FOR: BEMA GOLD CORPORATION
TSX, AMEX SYMBOL: BGO
AIM SYMBOL: BAU
June 3, 2005
Bema Announces Kupol Feasibility Study Results/Initial Phase III Drill Results; Notice of Conference
Call
VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - June 3, 2005) - Bema Gold Corporation
(TSX:BGO)(AMEX:BGO)(AIM:BAU) is pleased to announce the results of a Feasibility Study (the
"Feasibility Study") for the Kupol gold and silver project located in Chukotka, North Eastern Russia.
The Feasibility Study demonstrates that Kupol is technically feasible and can be developed as a high
grade, low cost gold and silver mine with robust project economics. Bema is earning a 75% interest in
the project, from the Government of Chukotka. All dollar figures are in United States dollars unless
otherwise indicated.
Following two seasons of drilling, in 2003 and 2004, Bema identified an estimated Indicated Mineral
Resource at Kupol of 6.4 million tonnes containing 4.2 million ounces of gold at an average grade of
20.3 grams per tonne (g/t) and 53 million ounces of silver at an average grade of 257 g/t and a
further 4 million tonnes of Inferred resources containing 1.6 million ounces of gold at an average
grade of 12.4 g/t and 23 million ounces of silver at an average grade of 171.4 g/t.
Using only the Indicated Mineral Resource, the Feasibility Study calculates a probable reserve
estimated at 7.1 million tonnes containing 3.85 million ounces of gold at an average grade of 16.9 g/t
and 48.76 million ounces of silver at an average grade of 214 g/t. The following tables outline the
production scenario on a 100% basis, using a gold (Au) price of $400 per ounce and a silver (Ag) price
of $6.00 per ounce.
/T/
Year 1-2 estimated average:
---------------------------------------------------------------------
Tonnes/ Grade Au Grade Ag Au oz's/ Ag oz's/ Oper. cash Total cash
day g/t g/t year year cost/oz(i) cost/oz(i)
---------------------------------------------------------------------
3000 23.1 242.9 701,000 6,260,000 $41 $83
---------------------------------------------------------------------
Year 1-5 estimated average:
---------------------------------------------------------------------
Tonnes/ Grade Au Grade Ag Au oz's/ Ag oz's/ Oper. cash Total cash
day g/t g/t year year cost/oz(i) cost/oz(i)
---------------------------------------------------------------------
3000 18.7 227.5 600,000 6,100,000 $43 $84
---------------------------------------------------------------------
Life of mine average (6.5 years):
---------------------------------------------------------------------
Tonnes/ Grade Au Grade Ag Au oz's/ Ag oz's/ Oper. cash Total cash
day g/t g/t year year cost/oz(i) cost/oz(i)
---------------------------------------------------------------------
3000 16.9 214 552,000 5,860,000 $47 $88
---------------------------------------------------------------------
(i)net of silver credit
/T/
The total pre-production capital cost is estimated at approximately $364 million which includes $288.2
million for mine site facilities and pre production development, $36 million for mining equipment and
$39.8 million in working capital. (This compares to the combined total of pre-production capital costs
and mining equipment costs of $340 million from the Kupol Preliminary Economic Assessment released in
May 2004).
Using $400 gold and $6.00 silver Bema has calculated a preliminary, pre tax, Net Present Value
(NPV)(a) at a 0% discount, of approximately $730 million for the life of mine. At a 5% discount the
NPV(a) has been calculated at approximately $430 million. Based on the assumptions from the
Feasibility Study, pre-production capital payback is estimated at approximately 18 months. These
calculations are based solely on probable reserves and do not include the inferred resource.
(a)100% basis
Mine Plan
The Feasibility Study contemplates the simultaneous commencement of open pit and underground mining.
For the first three years, the mill will process approximately 1,000 tonnes per day of open pit ore
and approximately 2,000 tonnes per day of underground ore. After year three the mill will process
approximately 2,750 tonnes per day of underground ore and 250 tonnes per day of stockpiled ore. Gold
recoveries are estimated to average 93.8%, while silver recoveries are estimated to average 78.8%. The
milling process will consist of a primary crushing and gravity circuit, and will include conventional
gravity technology followed by whole ore leaching. Merril Crowe precipitation will be used to produce
gold and silver dore bars.
