Bear Creek Report

Environment &
Sustainability
J07.82.13.02
Revision Number 0
Bear Creek Mining Corporation

Feasibility Study
Santa Ana Project
Puno, Perú
NI 43-101 Technical Report
Prepared for:
Bear Creek Mining Corporation
1050 – 625 Howe Street
Vancouver, BC V6C 2T6 Canada
Prepared by:
Ausenco Vector
Independent Mining Consultants, Inc.
Resource Development Inc.
Report Date: 21 October 2010
Endorsed by QP:
Scott Elfen, PE; John Marek, PE; Deepak Malhotra, PhD, Sean Currie, P.Eng., and Thomas Wohlford,
CPG.
Contents
Environment & Sustainability 1

J07.82.13.02 Revision Number 0 1
Bear Creek Mining Corporation 1
Feasibility Study Santa Ana Project Puno, Perú NI 43-101 Technical Report 1
1 Summary 1
1.1 Introduction and Executive Summary 1
1.2 Property Description 2
1.3 Geology 2
1.4 Resources and Reserves 2
1.5 Mining Plan 3
1.6 Metallurgy 5
1.7 Processing 5
1.8 Infrastructure 6
1.9 Environmental, Permitting and Closure 7
1.10 Project Execution 7
1.11 Operating Cost Estimate 7
1.12 Capital Cost Estimate 8
1.13 Economic Analysis 8
1.14 Opportunities 9
1.14.1 Organic Growth 9
1.14.2 Exploration Upside 9
1.14.3 Enhanced Silver Recovery 9
1.14.4 Operating Cost Reductions 9
1.15 Conclusions & Recommendations 10
2 Introduction 11
2.1 Terms of Reference and Purpose of the Report 11
2.2 Project Team and Responsibilities 11
3 Reliance on Other Experts 14
4 Property Description and Location 15
5 Accessibility, Climate, Local Resources, Infrastructure and Physiography 17
5.1 Access 17
5.2 Climate 17
5.3 Local Resources 17
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5.5 Physiography 18
6 History 19
7 Geologic Setting 20
8 Deposit Types 21
9 Mineralization 22
9.1 General 22
9.2 SEM 22
10 Exploration 26
11 Drilling 27
12 Sampling Method and Approach 29
13 Sample Preparation, Analysis and Security 30
13.1 Analytical Procedure 30
13.2 Quality Control Procedures (QA/QC) 30
13.3 Sample Security 31
14 Data Verification 32
14.1 Review of the Incremental Data collected between March 2009 and June 2010 32
14.2 Certificate Check 32
14.3 Standards 33
14.4 Blanks 35
14.5 Pulp Check Assays 37
14.6 Half Core Duplicates Samples 44
15 Adjacent Properties 47
16 Mineral Processing and Metallurgical Testing 48
16.1 Metallurgical Test Work 48
16.1.1 Metallurgical Testing – Phase I 48
16.1.1.1 Test Procedures 48
16.1.1.2 Test Results and Conclusions 48
16.1.2 Metallurgical Testing – Phase II 49
16.1.2.1 Bottle Roll Tests 49
16.1.2.2 Column Tests 49
16.1.2.3 Cyanide Amenability Tests (Shaker) 50
16.1.3 Metallurgical Testing – Phase III 51
16.1.3.1 Sample Selection 51
16.1.3.2 Bottle Roll Tests 53
16.1.3.3 Column Leach Tests 53
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16.1.3.4 Comminution Testing 56
16.1.4 Process Selection 56
16.2 Silver and Gold Recovery 56
17 Mineral Resources and Mineral Reserve Estimates 57
17.1 Block Model 57
17.1.1 Data Base 57
17.1.2 Rock Type and Estimation Boundaries 58
17.1.3 Density Assignment 60
17.1.4 Block Grade Estimation 60
17.1.5 Bottom Limit 63
17.1.6 Classification 63
17.2 Mineral Resources and Mineral Reserves 63
17.2.1 Mineral Reserves 64
17.3 Mineral Resources 68
18 Other Relevant Data and Information 70
19 Interpretations and Conclusions 71
20 Recommendations 72
21 References 73
22 Date and Certificates of Authors 75
23 Additional Requirements for Technical Reports on Development Properties 82
23.1 Mining 82
23.1.1 Summary 82
23.1.2 Introduction 82
23.1.3 Project Production Rate Consideration 84
23.1.4 Economic Pit Limits 84
23.1.5 Phase Designs 88
23.1.6 Mine Plan and Production Schedules 91
23.1.6.1 Description of the Schedule 93
23.1.6.2 Alternative Mine Schedules 105
23.1.7 Waste and Stockpile Storage 107
23.1.8 Mine Operations and Equipment 108
23.2 Mineral Processing 112
23.2.1 Flowsheets 112
23.2.2 Mass Balance 112
23.2.3 Piping and Instrumentation 112
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23.2.4 Production Plan 112
23.2.5 Process Description 112
23.2.5.1 Crushing 113
23.2.6 Ore Transport 115
23.2.7 Irrigation System 115
23.2.8 Leaching 115
23.2.8.1 Cyanide Solution Pumping 115
23.2.8.2 Pregnant Solution Collection 115
23.2.8.3 Pregnant Solution Pumping 115
23.2.9 Merrill-Crowe Plant 116
23.2.9.1 Clarification 116
23.2.9.2 Deaeration 116
23.2.9.3 Precipitation 118
23.2.10 Smelting Process 118
23.2.10.1 Retorting 118
23.2.10.2 Smelting 119
23.2.11 Chemical Reagents 119
23.2.11.1 Lime Addition 119
23.2.11.2 Sodium Hydroxide 119
23.2.11.3 Sodium Cyanide 120
23.2.11.4 Antiscalant 120
23.2.11.5 Lead Nitrate 120
23.2.11.6 Zinc Dust 120
23.2.11.7 Precoat 120
23.2.11.8 Body Feed 120
23.2.11.9 Hydrogen Peroxide 120
23.2.11.10 Copper Sulphate 121
23.2.11.11 Reagent Requirements 121
23.3.1 Power 121
23.3.2 Access Road 122
23.3.2.1 Mine Access Road 122
23.3.2.2 Main Haul Road 122
23.3.2.3 Auxiliary Access Road 122
23.3.2.4 Diversion Access Road 122
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23.4 Geotechnical 123
23.4.1 Geotechnical Units 123
23.4.2 Piezometric Level 124
23.4.3 Foundation Level 124
23.4.4 Open Pit / Pit Slopes 125
23.4.5 Heap Leach Facility Construction 126
23.4.5.1 Design Criteria and Approach 127
23.4.5.2 Leach Pad Materials Description 127
23.4.5.3 Underdrain System 129
23.4.5.4 Liner System 129
23.4.5.5 Solution Collection System 129
23.4.6 Process Ponds Construction 129
23.4.6.2 Process Ponds Materials Description 131
23.4.6.4 Liner System 131
23.4.7 Waste Rock Facility Construction 131
23.4.7.2 Waste Rock Facility Material Descriptions 133
23.4.8 Seismicity and Seismic Hazards 133
23.4.9 Instrumentation and Monitoring 134
23.5 Markets 134
23.6 Environmental Considerations and Permitting 136
23.7 Health, Safety, Environment and Community 136
23.7.1 Hydrogeological Evaluation 136
23.7.1.1 Field Investigations 136
23.7.1.2 Conceptual Hydrogeological Model 137
23.7.1.3 Simulation of Groundwater Inflow to Proposed Open-Pit Areas 137
23.7.2 Water Supply 137
23.7.2.1 Water Well Fields 137
23.7.2.2 Water Pipeline 138
23.7.3 Waste Geochemistry 138
23.7.3.1 Sampling 138
23.7.3.2 Results 139
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23.7.3.3 Conclusions 139
23.7.4 Closure 139
23.7.4.1 Reclamation and Closure by Facility 140
23.7.4.2 Post Closure 141
23.7.4.2.1 Maintenance 141
23.7.4.2.2 Monitoring 141
23.8 Project Execution 141
23.9 Economic Analysis 142
23.9.1 Economic Model 142
23.9.1.1 General Criteria 142
23.9.1.2 Mine and Process Production 142
23.9.1.3 Average LoM Operating Costs 143
23.9.1.4 Capital Cost Summary 144
23.9.1.5 Sustaining Cost Summary 144
23.9.1.6 Working Capital 146
23.9.1.7 Base Case Analysis 146
23.9.1.8 Sensitivity Analysis to Base Case 147
23.9.1.9 Economic Model 148
23.9.2 Taxes and Royalties 150
23.10 Opportunities 150
23.10.1 Finer Crushing 150
23.10.2 Northern Extension 151
23.10.3 Longer Mine Life 153
23.10.4 Deep Potential 153
24 Illustrations 154
Tables
Table 1.1 Reserve and Resource Estimate 3

Table 1.2 Key Project Assumptions 4
Table 1.3 Annual Crusher Feed (tonnes and grade) 4
Table 1.4 Capital Cost Summary 8
Table 1.5 Cost Sensitivities 9
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Table 2.1 Santa Ana Responsibility Matrix 12
Table 4.1 Santa Ana Project Mining Concessions 15
Table 14.1 Half Core Questionable Intervals 44
Table 16.1 Phase I Metallurgical Test Results 48
Table 16.2 Santa Ana Core Composites, Phase II Bottle Roll Test Results 49
Table 16.3 Santa Ana Core Composites, Phase II Column Test Results 50
Table 16.4 Santa Ana Core Composites, All Shaker Test Results 50
Table 16.5 Phase III Master Composite Description 51
Table 16.6 Phase III Bottle Roll Test Results 53
Table 16.7 Phase III Column Test Results 54
Table 16.8 Phase III Column Test Reagent Consumptions 54
Table 17.1 Santa Ana Block Model Parameters 57
Table 17.2 Kriging Parameters for Silver and Zinc Indicator Grade Breaks 61
Table 17.3 Kriging Parameters for Block Grade Estimation 62
Table 17.4 Inverse Distance Estimation for Bottom Limit of Grades 63
Table 17.5 Santa Ana Floating Cone Input Data 65
Table 17.6 Mine Production Schedule, Santa Ana Feasibility Study 67
Table 17.7 Process Schedule with Stockpile Reclaim 68
Table 17.8 Mineral Reserves and Mineral Resources 69
Table 23.1A Mine Production Schedule 83
Table 23.2A Production Schedule for Potential Low Tonnage Pit 105
Table 23.3A Production Schedule for Potential Large Tonnage Pit 106
Table 23.4 Mine Major Equipment Fleets for Development of Contractor Costs 110
Table 23.5 Contractor Manpower Requirements 111
Table 23.6 Retorting Process 119
Table 23.7 Primary Reagent Consumption 121
Table 23.8 Dore Transport and Refining Costs 136
Table 23.9 Project Development Plan 142
Table 23.10 General Model Criteria 142
Table 23.12 Operating Cost 143
Table 23.13 Capital Cost Summary 144
Table 23.14 Sustaining Cost 145
Table 23.15 Base Case Sensitivities 146
Table 23.16 Silver Price Sensitivities 147
Table 23.17 Capital Cost and Operating Cost Sensitivities 147
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Table 23.18 Sensitivities on Recovery 147
Table 23.19 Base Case Financial Cash Flow 149
Table 23.20 Northern Extension Drilling 152
Figures
Figure 1.1 Mine Schedule Summary 5

Figure 4.1 Location Map of Santa Ana 16
Figure 9.1 Thickness of 20g/t Silver, Contours on 30, 50, 100 m 23
Figure 9.2 East-West Section at 8,157,700N, Silver Grades 15, 45, 100, 200 g/t 24
Figure 9.3 East-West Section at 8,158,300N, Silver Grades 15, 45, 100, 200 g/t 25
Figure 11.1 Drillhole Location Map 28
Figure 14.1 2006, 2007 and 2008 Assay Standards Greater than 1.0 g/t 34
Figure 14.2 2009 and 2010 Assay Standards Greater than 1.0 g/t 35
Figure 14.3 Results of Sep-2010 Blanks from RockLabs Standards 37
Figure 14.4A XY Plot 2009 Data, ALS- Chemex Silver vs. Inspectorate Silver Check 38
Figure 14.5A XY Plot 2010 Data, ALS-Chemex Silver vs. Inspectorate Silver Check 40
Figure 14.6 XY Plot, ALS-Chemex Zinc vs. Inspectorate Zinc Check 42
Figure 14.7 XY Plot, ALS-Chemex Lead vs. Inspectorate Lead Check 43
Figure 14.8A XY Plot of Half Core Duplicates 45
Figure 16.1 Master Composite Sample Location Map 52
Figure 16.2 Column Test Recovery vs. Time 55
Figure 17.1 Illustration of Zone Codes, 3990 Elevation 59
Figure 17.2 Final Pit Configuration 66
Figure 23.1 Floating Cone Guide to Final Pit Design (at $13.00 Ag) 86
Figure 23.2 Nested Cones on the 4200 Level 87
Figure 23.3 Ultimate Pit Configuration 89
Figure 23.4 Pit Phase at the 4200 m Bench 90
Figure 23.5 Graphic Summary Mine Production Schedule 92
Figure 23.6 Phase Open Pit at the End of Preproduction 94
Figure 23.7 Phase Open Pit End Year 1 95
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Figure 23.11 Phased Open pit End Year 5 99
Figure 23.17 Santa Ana Heap Crushing Flowsheet 114
Figure 23.18 Process Flowsheet 117
Figure 23.19 Access Roads General Layout 123
Figure 23.20 Santa Ana's Heap Leach Pad First Stage Layout 126
Figure 23.21 Santa Ana's Leach Pad Ultimate Phase Layout 128
Figure 23.22 Santa Ana's Process Ponds Layout 130
Figure 23.23 Santa Ana's Waste Rock Facility Layout 132
Figure 23.24 NPV Sensitivity Analysis 148
Figure 23.25 IRR Sensitivity Analysis 148
Figure 23.26 Silver Recovery vs. Ore Grain Size 151
Figure 23.27 Northern Drilling Location Map 152
Figure 23.28 Current Mine Plan Production vs. Extended Life Alternate Plan 153
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1 Summary
This Technical Report summarizes the results of an updated resource determination and a
Feasibility Study (FS) for the Santa Ana Silver Project in Peru. This work was completed by three
engineering companies working as a team on behalf of Bear Creek Mining Corporation (Bear
Creek). The three companies and their responsibilities are as follows:
• Ausenco Vector (Vector) provided design and cost estimation for the process plant, heap
leach facilities and all infrastructure items required for project development. Vector also
assembled the cash flow analysis of the FS, and acted as the primary author of this Technical
Report. The preparation of this report and analysis of the data are the responsibility of Vector
except for those areas listed below which were performed by IMC and RDI;
• Independent Mining Consultants, Inc. (IMC) developed the estimated reserves and
resources, mine plan, and mining costs for the FS. IMC also supervised the parts of the
reports dealing with geology and sampling; and
• Resource Development, Inc. (RDI) was responsible for review and interpretation of the
process test results, development of the flow sheet, development of the process design
criteria and the quantity of the consumable items in the process plant.
1.1 Introduction and Executive Summary

The results of the Feasibility Study are as follows:
• The Santa Ana project can be in production within the second half of 2012;
• Proven and Probable Mineral Reserves containing 63.2 million ounces of silver are currently
defined at Santa Ana;
• Santa Ana Project pre-tax NPV of $85.3 million at a 5% discount rate and IRR of 25.3% at
$14.50 per ounce silver. After tax net present value of $66.5 million and IRR 21.8%;
• 11 year mine life producing 44.2 million ounces of silver;
• Average annual saleable silver production of 4.6 million ounces per year for the first 6 years;
• Cash cost of $9.02 per ounce silver for the 11 years LOM;
• Capital costs of $68.8 million with Capital Payback in 3.4 years at $14.50/oz Ag;
• At $22.92 per ounce silver (London Silver spot price fix from October 6, 2010), the project
would have a pre-tax IRR of 70.2% and an NPV at 5% of $341 million. On an after tax basis
the IRR would be 52.6% and NPV $232 million;
• At silver prices of $22.92 per ounce, free cash flow estimated at $46 million per year for the
first 6 years with a 1.4 year pay back;
• Numerous upside opportunities are being explored including increase of silver recovery,
reductions in cash costs, and an extended mine life plan to include an additional 35.7 million
ounces of silver; and
• The Santa Ana deposit remains open, mainly at depth and to the north where the
northernmost holes contain up to 22 meters @ 124 g/t Ag from surface.
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1.2 Property Description
The Santa Ana Project is located about 120 km south-southeast of the city of Puno, in southern
Peru. The elevation in the deposit area varies from 4150 to 4300 meters. The deposit contains
silver, zinc and lead mineralization. Zinc and lead mineralization is not currently considered to be
economic because it is not recovered in the heap leach processing method utilized in this FS. This
report focuses on the evaluation of the economic recovery of silver.
The deposit outcrops and is roughly 1.5 km long in the north-south orientation and approximately
0.75 wide in the east-west orientation. The deposit is best described as a high-level, low-
temperature epithermal polymetallic silver deposit hosted within volcanic units. Bear Creek controls
5400 hectares of mineral concessions that encompass the Santa Project through claims held 100%
by Bear Creek.
1.3 Geology
The Santa Ana property occupies a broad volcanic upland that lies between extensive exposures of
thin-bedded grey lithic sandstones and red beds that underlie the volcanics to the north and south.
The central and western portion of the upland is occupied by a sequence of fine-grained andesite
flows that strike generally north and dip to the west at angles ranging from 15° to 45°. To the west,
these flows are capped by coarse-grained dacitic porphyry that is, in turn, overlain unconformably
by a thick sequence of dacitic volcanoclastic rocks. The andesite flows are the mineral hosts.
Earlier descriptions of the mineralization described a northern Anomaly A and a southerly Anomaly
B. Drilling has connected these zones so that they represent major structural orientations that
contain continuous mineralization.
The sandstones exposed to the north and south likely underlie the host volcanic field. Total
thickness of the volcanic package is not well known.
1.4 Resources and Reserves

The mineral resource is based on a block model developed by IMC and a floating cone pit geometry
that was used to assure that the resource has reasonable expectation of economic extraction. The
FS and the reserve and resources are based on an updated resource estimation described in a
press release dated 7 October 2010. The mine sequencing performed as part of this FS by IMC is
based upon 60,458 meters of drilling and assays in 349 diamond drillholes and trenches completed
through June 2010. Measured and Indicated Resources contained within the Feasibility Study
design pit were used to determine final pit limits and thus converted respectively into Proven and
Probable Reserves. In addition to reserves, 72.8 million ounces of silver remain in measured and
indicated resources occurring outside of the Feasibility Study pit. Table 1.1 presents the reserves
and resources of the Santa Ana project.
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Table 1.1
Reserve and Resource Estimate
Mineral Reserves
(Cut-off Grade variable 27 to 24 g/t silver by year)
Contained
Silver Lead Zinc
Category kt Silver
(g/t) (%) (%)
(million oz.)
Proven 8,951 57.6 0.37 0.66 16.6
Probable 28,126 51.5 0.33 0.55 46.6
Proven+Probable 37,077 53.0 0.34 0.58 63.2
Mineral Resources in Addition to Reserves
(Cut-off Grade = 15 g/t Silver)
Measured 13,386 34.6 0.30 0.51 14.9
Indicated 51,337 35.1 0.30 0.50 57.9
Measured+Indictated 64,723 35.0 0.30 0.50 72.8
Inferred 21,632 40.6 0.32 0.49 28.2
Note: no lead and zinc will be recovered.
1.5 Mining Plan

The Santa Ana deposit lends itself to development by conventional open pit hard rock mining
techniques. Consequently, a floating cone computer algorithm was applied to the block model to
establish the mineral resource component of the block model. Economic value was applied to silver
only with a metal sales price of $13.00/troy oz. resulting in a variable cut-off grade of between 24
and 27 g/t silver. No economic consideration has been applied to lead or zinc; however, a slight
benefit is realized through by-product gold recovery.
The mining plan was developed by IMC. The mine plan was developed using conventional open pit
methods using 63t trucks and 8.6 m3 wheel loaders mining on 5 m high benches. The mine requires
minimal pre-production waste stripping of 2.97 million tonnes. During the life of the project the
overall stripping ratio will 1.96:1 (Waste:Ore). For the first nine and a half years of the operation, ore
will be directly shipped from the pit to the crusher where the trucks will dump the ore directly into the
crushing system. After crushing the ore will be loaded using an automated conveyor loading system
and then be hauled to the heap leach where the ore will be placed in cells and leached using weak
cyanide solution. In addition to the direct dump ore, the mining plan calls for a low-grade stockpile to
be built up in the first 5 years of the mining. The low-grade stockpile will contain 2,964 kt of ore
having an average grade of 29.9 g/t. The low-grade stockpile will be fed through the crusher once
the main mining activity has ceased. Waste will be hauled to a single waste storage facility located
approximately 1 km southwest of the pit.
The plan for the operation of the mine is to use a contract miner. IMC developed mining costs of
$1.68 per tonne of material mined (ore and waste) and $0.71 per tonne for the rehandling of the
crushed ore onto the heap leach. Separate budgetary quotes were received from local mining
contractors and closely matched the detailed estimate prepared by IMC.
Table 1.2 indicates key assumptions used in the development of the FS.
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Table 1.2
Key Project Assumptions
Item Description Value

Annual Ore Production
3,600,000 tonnes
(Year 1 to end of mine life)
Overall Process Recovery – Silver 70 percent
Total Processed Material 37,077,000 t
Average Silver Grade 53.0 g/t
Recovered Silver 44.2 million oz.
Overall stripping ratio 1.96:1
Life of mine (mining only) 9.5 years
Life of mine (processing) 11.2 years
Table 1.3 presents annual tonnes and grade of the ore fed to the crusher and placed on the heap
leach.
Table 1.3
Annual Crusher Feed (tonnes and grade)
Silver Grade
Time kt
(g/t)
Year 1 3,600 58.4
Year 2 3,600 60.5
Year 3 3,600 59.1
Year 4 3,600 57.6
Year 5 3,600 59.0
Year 6 3,600 55.6
Year 7 3,600 53.1
Year 8 3,600 49.7
Year 9 3,600 47.0
Year 10 3,600 37.0
Year 11 1,077 29.9
Total 37,077 53.0
Figure 1.1 illustrates the variation in the tonnes of the different material moved by year.
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Figure 1.1
Mine Schedule Summary
1.6 Metallurgy
Six column leach test have been completed at McClelland Labs and over one-hundred leach
amenability tests. The results have consistently demonstrated that the Santa Ana ore responds well
to conventional heap leaching techniques. The overall recovery is expected to be 70% silver for
minus ¾-inch crushed material. More recent column tests indicate that further improvements in
recovery to 75 percent silver can be achieved by crushing the ore to minus 3/8-inch. McClelland
Laboratories is currently performing a column test on minus 3/8-inch crushed material and the
Company will release the results when this long-term test is finished. Initial results strongly indicate
an improvement in recovery and acceleration of the silver leaching.
1.7 Processing
Santa Ana is an epithermal polymetallic deposit hosted within volcanic rocks with significant
quantities of primary silver. Considering its proximity to the surface, the ore will be mined in an open
pit operation.
The main operations are blasting, ore transportation to the crushing plant which will comprise two
crushing stages and one classification stage, heap leaching and recovery by Merrill-Crowe
extraction.
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The crushed ore, 80 percent passing 19mm (¾-inch) will be conveyed to the coarse ore stockpile
with a live capacity of approximately 6 hrs. The reclaim system will consist of one fixed conveyor
stockpile to withdraw material from the stockpile and deliver onto trucks. Trucks will be used to
transport the ore from the crushed ore stockpile to the heap leach pad. A sodium cyanide solution
will be irrigated on the heap to dissolve silver minerals and the pregnant solution will be sent to the
Merrill-Crowe plant to produce a silver-zinc precipitate, which will be smelted to produce a Dore bar
containing mainly silver.
The operation will treat 10,000 tpd and the estimated life of mine is 11.3 years. The design
considers a heap leaching process and the average silver content is 53 g/t. The metallurgical
recovery of silver by the leaching process is 70% with a 360 day leach recovery cycle. The leach
cycle is divided into a 120 day primary leach and a 240 day secondary leach occurring in the lower
levels of the heap.
The estimated monthly production is 306,255 ounces of silver.
The Merrill-Crowe plant was designed to treat 571 m3/hr of pregnant solution in order to assure the
production mentioned above. The design includes an effluent detoxification plant to treat 120 m3/hr
of solution with low cyanide content. This detoxification plant will only operate under special
circumstances such as excess of barren solution produced during the rainy season.
The estimated installed power is 3,547 kW, the maximum draw power is 1,683 kW and the
estimated critical consumption is 1,445 kW. The estimated power consumption is 1,132,027 kW-hr
per month. Emergency backup will be provided by diesel generators of 1,500 kW of continuous
service at 4,000 meters above sea level. This equipment will assure the operation of equipment
critical to the metallurgical process.
The requirement of water for the operation is approximately 3.86 litres per second during the first
year of operation. If the leaching operation starts in the dry season (May to September), the
requirement of water will be higher. The opposite will occur during the wet season (November to
April). At the start of operations, the storm water pond should contain no less than 42,000 m3 of
water. When the rainy season starts, it will be important to collect the rain water through the leach
pad.
The estimated direct cost of the investment for processing is US$ 12,359,000 million and the
indirect cost is US$ 2,740,000 million. The total cost of the investment (Capex) is US$ 15,009,000
million. The details of the capital cost estimate are presented in Section 23.9. The estimated
operating cost of the process is 2.644 dollars per tonne of ore processed or 1.186 dollars per ounce
of silver. The details of the operating cost estimate are presented in Section 23.9.
1.8 Infrastructure
The project has favourable infrastructure. Access will be via a good 8 km gravel road that will be a
combination of a new and improved roads requiring mostly upgrading. The new road will connect to
the existing paved highway connecting the Bolivian border to the port of Ilo, Peru. The mine is 42
km from an electrical substation at Pomata and the project includes building a transmission line to
the mine. The project has an excellent site for the heap leach pad resulting in a low capital and
operating cost as the plant will be located immediately adjacent to the heap leach pad and ponds.
The site is close to a very large alluvial aquifer that is replenished by a flowing river in the valley;
wells have been drilled in the aquifer and sufficient water is available to provide water for the mine’s
needs. Steps are being taken to acquire the necessary permits for water use. A 12 km pipeline from
the wells to the mine will be built to transport the water.
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1.9 Environmental, Permitting and Closure
The project has been designed to meet industry standards of environmental compliance. The heap
leach and solution ponds have been designed industry standards of containment and stability. The
waste rock storage facilities are designed to capture and manage any flows that may originate from
the waste rock. Finally an initial closure plan has been developed that will provide covers the both
the heap leach and waste rock facilities that will result in safe and environmentally compliant
closure of the mine. The lab tests on spent ore and waste rock have shown that the site has a very
low potential to produce acid rock drainage (ARD).
The Company is currently advancing the permitting process and expects to submit the
Environmental and Social Impact Assessment (ESIA) to the Peruvian authorities before the end of
2010. All additional necessary permitting will be processed once the ESIA has been approved by
the national government.
The Company has maintained good working relationships with the local communities.
1.10 Project Execution

The project is expected to be developed into a mine over the next 24 months. The figure below
illustrates the major parts of the development plan. First the company expects to present the ESIA
to the Peruvian authorities prior to the end of 2010. There will then be a period of review by the
government that is expected to last 6 to 9 months. In late 2010 and early 2011, the detailed project
engineering is expected to commence and is estimated to be completed in approximately 9 months.
Following ESIA approval the Company is expected to advance the permitting process by obtaining
the necessary construction and operating permits. In late 2011, once the proper permits are
obtained, the principal off-site project infrastructure is expected to be developed. This will include
the power line, the upgrading of the access road, the construction of the water supply pipeline and
drilling of any additional production water wells. Any temporary construction housing will be installed
in preparation for the on-site construction. Finally, the onsite construction is expected to start in the
nd
2 quarter of 2012, or earlier depending on the end of the rainy season and continue through the
dry season. Commercial production is expected to start in early part of the fourth quarter of 2012, or
earlier if the rainy season permits liner installation sooner.
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Item / Period
2010 2011 2011 2011 2011 2012 2012 2012 2012
ESIA Review
Detailed Engineering
Permitting
Off-site Infrastructure Construction
Site Development
Production
1.11 Operating Cost Estimate

Mining costs were prepared on a year-by-year basis with costs varying mostly due to changing
haulage distances. The life-of-mine average mining costs will be $1.68 per tonne of the total
material moved. The cost for hauling and placing ore on the pad will be $0.71 per tonne. The
process costs are estimated to be $3.19 per tonne of processed ore and the G&A is estimated to be
$1.17 per processed tonne or $4.2 million per year. The average life-of-mine, on site operating cost
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per ounce of silver will be $8.35. Including refining charges, doré transport and Peruvian production
royalties, the average cash cost per ounce will be $9.02.
1.12 Capital Cost Estimate

