VANCOUVER (miningweekly.com) – TSX-listed AuRico Metals and First Nations surrounding the Kemess underground project have signed an impact benefits agreement (IBA) for the Kemess underground project, in British Columbia, solidifying local relationships and ensuring the project provides economic opportunities and benefits to the region and local stakeholders.
Toronto-based AuRico signed the IBA with the Takla Lake, Tsay Keh Dene and Kwadacha First Nations, who are together called the Tse Keh Nay (TKN) – an alliance of three Sekani First Nations.
The IBA provides a framework that formalises the long-term cooperative relationship between AuRico and the TKN First Nations over the life of the project. The IBA captures the mutual commitment to consult and maintain an open, respectful and cooperative relationship throughout the development and operation of the Kemess underground project.
The IBA further provides for meaningful TKN participation in the project through training, employment, business opportunities, environmental protection and other means.
"In order to celebrate the success we have achieved today, we must look back to the path that got us here. The original plan for Kemess North was to use Amazay Lake as a tailings pond. It was through our struggles to protect that sacred lake that the Tsay Keh Nay alliance was reunited and strengthened.
“Through the development of the Kemess underground project, the Tsay Keh Nay alliance has remained strong; and continues to support each other in the pursuit of environmental integrity, cultural revitalisation and community health. Today, Tse Keh Nay recognises the environmental commitment made by AuRico Metals, and the respect for Tse Keh Nay rights, interests and genuine collaboration with the Tse Keh Nay alliance,” Tse Keh Nay chiefs said in a joint statement.
The Kemess project has about $1-billion of existing infrastructure on care and maintenance on site, which will dramatically reduce the expected capital expenditures to first production to just under $400-million.
The Kemess underground project and the Kemess East deposits currently hold about 3.34-million ounces of gold in the proven and probable mineral reserve categories, 6.66-million ounces gold in the indicated resource category, and another 2.26-million ounces in the inferred category.
AuRico believes there is significant exploration upside, especially at Kemess East, where the deposit remains open in several directions.
A 2016 feasibility study on the project calculated a net present value, at a 5% discount, of C$421-million, with an internal rate of return of 15.4%.