VANCOUVER (miningweekly.com) – Canadian gold producer AuRico Metals has published a positive preliminary economic assessment (PEA) for the Kemess East gold/copper project, even when considered as a standalone project, not part of the Kemess underground project, the company announced Monday.
The Kemess East PEA evaluated a low-cost panel caving operation with ore being processed at the existing mill.
The PEA calculated a pre-tax net present value (NPV), using a 5% discount, of C$670-million and an internal rate of return (IRR) of 22.1%. After taxes, the NPV is C$375-million and the IRR is 16.7%.
The mine plan stretches 12 years, during which it will produce 936 000 oz of gold, 57-million pounds of copper and 318 000 oz of silver.
Kemess East is located 6.5 km north of the existing Kemess mill and infrastructure, about 430 km northwest of Prince George, in British Columbia.
AuRico estimates the preproduction capital costs, including contingency, will be C$327-million. Over the life of the mine, the co-product all-in sustaining costs will be $744/oz of gold and $1.79/lb of copper.
The Kemess East deposit contains measured and indicated resources of 113.1-million tonnes averaging 0.46 g/t gold, 0.38% copper, 1.94 g/t silver, containing 1.68-million oz of gold, 954-million pounds of copper, and 7.01 oz of silver. It also has an inferred resource of 64.8-million tonnes at 0.31 g/t gold, 0.34% copper, and 1.90 g/t silver, containing 640 000 oz of gold, 478-million pounds of copper, and 3.89-million oz of silver. Further drilling is planned for this year.
AuRico plans to conduct a separate feasibility study, expected to be released in 2018, which will evaluate Kemess underground and Kemess East projects as part of an integrated development scenario. The combined feasibility study is expected to reflect further in-fill and expansion drilling planned at Kemess East this summer and the resulting resource update expected in early 2018.