F.1 0196303-0001 Project Description for Kemess Underground Project

AuRico Gold KEMESS UNDERGROUND PROJECT Project Description: Executive Summary

ERM Rescan Rescan Building, Sixth Floor - 1111 West Hastings Street Vancouver, BC Canada V6E 2J3 February 2014 Tel: (604) 689-9460 Fax: (604) 687-4277 Executive Summary

PROJECT OVERVIEW AND LOCATION AuRico Gold Inc. (AuRico) proposes to develop the Kemess Underground Project (the Project), an underground gold-copper mine located in a mountainous area of north-central British Columbia (BC), approximately 250 km north of Smithers, 430 km north-northwest of Prince George, and 6.5 km north of the past-producing Kemess South (KS) Mine (Figure 1). The Project is located in the traditional territories of the Takla Lake First Nation, Tsay Keh Dene First Nation, and the disputed area between the western provincial and federal boundaries of Treaty 8 (the ‘disputed area’).

The project (coordinates: 57º0′N; 126º45′W) is situated on provincial Crown land within the Peace River Regional District (PRRD). AuRico holds 57 mineral claims totaling 29,285 ha and mining leases totaling 3,483 ha. The project is accessed from the Omineca Resource Access Road (ORAR). Mackenzie is the closest town by road to the Project.

The KS Mine, a former open pit mine that produced 3.0 M ounces of gold and 749 M pounds of copper from 218 million tonnes (Mt) of ore, was owned and operated by Northgate Minerals, and acquired by AuRico Gold Inc. (AuRico) in 2011. The mine operated from 1988 to 2011 with an average daily production rate of 52,000 tonnes. The KS site is currently under care and maintenance. The new surface disturbance from the Project will be relatively small: approximately 65 ha (35 ha for the subsidence cone and 30 ha for infrastructure) compared to 1,900 ha of surface disturbance at the KS Mine, of which a substantial portion has since been reclaimed.

The purpose of the proposed Project is the economic extraction of gold and copper ore from the underground deposit using block caving techniques and processing approximately 9 Mt/year (24,650 tonne per day (t/d) equivalent) with an average annual production rate estimated at 105,000 ounces of gold and 44 million pounds of copper, for a total of 1.3 million ounces of gold and 563 million pounds of copper over a mine life of approximately 12 years.

Most of the KS mine infrastructure will be used for the Project, including the mill, KS open pit (which will be used for the tailings storage facility for the Project), and administrative/service complex/ accommodation. Only minor upgrades to KS mine infrastructure will be required for the Project. The Project will use the existing airstrip and road access to the site. Power will be provided by the existing 380 km, 230 kV transmission line.

The underground deposit will be accessed using three declines. Mining will take place on a single extraction level that includes 640 drawpoints over a 540-m-wide and 230-m-long footprint. Ore will be recovered using load-haul-dump machines and delivered to the underground crusher, located immediately south of the ore body. Once material is crushed, it will be placed on conveyor belt which rises through one of the dedicated declines and transfers the ore to surface conveyor, which will transport the crushed material to the existing, reclaimed stockpile area, directly north of the existing KS mill.

AURICO GOLD i PROJECT # 0196303-0001 GIS # KUG-15-005 December 23 2013

135°0'0"W 130°0'0"W 125°0'0"W 120°0'0"W 115°0'0"W

Great Slave Lake Northwest Territories Yukon 60°0'0"N ¤£1 60°0'0"N

Alberta British Columbia

Kemess Underground Fort Ware Project (Kwadacha) !. ¤£97 ^_ !( !. Tsay Keh Dene ¤£37

Omineca Resource Alaska, Access Road Dawson Creek !. USA Takla Landing !. !. Mackenzie 55°0'0"N 55°0'0"N !. Smithers !. !.Fort St. Terrace James ¤£16 !. Prince George

r a ¤£16

i v

Pacific Ocean ¤£97 ¤£1 Kemess Underground ^_ Project !. Community/Settlement 50°0'0"N Kemess Underground ¤£97 50°0'0"N !( Project Airstrip ¤£3 Railway Vancouver !. Forest Service Road ¤£1 Highway Omineca Resource USA Access Road 1:8,000,000 0 100 200

