Silver Bear Resources Inc. ("Silver Bear" or the "Company") is pleased to provide a development and construction update for its Vertikalny mine at the Mangazeisky Silver Project in the Republic of Sakha (Yakutia), Russia.
Mangazeisky Project Update
Mine development is well advanced at the Vertikalny Central deposit, with construction now approximately 60% complete. Project expenditure to date is approximately US$30 million of the proposed US$49.9 million budget with the project expected to come in under the Feasibility Study budget. Due to an unusually early winter the summer overland supply route has been curtailed until the winter road is fully frozen, which has resulting in a short delay in starting production ramp- up from early in Q1 2017 to the end of Q1 2017.
During and subsequent to Q3 2016 the following milestones were achieved:
- Project financing completed, with first tranche drawdown of US$42.9 million in September;
- Ball mill installed and set into place, mechanical assembly close to completion;
- Process Plant Weather-shield completed and boiler heating system commissioned;
- Open pit pre-stripping completed; ore stockpile and implementation of detailed mine plan to begin in Q4 2016;
- Updated Feasibility Study resulting in significant improvements in IRR (pre-tax) / (post-tax) from 43.6% to 86.1% / 40.2% to 81.9% and NPV (pre-tax) / (post-tax) at 5% discount from US$79.6 M to US$132.6 M / US$70.7 M to US$123.1 M with minimal impact on CAPEX and OPEX; and
- Detailed mining plans in line with the Updated Feasibility Study being developed and additional mining equipment required secured through new lease agreements with Caterpillar Finance and Scania.
Silver Bear's CEO, Graham Hill commented: "I am very proud of our team and our contractors for the development progress they have accomplished since 2015, and I would like to thank them for their dedication and excellent work. As a Company we have accomplished many milestones over 2016, and the energy at site continues to be focused and motivated as we push towards commissioning and production. We are building up the operational team, with senior operating heads recruited and on site. I am very happy that we have been able to secure the services of some excellent professionals so that our operations will be to the highest standards. At this time our team is actively preparing systems, procedures and detailed operational readiness plans in preparation for commissioning.
In addition to the mine development at Mangazeisky silver project, the Company has also successfully expanded its mineral resource base in all categories. These improvements have resulted in the Company updating its feasibility study for the Vertikalny deposit in October resulting in significant benefits and in the initiation of a Preliminary Economic Assessment ("PEA") at its Mangazeisky North deposit, which assessment is scheduled for completion early in Q1 2017."
The following important construction and development milestones were completed in 2016 to date:
- Remaining materials and equipment required for construction and commissioning are either now on site, or being prepared for transport from Yakutsk to site.
- Mangazeisky mine camp is near completion, including the engineers' quarters and crew dormitory, technical and medical offices, Wi-Fi and communications centre and cafeteria.
- The diesel power station has been installed and in the process of being connected to fuel supply and power cables with commissioning works planned for late November.
- Foundations and installation of fuel tanks and boiler system; installed the first phase of the main process building and adjacent garage heating system and completed the pre-commissioning testing of the heating system. The system is now in operation.
- Tailings storage facility design updates are being reviewed and detailed final design being completed to allow construction work to commence.
- Water supply borehole No. 2 is being drilled, water continues to be pumped from borehole No. 1. Water testing is ongoing for quality and further testing of water volumes will be done when borehole No. 2 is completed.
- Construction and weather sheeting of the main processing plant has been completed; the foundation and installation of ball mill within the plant has been completed and the mechanical assembly is close to completion.
- Completed the cyanidation tanks foundation and installed tanks, now working on completing the piping installation across the processing facility as well as continuing with the installation of electrical cabling.
- The workshop, warehouse and reagents storage facilities are near completion and are being fitted for heating and electrical systems.
Filing of Updated Feasibility Study Technical Report
The Company is also pleased to announce that on November 17, 2016 it filed the NI 43-101 technical report ("Technical Report") for the Updated Feasibility Study on the Mangazeisky silver project, Republic of Sakha (Yakutia), Russian Federation. The Technical Report supports the Company's announcement of October 4, 2016. To view and download the Technical Report, please visit www.sedar.com under the Company's profile. The Technical Report will also be available on the Company's website at www.silverbearresources.com.
Amendment to the October 4, 2016 Press Release
Due to a typographical error, the Company would also want to apologize to Mr. Michael Beare of SRK Consulting (UK) whose name was inadvertently listed under the Qualified Persons list for the Updated Feasibility Study. Mr. Beare was one of the Qualified Person responsible for the NI 43-101June 2016 Feasibility Study. Below is the revised Qualified Person's list for the October 4, 2016 press release.
Anton von Wielligh, BSC (Hons), PrEng, SAIMM
Arunasalam Vathavooran, PhD, CEng, MIMMM
Damian Hicks, MIEAust CPEng
Guy Roemer, PE
Jacques du Toit, CEng, PrEng, MScEng, PMP
Laszlo Bodi, MSc, CEng, PEng
Rene Gharapetian, PEng
Robert Davies, BSc (Hons), CGeol, EurGeol, FGS
Sabry Abdel Hafez, PhD, PEng
Saunjay Duggal, MSc, Peng
Houcyne El Idrysy, PhD, CGeol, FGS
Krysztof Czajewski, BSc, PEng
Max Brown, BSc, MSc, CEng, MIMMM
Derek Chubb, PEng