AuRico CEO sees 2017 as ‘pivotal’ year

JOHANNESBURG (miningweekly.com) – TSX-listed AuRico Metals CEO Chris Richter expects 2017 to be a pivotal year for the company, as it steps up efforts to advance the Kemess Underground project towards a development decision next year.

The project, which recently received an environmental-assessment certificate from British Columbia, is considered a “stand-out development opportunity, which has the potential to dramatically increase shareholder value”, Richter said on Thursday in a results statement, which details AuRico’s near-term objectives.

The project developer and precious metals royalty firm lists the signing of an impact benefits agreement with First Nations for the Kemess Underground project as one of its key goals, which it aims to conclude before month-end. It is also continuing to focus on progressing permitting and detailed engineering for the project. Permitting is expected to be completed in the second quarter of 2018.

AuRico plans to issue tender documents relating to initial construction activities to contracting companies in the third quarter of this year.

The company is also continuing to evaluate potential integration synergies between the Kemess Underground project and the Kemess East deposit, which are one kilometre apart.

The Kemess Underground project and the Kemess East deposits currently hold about 3.34-million ounces of gold in the proven and probable mineral reserves 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 12 000 m drilling programme, including infill drilling targeting the potassic strong zone, growth holes on the outer edges of the known deposit and exploration holes looking for higher grade material within the Kemess Offset zone, is planned at Kemess East in 2017. The Kemess Offset zone is located between the Kemess Underground and Kemess East deposits.

AuRico plans to release a preliminary economic assessment for Kemess East in the second quarter of 2017 and intends to publish the results of the 2017 Kemess East drilling programme in the fourth quarter of this year.

Meanwhile, AuRico reported higher royalty revenue in the March quarter and published a revised royalty revenue guidance for 2017.

Royalty revenue increased to $2.2-million in the first quarter, from $1.7-million a year earlier. AuRico hiked its guidance for 2017 to between $9.5-million and $10.4-million, from an original guidance of $8-million to $8.4-million, owing to Kirkland Lake Gold increasing its production guidance at the Fosterville operation. AuRico has a 2% net-smelter royalty at Fosterville.