AuRico Gold announces positive results on northern BC property

AuRico Gold Inc. recently announced a 43-101-compliant indicated resource of 2.1 million gold equivalent ounces and an inferred resource of 3.4 million gold equivalent ounces at its Kemess East deposit in northern British Columbia.  

In an announcement, AuRico president and CEO Scott Perry said the company was very encouraged by the initial resource estimate from Kemess East.

“The total indicated resource base of the Kemess property has doubled and still has the potential to grow further," he said. "The Kemess East deposit is a significant new gold-copper porphyry mineralized system.”

The Kemess Property, on which Kemess East and the previously delineated Kemess Underground deposit is located, is in north-central British Columbia, approximately 430 kilometres northwest of Prince George.

Kemess East is situated one kilometre east of Kemess Underground. It is also close to existing infrastructure on the Kemess land package, which includes a 50,000 tonne per day mill facility, administration and camp facilities, permitted tailings storage and full access to the hydro grid.

Perry said Kemess East is a significant new gold-copper porphyry mineralized system with a reported gold equivalent grade that is 10 percent higher than the Kemess Underground deposit.

Drilling underway at the Kemess East site in August 2014. — Photo courtesy AuRico Gold

“The delineation of these additional high-quality resources is consistent with our strategy to surface the long-term value of this asset," he said.

In addition, AuRico said there is considerable potential to increase and convert resources at Kemess East, because a number of holes from the recent drilling program ended in mineralization and the deposit remains open.

Since late 2013, the company has completed 19 diamond drill holes (27,214 metres) in the Kemess East area, with 16 of the 19 drill holes intersecting mineralization.

An expanded 2015 drilling program of up to 30,000 metres will focus on additional delineation of the Kemess East mineralization, as well as ongoing exploration drilling.

Kemess Underground is located approximately 5.5 kilometres north of the past-producing Kemess South mine. During its mine life, the Kemess South mine produced almost three  million ounces of gold and over 700 million pounds of copper.

The results of a 2013 feasibility study for Kemess Underground suggest an underground block cave operation with average annual production of 105,000 ounces of gold and 44 million pounds of copper at cash costs of $213 per ounce of gold, net of by-product credits, over a mine life of approximately 12 years.

Drilling underway at the Kemess East site in August 2014. — Photo courtesy AuRico Gold

The block cave operation at Kemess Underground would use the existing Kemess South mine infrastructure and mill facilities, including a permitted area for tailings storage in the Kemess South open pit, all of which are currently on care and maintenance.

Kemess Underground is currently undergoing a provincial environmental assessment. The review is in the pre-application stage of the process. AuRico expects to receive the Application Information Requirements from the province in February 2015.

AuRico plans to submit its environmental application in the first half of 2015. The application will undergo public comment and technical review by aboriginal groups and federal and provincial government agencies. After that, the application will be referred to both levels of government for a decision.

In addition to the Kemess property, AuRico has the Young-Davidson gold mine in northern Ontario and the El Chanate mine in Sonora State, Mexico.

AuRico's project pipeline also includes the Lynn Lake Gold Camp in northern Manitoba. In late 2014,  AuRico entered into a joint venture agreement with Carlisle Goldfields Ltd with respect to Carlisle's Lynn Lake property.

AuRico will acquire a 25 per cent interest in the project for an initial cash contribution of C$5 million, with the option to earn up to an additional 35 per cent interest by spending C$20 million on the project over three years and delivering a feasibility study within that time (see accompanying sidebar).