The project capital cost estimate has been prepared by two independent engineering companies.
The mining costs were prepared by Independent Mining Consultants of Tucson, Arizona, and the
process heap leach and infrastructure costs have been prepared by Ausenco Vector of Peru. The
initial start up capital is estimated to be $68.8 million and the total life of mine capital cost is
estimated to be $83.8 million. The initial capital equates to $1.56 per ounce of silver recovered. The
life of mine capital costs used in the financial model includes detailed long-term plans for heap
leach expansions as well as ongoing mine closure and monitoring. Sustaining capital expenditures
are estimated at an average $1.4 million per year over the 11-year life of the mine.
Tabulated below are the Capital costs for each of the principal areas.
Table 1.4
Capital Cost Summary
Item Cost
Civil Works $13,598,000
Water Supply $3,215,000
Process Plant $15,099,000
Auxiliary Facilities $5,859,000
Water Distribution $2,403,000
Electrical (LT & Distribution) $9,709,000
Crusher System $4,763,000
Preproduction Mine Development & Equipment $9,909,000
Owners Costs $4,226,000
Total Initial Capital $68,781,000
The estimates of the Capital Costs have been prepared to a feasibility level with a 15% contingency
applied to the estimates. An additional 15% has been added for Engineering Procurement and
Construction Management (EPCM).
1.13 Economic Analysis

The project has a pre-tax internal rate of return (IRR) of 25.3%, a net present value of $85.3 million
at a 5% discount rate and earnings before interest, taxes, depreciation and amortization (EBITDA)
of $144 million over the 11-year life based upon $14.50 per ounce silver. Recovered silver
production in the first six years averages 4.6 million ounces per year and the project is expected to
produce an average of 4.0 million payable ounces of silver per year over the 11-year mine-life.
Based upon a $14.50 silver price, the project achieves payback of capital in approximately 3.4
years. The Feasibility Study has been prepared using cost bids and estimates and production
forecasts provided by qualified engineering consulting groups who have recent bids and cost
structure experience relating to various Peruvian mining projects under development.
The project is sensitive to metal price and recovery. Additionally, given that the cash costs per
ounce are $9.02 per ounce of silver, the project is also sensitive to variations in operating costs.
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The project is least sensitive to capital cost variations and this can be explained by the relatively low
cost of $1.56 per produced ounce for the initial capital.
Sensitivities to various parameters are summarized below:
Table 1.5
Cost Sensitivities
Case IRR NPV @ 5% NPV @ 0%

Base Case 25% $85.3M $143.6M
Recovery +10% 34% $127.4M $203.5M
Recovery -10% 16% $43.1M $83.5M
Metal Price +10% 34% $129.4M $206.5M
Metal Price -10% 16% $41.0M $80.5M
Initial Capital Cost +10% 23% $79.0M $136.7M
Initial Capital Cost -10% 28% $91.6M $150.5M
Operating Cost +10% 20% $59.1M $106.6M
Operating Cost -10% 31% $111.5M $180.5M
Metal Prices Oct. 6, 2010 - $22.92/oz Ag 70% $341.1M $508.0M
Note:
Base case price is $14.50/oz Silver; London Silver spot price fix from October 6, 2010 = $22.92/oz Ag .All values are pre-tax.
1.14 Opportunities
The study has identified areas of opportunities that will be analysed immediately in detailed
engineering, column leach test work and future exploration:
1.14.1 Organic Growth

The Feasibility Study leaves 36 million ounces of measured and indicated silver resources in either
stockpiles or pit walls that can lead to expanded mine life on the order of 50%. Relatively minor
additional capital will be required in order to increase the size of the heap leach pad and waste
dump sites for which there is ample area for expansions (see Sections 23.4.5 and 23.12.3).
1.14.2 Exploration Upside

The deposit is still open at depth, to the north and northwest, and the “North” anomaly is under-
explored.
1.14.3 Enhanced Silver Recovery

Analysis of the recently completed column leach studies indicates that higher recoveries are likely
with a slightly finer crush size. At 80% passing 3/8 inch crush size the anticipated recovery is 75%
of the silver and initial results from test work indicate the speed of silver recovery is greatly
improved.
1.14.4 Operating Cost Reductions

The project is sensitive to operating costs. The Company and its consultants believe that, once the
project is in operation, many of the reagent consumption levels used in the Feasibility Study will be
reduced with a beneficial effect on the operating costs. Additionally, assuming that a finer crush size
is chosen, there is potential to reduce the cash costs by $0.30 to $0.40 per ounce resulting from
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accelerated silver leaching rates and increased recoveries. Details of the finer crushing potentials
are provided in Section 23.10.1.
1.15 Conclusions & Recommendations

This Report recommends proceeding with detailed engineering and permitting based on:
• Positive economics with excellent exposure to up-side silver prices;

• Well-defined resources open to expansion and potential conversion to reserves;
• Favourable infrastructure; heap leach, power and access;
• Available local water supply;
• Well-defined permitting path; and
• Local community acceptance.
The study has identified areas of opportunities that will be analysed in ongoing engineering studies
and test work:
• Reduce the crush size to minus 3/8” to improve silver recovery and leaching rate;
• Investigate reducing the process plant footprint to reduce capital costs; and
• As the sensitivity analysis shows, the project is sensitive to operating costs. BCM and its
consultants will explore opportunities for reducing operating costs mainly through reducing
reagent consumption both in ongoing leaching tests and after operations start-up.
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2 Introduction
2.1 Terms of Reference and Purpose of the Report
Ausenco Vector (Vector) was commissioned by Bear Creek Mining Corporation (BCM) to prepare a
feasibility study and independent National Instrument 43-101 Technical Report on the Santa Ana
Silver Project. The Project is located in south-eastern Peru. The feasibility study includes data and
information provided by Vector and other professional and consultants. This work was started in
June 2009 and summarized in a 7 October 2010 press release.
This report is intended for the use of BCM for the development and advancement of the Santa Ana
Project. This document presents a feasibility study with technical statements of resources, reserves
and results of an economic model. This report meets the requirements for NI 43-101 and the
resources and reserve definitions defined therein.
This report utilizes metric units. Tonnes are defined as metric tonnes and ktonnes are 1000 metric
tonnes. Metal grade of silver are in grams per metric tonne. Metal grades of lead and zinc are in
percent by weight. All tonnages reported in this document are dry tonnes.
2.2 Project Team and Responsibilities

The reserve and resources was updated based on all available drillhole assay information as of
May 2010 by IMC with John Marek acting as qualified person for update of reserve and resources.
Mine plans, production schedules, and mine cost estimates were developed by IMC with John
Marek acting as the qualified person for these tasks.
Review and interpretation of process testing, development of a preliminary process flow sheet, and
process cost estimation was the responsibility of RDI with Deepak Malhotra Ph.D. acting as
qualified person.
Preliminary design of the heap leach pad and estimation of costs for project infrastructure
requirements were the responsibility of Ausenco Vector with Scott Elfen, Sean Currie and Thomas
Wohlford acting as the qualified persons.
John Marek, Scott Elfen, Sean Currie and Thomas Wohlford have all visited the project. The most
recent site visit was completed Mr. Wohlford 24-30 July 2010.
Table 2.1 lists the contributors to the FS and the Qualified Persons (QP) responsible for the report.
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Table 2.1
Santa Ana Responsibility Matrix
Report
Title Responsible Party
Section
1 Summary Scott Elfen, Vector
2 Introduction Scott Elfen, Vector
3 Reliance on Other Experts Scott Elfen, Vector
4 Property Description and Location Scott Elfen, Vector
Accessibility, Climate, Local Resources,
5 Scott Elfen, Vector
Infrastructure and Physiography
6 History Scott Elfen, Vector
7 Geologic Setting John Marek, IMC
8 Deposit Types John Marek, IMC
9 Mineralization
9.1 General John Marek, IMC
9.2 SEM Deepak Malhotra, RDI
10 Exploration John Marek, IMC
11 Drilling John Marek, IMC
12 Sampling Method and Approach John Marek, IMC
13 Sample Preparation, Analysis and Security John Marek, IMC
14 Data Verification John Marek, IMC
15 Adjacent Properties Scott Elfen, Vector
16 Mineral Processing and Metallurgical Testing Deepak Malhotra, RDI
Mineral Resources and Mineral Reserve
17 John Marek, IMC
Estimates
18 Other Relevant Data and Information All
19 Interpretations and Conclusions Scott Elfen, Vector
20 Recommendations Scott Elfen, Vector
21 References Scott Elfen, Vector
22 Date and Certificates of Authors
Additional Requirements for Technical
23
Reports on Development Properties
23.1 Mining John Marek, IMC
23.2 Mineral Processing Deepak Malhotra, RDI
23.3 Infrastructure Sean Currie, Vector
23.4 Geotechnical Sean Currie, Vector
23.5 Markets Scott Elfen, Vector
23.6 Environmental Considerations and Permitting Scott Elfen, Vector
Thomas Wohlford,
23.7 Health, Safety, Environment and Community
Vector
23.8 Project Execution Scott Elfen, Vector
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Report
Title Responsible Party
Section
23.9 Economic Analysis Scott Elfen, Vector
23.10 Opportunities
23.10.1 Finer Crushing Deepak Malhotra, RDI
23.10.2 Northern Extension John Marek, IMC
23.10.3 Longer Mine Life John Marek, IMC
23.10.4 Deep Potential John Marek, IMC
24 Illustrations Scott Elfen, Vector
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3 Reliance on Other Experts
Project coordination and communication was the responsibility of Marc Leduc, Chief Operating
Officer for Bear Creek Mining who is also a qualified person under the definitions within
NI 43-101.
Bear Creek Mining Corp. has provided much of the information regarding the project property
situation as well as background information on the property. Where possible, the authors have
confirmed information provided by Bear Creek or previous authors by comparison against other
data sources or by field observation. Where checks and confirmations are not possible, the authors
have assumed that all information supplied is complete and reliable within normally accepted limits
of error. During the normal course of the work, we have not discovered any reason to doubt that
assumption.
Vector has not specifically reviewed or audited the property ownership documents at Santa Ana.
Vector has relied on the opinion of Peruvian legal counsel to Bear Creek Mining. Estudio Grau
Abogados provided a letter dated 19 October 2010 to Bear Creek Mining outlining the property
ownership at Santa Ana and signed by Juan Carlos Escuder (partner), and Edgardo Portaro
(Associate) which has been reviewed by Vector as support to the information provided in Section 4.
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4 Property Description and Location
The Santa Ana Property is located approximately 45 km west of Desaguadero, a small city located
near the Bolivian – Peruvian border southwest of Lake Titicaca. Santa Ana is 120 km south of the
much larger city of Puno in the Department of Puno in south-eastern Peru.
The Santa Ana property covers an area of 5,400 hectares in an area to the south of the village of
Huacullani. The approximate UTM grid coordinates for the centre of the main portion of the property
are 8,158,000 m North and 466,000 m East using the Prov. S. Am ’56 map datum (zone 19).
The property consists of six claims: the Karina 9-A, Karina 1, Karina 2, Karina 5, Karina 6 and
Karina 7. Bear Creek has executed its option to acquire 100% interest in the six mineral claims
which comprises 5,400 hectares. The claims were subject to payments under a finder's fee
agreement to a Peruvian individual of which $15,000 was paid upon receipt of title and $15,000 was
paid upon initiation of drilling. In addition, in accordance with the finder’s fee agreement, the
property is subject to a 3% payment of the direct exploration expenditures to a maximum payment
of $280,000.
The mineral titles were held on behalf of the Company by a third party. The Company initiated a
process to transfer the titles to its name under a Supreme Decree, whereby a foreign controlled
entity, such as Bear Creek Mining Corporation, can hold title to mineral rights located within the 50
kilometre border zone of Peru. The Company made a total payment of $7,000 to the third party
upon transfer of title. This process was completed late in 2007 and the company now holds clear
title to the claims. Table 4.1 presents a list of the claims and their sizes.
Table 4.1
Santa Ana Project Mining Concessions
Concession Identification Size

Name Code (Hectares)
Karina 9-A 010146204 1000.00
Karina 1 010146304 700.00
Karina 2 010146404 1000.00
Karina 5 010367604 700.00
Karina 6 010367804 1000.00
Karina 7 010367704 1000.00
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Figure 4.1
Location Map of Santa Ana
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5 Accessibility, Climate, Local Resources, Infrastructure and Physiography
5.1 Access
Access to the property is obtained by driving west 44 km from Desaguadero on paved and gravel
roads to the village of Huacullani, then south on a good dirt road another 4.9 km to the project site.
In good weather, two-wheel drive vehicles can easily access the property; off road or wet weather
travel requires four-wheel drive vehicles.
5.2 Climate
The climate of the region is typical of the high Andes of Peru. There is a pronounced dry season
with little precipitation from May through September and a pronounced wet season from January
through March. The temperatures are mild with average daytime high temperature above freezing.
Occasionally, the overnight temperatures drop below freezing.
There are no climatic conditions that would cause the project great operational difficulty. The largest
concern will be managing stormwater but this is a concern at all mine sites and can be managed
with proper controls.
Vegetation is primarily the stiff bunch grass found at these altitudes in the Andes. Trees are nearly
absent.
The property lies within a volcanic upland to the south of Huacullani. Elevations generally vary from
4150 to 4300 meters above mean sea level. A stream flows through the broad valley east of the
deposit, which might be developed to provide some of the water requirements for mining and
processing.
5.3 Local Resources

Local resources are beneficial for resource projects. Huacullani is a small provincial town with small
scale farming as the primary economic activity. Local farming is mostly limited to growing of market
vegetables (potatoes and corn) and the herding of sheep, alpaca and cattle. The recently utilized
exploration labour force came from the nearby communities. There is no history of mining in the
area during the recent past.
5.4 Infrastructure
Infrastructure is in-place for mine development with a good paved highway 8 km north of the
project. Water for mining operations could be obtained from a large river located 10 km to the north
of the project (next to the paved highway). Power for exploration was supplied by generators but for
a mining operation a power line will be constructed and connected to the national grid at the sub-
station located in Pomata (43 km to the northeast).
The project area has a moderate topography so the construction of site access roads is easy
compared to other projects in Peru where there is more severe topography.
There is only one small structure within the project property and the exploration group used it during
the drilling phase for offices and accommodations. The mine development plan describes
installation of all new site infrastructure for the project.
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5.5 Physiography
The physiographic features are moderate to gentle and access is easy to all parts of the project
either by 4x4 truck or on foot. The project is located at the top of a mesa shaped mountain with the
top of the mesa forming a gentle bowl shape. The sides of the mesa are more rugged than the
project site: consequently, the access road from Huacullani to the top of the mesa is more sinuous
and steeper than other roads in the area. The project is located at the 4200 meter elevation on
average.
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6 History
Bear Creek Mining Corporation became aware of old Colonial workings on the Santa Ana property
and began a concerted exploration campaign during the second half of 2004. Otherwise, little is
known of the exploration history of the property. The Spanish in the Colonial era had a modest, vein
mining and exploration operation here with most of the workings concentrated at the southern end
of the deposit.
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7 Geologic Setting
The Santa Ana property occupies a broad volcanic upland that lies between extensive exposures of
thin-bedded gray lithic sandstones and red beds of the Puno group (Cretaceous to lower-Tertiary)
that underlie both Huacullani and the region to the south of the ore body. The central and western
portion of the upland is occupied by a sequence of fine-grained andesite flows and autobreccias
that possibly belong to the Tertiary Tacaza group, strike generally north or northeast and dip to the
west at angles ranging from 15° to 60°. To the west these Tertiary flows are capped by a coarse-
grained dacitic porphyry that, in turn, is overlain unconformably by a thick sequence of Miocene-
Pliocene dacitic volcanoclastic rocks. The andesite flows, autobreccias and dacitic porphyry are the
mineral hosts.
Earlier descriptions of the mineralization described a northern Anomaly A and a southerly Anomaly
B. Recent drilling has connected these zones so that they represent major structural orientations
that contain continuous mineralization.
The andesite volcanic unit host the mineralization including veins and bulk tonnage material.
Quartz-feldspar porphyry intrusives host minor mineralization in the northern Anomaly B and in the
canyon south of Huacullani. The best evidence of attitude in the andesite rocks is the ledges of
outcrop that, from a distance, appear to be flows striking north-northeast and dip west at 15° to 60°.
This attitude would be in general accord with the attitude of some overlying flows observed to the
west.
Presumably, the sandstones exposed to the north and south underlie the host volcanic field in the
central part of Anomaly B. Total thickness of the volcanic package is not well defined.
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8 Deposit Types
The Santa Ana deposit is typical of intermediate-sulfidation polymetallic silver-bearing vein and
stockwork deposits that, although epithermal, represent mineralization both laterally and vertically
distal to an intrusive source rather than the shallow, very high-level mineralization commonly
associated with hot springs systems.
These kinds of deposits are typically distal to porphyry copper systems and characterized by quartz,
galena, sphalerite, pyrite, magnetite-pyrite, minor chalcopyrite and rhodochrosite mineralization in
the sulfide zone with variable amounts of silver, generally in the form of argentite. Barite is locally
abundant occurring as an important gangue mineral.
Depending on the host rocks available, these deposits occur as discreet veins, brecciated bodies,
stockwork systems, or replacement deposits (in calcareous rocks). The oxidized portions of these
deposits generally contain cerrusite, abundant manganese wad or other manganese oxides,
abundant iron oxides and small amounts of argentite and cerargyrite. Both oxide and sulfide zones
commonly contain economic mineralization in typical deposits of this type.
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9 Mineralization
9.1 General
The majority of mineralization is within two major structural trends and hosted within the andesite
unit. Both vein and disseminated mineralization occur within these trends, with higher grade
associated within veins, vein swarms, breccias and open space fillings.
Brecciation associated within the broad structural zones are thought to be tectonic in origin, with
occasional overprints of hydrothermal brecciation.
The host rock has been described as primarily volcanic andesites with minor dykes and intrusive.
XMOD analysis of 12 drillholes describes K-feldspars as the predominant gangue mineral, followed
by illite and chlorite. The quartz content is low at less than 10%. The carbonate content is less than
5%.
Figure 9.1 is a thickness map of plus 20g/t silver at Santa Ana. The north-south trend of the
northern two thirds of the deposit can be seen on this map. The southern third of the deposit is
generally oriented north-easterly. This appears to be caused by a flexure in the structure where it
bends to the west.
Figure 9.2 is an east-west cross section through the southern portion of the deposit, and
Figure 9.3 is an east-west section through the northern portion of the deposit. Both sections
illustrate the generally vertical character of the mineralization.
Higher grade zones within the deposit are ubiquitous but are not particularly continuous. The
percentage of high grade (plus 200g) intercepts is relatively constant from drillhole to drillhole, but
the continuity of those zones is spatially limited.
9.2 SEM
A scanning electron microscope (SEM) study of 12 drillholes identifies argentite as the predominate
silver mineralization. Argentite accounts for 85% of the total silver in the samples. Arsenopolybasite
(AgCu)16 As2S11 and McKinstyrite (AgCu)2S were identified as the other silver bearing minerals in
the study. Native silver was identified in one sample as a microscopic inclusion in barite. The zinc
sulfide mineral sphalerite and the lead mineral galena were free of included silver.
The silver mineralization was mostly associated with goethite and pyrite.
The relative order of cyanide solubility of the silver mineralization is:
• Mineral Solubility
• Argentite 90%
• McKinstyrite ±60%
• Arsenopolybasite ±40%
The SEM study indicates low levels of cyanocide minerals. The cyanocide minerals are covellite
and the manganese oxide sulfosalts.
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Figure 9.1
Thickness of 20g/t Silver, Contours on 30, 50, 100 m
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Figure 9.2
East-West Section at 8,157,700N, Silver Grades 15, 45, 100, 200 g/t
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Figure 9.3
East-West Section at 8,158,300N, Silver Grades 15, 45, 100, 200 g/t
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10 Exploration
Bear Creek conducted exploration activities since mid-2004 at Santa Ana. Drilling finished in May
2010. Drilling activities are summarized in Section 11.
Exploration work at Santa Ana included detailed surface mapping, sampling of outcrops, hand
trenching with channel sampling, geophysics, and diamond drilling. Surface trench data has not
been used in the estimation of the resource, but was used as an exploration guide for drill site
selection.
Bear Creek is unaware of exploration efforts on the property prior to its work in the district. Local
prospectors and Colonial Spanish workings may have been the only prior work on the site.
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11 Drilling
Bear Creek has utilized HQ-size diamond core drilling methods for all drillhole sampling at Santa
Ana. The drilling contractor, Bradley, utilized LD- 250 skid mounted drills. Most completed drillholes
consisted of 70-degree angle holes at Santa Ana in order to cross cut the near vertical
mineralization.
Drillhole collar surveys were completed using hand held GPS units, with an accuracy of ±3 meters,
and then followed up with a survey by a total station with three geodesic points of order “B” located
on the property from the closest IGN (Geographic National Institute) point on the Peruvian national
grid. Down hole surveys were not completed in the exploration holes. The orientation of each
exploration drillhole is based on the orientation of the drill mast.
In addition to the exploration borings, thirteen geotechnical, oriented core holes were completed.
Downhole surveying was completed within each geotechnical, oriented core boring indicating a
deviation of 1 to 2 degrees.
Drillhole collars are currently abandoned with a concrete marker with pertinent drill data inscribed
on the marker at the collar.
As of June 2010, the following drilling information was completed, including logs and assays. IMC
received the data for the determination of this resource.
Santa Ana Drill Data as of June 2010
• 349 drillholes
• 60,143.1 meters of drilling
• 28,694 assay intervals
• 28,694 intervals assayed for silver, zinc, lead, and copper.
New holes added to the Santa Ana database since February 2009
• 43 drillholes
• 4,567.85 meters of drilling
• 1,978 assay intervals
• 1,978 intervals assayed for silver, zinc, lead, and copper.
Drill core is logged and split at site. Half core is transported to a commercial sample preparation lab
as outlined in Section 12 on sampling method and approach.
Figure 11.1 presents a drillhole location map for Santa Ana as of June 2010. The holes coloured
blue were available in the February 2009 database. Holes plotted in red were added between
February 2009 and June 2010. The plot outline also represents the physical size of the block model
assembled for the current resource estimates.
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The drilling at Santa Ana is of sufficient density and of proper orientation to support the estimation
of resources as reported in Section 17.0. True thickness and grade of the mineralization is defined
by multiple holes at Santa Ana due to the bulk character of the deposit. The true thickness Santa
Ana is the overall width and depth of the deposit which is in the range of 300 to 500m.
Figure 11.1
Drillhole Location Map
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12 Sampling Method and Approach
All mineral sampling for determination of economic resources was collected from HQ-size diamond
drill core. The core is logged and split on site. Split core is then delivered to a commercial lab for
preparation.
Drill sampling is typically completed on two meter intervals, as marked by Bear Creek field
geologists. Core is split in half using manual mechanical core splitters and half-core is returned to
the core boxes. Bear Creek staff then collect each half split 2-meter core sample interval and mark
the samples using duplicate sample tag: one tag in the sample bag, and the other sample tag
retained and recorded with the drillhole designation and interval sampled. The assay lab, therefore,
has the sample tag number, but does not have the drillhole ID designation or sample interval for any
of the samples. Samples are bagged by Bear Creek personnel and are transported by a vehicle
driven by Bear Creek employees from the Santa Ana camp site to Puno for shipment by the Cruz
del Sur bus line from Puno to Lima, Peru. The analytical lab, ALS Chemex, picks up the samples at
the bus station for transport to the lab in Lima, where the samples are prepared for analysis.
Bear Creek has implemented a procedure for determination of sample density. Whole core samples
are weighed on site before sample splitting. Core samples are subsequently air dried and weighed
in air. Then the samples are coated with paraffin and weighed in air again. Finally the samples are
immersed in water and the water displacement is measured.
As of June 2010, Bear Creek completed 843 density determinations. Most of the samples represent
the andesite rock unit, with a few dykes, post mineralized rock and sedimentary units represented in
the 843 samples. The average dry density of all 814 mineralized andesite samples was 2.47, and
the average dry density for all 30 post mineralized and sedimentary samples was 2.18.
Results presented in this report include all available density data to date.
The sampling method applied by Bear Creek is reliable due to the use of large diameter drill core.
The method is not susceptible to the impacts of ground water inflows and down hole contamination
as are other drilling procedures. Core recoveries are good and their does not appear to be any
drilling related factors that could affect the reliability of the results.
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13 Sample Preparation, Analysis and Security
The analytical laboratory, ALS-Chemex performs sample preparation and analyses at its facilities in
Lima, Peru. The laboratory is located at Calle 1 LT-1A Mz-D, esq. Calle A, Urb. Industrial
Bocanegra, Callao 01, Lima, Peru. ALS Chemex is an internationally known analytical laboratory
commonly used by the mining industry. ALS Chemex has been the primary lab for all of Bear
Creek’s analytical results for the Santa Ana Project.
Half core samples are retrieved at the Lima bus station by ALS-Chemex personnel and logged into
the ALS-Chemex tracing system for preparation and assay.
Samples are crushed and pulverized to create a sample pulp, using standard crushing and
pulverizing equipment and procedures. Samples are first dried at 110-120°C and then crushed with
either an oscillating jaw crusher or a roll crusher. The ALS-Chemex procedure for crushed material
is that more than 70 percent of the sample must pass a 2mm (#10 mesh) screen. The entire sample
is crushed, and a portion, typically 250g, is subdivided for pulverizing using a rifle splitter. The
remainder of the crushed material, the coarse reject, is returned to Bear Creek for storage. The split
portion derived from the crushing process is pulverized using a ring mill. The ALS Chemex
procedure is to pulverize the sample such that more than 85 percent of the sample is finer than 75
microns (#200 mesh); producing a sample pulp. A portion of the sample pulp is used in the sample
digestion and analytical process to achieve and assay result.
As a result of the data review and verification discussed in this section and the following section,
IMC and John Marek (qualified person for mineral reserves and mineral resources) have formed the
opinion that the Santa Ana sample preparation, analysis, and security have resulted in a data base
that is reliable for the estimation of mineral reserves and mineral resources as described in Section
17.0.
13.1 Analytical Procedure

Bear Creek selected the ore-grade acid digestion with atomic absorption spectroscopy (AAS) AAS
finish as the analytical method (ALS code AA62b) for the mineralization at Santa Ana. The ore-
grade digestion is a three-acid digestion procedure using hydrofluoric, nitric, and perchloric acids for
maximum digestion of the sample. This method, followed by hydrochloric acid leach and AAS
analysis, will provide accurate silver analyses in the range of 1.0 to 1,000 g/t Ag.
Similar methods of ore-grade digestion are used for the lead, zinc, and copper analyses. ICP
methods are used for determining gold and other trace elements. When higher gold values are
anticipated, gold values are also determined using fire-assay preparation and AAS finish.
13.2 Quality Control Procedures (QA/QC)

A QA/QC program to verify consistency of analytical results has been in place since Bear Creek
started work at Santa Ana. The QA/QC procedures are summarized below and discussed in more
detail in the following paragraphs.
• Certified standards and blanks are periodically inserted by Bear Creek personnel in the
sample submission stream to ALS Chemex;
• Check assays on pulps are submitted to a third party lab; and
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• The remaining half core samples from every 50th core box are resampled and sent to the
ALS-Chemex lab as a check on sample preparation procedures.
Standards are inserted in sequence with the regular rock samples from half-split core. Since the
inserted sample standards are pulps rather than rock, the analytical lab is aware that they are
QA/QC samples; however, the lab does not know whether they are standards, blanks, or re-runs of
former pulps. Bear Creek inserts one of six standard sample pulps, selected randomly, with every
20 regular samples. The sample standards have been prepared by one of three laboratories:
RockLabs Australia, CIMM Labs Lima, or by Inspectorate Labs Lima. CIMM and Inspectorate are
internationally known analytical labs that service the mining industry, and have an assay lab in
Lima, Peru. Rock Labs is an internationally known provider of sample standards to the mining
industry.
Typically two to five standards have been inserted into the sample stream for each drillhole
completed to date. Bear Creek tracks the reported assay of the standards with the mid-point of the
known range, and triggers a possible re-assay of sample batches for which the difference between
the two values is greater than +/- 10% or 2 times the standard deviation. This event has occurred a
few times during the project life. The final decision on sample reassays also considers the real
difference between the standard assay and the known mid-point. For example, a standard assay of
2.0 g/t Ag for a mid-point of 1.2 g/t Ag, while a difference of 167%, is not statistically sufficient to
trigger a reassay of a sample batch. Should re-assays of a sample batch and standard be required,
the corrected assays are input into the database. This procedure assures consistency of assays
from ALS-Chemex.
Blanks are inserted in the sample stream as part of the standards insertion process. Some of the
early “blanks” were actually low-grade standards of approximately 1 g/t. Recent “blanks” from
RockLabs are indeed certified values of 0.0. Drillholes added since July 2008 tend to have one
“blank” per hole as part of the standards submission.
Check assays are completed by sending splits from prepared pulps to a third party laboratory to
rerun the assay. Roughly 1 out of every 10 pulps has a portion separated and sent to the
Inspectorate Assay Laboratory in Lima for an independent re-assay of the pulp.
Starting in late 2007, Bear Creek initiated a program of half core preparation and assaying by
th
retrieving the last full 2 meter core interval from every 50 core bock. The remaining half core after
sampling is bagged and shipped to ALS-Chemex for preparation and assay as a check on the
original half sample preparation and assay.
Bear Creek also retrieves the full and complete internal ALS-Chemex QA/QC data as an additional
check on the consistency of the assays received from that lab.
Assay results from ALS-Chemex are received electronically for incorporation into the database. The
electronic transfer process helps to minimize data entry errors into the database. Bear Creek also
verifies the electronic data against the hard copy certificates of assay also provided by ALS-
Chemex.
13.3 Sample Security