130°0'0"W 125°0'0"W 120°0'0"W

Figure 1 Kemess Underground Project Location EXECUTIVE SUMMARY

The Project will be operated on a fly-in fly-out basis with the majority of workers operating on a cycle of two weeks on, two weeks off. The Project is expected to provide close to 4,000 person years of employment of which 1127 person years will be during the construction phase, and 2863 person years during the Project’s operation phase. The workforce will peak with approximately 400 people by Year-2 due to increased labour needs for development, production, maintenance, technical, and management- supervision. This level of workforce personnel is maintained through Year +4, after which development, undercutting, and drawbell opening ceases. Years 5 to 10 have total workforce complements ranging from 295 to 183, after which complements decline as the end of the mine’s life is reached. The total life of mine capital cost is estimated to be $683 M.

An estimated $236 million will be paid in provincial and federal taxes, including approximately $63.8 million in provincial corporate tax, $87 million in federal corporate tax, and $86 million in BC mineral tax pursuant to the Mineral Tax Act (1996d). These estimates are based upon US$1,300 per ounce gold and US$3.00 per pound copper, assuming the Canadian and US dollars are at parity.

GENERAL INFORMATION AND CONTACTS AuRico Gold Inc. (AuRico) proposes to develop the Kemess Underground Project (the Project). AuRico is a Canadian gold producer with operating mines in Ontario (Young-Davidson) and Sonora, Mexico (El Chanate) and mineral exploration and development opportunities in Canada and Mexico. AuRico’s common shares are listed on the Toronto Stock Exchange (TSX: AUQ) and the New York Stock Exchange (NYSE: AUQ). Further information about AuRico Gold Inc. can be found in the AuRico’s regulatory filings, including its Annual Information Form, available on SEDAR at www.sedar.com, on EDGAR at www.sec.gov, and on AuRico’s website at www.auricogold.com.

Principal contacts for the Project are provided below:

Chris Rockingham Vice President, Exploration & Business Development 110 Yonge Street, Suite 1601 Toronto, ON M5C 1T4 Telephone: 647-260-8880 Facsimile: 647-260-8881 Internet: www.auricogold.com Email: [email protected]

Harold Bent Director - Environment 1076 Main Street, Suite 2 PO Bag 3519 Smithers, BC V0J 2N0 Telephone: 250-877-7855 Facsimile: 250-877-7895 Email: [email protected]

Mr. Bent is the principal contact for the purposes of this Project Description.

AURICO GOLD iii PROJECT DESCRIPTION

AuRico Project Management Team

Toronto Office Scott Perry, President & Chief Executive Officer & Director [email protected]

Peter MacPhail, Chief Operating Officer [email protected]

Vancouver Office Susan Craig, Director Government Affairs & Community Relations 535 Thurlow Street., Suite 803 Vancouver, BC V6E 3L2 Telephone: 604-681-4004 Facsimile: 604-681-4003 Email: [email protected]

Environmental Assessment Consultant ERM Rescan Sixth Floor, 1111 West Hastings Street Vancouver, BC V6E 2J3 Telephone: 604-689-9460, ext. 3351 Facsimile: 604-687-4277

Anne Currie, Partner Email: [email protected]

Mark Branson, Project Manager Email: [email protected]

Engineering Consultant SRK Consulting (Canada) Inc. Suite 2200-1066 West Hastings Street Vancouver, BC V6E 3X2 Telephone: 604-681-4196 Facsimile: 604-687-5532 Email: [email protected]

The purpose of the Project is to develop the underground gold-copper deposit to help meet world demand for gold and copper in a manner that benefits Aboriginal groups, local communities, and local, provincial, and federal governments without compromising the ability of future generations to meet their own needs.

