $ 175
----------------------------------------------------------------------------
IRR (%) 19.7% 23.8% 26.4% 29.6%
----------------------------------------------------------------------------
Payback (Years) 5.29 5.07 4.88 4.71
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All NPV values are shown in US$ millions. Figures in Table 13 calculated using
constant $3.25/lb copper and $20/oz silver prices.
Table 14. NPV Sensitivity to Long-Term Metal Prices.
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Project Pre-Tax NPV at Various Metal Price Assumptions (NPV @ 8% discount)
----------------------------------------------------------------------------
Metal Prices Gold Price (US$/oz)
-------------------------------------------------
$1,000 $1,200 $1,300 $1,400 $1,500 $1,600
----------------------------------------------------------------------------
Copper Price (US$/lb) $2.50 $ (41) $ 66 $ 119 $ 172 $ 226 $ 279
-------------------------------------------------
$2.75 $ (11) $ 96 $ 149 $ 202 $ 256 $ 309
-------------------------------------------------
$3.00 $ 19 $ 125 $ 179 $ 232 $ 286 $ 339
-------------------------------------------------
$3.25 $ 49 $ 155 $ 209 $ 262 $ 315 $ 369
-------------------------------------------------
$3.50 $ 78 $ 185 $ 239 $ 292 $ 345 $ 399
----------------------------------------------------------------------------
All NPV values are shown in US$ millions. Figures in Table 14 calculated using a
constant $20/oz silver price.
Table 15. NPV and IRR Sensitivity to Estimated CapEx.
----------------------------------------------------------------------------
Variance from Base Case-CapEx Estimate
---------------------------------------------
pre-tax -20% -10% Base +10% +20%
----------------------------------------------------------------------------
NPV (0%) $ 524 $ 500 $ 476 $ 452 $ 428
----------------------------------------------------------------------------
NPV (5%) $ 379 $ 352 $ 329 $ 306 $ 283
----------------------------------------------------------------------------
NPV (8%) $ 306 $ 284 $ 262 $ 240 $ 218
----------------------------------------------------------------------------
NPV (10%) $ 267 $ 246 $ 224 $ 203 $ 181
----------------------------------------------------------------------------
IRR (%) 42% 37% 33% 30% 27%
----------------------------------------------------------------------------
All NPV values are shown in US$ millions. Figures in Table 15 calculated using
constant $1,400/oz gold, $3.25/lb copper, and $20/oz silver prices.
Table 16. NPV and IRR Sensitivity to Mine OpEx.
----------------------------------------------------------------------------
Variance from Base Case-Mine OpEx Estimate
---------------------------------------------
pre-tax -20% -10% Base +10% +20%
----------------------------------------------------------------------------
NPV (0%) $ 589 $ 532 $ 476 $ 420 $ 363
----------------------------------------------------------------------------
NPV (5%) $ 412 $ 320 $ 328 $ 287 $ 246
----------------------------------------------------------------------------
NPV (8%) $ 332 $ 297 $ 262 $ 227 $ 192
----------------------------------------------------------------------------
NPV (10%) $ 287 $ 256 $ 224 $ 193 $ 161
----------------------------------------------------------------------------
IRR (%) 38% 36% 33% 31% 28%
----------------------------------------------------------------------------
All NPV values are shown in US$ millions. Figures in Table 16 calculated using
constant $1,400/oz gold, $3.25/lb copper, and $20/oz silver prices.
Table 17. NPV and IRR Sensitivity to Processing OpEx.
----------------------------------------------------------------------------
Variance from Base Case-Processing OpEx
Estimate
---------------------------------------------
pre-tax -20% -10% Base +10% +20%
----------------------------------------------------------------------------
NPV (0%) $ 528 $ 502 $ 476 $ 450 $ 424
----------------------------------------------------------------------------
NPV (5%) $ 368 $ 348 $ 329 $ 309 $ 290
----------------------------------------------------------------------------
NPV (8%) $ 295 $ 278 $ 262 $ 246 $ 229
----------------------------------------------------------------------------
NPV (10%) $ 254 $ 239 $ 224 $ 209 $ 195
----------------------------------------------------------------------------
IRR (%) 36% $ 35% 33% 32% 31%
----------------------------------------------------------------------------
All NPV values are shown in US$ millions. Figures in Table 17 calculated using
constant $1,400/oz gold, $3.25/lb copper, and $20/oz silver prices.