Bear Creek maintains control of the surface and drillhole samples from the drill rig to delivery of
individually sealed samples in sealed shipping sacks at the bus depot in Puno for transport to the
assay lab. Bear Creek retains the pulps and coarse rejects from the Santa Ana drillhole samples at
its secure warehouse in Lima and retains the boxed half-core at a secure storage warehouse in
Puno.
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14 Data Verification
IMC completed the following tasks as part of the due diligence data verification of the Santa Ana
project:
• Comparison of the June 2010 database against the previously provided February 2009 data;
• Spot check of the July 2008 certificates of assay versus the assay information recorded in the
February 2009 database;
• Analysis of blanks and standards results for both 2009 and 2010 data bases;
• Analysis of pulp check assays for both 2009 and 2010 data bases; and
• Half core duplicate assays analysis based on February 2009 drilling.
As a result of the tasks completed above, IMC holds the opinion that the database can be used for
the determination of mineral reserves and mineral resources.
14.1 Review of the Incremental Data collected between March 2009 and June 2010
The comparison of the recent June 2010 data set versus the previous February 2009 database
indicated that 43 new drillholes totalling 4,568 meters of drilling with 1,978 assay intervals were
added to the database.
In June 2010 IMC received updated topography for the Santa Ana deposit. The new topographic
survey was conducted by a company called Digital Globe, based in Longmont, Colorado, USA. The
updated topography was done in the PSAD _19S system and was supplied to IMC as contour data.
The updated topography is used both in the June 2010 database and block model.
IMC checked the drillhole collars versus the topographic information listed above and found them to
be consistent.
IMC has focused on the verification of silver in this report as that is the only metal for which there
will be economic credit. Bear Creek does maintain an appropriate QA/QC program on the contained
zinc and lead at Santa Ana.
14.2 Certificate Check

IMC selected 10 drillholes from the February 2009 database for detailed comparison of the paper
certificate of assay versus the electronic database. The certificates of assay for these 10 holes were
transferred to IMC as PDF files via email communication with Bear Creek personnel. The 10 holes
were selected by IMC, as follows:
DDH-SA-8 DDH-SA-26 DDH-SA-50 DDH-SA-135
DDH-SA-168 DDH-SA-172 DDH-SA-176 DDH-SA-180
DDH-SA-191 DDH-SA-197
Assay Certificate data for silver, copper, lead and zinc from ALS Chemex was entered by IMC
personnel and this data was checked against the data in the drillhole database provided by Bear
Creek Mining.
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Date: October 2010
Out of the 813 assay intervals that IMC checked against certificates, there were no assay
differences found for silver, zinc, or lead. In summary, the certificate check did not identify any
issues with the assay information in the electronic data set.
Several of the holes selected in the list above were identified from the check assay results as holes
were outliers occurred. The certificates were reviewed to see if sample swap issues could have
explained the check assay outliers.
IMC has not completed a check of certificates for the 43 holes drilled in 2010.
14.3 Standards
Pulp standards or Certified Reference Material (CRM) are inserted roughly every 20 intervals by
Bear Creek geologists. Since split core is received by ALS-Chemex and standards are pulps, the
lab does know that the insertion is either a standard or blank. They however, do not know which
standard or blank.
IMC completed a review of the silver standards values versus the reported values from ALS-
Chemex. As of February 2009 there were 1,078 standards in the database with certified mid-values
that are greater than 1.0. The new 2010 drilling data has 54 additional standards analysis and 52
‘blanks’.
IMC has sorted the values that are 1.0 g/t or less out for separate review as “blanks”. The standards
with low silver values of 1.0 g/t appear to be treated as “blanks” in the Bear Creek insertion process.
The figures below show the comparison of silver standards with grade above 1.0 g/t versus reported
ALS-Chemex assay results. Figure 14-1 illustrates all the 2006, 2007, and 2008 standards. Figure
14.2 shows the standards results analysed in 2009 and 2010.
Included in Figure 14.1 are 115 assays from the standard CIMM-24. In the Excel file provided to
IMC this standard has Two Certified Silver Grades, the values are 3.5 g/t (27 intervals) and
4.1 g/t (88 intervals). These observations are of silver grades well below economic interest.
However, the certified value for this standard should be verified and the correct CRM values used.
The newer drilling data included three higher grade standards, BCSA-4357 with a CRM value of
37.6 g/t, BSCA-1234 at 24.6 g/t, and BSCA-3875 having a certified value of 48.2 g/t silver.
Between 2006 and 2009 the CRM checks were generally unbiased in the range of interesting
economic grades. IMC has reviewed the standards from 2006 that appear to be outside the
expected ranges. Historically these may have been due to the data recording and insertion process.
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Date: October 2010
Figure 14.1
2006, 2007 and 2008 Assay Standards Greater than 1.0 g/t
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Date: October 2010
Figure 14.2
2009 and 2010 Assay Standards Greater than 1.0 g/t
The results of the 2010 CRM checks indicate a very slight high bias of silver values by ALS-
Chemex, in grades above 20.0 g/t. The new standards analyses show no indications of sample
swaps. In the historic data there are a few outliers that may be due to sample swaps in the sample
handling or database process.
14.4 Blanks
The standards file provided to IMC contains:
• In the February 2009 database there are 172 inserted pulps with certified values of 0.0 g/t
silver;
• 110 inserted pulps with certified values of 1.0 g/t silver are contained in the February 2009
data;
• During 2009-2010 there were 24 samples inserted with certified values of 1.0 g/t silver; and
• There are 28 new samples with certified values of 0.0 g/t silver.
IMC has chosen to treat both of those standards sets as “blanks” in that the 1.0 g/t material is
substantially lower grade than any potential economic consideration.
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Date: October 2010
June 2010 Certified Value of 0.0 g/t (Rock Labs_29)
• Number Inserted 24
• Average Reported Grade 1.104 g/t
• Percentage reported between 1.0 and 1.99 g/t 58%
• Percentage greater than or equal to 3.00 g/t 0%
• Maximum value 2 g/t
June 2010 Certified Value of 1.0 gm/t (Rock Labs_35)
February 2009 Certified Value of 0.0 g/t

February 2009 Certified Value of 1.0 g/t

IMC was able to confirm that the outlier blanks values listed in the 2009 data did trigger questions
within the Bear Creek system.
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Date: October 2010
In summary, none of the ALS-Chemex assays of blank values reported grades that were greater
than about ¼ of the lowest potentially interesting economic cutoff grade. Figure 14.3 shows the
assay results of the 2009 and 2010 ‘blank’ standards.
Figure 14.3
Results of Sep-2010 Blanks from RockLabs Standards
14.5 Pulp Check Assays

Bear Creek routinely sends duplicate pulps out for reassay at the Inspectorate Assay Lab in Lima
as a measure of the ability of ALS-Chemex to repeat their results on the same pulp. Figures 14.4
and 14.5 present the XY and QQ plots of silver from the February 2009 and June 2010 data base
ALS-Chemex assays versus the Inspectorate AAS finish duplicate assay. Correlation is good and
there is no evidence of bias or inappropriate variability within the 2009 and recent 2010 assay
procedure.
There are 193 recent (2009-2010) duplicate pulp analyses. This is approximately four repeat assays
per drillhole completed in late 2009 to mid-2010. The mean of the recent drilling original values is
17.95 g/t and the mean of the duplicates are 17.70 g/t. Historically, there were 2,573 duplicates in
the February 2009 data set, with the ALS-Chemex mean of 24.7 g/t and the Inspectorate duplicate
of 24.4 g/t.
In June 2010 IMC also received duplicate assay data for zinc and lead. Figures 14.6 and 14.7
present XY plots of zinc and lead of the 2009-2010 original ALS-Chemex assays versus the
Inspectorate AAS finish duplicate assay. The XY plots of these elements show no bias or reason for
concern.
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Date: October 2010
Figure 14.4A
XY Plot 2009 Data, ALS- Chemex Silver vs. Inspectorate Silver Check
(Chemex Avg=24.7 g/t : Inspectorate Avg=24.4 g/t)
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Date: October 2010
Figure 14.4B
QQ Plot 2009 Data, ALS-Chemex Silver vs. Inspectorate Silver Check
(5th to 99th Percentiles Plotted)
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Date: October 2010
Figure 14.5A
XY Plot 2010 Data, ALS-Chemex Silver vs. Inspectorate Silver Check
(Chemex Avg=17.95 g/t : Inspectorate Avg=17.70g/t)
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Date: October 2010
Figure 14.5B
QQ Plot 2009 Data, ALS-Chemex Silver vs. Inspectorate Silver Check
(5th to 99th Percentiles Plotted)
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Date: October 2010
Figure 14.6
XY Plot, ALS-Chemex Zinc vs. Inspectorate Zinc Check
(Chemex Avg=0.35% Zn: Inspectorate Avg=0.34% Zn)
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Date: October 2010
Figure 14.7
XY Plot, ALS-Chemex Lead vs. Inspectorate Lead Check
(Chemex Avg=2.17% Pb: Inspectorate Avg=2.14% Pb)
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Date: October 2010
14.6 Half Core Duplicates Samples
In 2007 Bear Creek personnel began a half core check program in which the second half of the
remaining drill core is send out for re-assay as a check against the original split core sample. This
sample is selected as the last full 2m sample run in the 50th core box. The following results are
based on data February 2009. No half core sample results from March 2009 to June 2010 were
sent to IMC.
The half core duplicates were delivered to IMC in the form of an Excel file with the title ‘duplicates’.
The second half core sample is sent to ALS-Chemex for preparation and assay in the identical
method as the original samples. There are assays for silver, zinc, lead, and copper for each of the
selected drillhole intervals. This report focuses on the results for silver.
The 350 split core samples are from 284 drillholes.
Figure 14.8 is an XY plot of the original ALS-Chemex assay versus the half core duplicate assay.
The plot shows that within the core duplicate assay, six intervals have significantly lower grades
than their original assays. The questionable intervals are listed in Table 14.1.
Table 14.1
Half Core Questionable Intervals
Original Half Core

From To Sample Difference
Drillhole Silver Silver
(m) (m) Number (g/t)
(g/t) (g/t)
DDH-SA-124 40 42 16945 949.0 42.0 907.0
DDH-SA-2B 134 136 4444 576.0 458.0 118
DDH-SA-156 150 152 22266 271.0 68.0 203.0
DDH-SA-112 208 210 17182 209.0 85.0 124.0
DDH-SA-19 26 28 51387 194.0 127.0 67.0
DDH-SA-187A 100 102 24440 188.0 27.0 161.0
DDH-SA-64B 150 152 13643 50.0 143.0 -93.0
The grade differences illustrated in Table 14.1 are generally in the high-grade range, indicating that
there is a significant variability within the high grade assays. These types of assay values occur in
every drillhole but their size and continuity is quite variable.
IMC also applied several statistical hypothesis tests on the data illustrated in Figure 14.8. The two
data sets pass all of the following statistical tests indicating that the two samples could have come
from the same population with 95% confidence, including: T-Test on Mean; Pair T Test on Sample
differences; Binomial Test; and the Komologorov-Smirnoff test of populations.
Detail review of the data did identify that two of the high-grade samples in the above list incurred a
nearly matching value in a previous or following interval. This result could indicate that there may be
some mislabeling of the sample intervals. Alternatively, the physical vein orientation could cross
from one half-sample to the other across an adjacent sample interval.
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Date: October 2010
Figure 14.8A
XY Plot of Half Core Duplicates
(350 Samples, Original Mean=25.6 g/t : Duplicate Mean=21.0 g/t)
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Date: October 2010
Figure 14.8B
QQ Plot of Half Core Duplicates
(0 to 100th Percentiles, Points are not equal percentiles)
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Date: October 2010
15 Adjacent Properties
There are no adjacent mineral properties that have bearing upon Santa Ana.
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Date: October 2010
16 Mineral Processing and Metallurgical Testing
16.1 Metallurgical Test Work
Detailed leach test work has been performed on several representative composite ore samples
taken from the Santa Ana ore body. The test work shows that the long-term recovery of silver will be
70% when the ore is crushed to 80% passing 19mm. Recent analysis of the earlier test work and an
on-going column leach test on ore crushed to 80% passing 9.5 mm, has indicated that the recovery
of silver will increase to at least 75% and a significantly shorter recovery period can be obtained.
However, the FS and the economic analyses have all been based on the 19mm crush case and
70% long-term recovery.
16.1.1 Metallurgical Testing – Phase I

The project has no recent mining history. BCM approached the metallurgical testing in a systematic
fashion in three phases.
The samples for the Phase I test program were coarse assay rejects. Ten intervals were selected to
represent all areas of known mineralization including both high and low grade mineralization. The
samples assay ranged from 52g/t Ag to 172g/t Ag.
16.1.1.1 Test Procedures

Three laboratories performed tests on the samples.
• ALS/Chemex Laboratories in Lima performed 24-hour shaker tests on the coarse assay
rejects.(#10 mesh);
• Plenge Lab in Lima performed 96-hour bottle roll tests on samples ground to 50% -200 mesh;
and
• McClelland Laboratories performed 168 hour bottle roll tests on coarse assay rejects (#10
mesh).
16.1.1.2 Test Results and Conclusions
Table 16.1
Phase I Metallurgical Test Results
Silver Rec.
Laboratory Type Duration Size
%
ALS Shaker 24 hours 10 mesh 55.3
Plenge Bottle Roll 96 hours 200 mesh 84.5
McClelland Bottle Roll 168 hours 10 mesh 71.3
The tests demonstrated the viability of cyanide leaching of these ores as well as a recovery
sensitivity to size and leach times.
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Date: October 2010
16.1.2 Metallurgical Testing – Phase II
BCM initiated a series of bottle roll and column tests to simulate the effect of fine grinding high-
grade ores and adding the pulp to crushed low-grade ores for heap leaching. The process is known
as pulp agglomeration.
BCM selected half core samples from the results of assays to be representative of the ore body.
The high grade sample assayed 106 g/t, the low grade ores [heap grade] assayed 37 g/t.
The tests were done at McClelland Laboratories in Sparks, Nevada.
16.1.2.1 Bottle Roll Tests

168 hour bottle roll tests were performed on heap grade ores at p80 19mm and the high grade ores
at p80 212 micron, p80 150 micron and p80 75 micron (200 mesh). Table 16.2 presents results of
the Phase II bottle roll testing.
Table 16.2
Santa Ana Core Composites, Phase II Bottle Roll Test Results
Metallurgical Results
Extraction Heap-Grade High Grade
p80 212µm p80-75 µm
(% Ag) (p80-19mm) (p80-150 µm)
24 hrs. 33.0 58.3 61.6 63.7
28 hrs. 36.8 70.8 73.0 79.1
72 hrs. 39.9 77.2 80.8 83.1
168 hrs. 46.0 85.8 88.3 88.4
Residue
20.33 16.33 13.33 13.33
(g/t Ag)
Cal Head
37.69 114.97 113.77 115.17
(g/t Ag)
16.1.2.2 Column Tests

Three 150 day column leach tests were done on:
• Heap Grade ore at p80 19mm;

• High Grade ore at p80 19mm;
• Pulp Agglomeration with 20% high grade at p80 150 micron; and
• And 80% heap grade at p80 19mm.
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Date: October 2010
Table 16.3
Santa Ana Core Composites, Phase II Column Test Results
Metallurgical Results
High/Heap Grade
Extraction
Pulp High Grade Heap Grade
(% Ag)
Agglomeration
5 days 15.0 0.6 4.2
50 days 55.9 50.2 52.5
109 days 62.9 61.3 61.0
150 days 65.2 65.3 63.8
Residue
11.16 39.6 13.34
(g/t Ag)
Cal Head
33.39 114.11 36.84
(g/t Ag)
Reagent
Consumption
(kg/t at 150 days)
NaCN 3.12 3.58 3.11
Lime 6.00 2.50 2.50
The bottle roll tests indicated that grinding high-grade ores finer than 150 micron was not effective
for recovery. The grind of 212 micron was only moderately effective.
In the column tests, virtually identical recoveries were obtained for the three columns.
The slight advantage in recovery of a pulp agglomeration process does not justify the capital cost of
the equipment (i.e., grinding mills and thickeners) or the operating cost of ore separation and
operation of the system.
16.1.2.3 Cyanide Amenability Tests (Shaker)

The series of Cyanide Amenability tests were done as part of the Phase II testing. A shaker test
involves placing a sample in a cyanide solution and shaking for 24 hours.
Table 16.4 presents results of all the shaker tests, including the Phase I tests.
Table 16.4
Santa Ana Core Composites, All Shaker Test Results
Grade Recovery Duration

Test Holes Samples Size
(g/t) (%) (hr)
Phase I 5 10 2 mm 112.3 55.5 24
Phase II 7 14 2 mm 109.6 63.9 24
Phase III 23 55 74 µm 50.4 69.2 24
The shaker tests demonstrated that cyanide solubility was reasonably consistent across the ore
body.
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Date: October 2010
The shaker tests along with the other Phase I and Phase II tests provide BCM with sufficient data to
select drill locations for a representative master sample for definitive testing.
16.1.3 Metallurgical Testing – Phase III

The Phase III testing included:
• Whole rock and ICP identification;

• Bottle roll tests at three crush sizes;
• Column tests at three crush sizes; and
• Comminution testing.
16.1.3.1 Sample Selection

BCM selected three locations for representative metallurgical samples on the basis of the Phase I
and II test results. Three PQ size holes were drilled and a master composite created with whole
core.
Table 16.5 presents the master composite make up and Figure 16.1 illustrates the drilling and
sampling location within the Santa Ana project.
Table 16.5
Phase III Master Composite Description
Hole Weight Depth Range

Intervals
ID (kg) (m)
01 2 586.7 5-78
02A 7 560.4 5-75
03 8 511.0 2-100
Total 1658.1 kg.
The Master Composite was shipped to McClelland Laboratory. McClelland Labs reduced the core to
p80 63-mm in stage crushing and thoroughly blended the crushed product. A split was taken from
the Master for bottle roll and column tests at 63 mm and comminution testing. Splits were taken
from the Master Composite and stage crushed to 37.5 mm and 19-mm for bottle roll and column
testing. The range of silver assays and calculated heads from the tests was 52-60 g/t.
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Date: October 2010
Figure 16.1
Master Composite Sample Location Map
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Date: October 2010
16.1.3.2 Bottle Roll Tests
Bottle roll tests were performed at 63mm, 37.5mm, and 19mm sizes. The 168 hour (7 day) tests
were performed at pH of 10.5 (maintained with lime) and a maintained NaCN concentration of 1.0
g/L.
Table 16.6 provides results of the Phase III bottle roll test results.
Table 16.6
Phase III Bottle Roll Test Results
Particle Size
Time
63 mm 37.5 mm 19 mm 9.5mm
% rec at 24 hrs 33.9 32.2 33.8 43.3
% rec at 48 hrs 38.7 36.5 39.3 51.6
% rec at 72 hrs 41.4 39.1 41.7 54.9
% rec at 96 hrs 43.9 40.4 44.1 57.1
% rec at 144 hrs 47.2 43.8 47.8 60.5
% rec at 168 hrs 48.5 44.9 49.3 61.9
Lime cons kg/t 1.6 1.7 1.9 3.4
NaCN cons kg/t 0.52 0.65 0.69 0.89
Note: the 9.5mm test results are preliminary results
Silver leaching was ongoing in all tests of 168 hours albeit at a low rate. Lime and NaCN
consumption increase as the crush size decreases.
16.1.3.3 Column Leach Tests

Column tests were performed on the 63mm, 37.5mm and 19mm sizes. The column test procedure
included head and tail assay screens, and a 23-element ICP scan of a composited first 5-day
pregnant solution.
Agglomeration testing was not required. Previous column testing and screen analysis of crushed
product indicated that percolation would not be affected at any height. In general, heap percolation
problems do not occur with ores with less than 10% -200 mesh materials. The Santa Ana ores at
the finest crush indicate less than 5% -200 mesh size.
The columns were leached at 12 L/hr/m2 solution application rate with a 1.0 g/L NaCN solution. A
target pH of 10.5 maintained with milk of lime. After 30 days of leach, the NaCN concentration was
allowed to go to 0.50 g/L and was maintained at that level through the remainder of the leach cycle.
The columns were leached and rinsed for a total of 144 days. The columns were placed on 1 week
leach and 1 week rest cycles when silver solution tenors dropped to low levels.
Results of the Phase III column tests are presented in Table 16.7.
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Date: October 2010
Table 16.7
Phase III Column Test Results
Size Leach/Rinse Ag Recovery Calculated

Sample
(mm) (days) (%) Head
Master Comp. p80 63-mm 145 45.0 54.90
Master Comp. p80 37.5-mm 144 54.0 55.96
Master Comp. p80 19-mm 144 64.8 60.82
The silver recovery is based on the calculated head. The calculated head is the sum of all the silver
in solution through the leach/rinse cycle plus the silver in the residues as determined by duplicate
fire assays.
Table 16.8 presents reagent consumptions for the column test.
Table 16.8
Phase III Column Test Reagent Consumptions
Sample 63-mm 37.5-mm 19-mm

Lime Kg/t 3.31 3.38 5.76
NaCN Kg/t 1.14 1.18 1.15
The column test charges were treated with the amount of dry lime as indicated by the bottle roll
tests. The 63-mm and 37.5-mm columns reached the desired pH level of 10.5 at the onset of
leaching and maintained pH levels with modest additions of milk of lime.
The 19-mm column initially reached the desired pH level but within 30 days the pH had dropped to
levels as low as 9.2. The adjustment to the desired pH level required large amounts of milk of lime.
The milk of lime must be added in small increments to avoid plugging the column.
The column test results indicated that the p80 19mm crush size should be utilized for the feasibility
study and the project.
The column data for all sizes indicate an early return of silver values followed by a long period of
steady but small returns. This behaviour is illustrated in Figure 16.2 and these leach curves are
typical for silver ores. A finer crush favours the early return and the long-term recovery.
Column leach times understate the time required in the heap. Columns tend to plug flow, heaps
tend to diffusion flow. Empirical formulas have been developed to predict heap requirements or field
days. The early return period of the curve is multiplied by 3 times, the curve break area is at 2.5
times and the tail-out is at a 1/1 ratio. BMC has utilized a 360 day complete leach cycle for silver
production. The leach cycle includes allowances for placement, wetting of ore, solution retention in
the heap and processing to a silver bar. Recovery data derived from Santa Ana laboratory column
testing is illustrated in Figure 16.2 along with the modelled recovery curve used in the financial
model.
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Date: October 2010
Figure 16.2
Column Test Recovery vs. Time
100.0%
Column Test Recovery vs Time
90.0%
80.0%
70.0%
60.0%
% Ag Recovery
50.0% Phase III 63mm

Phase III 37.5mm
Phase III 19mm
40.0%
Phase II 19mm
New 9.5mm
30.0% FS Base Case Recovery Model
20.0%
10.0%
0.0%
0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 300 320 340 360
Leach Days
The columns were leaching albeit at slow rates at the cessation of the tests. Once the tail-out of the
silver values has begun, the leach rate can be predicted by the use of regression formulas. The p80
19mm column recovery at 144 days leach and rinse regresses to a recovery of 70% silver in 210
days of column leach which in turn is 360 days of field leach. For the design of the heap leaching
pad, a 120-day primary leach cycle was assumed. The additional 240 days of leaching to finish the
recovery is assumed to happen in the lower lifts of the heap as leach solution passes through the
pad.
The long term leach cycle demands multi-lifts in the heap and recirculation of low grade solution are
done. Also solution application rates on ores in the latter stages of the cycle are reduced.
The NaCN consumption in the 19mm column was high at 1.15 kg/t. In the absence of cyanocides
(such as is the case at Santa Ana), heap leaching NaCN consumptions under operating conditions
are characteristically ¼X to 1/3X of column testing consumptions. In addition, poor pH control in the
19mm column test probably affected the NaCN consumption negatively. Therefore, NaCN
consumption of 0.4 kg/t ore was considered appropriate for this feasibility study.
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Date: October 2010
The lime consumption in the 19mm was very high, at 5.86 kg/t mostly due to the attempt to correct
the initial low pH from the column. A review of all previous tests indicate the 3.0 kg/t lime to be
added during crushing will be adequate.
16.1.3.4 Comminution Testing

Phase III comminution testing resulted in the following data:
• Low Energy Impact Test 10.3 kwh/t; and

• Abrasion Index 0.0539
The low energy impact test is a measure of power required to crush the ore to 19mm size. This ore
is moderate to low in power requirements.
The abrasion index is a relative measure of the wear to be expected on crushers and screens. This
ore has a very low abrasion index. Wear will be minimal.
16.1.4 Process Selection

A heap leach operation at p80 19mm crush size is appropriate for the Santa Ana Project.
The relatively low silver grade (>50 g/t) combined with the 15% differential in heap leach recovery
vs. milling recovery does not justify the much higher capital and operating costs of milling.
A Merrill-Crowe (zinc precipitation) is appropriate for recovery of silver. Economic studies

comparing carbon adsorption vs. Merrill-Crowe recovery in gold/silver ores show that for a
silver/gold ratio of over 4/1 the Merrill-Crowe presents the best economic case.
The Santa Ana silver/gold ratio is 7142/1.
16.2 Silver and Gold Recovery

Silver recovery of 70.0% is projected for the Santa Ana Project. The recovery is predicted on a p80
19mm crush size and a 360 day total (primary and secondary) leach cycle.
Gold recovery of 75% is projected for the Santa Ana Project. The master composite for the
definitive test program contained gold at 0.006-.008 g/t of gold. The definitive test column at p80
19mm extracted 0.008 g/t of gold in seven days of leaching or a recovery of 100%. Both the initial
assay and the solution assays from which the extracted gold was calculated are at or below assay
limits. The actual recovery is questionable. A 75% recovery is a conservative estimate.
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17 Mineral Resources and Mineral Reserve Estimates
Estimated mineral resources and mineral reserves at Santa Ana were developed from a computer
based block model of the mineralization. The mineral resource was based on the application of the
floating cone open pit computer program to that model. The floating cone was used to determine
the component of mineralization with reasonable expectation of economic extraction.
The mineral reserve was based on a detailed mine plan. The mine plan was guided by additional
floating cone results that guided mine phase designs and mine plans that incorporated access
roads and appropriate equipment operating room. The mineral reserve is the total of all proven and
probable category ore that is planned for processing within the mine plan.
This section describes the block model and summarizes the mine plan and floating cone that result
in the mineral reserves and mineral resources. Section 23 presents a more detailed discussion of
the mine plan.
17.1 Block Model

The block model was developed using blocks sized 5 x 5 m in plan and 5m high. The selection of
this small block size was based on a number of judgments including the width of high-grade
mineralization and the potential to eventually mine the deposit with smaller mining equipment.
The block model is assembled in the UTM coordinate system and is parallel to the UTM grid.
Topographic information was assigned to the model based on topographic maps provided to IMC
from Bear Creek. The topographic maps are consistent with field observations and with drillhole
collar coordinates.
Table 17.1
Santa Ana Block Model Parameters
Santa Ana Block Model Size and Location

Block Size 5 x 5 meters
Bench Height 5 meters
Number of block
East 300
North 480
Benches 104
Model Limits
East 465,600 467,100
North 8,157,000 8,159,400
Elevation 3,900 4,420
17.1.1 Data Base

The data base for the block model assembly was developed from 349 diamond drillholes. The
following summarizes the data available as of June 2010:
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Date: October 2010
• Number of Drillholes: 349 holes
• Meters of Drilling: 60,143.7 meters
• Number of Drill Intervals: 28,923 intervals
• Number of Silver Assays: 28,696 assayed intervals
Each of the intervals that were assayed for silver was also assayed for copper, lead, and zinc.
Copper, lead, and zinc were modelled, but the heap leach process applied for metal recovery at
Santa Ana does not recover the lead, zinc, or copper.
17.1.2 Rock Type and Estimation Boundaries