AUTHORIZATIONS, PERMITS, AND LICENCES Under the British Columbia Environmental Assessment Act (BC EAA; 2002a), the Project will not trigger an environmental assessment (EA) pursuant to Section 8 (1) of the Reviewable Projects Regulation (BC Reg. 370/2002) for a modification to an existing facility because, although the production capacity exceeds the Regulation trigger of 75,000 t/y of mineral ore, it will not exceed the threshold of either 750 ha of new land disturbance or a 50% increase in land disturbance. However, AuRico has chosen to

iv ERM RESCAN | PROJ#0196303-0001 | REV F.1 | FEBRUARY 2014 EXECUTIVE SUMMARY apply to the Executive Director of the BC Environmental Assessment Office under Section 7 of the BC Environmental Assessment Act (2002a) to request the Project be designated a reviewable project, and is submitting this Project Description for that purpose.

Under the Canadian Environmental Assessment Act, 2012 (CEAA, 2012) the Project is considered a “designated project” pursuant to Section 16 (c) of the Schedule of the Regulations Designating Physical Activities (SOR/2012-147) as the production rate will exceed the threshold for a gold mine of 600 t/d. As such, a Project Description is required by the Canadian Environmental Assessment Agency, for the purposes of determining whether a federal environmental assessment (EA) is required. If a federal EA is required, AuRico is interested in pursuing substitution of the federal process by the provincial EA process, pursuant to Section 32 of CEAA, 2012.

AuRico is planning to apply for concurrent review of provincial permits pursuant to the BC EAA (2002a) Concurrent Approvals Regulation (BC Reg. 371/2002). Under the Regulation, these permits would be reviewed at the same time as the EA Certificate Application. No decisions on permits can be made until a positive decision has been made to issue the EA Certificate.

The Project will require provincial authorizations, licences, and permits, as well as amendments to authorizations currently held by AuRico for the KS Mine. Authorizations under the Environmental Management Act (2003a), Mines Act (1996f), Heritage Conservation Act (Carlson and Dellabona 1996), Forest Act (1996b), Mineral Tenure Act (1996e), Public Health Act (2008), Drinking Water Protection Act (2001), Safety Standards Act (2003b), Water Act (1996i), and Water Protection Act (1996h) may be required for the Project. The list is not intended to be comprehensive. AuRico will meet with the appropriate provincial agencies to discuss permitting requirements related to the Project and to determine the best approach to applying for or amending existing permits.

The Project will also require federal authorizations, licences, and permits, including those currently held by AuRico for the KS Mine. Authorizations under the Explosives Act (1985a) and Canada Transportation Act (1996a) will be required. All applicable provisions under the Species at Risk Act (2002b), Migratory Birds Convention Act (1994), the Metal Mining Effluent Regulations (MMER; SOR/2002-222), and the Transportation of Dangerous Goods Act (1992) will be followed. Authorizations under the Fisheries Act (1985b) are not expected to be required. The list is not intended to be comprehensive. AuRico will meet with the appropriate federal agencies to discuss permitting requirements related to the Project and to determine the best approach to applying for permits.

REGIONAL SETTING The Project is located on provincial Crown Land in the Peace River Regional District (PRRD) and within the boundary of the Mackenzie Land and Resource Management Plan (Mackenzie LRMP; BC ILMB 2000). The closest communities to the Project by air are Fort Ware (Kwadacha), Tsay Keh Dene, and Takla Landing. The Kwadacha Nation resides at Fort Ware (Kwadacha), located on the Finlay River approximately 70 km northeast of the Project. The Tsay Keh Dene First Nation resides at Tsay Keh Dene on the north end of the Williston Reservoir, approximately 120 km east of the Project. The Takla Lake First Nation resides at Takla Landing, approximately 180 km south of the Project.

The closest communities to the Project by road are Germansen Landing (230 km south of the Project) and Manson Creek (250 km south of the Project). Germansen Landing is a historical mining town. Currently, the community is the centre of some placer gold operations and serves a growing tourism trade through guide outfitting, a general store, and accommodations. Manson Creek is also a historical mining town, with currently active placer operations.

AURICO GOLD v PROJECT DESCRIPTION

Regional communities include Mackenzie, Smithers, Terrace, Prince George, and Fort St. John. The major centres expecting to supply the Project are Smithers Prince George, and Kamloops.