The Feasibility Study was prepared by an integrated engineering team which included Bema personnel,
Orocon Incorporated, AMEC Americas Limited, Thyssen Mining and a group of independent metallurgical
labs.
Inferred Resources
In addition to the probable reserve outlined in the Feasibility Study the Kupol property hosts an
inferred resource estimated at approximately 4 million tonnes grading 12.4 g/t gold and 171.4 g/t
silver containing 1.6 million ounces of gold and 23 million ounces of silver. This inferred resource
is proximal to the Kupol reserves, located primarily to the north of the North Zone. If further
drilling succeeds in converting these resources to reserves, this could extend the Kupol mine life up
to approximately 6 years (depending on the mining rate) beyond the current 6.5 years as identified by
the Feasibility Study.
Financing
With the completion of the Feasibility Study, Bema is working to finalize negotiations with its
bankers regarding the project loan facility for the development of the Kupol mine. Bema is currently
utilizing a $100 million bridge loan from Bayerische Hypo- und Vereinsbank AG ("HVB") for the ongoing
development work at Kupol. This bridge loan will be paid back from a portion of the project loan.
Development
The 2005 development program has commenced consisting of camp expansion, road construction and site
earth works. Materials for the 2006 development program are currently being procured and will be
shipped to the Pevek (Russia) storage facility this summer for delivery to the Kupol site next year.
The main construction years at Kupol will be 2006 and 2007, with production scheduled for mid 2008.(b)
(b)Subject to financing and final permitting
Exploration
The 2005 exploration and condemnation drill program has commenced at Kupol using six rigs. The
schedule calls for 45,000 metres of exploration, condemnation and infill drilling. The primary focus
of this year's program is exploration designed to drill test the deposit to the north and to depth in
the north, to test the main structure at depth looking for stacked boiling zones, to drill further
south on the main structure and to at least 4 other possible parallel structures. To date, Bema has
drilled 17 holes totaling 4,270 metres of condemnation and exploration drilling, complete results have
been received from six condemnation and one exploration hole.
The first exploration hole (hole 05-456), a step-out hole drilled 100 metres north of the last
mineralized hole in the North Extension Zone, intersected 28.33 g/t gold and 245.7 g/t silver over a
drill length of 13.6 meters (approximate true width of 8 meters). The North Extension Zone continues
to remain open to the north and at depth.
Condemnation holes drilled in the tailings area, 1.5 kilometres southwest of Big Bend, have
intersected a large zone of structurally controlled clay alteration similar to the upper part of the
North Zone Extension. Hole 05-457 drilled in this area intersected 2.95 meters of 44.54 g/t silver in
a quartz vein. The orientation of this vein and its genetic relationship to the clay alteration zone
is currently unknown and follow up drilling is on going in this area.
/T/
Results from the significant intercepts are as follows:
---------------------------------------------------------------------
Hole # Location From To Length Gold Silver
(m) (m) (m) g/t g/t
---------------------------------------------------------------------
---------------------------------------------------------------------
KPO5-456 North Extension 376.2 389.8 13.6 28.3 245.7
includes 376.2 382.9 6.7 40.3 301.45
plus 402.1 405.6 3.5 5.9 43.4
KPO5-457(c) Tailing area 118.0 120.95 2.95 0.1 44.5
---------------------------------------------------------------------
(c)Condemnation hole
/T/
A Quality Control Program ("QC") has been designed in concert with an independent consultant to meet
or exceed the requirements of N1 43-101. This QC program includes the use of certified standard
reference samples, coarse field blank material and duplicate sampling. Tom Garagan, Vice President of
Exploration, is the Qualified Person for Bema Gold Corporation. For drill hole locations please refer
to the last page of this news release.