Population bounds or estimation zone boundaries have been assigned to the Santa Ana Block
model. There are four estimation zones, two zones are to align the estimation parameters with the
predominate mineralization directions. Figure 17.1 illustrates the zone assignments applied to the
model on the 3990 meter elevation. Zone 1 has been estimated with a North-South oriented ellipse;
while model blocks and composites in Zone 2 were estimated with the ellipse oriented North 40°
East.
The host rock is primarily volcanic andesite with minor dykes and intrusives. There are post mineral
volcanics that overly the andesites on the western edge of the deposit. They just appear on the
northwest edge of Figure 17.1 on the 3990 elevation. The post mineralization volcanics are barren
and were assigned as Zone 3. Also added to the Santa Ana block model is a barren sedimentary
rock Zone 4. Zone 4 is mainly on the northern end of the deposit. No grades were assigned in either
of Zones 3 or 4 as they are barren or low grade.
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Figure 17.1
Illustration of Zone Codes, 3990 Elevation
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Date: October 2010
17.1.3 Density Assignment
Bear Creek collects density data on a regular basis by weighing whole core samples in two steps:
1) dry and, 2) suspended in water. IMC has spot checked the calculation of the individual densities
from each sample. In total there were 843 density measurements provided to IMC. The density
results correlate well with rock type but showed no correlation with the silver grade of the sample.
Consequently, a simple density assignment by rock type was applied to the block model:
• Rock Type Dry Specific Gravity

• Mineralized Tuff 2.469
• Post Mineral Tuff 2.059
• Sediments 2.318
17.1.4 Block Grade Estimation

Block grades were estimated for silver, and zinc using Indicator Kriging (IK). Lead and copper were
estimated using linear kriging. The indicator kriging procedure that was applied for silver and zinc
was used to establish a computer generated grade contour. The boundary or contour is generally
referred to as a discriminator value. Silver incorporated a discriminator value of
15.0 g/t Ag, and zinc utilized a discriminator value of zinc 0.13% Zn. These grade contours were
used to segregate a moderate grade population from a lower grade population within the deposit.
Grades were estimated above and below the discriminator values, and only inside zones 1 and 2
(Mineralized Tuff).
Assay data was composited to 5m down-hole composites. Prior to compositing, individual assay
values were cut in order to limit the influence of high-grade outliners on the block grade distribution.
Assay Cuts Prior to Compositing:
• Silver +1000 g/t set to 1000 g/t 21 assays

• Lead +4.5% set to 4.5% 35 assays
• Zinc +4.5% set to 4.5% 28 assays
• Copper +0.35% set to 0.35% 15 assays
The Santa Ana drillholes were composited to 5m down hole or length composites for use in block
grade estimation after the above cuts were completed on assays.
Cumulative frequency plots were generated for each of the metals. These were evaluated to
determine breaks or boundaries within the mineral population. Review of those graphs resulted in
the use of population breaks for both silver and zinc at 15 g/t and 0.13% respectively. No grade
boundaries were applied to lead or copper.
The 15 g/t discriminator was used to establish an indicator kriged boundary of plus 15g/t blocks
versus lower grade blocks for silver. For zinc, the discriminator grade was 0.13%. Both indicators
were sorted on a 50% probability level to establish whole block assignments where the blocks have
a greater than 50% chance of being above 15 g/t silver. A similar approach was used for zinc with a
0.13% discriminator.
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Table 17.2 summarizes the kriging parameters used to establish the indicator codes within the
model.
Table 17.2
Kriging Parameters for Silver and Zinc Indicator Grade Breaks
Sub- Spherical
Major Axis Range Search
Major Variogram
Area, Metal
Discriminator Total
Bearing Plunge Dip Major Inter. Vert. Major Inter. Minor Nugget
Sill
Silver, 15 gm/t
Zone 1 (North) 0 0 0 65 30 90 65 30 90 0.10 1.00
Zone 2 (South) 40 0 0 65 30 90 65 30 90 0.10 1.00
Zinc, 0.13 %Zn
Zone 1 (North) 0 0 0 65 30 90 65 30 90 0.10 1.00
Zone 2 (South) 40 0 0 65 30 90 65 30 90 0.10 1.00
Maximum Composites = 10, Minimum Composites = 2, Maximum of 3 per hole.
Although the zones utilize different search orientations, the zone boundaries 1 and 2, were not
treated as hard boundaries for the indicator assignment. Composite grades were allowed to
comingle between the zones. However, zones 3 and 4 were not estimated and are considered
barren.
Once the silver and zinc indicators codes were assigned to the model, the respective block grades
were estimated using ordinary linear kriging inside and outside of the indicator areas, treating the
indicator breaks as hard boundaries. A maximum of 10 composites were used and a minimum of 2
were used to assign the grade. A maximum of 3 composites per drillhole were allowed within the
search process.
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Table 17.3
Kriging Parameters for Block Grade Estimation
Area, Metal Major Axis Sub-Major Range Search Spherical Variogram High Grade Limit
Discriminator Bearing Plunge Dip Major Inter. Minor Major Inter. Minor Nugget Total Sill Limit Search M
Silver Grade for + 15 gm/t Blocks

Zone 1 (North) 0 0 0 65 30 90 65 30 90 0.10 1.00 200 gm/t 33
Zone 2 (South) 40 0 0 65 30 90 65 30 90 0.10 1.00 200 gm/t 33
Silver Grade for less than 15 gm/t Blocks
Zone 1 (North) 0 0 0 65 30 90 65 30 90 0.10 1.00 200 gm/t 15
Zone 2 (South) 40 0 0 65 30 90 65 30 90 0.10 1.00 200 gm/t 15
Zinc Grade for +0.13 % Blocks
Zone 1 (North) 0 0 0 65 30 90 65 30 90 0.10 1.00 2.00% 33
Zone 2 (South) 40 0 0 65 30 90 65 30 90 0.10 1.00 2.00% 33
Zinc Grade for less than 0.13% Blocks
Zone 1 (North) 0 0 0 65 30 90 65 30 90 0.10 1.00 2.00% 15
Zone 2 (South) 40 0 0 65 30 90 65 30 90 0.10 1.00 2.00% 15
Lead Grade
Zone 1 (North) 0 0 0 65 30 90 65 30 90 0.10 1.00 1.30% 33
Zone 2 (South) 40 0 0 65 30 90 65 30 90 0.10 1.00 1.30% 33
Copper Grade
Zone 1 (North) 0 0 0 65 30 90 65 30 90 0.10 1.00 1.30% 33
Zone 2 (South) 40 0 0 65 30 90 65 30 90 0.10 1.00 1.30% 33
Maximum Composites = 10, Minimum Composites = 2, Maximum of 3 per Hole
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Lead and copper were estimated based on ordinary linear kriging without the application of indicator
grade boundaries. Table 17.3 summarizes the search and kriging parameters used to estimate the
block grades.
The high-grade limit on Table 17.3 was used to reduce the impact of high-grade composites on the
grade estimate. For example, in Silver Zone 1, a silver value of 200 g/t utilized a search limit of 33-
m. Consequently, high grades over 200 g/t could not be extended more than a 33-m radius.
17.1.5 Bottom Limit

Once the block grades were assigned for silver, lead, zinc, and copper, a limit was applied below
the bottom of the drillholes to stop the downward extrapolation of the extensive vertical search. A
boundary was established that limited downward extrapolation below the bottom of a drillhole to
less than 30 m. Any block value that was more than 30-m below a drillhole was assigned a zero
value within the model.
An inverse distance procedure was applied as an indicator to determine the presence or absence of
assay information. That inverse distance indicator was used to clip the mineralization if there were
extrapolated block values below the 30-m search limit. Table 17.4 details the bottom limit
‘estimation’ parameters.
Table 17.4
Inverse Distance Estimation for Bottom Limit of Grades
Area, Metal Major

Major Axis Sub-Major Search Search Search
Power Axis
Bearing Dip major Intermediate Minor
Weight plunge
Silver Grade
th
ID 5 0 0 0 90 90 30
17.1.6 Classification
Blocks were coded as measured, indicated or inferred based on the silver grade estimate. The
kriged standard deviation (square root of the kriged variance) and the number of composites were
used to estimate the silver grade and were used to establish the block classification. The
parameters are summarized below:
Category Classification
Inferred A silver grade was estimated
Silver grade was estimated, and the kriged standard
Indicated
deviation is less than or equal to 1.05
Silver grade was estimated, and the kriged standard
deviation is less than or equal to 0.65, and 4 or
Measured
more composites used to estimate the grade (2 or
more drillholes)
17.2 Mineral Resources and Mineral Reserves

Mineral resources were established based on the block model and the results of an approximate
open pit geometry. The floating cone algorithm was used to establish the component of the block
model that meets the criteria for reasonable expectation of economic extraction for the resource.
The mineral resource presented in this section is completely contained within a computer generated
open pit geometry.
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The mineral reserve is the result of a detailed annual mine plan. The mineral reserve is the sum of
all proven and probable class ore that is planned for processing during the mine life. The floating
cone algorithm was used to guide the development of the mine plan, however, the mine plan
includes mine roads, and proper equipment working room.
John M. Marek P.E. of Independent Mining Consultants, Inc. was in responsible charge of the
mineral reserve and mineral resource estimates and is the qualified person for this section. Mr.
Marek is independent of Bear Creek mining.
17.2.1 Mineral Reserves

The mine plan that results in the mineral reserve will be discussed in more detail in Section 23. The
basic economic input and the mine schedule is presented in this section for completeness.
The floating cone algorithm was used to guide to the development of the final pit design and the
extraction sequence for the Santa Ana open pit. Table 17.5 summarizes the economic input
assumptions that were used for the floating cone runs. These values were based on the results of
the previously completed PEA and do not reflect the final cost estimates from this feasibility study.
The final pit was guided by a silver price of $13.00 /oz. However, multiple cones were developed to
provide guidance for the design of practical mining pushbacks of phases. The breakeven and
internal cutoffs for a range of metal prices are also shown on Table 17.5. Economic credit was only
applied to measured and indicated silver mineralization within the cones used for mine planning
guidance.
A series of 6 phases or pushback designs were developed for input to the mine schedule. Figure
17.2 illustrates the final pushback and correspondingly the final pit design that contains the mineral
reserve. The waste rock facility illustrated in Figure 17.2 does not represent the optimized
geotechnical design and was used only to account for waste volume and hauling distances. Details
of the optimized waste rock facility are provided in Section 23.4.7. The total material movement of
ore, low grade and waste within the final pit is 109,704 kt of which 37,077 kt of ore is planned for
processing.
Table 17.6 summarizes the mine production schedule for the Santa Ana feasibility study. Proven
and Probable ores are combined on the mine schedule and are the only materials considered for
economic benefit within the mine plan and mineral reserve. The total of all ore processed within the
feasibility study mine plan matches the total proven plus probable mineral reserves on Table 17.7.
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Table 17.5
Santa Ana Floating Cone Input Data
Item Units Input Parameters

Mining Cost $ / tonne Material $1.73
Leach Cost $ / tonne Ore $4.00
Pad Cost $ / tonne Ore $0.48
Rehandle Haul $ / tonne Ore $0.88
G&A Cost $ / tonne Ore $1.33
Total $ / tonne Ore $6.69
Process Recovery Percent 70%
Refining Charge $/oz $0.40
Refining Recovery Percent 99.7%
Slope Angle Degrees 40
$/Troy oz $/g Breakeven g/t Internal g/t
5.00 0.1608 81.6 64.7
6.00 0.1929 67.0 53.2
7.00 0.2251 56.9 45.2
8.00 0.2572 49.4 39.2
9.00 0.2894 43.6 34.7
Metal Price 10.00 0.3215 39.1 31.1
11.00 0.3537 35.4 28.1
12.00 0.3858 32.3 25.7
13.00 0.4180 29.8 23.7
14.00 0.4501 27.6 21.9
15.00 0.4823 25.7 20.4
16.00 0.5144 24.1 19.1
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Figure 17.2
Final Pit Configuration
Figure 17.2 does not illustrate the optimized geotechnical design for the waste rock facility as
presented in Section 23.4.7. The waste storage area shown was used only for storage and hauling
distance accounting.
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Date: October 2010
Table 17.6
Mine Production Schedule, Santa Ana Feasibility Study
Crusher Feed Low Grade at 27g

Total
Time Cutoff Waste
To Material
Period (g/t) Ore Silver Silver (kt)
Stockpile (kt)
(kt) (g/t) (g/t)
(kt)
Preproduction
23 23
Q1
Preproduction
34 37 52.6 16 29.9 599 652
Q2
Preproduction
34 182 49.3 67 30.5 1,260 1,509
Q3
Preproduction
34 196 49.0 100 30.4 1,115 1,411
Q4
Y1, Q1 34 721 51.8 254 30.7 2,085 3,060
Y1, Q2 34 791 56.4 269 30.5 2,000 3,060
Y1, Q3 34 832 62.1 219 30.5 2,009 3,060
Y1 Q4 34 841 66.5 173 30.4 2,046 3,060
Y2 30 3,600 60.5 329 28.4 8,571 12,500
Y3 32 3,600 59.1 494 29.6 8,606 12,700
Y4 33 3,600 57.6 953 30.0 8,147 12,700
Y5 28 3,600 59.0 90 27.5 8,550 12,240
Y6 24 3,600 55.6 7,725 11,325
Y7 24 3,600 53.1 7,552 11,152
Y8 24 3,600 49.7 5,844 9,444
Y9 24 3,600 47.0 4,706 8,306
Y10 24 1,713 44.8 1,789 3,502
Total 34,113 55.0 2,964 29.9 72,627 109,704
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Table 17.7
Process Schedule with Stockpile Reclaim
Crusher Feed
Time Cutoff
Period (g/t) Ore Silver
(kt) (g/t)
Preproduction Q1
Preproduction Q2 34
Preproduction Q3 34
Preproduction Q4 34
Y1, Q1 34 900 51.3 Y1:
Y1, Q2 34 900 55.6 3,600 kt
Y1, Q3 34 900 61.1 at
Y1 Q4 34 900 65.4 58.4 g/t
Y2 30 3,600 60.5
Y3 32 3,600 59.1
Y4 33 3,600 57.6
Y5 28 3,600 59.0
Y6 24 3,600 55.6
Y7 24 3,600 53.1
Y8 24 3,600 49.7
Y9 24 3,600 47.0
Y10 24 3,600 37.0 Reclaim Low-
Y11 1,077 29.9 grade Stockpile
Total 37,077 53.0
17.3 Mineral Resources

Estimated mineral resources were based on a larger floating cone that was generated at a silver
price of $16.00 /oz. Seventeen percent lower process and mining costs were utilized in the resource
cones as compared with those on Table 17.4. Slope angles and process recoveries were
unchanged from those on Table 17.5. The internal cutoff grade for the input economics was 15 g/t.
The resource cone did allow economic credit for inferred mineralization. However, no economic
analysis or credit for inferred mineralization is included anywhere in this feasibility study.
Once the resource floating cone was established, the incremental resource mineralization between
the mineral reserve and the resource cone was calculated by subtraction. Consequently, Table 17.8
summarizes the mineral resources that are in addition to mineral reserves and do not include the
mineral reserves.
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Date: October 2010
Table 17.8
Mineral Reserves and Mineral Resources
Mineral Reserves
Cutoff Grade, variable 27 to 24 g/t Silver by year
Contained
Silver Lead Zinc Copper
Category kt Silver
(g/t) (%) (%) (%)
Million ozs
Measured 8,951 57.6 0.37 0.66 0.02 16.6
Indicated 28,126 51.5 0.33 0.55 0.02 46.6
Measured +
37,077 53.0 0.34 0.58 0.02 63.2
Indicated
Mineral Resource in Addition to Reserves
Cutoff Grade = 15 g/t Silver
Measured 13,386 34.6 0.30 0.51 0.02 14.9
Indicated 51,337 35.1 0.30 0.50 0.02 57.9
Measured +
64,723 35.0 0.30 0.50 0.02 72.8
Indicated
Inferred 21,632 40.6 0.32 0.49 0.02 28.2
Zinc, lead and copper are reported because they are contained. Zinc, lead and copper do not
contribute economic benefit.
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Date: October 2010
18 Other Relevant Data and Information
No additional information or explanation is necessary to make this Technical Report understandable
and not misleading.
Details of the Feasibility Study can be found in Section 23.
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Date: October 2010
19 Interpretations and Conclusions
Ausenco Vector has relied on John Marek, the QP for sections 7 through 14 of this Technical
Report, for the detailed review of the geology, mineralization, sampling and block modelling
presented in this Technical Report on the Feasibility Study of the Santa Ana Project. The
assumptions and resulting data input have been completed in accordance with acceptable industry
standards.
At the Feasibility-level, the Santa Ana project reflects:
• Positive economics with excellent exposure to up-side silver prices. For example, a change in
silver price from the assumed $14.50 per ounce used in the FS to the London closing on
October 6, 2010 of $22.92 decreases the Capital Payback period from 3.4 to 1.4 years and
increases the NPV and IRR by approximately 300% and 175%, respectively;
• Well-defined resources open to expansion and conversion to reserves;
• Favorable infrastructure; heap leach, power and access;
• Available local water supply;
• Well-defined permitting path; and
• Local community acceptance.
The key results and highlights of this study include:
• The Santa Ana project can be in production by the later part of 2012;
• Proven and Probable Mineral Reserves containing 63.2 million ounces of silver at Santa Ana;
• Santa Ana Project pre-tax NPV of $85.3 million at a 5% discount rate and IRR of 25.3% at
$14.50 per ounce silver. After tax net present value of $66.5 million and IRR 21.8%;
• 11 year mine life producing 44.2 million ounces of silver;
• Average annual saleable silver production of 4.6 million ounces per year for the first 6 years;
• Cash cost of $9.02 per ounce silver for the 11 years LOM;
• Capital costs of $68.8 million with Capital Payback in 3.4 years at $14.50/ oz Ag.;
• At $22.92 per ounce silver the project would have a pre-tax IRR of 70.2% and an NPV at 5%
of $341 million. On an after tax basis the IRR would be 52.6% and NPV $232 million;
• At current silver prices of $22.92 per ounce, free cash flow estimated at $46 million per year
for the first 6 years with a 1.4 year pay back;
• Numerous upside opportunities being explored including increase of silver recovery through
finer crushing, reductions in cash costs, and an extended mine life plan to include an
additional 35.7 million ounces silver; and
• The Santa Ana deposit remains open, mainly at depth and to the north where the
northernmost holes contain up to 22 meters @ 124 g/t Ag from surface.
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20 Recommendations
The authors of this Technical Report on the Feasibility of the Santa Ana Project recommend
proceeding with detailed engineering and permitting.
The study has identified areas of opportunities that will be analysed in later engineering studies and
test work:
Reduce the crush size to improve recovery and leaching rate. Produce “trade-off” studies to
examine required additional capital expenditures and crushing costs versus benefits in the form of
reduced cash costs per ounce of silver.
Investigate reducing the process plant footprint to reduce capital costs; and
As the sensitivity analysis shows, the project is sensitive to operating costs. BCM and its
consultants will explore different ways to reduce operating costs mainly by reducing reagent
consumption in the process during operations.
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Date: October 2010
21 References
The following documents were utilized in the development of this Technical Report.
Independent Mining Consultants, Inc., 2008: National Instrument 43-101 Technical Report, Santa
Ana Resource Estimate, prepared for Bear Creek Mining Corporation, 12 May 2008 and amended
in July of 2008.
Estudio Grau Abogados, letter outlining the property ownership at Santa Ana, prepared for Bear
Creek Mining Corporation, 19 October, 2010.
Ausenco Vector, 2010: Proyecto Santa Ana Informe de Ingenieria – Estudio de Factibilidad
Definitiva, prepared for Bear Creek Mining Corporation, 2010-Pending.
Ausenco Vector, 2010: Santa Ana Definitive Feasibility Study Pit Slope Design, prepared for Bear
Creek Mining Corporation, 2010-Pending.
Ausenco Vector, 2010: Santa Ana Definitive Feasibility Study Seismic Hazard Study, prepared for
Bear Creek Mining Corporation, 2010-Pending.
Ausenco Vector, 2010: Definitive Feasibility Study Hydrological and Hydrogeological Report Santa
Ana Project, prepared for Bear Creek Mining Corporation, 2010-Pending.
Ausenco Vector, 2010: Estudio de Drenaje Acido de Roca, Proyecto Santa Ana, prepared for Bear
Creek Mining Corporation, 2010-Pending.
Ausenco Vector, 2010: Estudio de Impacto Ambiental Proyecto Santa Ana, prepared for Bear Creek
Mining Corporation, 2010-Pending.
Heap Leaching Consulting S.A.C., 2010: Estudio de Factibilidad para el Procesamiento Metalurgico
de 10,000 MTPD Proyecto Santa Ana, Procesos y Facilidades, prepared for Ausenco Vector, 14
August 2010.
Heap Leaching Consulting S.A.C., 2010: Estudio de Factibilidad para el Laboratorio de Analisis
Quimico, Proyecto Santa Ana, Procesos y Facilidades, prepared for Ausenco Vector, 2010-
Pending.
Heap Leaching Consulting S.A.C., 2010: Estudio de Factibilidad para la Planta de Tratamiento de
Aguas Acidas, Proyecto Santa Ana, Procesos y Facilidades, prepared for Ausenco Vector, 2010-
Pending.
Heap Leaching Consulting S.A.C., 2010: Estudio de Factibilidad para Agua Potable, Red de
Alcantarillado y Tratamiento de Aguas Residuales, Proyecto Santa Ana, Procesos y Facilidades,
prepared for Ausenco Vector, 2010-Pending.
Heap Leaching Consulting S.A.C., 2010: Estudio de Factibilidad para Servicios Complimentarios,
Proyecto Santa Ana, Procesos y Facilidades, prepared for Ausenco Vector, 2010-Pending.
Samuel Engineering, Inc., 2010: Santa Ana Water Supply Pipeline Study, prepared for Ausenco
Vector, 2010-Pending.
Rev: 0
Date: October 2010
Promotora de Proyectos S.A.C., 2010: Estudio de Factibilidad, Línea de Transmisión 60 kV
Subestación Pomata – Subestación Santa Ana y Subestaciones, prepared for Ausenco Vector,
2010-Pending.
Rev: 0
Date: October 2010
22 Date and Certificates of Authors
The date of this report is: 21st October 2010.
The certificates of John Marek, Scott Elfen, Sean Currie, Deepak Malhotra and Thomas Wohlford
follow. Mr. Wohlford visited the site most recently in July 2010. The other authors have relied on his
observations during that site visit to augment and confirm the current status of the deposit.
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Date: October 2010
23 Additional Requirements for Technical Reports on Development Properties
23.1 Mining
23.1.1 Summary
Santa Ana is planned to be mined using conventional open pit hard rock methods to deliver 3,600 kt
of ore per year (10,000 tpd) to the crusher for heap leach processing. The total material movement
at the mine is planned to be around 12,500 kt per year (34,725 tpd) for years 1 through 5. After that
time the waste stripping requirements begin to taper down.
Mining will utilize 5m benches. Drilling and blasting is planned for all material to be moved. Blast
hole sampling and assaying will be required for ore control within the pit. Bear Creek currently plans
to utilize a mining contractor at Santa Ana. An estimate of contract mining cost has been developed
for this study based on the direct operating costs of standard mining equipment combined with
contractor equipment ownership costs and profit margin.
The major mine equipment that was the basis of the study includes:
• 3 - Blast Hole Drills with 45,000lb pull down and 6 inch bits;
• 3 - 8.6 cubic meter front end loaders;
• Up to 14 - 63 metric tonne trucks; and
• Appropriate mine auxiliary and support equipment is also planned and scheduled.
The mine production schedule is summarized on Table 23.1. The annual mine plan and waste
storage drawings are summarized on Tables 23.6 through 23.16. Three quarterly mine plans were
developed for the preproduction period and Year 1 of the mine plan, however, only the annual plans
are presented in this text for brevity.
23.1.2 Introduction
Independent Mining Consultants, Inc. developed the mine plan, equipment requirements, capital
costs, and contractor operating costs. Preproduction stripping costs were calculated as part of the
operating costs; however, they have been treated as capital costs within the project financial
analysis.
The process cost and recovery input information to the mine plan was provided to IMC by Bear
Creek personnel working with the process testing and design team members.
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Date: October 2010
Table 23.1A
Mine Production Schedule
Low Grade at
Crusher Feed Total
27 g
Time
To
Period Cutoff Ore Silver Silver Waste Material
Stockpile
(g/t) (kt) (g/t) (kt) (g/t) (kt) (kt)
Preproduction
23 23
Q1
Preproduction
34 37 52.6 16 29.9 599 652
Q2
Preproduction
34 182 49.3 67 30.5 1,260 1,509
Q3
Preproduction
34 196 49.0 100 30.4 1,115 1,411
Q4
Y1, Q1 34 721 51.8 254 30.7 2,085 3,060
Y1, Q2 34 791 56.4 269 30.5 2,000 3,060
Y1, Q3 34 832 62.1 219 30.5 2,009 3,060
Y1, Q4 34 841 66.5 173 30.4 2,046 3,060
Y2 30 3,600 60.5 329 28.4 8,571 12,500
Y3 32 3,600 59.1 494 29.6 8,606 12,700
Y4 33 3,600 57.6 953 30.0 8,147 12,700
Y5 28 3,600 59.0 90 27.5 8,550 12,240
Y6 24 3,600 55.6 7,725 11,325
Y7 24 3,600 53.1 7,552 11,152
Y8 24 3,600 49.7 5,844 9,444
Y9 24 3,600 47.0 4,706 8,306
Y10 24 1,713 44.8 1,789 3,502
Total 34,113 55.0 2,964 29.9 72,627 109,704
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Table 23.1B
Crusher Feed
Time
Cutoff Ore Silver
Period
(g/t) (kt) (g/t)
Preproduction
Q1
Preproduction
34
Q2
Preproduction
34
Q3
Preproduction
34
Q4
Y1, Q1 34 900 51.3
Y1, Q2 34 900 55.6
Y1, Q3 34 900 61.1
Y1, Q4 34 900 65.4
Y2 30 3,600 60.5
Y3 32 3,600 59.1
Y4 33 3,600 57.6
Y5 28 3,600 59.0
Y6 24 3,600 55.6
Y7 24 3,600 53.1
Y8 24 3,600 49.7
Y9 24 3,600 47.0
Y10 24 3,600 37.0
Y11 1,077 29.9
Total 37,077 53.0
23.1.3 Project Production Rate Consideration

Alternative production rates were evaluated by IMC and Bear Creek during the PEA evaluation in
2009. No further evaluation of production rate alternatives was required at this time. The feasibility
mine plans focus on producing 10,000 tpd of ore to the crusher.
23.1.4 Economic Pit Limits

As discussed in Section 17, the floating cone algorithm was used as a guide to the development of
the final pit and mine pushback designs. Economic and process recovery information that was used
as input to the mine design cones was summarized on Table 17.4.
The mining cost was based on the results from the PEA study including the haulage between the
crushing plant and the heap leach. Processing costs were provided by Bear Creek based on work
from the process contractor (HLC, 2010). The slope angles for the cones were based on the
Ausenco Vector Pit Slope Design report (Ausenco Vector, 2010) with a reduction in slope angle to
reflect the impacts of haul roads in the cones. These parameters and the resulting cone geometries
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were used to guide phase design and final pit design. They are not intended to represent
engineered cost and stability estimates or to be used for financial analysis.
Figure 23.1 illustrates the cone produced at the silver price of $13.00/oz. This cone was used as a
guide to design the final pit.
Cones were generated for silver prices ranging from $5.00/oz to $15.00/oz. Cones run at silver
prices lower than $13.00/oz. were used to determine the regions containing the most valuable
material. Figure 23.2 shows nested cones between $8.00 /oz and $13.00/oz silver sliced at the
4200 bench elevation.
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Figure 23.1
Floating Cone Guide to Final Pit Design (at $13.00 Ag)
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Figure 23.2
Nested Cones on the 4200 Level
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23.1.5 Phase Designs
A total of six phases were designed for the development of a practical mine production schedule.
The sequence of the phase geometries corresponds with cones of increasing silver price allowing
the more valuable material to be mined earlier in the mine life. Phases were designed with proper
equipment operating room, working geometries and access roads.
The following criteria were followed in designing the phases:
• Bench Height: 5 meters

