Northgate Minerals expects to spend $1.4 million this year on examining the prospects of an underground gold and copper mine project in northern B.C.
Northgate's Kemess South project finished production in March after 13 years of operations, but the company is continuing work to resurrect the nearby Kemess North project as an underground mine.
The company first announced it was trying to resurrect the project last year after the Kemess North mine was rejected as an open pit mine by a federal regulatory panel in 2007.
Northgate's outgoing president and CEO, Ken Stowe, said Tuesday a preliminary underground mining design plan for Kemess North is expected to be ready by this summer. Stowe said he is confident they would take the next step to commission a feasibility study, a critical element in determining, in detail, a mine's economic viability.
"I am personally convinced (the Kemess North underground mine) is a project in today's world," Stowe said at the company's annual general meeting where a $19.8-million profit was announced.
The existing Kemess South mine's milling facilities have been mothballed, and employees are leaving.
About 350 people worked at the mine, some of them living in Prince George. The city was also a supply and service centre for the mine.
Mining equipment that would not be needed for the Kemess North underground mine is also being sold off. The Toronto-based company has already sold off $19 million in equipment, and expects to sell more.
Stowe said the Kemess North project is well positioned to take advantage of the existing mill facility, power and road access. He noted there are also two permitted tailings facilities -- used to store mine waste -- on the site. "We know the site well, we know what we can do, how to operate in that part of the world," said Stowe, who announced his retirement as CEO on Tuesday.
The Kemess North site is located about 425 kilometres northwest of Prince George, in a remote region that sees snow almost ever month of the year.
Toronto-based Northgate conducted an extensive drilling program in 2010 to better define the mineral resources at Kemess North for an underground mine. New estimates showed an estimated 2.6 million ounces of gold and more than 800 million pounds of copper.
A federal environmental review panel rejected the Kemess North project in Sept. 2007 as an open pit mine, saying the economic and social benefits provided by the project were outweighed by the risks of significant adverse environmental, social and cultural effects.
The central issue was First Nations' opposition to the use of six-kilometre Duncan Lake, called Amazay in their traditional language, as a dump for mining waste.
Northgate has already said the underground mine concept would not require the use of Duncan Lake. Instead, existing space in the two already-permitted sites could be used.
Northgate also has operations and interests in Ontario, Australia and Nevada.