This news release has been prepared under the supervision of Mr. Thomas J.
Drown, P.Geo. Mr. Drown has more than 25 years relevant experience and is a
British Colombia Professional Geoscientist. He is a senior project geologist
with the Company at the La Mina Project and serves as the qualified person as
defined by National Instrument 43-101.
Mr. Gregory Chlumsky, Principal for InterPro, and a Qualified Person as defined
by NI 43-101, has reviewed and approved the process and economic information
contained in this release.
Bellhaven to Present at the 2013 Summit Colorado Conference
Bellhaven will be presenting at the 2013 Summit Colorado conference, September
18-20, at the Park Hyatt Beaver Creek. This annual conference is organized by
Precious Metals Summit Conferences, LLC and features corporate presentations and
one-on-one meetings with senior management of some of the world's most
prospective precious metals explorers, developers and emerging producers. For
more information, please use the following link,
http://www.precioussummit.com/event/2013-summit-colorado/?section=home.
About Bellhaven
Bellhaven Copper & Gold Inc. is a Canadian-listed (TSX-V: BHV) exploration
company exploring for gold and copper in Panama and Colombia. The Company's goal
is to be a leader in gold and copper development in Panama and Colombia.
Bellhaven focuses on discovery, acquisition, and development of high-quality
resources in a safe and responsible manner for the benefit of all of its
stakeholders.
The Company's flagship project is the 100%-controlled La Mina porphyry
gold-(copper) porphyry project in the Middle Cauca belt of Colombia. The total
La Mina resource now includes 1.6 Moz gold and 419 million pounds of copper (or
2.55 Moz gold equivalent) contained in 79.9 million tonnes averaging 0.62 g/t
Au, 0.24% Cu, or a gold equivalent grade of 1.0 g/t (based on a 0.30 g/t Au
cutoff grade). The average grade of 1.0 g/t gold equivalent makes La Mina one of
the highest grade gold-(copper) porphyry deposits in the Americas. The Company
is currently seeking to develop and to grow these resources through mine
development ongoing exploration on the La Mina concession. For more information
regarding Bellhaven, please visit our website at www.bellhavencg.com.
On behalf of the board of directors,
Julio Benedetti, CEO & Chairman of the Board of Directors
BELLHAVEN COPPER & GOLD INC.
Forward-Looking Statements
Statements in this press release, other than purely historical information,
including statements relating to the Company's future plans and objectives or
expected results, may include forward-looking statements. Forward-looking
statements are based on numerous assumptions and are subject to all of the risks
and uncertainties inherent in resource exploration and development. As a result,
actual results may vary materially from those described in the forward-looking
statements.
Gold equivalent grades have been calculated using the following formula: AuEq =
Au(g/t) + (Cu(%)) x (%Recoverable Cu / %Recoverable Au) x (Net Cu Price/Net Au
Price) x (%Payable Cu / %Payable Au x 22.0462 x 31.1035). Metal recoveries are
estimates based on metallurgical results announced in Bellhaven's news release
dated Nov. 15, 2011. Net metal prices for gold and copper are the long-term
forward-curve metal price minus refining charge. Metal prices based on the
long-term forward curve are as of May 8, 2013 (US$1482 for gold and $3.40/lb for
copper). Metal refinery charges and % payable metal by the smelter are estimates
based on third-party consultants. Metal prices, refinery charges and % payable
metal are not constant and are subject to change. Mineral resources are not
mineral reserves and do not have demonstrated economic viability. There is no
certainty that all or any part of the mineral resources will be converted into
mineral reserves.