• Interramp Slope Angle: 40 degrees
• Haul Road Width: 21 meters
• Haul Road Gradient: 10 percent
• Minimum pushback width: ~100 meters
A minimum pushback width of 100 meters was chosen to provide adequate working room and to
allow for access to multiple ore zones on a single bench.
In order to minimize preproduction stripping and at the same time provide adequate ore on a single
bench once production begins, the size of Phase 1 was adjusted to contain a year and a half of ore.
This also provides an ore cushion if there is a delay in opening the subsequent phase.
Figure 23.3 illustrates the ultimate pit design. It can be compared with Figure 23.1, the floating cone
at $13.00/oz silver.
Figure 23.4 shows the phases sliced at the 4200m bench level to be compared with the cones
sliced at the 4200 level in Figure 23.2.
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Figure 23.3
Ultimate Pit Configuration
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Figure 23.4
Pit Phase at the 4200 m Bench
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23.1.6 Mine Plan and Production Schedules
The mine production schedule was developed from the previously described model and mine phase
designs. The schedule was developed to deliver 3,600 kt of ore per year (10,000 tpd) to two semi-
mobile crushers and then to a leach pad. Pre-stripping of later phases is scheduled simultaneously
with mining of ore in earlier phases to ensure sustained ore release to the crushers throughout the
mine life.
Table 23.1 summarizes the scheduled movement of ore, low-grade ore, and waste by year over the
mine life. Pre-production and the first year of production are broken out into quarters to show
greater detail. A graphic of the mine schedule is presented in the first graph of
Figure 23.5. The remaining graphs show the feed to the mill and contained/recovered silver.
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Figure 23.5
Graphic Summary Mine Production Schedule
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23.1.6.1 Description of the Schedule
For the first five years of mine life, the cutoff grade for ore has been raised above the breakeven
cutoff of 30 g/t. The cutoff for each year in the schedule was established to maximize the project’s
return on investment.
The cutoff strategy produces an improved net present value for the project compared to other cutoff
strategies that were considered. To evaluate the schedule, the same economics were used as for
running floating cones that were shown on Table 17.5. When creating the schedule, loader
capacities were also considered in order to prevent scheduling material movement rates that
required fractional pieces of equipment.
The cutoff grade for low grade material in the first five years is increased from the internal cutoff of
24 g/t to 27 g/t to account for an added $0.88/tonne cost to rehandle material from the low-grade
stockpile to the crusher. Ore from the low-grade stockpile is sent to the crusher during year 10 and
year 11.
The mine schedule shows little material movement in the first quarter of preproduction. This quarter
is set aside for the construction of mine access roads. The ore that is mined in stripping during the
next three quarters of preproduction is stockpiled near the crushers to be combined with ore mined
in year one to provide the crushers with a constant feed of 10,000 tpd during Year 1.
During preproduction, both Phase 1 and Phase 2 are opened in an effort to release enough ore to
sustain the crusher feed in Year 1. These two phases are not adjacent to each other so the initial
year appears as two separate pit operations.
Figures 23.6 through 23-16 illustrate the mine and waste storage plan.
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Figure 23.6
Phase Open Pit at the End of Preproduction
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Figure 23.7
Phase Open Pit End Year 1
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Figure 23.8
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Figure 23.9
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Figure 23.10
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Figure 23.11
Phased Open pit End Year 5
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Figure 23.12
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Figure 23.13
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Figure 23.14
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Figure 23.15
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Figure 23.16
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23.1.6.2 Alternative Mine Schedules
The Santa Ana pit design and production schedule was developed to maximize the project return
with $13.00 / oz silver. Changes in the silver price could change the mine strategy to match the
conditions.
A prolonged down turn in the silver price would result in a shorter mine life with a cash cost per
ounce around $8.00/oz silver. A sustained long term price of around $19.00/ounce would result in
an extension of the mine life to take advantage of the substantial tonnage of lower grade material
that surrounds the Santa Ana feasibility pit.
All three of the mine schedules: 1) Feasibility, 2) Low Tonnage, and 3) Large Tonnage utilized the
same pushback designs for the first 3 pushbacks. Consequently, the decision to change the
strategic course of the mine can be made as late as year 2 or 3. Consequently, implementation of
the base case Feasibility Schedule on Table 23.1 can be modified after start up to deal with a range
of economic conditions. The mine plan provides substantial flexibility to deal with both positive and
negative changes in the silver price.
Table 23.2 summarizes the Low Tonnage, low cost pit that could be utilized in a low silver price
condition.
Table 23.3 summarizes the Large Tonnage, long life pit option should silver prices enjoy a
prolonged up turn.
Table 23.2A
Production Schedule for Potential Low Tonnage Pit
Crusher Feed Low Grade at 27 g

Time Cutoff Waste Total
Period (g/t) Ore Silver To Stockpile Silver (kt) Material
(kt) (g/t) (kt) (g/t)
Preproduction 30 495 45.0 3,105 3,600
Y1 30 3,105 55.4 7,945 11,050
Y2 30 3,600 62.1 7,450 11,050
Y3 30 3,600 56.5 8,210 11,810
No Low Grade Stockpile
Y4 30 3,600 52.5 6,676 10,276
Y5 30 3,600 61.0 5,632 9,232
Y6 30 1,971 65.7 3,420 5,391
Total 19,971 58.1 42,438 62,409
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Table 23.2B
Crusher Feed
Time Cutoff
(kt) (g/t)
Preproduction 30
Y1 30 3,600 54.0
Y2 30 3,600 62.1
Y3 30 3,600 56.5
Y4 30 3,600 52.5
Y5 30 3,600 61.0
Y6 30 1,971 65.7
Total 19,971 58.1
Table 23.3A
Production Schedule for Potential Large Tonnage Pit
Crusher Feed Low Grade at 27g

Total
Time Cutoff To Waste
Ore Silver Silver Material
Period (g/t) Stockpile (kt)
(kt) (g/t) (g/t) (kt)
(kt)
Preproduction 30 887 53.8 252 24.3 1,884 3,023
Y1 30 2,713 56.5 650 24.7 7,962 11,325
Y2 30 3,600 56.5 1,551 24.5 8,439 13,590
Y3 30 3,600 60.2 1,116 24.7 8,874 13,590
Y4 28 3,600 59.6 726 23.4 9,264 13,590
Y5 27 3,600 55.9 913 22.9 9,077 13,590
Y6 27 3,600 51.1 939 22.9 9,051 13,590
Y7 27 3,600 51.8 839 22.9 9,151 13,590
Y8 27 3,600 51.7 909 23.2 7,776 12,285
Y9 25 3,600 45.0 831 22.2 6,894 11,325
Y10 20 3,600 45.1 64 19.5 5,396 9,060
Y11 19 3,600 46.6 5,460 9,060
Y12 19 3,600 41.0 5,460 9,060
Y13 19 3,600 38.9 7,234 10,834
Y14 19 3,600 40.3 8,905 12,505
Y15 19 3,600 42.6 6,572 10,172
Y16 19 3,600 45.7 4,855 8,455
Y17 19 729 45.3 1,127 1,856
Total 58,329 49.2 8,790 23.6 123,381 190,500
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Table 23.3B
Crusher Feed
Time Cutoff
(kt) (g/t)
Preproduction 30
Y1 30 3,600 55.8
Y2 30 3,600 56.5
Y3 30 3,600 60.2
Y4 28 3,600 59.6
Y5 27 3,600 55.9
Y6 27 3,600 51.1
Y7 27 3,600 51.8
Y8 27 3,600 51.7
Y9 25 3,600 45.0
Y10 20 3,600 45.1
Y11 19 3,600 46.6
Y12 19 3,600 41.0
Y13 19 3,600 38.9
Y14 19 3,600 40.3
Y15 19 3,600 42.6
Y16 19 3,600 45.7
Y17 19 3,600 28.0
Y18 3,600 23.6
Y19 2,319 23.6
Total 67,119 45.8
23.1.7 Waste and Stockpile Storage

Waste from the mine is sent to a single waste dump southwest of the pit while low-grade material is
sent to a low-grade stockpile northeast of the pit during the first five years of production.
The time sequence illustrations of the mine and material storage plans are shown in
Figures 23.6 through 23.16. They illustrate the material storage as described in the following
paragraphs.
The waste storage area shown the Figure 23.6 to 23.16 annual maps do not reflect the final
reclamation geometry as illustrated later in Section 23.21. The waste dumps on the mine plan
drawings were used to calculate storage volumes and hauling distances.
Uneconomic rock mined from the open pit is hauled to the storage area and dumped from a
constant elevation of 4255 meters. It is constructed in a semicircular shape by increasing the radius
with the addition of waste. This geometry results in the shortest haul distance possible over the
mine life. At the crest, the dump has a final radius of 713 meters and a maximum elevation for this
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single lift case is 85 meters. Prior to construction of the dump, all top soil is to be removed from the
footprint of the toe to be used in reclamation.
The low-grade stockpile is stacked from the bottom up in 5 meter lifts. The first lift is dumped at the
4190 meter elevation and the crest of the final lift is at 4220 meters. Construction of the dump
begins in preproduction and ends in year five. The stockpile is re-mined in years ten and eleven to
be sent to the crusher.
23.1.8 Mine Operations and Equipment

Mine mobile equipment was selected to meet the production requirements as outlined on Table
23.4. Mine equipment was selected on the basis of establishing an efficient, safe, and low cost mine
operation. Bear Creek currently contemplates using a mining contractor and as such, the selection
of the mining equipment fleet will actually be established by that contractor.
The approach applied to this study was to select the most efficient fleet as if the project were to be
owner operated. The costs of operating that equipment were then converted to contractor costs
including ownership and profit markup.
Mining is schedule for 360 days/year, and 3 shifts per day of 8 hours duration. Four crews will be
required to maintain the shift schedule. The ramp up of scheduled shifts during preproduction is
planned as follows:
• Preproduction Quarter 1: 60 Shifts/Qtr

• Preproduction Quarters 2 through 4: 180 Shifts/Qtr, 2 Shifts/day
• Years 1 through 10: 1080 Shifts/Year, 3 Shifts/day
It has been assumed that there will be 7 hours worked during a shift with a standard efficiency of 50
minutes per hour resulting in 350 operating minutes per shift. This term is sometimes referred to as
effective time per shift. All equipment productivities reported herein are based on 350 operating
minutes per shift.
The in-place material densities were presented in Section 17 Mineral Resources and Mineral
Reserve Estimates. A 40% swell factor and 2.5% in-situ moisture content has been used for all
equipment calculations. The material will re-compact slightly on the waste dumps so that a 30%
swell from in-situ has been used for waste dump design.
There are two components or functions that will be completed with the mine equipment.
• Mining from the pit and delivery of ore to the crusher, low grade to the stockpile, and waste to
the waste storage facility; and
• Haulage of the crushed material from the crusher to the heap leach pad and spreading of the
material with a dozer on the heap leach pad.
The following discussion of equipment addresses the open pit mining.
Drilling will be completed with conventional track mounted blasthole drills. Pull down levels of
45,000 lbs (100,000 kg) were judged to be appropriate for the material at Santa Ana with bit
diameters of 6 inches (15.25 cm). Drillholes will be sampled and assayed for ore control Holes will
be loaded with ANFO and blasted prior to loading.
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Loading is planned to utilize front-end loaders with 8.6 cubic meter buckets. Loaders were selected
to match the production requirements and to utilize their mobility when dealing with multiple
pushbacks. The front-end loaders will also be used for auxiliary functions including minor rehandling
at the crusher stockpile and mine road construction etc.
Haulage is planned with 63t haul trucks for all material.
Track dozers are 310 HP (D8 Class) units and graders are 14ft moldboard (Cat 14m class). A
50,000 liter water truck is provided for dust suppression. A drill for pioneering and secondary
breakage is provided along with a 2 cubic meter excavator for general mine support.
Other minor support equipment is also provided in the equipment list. The minor items include but
are not limited to items such as: lube and fuel trucks, light plants, pickups, blasting trucks, and
loader-tire handlers.
Once the ore has been crushed, it will be delivered by conveyor to a haul truck for transport to the
heap leach pad. A front end loader will not be required to load the leach trucks. The same 63t haul
trucks will be used for this task. For most years, 2 or 3 additional trucks will be working to deliver
material to the heap.
A D8 Class dozer equipped with a ripper is allocated to the leach pad for spreading, ripping and
preparing the material on the pads.
Table 23.4 summarizes the major mine equipment. The top of the table presents the mine
equipment, and the lower portion summarizes the equipment for the heap leach haul and spreading.
The estimated contractor personnel to operate and maintain the equipment is summarized on Table
23.5. Contractor supervisory staff is also shown on the table.
The owners supervisory, engineering, and geology staff at the mine are not included in the
personnel list on Table 23.5 because they are included in the owner’s cost.
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Table 23.4
Mine Major Equipment Fleets for Development of Contractor Costs
Mine Major Equipment Fleet On Hand for Primary Mine Operations
Equipment Type ppq1 ppq2 ppq3 ppq4 yr1q1 yq1q2 yr1q3 yr1q4 2 3 4 5 6 7 8 9 10 11
Blast Hole Drill, 45,000 lb pull down 1 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 0
Wheel Loader, 8.6 cu meter 1 1 2 2 3 3 3 3 3 3 3 3 3 3 2 2 2 2
Haul Truck, 63 tonne 1 3 6 7 9 9 9 9 10 11 11 11 11 11 11 11 11 11
310 HP Track Dozer 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3
14 FT Motor Grader 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2
50000 Ltr Water Trk 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Atlas Copco ROC D7 Drill 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
2 Cu Yd Excavator 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
TOTAL 9 13 18 19 23 23 23 23 24 25 25 25 25 25 24 24 24 21
Mine Major Equipment Fleet On Hand for Heap Leach Loading, Hauling, Dozing, and Ripping
Equipment Type ppq1 ppq2 ppq3 ppq4 yr1q1 yq1q2 yr1q3 yr1q4 2 3 4 5 6 7 8 9 10 11
Haul Truck, 63 tonne 0 0 0 0 2 2 2 2 2 2 2 3 3 3 3 3 3 3

310 HP Track Dozer 0 0 0 0 1 1 1 1 1 1 1 1 1 1 1 1 1 1
TOTAL 0 0 0 0 3 3 3 3 3 3 3 4 4 4 4 4 4 4
Notes:
Replacements for haul trucks have considered the combined fleet from both the mine and the leach haul
Contractors will utilize alternative equipment, The fleet and equipment types above are recommendations for an efficient operation
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Table 23.5
Contractor Manpower Requirements
Contractor Salaried Staff Labor Requirements
JOB TITLE ppq1 ppq2 ppq3 ppq4 yr1q1 yq1q2 yr1q3 yr1q4 2 3 4 5 6 7 8 9 10 11
Secretaries / Clerks 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Mine General Foreman 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Mine Shift Foreman 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
Drill & Blast Foreman 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Maintenance General Foreman 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1
Maintenance Foreman 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4
TOTAL STAFF PERSONNEL 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12 12
Hourly Labor Requirements for Primary Mining Operations
MINE OPERATIONS:
Drill Operator 3 4 8 8 12 12 12 12 12 12 12 12 8 8 8 8 4 0
Loader Operator 3 4 8 8 12 12 12 12 12 12 12 12 8 8 8 8 4 4
Haul Truck Driver 3 12 20 20 28 28 32 32 32 36 36 32 28 28 24 24 12 8
Track Dozer Operator 6 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 8 4
Grader Operator 3 4 4 4 8 8 8 8 8 8 8 8 8 8 8 8 8 4
Service Crew 2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 2
Blasting Crew 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 4 0
Laborer 4 4 4 4 8 8 8 8 8 8 8 8 8 8 8 8 8 2
Operations Total 28 43 59 59 83 83 87 87 87 91 91 87 75 75 71 71 51 24
MINE MAINTENANCE:
Mechanic 2 8 12 12 14 14 14 16 16 16 16 16 14 14 12 12 8 10
Mechanic's Helper 1 4 6 6 7 7 7 8 8 8 8 8 7 7 6 6 4 5
Welder 1 4 6 6 7 7 7 8 8 8 8 8 7 7 6 6 4 5
Electrician 1 4 6 6 7 7 7 7 8 8 8 8 7 7 6 6 4 5
Fuel & Lube Man 6 6 6 6 8 8 8 8 8 8 8 8 8 8 8 8 4 1
Tire Man 6 6 6 6 8 8 8 8 8 8 8 8 8 8 8 8 4
Laborer 6 6 6 6 8 8 8 8 8 8 8 8 8 8 8 8 4
Maintenance Total 23 38 48 48 59 59 59 63 64 64 64 64 59 59 54 54 32 26
VS&A at 5 8 11 11 14 14 15 15 15 16 16 15 13 13 13 13 9 5
TOTAL LABOR REQUIREMENT 56 89 118 118 156 156 161 165 166 171 171 166 147 147 138 138 92 55
Maint/Operations Ratio 0.82 0.88 0.81 0.81 0.71 0.71 0.68 0.72 0.74 0.70 0.70 0.74 0.79 0.79 0.76 0.76 0.63 1.08
Hourly Labor Requirements for Leach Loading, Hauling, Dozing, and Ripping
MINE OPERATIONS:
Haul Truck Driver 8 8 8 8 8 8 8 8 12 12 12 12 12 12
Track Dozer Operator 4 4 4 4 4 4 4 4 4 4 4 4 4 4
Operations Total 12 12 12 12 12 12 12 12 16 16 16 16 16 16
MINE MAINTENANCE:
Mechanic 2 2 2 2 2 2 2 2 4 4 4 4 4 4
Mechanic's Helper 1 1 1 1 1 1 1 1 2 2 2 2 2 2
Welder 1 1 1 1 1 1 1 1 2 2 2 2 2 2
Electrician 1 1 1 1 1 1 1 1 2 2 2 2 2 2
Maintenance Total 5 5 5 5 5 5 5 5 10 10 10 10 10 10
VS&A at 2 2 2 2 2 2 2 2 3 3 3 3 3 3
TOTAL LABOR REQUIREMENT FOR LEACH HAULAGE 19 19 19 19 19 19 19 19 29 29 29 29 29 29
Maint/Operations Ratio 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.42 0.63 0.63 0.63 0.63 0.63 0.63
Notes:
1. Service Crew operates Rock Drill, Excavators, Water Truck, etc.
2. VSA Basis: 10%
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23.2 Mineral Processing
Heap Leaching Consulting in coordination with Ausenco-Vector prepared the design criteria for the
metallurgical process considering information related to plant capacity and operating conditions.
The information used in the design criteria was obtained from field work, metallurgical testing
programs, and leach pad design prepared by Vector. Some data was assumed from experience on
similar projects and from mathematical calculation.
The basic process consists of material from the open pit transported to the crushing plant, which will
comprise two crushing stages and one classification stage. The final crushed ore product will
consist of 80 percent passing 19mm and will be conveyed to the temporary stockpile. The reclaim
system will consist of one fixed conveyor stockpile to withdraw material from the stockpile and
deliver onto trucks. Trucks will transport the ore from the stockpile to the heap leach pad, which will
receive 10,000 tpd of ore containing 53 g/t of silver. A sodium cyanide solution will be drip irrigated
on the heap to dissolve silver minerals. The estimated dissolution of silver is 70% and the pregnant
solution will flow to the Merrill-Crowe plant to produce a precipitate, which will be smelted to
produce a silver/gold doré bar.
23.2.1 Flowsheets
The project process flowsheet development considered the design criteria, field work, leach pad
design, water system distribution and electric system distribution as inputs; plus, smelting, reagent
system preparation, effluents detoxification, water distribution and plant facilities for a heap leaching
process to recover precious metals. The Merrill-Crowe process was selected as the optimum
alternative to recover the precious metals as a precipitate. The precipitate will be sent to the
retorting stage, and finally will be smelted to produce a Dore bar. The process flowsheet developed
for the feasibility study is provided as Figure 23.17 (full flow sheet in Figure 24.2).
23.2.2 Mass Balance

The parameters determined in the design criteria were used to calculate the mass balance of the
process: leaching, Merrill-Crowe Plant, smelting, reagents handling, effluent detoxification process,
water distribution, and plant facilities. The information obtained was used to select the appropriate
equipment and flow streams for the metallurgical process as illustrated in Figure 23.17.
23.2.3 Piping and Instrumentation

Based on the information obtained on the leaching process, mechanical area, piping and
instrumentation, the piping and instrumentation diagrams were developed. The diagrams include
mechanical equipment, instrumentation equipment, piping, valves, effluent detoxification plant
equipment, water distribution and plant facilities.
23.2.4 Production Plan

The production plant was prepared using the mine plan prepared by IMC and consists of periods of
three months until the ore reserves are exhausted and the additional time required to reach
maximum dissolution of silver bearing minerals. The metallurgical recovery of silver by the leaching
process is 70% with leaching periods of 120 days for the primary leach cycle and a total leach time
of 360 days. The estimated monthly production is 306,255 ounces of silver.
23.2.5 Process Description

The metallurgical process comprises the following operations: ore crushing, ore transportation to
the leach pad, leach pad irrigation, leaching solutions handling, zinc dust precipitation, smelting and
gases treatment.
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23.2.5.1 Crushing
Run of Mine Ore (ROM) will be delivered by 63t haul trucks to the dump pocket of a single jaw
crusher located to the west of the pit. The installation was designed to allow one truck to approach
the dump pocket. The discharge from the dump pocket will flow by gravity to the apron feeder. The
apron feeder will discharge onto a grizzly with a 200 mm nominal spacing. The feeder will be
employed to feed the primary crusher. The primary crusher and grizzly feeder undersize products
will be sent to a vibrating screen in an open circuit with a cone crusher. The cone crusher will be
operated with an approximate 20-mm closed side setting to ensure that the final screen undersize
product will be 80% passing 19-mm. The screen undersize product will be dropped onto an
overland conveyor provided with a belt scale. A simplified flowsheet is provided as Figure 23.17.
A hydraulic rock breaker will be installed to clear crusher blockages caused by oversized rocks.
Chains are to be installed on the base of the crusher dump pocket before operations commence to
allow break up of impacted rocks prior to maintenance around the top of the crusher. The primary
and secondary crusher service pedestal crane will be located adjacent to the crusher to service
equipment located around and within the crusher structure. A metal detector and belt magnet at the
discharge conveyor that feeds the screen will be used as tramp metal protection system.
Coarse ore from the overland conveyor will be fed to the coarse ore stockpile with a live capacity of
approximately 6-hrs (3,000t) and dead capacity of one day. The desired design basis for the
stockpile is to provide sufficient ore capacity to allow for one day down time. The conical coarse ore
stockpile will not be covered. The reclaim system will consist of one fixed conveyor stockpile to
withdraw material from the stockpile and deliver onto trucks and a radial stacker building the coarse
ore.
The parameters used to design the crushing circuit are listed below,
• Total capacity, 10,000 t/d

• Capacity, 555 t/hr
• Maximum particle size, 24-inch
• Final product, 80% passing ¾-inch (19-mm)
• Low Energy Impact Test, 10.3 kw-hr/t
• BBWI, 17.1 kw-hr/t
• Abrasion index, 0.0539
• Specific Gravity, 2.43
• Bulk density, 1.65
• Ore moisture, 3-4%
• Operation, 18 hr per day.
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Figure 23.17
Santa Ana Heap Crushing Flowsheet
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Date: October 2010
23.2.6 Ore Transport
Crushed ore will be transported by 63t trucks to the leach pad and dumped into leach cells. The
material will be placed on the pad in 7m high lifts and pushed to the final placement with a dozer in
accordance with the stacking plan developed for the project heap leach pad. Prior to leaching the
top of the leach cell will be ripped by a dozer to ensure proper infiltration of the leach solutions.
23.2.7 Irrigation System

The design considers cells of approximately 50m x 120m (6,000 m2) with their respective flow lines
and drip irrigation system considering as initial point the distribution of manifolds, which will be
fabricated with schedule 40 steel pipe of 300mm diameter. There will be four distribution pipes of
150mm diameter that will be connected with an irrigation system.
The drip irrigation system comprises HDPE pipes of 150mm diameter and Lay Flat™ hoses of
100mm installed with hoses of 16mm diameter and drips of 4 litres per hour and separated by
63 cm.
23.2.8 Leaching
The leaching operation is a hydrometallurgical process of precious metals dissolution. The cyanide
solution is spread on the top of the ore heap using drip emitters and percolates through the pile.
Particles of silver and gold are dissolved. The pregnant solution flows to and collects in the
pregnant pond. The nominal flow of cyanide solution is 10 l/hr/m2 and the design is based on
11 l/hr/m2.
23.2.8.1 Cyanide Solution Pumping

The pH of the cyanide solution will be adjusted between 10.5 to11 and the cyanide concentration
will be adjusted to 1000ppm. Also, 4ppm of antiscalant will be added. The solution will be pumped
from the barren solution tank to the leach pad by means of one horizontal centrifugal pump. The
process design includes two pumps; one on-line and the other on standby. Each pump has an
adjustable-speed drive that varies the speed of the pump motor.
Once the solution is delivered to the pad, the main solution pipeline will be divided in two parts to
border the leach pad. Within the active leach cells irrigation systems will be installed. The solution
that feeds the barren tanks will come from the Merrill-Crowe process and the concentration of
cyanide will be adjusted to 1000 ppm.
The process water required will be taken from the barren pond, storm water pond or fresh make-up
water according to the requirement of the operation. One submergible pump will be installed in each
pond.
23.2.8.2 Pregnant Solution Collection

The pregnant solution that percolates through the leach pad will be collected in a pregnant pond
where floating vertical pumps will be installed. One pond is called pregnant pond and will collect
high grade solution and the other one is an intermediate pond and will receive low grade solution.
23.2.8.3 Pregnant Solution Pumping

The pregnant solution will be pumped to the unclarified solution tank using two submergible vertical
pumps. Each pump has an adjustable-speed drive that varies the speed of the pump motor. One of
the pumps is on-line while the other is a standby spare.
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The floating vertical pumps will be installed on barges equipped with a special maintenance system.
The barges will be steel platforms supported on floating polyethylene.
23.2.9 Merrill-Crowe Plant

The Merrill-Crowe process recovers silver and gold from the pregnant solution in form of precipitate.
Zinc powder is added to the clarified and deaerated pregnant solution to precipitate precious
metals.
The design has considered a Merrill-Crowe plant to treat 571 m3/hr of pregnant solution containing
silver and gold. The capacity of the plant assures the treatment of 10,000 tpd of silver ore from the
pit. The precipitation process comprises the following stages: clarification, deaeration and
precipitation with zinc dust. A simplified process flowsheet is provided as Figure 23.18.
23.2.9.1 Clarification
The unclarified pregnant solution will be pumped to the clarifiers at the rate of 571 m3/hr. The
design considers two centrifugal pumps, one operating and other in standby. Each pump has an
adjustable-speed drive that varies the speed of the pump motor. One of the pumps is on-line while
the other is a standby spare. Clarifiers are three leaf pressure filters, two operating and one in
standby.
When one filter is saturated, the flow of solution will be sent to the third filter. At this moment the
other filter will be cleaned and prepared to operate. This operation will be practiced in determined
periods in order to assure the constant feed of pregnant solution to the clarifiers and avoid
unexpected problems. It has been estimated that each filter will be cleaned 1 to 2 times daily. The
resultant solids will be collected and recycled to the leach pad by a pumping system.
Prior to the operation of the clarifying filter a pre-coat layer will be applied, this will be reinforced
with the addition of body feed. During the filtration cycle, solid particles will be retained and the
solution leaving the filter will contain 1 Nephelometric Turbidity Units (NTU) of suspended solids.
When one filter is out of operation, it will be cleaned by pumping barren solution or process water.
In this way, solids and remaining pre-coat will be removed.
23.2.9.2 Deaeration
The objective is to remove dissolved oxygen from the clarified solution. The elimination of oxygen is
important in the precipitation process because an excess of oxygen will oxidize zinc particles and
the efficiency of the precipitation process is affected. Other negative aspect is the presence of
excessive quantities of suspended solids in the solution, which may passivate the surface of zinc
particles.
A vacuum tower will be employed as deaeration unit and will be equipped with control levels,
distributor, support and fill. The vacuum is required to maintain a high vacuum within the tower and
removes the oxygen from the solution. The clarified and deaerated solution is withdrawn from the
bottom of the tower by a liquid sealed pump, which prevents re-entry of air.
The solutions from the clarifiers contain approximately 8-ppm of dissolved oxygen and pass down
while it is distributed around the diameter of the tower. The solution leaves the tower with less than
1-ppm of dissolved oxygen.
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Figure 23.18
Process Flowsheet
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23.2.9.3 Precipitation
Zinc dust is used to precipitate precious metals by means of an electrochemical reaction. Lead
nitrate is added to catalyse the reaction. Adequate zinc dust is required to provide a coherent
deposit on the filter surface through which the silver bearing solution passes, to make certain that
sufficiently close contact is made with the zinc particles to obtain maximum precipitation efficiency.
Zinc dust, lead nitrate and sodium cyanide solution will be added in an emulsifying tank.
The solution containing the precipitate will be pumped by means of liquid sealed centrifugal pumps
to the filter presses. The design considers two pumps with variable speed, one operating and other
in standby and its pumping capacity is 571 m3/hr of solution. The precipitate will be collected in
three filter presses, equipped with 55, 1200 mm x 1200 mm plates, and designed to treat 191 m3/hr
of solution. Two filters will operate and one will be in standby. The process flowsheet presented as
Figure 23-17 indicates a forth filter press may be added to the system in the future.
When one filter is saturated, the flow of solution will be sent to the third filter while the saturated
filter is discharged, cleaned and prepared to operate. This operation will be practiced in determined
periods in order to assure the constant feed of solution to the filters and avoid unexpected
problems. The resultant solids will be collected, dried, and sent to the retorting stage.
Before discharging the filter, air will be injected to reduce the moisture content of the precipitate.
The solution from the filters will be recycled to the barren solution tank.
23.2.10 Smelting Process