The regional economic base is supported primarily by forestry activities, and, to a lesser extent, by mining. There is limited tourism in the Project area, primarily focused on outdoor pursuits such as fishing, hunting, camping, guide outfitting, and snowmobiling.

The Project does not overlap any provincial parks or protected areas. The closest provincial parks and protected areas to the Project are: Tatlatui Provincial Park, located approximately 15 km west of the Project; Spatsizi Plateau Wilderness Park, located 47 km northwest of the Project; Finlay – Russel Provincial Park, located approximately 35 km north/northeast of the Project; and Finlay – Russel Protected Area, located approximately 47 km northeast of the Project. No formally designated environmentally sensitive areas (e.g., ecological reserves, conservancy areas, national wildlife areas) exist within 120 km of the Project.

With respect to permanent, temporary and seasonal residences, a remote residential tenure exists 41 km southeast of the Project, a residence exists 60 km from the Project, and a fishing camp is located 84 km from the Project.

Aboriginal Groups The Project area is within or near traditional territories claimed by Takla Lake First Nation, Tsay Keh Dene First Nation, Kwadacha Nation, and Gitxsan Nation. There are Métis communities in the larger regional area. The Project area is also located within the Treaty 8 disputed area.

Takla Lake First Nation, Tsay Keh Dene First Nation, and the Kwadacha Nation, have revived their historic and cultural connections to their Sekani ancestors who historically used, occupied and managed the area in the region including the Project area. The three First Nations have formed an alliance known as the Tse Keh Nay (TKN). AuRico negotiated an Interim Measures Agreement (IMA) with the TKN, which was signed by the chiefs of Tsay Keh Dene First Nation and Takla Lake First Nation on June 21, 2012, and by the chief of Kwadacha Nation on July 4, 2012. The Agreement is discussed in more detail in the Aboriginal Engagement and Consultation section.

Takla Lake First Nation Located approximately 320 km north of Prince George, Takla First Nation has 17 federal Indian Reserves covering 809 ha (BC MARR 2013a). Takla Lake First Nation is awaiting confirmation of additional Reserve land.The main community of Takla Landing is located on North Takla Lake Indian Reserve No.7 and 7A on the east shore of (Takla Lake; BC MARR 2013a). Travel time from Prince George to Takla Landing by road is approximately seven hours.

The total registered population for the Takla Lake First Nation is 740 (AANDC 2013d). Takla Lake First Nation is governed under a custom electoral system, comprised of one chief and four councillors, all elected at large by the community (AANDC 2013b). Takla Lake First Nation also has a band office in Prince George.

Takla Lake First Nation is nominally a member of the Carrier Sekani Tribal Council (CSTC) (Takla Lake First Nation, written comment). The CSTC represents the interests of eight First Nations in treaty negotiations with British Columbia and Canada. The CSTC is in Stage 4 (or agreement-in-principle negotiation stage) of the six-stage BC treaty process (BC MARR 2013a). Takla is reviewing options regarding its membership in CSTC and its status in Treaty negotiations (Takla Lake First Nation, written comment)

vi ERM RESCAN | PROJ#0196303-0001 | REV F.1 | FEBRUARY 2014 EXECUTIVE SUMMARY

The Project and associated transportation activities on the ORAR occur within Takla Lake First Nation traditional territory.

Tsay Keh Dene First Nation Tsay Keh Dene First Nation has three federal Indian Reserves covering 201 ha and holds 810 ha of provincial Crown land (BC MARR 2013a). Tsay Keh Dene First Nation also occupies two parcels of federal Crown land that it is in the process of being converted to reserves. The total registered population for Tsay Keh Dene First Nation is 459 (AANDC 2013e). Of these members, roughly half reside in the community of Tsay Keh Dene located at the north end of Williston Reservoir, approximately 430 km north of Prince George. The community is accessible by forest service road from Mackenzie and by air from Prince George. Travel time from Tsay Keh Dene to Prince George by road is from eight to ten hours, depending on road and weather conditions, or a one- to two-hour flight from Prince George.

Tsay Keh Dene First Nation is governed under by an elected Chief and Council composed of four Councillors. Tsay Keh Dene First Nation also has a band office in Prince George.

