Silver Wheaton dips into Bear Creek

Shares in Bear Creek Mining (BCM-V) ended 66, or around 22%, higher at a new 52-week high of $3.65 on the TSX Venture Exchange on Aug. 11, after the company said that Silver Wheaton (SLW-T) had taken a 15% undiluted stake.

Wheaton says it acquired just more than 4.8 million shares on the open market at $3.03 apiece for investment purposes. The shares represent a 12.2% interest on a fully diluted basis.

Bear Creek says the shares were sold by MK Resources (MKRR-O) after a recent corporate restructuring and merger. MK does not retain any shares in Bear Creek.

Bear Creek’s key asset is a 70% stake in the potentially major new discovery at the Corani silver prospect in southeastern Peru (T.N.M., Aug. 1-7/05). A first pass of diamond drilling on the northern-most target at Corani returned shallow, multi-ounce silver values over intervals of up to 100 metres.

Highlights include:

• Hole 1 — 94 metres of 79 grams silver, 1.52% lead and 0.12% zinc, starting from surface;
• Hole 2 — 52 metres averaging 113 grams silver, 1.32% lead and 0.36% zinc;
• Hole 2A — 78 metres grading 144 grams silver, 1.78% lead and 0.57% zinc from surface;
• Hole 3 — 102 metres of 72 grams silver right from surface, including the first 38 metres, which run 147 grams. Lead and zinc values are pending.

Bear Creek optioned a 70% interest in the project earlier this year from Rio Tinto (RTP-N) for US$5.4 million over three years. On earn-in, Rio Tinto has 90 days to either to sell the remaining 30% to Bear Creek for US$5 million or continue as a joint-venture partner.

Rio Tinto can reacquire a 60% stake should Bear Creek manage to outline resources exceeding 10 million oz. gold-equivalent (or about 600 million oz. silver). To do so, the major would need to carry Bear Creek through project construction.