(The true thickness of the mineralized intervals is estimated at approximately 80% of the reported intercept length.)
(Refer to Table 1 for Drill Results, Table 2 for Drill Collar Locations, Table 3 for the Kemess East Resource Estimate, and Figures 1-5 respectively for the Kemess East Plan Map, and Cross-Sections of Kemess East.)
This year's exploration program had three key objectives: to test internal gaps from previous years' drilling, to expand the limits of the currently known deposit and to more accurately determine the location of key faults.
Commenting on today's exploration results, Chris Richter, President and CEO of AuRico Metals, stated; "This summer's Kemess East drilling successfully achieved our objectives, particularly with regards to intersecting significant higher grade intervals in and around our Kemess East deposit but falling outside of the existing resource. We look forward to incorporating these results into an updated Kemess East resource which we plan to release in the first quarter of 2017."
The current Kemess East resource estimate (see press release dated March 23, 2016 and Technical Report dated May 6, 2016) includes a high grade core estimated to contain Indicated Resources of 19.2 million tonnes grading 0.47% Cu and 0.72 g/t Au as well as Inferred Resources of 31.7 million tonnes grading 0.45% Cu and 0.63 g/t Au; as shown in Table 3). The high grade core of the Kemess East resource estimate is associated with strong potassic alteration and the overall resource is mostly hosted in moderate potassic alteration.
Although each hole in the 2016 program had multiple objectives they can generally be subdivided as follows. Holes KH-16-07, KH-16-11, KH-16-12 and KH-16-13 tested the internal gaps in the geological and resource model and intersected intervals that are within the top fifteen holes ever drilled at Kemess East as measured by combined grade for intervals greater than 350 metres.
Holes KH-16-01, KH-16-04, KH-16-08B, KH-16-09 and KH-16-10 tested areas on the east, west, north and south edges of the 2015 block model but within structural domains that host the copper and gold mineralization. These holes targeted approximately 25 to 100m outside the current resource model with promising results as reflected in the assay table.
Finally holes KH-16-02, KH-16-03, KH-16-05 and KH-16-06 were designed to pin down some of the more important structures, namely the West Boundary, Head Wall and Kemess East Offset faults that control the limits of the deposit as currently understood. Based on these drill holes the Kemess East Offset Fault is better defined in strike and dip while the West Boundary is viewed as less important than previously believed and the Head Wall fault is further south than previously modelled.
We are confident that the 2016 drill program will contribute to a much better geological model that will be the basis for the Q1 2017 resource update. Following this year's drilling, the Kemess East Deposit remains open to the west towards the Kemess Offset Zone, to the north, and to the south.
Kemess Property Overview
The Kemess Property (See Figure 1) is located in north-central British Columbia, Canada, approximately 430 kilometres northwest of Prince George. The Kemess Underground Project is located approximately 6 kilometres north of the past producing Kemess South open pit mine that operated from 1998 to 2011 and produced 3 million ounces of gold and 749 million pounds of copper.
A Feasibility Study on the Kemess Underground Project was released on March 23, 2016 and proposes an underground panel caving operation with average annual production of 238,000 gold-equivalent ounces (129,000 ounces of gold and 52 million pounds of copper) for the first five years of a 12 year mine life.
AuRico Metals' Environmental Assessment Application was formally accepted by Provincial and Federal regulatory bodies on April 25, 2016 and it is anticipated that the regulators will submit their recommendations to their respective Ministers early in 2017. The Ministers' decisions are expected in February, 2017.
Quality Control – Analyses and Sample Location
Exploration activities at Kemess are being conducted by AuRico personnel under the supervision of Wade Barnes, Project Geologist and a Qualified Person as defined by National Instrument 43-101. Wade Barnes is a PGeo registered with the Association of Professional Engineers and Geoscientists of British Columbia (APEGBC) and he has verified the data and he has also reviewed and approved this news release.
Samples were prepared at an on-site sample preparation lab. The prepared 250g samples, crushed to 80% passing 10-mesh and pulverized to 85% passing 150-mesh, were shipped in security sealed pails to ALS Chemex Laboratory in North Vancouver for analysis. The 2016 samples were analyzed for a suite of 33 elements, including iron, molybdenum, and silver, using 4-acid digestion and ICP atomic emission spectroscopy on a one gram sub-sample. Significantly mineralized samples were additionally analyzed by an extra ore grade analysis for copper and molybdenum by ICP atomic emission spectroscopy, following a 4-acid digestion. Gold analyses were completed by standard 30g fire assay with an atomic absorption finish. The 2016 quality control ("QC") samples (blanks, duplicates, and certified reference materials) were inserted into the sample stream at regular intervals such that 2 in 25 (8%) of samples were submitted for QC purposes. QC sample performance was monitored on a regular basis, independently of the laboratories, and failures addressed in a timely manner. All sample batches were also subjected to each laboratory's internal QC procedures, for an additional 40% QC sample volume.
