bcMetals Corporation

bcMetals Corporation

October 20, 2005 19:34 ET

bcMetals Corporation: Red Chris Concentrate Offtake Agreements

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Oct. 20, 2005) - bcMetals Corporation (TSX VENTURE:C) is pleased to announce the completion of commercial terms for the sale of 180,000 dmt of copper and gold concentrate from its Red Chris copper-gold porphyry project in Northwestern BC. The term of the agreement is for five years commencing in January 2008. These Offtake Agreements have been concluded between the Company and two major concentrate trading companies and are subject to satisfactory completion of Frame Contracts. Standard Bank Plc is adviser to Red Chris Development Company Ltd. for these Offtake Agreements.

The commercial terms are extremely favourable to the Company. One agreement also provides for the Offtaker to provide up to US$12.0 million for working capital on commencement of commercial production and reduces the Company's equity requirements accordingly. This funding, which will be subordinated to project bank debt financing, will be repaid commencing in 2013 after repayment of bank debt.

In its October 11, 2005 news release, the Company announced the execution of a Mandate and Term Sheet with Investec Bank (UK) Limited. The Term Sheet provides for Investec, as the Lead Bank and Arranger of a consortium of international banks, to provide debt finance in an amount of US$110 million with repayment over seven years commencing in year three following a two-year construction period.

Since 2001, the BC Government has encouraged the mining industry to return to BC, offering to improve the efficiency of the regulatory environment and provide the infrastructure necessary to develop new mines. This year the BC Mining Association declared the Northwest powerline extension as the most important infrastructure investment the BC Government can make to achieve this goal. This is also consistent with goals established within BC's Mining Plan published in January 2005. Action #35 states: "Pursue strategic investment opportunities in unserviced areas to secure long-term delivery of energy supply and transportation infrastructure."

The Honorable Bill Bennett, BC Minister of State for Mining, at a speech delivered on BC's Mining Day September 12, 2005 said: "During my trip to the northwest I heard the message loud and clear - whether in Terrace, Stewart, Smithers or Iskut. There needs to be a secure power source for new mines to happen in the Northwest. It's my job to advocate for the power line up Highway 37."

One of the conditions precedent for loan draw down is the BC Government's commitment to extend the North American power grid up the Highway 37 corridor to Iskut in time for Red Chris to meet its currently planned construction schedule for first concentrate production in late 2007.

The Red Chris project, as designed in the AMEC Feasibility Study, is a 30,000 tpd open pit mine and flotation concentrator located 12 km east of Highway 37 and 18 km south of the village of Iskut. Over the course of the currently envisaged 25-year mine life the project will produce 1.85 billion pounds of copper and 1.187 million ounces of gold in concentrates. Red Chris today is the largest new copper-gold open pit project in North America being readied to commence construction with its Environmental Assessment Certificate approved by the BC Government in August 2005.

The Company expects to receive proposals for its Engineering, Procurement and Construction Management contract shortly.

Ian Smith, President and CEO

This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this news release.

Contact Information

  • bcMetals Corporation
    Ian Smith
    President and CEO
    (604) 683-0140
    (604) 683-0126 (FAX)