Over the years, Tsay Keh Dene First Nation has pursued a range of initiatives to create employment and training opportunities for its members in forestry, mining and other sectors. The Interim Measures Agreement signed by Tsay Keh Nay First Nation with AuRico is one of these initiatives (Tsay Keh Dene, written comment)

Tsay Keh Dene First Nation is in stage 4 (or agreement-in-principle stage) of the six-stage BC treaty process (BC MARR 2013c).

The Project and associated transportation activities on the ORAR occur within the traditional territory of Tsay Keh Dene First Nation.

Kwadacha Nation Kwadacha Nation is situated at the confluence of the Fox, the Kwadacha, and Finlay rivers in the Rocky Mountain Trench. Kwadacha Nation has three federal Indian Reserves covering 391.8 ha (BC MARR 2013b). The main community is Fort Ware (Kwadacha), located approximately 570 km north of Prince George, and 75 km north of the community of the Tsay Keh Dene. The community is accessible by forest service road from Mackenzie and by air from Prince George. Travel time from Fort Ware (Kwadacha) to Prince George by road is from 10 to 12 hours, depending on road and weather conditions, and a one- to two-hour flight from Prince George.

Kwadacha Nation is governed under a custom electoral system consisting of a chief, deputy chief and three councillors. The registered population of Kwadacha Nation is 475 (AANDC 2013c).

Kwadacha Nation is a member of the Kaska Nation, which represents three BC First Nations Bands (Kwadacha, Dease Lake, and Lower Post) and two Yukon First Nations (Liard First Nation and Ross River Dena Council). The Kaska Dena Council is negotiating a comprehensive treaty on behalf of the Kaska Nation under the British Columbia treaty process. The Kaska Dena Council is currently at Stage 4 (or agreement-in-principle stage) of the six-stage BC treaty process.

The Project occurs outside the southern boundary of the Kaska Dena Council traditional territory.

AURICO GOLD vii PROJECT DESCRIPTION

Gitxsan Nation Gitxsan Nation consists of five bands, each with their own Indian Reserves: Gitwangak, Gitsegukla, Gitanmaax, Kispiox, and Glen Vowell. As of September 2013, the total registered population of the bands making up Gitxsan Nation was 6,585 people, with 2,351 of those living on-reserve (AANDC 2013a).

Gitxsan Nation governance is based on the wilp system. As of 2012, there were reported to be 64 huwilp within the Gitxsan Nation (Canadian Press 2012), however it has varied in the past between 45 and 65 huwilp (Gitxsan Nation n.d.). All houses of the Gitxsan Nation belong to one of four clans based on matrilineal descent. Each Gitxsan Nation member belongs to a wilp that has a traditional territory within the broader Gitxsan Nation territory. The wilp is responsible for managing lands and resources within the wilp territory. Each wilp is led by a hereditary chief.

The Project Mine Site is located outside of the northeast boundary of Gitxsan Nation traditional territory, with portions of the ORAR passing through the Gitxsan territory. The closest wilp to the Project area is wilp Nii Kyap. This wilp has authority to make decisions regarding the portion of the Gitxsan Nation Statement of Intent Area closest to the Project area. A portion of the ORAR also passes through the asserted territory of this wilp.

Treaty 8 Treaty 8, signed on June 21, 1899, includes lands in northeast BC, much of northern Alberta and northern Saskatchewan, and parts of the Northwest Territories. Adhesions to this agreement were made on 13 subsequent occasions between 1899 and 1900 (Government of Canada 1966a). In 1910, an additional adhesion was made in Fort Nelson, BC. There are eight signatory Treaty 8 nations in BC: McLeod Lake Indian Band, Blueberry River First Nations, Doig River First Nation, Fort Nelson First Nation, Halfway River First Nation, Prophet River First Nation, Saulteau First Nations and West Moberley First Nations.Treaty provisions include the right to carry out their “usual vocations” of hunting, fishing, and trapping within the Treaty 8 area. This right is protected by section 35 of the Constitution Act (1982), but is subject to the right of the Crown to “take up” lands for settlement, mining, lumbering, trading or other purposes (Madill 1986).

