Bear Creek was recently awarded $30.4 million in damages in the arbitration process regarding the Santa Ana case. How has that helped strengthen Bear Creek's reputation?

Anthony Hawkshaw (AH): Reading the arbitration award, it was clear that Bear Creek had conducted itself in an honest and credible manner before and throughout the arbitration process. For us it was very important to show there was no wrongdoing on our part.

Bear Creek is focused on Corani now. Can you summarize the project's latest developments?

Elsiario Antúnez de Mayolo (EAM): Since last year, the main engineering changes were based on the use of contract mining equipment. We reduced the capex to $585 million and increased the opex. In general, the reserves are the same and there have been some changes to our long-term pricing assumptions, now sitting at $18/oz silver and $1.10/lb zinc. The payback is currently three years, although with the current spot prices it would be shorter than that. We are in the process of receiving our construction and prior consultation permits, and expect some of these by Q2 2018.

AH: The engineering firm involved identified certain areas that we could focus on to improve metallurgical recoveries. The early results of a new testing program are encouraging and may have the effect of reducing the capital cost in treatment and processing. We are going to carry out more geotechnical and metallurgical tests and are entering discussions with engineering firms to start on detailed engineering. There are areas to save money and initial engineering observations have identified possible capex reductions. In regards to project financing, we are talking to international lending agencies and private equity firms to see what package we can put together.  

With record-high zinc prices and constant speculation as to when Corani will start construction, what is the project’s current timeframe?

AH: We have to be patient as there is only one chance to build a project correctly. It is wiser to spend additional time and investment now on engineering than to rush ahead. We are being very deliberate, thorough, and patient to minimize potential risks. In addition, many systems and procedures must be designed --from health and safety programs, training, maintenance, and even lightning detection equipment. When I was a lecturer, I used to tell my students, think first, write later. You can process much more when you are thinking rather than when acting and I believe this is the right approach for us.

With respect to the rising zinc price, our investors’ feedback is to keep doing what we have been doing. Our larger shareholders are sophisticated long-term mining investors that have had a lot of success and some failures in their time. Some of those failures came from companies rushing into construction.

With an anticipated capacity of 22,500 mt/d, do you think the market understands that Corani is not the typical Peru underground silver project?

AH: It is large for a silver project, but when you compare it to a lot of open pit copper projects, it is very small. It might be a little more complicated, as it is a silver-lead-zinc mine. The footprint may not be huge, but it is still a $500-$600 million project with an expected 2,500 people working on its construction. A slow, deliberate and intelligent process will be undertaken to protect our shareholders and the local communities, and the market will eventually reward the company for this.

Can you tell us about the work Bear Creek has been doing with the local communities of Chacaconiza and Quelccaya?

EAM: We have been developing skills and business ideas within the community to create long-term benefits. Mines are always temporary and cannot support the community forever, so it is important to guarantee the long-term future of the local populations. In the past five years, the economy in the area has improved tenfold with social entrepreneurship, including alpaca wool projects, and other schemes driving this growth. The community is feeling the effect of the improved economy and the benefits of our presence. We are also helping to connect community leaders and the central government, as it is usually difficult for the local people due to the remoteness of many of their communities.

What will be the main milestones for Bear Creek this year?

AH: The main milestones for 2018 will include completing more engineering, continue testing and raise funding depending on market conditions. Furthermore, we will commence a limited program of early infrastructure work at the mine with the establishment of a camp and the construction of local roads. We will also continue helping the communities outside the project area with a reliable source of electricity, in a process that began in January.