Canada

Kemess East Project

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Overview

Mine TypeUnderground
StagePreliminary Economic Assessment
Commodities
  • Copper
  • Gold
  • Silver
Mining Method
  • Panel caving
Mine Life12 years (as of Jan 1, 2017)
ShapshotThe Kemess East (KE) deposit is located approximately one kilometre east of the Kemess Underground (KUG) deposit and 6.5 kilometres north of the existing Kemess South processing plant and infrastructure.

The Kemess East PEA presents a stand-alone scenario that does not incorporate the economics of the KUG project.

Owners

SourceSource
CompanyInterestOwnership
Centerra Gold Inc. 100 % Indirect
Centerra’s wholly owned subsidiary (directly held), AuRico is the 100% holder of the rights to the Kemess Project.

Deposit type

  • Porphyry
  • Vein / narrow vein

Summary:

The Kemess East area of interest is underlain by the Hazelton Group-Toodoggone formation. The Hazelton Group-Toodoggone formation extends from surface to 600m. The Hazelton Group is unmineralized and displays weak propylitic alteration. The Hazelton Group is host to dacitic fragmental volcanic rocks. The Hazelton Group displays the same chemical characteristics as the Black Lake plutonic rocks indicating that they are related. In closer contact with the lower Takla Group, fragments of Takla within the Hazelton Group increase towards the unconformity. The structurally controlled phyllic sections of this polylithic fragmental dacite and pyritic veins and silcificed dacitic sections with disseminated pyrite in the southern area of the deposit can carry anomalous gold concentrations. The evidence suggests that basement structures and conduits that allowed extrusion of the local Toodoggone volcanic assemblage underlie the Kemess East area.

Below the Hazelton Group-Toodoggone formation is a succession of andesitic flows that are part of the Takla Group volcanics. The Takla volcanic rocks host a minor portion of the copper-gold mineralization and display propylitic to phyllic to potassic alteration at Kemess East. The weakly to unmineralized portion of the Takla volcanic rocks display propylitic and phyllic alteration. The Takla Group sequences include a feldspar porphyritic unit, augite porphyry unit and basalts and andesites. The sequence in contact with the overlying Hazelton is not consistent.

The Kemess East pluton beneath the East Squared Cirque hosts the bulk of the copper-gold mineralization for the Kemess East deposit. To remain consistent with earlier work, the field terms monzodiorite and quartz monzonite have been retained. Early whole rock analysis points to the pluton being diorite in composition. The Kemess East pluton displays strong potassic alteration and transition to phyllic alteration towards the bottom with decreasing copper-gold mineralization.

Below the Kemess East pluton is another section of the Takla Group basalt with strong potassic alteration hosting copper-gold mineralization within quartz veins and stringers. Below this is another Black Lake intrusive unit that has only been intersected in three drill holes. This intrusive unit is below the mineralized Kemess East pluton, but displays similar lithological characteristics. The lower intrusive unit is moderately phyllic to potassic altered with lower grade copper-gold mineralization. The evidence suggests that the Black Lake intrusive plutons are stacked sills and are coeval to each other.

The most prominent structure traversing the Kemess East project area is the Kemess East Offset Fault (KEO), a southeast trending southwest dipping reverse fault that truncates the Kemess East pluton and associated mineralization at depth. To the east of the KEO Fault is a thick sequence of the Jurassic-Toodoggone Hazelton Group predominantly dacitic in composition. The amount of downdrop offset and any strike slip component is unknown at this time because of the lack of drilling at depth. It is thought that the strike slip component could be left lateral as similar Takla Group volcanic rocks are 1,000–1,500 meters north-west of the Kemess East area. Within the Kemess East area there are a few northwest trending faults dipping to the northeast into the KEO fault. These faults are thought to be related to the horst and graben style faulting and the KEO fault. These faults look to be compressional faults uplifting the lithology towards the KEO fault.