The smelting process has been designed to produce Silver/Gold Dore bars with high silver content
from the precipitates obtained through the Merrill-Crowe process. The smelting process includes
retorts to eliminate mercury, an induction furnace, a gases collection system and slag treatment.
23.2.10.1 Retorting
The precipitate from the filter press contains mercury, which comes from the leaching process and it
is recovered in the Merrill-Crowe plant. The design considers three retorts, which operate following
heating and cooling stages. Table 23.6 details the retort process.
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Table 23.6
Retorting Process
Temperature Time
Description
(co) (hours)
Initial heating 0 to 300 1.5
Maintain temperature 300 2
Final heating 300 to 540 3
Maintain temperature 540 4
Cooling 100 5.5
Total time 16
During the retorting process, air enters the retorts and collects all the gases. These gases will go to
a first condenser equipped with a water cooling system and metallic mercury is precipitated to the
mercury recovery tank. The gases report to a second condenser to assure the complete
precipitation of mercury. The system includes a column loaded with granular activated carbon to
collect any remaining mercury vapour. The retorting process will allow the release of gases without
mercury content to the atmosphere. A gas extractor system will help to remove the gases.
23.2.10.2 Smelting
An induction furnace will be used to smelt the precipitate. Upon completion of the retorting process,
the precipitate is dried and mixed with fluxes such as potassium nitrate, manganese dioxide, silica,
sodium carbonate and fluorite. The charge is loaded into the crucible. The smelting process takes
approximately 3 hours. The molten charge is poured in ingots and the final product of this process is
a doré bar with high content of silver.
The doré bars will be deposited in a safe room and will be transported to the market following a
schedule, which will be determined with taking the silver production into account.
The smelting process area includes a gas collection system to collect all the gases produced during
the smelting process.
23.2.11 Chemical Reagents

The chemical reagents that will be used in the process are lime, sodium hydroxide, sodium cyanide,
antiscalant, lead nitrate, and detoxification reagents (hydrogen peroxide, copper sulphate) to
destroy cyanide and precipitate some compounds in the cyanide detoxification process. The
reagents will be stored in three separated areas; one for lime, located near the leach pad; one for
cyanide and sodium hydroxide, located near the process plant; and the last one will be used to
store all the other reagents.
23.2.11.1 Lime Addition

Lime will be stored in a special area. One tonne bags will be transported by trucks near the crushing
plant and leach pad. The main lime addition point will be the crushing plant and a dry reagent
feeder will be used to add lime.
23.2.11.2 Sodium Hydroxide

Sodium hydroxide will be added to the sodium cyanide mix tank and the effluent detoxification
process. Sodium hydroxide will be received and stored as a powder in 25-kg bags. Water and
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sodium hydroxide are added to a mixing tank to achieve a concentration of 30 percent. The
preparation of sodium hydroxide will be completed in batches. A pump will be used to add sodium
hydroxide solution to the sodium cyanide preparation tank.
When the cyanide destruction plant operates, the sodium hydroxide solution will be pumped to the
plant.
23.2.11.3 Sodium Cyanide

Sodium cyanide will be received and stored as briquettes in 1-tonne bags. Process water and
sodium cyanide briquettes are mixed to achieve a concentration of 25 percent. A service hoist is
used to discharge the contents of the bags through a charge chute and into an agitating mix tank
with process water. The design considers two sodium cyanide preparation tanks.
Pumps transfer sodium cyanide from the mix tank to the storage tank. Any spillage in the cyanide
area is recovered in a sump and pumped to the mix tank. Circulating pumps provide a distribution
loop for sodium cyanide use in the leaching circuit and Merrill-Crowe plant. Sodium cyanide is
pumped through this loop at a controlled pressure. The unused solution returns to the storage tank.
The design considers two pumps with variable speed with a capacity of 20 m3/hr of solution.
23.2.11.4 Antiscalant
Antiscalant will be used to avoid the formation of precipitates in the pipes, equipment and
accessories of the process plant. The antiscalant solution will be added in the barren solution tank,
pregnant pond and storm water pond. The addition of antiscalant will be permanent in the first two
points.
The concentration of antiscalant must be maintained between 5 and 10 ppm in the leaching and
pregnant solutions.
23.2.11.5 Lead Nitrate

Process water and lead nitrate are mixed to achieve a concentration of 5 percent. The mixing tank
will have a capacity of 0.36 m3. The solution will be sent to the emulsifying tank.
23.2.11.6 Zinc Dust

The zinc dust feed system comprises one bin and one screw feeder, which feeds the material to the
emulsifying tank. The maximum capacity of the feeder will be 30.5 kg/hr and the estimated
consumption of zinc dust is 17 to 25 kg/hr.
23.2.11.7 Precoat
Process water and diatomaceous earth are mixed to achieve a concentration of 0.3 to 2 percent.
The mixing tank will have a capacity of 13.3 m3. The solution will be pumped to the clarifier filters or
filter presses to form a layer of 1.5 to 10-mm on the filtration medium. The solution will recirculate
between the pre-coat tank, clarifier filter or filter press.
23.2.11.8 Body Feed

Process water and diatomaceous earth are mixed to achieve a concentration of 0.5 to 5 percent.
The mix tank will have a capacity of 11 m3. The solution will be pumped to the clarifier filters.
23.2.11.9 Hydrogen Peroxide

Hydrogen peroxide will be used in the effluent detoxification plant to destroy cyanide.
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23.2.11.10 Copper Sulphate
Process water and copper sulphate are mixed to achieve a concentration of 5 percent. The mixing
tank will have a capacity of 200-m3. The solution will be pumped to the storage tank, which will have
two pumps for supply to the effluent detoxification plant.
23.2.11.11 Reagent Requirements

Lime and Sodium
Lime and Sodium Cyanide are the major reagents used in the heap leach Merrill-Crowe circuit.
Table 16.9 presents the primary reagent consumptions projected for the p80 19mm crush size.
Table 23.7
Primary Reagent Consumption
Reagent Consumption Addition Trim

Heap or Barren
Lime (@ 80% CaO) 3.0 kg/t Crushing
Solution
Sodium Cyanide 0.4 kg/t Barren Solution Barren Solution
The lime consumption was estimated from the test program. The p80 19-mm columns had pH
control problems at the initial addition rate of 2 kg/t. The 3.0 kg/t addition will assure that the heap
will maintain the pH at 10.5 or above. The sodium cyanide requirement was derived from the
column tests. Heap leach consumptions run from ¼ to 1/3 the column consumptions.
Other Reagents
The zinc powder requirement of 1g Zn/1g Ag was confirmed in tests at McClelland Laboratories,
and utilized in the feasibility study.
Operating Merrill-Crowe plants with the same tenor of silver in solution report requirements as low
as 0.6g Zn/1g Ag.
The reagent consumption was determined using information from metallurgical tests, stoichiometric
calculation and experience on similar projects.
23.3 Infrastructure
23.3.1 Power
Electrical power to the Santa Ana facilities will be provided from the Peruvian grid (Sistema
Electrico Interconectado Nacional - SEIN) by a new line to be built connecting the existing Pomata
substation in the town of Pomata to the Santa Ana substation. In addition, there will be 10kV
primary lines and distribution substations.
The electrical power transmission line will supply the power required for the future Santa Ana
operations with a power of 6MW.
The following facilities will be involved:
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• 60kV bars expansion of the existing Pomata substation and installation of connection
equipment for the 60kV line to the Santa Ana substation;
• 60kV transmission line from the existing Pomata substation to the Santa Ana substation,
about 48.55 km of a three-phase circuit with two guard wires;
• A new substation for the Santa Ana mining operation, which includes the installation of a
transformation cell (step-down cell) 60/10/4.16kV - 5/5/1.7MVA (ONAN), 6.25/6.25/2.13
(ONAF) and distribution cells in 10kV;
• Communication systems; and
• Emergency power will be provided by diesel generators.
23.3.2 Access Road

In order to develop the Santa Ana project, it will be necessary to improve the existing mine access
road between the existing interstate highway and the project site. Additional mine site roads will
also be necessary for daily operation of the mine.
In general terms, the roads included in this study have a total width of 7,2m including a diversion
ditch. The slopes along these access roads are generally intended to be kept between 4 and 10%.
Due to the relative steepness of the property some roadway sections will require slopes as great as
15% or more. Further details and technical data on the access road development are provided in
the DFS Engineering Design Report (Ausenco Vector, 2010).
23.3.2.1 Mine Access Road

Access to the project site is proposed as improvements to an existing rural road that comes from
the town of Huacullani and continues south, passing through the proposed Santa Ana mine site to
permit the mobilization of heavy equipment and materials along the entire 4.3km length. This road
improvement is relatively inexpensive as it gets closer to Huacullani, as the existing ground surface
is very flat and the road alignment does not present many horizontal curves. This road improvement
increases in costs as it approaches the mine site, where the ground is steeper and mainly rocky.
23.3.2.2 Main Haul Road

The main haul road runs from the end of the mine access road and has a total length of 1.3km until
it joins the perimeter access road of the leach pad. Its location and alignment are strategic since
complementary haul roads to the open pit and crusher join this access as well as the access road
that goes to the offices and camp site.
23.3.2.3 Auxiliary Access Road

These roads are divided into two alignments: the first auxiliary access road has a length of 2.4 km
starting from station 0+620 of the main haul road and finishing where the general offices are
located. The second auxiliary access road has a total length of 2.6 km and connects the west side
of the leach pad perimeter access road with the acid water treatment plant, after passing through
the general offices and camp site.
23.3.2.4 Diversion Access Road

A diversion access road is planned to permit continued access to the south for local residents while
maintaining proper mine site security and safety. This road alignment, a rerouting of existing traffic,
starts at the end point of the main access road, located at the north of the leach pad, going around
the upper slopes until it meets the existing road located on the south direction of the process ponds,
for a total length of 5.6 km.
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Figure 23.19 illustrates the general mine site arrangement including the proposed Diversion Access
road.
Figure 23.19
Access Roads General Layout
23.4 Geotechnical
The civil structures of the area, such as the leach pad, waste dump, solution ponds and process
plant, are located at an average elevation of 4200 m masl and cover an area bounded roughly by
the UTM coordinates: 8,159,000 to 8,156,500 mN and 464,500 to 468,500 mE. Five predominant
geotechnical (surficial) units have been identified within the project area.
23.4.1 Geotechnical Units

Moist grasslands composed of saturated moist organic soils have a surface thickness that varies
from 0.20 to 2.00 m. These soil units vary from very wet to saturated and are located, specifically,
along streams northeast and southeast of the leach pad, southeast of the waste facility area and
within the footprint of the process plant and solution ponds. This material will require removal where
it underlies project facilities.
Colluvial deposits are distributed around the toe of rocky outcrops covering much of the proposed
leach pad footprint and the access road alignments. Colluvium consists of soils whose formation
was caused by gravity, or natural landscape degradation. These deposits consist of clayey sand
with gravel, clayey gravel with sand and clay with gravel. Typical clay content consists of medium to
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high plasticity. Cohesionless material typically has loose to medium dense consistency. On-site
colluvium is generally in a moist condition, with angular gravel fragments and scattered cobbles and
boulders. Colluvium falls into the following Unified Soil Classification System (USCS) codes: SC,
GC and MS. These materials are suitable for foundations.
Less common are the alluvial deposits, which are present in small streams, tributaries and in the
lower reaches of the heap leach pad area and process pond footprints. Alluvium consists of a thin
layer of subangular gravel and sand, with some silt and clay. The alluvial soil is typically moderately
dense, and classifies as USCS codes GM, SC, SM and CL-ML.
Residual soils are the predominant geotechnical unit in the project area. Residual soils comprise
much of the near surface material underlying the waste dump, much of the leach pad, solution
ponds and process plant areas. Residual soil deposits are generated in situ through the alteration
processes of bedrock units and comprise generally clay and clayey sand with low to medium
plasticity, classified in the USCS as CL and SC. This unit is suitable for the heap leach pad, waste
dump, solution ponds and process plant foundations depending on the degree of compaction that is
required after stripping the surface.
During the investigation the presence of bedrock was determined through the mapping of rocky
outcrops, diamond drilling, and excavation of test pits. Bedrock is present at shallow depth in much
of the study area including the location of the leach pad, waste dump, solution ponds and process
plant. Bedrock underlying proposed project facilities is suitable for foundation purposes.
23.4.2 Piezometric Level

Based on field investigations within the proposed heap leach pad footprint, groundwater exists at
depths from 1.45 to 13.30 m below the current ground surface. Artesian conditions were recorded in
drillholeDH_SA10-107. In the area of waste rock facility the groundwater level was recorded
between 0.85 m and 53.0 m.
Groundwater was recorded during drilling between 0.0 m to 19.95 m in the area of the process plant
and solution ponds.
23.4.3 Foundation Level

During the geotechnical investigations a recommended depth of excavation to the foundation was
determined for the leach pad, waste dump, solution ponds and process plant. The criterion for this
depth was based primarily on finding a rigid non-yielding foundation resulting in minimal differential
settlement.
Based on these investigations, the heap leach pad may be founded on the surface of the residual
and colluvial soils deposits, bedrock and to a lesser extent alluvial deposits. According to drilling
results, bedrock is located 19.10 m below the existing ground surface in the central part of the pad
and less than 3.30 m in the northern and eastern sections. The bedrock ranges from 2.60 to
11.30 m in depth in the western section of the pad and is of very poor quality near the surface, but
improves with depth.
The waste dump foundation is at minimal depth and is on residual soil surface and bedrock. Drilling
indicates that the bedrock is between 1.0 and 4.0 m depth and is from very bad to bad quality at the
surface, improving with depth.
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The foundation level of the solution ponds is on residual and colluvial soils deposits, bedrock and to
a lesser extent alluvial deposits. Drilling indicates that the bedrock is between 1.0 to 3.40 m in
depth, and is very poor to poor quality at the surface, improving with depth.
The process plant is next to the solution ponds, and the foundation is on residual soils and bedrock.
Test pits and drilling indicate that the bedrock is found between 1.0 and 4.6 m in depth, and is of
very poor to poor quality, improving at depth.
The camp and offices are located approximately 500 m south of the solution ponds. The foundation
level is on bedrock and colluvial deposits. Test pits indicate that the foundation level is 1.0 m above
the colluvial material.
23.4.4 Open Pit / Pit Slopes

Geotechnical investigations were conducted for the Santa Ana open pit area, including: oriented
core drilling, geomechanical and oriented core logging, and surface outcrop mapping and sampling.
Select samples were delivered to a laboratory for estimating strength parameters of intact rock.
These parameters assist in slope stability analyses of the proposed pit walls.
The open pit area consists mainly of volcanic rocks, mostly andesite of porphyritic to aphanitic
texture, and post-mineralization tuffs in the northwest side. Other minor lithologies found were
quartz feldspar, hypabissal dikes, breccia and sandstone.
A structural control as part of a syncline with NW-SE trend was observed, which crosses the
southern part of the pit area. Predominant joint sets were found to strike NW, NS, EW and NE.
From the field and lab investigation the rock mass was geomechanically characterized, finding a
fractured to very fractured, but hard andesite; and low fractured but relatively weak post-
mineralization tuff.
Slope stability was first evaluated through kinematic analysis to define the maximum bench face
and interramp angles in each rock type, as a function of the potential sliding planes or wedges, and
then through limit equilibrium analysis to verify or optimize the proposed interramp angles by
analysing global slopes.
Recommended interramp slope angles are 40° for sectors of low RQD rock mass by using a
5 m single bench design, 43° for the post-mineralization tuff with high RQD and 44° for andesite
with high RQD, the last ones permitting the use of a 10-m double bench design.
For further optimization of the interramp slope angles, the geological model of the deposit and the
geomechanical database need to be improved. A more detailed RQD model can be completed after
training technical personnel to correctly gather this parameter in future drilling works, or as mining
progresses.
Open pit slope stability is sensitive to the estimated phreatic condition. Therefore, it is strongly
recommended to maintain the phreatic surface as far as possible from the slope faces by
implementing permanent horizontal drains and pumping water from the open pit bottom during
operation. Installation of piezometers around the final pit area is recommended for monitoring the
impact of the pumping and drainage measures during operation, and for permanent review of slope
stability.
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A monitoring program of displacements of the crest slopes, particularly those that are higher, is
recommended as stability oriented control through frequent surveying of control points in the slopes
from permanent survey stations.
23.4.5 Heap Leach Facility Construction

The leach pad and process ponds design was prepared by Vector in accordance with the design
criteria provided by BCM and complementary data calculated or obtained from the various field
campaigns. This design includes:
• Definition of the design parameters for the leach pad;

• Field geotechnical investigation;
• Development of the ore stacking plan;
• Stability analysis for the most critical sections;
• Hydrological and hydraulic calculations for diversion channels;
• Preparation of a water balance for the leach pad; and
• Earthworks volumes and materials quantities estimation.
Further details of the leach pad design are described in Ausenco Vector's DFS Engineering Design
Report (Ausenco Vector, 2010). Summary design information useful to developing capital costs is
presented herein.
Figure 23.20
Santa Ana's Heap Leach Pad First Stage Layout
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23.4.5.1 Design Criteria and Approach
The criteria and approach used to develop the DFS design of the heap leach pad were provided to
Vector by BCM and are listed as follows:
• The preferred heap leach pad location was selected from a previous Scoping Study (Vector,
2009).);
• Ultimate heap leach storage capacity equals approximately 42 million tonnes (MT) of crushed
ore for an operational life of 11 years;
• A daily production rate was estimated at 10,000 tpd or 3,650,000 tpy;
• The first phase of the heap leach pad is designed for a 4.18 Mt capacity or the first year’s
production;
• The ultimate heap leach pad will see two additional phases;
• The ore stacking plan includes 7 m lifts stacked at the internal angle of repose of the ore
(about 37°) with internal benches 81 m wide resulting in an overall slope of 2.5H:1V;
• The ore lifts top surfaces of each ore lift was assumed to be horizontal;
• The assumed ore density is 165t/m3;
• Every phase of the heap leach pad will have a perimeter access road for materials
transportation and construction activities;
• On-site borrow sources have been identified for construction materials (such as low
permeability soil, drainage gravel, etc.);
• An underdrain system will be constructed beneath the entire heap leach pad footprint to
control groundwater flow beneath the liner system;
• The heap leach pad foundation will be covered with a composite liner system consisting of a
300mm thick low-permeability soil and an overlying LLDPE geomembrane;
• The minimum static design factor of safety for stability analysis of the heap leach pad is 1.5
while the minimum dynamic factor of safety is 1.0; and
• The maximum design earthquake (MDE) with a recurrence interval of 2,500 years or a 2
percent probability of exceedance in 50 years was used to estimate the potential maximum
seismic deformations of the heap leach pad during operational life.
23.4.5.2 Leach Pad Materials Description

Materials necessary for construction of the design heap leach pad are summarized in the following
paragraphs. The DFS Engineering Design Report (Ausenco Vector, 2010) provides complete
details.
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Figure 23.21
Santa Ana's Leach Pad Ultimate Phase Layout
Low Permeability Soil

A low permeability soil layer consisting of inorganic, mostly fine-grained soil will be placed
immediately beneath the geomembrane liner. In order to prevent damaging the geomembrane, the
maximum particle size shall be 38 mm. The material shall have a plasticity index of 15 percent or
higher. This material shall be placed in horizontal lifts that ensures a thickness of 300 mm after
compaction, moisture conditioned to within plus or minus 2 percent of the optimum moisture
content, and compacted to a minimum of 95 percent of the maximum dry density (ASTM D-698).
Rock Fill
Rock fill will be used for erosion control structures discharging storm water flow from the diversion
channels to the natural valleys. This material is anticipated to be obtained from inert mine waste
materials with a value of D50 value equal to 250mm and will be mixed with concrete.
Drainage Gravel
The underdrain ditches will be a part of the heap leach pad design and will be filled with a granular
material consisting of inorganic, free-draining, durable sand and gravel with a 38mm maximum
particle size and a maximum of 5 percent fines. The material used will be inert and placed in
maximum 1 m thick loose lifts.
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Anchor Trenches Fill
Fill material used to backfill geomembrane anchor trenches will consist of the material excavated
from the trenches and will be backfilled into the anchor trenches after the geomembrane installation
is completed. There will be no lift placement, moisture conditioning or compaction requirements,
except the top surface must be wheel-rolled by a rubber-tired backhoe or front-end loader to seat
and seal the fill surface.
23.4.5.3 Underdrain System

The underdrain system will collect the flow of water beneath the heap leach pad and divert it
downstream of the heap leach facilities. This system consists of a network of perforated HDPE
pipes laid out in a "herringbone" pattern and placed in trenches filled with drainage gravel. The
underdrain system must be constructed after the unsuitable materials have been removed from the
facility limits and the final grading surface has been excavated.
23.4.5.4 Liner System

The design geomembrane is single-side textured 2 mm linear low density polyethylene (LLDPE)
geomembrane meeting the minimum requirements of the Geosynthetics Research Institute (GRI)
standards.
23.4.5.5 Solution Collection System

Solution collection pipelines will lie on the installed liner system to collect and evacuate the solution
draining down through the stacked ore to the process ponds. Solution collection piping is sized to
adequately pass the assumed design solution flow and minimize solution hydraulic head on the liner
system. The overdrain system is installed in a pattern similar to the underdrain system.
23.4.6 Process Ponds Construction

In accordance with established project design criteria and information collected during the field
geotechnical investigations, process pond design included the following key components:
• Definition of the design parameters for the process ponds;

• Field geotechnical investigation;
• Development of the ponds operational process;
• Design of the process ponds and plant site platform;
• Stability analysis for the most critical sections;
• Hydrological and hydraulic calculations for the pond dimensions;
• Preparation of a water balance for the process ponds; and
• Earthwork volumes and materials quantities estimation.
The Vector DFS engineering design report (2010) provides additional details on process ponds
design. A brief description of the process ponds components follows.
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Date: October 2010
Figure 23.22
Santa Ana's Process Ponds Layout

Key criteria and assumptions used to design the process ponds at the feasibility level are
summarized in the following list:
• The process ponds location was based primarily on favourable site conditions and proximity
to the design location for the heap leach pad;
• Three separate ponds comprise the process ponds, namely: the PLS pond, the ILS pond and
the storm water pond with storage capacities of 17,750m3, 18,000m3 and 141,700m3,
respectively;
• Each pond has a minimum free board of 500mm without considering the perimeter safety
berms;
• Two sedimentation ponds are included to prevent sediments from entering the process
ponds; one for the PLS pond and another for the ILS pond;
• All the process ponds are interconnected with spillways that shall alleviate any overflow
occurring in the PLS and/or ILS ponds;
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Date: October 2010
• Site borrow sources have been identified for specific construction materials (such as
structural fill material, drainage gravel, etc.);
• An underdrain system will be constructed underneath the limits of the process ponds and
plant site platform to capture groundwater flow beneath these facilities;
• The liner system for the PLS and ILS ponds consist of a geosynthetic clay liner (GCL) as the
low permeability soil layer and a double HDPE geomembrane system with a geonet layer
between the two liners;
• The liner system for the stormwater pond consists of a composite liner system based on a
geosynthetics clay liner (GCL) and a HDPE geomembrane layer;
• The PLS and ILS pond designs include a leak detection system integrated into the double
liner system;
• The minimum design static factor of safety for stability analysis of the process ponds is 1.5
and the minimum dynamic factor of safety is 1.0; and
• The maximum design earthquake (MDE) has a recurrence interval of 2,500 years or a 2
percent probability of exceedance in 50 years) and was used to estimate the potential
maximum seismic deformations of the process pond slopes during operational life.
23.4.6.2 Process Ponds Materials Description

Construction materials necessary for building the process ponds are similar to those described for
the heap leach pad with the exception of the low permeability soil liner that has been replaced by a
geosynthetic clay liner (GCL).

The underdrain system for the process ponds is similar to the system described for the heap leach
pad and consists of a network of HDPE perforated pipes set out in a "herringbone" pattern and
placed in trenches filled with drainage gravel. The underdrain system must be constructed after the
unsuitable materials have been removed from the facility limits and the final grading surface has
been excavated.
23.4.6.4 Liner System

The process ponds will be lined in two different ways: the PLS and ILS ponds will have a double
liner system while the stormwater pond will have a single composite liner. However, for both cases,
the low permeability soil layer use beneath the heap leach pad liner system is replaced by a
geosynthetic clay liner (GCL). GCL placement permits steeper side slopes for the ponds (up to
1.5H:1V) in order to achieve more storage capacity within the same footprint.
The PLS and ILS ponds will have a double geomembrane liner system with a geonet (which will
serve as a leak detection layer) between them. The storm water pond will have a single
geomembrane liner system. In both cases, the geomembrane will be a smooth, 1.5mm thick HDPE
liner.
23.4.7 Waste Rock Facility Construction

Ausenco Vector designed a waste rock facility in accordance with design criteria provided by BCM
and in accordance with industry standard practice. A summary of key design components follows:
• Preparation of preliminary layouts for this facility;
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Date: October 2010
• Stability analysis of the waste rock facility’s most critical sections;
• Definition and sizing of preliminary water management structures; and
• Estimation of earthwork, material quantities and costs for staged construction.
The design of the waste rock facility is detailed in the DFS Engineering Design Report (Ausenco
Vector, 2010) and is briefly summarized herein.
Figure 23.23
Santa Ana's Waste Rock Facility Layout

The following summary items present key design criteria and assumptions used to develop the
waste storage facility.
• The waste dump location was determined as the most feasible as a result of a Scoping Study
(Ausenco Vector, 2009) comparing several potential sites;
• In accordance with the mine plan developed for BCM, the waste storage facility was design to
contain approximately 95 Mt of uneconomic mined rock material;
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Date: October 2010
• The first stage of the waste rock facility is design to contain the first year’s production of
8.5 Mt;
• During operations, haul trucks will deposit mine waste from the upper platform at the natural
angle of repose estimated at 37° or 1.34H:1V (short term conditions);
• The recommended final layout includes benches necessary to increase the overall side
slopes to 2.5H:1V for long term slope stability conditions;
• The minimum design static factor of safety for slope stability analysis is 1.5 while the
minimum design dynamic factor of safety is 1.0;
• Dynamic analyses utilize a maximum design earthquake (MDE) with a recurrence interval of
2,500 years or a 2 percent probability of exceedance in 50 years. for during operational life
conditions;
• A waste rock facility diversion channel was designed to safely pass a 500-yr recurrence
storm event; and
• A sedimentation pond will be constructed downstream of the waste rock facility to collect
surface water flow originating from the waste rock facility. The pond will provide a monitoring
point prior to release to the environment.
23.4.7.2 Waste Rock Facility Material Descriptions

Construction materials necessary for the waste rock facility foundation include underdrain gravel
and HDPE drain pipes.

