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Rejected in 2008, Kemess gold-copper mine proposal on table again

The open pit Kemess South Mine was in production from 1988 to 2011.

JOHN LEHMANN/The Globe and Mail

A mine rejected in 2008 on environmental grounds is back in play, with a different company at the helm and plans for an underground, rather than an open-pit, operation.

Toronto-based AuRico Gold filed a project description for the Kemess Underground Mine Project with the B.C. Environmental Assessment Office last month, reviving plans for a gold-copper deposit about 250 kilometres north of Smithers and about 6.5 kilometres north of former producer Kemess South Mine, which was in production from 1988 to 2011.

In the years leading up to Kemess South being depleted, former owner Northgate Minerals made plans to extend operations by developing the nearby Kemess North deposit. Plans at the time called for disposing of tailings and waste rock from expanded operations in Duncan Lake, also known as Amazay Lake.

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That plan did not sit well with aboriginal groups that had historic and cultural connections to the lake.

In 2007, a federal review panel concluded Kemess North as it was then designed was not in the public interest "because of significant adverse environmental, social and cultural effects, some of which may not emerge until many years after mining operations cease."

After reviewing the panel decision, Ottawa in March, 2008, said the project should not go ahead.

That was a major setback for Northgate, which was acquired by AuRico Gold in a friendly, $1.5-billion deal in 2011.

Even before that deal closed, attempts were under way to find a way to put Kemess North back on the table – which meant giving up the notion of using Duncan Lake as a tailings site.

"It was obvious that to get social licence [for the project], we had to do a far better job of explaining and engaging with First Nations," said Chris Rockingham, who was formerly with Northgate and is now vice-president of business development with AuRico. "To get a discussion going, we made a commitment that we would not consider using Amazay Lake for any purpose related to mining."

The current proposal calls for tailings to be disposed of in the old open pit.

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AuRico has also been able to develop its feasibility plan based on copper and gold prices that are significantly higher than they were when Northgate was pursuing the project.

AuRico and Tse Keh Nay – an alliance representing the Takla Lake, Tsay Keh Dene and Kwadacha aboriginal groups – reached an "interim measures" agreement in 2012 that set the stage for the project to move into environmental review.

AuRico has other producing mines so is not under pressure to bring Kemess Underground into production, Mr. Rockingham said.

The $500-million Kemess Underground project must undergo a provincial review, and a federal review may also be required. Under rules introduced in 2012, B.C. has applied to substitute its process for a federal review if one is required. The deadline for public comments on that request is March 13.

It is not unusual for a mine proponent that fails to obtain a permit to take another try.

Vancouver-based Taseko Mines redesigned its New Prosperity copper-gold mine project after the federal government turned down an earlier proposal – known as Prosperity – in 2010. Ottawa rejected the $1-billion project a second time in February.

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Taseko is pursuing a judicial review of what it maintains was a flawed federal panel review.

Designs can be reconfigured based on factors including commodity prices, technology, environmental issues or a change in corporate ownership.

Environmental laws do not prohibit multiple applications, but permits are typically granted with a limited time window in which proponents have to develop the project or start the process over again.

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