West of the Kemess East area, is known as the Kemess Offset Zone. This is the area between Kemess Underground and Kemess East and lies beneath the east-west headwall to the south of Kemess East and Kemess Underground. To the south of the Kemess East area is a steep normal fault that is marked by a steep headwall. This fault has a displacement of 150-200 meters shifting the units up. This uplift is possibly caused by the Black Lake Sovereign unit to the south that post-dates the mineralized Black Lake pluton in Kemess East.

Copper-Gold mineralization forms a relatively flat-lying zone within the Kemess East deposit. Not enough drilling data is present to determine the true orientation of the mineralization and Kemess East pluton. Horst and graben faulting towards the Kemess East Offset Fault has resulted in up lift fault blocks in the copper-gold mineralization. The Kemess East pluton exhibits an irregular upper contact with various peaks and troughs, but has a rough easterly strike and slight shallow south dip. More drilling is needed to define the orientation of the Kemess East pluton.

Alteration and mineralization is associated with, and zoned both vertically and laterally from the Kemess East pluton at depth beneath the East Squared Cirque. At this time a surface alteration map has not been completed. Based on the collar lithologies and alteration it is evident the Kemess East area surface alteration is mostly propylitic.

The phyllic zone consists of pyrite associated with sericite-chlorite alteration. The phyllic zone is barren of significant copper and gold but spikes do occur due to remobilization of mineralization from fluids at depth. Pyrite within the phyllic zone ranges from 3-5% and is dissemined and veined. Minor quartz veining is present within the phyllic zone with pyrite +/- chalcopyrite.

The potassic zone contains a high percentage of the copper-gold mineralization with an upper zone of molybdenum mineralization. Molybdenum is present in the transition zone from phyllic to potassic alteration and is present with chalcopyrite and pyrite within quartz veins, late stage zeolite and carbonate veins, and within joints. The main copper-gold mineralization is present within the Kemess East pluton and is associated with chalcopyrite and pyrite finely disseminated within the host pluton. To a lesser degree, copper-gold mineralization is associated with quartz veining with chalcopyrite and pyrite. This is different than Kemess Underground where the bulk of the copper- gold mineralization is hosted within the overlying Takla Group and the quartz diorite / quartz monzonite intrusive. The pyrite to chalcopyrite ratio within Kemess East is roughly 1:1 whereas in Kemess Underground it is 3:1. There is also much less magnetite mineralization / alteration within the Kemess East deposit compared with the Kemess Underground deposit.

Kemess East is a copper-gold-silver-molybdenum porphyry deposit and is typical of calc-alkaline porphyry copper-gold deposits in the western cordillera. The deposit is deeply buried and mineralization starts at an average depth of 900 m below surface and extends to 1500 m below surface. Unlike Kemess Underground, there is no significant low grade mineralization associated with Kemess East. At Kemess East there is reasonable continuity of mineralization within the deposit. Kemess East is mostly hosted by potassic altered Black Lake plutonic rocks. In the eastern portion of the deposit, weak mineralization is hosted within potassic altered Takla Volcanics, but still largely within the Black Lake plutonic rocks. From whole rock analysis, it is evident that the deposit is centered on a mineralized porphyritic diorite pluton. This is in contrast to the Kemess Underground deposit which is centered on a mineralized porphyritic monzondiorite/diorite pluton. The alteration within the mineralized zone is characterized by secondary chlorite with lesser secondary biotite and quartz within the plutonic host rocks. Higher grade copper-gold mineralization is characterized by strong secondary biotite and quartz alteration and lesser chlorite alteration in the plutonic rocks. Higher grade copper-gold mineralization is also characterized by a slight increase in quartz veining and an increase in chalcopyrite to pyrite ratios.

Reserves

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Mining Methods

  • Panel caving

Summary:

The Kemess East (KE) deposit is approximately 1 km east of the Kemess Underground (KUG) deposit. The bulk of the KE deposit is located from 200 m to 1,000 m elevations, significantly deeper than the KUG deposit. The ground surface elevation is approximately 1,650 to 1,750 m, so the KE deposit is 700 to 1,500 m below surface.

