Bema lands Kupol loan

Vancouver — A US$60-million loan by a major German bank is encouraging Bema Gold (BGO-T) to develop the Kupol gold-silver project in northeastern Russia. The loan should ease investors’ concerns over jurisdictional issues surrounding the government of the autonomous region of Chukotka, from which Bema is earning a majority interest in Kupol.

Bayerische Hypo-und Vereinsbank is arranging the loan, which will be used to pay for ongoing development. Kupol is at the prefeasibility stage and undergoing extensive drilling. Construction has begun on a runway and other infrastructure.

Bema has first-hand experience mining in Russia as a result of its Julietta gold operation, also in the northeast.

Plans call for an open-pit/underground mine at Kupol, to be operated over 12 years at a capital cost of about US$280 million. The proposed mine is expected to be high-grade and low-cost.

Bema is securing the loan with the ounces of gold contained in the ground, says Ian MacLean, the company’s manager of investor relations. The loan will mature in two years. In early 2005, the company will raise further financing, for project construction.

Kupol is a high-grade gold-silver deposit in an epithermal vein system up to 30 metres wide. The system has been defined over 4 km of strike length and remains open along strike and at depth.

The preliminary indicated resource stands at 2.6 million tonnes grading 22.3 grams gold and 232 grams silver per tonne, or 1.8 million oz. gold and 19.1 million oz. silver. The inferred estimate is 7.2 million tonnes grading 18.4 grams gold and 243 grams silver, or 4.2 million oz. gold and 55.9 million oz. silver.

A 57,000-metre program of infill drilling is endeavouring to raise the inferred resource to the measured and indicated category, and Bema is testing the northern strike and depth extent of the Kupol vein. The drilling will continue throughout the fall, followed by a final feasibility study in March 2005.