An underdrain system will be constructed at the waste rock facility to evacuate any shallow
groundwater and contact meteoric water from the facility. Based on studies to date, Santa Ana mine
waste has a very low acid generating potential. Therefore, a liner system and/or an effluent
collection system are not necessary for the facility.
23.4.8 Seismicity and Seismic Hazards

Vector prepared a site-specific, comprehensive seismic hazard analysis as part of the FS (Vector,
2010). The study was developed to review the tectonics of the project area, review available data
on historical and instrumented seismicity, identify seismogenic sources, estimate the regional
seismic attenuation effects, estimate the deterministic and probabilistic ground motions at the site
and develop response spectra for both soil and rock conditions at the site.
Tectonics is governed by the subduction mechanism in the southwestern region of Peru, where the
Nazca plate dips beneath the South American plate with an average angle of 30º up to300 km in
depth. Also, various faults systems have been recognized in the southern region of Peru. The
nearest active fault to the project site is the Cuenca de Charaña fault, located 77km southward of
the mine site, and the East Peñas fault, located 98km to the east. Although these faults have not
been sufficiently studied, they are near surface faults with the potential to generate destructive local
seismic effects.
According to the reviewed seismic history of the project area, during the last 400 years earthquakes
have occurred with intensities of up to modified Mercalli intensity, MMI=V. in the project area,
although the area is scarcely populated and greater intensities not reported could have occurred.
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Date: October 2010
For the seismic hazard evaluation, subduction and continental sources have been considered,
using different attenuation laws in each case. The seismic catalogue was updated to 2009. The
nearest faulting systems have also been identified for analysis.
The deterministic analysis estimates that the maximum credible earthquake at the Santa Ana
project site will cause a peak ground acceleration of 0.32g in bedrock and 0.45g in very dense soil
sites as a result of the intermediate and superficial subduction seismic activity, respectively.
For the probabilistic analysis, updated seismic zonal sources have been identified. Due to scarcity
of information on the seismic activity related to continental faults, these source zones have also
been modeled as areas having similar seismic characteristics instead of discrete linear sources.
Earthquake recurrence rates were calculated for each seismic source from the compiled historical
catalogue. These parameters were used as input into the probabilistic seismic hazard analysis.
Results are presented in terms of ground motion as a function of annual exceedance probability, the
reciprocal of the average return period.
For the seismic design of common facilities in the Santa Ana project, a 475-year return period is
recommended, which corresponds to a 10% probability of exceedance in a 50 year time period.
Considering the site classification system proposed by the International Building Code (IBC, 2006),
the peak ground acceleration for this return period at the project site is 0.25 g, 0.26 g and 0.43 g, for
site classes B, C and D, respectively. Design ground motions at varying exposure levels have been
estimated and detailed in the Seismic Hazard Study (Ausenco Vector, 2010) report. Selection of
applicable return period events or perceived risk is beyond the scope of this report.
23.4.9 Instrumentation and Monitoring

In order to monitor the geotechnical behaviour of the projected facilities, survey instruments will be
installed at strategic locations around the project area. The monuments will be surveyed routinely
according to an established monitoring plan and the readings used to track movements with time.
As these monitoring instruments are very important throughout the project life, a set of hydraulic
piezometers, to monitor groundwater conditions and slope inclinometers have been proposed in an
area downstream of the leach pad, process ponds and the waste dump. Details and locations of the
instrumentation elements and the monitoring schedules are provided in the DFS Engineering
Design Report (Ausenco Vector, 2010).
23.5 Markets
The principal commodity of silver is freely traded, at prices that are widely known, so that prospects
for sale of any production are virtually assured. Silver is considered both a precious and industrial
metal having increasing applications in industrial uses and high-technology sectors. The price of
silver historically tracks gold; however, in recent years those ratios have been more volatile. BCM
used the average silver price of US$14.50/oz. for the Base Case economic model which
corresponds to an average forecasted long-term consensus price from 45 capital market analyses
as of September 2010.
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Date: October 2010
Source: available street research
A cost estimate of $0.63/oz has been provided by Johnson Matthey to BCM for transportation from
Peru to the US and metal refining according to the cost structure indicated in Table 23.7.
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Date: October 2010
Table 23.8
Dore Transport and Refining Costs
Item Quantity Units

Cost Basis 5,000 kg per shipment
Peru transport $3.43 per kg
Air transport $7 per kg
Fuel Surcharge $0.3 per kg
Basic transport $0.20 per kg
Total Transport (USD) $0.34 /oz
Treatment $0.29 /oz
Total $0.63 /oz
23.6 Environmental Considerations and Permitting

The project has been designed to meet industry standards of environmental compliance. The heap
leach and solution ponds have been designed industry standards of containment and stability. The
waste rock storage facilities are designed to capture and manage any flows that may originate from
the waste rock. Finally an initial closure plan has been developed that will provide covers for both
the heap leach and waste rock facilities that will result in safe and environmentally compliant
closure of the mine. The lab tests on spent ore and waste rock have shown that the site has a very
low potential to produce acid rock drainage (ARD).
The Company is currently advancing the permitting process and expects to submit the
Environmental and Social Impact Assessment (ESIA) to the Peruvian authorities before the end of
2010. All additional necessary permitting will be processed once the ESIA has been approved by
the national government.
The Company has maintained good working relationships with the local communities
23.7 Health, Safety, Environment and Community
23.7.1 Hydrogeological Evaluation

Vector (2010) completed a feasibility-level hydrogeological evaluation of the Santa Ana project site,
including:
• Field Investigations: such as, permeability testing, piezometer and test well installations,
mapping of springs, sampling for water quality, and groundwater level monitoring; and
• Hydrogeological characterization: such as, estimates of permeability and aquifer parameters,
estimates of groundwater recharge and discharge relationships, numerical groundwater
modelling, and open pit infiltration estimates.
23.7.1.1 Field Investigations

Field investigations included drilling and installation of 15 groundwater piezometers and 2 test wells.
Permeability testing (Lugeon and Lefranc) was performed during drilling and included 61
permeability tests in open boreholes and installed piezometers. In addition, two pumping tests were
conducted to evaluate potential water supply yield and aquifer parameters. Groundwater level
monitoring was conducted during the period of April to August 2010. Groundwater samples were
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Date: October 2010
collected from a total of 9 points for water quality analysis. Surface water mapping included
mapping of spring locations in the study area.
23.7.1.2 Conceptual Hydrogeological Model

The site is situated in a mountainous and previously glaciated area. Groundwater flow is strongly
influenced by site topography with recharge and downward flow occurring within the highland areas
and groundwater discharge and upward flow occurring within the stream bottoms. This pattern of
flow is evidenced by both the measured piezometric surface in piezometers and relationships to
springs and streams. Groundwater discharge to the streams supports flow during the dry winter
months. Calculations of runoff, real evapotranspiration and total precipitation based on published
climatic data, resulted in a value of effective infiltration (aquifer recharge) of about 0.12 mm/day (7%
of total average annual precipitation).
Unconsolidated sediments are confined to the valley bottoms and consist of alluvium, colluvium and
glacial outwash with generally limited thickness (less than 1.0 to1.5 m) except in the Zorrillo River
valley where a thickness of 18m was found in one of the exploration boreholes.
Regional andesite bedrock typically has a low primary porosity. Permeability and storage are
dependent upon degree of jointing, fracturing and faulting within the bedrock, which ultimately
controls movement of groundwater.
Based on results of testing, bedrock permeability measurements are variable, ranging from a low of
approximately 10-7 cm/sec to a high of 10-2 cm/sec. In the areas of the Waste Rock Facility, Heap
Leach Facility and proposed open-pit areas, observed bedrock permeabilities are relatively lower
(with a geometric mean of 2 x 10-5 cm/sec).
23.7.1.3 Simulation of Groundwater Inflow to Proposed Open-Pit Areas

A groundwater model was constructed and calibrated to field water level measurements to: 1)
confirm the conceptual hydrogeological model; 2) provide estimates of pit inflow rates; and, 3)
evaluate potential groundwater impacts and potential needs for dewatering. The geometric mean
and range of permeability values determined from the model calibration were in close agreement
with field measurements.
Using the steady-state calibrated groundwater model, a transient-state model was used to simulate
groundwater inflow to the open pit during different stages of development including the end of
mining. The projected pit inflow shows steady increases over the life-of-mine as the pit widens and
deepens, reaching a maximum predicted inflow of 7.5 m3/hour (2 L/s) after 10 years of mining.
Provided the small projection of pit inflow, requirements for pit dewatering will be minimal
23.7.2 Water Supply

The amount of fresh water required by the Santa Ana facilities is approximated at 73.8 m3/hour
(20.5 L/s) with a peak delivery of 109.4 m3/hour (30.4 L/s). The well field and water supply pipeline
will be designed for this peak demand.
23.7.2.1 Water Well Fields

Water quantities are limited and environmentally and socially sensitive in the region of the Santa
Ana mine. Groundwater near the facilities was, therefore, not considered as a main source of water
for the project; however an area does exist for auxiliary, short-term groundwater supply in fractured
andesitic rocks if required.
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Date: October 2010
The primary water supply for the project will be from the basin-fill deposits of the Challacollo Valley
along the Callacame River, which lies 7.8 km from the mining facilities (Figure 24.1). A 339 hectare
parcel along the Callacame River was explored using surface resistivity geophysical methods. After
completion of geophysics, a piezometer and a water supply test well were drilled in the area.
Aquifer testing of the water supply test well was conducted for determination of aquifer parameters.
Aquifer testing results were favorable and indicated that a well field in the area could produce on the
order of 108 m3/hr (30 L/s) or more. Water samples collected from the test well were submitted to
an internationally-approved analytical laboratory for analysis and the results indicate that the quality
of the groundwater is suitable for anticipated mine uses, including public water supply. It is
estimated a total of 3 production wells in the area will meet the water supply needs for the project,
including back-up capacity.
23.7.2.2 Water Pipeline

The Santa Ana water supply and pipeline originates north-northeast of the proposed plant utilizing
two 100m³ 125 hp well pumps capable of 194 m total dynamic head (TDH). The water is then piped
for 12.2 km following existing roads to a water storage tank located approximately 60 m above the
plant. Pipe for this project is 150 mm carbon steel, HDPE SDR 11 and SDR 17 and 200 mm HDPE
SDR 9 depending on pressures in the line. This alignment will require two booster pump stations to
overcome 374 m of static head and various head losses. Each booster pump will supply 100 m³/hr
at 75 and 150 hp to overcome 136 m and 238 m of TDH respectively. Water from the storage tank
will then flow to the plant by gravity.
23.7.3 Waste Geochemistry

This section discusses the geo-chemical characterization of waste rock material and of the
materials which will make up the final pit surface.
The objective of the study was to characterize representative waste rock material from the
perspective of potential generation of acidity and/or leaching of metals in such a manner as to
ensure that any negative effects are mitigated in a timely manner in the context of any future
projects.
23.7.3.1 Sampling
The sampling criteria utilized corresponded to the most representative lithologies and alterations for
both waste rock and the final pit surface. The lithologies sampled were andesite, quartz-feldspar-
porphyry (QFP) dikes and breccias.
The sampling procedure included the identification of representative drillholes, integrating the
information from vertical drilling (in accordance with geological sections) with horizontal information
(geological mapping), in order to represent the waste rock area, the area which is not economically
viable for exploitation and areas which BCM considers to be low grade (<20% Ag) or low ore zones.
A list of boreholes representative of the entire waste rock deposit was obtained based on the most
recent drilling plan, in order to minimize the effects of weathering (oxidation) on older drill samples.
Sampling of the final pit surface considered the drillholes where the bottom of the pit was taken into
account, in accordance with the pit design provided by BCM.
The execution of the sampling plan is described in detail below:
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Date: October 2010
• When considering waste rock, the segment corresponding to the waste rock was first
identified, and then samples were taken every ten centimetres for every two meters of core
samples; and
• When considering the final pit walls, the segment to be sampled was identified, and a sample
two meters in length was then extracted, taking half of the sample found in the core boxes.
Thirty samples of waste rock material and 23 samples of the material which will make up the final pit
surface were collected.
23.7.3.2 Results
The materials analyzed contained low levels of both sulfur and sulphide(<0.24%),and are made up
of materials such as quartz, clays, and aluminosilicates, which are very stable materials, and slow
to react in terms of acid consumption. The presence of barite in these samples calls for caution, due
to its association with the presence of base metal sulphides, such as the sphalerite and galena
encountered in samples of the QFP dike and the Andesitic Lava materials.
Mn, Sr, and Zn could be considered elements of interest in the analysis conducted of total metallic
elements present and short term leach testing. However, further analysis must be conducted on
these elements, given that their potential to dissolve is conditioned by the manner in which this
waste is disposed of affecting the oxygen reducing conditions of the surrounding environment, and
other factors. The high Pb content (750-4160 ppm) encountered in solid samples should be taken
into account, even though the pH of the surrounding environment remains neutral, a factor which is
not considered conducive to the release of this metal.
Kinetic tests were conducted on two composites of the material which will make up the final pit
surface, on fractured sandstone. For 23 weeks of pH testing, values remained within the 5.17 to
6.68 range (near-neutral). Sulphide levels did not exceed 27 mg/L, which is indicative of the fact
that oxidation in the cell developed at a slow rate. For metal leaching, the mobility of elements such
as lead (Pb), magnesium (Mn) and zinc (Zn) was evaluated, the results of which are included in the
Acid Rock Drainage study conducted by Ausenco Vector (2010).
23.7.3.3 Conclusions
The results of this study indicate that the pH of effluents that come into contact with the model
waste materials tested will remain in near-neutral conditions over the long term, and the monitoring
of elements such as Mn, Sr, Zn and Pb throughout the length of mine operations is recommended
in order to determine the mobilization potential of metals in any effluent discharge.
23.7.4 Closure
Closure legislation (Peruvian Law 28090) requires that every mining operation must have an
approved closure plan and financial guarantees capable of covering the estimated closure costs.
The closure plan must be developed and submitted to the Ministry of Energy and Mines (MINEM)
within a year of the approval of the ESIA, and must be approved by the MINEM prior to receipt of
permission to operate.
The ESIA is required to include a conceptual closure plan for the operation, with the objective of
ensuring the physical and chemical stability of the diverse components of the project after closure
and returning the environment to a condition similar to that found before implementation of the
project.
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Date: October 2010
The plan must address progressive, final and post closure stages, and also include a contingency
plan in the event of temporary or early closure.
23.7.4.1 Reclamation and Closure by Facility

The principal activities at closure relate to the open pit, leach pad, and waste stockpiles, assuring
physical and geochemical stability, including appropriate measures to mitigate the impacts of acid
generating material (such as construction of low permeability cover systems).
Typical principal closure activities likely for the project, based on the FS design, are described
below. More assessment will be required in conjunction with detailed level engineering and the
development of the ESIA for the project.
Open Pit
The open pit must be hydrologically and hydrogeologically analyzed in order to determine if the
groundwater and precipitation reporting to the pit during closure and post-closure phases could
accumulate and create a lake. These studies will provide the volumes of water that will be
discharged. It is assumed that for the pit the following principal closure activities will be required:
• Reshaping of parts of the pit; and

• Construction of water management structures.
Leach Pad
For the leach pad, it is assumed that the following principal closure activities will be required:
• Reshaping slopes of the leach pad;

• Construction of water management structures;
• Installation of a low permeability cover system; and
• Revegetation of the leach pad area.
Waste Rock Facilities
It is assumed that for the Waste Rock Facilities (WRF) the following principal closure activities will
be required:
• Reshaping of WRF slopes;

• Construction of water management structures, where needed;
• Installation of organic or inert cover soils over the WRF; and
• Revegetation of the WRF.
Processing Areas and Buildings
In addition, the closure plan provides for demolition of facilities and most constructed infrastructure,
and leveling of the affected areas. It is assumed that for the plant and processing areas, office
buildings and camp site, the following principal closure activities will be required:
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• Demolition and/or removal/disposal of structures;
• Reshaping/grading of disturbed areas;
• Installation of organic cover soils;
• Revegetation of disturbed areas; and
• Construction of water management structures, where required.
General
Depending on the requirements of government regulators and the local communities, it is possible
that ownership of some of the infrastructure, i.e. the electrical transmission line, camps, and road
access might be transferred to the community for its use post-closure.
23.7.4.2 Post Closure

Post-closure refers to the monitoring and maintenance following completion of closure activities,
which verify compliance with the closure objectives.
23.7.4.2.1 Maintenance
After the final closure, a minimum 3 year period of active maintenance must follow, in order to
ensure both the physical and chemical stability of the mine site. It is recommended that a team is
made responsible for maintenance and should remain on site during this period. Once active
maintenance has been completed, a passive maintenance stage will begin, during which the team
will carry out inspections and periodic work. A minimum of 2 years is required for this stage.
The maintenance team should be composed of an engineer and a group of workers. They will be
required to monitor the physical and chemical stability of the closed components and carry out any
maintenance activities required.
23.7.4.2.2 Monitoring
The maintenance team must permanently monitor the facilities during the active closure stage and
periodically monitor during the passive closure stage.
23.8 Project Execution

The project will be developed into a mine over the next 24 months. The figure below illustrates the
major parts of the development plan. First the company will present the ESIA to the Peruvian
authorities prior to the end of 2010. There will then be a period of review by the government that is
expected to last 6 to 9 months. In late 2010 and early 2011, the detailed project engineering will
commence and is estimated to be completed in approximately 9 months. Following ESIA approval
the Company will advance the permitting process by obtaining the necessary construction and
operating permits. In late 2011, once the proper permits are obtained, the principal off-site project
infrastructure will developed. This will include the power line, the upgrading of the access road, the
construction of the water supply pipeline and drilling of any additional production water wells. Any
temporary construction housing will be installed in preparation for the on-site construction. Finally,
nd
the onsite construction will start in the 2 quarter of 2012 or earlier depending on the end of the
rainy season and continue through the dry season. Commercial production will start in early part of
the fourth quarter of 2012, or earlier if the rainy season permits liner installation sooner.
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Date: October 2010
Table 23.9
Project Development Plan
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Item / Period
2010 2011 2011 2011 2011 2012 2012 2012 2012
ESIA Review
Detailed Engineering
Permitting
Off-site Infrastructure Construction
Site Development
Production
23.9 Economic Analysis
23.9.1 Economic Model
23.9.1.1 General Criteria

General technical-economic parameters used in the model are summarized in Table 23.10¡Error!
No se encuentra el origen de la referencia. The model is presented before taxes and assumes 100-
percent equity (i.e. no leverage) to provide an unbiased view of the project’s merits. It has been
estimated using 4th Quarter 2010 United States dollars. There is no provision for inflation or
currency fluctuations.
The financial model assumes the following general model criteria:
Table 23.10
General Model Criteria
Description Values
Construction Period 24 months
Mine Life (after preproduction) 11 years
Life of Mine (LoM) Ore Tonnage 37,077,000
Life of Mine (LoM) Silver Grade (g/t) 53.00
Average Annual Recovered Silver, Years 1-11 (oz/year) 4,008,694
Average Annual Recovered Gold, Years 1-11 (oz/year) 650
Silver Average Price (U.S.$/oz) $14.50
Gold Average Price (U.S.$/oz) $950.00
Cost Basis 4th Quarter 2010
Inflation/Currency Fluctuation None
Leverage 100% Equity
Income Tax Pre-tax
23.9.1.2 Mine and Process Production

Table 23.11 shows the mine and processing production schedules for the life of the mine.
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Date: October 2010
Table 23.11
Life of Mine Production Schedule
Total PPD Production Year

Units or Average -1 1 2 3 4 5 6 7 8 9 10 11 12
MINE
Ore Processed Crushed t 37,077,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 1,077,000 0
Silver Ore Grade g/t 53.00 58.35 60.50 59.10 57.60 59.00 55.60 53.10 49.70 47.00 36.97 29.87 0.00
CONTAINED METALS
Silver oz 63,179,850 6,754,123 7,002,433 6,840,393 6,666,779 6,828,819 6,435,293 6,145,937 5,752,412 5,439,906 4,279,476 1,034,280 0
PROCESS
Process Recoveries
Recovered Silver oz 44,223,686 3,891,414 4,870,714 4,808,098 4,688,007 4,759,872 4,553,203 4,337,766 4,075,210 3,846,436 3,139,158 1,125,752 128,055
Recovered Gold (.006 g/t-ore) oz 7,152 694 694 694 694 694 694 694 694 694 694 208 -
Contained Metal with Transit Loss:
Loss in Transit % 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Silver oz 44,223,686 3,891,414 4,870,714 4,808,098 4,688,007 4,759,872 4,553,203 4,337,766 4,075,210 3,846,436 3,139,158 1,125,752 128,055
Metal Payfors
Silver % 99.75% 99.75% 99.75% 99.75% 99.75% 99.75% 99.75% 99.75% 99.75% 99.75% 99.75% 99.75% 99.75%
Payable Silver oz 44,113,127 3,881,685 4,858,538 4,796,078 4,676,287 4,747,972 4,541,820 4,326,922 4,065,022 3,836,820 3,131,310 1,122,937 127,735
Net Weight Deduction oz 500 451 454 460 456 467 478 491 502 537 151 (6)
Gold % 95.00% 95.00% 95.00% 95.00% 95.00% 95.00% 95.00% 95.00% 95.00% 95.00% 95.00% 95.00% 95.00%
Payable Gold oz 4,700 475 428 431 437 434 443 454 466 477 511 144 -
Payable Metals:
Silver oz 44,113,127 3,881,685 4,858,538 4,796,078 4,676,287 4,747,972 4,541,820 4,326,922 4,065,022 3,836,820 3,131,310 1,122,937 127,735
Gold oz 4,700 475 428 431 437 434 443 454 466 477 511 144 -
Total oz 44,117,827 3,882,160 4,858,966 4,796,509 4,676,724 4,748,406 4,542,264 4,327,376 4,065,488 3,837,297 3,131,821 1,123,081 127,735
23.9.1.3 Average LoM Operating Costs

Table 23.10 shows the life of mine and average life-of-mine operating costs for the project.
Table 23.12
Operating Cost
Average Annual
Fixed or Average Annual Cost
Description Life of Mine Cost Cost (11 Year
Variable per Tonne Ore
Average)
Operating Costs
Mining Variable $ 207,645,368 $ 18,876,852 $5.60
Crushing, Leaching and Lab Work Variable $ 118,150,772 $ 10,740,979 $3.19
G&A Fixed $ 43,523,427 $ 3,956,675 $1.17
Totals $ 369,319,566 $ 33,574,506 $9.96
Rev: 0
Date: October 2010
J078213.02: Feasibility Study – NI 43-101 Technical Report – Santa Ana Project 143
23.9.1.4 Capital Cost Summary
The project capital cost estimate has been prepared by two independent engineering companies.
The mining costs were prepared by Independent Mining Consultants of Tucson, Arizona, and the
process heap leach and infrastructure costs have been prepared by Ausenco Vector of Peru. The
initial startup capital is estimated to be $68.8 million and the total life of mine capital cost is
estimated to be $83.8 million. The initial capital equates to $1.56 per ounce of silver recovered. The
life of mine capital costs used in the financial model include detailed long-term plans for heap leach
expansions as well as ongoing mine closure and monitoring. Sustaining capital expenditures are
estimated at an average $1.4 million per year over the 11-year life of the mine.
Tabulated below are the Capital costs for each of the principal areas.
Table 23.13
Capital Cost Summary
Item Cost
Civil Works $13,598,000
Water Supply $3,215,000
Process Plant $15,099,000
Auxiliary Facilities $5,859,000
Water Distribution $2,403,000
Electrical (LT & Distribution) $9,709,000
Crusher System $4,763,000
Preproduction Mine Development & Equipment $9,909,000
Owners Costs $4,226,000
Total Initial Capital $68,781,000
The estimates of the Capital Costs have been prepared to a feasibility level with a 15% contingency
applied to the estimates. An additional 15% has been added for Engineering Procurement and
Construction Management (EPCM).
23.9.1.5 Sustaining Cost Summary

Table 23.14 summarizes sustaining capital requirements over the life of the mine.
Rev: 0
Date: October 2010
Table 23.14
Sustaining Cost
Sustaining Capital Summary

Year Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Yr 11 Yr 12 Total
Leach Pad $ 4,591,326 $ 4,313,126 $ 8,904,452
Waste Dump Facility $ 382,461 $ 427,645 345,663 $ 229,201 $ 256,479 $ 213,634 $ 144,080 $ 153,563 $ 157,309 $ 329,829 $ 2,639,864
Contracted Indirects $ 57,369 $ 752,846 $ 51,849 $ 34,380 $ 685,441 $ 32,045 $ 21,612 $ 23,034 $ 23,596 $ 49,474 $ - $ - $ 1,731,648
Contingency $ 57,369 $ 752,846 $ 51,849 $ 34,380 $ 685,441 $ 32,045 $ 21,612 $ 23,034 $ 23,596 $ 49,474 $ - $ - $ 1,731,648
Total $ 497,199 $ 6,524,663 $ 449,361 $ 297,962 $ 5,940,487 $ 277,724 $ 187,304 $ 199,632 $ 204,502 $ 428,777 $ - $ - $ 15,007,612
Rev: 0
Date: October 2010
23.9.1.6 Working Capital
Working Capital was calculated as the largest amount of funds required during the initial operating
period to provide for the cash disbursement for expenses prior to the cumulative revenue offsetting
the cumulative expenses; that is, when the operation becomes self-sustaining in its cash flow.
The revenue was calculated on a weekly basis, based on the leaching cycle of the material. The
following ramp-up resulted:
• Month 1: 0 percent production;

• Month 5: 91 percent production; and
• Month 13: 100 percent production.
Revenue was projected based on receipt of 100 percent of production revenue, five weeks after the
shipping date. Weekly shipment of product starts six weeks after ore crushing begins.
Average weekly expenditure rates were calculated from the operating costs for Year 1. The
processing and G&A labour costs were calculated as being disbursed on average every two weeks;
transport, treatment and refining cost for product were calculated by reducing revenue payments.
100% of contract mining, 33% of processing and 25% of G&A costs were calculated as weekly
disbursals; the balance of expenses were timed to be expended one month after being invoiced.
The largest deficiency of funds would occur in Week 10, at an amount of $6,654,870. This working
capital cost was input into the economic cash flow, in production year +1.
23.9.1.7 Base Case Analysis

The base-case financial model was developed on information presented in this report as listed in
Tables 23.9, 23.10, 23.11, 23.12.
The NPV at a discount rate of five (5%) percent (pre-tax) over the assumed mine life is
$85,283,009. The Internal Rate of Return (IRR) is 25.3 percent before income tax, depreciation and
IGV. Payback is estimated to be approximately 3.4 years after start of production. The base-case
sensitivities according to discount rate are presented in Table 23.13
Table 23.15
Base Case Sensitivities
NPV before tax, depreciation, and IGV for varying discount rates:
Discount Rate 0% 5% 8%
NPV ($/millions) $143,577,074 $ 85,283,009 $ 61,441,705
Rev: 0
Date: October 2010
23.9.1.8 Sensitivity Analysis to Base Case
In this section, cost and price sensitivities are presented in Table 23.14, initial capital cost and
operating cost in Table 23.15, recovery sensitivities are presented in Table 23.16. Graphical
presentations are shown in Figures 23.22 and 23.23, which follow the tables.
Table 23.16
Silver Price Sensitivities
Silver Metal Price -20% -10% 0% 10% 20%

Silver Metal Price
$11.60 $13.05 $14.50 $15.95 17.40
($/oz)
NPV @5% ($) ($3,425,766) $41,036,612 $85,283,009 $129,437,875 $173,497,288
IRR (%) 4% 16% 25% 34% 42%
Table 23.17
Capital Cost and Operating Cost Sensitivities
Initial Capital Cost -20% -10% 0 10% 20%

NPV @5% ($) $97,857,856 $91,570,432 $85,283,009 $78,995,585 $72,708,161
IRR (%) 32% 28% 25% 23% 20%
Operating Cost -20% -10% 0 10% 20%
NPV @5%($) $137,733,914 $111,508,461 $85,283,009 $59,057,556 $32,832,103
IRR 36% 31% 25% 20% 13%
Table 23.18
Sensitivities on Recovery
Overall Silver
56% 63% 70% 77% 84%
Recovery
-20% -10% 0.00% 10% 20%
NPV ($ millions) $715,108 $43,101,995 $85,283,009 $127,382,953 $169,395,001
IRR (%) 5% 16% 25% 34% 41%
Rev: 0
Date: October 2010
Figure 23.24
NPV Sensitivity Analysis
Santa Ana Sensitivity Analysis NPV @ 5% Before Tax

300,000,000
250,000,000
200,000,000
150,000,000
100,000,000
$
50,000,000
-
-40% -30% -20% -10% 1.00 10% 20% 30% 40%
(50,000,000)
(100,000,000)
(150,000,000)
Capital Cost Operating Cost Recovery Ag Price
Figure 23.25
IRR Sensitivity Analysis
Santa Ana Sensitivity Analysis IRR Before Tax

70%
60%
50%
40%
30%
$
20%
10%
0%
-40% -30% -20% -10% 1.00 10% 20% 30% 40%
-10%
Capital Cost Operating Cost Recovery Ag Price
23.9.1.9 Economic Model

The base-case financial model presentation for cash flow is presented in Table 23.17.
Rev: 0
Date: October 2010
Table 23.19
Base Case Financial Cash Flow
Pre-production Years Production Years Closure Years