The western boundary of Treaty 8 is currently disputed as a result of unclear language in the original document. The treaty describes the boundary as the “central range of the Rocky Mountains”, while the maps accompanying both the treaty and the enabling order-in-council, P.C. 2749, authorizing the signing of Treaty 8, indicate the western boundary of Treaty 8 to be the height of land separating the Arctic drainage system from the Pacific drainage system, a more westerly range of mountains. The boundary question has been addressed by the Department of Indian Affairs (now Aboriginal Affairs and Northern Development Canada [AANDC]) on several occasions, although an ongoing dispute regarding the boundary is scheduled to be resolved in court from February to April 2014 in Victoria (Devlin Gailus 2010-2014).

Métis Chartered Métis communities in the vicinity of the Project area include the Tri-River Métis Association in Smithers, the Northwest BC Métis Association in Terrace, the Prince George Métis Community Association, Moccasin Flat’s Métis Society (Chetwynd), the Northeast Métis Society (Hudsons Hope), and the New Caledonia Métis Association (Fort St. James; MétisNation British Columbia n.d.). Based on 2006 census data, there are 4,445 Métis residing in the Fraser-Fort George Regional District (Statistics Canada 2007b), 3,260 Métis residing in the PRRD (Statistics Canada 2007d), 935 residing in the Regional District of Kitimat-Stikine (Statistics Canada 2007c), and 1,205 residing in the Regional District of Bulkley-Nechako (Statistics Canada 2007a).

viii ERM RESCAN | PROJ#0196303-0001 | REV F.1 | FEBRUARY 2014 EXECUTIVE SUMMARY

Regional Environmental Studies No regional studies are being conducted in the region of the Project as defined under Section 74(1) of CEAA, 2012 (2012). As well, AuRico is unaware of any regional initiatives run by other agencies in the region of the Project.

The Project is located in a remote part of BC; little industrial activity has occurred or is planned to occur in the Project area (Table 1; Figure 2).

Table 1. Current Status of Regional Development Projects

Past Projects Existing Projects Reasonably Foreseeable Future Projects Lawyer’s Mine KS Mine (currently under care and maintenance) None Baker Mine Mount Milligan Mine Shasta Mine (currently on care and maintenance)

FEDERAL LANDS, FUNDING, AND TRANSBOUNDARY EFFECTS The nearest federal lands to the Project are Indian Reserves, including Sucker Lake No. 130 (78 km from Project), Bear River 3 (88 km from the Project), and Fort Ware No. 80 (76 km from Project). No Project-related effects to federal lands are anticipated.

No financial support from federal authorities is being sought or provided for the Project.

The Project is not expected to result in any transboundary effects to areas outside of British Columbia, including Alberta and the United States.

MINERAL RESOURCES Kemess Underground is a gold-copper porphyry deposit and is typical of calc-alkaline porphyry gold- copper deposits in the western Cordillera. The deposit is centred on a mineralized porphyritic monzodiorite/diorite pluton and associated west-southwest trending dikes, which extend to the southwest. Higher-grade gold-copper mineralization is characterized by secondary biotite alteration in volcanic and the eastern plutonic host rocks.

The Kemess Underground deposit is located at the southern end of the Toodoggone mining camp. The district comprises Early Jurassic Hazelton Group rocks represented by the Toodoggone Formation calc-alkaline volcanics, as well as coeval plutonic and sub-volcanic intrusive rocks (Black Lake Intrusions). The property is predominantly underlain by a thick (> 1,000 m) succession of andesitic flows (Takla Group), which host a significant proportion of the gold-copper mineralization on the property. The bulk of the gold-copper mineralization is hosted by the intrusive volcanic rocks beneath East Cirque.

The most prominent structure traversing the Project area is the Kemess North (KN) Fault, an east-west trending south dipping reverse fault that truncates the Kemess North pluton and associated mineralization at depth.

A near surface flat-lying zone of intensely broken rock and rubble, referred to as the Broken Zone, or Sulphate Leach Zone, occurs above the deposit. This zone averages a thickness of about 80 m from surface to competent bedrock and is comprised of clay, multiple gouge zones and a pyritic-argillic (clay) alteration component. The Phyllic Zone underlies the Sulphate Leach Zone. Pyrite contents rise with depth, peaking in the 12 to 15% range and then reducing to 3 to 4%.