The underground mine at KE would begin production as the KUG mine production is decreasing, continuing to feed the process plant. The crushed material would be conveyed up from the underground crusher and then connect to the conveyor in the KUG decline, where it would use existing KUG infrastructure to be conveyed to the surface process plant.

The development stage of the KE mine is approximately five years, which includes mine access, initial footprint development, and construction of major mine infrastructure, such as underground crusher, material handling system, workshop, dewatering system, and primary ventilation system. Following the development stage, the initial ramp-up period is 3 years to reach steady state production of 10.9 million tonnes per year (Mt/yr; 30 kt/d) for 6 years, followed by ramp-down production for another 3 years, for a total production operating life of 12 years.

The most appropriate mining methods for KE deposit are block caving, sub-level caving, and sub-level stoping. Based on mining costs, deposit grade, geometry, and depth, block caving was selected as the preferred mining method.

A footprint at elevation at 370 m has the most value, and the cave design was based on this footprint. Several cave clipping boundaries were trialled before determining the final shape that produced the most value. A cylinder with a 150 m diameter was used to rationalize a realistic caving boundary while extracting some non-economic material in order to include the narrow arms at the northern and southern extremes of the footprint.

The area of the footprint is 107,000 m2 and the perimeter is 1.4 km long. The widest span of the footprint is 470 m.

Access for personnel, equipment, and supplies to the KE underground would be through a decline collared off the Kemess UG (KUG) ventilation decline. A parallel conveyor decline would be driven for material handling from above the KUG conveyor decline to the KE underground. The approximate location of the connections between the KE twin declines and the KUG triple declines is 2,700 m from the KUG portals (1,150 m elevation, slightly higher than the connection to the KUG workings).

The underground water management system at the KE underground would be designed to handle 1.5 m3/s (24,000 gallons per minute). This accommodates both the groundwater and peak surface water inflows during a 1-in-200-year storm event.

Comminution

Crushers and Mills

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Processing

  • Crush & Screen plant
  • Dry Screening
  • Flotation
  • Dewatering
  • Filter press

Summary:

The process plant for processing the Kemess East (KE) deposit would be composed of conventional processing circuits for the production of a copper concentrate containing gold and silver as by-products. The existing KUG process plant would be expanded from 25,000 tpd to 30,000 tpd for processing the KE deposit. The results of the metallurgical test programs on the KE sample composites indicate that the same KUG processing circuits would be suitable for KE.

The processing circuits would be composed of the following:
- coarse stockpile with reclaim feeders;
- SAG ball mill combination;
- rougher flotation;
- rougher concentrate regrind;
- cleaner flotation;
- copper concentrate thickening;
- copper concentrate filtering.

Modifications and equipment additions to the KUG process plant for KE would be primarily for the grinding and flotation circuits. The currently planned work programs for the KUG process plant are focused on re-conditioning, repairs and replacement of existing equipment, and the installation new regrind IsaMills™.

Rougher flotation at 36% solids would be done in mechanical cells. Chemicals and reagents added during flotation would include lime for pH control, frothers, and collectors. The tailings from rougher flotation would be pumped to a cyclone for final tailings disposal. The rougher concentrate at about a 13% mass pull would be pumped to cyclones in the regrind circuit ahead of cleaner flotation. The cyclone underflow would operate in closed circuit with the regrind mills. The cyclone overflow would be sent to the first flotation cleaners. The tailings from the first cleaners would be processed in cleaner scavengers, with the cleaner scavenger tailings pumped to the Kemess South Pit (KUG TSF). The concentrate from the cleaner scavengers would be returned to the regrind circuit. The concentrate from the first cleaners would be pumped to the second cleaners (column cells). The concentrate from the second cleaners would be the final copper concentrate and would be pumped to the concentrate thickener. The concentrate thickener underflow at 65% solids would be filtered to approximately 8% moisture in horizontal pressure filters before being shipped to smelters.

There is a potential for installing a Knelson gravity concentrator in the cleaner circuit to recover gold from the cleaner tailings.