Units Total -2 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18
PRODUCTION SUMMARY
Production Data
Ore Processed t 37,077,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 1,077,000 0 0 0 0 0 0 0
Recovered Metals
Silver oz 44,223,686 3,891,414 4,870,714 4,808,098 4,688,007 4,759,872 4,553,203 4,337,766 4,075,210 3,846,436 3,139,158 1,125,752 128,055 0 0 0 0 0 0
Gold oz 6,458 694 694 694 694 694 694 694 694 694 208 0 0 0 0 0 0 0 0
GROSS INCOME FROM MINING
Market Price
Silver $/oz 14.50 14.50 14.50 14.50 14.50 14.50 14.50 14.50 14.50 14.50 14.50 14.50 14.50 0.00 0.00 0.00 0.00 0.00 0.00
Gold $/oz 950.00 950.00 950.00 950.00 950.00 950.00 950.00 950.00 950.00 950.00 950.00 950.00 950.00 950.00 950.00 950.00 950.00 950.00 950.00
Payable Metals
Silver oz 44,113,127 3,881,685 4,858,538 4,796,078 4,676,287 4,747,972 4,541,820 4,326,922 4,065,022 3,836,820 3,131,310 1,122,937 127,735 0 0 0 0 0 0
Gold oz 4,700 475 428 431 437 434 443 454 466 477 511 144 0 0 0 0 0 0 0
Metal Revenues
Silver $ 639,640,338 56,284,436 70,448,796 69,543,130 67,806,167 68,845,597 65,856,393 62,740,369 58,942,816 55,633,887 45,403,997 16,282,588 1,852,162 0 0 0 0 0 0
Gold 4,464,830 451,115 406,924 409,750 415,169 411,926 421,252 430,974 442,821 453,145 485,061 136,693 0 0 0 0 0 0 0
Total Gross Revenue $ 644,105,168 56,735,552 70,855,720 69,952,879 68,221,336 69,257,523 66,277,645 63,171,342 59,385,637 56,087,032 45,889,058 16,419,281 1,852,162 0 0 0 0 0 0
NSR CALCULATIONS
Shipping and Treatment Charge
Silver and Gold $0.63 $/oz 27,794,231 2,445,761 3,061,149 3,021,801 2,946,336 2,991,496 2,861,626 2,726,247 2,561,257 2,417,497 1,973,047 707,541 80,473 0 0 0 0 0 0
Total Transportation and TC/RC Charges $ (27,794,231) (2,445,761) (3,061,149) (3,021,801) (2,946,336) (2,991,496) (2,861,626) (2,726,247) (2,561,257) (2,417,497) (1,973,047) (707,541) (80,473) 0 0 0 0 0 0
NSR $ 616,310,937 54,289,791 67,794,572 66,931,079 65,275,000 66,266,028 63,416,019 60,445,096 56,824,380 53,669,535 43,916,011 15,711,740 1,771,689 0 0 0 0 0 0
ROYALTY CALCULATIONS
Peruvian Royalty Tax- 1% on first $60 million 1% $ (5,861,831) (542,898) (600,000) (600,000) (600,000) (600,000) (600,000) (600,000) (568,244) (536,695) (439,160) (157,117) (17,717) 0 0 0 0 0 0
Peruvian Royalty Tax- 2% on amount greater than $60 million 2% $ (602,556) 0 (155,891) (138,622) (105,500) (125,321) (68,320) (8,902) 0 0 0 0 0 0 0 0 0 0 0
Gross Income from Mining $ 609,846,550 53,746,893 67,038,680 66,192,457 64,569,500 65,540,707 62,747,698 59,836,194 56,256,136 53,132,839 43,476,851 15,554,623 1,753,972 0 0 0 0 0 0
OPERATING MARGIN
Operating Costs
Unit Costs 1.00
Average Mining and Material Handling $/t ore $5.05 6.08 6.28 6.52 6.51 6.46 6.12 5.67 4.79 4.65 3.36 4.13 0.00
Crushing, Leaching, and Lab work $/t ore $3.19 3.19 3.19 3.19 3.19 3.19 3.19 3.19 3.19 3.19 3.19 3.19 3.19
Average G&A $/t ore $1.17 1.17 1.17 1.17 1.17 1.17 1.17 1.17 1.17 1.17 1.17 1.17 1.17
Average Total Unit Operating Cost $/t ore 9.40 10.44 10.63 10.88 10.87 10.82 10.47 10.03 9.15 9.00 7.72 8.49 4.36
Annual Operating Costs

Mining and Material Handling $ (207,645,368) (21,886,427) (22,600,075) (23,468,653) (23,442,012) (23,266,228) (22,026,094) (20,410,122) (17,259,710) (16,733,273) (12,102,719) (4,450,055) 0
Crushing, Leaching, and Lab work $ (118,150,772) (11,471,877) (11,471,877) (11,471,877) (11,471,877) (11,471,877) (11,471,877) (11,471,877) (11,471,877) (11,471,877) (11,471,877) (3,432,003) 0
G&A $ (43,523,427) (4,212,000) (4,212,000) (4,212,000) (4,212,000) (4,212,000) (4,212,000) (4,212,000) (4,212,000) (4,212,000) (4,212,000) (1,260,090) (143,337)
Closure Costs
Closure Progressive $ $ 4,091,646.07 $ (1,022,912) $ (2,045,823) $ (1,022,912) $ -
Final Closure (Letter of Credit) $ $ 5,068,506.04 $ (2,534,253) $ (2,534,253)
Maintenance and Monitoring $ $ 3,612,667.09 $ (722,533) $ (722,533) $ (722,533) $ (722,533) $ (722,533.42)
Bond for Final Closure $ $ (789,198) $ (1,578,395) $ (2,367,593) $ (3,156,790) $ (3,945,988) $ (4,735,185) $ (5,524,383) $ (6,313,580) $ (7,102,778) $ (7,891,976) $ (8,681,173) $ (8,681,173) $ (6,146,920) $ (3,612,667) $ (2,890,134) $ (2,167,600) $ (1,445,067) $ (722,533)
Subtotal Letter of Credit $ $ (3,946) $ (7,892) $ (11,838) $ (15,784) $ (19,730) $ (23,676) $ (27,622) $ (31,568) $ (35,514) $ (1,062,371) $ (2,089,229) $ (3,600,570) $ (2,564,988) $ (740,597) $ (736,984) $ (733,371) $ (729,759) $ (726,146)
Total Annual Operating Costs $ (376,249,307) (37,574,250) (38,291,843) (39,164,368) (39,141,672) (38,969,835) (37,733,647) (36,121,620) (32,975,155) (32,452,664) (28,848,967) (11,231,377) (3,743,907) (2,564,988) (740,597) (736,984) (733,371) (729,759) (726,146)
Net Profit Before Depreciation $ 233,597,243 16,172,643 28,746,837 27,028,090 25,427,827 26,570,872 25,014,051 23,714,574 23,280,981 20,680,175 14,627,883 4,323,246 (1,989,935) (2,564,988) (740,597) (736,984) (733,371) (729,759) (726,146)
Amortization of Santa Ana pre construction expenditures - $23.96
million $ (23,960,000) (2,108,333) (2,638,910) (2,604,985) (2,539,921) (2,578,856) (2,466,885) (2,350,163) (2,207,912) (2,083,965) (1,700,768) (609,922) (69,379) 0 0 0 0 0 0
Tax losses available for use (positive means carrying/ negative is
applying) $ (14,414,000) (3,672,622) (10,741,378) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Depreciation $ (84,257,053) (10,391,687) (11,370,386) (11,437,790) (11,482,485) (12,373,558) (12,415,216) (8,979,416) (1,755,337) (1,718,608) (1,198,048) (871,228) (263,293) 0 0 0 0 0 0
Net Profit Before Taxes $ 149,340,190 0 3,996,163 12,985,314 11,405,422 11,618,458 10,131,950 12,384,994 19,317,732 16,877,603 11,729,067 2,842,096 (2,322,607) (2,564,988) (740,597) (736,984) (733,371) (729,759) (726,146)
Profit Sharing 8% $ (9,063,104) 0 (319,693) (1,038,825) (912,434) (929,477) (810,556) (990,800) (1,545,419) (1,350,208) (938,325) (227,368) 0 0 0 0 0 0 0
Subtotal 0 3,676,470 11,946,489 10,492,988 10,688,981 9,321,394 11,394,194 17,772,313 15,527,394 10,790,742 2,614,728 (2,322,607) (2,564,988) (740,597) (736,984) (733,371) (729,759) (726,146)
Income Tax @ 30% $ (31,267,708) 0 (1,102,941) (3,583,947) (3,147,896) (3,206,694) (2,796,418) (3,418,258) (5,331,694) (4,658,218) (3,237,222) (784,418) 0 0 0 0 0 0 0
Net Profit After Taxes $ 118,072,482 0 2,573,529 8,362,542 7,345,092 7,482,287 6,524,976 7,975,936 12,440,619 10,869,176 7,553,519 1,830,310 (2,322,607) (2,564,988) (740,597) (736,984) (733,371) (729,759) (726,146)
Add-Back Non-Cash Depreciation $ 84,257,053 10,391,687 11,370,386 11,437,790 11,482,485 12,373,558 12,415,216 8,979,416 1,755,337 1,718,608 1,198,048 871,228 263,293 0 0 0 0 0 0
Add-back amortization $ 23,960,000 2,108,333 2,638,910 2,604,985 2,539,921 2,578,856 2,466,885 2,350,163 2,207,912 2,083,965 1,700,768 609,922 69,379 0 0 0 0 0 0
Add-back tax loss carry forward $ 14,414,000 3,672,622 10,741,378 0 0 0 0 0 0 0 0 0 0
Capital Costs: 1.00
Mine, Process, Infrastructure & Owner's Costs $ (53,813,367) (10,762,673) (43,050,694)
Preproduction Mine Development & Equipment $ (9,908,563) (9,908,563)
Owners Costs $ (4,226,150) (4,226,150)
Spare Parts $ 0 (832,633) 0 0 0 0 0 0 0 0 0 0 0 832,633
Total Capital Costs $ (68,780,713) (10,762,673) (58,018,039)
Sustaining Capital 13,462,587
Sustaining Capital $ (15,007,612) (497,199) (6,524,663) (449,361) (297,962) (5,940,487) (277,724) (187,304) (199,632) (204,502) (428,777) 0 0 0 0 0 0 0 0
Working Capital Expenditures $ (6,654,870) (6,654,870) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Working Capital Recapture $ 6,654,870 0 0 0 0 0 0 0 0 0 0 6,654,870 0 0 0 0 0 0
IGV (VAT) 19% $ (13,068,335) (2,044,908) (11,023,427)
IGV (VAT) Recapture- $8,442,000 million added for existing Santa Ana
Balance 19% $ 21,510,335 10,779,755 10,730,581 0
Plus Salvage Value $ 2,500,000 0 0 0 0 0 0 0 0 0 0 0 2,500,000 0 0 0 0 0
ANNUAL CASH FLOW $ 115,020,895 (12,807,581) (69,041,467) 19,800,328 31,530,121 21,955,956 21,069,535 16,494,214 21,129,353 19,118,212 16,204,237 14,467,247 10,023,558 3,311,460 5,497,568 (64,988) (740,597) (736,984) (733,371) (729,759) (726,146)
CUMULATIVE CASH FLOW (12,807,581) (81,849,048) (62,048,720) (30,518,600) (8,562,644) 12,506,892 29,001,105 50,130,458 69,248,670 85,452,907 99,920,154 109,943,712 113,255,172 118,752,740 118,687,752 117,947,155 117,210,171 116,476,800 115,747,041 115,020,895
After Tax IRR
IRR = 21.8%
NPV ($) @ 8.0% $46,502,778
NPV ($) @ 5.0% $66,458,082
NPV ($) @ 0.0% $115,020,895
ANNUAL CASH FLOW BEFORE TAX, IGV, & DEPRECIATION $ 143,577,074 (10,762,673) (58,018,039) 9,020,573 22,222,174 26,578,728 25,129,866 20,630,385 24,736,327 23,527,270 23,081,349 20,475,674 14,199,106 4,323,246 4,664,935 (2,564,988) (740,597) (736,984) (733,371) (729,759) (726,146)
CUMULATIVE CASH FLOW (10,762,673) (68,780,713) (59,760,140) (37,537,966) (10,959,238) 14,170,628 34,801,013 59,537,339 83,064,609 106,145,958 126,621,632 140,820,738 145,143,983 149,808,918 147,243,931 146,503,334 145,766,350 145,032,979 144,303,220 143,577,074
Before Tax IRR
IRR = 25.3% 2,094,155
NPV ($) @ 8.0% $61,441,705 (5.23)
NPV ($) @ 5.0% $85,283,009
NPV ($) @ 0.0% $143,577,074
Rev: 0
Date: October 2010
23.9.2 Taxes and Royalties
Along with the pre-tax financial model, a financial model was prepared that incorporated the
prevailing Peruvian corporate tax regime and took into account the current tax situation of the
holding company of the Santa Ana project. Only losses and expenses that can be used by the
current holding company of the Santa Ana project were used, no additional tax advantages were
used that could be applied from other projects were used.
The assumptions used in calculating the taxes were as follows.
• The Peruvian production royalty was applied to the gross revenue at 1% for the first $60
million of annual revenue, 2% on the next $60 million (increment of revenue $60 to $120
million) and 3% to any revenue above $120 per year;
• All capital was depreciated using straight line depreciation per year of 15%, with 10% being
applied in year 7;
• $23.96 million of pre-production expenses were amortizes over the life of the project on a
silver ounces units-of-production basis;
• Peruvian mandatory employee profit sharing of 8% is applied to the net profits. This cost is a
pre-tax expense;
• A 30% Peruvian corporate tax was applied to the net profits;
• The company will have $14.414 million in tax loss carry-forward available in 2013 and this
was applied in financial model to reduce payable taxes until the balance was reduced to zero;
and
• In Peru the there is a value added tax called the IGV which is applied to all goods and
services at a rate of 19%. The company can recuperate this tax as the production will be
exported. The company will have a credit of $8.442 million that will be recuperated once
commercial production starts. In addition, a total of $13.068 million in IGV will be paid during
construction of the project. The Company can recuperate these taxes based on 19% of the
gross revenues in the early years of production. In the financial model, the IGV is recuperated
in the first 2 years of operation.
In the financial model, the company will pay $6.46 million in Peruvian production royalty, $9.06
million in mandatory employee profit sharing and $31.3 million in corporate income tax.
23.10 Opportunities
23.10.1 Finer Crushing

Bear Creek has completed six column leach test at McClelland Labs and over one-hundred leach
amenability tests. The results have consistently demonstrated that the Santa Ana ore responds well
to conventional heap leaching techniques. The overall recovery is expected to be 70% silver for
minus 19mm (¾ inch) crushed material. More recent column tests indicate that further
improvements in recovery to 75% silver can be achieved by crushing the ore to minus 9.5mm
(3/8 inch). The preliminary results of the finer crushed column tests are shown in Figure 16.2 and
the increased recovery rate is clearly evident from this test.
McClelland Laboratories is currently performing a column test on minus 9.5mm (3/8 inch) crushed
material. The 168hr. bottle roll test preliminary results indicated an 11.3% recovery gain over the
p80 19mm bottle roll tests. A portion of the recovery gain can be attributed to faster leaching at the
Rev: 0
Date: October 2010
smaller size. The column test at p80 9.5mm through 49 days of leaching had extracted nearly as
much silver as the p80 19mm column did in 144 days of leaching. The column work holds the
promise of increasing the final silver recovery by 5% in one half of the leach time. BCM will release
the results when this long-term test is finished. Initial results strongly indicate an improvement in
recovery and acceleration of the silver leaching.
Reducing the crushed ore size to a minus 9.5mm product (3/8 inch) involves capital cost
expenditures for a necessary third crusher stage adding approximately $2M in capital cost and
0.30/t in operating costs. With the additional recovery of silver this should result in a reduction in
cash costs per ounce by $0.30 from the base case. Additional cost savings (not calculated) would
be realized in reducing the amount of recirculation of solutions needed to complete the leach cycle.
Figure 23.25 below shows the recovery by grain size fraction achieved in the last ¾ inch (19mm)
column leach test performed at McClelland Labs. It clearly shows that there is a large improvement
in the recovery of silver when the material is crushed fine. This is why it is anticipated that there will
be an increase in recovery when the crush size is reduced from ¾ of an inch (19 mm) to 3/8 of an
inch (9.5 mm).
Figure 23.26
Silver Recovery vs. Ore Grain Size
23.10.2 Northern Extension

The Company discovered a new style of base metal-rich mineralization in the northwest portion of
the project 4 holes (SA-221, SA-222, SA-241 and SA-241A). The location of these four holes is
shown in Figure 23.8 and the grades of the mineralized sections are tabulated below. This new
zone includes abundant fine sulfide mineralization containing higher lead and zinc than is common
in the central zone of the South Anomaly. This new zone trends towards the Northern Anomaly
which has been a target for exploration for some time but has received only surface mapping and
Rev: 0
Date: October 2010
prospecting up to this time. The Company plans to expand its exploration efforts in this area to
identify targets for future expansions of the mine plan.
Table 23.20
Northern Extension Drilling
Depth
Drillhole Azimuth Inclination Total From To Silver Lead Zinc
Interval
ID (degrees) (degrees) Depth (m) (m) (g/t) (%) (%)
(m)
SA- 221 110 -60 106 74 104 30 36.1 1.3 2.3
SA- 222 110 -60 108.6 18 50 32 48.8 1.2 2.0
SA- 241 90 -70 152.6 36 56 20 28.6 1.4 1.3
and 86 98 12 63.5 2.1 1.2
and 116 132 16 47.4 0.3 0.5
SA- 241A 270 -70 115 66 96 30 62.7 1.1 0.5
Figure 23.27
Northern Drilling Location Map
Rev: 0
Date: October 2010
23.10.3 Longer Mine Life
IMC prepared an alternative mine plan to the base case and it is discussed in detail in Section
23.1.6.2. Figure 23.28 shows the amounts of recoverable ounces of silver placed on the pad. Since
both plans have a similar stripping ratio of approximately 2:1 this shows that the mine could be
extended easily at the latter years of the project. The base case leaves 36 million ounces of
measured and indicated silver resources in either stockpiles or pit walls that can lead to expanded
mine life on the order of 50%. Relatively minor additional capital will be required in order to increase
the size of the heap leach pad and waste dump sites for which there is ample area for expansions.
Figure 23.28
Current Mine Plan Production vs. Extended Life Alternate Plan
23.10.4 Deep Potential

The mineralization at Santa Ana is controlled within wide structural corridors where the rock has
been structurally shattered creating high permeability that was flooded with carbonate and silver
mineralization. Many of the exploration holes end in ore-grade mineralization leaving the
mineralization open for expansion at depth. Furthermore, high-grade structural feeder zones
providing a source for the mineralizing fluids potentially underlie this large ore body and are
considered targets for higher grade underground mining targets. The company will be targeting
deep holes that will determine what type of mineralization occurs at depths of 300m to 400 m below
the surface during 2011.
Rev: 0
Date: October 2010
24 Illustrations
Figure 24.1 shows the general layout of the proposed Santa Ana mine, including the open pit, leach
pad, waste rock facility, access roads, process plant and water supply pipeline.
Figure 24.2 shows the process flowsheet.
Rev: 0
Date: October 2010
LEGEND
N 8 163 000
N 8 160 000
N 8 157 000
WATER SUPPLY WELL FIELD
EXISTING GROUND SURFACE CONTOURS
E 471 000 E 471 000 4200
GRADED SURFACE CONTOURS

4200
OPEN PIT GRADED SURFACE CONTOURS

4200
PHASE 1, 2, 3 AND WASTE DUMP PROJECTED

4200 STACKING SURFACE CONTOURS
DESIGN LINE
LIMIT OF CUT OR FILL
EXISTING ACCESS ROAD
EXISTING GULLIES
STOCKPILE LIMIT
PROJECTED FACILITIES
NOTAS:
1. IN JANUARY 2010, THE OWNER PROVIDED THE TOPOGRAPHY.
2. THE EXISTING FACILITIES LOCATED INSIDE THE CONSTRUCTION LIMITS

WILL HAVE TO BE REMOVED AND/OR RELOCATED BY THE OWNER
BEFORE THE BEGINNING OF CONSTRUCTION.
WATER SUPPLY LINE
DIVERSION ACCESS ROAD
E 468 000 E 468 000

TOP SOIL STOCKPILE 1
TOP SOIL STOCKPILE 2
LEACH PAD
MAIN HAUL ROAD
SOLUTION PONDS
PROCESS PLANT
CRUSHER
MINE ACCESS ROAD WATER TANK OPEN PIT
E 465 000 E 465 000

ELECTRICAL TRANSMISSION LINE WASTE ROCK FACILITY
600 0 600 300 1 200 2 400
(EN METROS)
TA
MA 1:30 000
PO
TO
CLIENTE:
BEAR CREEK - MINING CORPORATION
DEFINITIVE FACILITY STUDY - SANTA ANA PROJECT
LEACH PAD, PONDS, WASTE DUMP, ACCESS ROADS AND FACILITIES
GENERAL LAYOUT
SANTA ANA MINE
N 8 163 000
N 8 160 000
N 8 157 000
07.82.13.02 A
19/10/2010
DIBUJADO: C.TUEROS
DATUM:
UTM
PSAD 56
ZONA:
ESCALA:
19
1:30 000
REVISADO:
APROBADO: D.PARRA
24.1
ARCHIVO CAD: X:\078213.XX BEAR CREEK - SANTA ANA PROJECT\078213.02 DFS\DESIGN\REV. A\NI43101\FIGURA 24.1.DWG ISSUED FOR REVIEW
LIME STORAGE
SODIUM
SODIUM CYANIDE
STOCKPILE
HYDROXIDE
SODIUM HYDROXIDE SODIUM CYANIDE SODIUM CYANIDE

MIXING TANK MIXING TANK DOSING TANK
COMPRESSOR
FILTER PRESSES UNCLARIFIED

SOLUTION
TANK
COMPRESSED AIR
DUST COLLECTION SYSTEM
SLUDGE
BODY FEED TANK PRE COAT TANK
BARREN SOLUTION NaOH

B
H2O2 CuSO4
LIME
FLOCCULANT
ACID
WATER
EFFLUENT DETOXIFICATION TREATMENT

ACID WATER TREATMENT
STREAM MASS BALANCE NOTES: LEGEND:

L-01 L-02 L-03 L-04 L-05 L-06 L-07 L-08 L-09 L-10 L-11 L-12 L-13 L-14 L-15 L-16 L-17 L-18
antiscalant
1. THE MASS BALANCE IS BASED ON STREAM
PREGNANT SOLUTION PRE-COAT PRE-COAT BODY FEED ADDITION OF ZINC DUST NaCN (25%) antiscalant NaCN (25%) LEACH SOLUTION
DESCRIPTION UNITS LIME PREGNANT SOLUTION TO TO MERRILL-CROWE ADDITION TO FILTER ADDITION TO FILTER ADDITION TO LEAD NITRATE ADDITION TO EMULSIFIER TO TO BARREN TANK TO 10,000 TONNES/DAY OPERATION
PROCESS WATER PRECIPITATE FROM DRY PRECIPITATE TO
ROM TO TO PREGNANT PREGNANT POND PLANT CLARIFIERS PRESSES CLARIFIERS SOLUTION 145-TR-001 130-PU-006 BARREN TANK 130-PU-005 HEAP LEACH PAD FILTER PRESSES RETORT AND A LEACH CYCLE OF 24 HR/DAY.
PAD POND 130-PU-017 145-PU-001/002 130-PU-007/008 130-PU-007/008 130-PU-009/010 145-TR-005 130-PU-020 135-PU-007/008 CONTINUOUS PROCESS
PHASE SOLID SOLID LIQUID LIQUID LIQUID SOLID / LIQUID SOLID / LIQUID LIQUID LIQUID SOLID LIQUID LIQUID LIQUID LIQUID LIQUID SOLID SOLID SOLID 2. THE DESIGN ASSUMES AN ORE
SOLUTIONS (m3/h)(l) ------ ------ 571 0.0045 571 270 270 2.38 0.0182 ------ 0.190 0.0054 0.45 571 3.86 (l/s) ------ ------ ------ MOISTURE CONTENT OF 4
PERCENT IN THE WET SEASON AND NON-CONTINUOUS PROCESS
SOLIDS (kg/hr)(kg/day) ------ ------ ------ ------ ------ ------ ------ ------ ------ 10.7 (kg/hr) ------ ------ ------ ------ ------ 928.3 (kg/day) 927.7 (kg/day) 373.4 (kg/day) CLIENTE:
FLOW t/day 10,000 10.8 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
3 PERCENT IN THE DRY SEASON.
BEAR CREEK - MINING CORPORATION
CONCENTRATION ppm (%) ------ >80% ------ 10 ------ 1% 1% 2% 5% 99% 25% 10 25% 150 (ppm) ------ ------ ------ ------
3. GOLD AND SILVER GRADES ARE DEFINITIVE FACILITY STUDY - SANTA ANA PROJECT
TAKEN FROM THE PROJECT DRAWING REFERENCE
TEMERATURE ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ 550 1,150 DESIGN CRITERIA LEACH PAD, PONDS, WASTE DUMP, ACCESS ROADS AND FACILITIES
GOLD GRADE (AU) (g/m3) (%) 0.01 (gpt) ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ 0.01 (%) ------ ------
4. NOMINAL FLOW RATE IS 519 M3/HR.
SILVER GRADE (AG) (g/m3) (%) 53.0 (gpt) ------ 28.9-31.8 ------ 28.9-31.8 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ 39.96 (%) ------ ------ OVERALL PROCESS
GOLD OUNCES (Oz/day) ------ ------ 379.57 ------ 379.57 ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ 2.57 ------ 3 MASS BALANCE
SILVER OUNCES (Oz/day) ------ ------ 838.79 ------ 838.79 ------ ------ ------ ------ ------ ------ ------ ------ ------ 11927.9 ------ 11928
------
OPERATION TIME (hr) 24 24 24 24 24 0.08 a 0.16 0.08 a 0.16 24 24 24 24 24 24 24 ------ ------ 24 8 07.82.13.02 A
20/10/2010
DIBUJADO: C.TUEROS
DATUM:
UTM
PSAD 56
ZONA:
ESCALA:
19
S/E
REVISADO:
APROBADO: D.PARRA
24.2
ARCHIVO CAD: X:\078213.XX BEAR CREEK - SANTA ANA PROJECT\078213.02 DFS\DESIGN\REV. A\NI43101\FIGURA 24.2.DWG ISSUED FOR REVIEW

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Environment &

Bear Creek Mining Corporation

Environment & Sustainability 1

Table 1.1 Reserve and Resource Estimate 3

Figure 1.1 Mine Schedule Summary 5

1.1 Introduction and Executive Summary

1.4 Resources and Reserves

1.5 Mining Plan

Item Description Value

The estimated monthly production is 306,255 ounces of silver.

1.10 Project Execution

1.11 Operating Cost Estimate

1.12 Capital Cost Estimate

1.13 Economic Analysis

Sensitivities to various parameters are summarized below:

Case IRR NPV @ 5% NPV @ 0%

1.14.1 Organic Growth

1.14.2 Exploration Upside

1.14.3 Enhanced Silver Recovery

1.14.4 Operating Cost Reductions

1.15 Conclusions & Recommendations

• Positive economics with excellent exposure to up-side silver prices;

2.2 Project Team and Responsibilities

Concession Identification Size

5.3 Local Resources

The relative order of cyanide solubility of the silver mineralization is:

Santa Ana Drill Data as of June 2010

13.1 Analytical Procedure

13.2 Quality Control Procedures (QA/QC)

13.3 Sample Security

14.2 Certificate Check

DDH-SA-8 DDH-SA-26 DDH-SA-50 DDH-SA-135

DDH-SA-168 DDH-SA-172 DDH-SA-176 DDH-SA-180

June 2010 Certified Value of 1.0 gm/t (Rock Labs_35)

February 2009 Certified Value of 0.0 g/t

• Number Inserted 172

February 2009 Certified Value of 1.0 g/t

• Number Inserted 110

14.5 Pulp Check Assays

(Chemex Avg=24.7 g/t : Inspectorate Avg=24.4 g/t)

(5th to 99th Percentiles Plotted)

(Chemex Avg=17.95 g/t : Inspectorate Avg=17.70g/t)

(5th to 99th Percentiles Plotted)

(Chemex Avg=0.35% Zn: Inspectorate Avg=0.34% Zn)

(Chemex Avg=2.17% Pb: Inspectorate Avg=2.14% Pb)

The 350 split core samples are from 284 drillholes.

Original Half Core

(350 Samples, Original Mean=25.6 g/t : Duplicate Mean=21.0 g/t)

(0 to 100th Percentiles, Points are not equal percentiles)

16.1.1 Metallurgical Testing – Phase I

16.1.1.1 Test Procedures

16.1.1.2 Test Results and Conclusions

The tests were done at McClelland Laboratories in Sparks, Nevada.

16.1.2.1 Bottle Roll Tests

16.1.2.2 Column Tests

• Heap Grade ore at p80 19mm;

16.1.2.3 Cyanide Amenability Tests (Shaker)

Grade Recovery Duration

16.1.3 Metallurgical Testing – Phase III

• Whole rock and ICP identification;

16.1.3.1 Sample Selection

Hole Weight Depth Range

16.1.3.3 Column Leach Tests

Size Leach/Rinse Ag Recovery Calculated