The results of the recent Kemess Underground feasibility study outline the development of an underground block cave operation with average annual production of 105,000 ounces of gold and 44 million pounds of copper. The production estimates are based on cash costs of $213 per ounce of gold, net of byproduct credits, over a mine life of approximately 12 years. Base case commodity price assumptions are $1,300 per ounce gold, $3 per pound copper and $23 per ounce silver, and a flat exchange rate of US$1/CDN$1.

The proposed Kemess Underground operation would leverage the existing infrastructure and mill facilities at the Kemess South mine, which are currently on care and maintenance, including a permitted area for tailings storage in the Kemess South open pit. The ore would be taken by conveyor from the underground mine to the mill. The resulting concentrate will then be trucked to Mackenzie, B.C., where it will be transported to refineries by rail.

Over the next two years, AuRico intends to enhance the value of Kemess Underground through permitting, as well as exploring outside existing reserves, in order to develop the optionality of the asset.

In late 2014, AuRico announced that a recent exploration drilling program had delineated a new porphyry mineralized system at Kemess East, located one kilometre east of the Kemess Underground deposit and 6.5 kilometres north of the Kemess mill facility. In an announcement, AuRico president and CEO Scott Perry said, “This new discovery demonstrates the significant potential of the Kemess land package with some of the program’s drill holes ending in mineralization. With an initial resource expected early next year, we will look to expand our exploration drilling program and advance our Kemess Underground permitting efforts to continue surfacing value.”