26 May 2004 05:37
Bema Announces Preliminary Economic Assessment for the Kupol Project/Commences Phase II Drill Program
VANCOUVER, British Columbia--(BUSINESS WIRE)--May 26, 2004--Bema Gold Corporation (AMEX:BGO) (TSX:BGO) (AIM:BAU) is
pleased to announce the results of a Preliminary Economic Assessment (PEA) for the Kupol gold and silver project located
in Chukotka, North Eastern Russia. The PEA demonstrates that Kupol can be developed as a high grade, low cost gold and
silver mine with robust project economics. Bema is earning a 75% interest in the project, from the Government of
Chukotka, through cash payments and work requirements. All dollar figures are in United States dollars unless otherwise
indicated.
The PEA has been completed following one summer season of exploration at the Kupol Property, where Bema has
identified a Preliminary Mineral Resource (see table 1) containing 1.8 million ounces of gold and 19 million ounces of
silver in the indicated category and a further 4.2 million ounces of gold and 56 million ounces of silver in the
inferred category. This PEA is the beginning of the planning process for conducting mining and milling operations at
Kupol. While some parts of the study including Metallurgical Design, Logistics, Plant and Infrastructure are advanced
well beyond what is required for a PEA, the study has been based on the Indicated plus Inferred resources which
therefore reverts it to a PEA by definition.
Year 1-2 average from open pit mining ------------------------------------------------------------------- Gold Silver
Tonnes/ Grade Grade oz's/ oz's/ Oper Cash Total Cash day Au g/t Ag g/t year year cost/oz(i) cost/oz(i)
------------------------------------------------------------------- 3200 23.3 239 774,943 7,018,999 $39 $75
------------------------------------------------------------------- Year 1-5 average from a combination of open pit and
underground ------------------------------------------------------------------- Gold Silver Tonnes/ Grade Grade oz's/
oz's/ Oper Cash Total Cash day Au g/t Ag g/t year year cost/oz(i) cost/oz(i)
------------------------------------------------------------------- 3200 16.9 189.7 582,860 5,788,619 $70 $106
------------------------------------------------------------------- Year 1-10 average from a combination of open pit and
underground ------------------------------------------------------------------- Gold Silver Tonnes/ Grade Grade oz's/
oz's/ Oper Cash Total Cash day Au g/t Ag g/t year year cost/oz(i) cost/oz(i)
------------------------------------------------------------------- 2900 14.8 179 470,243 5,030,315 $75 $111
------------------------------------------------------------------- (i) net of silver credit
The PEA contemplates an initial 12 year mine life based on the drilling to date. The total pre-production capital
cost is estimated at $280.1 million, which includes $221.3 million for construction of the plant facilities, tailings
pond, owners costs and pre-stripping, and $58.8 million in working capital as it is expected that all consumables and
supplies required for a 12 month period will be purchased and shipped to site prior to start up. Open pit mine
equipment, as well as an initial underground mining fleet is assumed to be arranged by way of a capital equipment lease
at a total cost of $58.7 million.
The following tables outline the various production scenarios on a 100% basis, using a gold price of $375 per ounce
and a silver price of $5.50 per ounce. Recoveries have been calculated at 93.5% for gold and 83% for silver.
Using $375 gold and $5.50 silver Bema has calculated a preliminary, after tax, Net Present Value (NPV) at a 0%
discount, of approximately $734 million for the life of mine. At a 5% discount the NPV has been calculated at
approximately $472 million. Repayment of all pre-production capital is estimated at approximately 22 months.
Using $400 gold and $6.00 silver, with a 0% discount, Kupol has a preliminary, after tax NPV of approximately $841
million for the life of mine. Using the same metal prices at a 5% discount the project NPV is $551 million.
The Preliminary Economic Assessment includes Inferred resources that have not yet been sufficiently drilled to have
economic considerations applied to them to enable them to be categorized as reserves. Until there is additional drilling
to upgrade the Inferred resources to reserves, there can be no certainty that the preliminary assessment will be
realized. Tom Garagan, VP Exploration for Bema is the Qualified Person overseeing this PEA.
The study recommends a 4,300 tonne per day open pit operation for the first two years, processing 3,200 tonnes per
day and stockpiling lower grade ore. From years 3 to 7 the mine will continue to process 3,200 tonnes per day from a
combination of open pit, underground mining and stockpile with daily throughput projected to decrease during 8 to 12 to
2,200 tonnes per day from underground mining. The decrease in throughput in later years is due to the limitation within
the current underground plan, which only includes Big Bend and the North Zone, plus the extension. With further
drilling, management feels that other areas will be sufficiently defined to be included in the underground production
plan. Bema is currently conducting trade off studies, examining different combinations of open pit and underground
mining which could maintain the daily throughput rate of 3,000 tonnes per day for the ultimate life of the mine. The
result of the trade off studies could also substantially reduce the capital expenditures for the project
development.
A second phase exploration drilling program is now underway to determine the ultimate potential of the Kupol
property. The program will utilize 7 rigs to drill 57,000 metres to infill the area defined in the Preliminary Mineral
Resource and further test the Kupol vein structure to the north and at depth. The potential for this program is both to
enhance the project economics and increase the ultimate mine life. Management's target at Kupol remains up to, or
in excess of, 16 million tonnes with similar gold and silver grades to those stated in the Preliminary Mineral
Resource.(ii)
(ii) The potential quantity and grade is conceptual in nature and there has been insufficient exploration to define
this target at this time and it is uncertain that further exploration will result in further discoveries on the
property. The target referred to is based on follow up to currently untested, known strike length and down dip
potential.
------------------------------------------------------------------- Tonnes Gold Silver Gold Ounces Silver Ounces
Indicated (000's) (g/t) (g/t) (000's) (000's) ------------------------------------------------------------------- Big
Bend zone 1,257 29.6 308 1,196 12,400 ------------------------------------------------------------------- Kupol Vein,
all zones 2,551 22.3 232 1,826 19,100 -------------------------------------------------------------------
------------------------------------------------------------------- Tonnes Gold Silver Gold Ounces Silver Ounces
Inferred (000's) (g/t) (g/t) (000's) (000's) ------------------------------------------------------------------- Big
Bend zone 2,629 22.4 337 1,895 28,500 ------------------------------------------------------------------- Kupol Vein,
all zones 7,166 18.4 243 4,231 55,900 -------------------------------------------------------------------
The Preliminary Economic Assessment was prepared by an integrated engineering team which included Bema personnel,
Orocon Incorporated and SRK Consulting.
Table 1
The flowing tables outline the Kupol Indicated Mineral Resource and the Inferred Resource at a 6 g/t gold cutoff. Due
to wide drill spacing, a 10% metal loss was applied to the resource.
On behalf of BEMA GOLD CORPORATION
"Clive T. Johnson"
Chairman, C.E.O., & President
--30--JS/na* CONTACT: Bema Gold Corporation Investor Relations (604) 681-8371 or Toll Free: 1-800-316-8855 Website:
www.bema.com
Bema Gold Corporation trades on The Toronto and American stock exchanges. Symbol: BGO.
Some of the statements contained in this release are forward-looking statements, such as estimates and statements
that describe the Company's future plans, objectives or goals, including words to the effect that the Company or
management expects a stated condition or result to occur. Since forward-looking statements address future events and
conditions, by their very nature, they involve inherent risks and uncertainties. Actual results in each case could
differ materially from those currently anticipated in such statements.
The Toronto Stock Exchange neither approves nor disapproves the information contained in this News Release.
[Business Wire] |
RUSSIA IN FACTS