Conference Call Details
Bema will host a conference call and webcast to discuss the Kupol Feasibility Study on Friday, June 3,
2005 at 11:00 am PST / 2:00 pm EST. You may access the call by calling the operator at 416-695-9753 or
toll free 1-877-888-7019 prior to the scheduled start time. A playback version of the call will be
available for one week after the call at 416-695-5275, or within North America call toll free 1-888-
509-0081. The webcast can be accessed from Bema's web site at http://www.bema.com.
On behalf of BEMA GOLD CORPORATION
"Clive T. Johnson"
Chairman, C.E.O., & President
Bema Gold Corporation trades on the Toronto Stock Exchange (TSX) and the American Stock Exchange
(AMEX). Symbol: BGO. Bema Gold also trades on the London Stock Exchange's Alternative Investment
Market (AIM). Symbol: BAU.
Some of the statements contained in this release are "forward-looking statements" within the meaning
of Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause our actual results, performance or
achievements to differ materially from the anticipated results, performance or achievements expressed
or implied by such forward-looking statements. Forward-looking statements in this release include
statements regarding: the Company's projections regarding gold production, costs of production,
drilling and development program and financings. Factors that could cause actual results to differ
materially from anticipated results include risks and uncertainties such as: risks relating to
estimates of reserves, mineral deposits and production costs; mining and development risks; the risk
of commodity price fluctuations; political and regulatory risks; and other risks and uncertainties
detailed in the Company's Form 40-F Annual Report for the year ended December 31, 2004, which has been
filed with the Securities and Exchange Commission, and the Company's Renewal Annual Information Form
for the year ended December 31, 2004, which is an exhibit to the Company's Form 40-F and is available
at the SEDAR website. The Company disclaims any intention or obligation to update or revise any
forward-looking statements, whether as a result of new information, future events or otherwise.
Kupol Mineral Resource
QA/QC on Assay and Logged Database
The Kupol QA/QC program used to monitor the accuracy of the assay database was managed by Bema's
Qualified Person Tom Garagan and was audited by Smee and Associates, who found it to be compliant with
43-101 regulations. The lithology database was verified by redundant checks against original and quick
log information
Methodology Used to Estimate the Kupol Resource
The construction of the Resource Model was performed using Datamine software by Bema personnel and
several contractors. The process of building the resource model was overseen by Susan Meister
(Resource Modeling consultant) and Ken Brisebois (AMEC, Principle Geostatistician).
The resource was estimated from a three-dimensional block model, which was created by interpreting the
vein, stockwork zone, dyke and faults on east-west trending vertical cross sections and reconciling
the interpretations on levels. Three-dimensional solids (wireframe) models were built from the
interpretations and were the basis for coding the block model. Within the vein and stockwork
interpretation, 1.5-metre composites were created from the assay intervals. To best represent the high
and lower grade portions of the vein, an indicator variable was created using the intensity of
sulfosalts and Au grade. Variograms were run on composites for the indicator variable in addition to
Au and Ag within the high-grade portion and Au and Ag within the lower grade portion of the vein.
The indicator (high-sulfosalt) variable, high-grade Au, low-grade Au, high-grade Ag and low-grade Ag
were estimated with four passes of ordinary kriging, using 15 search orientations from south-to-north
that match the local strike and dip of the vein. Each of the passes was used to control the amount of
data mixing with consideration given to the drill hole spacing.
The whole block grade for vein was calculated using the kriged indicator to weight the high and low
grade kriged estimates. The formula used in this calculation was determined by visual inspection of
the block grades relative to the drill hole and trench data, comparison of the average grade at a zero
cutoff to the average of the declustered composites and comparison of profiles of kriged versus
nearest neighbor results by northing and elevation.
An insitu dry density of 2.48 tonnes per cubic metre was used for tonnage calculations. This is based
on 543 vein samples collected from throughout the deposit. These were tested at site using the wax-
coated density technique as specified in ASTM standard C914-95 (reapproved 1999).
Checks made on the model include a comparison of the kriged estimate to the nearest neighbor (block
polygon) models and to the declustered composites. The effect of edge (contact) dilution and ore loss
will be assessed in a mining study that is in progress. Visual checks of the block grades relative to
the drill hole and trench data were completed in detail on cross sections and levels on the computer
screen.