All information contained in this press release relating to the contents of the
PEA Study are "forward looking statements" within the definition of the United
States Private Securities Litigation Reform Act of 1995 and applicable Canadian
securities legislation. Generally, these forward-looking statements can be
identified by the use of forward-looking terminology such as "plans", "expects"
or "does not expect", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates" or "does not anticipate", or "believes",
or variations of such words and phrases or state that certain actions, events or
results "may", "can", "could", "would", "might" or "will be taken", "occur" or
"be achieved".
The PEA Study was prepared to quantify broadly the project's capital and
operating cost parameters and to provide guidance on the type and scale of
future project engineering and development work that will be needed to
ultimately define the project's likelihood of feasibility and optimal production
rate. It was not prepared to be used as a valuation of the project nor should it
be considered to be a pre-feasibility study. The capital and operating cost
estimates which were used have been developed only to an approximate order of
magnitude based on generally understood capital cost to production level
relationships and they are not based on any systematic engineering studies, so
the ultimate costs may vary widely from the amounts set out in the Study. This
could materially and adversely impact the projected economics of the project. As
is normal at this stage of a project, data are incomplete and estimates were
developed based solely on the expertise of the individuals involved as well as
the assessments of other persons who were involved with previous operators of
the project. At this level of engineering, the criteria, methods and estimates
are very preliminary and result in a high level of subjective judgment being
employed.
The following are the principal risk factors and uncertainties which, in
management's opinion, are likely to most directly affect the conclusions of the
Study and the ultimate feasibility of the project. The mineralized material at
the project is currently classified as resources and it is not reserves. The
mineralized material in the Study is based only on the resource model developed
by Scott E. Wilson Consulting, Inc, a professional mining engineering firm, in
July, 2012 in accordance with the definitions in Canadian National Instrument
43-101. Considerable additional work, including in-fill drilling, additional
process tests, and other engineering and geologic work will be required to
determine if the mineralized material is an economically exploitable reserve.
There can be no assurance that this mineralized material can become a reserve or
that the amount may be converted to a reserve or the grade thereof. Final
feasibility work has not been done to confirm the mine design, mining methods,
and processing methods assumed in the PEA Study. Final feasibility could
determine that the assumed mine design, mining methods, and processing methods
are not correct. Construction and operation of the mine and processing
facilities depends on securing environmental and other permits on a timely
basis. No permits have been applied for and there can be no assurance that
required permits can be secured or secured on a timely basis. Data are
incomplete and cost estimates have been developed in part based on the expertise
of the individuals participating in the preparation of the PEA Study and on
costs at projects believed to be comparable, and not based on firm price quotes.
Costs, including design, procurement, construction, and on-going operating costs
and metal recoveries could be materially different from those contained in the
PEA Study. There can be no assurance that mining can be conducted at the rates
and grades assumed in the PEA Study.
The PEA Study assumes specified, long-term prices levels for copper, gold and
silver. Prices for these commodities are historically volatile, and Bellhaven
has no control of or influence on those prices, all of which are determined in
international markets. There can be no assurance that the prices of these
commodities will continue at current levels or that they will not decline below
the prices assumed in the PEA Study. Prices for gold, copper, and silver have
been below the price ranges assumed in PEA Study at times during the past ten
years, and for extended periods of time. The project will require major
financing, probably a combination of debt and equity financing. Interest rates
are at historically low levels. There can be no assurance that debt and/or
equity financing will be available on acceptable terms. A significant increase
in costs of capital could materially and adversely affect the value and
feasibility of constructing the project. Other general risks include those
ordinary to large construction projects including the general uncertainties
inherent in engineering and construction cost, the need to comply with generally
increasing environmental obligations, and accommodation of local and community
concerns.
FOR FURTHER INFORMATION PLEASE CONTACT:
Corporate Contact in North America:
Mrs. Milagros "Millie" Paredes, President/Director
U.S. Tel: (971) 344-1500
mparedes@bellhavencg.com
Corporate Contact in Panama:
Mr. Julio Benedetti, CEO/Chairman
Int'l No: +507-226-3967
juliobenedetti@bellhavencg.com
Bellhaven Copper & Gold Inc. (TSXV:BHV)
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Bellhaven Copper & Gold Inc. (TSXV:BHV)
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