Bema Gold Corp - Prelim. Economic Assessment
RNS Number:1351Z Bema Gold Corporation 27 May 2004 New Release Bema Announces Preliminary Economic Assessment for the
Kupol Project/Commences Phase II Drill Program Vancouver, May 26, 2004 - Bema Gold Corporation (BGO-TSX, AMEX, BAU-AIM)
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. 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. Year 1-2 average from open pit mining: Tonnes/
Grade Au Grade Ag Gold oz's Silver oz's Oper. cash Total cash day g/t g/t /year /year cost/oz* cost/oz* 3200
23.3 239 774,943 7,018,999 $39 $75 Year 1-5 average from a combination of open pit and underground: Tonnes Grade Au
Grade Ag Gold oz's Silver oz's Oper. cash Total cash /day g/t g/t /year /year cost/oz* cost/oz* 3200 16.9
189.7 582,860 5,788,619 $70 $106 Year 1-10 average from a combination of open pit and underground: Tonnes/ Grade Au
Grade Ag Gold oz's Silver oz's Oper. cash Total cash day g/t g/t /year /year cost/oz* cost/oz* 2900 14.8 179
470,243 5,030,315 $75 $111 *net of silver credit 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.** **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. 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. Indicated Tonnes Gold (g Silver Gold Ounces Silver
Ounces (000's) /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 Inferred Tonnes Gold (g Silver Gold Ounces Silver Ounces (000's) /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 On behalf of
BEMA GOLD CORPORATION "Clive T. Johnson" Chairman, C.E.O., & President For more information on Bema Gold
please contact Investor Relations at (604) 681-8371 or toll-free 1-800-316-8855 or alternatively contact our web-site at
www.bema.com The Toronto Stock Exchange neither approves nor disapproves the information contained in this News Release.
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. This information is provided by RNS The company news service from the London Stock
Exchange
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