Resource Classification
Mineral Resources have been categorized using the classification of the Canadian Institute of Mining,
Metallurgy and Petroleum (2000), relevant definitions being quoted below. This classification is the
basis for Technical Reports by Qualified Persons in Canada, and the classification is virtually the
same as that of the JORC code (Australia), SME guidelines (USA), SAMREC (South Africa) and that of the
European Union.
The CIM Mineral Resource Definitions state that an Indicated Mineral Resource is that part of a
Mineral Resource for which quantity, grade or quality, densities, shapes and physical characteristics
can be estimated with a level of confidence sufficient to allow appropriate application of technical
and economic parameters, to support mine planning and evaluation of the economic viability of the
deposit. The estimate is based on detailed and reliable exploration information gathered through
appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that
are spaced close-enough for geological and grade continuity to be assumed. Mineral resources under NI
43-101 must show a reasonable chance of economic viability however are not mineral reserves and do not
have demonstrated economic viability.
An Inferred Mineral Resource can be estimated on the basis of geological evidence and limited sampling
and reasonably assumed, but not verified geological and grade continuity. The estimate is based on
limited information from locations such as outcrops, trenches, pits, workings and drill holes.
Due to the uncertainty which may attach to Inferred Mineral Resources, it cannot be assumed that all
or part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource
as a result of continued exploration.
At Kupol, Indicated and Inferred Resources were defined by reviewing grade and mineralized vein width
on east/west trending cross sections and on a vertical longitudinal projection. Indicated Mineral
Resources are estimated where drill holes or trenches intersect the vein(s) at an approximate 50-metre
spacing. Eighty-three percent of the Indicated Resource is supported by approximately 25x50-metre
drill hole spacing. Projection of Indicated Resources is limited to 25 metres down-dip in the vein and
12.5 to 25 metres along strike. Within Indicated Resources, the vein structure is continuous, although
the vein thickness may be affected locally by faulting and dikes. The grade appears continuous from
hole to hole; this continuity has been confirmed by 141 trenches spaced at 4- to 5-metre intervals and
27 trenches at 10-metre intervals across the outcrop of the vein. Additionally, 63 close spaced drill
holes were completed in Big Bend and South Zones, which confirm the grade and vein continuity. The
average spacing of the detailed drilling is 10-metres along strike and 5 to 10-metres down dip.
Inferred Mineral Resources are estimated down dip and along strike from Indicated Resources in areas
that have been drilled on an approximate 100-metre spacing. Projection distances have been limited to
within 100 m of a drill hole.
Metal-at-Risk (Capping Levels)
The Mineral Resource is risk-adjusted with an average 5.8% metal reduction in the 25x50-metre spaced
drill area (within Indicated Resource), 11.3% metal reduction in the 50x50-metre spaced drill area
(within Indicated Resource) and 3.7% metal reduction in Inferred Resource. These approximately
correspond to reductions of 5.8, 12.2 and 5 % targets developed by Dr. Parker and Mr. Brisebois. The
risk-adjustment accounts for a large portion of the gold being represented by a relatively small
proportion of samples having very high grades. Blocks in the three-dimensional block model with gold
grades greater than 8 g/t were adjusted downward by factoring the indicator to attain the metal
reduction suggested by the metal-at-risk analysis.
Risk Adjustment (Description of Methodology)
Precious metals deposits have skewed grade distributions. Skewed grade distributions have the property
that a small proportion of samples can represent a disproportionately large amount of metal. The
limited number of these samples can introduce significant uncertainty into a resource estimate. It is
a common practice to cut the grades of very high-grade samples, restrict their projection distance or
to adjust resource models to mitigate risk.
In many precious metals deposits, Kupol included, the highest grade samples are scattered and
discontinuous at the exploration drill-hole spacing. The number of high-grade samples intersected can
vary according to the positioning of the drill holes, and it is impossible to know in advance which
positions would give the most accurate estimate of the amount of high-grade metal actually present.
