Kemess UndergroundProject Overview

Prince George City CouncilNovember 18, 2013

Harold Bent, Manager, Environmental Manager www.auricogold.com

AuRico old

Kemess Underground

Who is AuRico Gold?• AuRico Gold is a Canadian gold mining

and exploration company with two

operating mines, located in Ontario &

Mexico.

• AuRico is a public company trading on the

Toronto and New York Stock Exchanges.

• In 2011 acquired Northgate Minerals,

which operated Kemess South from 2000

until closure in 2011.

• Primary production is currently gold.

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i 0 Convnunity/Settlement

Kemess Underground ProjectAntrip

-+-- Railway

-- f orest Service Road

-- Highway

* ~~j:C~s Underground

Omineca Resource -- Access Road

18,000,000 100 200 e-- I

Kilometres Pn:,jedion; NAO IS-83 BCEn~ntAlbe~

130'WW

~ AuRico Gold Kem ess Underground

fl: AuRico Gold Kemess Underground

,.,,,_...,_.06 2013

Copyr~ht:C> 2013 Esri

125"0'0'\IV ,,......, Figur e 1

Kemess Underground Proj ect Location ~ EJlM_ I-'

Kemess UndergroundRegulatory Status

• June 2013: CEAA Regional office advised KUG project may be classified as a new mine and required to submit a project description for screening

• July 2013: BC EAO advised KUG would be considered a modification or expansion of the existing Kemess South Mine, therefore options for review:

• Certificate Amendment, or

• Opt In to the BC EA Review process

• AuRico will apply to Opt In to the BC EAO process

• will apply for substitution to the BC EAO process if determined to be CEAA reviewable.

• Project Description to be submitted in January 2014

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Kemess South Mine

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Operated from 1998 to 2011• Open pit mine• Tailings storage facility & Waste Rock Dump• Mine reclamation ongoing• Currently on care & maintenance – six people at site

Existing infrastructure at Kemess South • Cost to replace Existing Infrastructure: +$750

millionCamp• 7 x 40-person bunk house units, kitchen,

potable water facility, sewage facilityPowerline• 380 km, 230 kV power line Step-down

transformers, backup diesel generatorsMill• 25,000 tpd MillOther• Admin building, truck shop, warehouse • 1,500 m all weather air strip • 400 km access road

fl: AuRico Gold Kemess Underground

Comparison of Kemess North and Kemess Underground Project

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Item Kemess North(project denied)

Kemess Underground

Ore body location 6 km north of Kemess South 6 km north of Kemess South

Mining Method Open Pit Underground (block caving)

Amount of Tailings & Waste 397 MT tailings325 MT waste722 MT total

100.3 MT tailings2.3 MT waste102.6 MT total

Deposition of Tailings/Waste Amazay Lake Kemess South mined out open pit

Mill Increase to 120,000 tonnes per day

Decrease to 24,600 tonnes per day

Surface Disturbance ~980 ha ~65 ha

Type of disturbance Open Pit, Waste rock & tails facility, Conveyor & road, tails pipeline, construction borrows

Portal, conveyor & road, subsidence zone

Kemess Underground Project

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Kemess Underground Infrastructure & Surface Disturbance

Waste/Tailings Impoundment

Open Pit

Haul Road

Spillway

Tunnel & Declines

Waste Rock & Tailings Conveyor & Road

Tunnel

Zone of Subsidence

• 65 ha of new disturbance

• 3.9 km of surface road

• 4.6 km of ore conveyor

• Portal (buildings & laydown)

• 700m tunnel

• 3 declines (each 3.4km)

• Underground mine infrastructure

• Surface subsidence zone (35ha)

• Waste Rock & Tailings to be stored in Kemess South Pit

Amazay(Duncan) Lake

Omineca Resource Access Road

fl: AuRico Gold Kemess Underground

Kemess Underground Mine Summary

Feasibility Study provides financial and technical analysis on project to +/- 15%

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Item DetailsMine Method Block caving underground mining (minimizes waste rock)

Underground (UG) facilities Includes crusher, maintenance shop, warehouse

Transportation of ore Crushed ore transported to stockpile near existing mill via conveyors

Mill Process 24,600 tonnes per day (tpd) (utilizes half of existing mill)

Tailings Deposited into mined out South Kemess Pit

Concentrate Trucked to Mackenzie rail loadout to be shipped to smelters

Annual Production 105,000 ounces gold44 million pounds copper

Total Production 1.3 million ounces gold563 million pounds copper

Mine Life 12 years

Construction 5 years

Labour 100 to 400 range

Kemess UndergroundCross Section Showing Decline, Underground Workings and Block Cave

Three Declines (3.4 km long)One for air intake, one for haulageConveyor decline used for ore

Ventilation raise (only 1)

Crusher, shops & dewatering at bottom of decline

Ore body

• Block Cave video http://www.youtube.com/watch?v=a-pWzUb6How

fl: AuRico Gold Kemess Underground

Areas studied for Kemess South and Proposed Kemess North are outlined in green and blue respectively

Ongoing studies:• Archaeology

• Socio-Economic Review

• Hydrology

• Hydrogeology

• ML/ARD

• Surface Water Quality

• Meteorology

• Underground water prediction

Additional Studies:• Archaeological Overview

Assessment

• Caribou

Baseline Studies Required

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Tunnel & Declines

Waste & Tailings Conveyor & Road

Tunnel

fl: AuRico Gold Kemess Underground

Kemess UndergroundAboriginal Engagement

Which First Nations will be affected by the Project?

• Three Aboriginal traditional territories overlap the project location: Kwadacha, Tsay Keh Dene, and Takla Lake. Self identified as Tse Keh Nay (TKN).

• Tse Keh Nay, Northgate and subsequently AuRico communication resulted in the signing of an Interim Measures Agreement on June 22, 2012.

• A cooperative agreement to cover advanced exploration and construction with respect to the KUG Project

• A strength of the IMA is that it places AuRico and the TKN at ~80% towards completion of an Impact Benefit Agreement (IBA)

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Kemess UndergroundFederal and Provincial Potential Taxes to be PaidLife of Mine (LOM)

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Federal & Provincial Taxes Feasibility($M)

BC Provincial Corporate Tax 63.8Federal Corporate Tax 87.0BC Minerals Tax 86.0Total Taxes 236.7Gold Price (US$/ounce) $1,300Copper Price (US$/pound) $3.00Assume CA$ and US$ are at parity

What was the economic impact of Kemess South? • Expenditures/Payroll by location in a typical year at Kemess South

included: 40% in Prince George/Mackenzie/Fort St. James/Bulkley Valley/Smithers

• Compared to 17% in Kamloops/Cariboo and 13% Vancouver/Sunshine Coast

KEMESS UNDERGROUNDSUMMATION

INFRASTRUCTURE• KUG utilizes substantial existing KS infrastructure

• Waste rock & tailings will be deposited into empty KS Pit,

• New disturbance of 65ha

AURICO & TSE KEY NAY RELATIONSHIP• Interim Measures Agreement

• Open and regular communication via Senior Implementation Committee & Environment Management Committee

REGULATORY PROCESS• Will Opt In to BC EA Review Process

• If applicable will request BC EA Review Substitution for CEAA Review

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