Recoveries & Grades:

CommodityParameterAvg. LOM
Copper Recovery Rate, % 88.8
Copper Head Grade, % 0.34
Copper Concentrate Grade, % 22.3
Gold Recovery Rate, % 69.9
Gold Head Grade, g/t 0.42
Gold Concentrate Grade, g/t 0.69
Silver Recovery Rate, % 66.7
Silver Head Grade, g/t 1.76
Silver Concentrate Grade, g/t 2.74

Production

CommodityProductUnitsAvg. AnnualLOM
Copper Metal in concentrate M lbs 57687
Copper Concentrate kt 1,395
Gold Metal in concentrate koz 80963
Silver Metal in concentrate koz 3183,826
Gold Equivalent Metal in concentrate koz 2222,666
Copper Equivalent Metal in concentrate M lbs 921,111

Operational metrics

Metrics
Daily ore mining rate 30 kt *
Daily processing capacity 30 kt *
Annual ore mining rate 10.9 Mt *
Tonnes processed, LOM 103.09 Mt *
* According to 2017 study.

Production Costs

CommodityUnitsAverage
Total cash costs Copper USD 1.49 / lb *  
Total cash costs Gold USD 619 / oz *  
Total cash costs Copper USD 0.69 / lb *  
Total cash costs Gold USD -415 / oz *  
All-in sustaining costs (AISC) Copper USD 1.1 / lb *  
All-in sustaining costs (AISC) Gold USD -69 / oz *  
Assumed price Copper USD 3 / lb *  
Assumed price Silver USD 18 / oz *  
Assumed price Gold USD 1,250 / oz *  
* According to 2017 study / presentation.
Net of By-Product.

Operating Costs

Currency2017
UG mining costs ($/t mined) CAD 7.31 *  
Processing costs ($/t milled) CAD 5.13 *  
Total operating costs ($/t milled) CAD 16.8 *  
* According to 2017 study.

Project Costs

MetricsUnitsLOM Total
Initial CapEx $M CAD 327
Sustaining CapEx $M CAD 456
Total CapEx $M CAD 783
UG OpEx $M CAD 745
Processing OpEx $M CAD 528
G&A costs $M CAD 217
Total OpEx $M CAD 1,724
Gross revenue (LOM) $M CAD 4,290
Pre-tax Cash Flow (LOM) $M CAD 1,309
After-tax Cash Flow (LOM) $M CAD 797
Pre-tax NPV @ 5% $M CAD 670
Pre-tax NPV @ 8% $M CAD 440
After-tax NPV @ 5% $M CAD 375
After-tax NPV @ 8% $M CAD 224
Pre-tax IRR, % 22.1
After-tax IRR, % 16.7
Pre-tax payback period, years 3
After-tax payback period, years 4

Heavy Mobile Equipment

HME TypeSizeQuantityLeased or
Contractor
ANFO Loader 3 Leased
Deck & Boom Trucks 2 Leased
Drill (long hole) 2 Leased
Drill jumbo (two boom) 3 Leased
Grader 1 Leased
Load-Haul-Dump (LHD) 14 t 7 Leased
Load-Haul-Dump (LHD) 17 t 2 Leased
Personnel Carrier 6 Leased
Raise boring rig 1 Leased
Rock bolter 3 Leased
Rockbreaker 4 Leased
Scissor Lift 3 Leased
Shotcreter 1 Leased
Trans Mixer 1 Leased
Truck (boom) 2 Leased
Truck (fuel / lube) 1 Leased
Truck (haul) 55 t 7 Leased
Truck (haul) 50 t 3 Leased

Personnel

Mine Management

Source Source
Job TitleNameProfileRef. Date
Environmental & Permitting Manager Scott Webber LinkedIn Apr 26, 2024
Executive VP and Chief Operating Officer Paul Chawrun LinkedIn Apr 26, 2024
Project Director Angela Williams LinkedIn Apr 26, 2024

Total WorkforceYear
362 2017

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