The uncertainty related to the amount of high-grade metal can be evaluated using a Monte Carlo
simulation technique developed by Mineral Resources Development/AMEC that has been applied over a 14-
year period. This method simulates re-drilling the deposit 1000 times and notes the variation in the
amount of high-grade metal present in annual or global production increments. The 20th percentile of
the simulated metal contents is added to the metal content represented by the remaining samples to
give a risk-adjusted metal content. The difference between total metal content and risk-adjusted metal
content is termed metal at risk. Theoretically, in four periods out of five, the mine should do better
than the estimate; however there is additional and largely unquantifiable uncertainty related to how
representative the assay distribution input is to the simulation.
The appropriate time-period for Indicated Resources is annual, as Indicated Resources will be used to
prepare annual production schedules as part of scoping and feasibility studies. For Inferred
Resources, there is inadequate information to support annual planning; therefore a global time-period
is used.
The method has advantages over other top-cutting methods in that it takes into account 1) the data
density, and 2) the volumes used for production scheduling. As the data density is increased, the
amount of metal at risk declines; longer production increments will have less risk than shorter ones.
The Toronto Stock Exchange neither approves nor disapproves the information contained in this News
Release.
Some of the statements contained in this release are "forward-looking statements" within the meaning
of Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve known
and unknown risks, uncertainties and other factors that may cause our actual results, performance or
achievements to differ materially from the anticipated results, performance or achievements expressed
or implied by such forward-looking statements. Forward-looking statements in this release include
statements regarding: the Company's projections regarding gold production, costs of production,
drilling and development programs, financings and the proposed bid for Arizona Star. Factors that
could cause actual results to differ materially from anticipated results include risks and
uncertainties such as: risks relating to estimates of reserves, mineral deposits and production costs;
mining and development risks; the risk of commodity price fluctuations; political and regulatory
risks; and other risks and uncertainties detailed in the Company's Form 40-F Annual Report for the
year ended December 31, 2003, which has been filed with the Securities and Exchange Commission, and
the Company's Renewal Annual Information Form for the year ended December 31, 2003, which is an
exhibit to the Company's Form 40-F and is available at the Canadian Depository for Securities Web
site. The Company disclaims any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
/T/
Drill hole locations:
HOLE EASTING NORTHING ELEVATION DIP AZ LENGTH
KP05-452 76,154 89,530 505 -53.2 271.1 200.0
KP05-453 76,129 89,931 505 -55.4 91.1 250.0
KP05-454 76,243 89,530 508 -55 215 261.0
KP05-455 75,961 89,320 524 -53.8 269.9 93.8
KP05-455a 75,959 89,320 524 -53.3 269.4 250.0
KP05-456 77,304 93,040 504 -57 273 426.0(d)
KP05-457 76,065 89,320 522 -54.7 268.1 205.6
KP05-458 77,138 92,551 573 -62 270 166.2(d)
KP05-4-459 76,095 89,320 521 -55 270 292.9
KP05-460 76,994 90,422 536 -55 270 229.0
KP05-461 77,229 93,150 539 -60 270 553.0
KP05-462 77,037 90,424 535 -55 270 296.0
KP05-463 75,896 89,275 514 -55 90 200.4
KP05-464 72,210 91,425 636 -55 270 211.0
KP05-465 77,079 92,450 592 -55 270 134.0
KP05-467 77,210 91,425 654 -66 270 265.0
KP05-469 77,130 92,425 594 -58 270 236.0
(d)Does not include 2004 pre-collar
/T/
-30-
FOR FURTHER INFORMATION PLEASE CONTACT:
Bema Gold Corporation
Ian MacLean
Manager, Investor Relations
604-681-8371
investor@bemagold.com
OR
Bema Gold Corporation
Derek Iwanaka
Investor Relations
604-681-8371
investor@bemagold.com
http://www.bema.com
The Toronto Stock Exchange neither approves nor disapproves the information contained in this News
Release.
-0-
Bema Gold Corporation
Bema Npv (LSE:BAU)
Historical Stock Chart
From Sep 2024 to Oct 2024
Bema Npv (LSE:BAU)
Historical Stock Chart
From Oct 2023 to Oct 2024