About AuRico Metals
AuRico Metals is a mining royalty and development company whose producing gold royalty assets include a 1.5% NSR royalty on the Young-Davidson Gold Mine, a 0.25% NSR royalty on the Williams Mine at Hemlo, and a 0.5% NSR royalty on the Eagle River Mine – all located in Ontario, Canada. AuRico Metals also has a 2% NSR royalty on the Fosterville Mine and a 1% NSR royalty on the Stawell Mine, located in Victoria, Australia. Aside from its diversified royalty portfolio, AuRico Metals owns (100%) the advanced Kemess Gold-Copper Project in British Columbia, Canada. AuRico Metals' head office is located in Toronto, Ontario, Canada.
Cautionary Statement on Forward-Looking Information
All statements, other than statements of historical fact, contained or incorporated by reference in this news release including, but not limited to, any information as to the future financial or operating performance of AuRico, constitute ''forward-looking information'' or ''forward-looking statements'' within the meaning of certain securities laws, including the provisions of the Securities Act (Ontario) and are based on expectations, estimates and projections as of the date of this news release. Forward-looking statements contained in this news release include, without limitation, statements with respect to: an updated Kemess East resource to be released in the first quarter of 2017, the 2016 drill program will contribute to a much better geological model that will be the basis for the Q1 2017 resource update, AuRico Metals' Environmental Assessment Application and the timing of the regulatory recommendations and the Ministers' decisions, the future price of gold, copper and silver, the estimation of mineral resources, costs and timing of the development of projects and new deposits, success of exploration, currency fluctuations, requirements for additional capital, government regulation of mining operations, and environmental risks. The words "anticipates", ''estimates'', ''expects'', "focus", ''forecast", "indicate", "initiative", "intend", "model", "opportunity", "option", "plans'', "potential", "projected", "prospective", "pursue", "strategy", "study" (including, without limitation, as may be qualified by "feasibility" and the results thereof), "target", "timeline" or variations of or similar such words and phrases or statements that certain actions, events or results ''may'', ''could'' or ''would'', and similar expressions identify forward-looking statements.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by AuRico as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates, models and assumptions of AuRico referenced, contained or incorporated by reference in this news release, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein and in our most recently filed Annual Information Form and Management's Discussion and Analysis as well as: (1) the exchange rate between the Canadian dollar and the U.S. dollar being approximately consistent with assumed levels; (2) certain price assumptions for gold, copper and silver; (3) the results of the Kemess Underground Feasibility Study will be realized within a margin of error consistent with the Company's expectations; (4) the accuracy of the current mineral resource estimates of the Kemess East project; and (5) access to capital markets, including but not limited to identifying financing options and securing partial project financing for the Kemess project, being consistent with the Company's current expectations.
Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements. Such factors include, but are not limited to: the results of exploration at Kemess East and the accuracy of the mineral resource estimates at Kemess East; relations with First Nations partners and the Province of British Columbia; exploration for additional mineral resource potential; fluctuations in the currency markets; changes in the market valuations of peer group companies and the Company, and the resulting impact on market price to net asset value multiples; changes in various market variables, such as interest rates, foreign exchange rates, gold, copper or silver prices; changes in national and local government legislation, taxation, controls, policies and regulations; political or economic developments in Canada, the United States or elsewhere; business opportunities that may be presented to, or pursued by, us; employee relations; litigation against the Company; the speculative nature of mineral exploration and development including, but not limited to, the risks of obtaining necessary licenses and permits; diminishing quantities or grades of reserves; and contests over title to properties. In addition, there are risks and hazards associated with the business of mineral exploration, development and mining. Many of these uncertainties and contingencies can directly or indirectly affect, and could cause, AuRico's actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, AuRico.
There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Forward-looking statements are provided for the purpose of providing information about management's expectations and plans relating to the future. All of the forward-looking statements made in this news release are qualified by these cautionary statements and those made in our other filings with the securities regulators of Canada including, but not limited to, the cautionary statements made in the ''Risk Factors'' section of our most recently filed Annual Information Form, Short-Form Prospectus and Management Discussion and Analysis. These factors are not intended to represent a complete list of the factors that could affect AuRico. AuRico disclaims any intention or obligation to update or revise any forward-looking statements or to explain any material difference between subsequent actual events and such forward-looking statements, except to the extent required by applicable law.
Table 1 - Drill Intercepts Kemess East Deposit
Table 2 - 2016 Drill Collar Locations
Table 3 - Kemess East Resource Estimate
Figure 1 - Kemess East Plan Map
Figures 2-5 - Kemess East Cross-Sections
SOURCE AuRico Metals