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TABLE OF CONTENTS Oct 14 - 20, 2013 Volume 99 Number 35 - 0 comments

Bellhaven rolls out PEA results at La Mina

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VANCOUVER — It has been a busy year for Colombia-focused junior Bellhaven Copper & Gold (TSXV: BHV; US-OTC: BHVCF) at its wholly controlled La Mina porphyry gold-copper project in the Middle Cauca volcanic-plutonic belt, 45 km southwest of Medellin.

The company completed a six-hole drill program at its La Garrucha prospect — which it optioned from AngloGold Ashanti (NYSE: AU) — in May, and on Sept. 18 released the results of a preliminary economic assessment (PEA) that models an open-pit mining operation at La Mina.

Bellhaven’s mine plan is based on twin open pits across La Mina’s La Cantera and Middle zone deposits, with global inferred resources at the project totalling 80 million tonnes grading 0.62 gram gold per tonne and 0.24% copper.

The company has focused on a higher-grade in-pit resource for its study, which includes 42.5 million tonnes averaging 0.74 gram gold, 0.24% copper and 1.91 grams silver for 1 million contained oz. gold, 2.6 million contained oz. silver and 226 million contained lb. copper.

La Mina’s initial development costs would total around US$320 million, with the mine producing 93,400 oz. gold, 80,367 oz. silver and 20.6 million lb. copper annually over 10 years.

A 12,500-tonne-per-day concentrator circuit would treat resource material, with milling costs sitting at around US$5.87 per tonne.

Recoveries are 90% for gold, 88% for copper and 30% for silver.

The projected returns are highly sensitive to gold prices. At US$1,200 per oz. gold, La Mina carries a US$101-million after-tax net present value (NPV) at an 8% discount rate, along with a 19.7% internal rate of return. Assuming US$1,400 per oz. gold La Mina’s NPV jumps to US$172 million, with an IRR of 26.4%. All values assume constant copper and silver prices at US$3.25 per lb. and US$20 per oz.

“The financial results outlined are highly encouraging, demonstrating the economic robustness of the existing resource, even in a low metal-price environment,” says chairman and CEO Julio Benedetti.

“These results support our belief that La Mina has potential to develop into one of the lowest-cost gold producers in the Americas and be a significant gold producer in Colombia,” he adds, noting all-in sustaining costs of US$1,082 per oz. gold, net of by-product credits, over the mine’s life.

Meanwhile, Bellhaven has been completing a US$1-million drill program at the 14 sq. km La Garrucha concession — which lies 600 metres east of its La Cantera deposit — in order to fulfill a first-year requirement under its earn-in agreement with AngloGold.

Bellhaven optioned La Garrucha in March, and can earn a 100% interest by spending US$8.5 million in the project over three years. If La Garrucha’s in-situ resources are greater than 3 million equivalent oz. gold, AngloGold can option back a 51% interest for US$17 million in cash.

Benedetti says that La Mina “still has outstanding potential to increase its existing resources and improve the project economics by drilling the nearby La Garrucha prospect,” adding that the company would begin prefeasibility study to expand the PEA and explore optimization. He also says that “we look forward to pursuing our exploration program at La Garrucha with the goal of adding new ounces.”

Drilling efforts at La Garrucha are off to a promising start. On Sept. 10, the company released assay results from a 3,000-metre program where four of the six holes collared at the site delivered long, mineralized intercepts.

Hole 1105 established that La Garrucha’s gold-copper zone starts at surface when it cut 145 metres grading 0.51 gram gold and 0.15% copper. By far the most promising intercept for Bellhaven, however, occurred in hole 1106, where the company cut 271 metres averaging 1.03 grams gold and 0.13% copper from 171 metres depth.

“The continuity of mineralization between the two sections is very good, providing a high degree of predictability to the deposit. The mineralization remains open to the southeast and to the northwest, as well as at depth. There is still a lot of drilling to do before we define the outer limits of the deposit,” Benedetti says.

Bellhaven reported US$1.9 million in working capital at the end of April, and initiated cost-saving initiatives in early June. The company closed its offices in Denver and Colorado, and reduced salary to key personnel by between 20% and 25%. Bellhaven issued incentive stock options to management and board members, as disposition for the reduction in salaries and to foster an “owner mentality among its workers.”

Over the last 52 weeks, shares traded between 5¢ and 26¢, and closed up 6% at press time at 9.5¢  after news of La Mina’s PEA.

Bellhaven maintains 137 million shares outstanding for a $13-million market capitalization.

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