AURICO GOLD ix PROJECT #0196303-0001 GIS # KUG-15-009 October 30 2013

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Kilometres *Mine information based on MINFILE accquired from Land and Resource Data Warehouse on August 16, 2013 Projection: NAD 1983 UTM Zone 9N © BCGOV FLNRO Water Management Branch 6275000 6275000

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Figure2 Figure 2 Industrial Developments near the Kemess Underground Project EXECUTIVE SUMMARY

Overall, sulphide mineralization throughout the deposit consists of 2 to 3% pyrite, with lesser amounts of chalcopyrite and traces of molybdenum.

PROJECT DESCRIPTION The Project is a proposed underground gold-copper mine. Ore will be mined using block cave mining (block caving). Block caving is a mass mining method that allows for bulk extraction of large, relatively lower grade ore bodies. It involves undercutting large blocks of ore, causing the ore to break or cave under its own weight, potentially leading to surface subsidence. The essential components of a block caving operation involve an underground tunnel leading to draw points, where overlying rock, broken by gravity, flows to the draw point and is gathered and transported for processing.

Based on current mine planning, the underground workings will roughly correspond to an aboveground footprint of 540 m wide and 230 m long, which is predicted to result in a 35 ha subsidence zone

Over a 12-year mine life, the mine will produce approximately 100.4 Mt of ore at an average annual rate of 9 Mt/y with daily production up to 24,650 tpd. The Project is estimated to yield 105,000 ounces of gold and 44 million pounds of copper on an annual basis, for a total of 1.3 million ounces of gold and 563 million pounds of copper over the life of the Project.

The proposed surface layout for the mine is shown in Figures 3 through 6. The Project consists of the following on-site and off-site components:

o underground facilities:

− access and haulage decline; − conveyor decline; − ventilation intake decline; − cave gallery; − gyratory crusher; − ventilation exhaust raise; − garages, electrical substation, warehouse, storage, and explosives magazines; − refuge stations and lunchroom;

o surface portal facilities:

− offices, workshop, and stores; − concrete batch plant; − electrical substation; − decline ventilation system; − waste stockpile; − ore stockpile; − organics stockpiles; − laydown areas; − fuel storage tank; − water handling infrastructure: • sedimentation pond; • pump house; • runoff collection ditch; • culverts;

AURICO GOLD xi PROJECT # 0196303-0001 GIS # KUG-15-010a February 11 2014

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Figure 6

Figure 5b 6323000 6323000

?! End of Tunnel 6322000 6322000 ?! Start of Tunnel Kemess Lake 6321000 6321000 ?! Proposed Tunnel Location Transmission Line (Existing) Access Road Figure 5b Existing Road Explosives Magazine

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Decline k e e r Rough Road C s s Existing Infrastructure e m e Proposed Infrastructure K

6319000 Proposed Subsidence 6319000 Cone 1:40,000 0 0.5 1

Kilometres Figure 4 Projection: NAD 1983 UTM Zone 9N

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Figure 3 Kemess Underground Project Infrastructure PROJECT # 0196303-0001 GIS # KUG-15-010e February 11 2014

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Tailings Storage Facility

Proposed East Dam 6320000 6320000

Proposed Access Road 6319500 6319500 Primary Crusher Site for Open Pit Proposed Conveyor Proposed Power Line

Existing Road Maintenance Back-up Diesel Supply Storage Live Ore Proposed Access Road Generators Stockpile Exploration Infrastructure Facilities Proposed Conveyor Maintenance Shop Proposed Power Line Fuel Storage (Tank Farm) 6319000 6319000 Process Water Line Camp Bunkhouses Proposed East Dam Domestic Water 1:12,000 Supply Administration 0 150 300 (Drilled Well) Complex Back-up Power Metres Generator Substation Mill Facility Including Projection: NAD 1983 UTM Zone 9N Sewage Treatment Plant Concentrate Storage

635000 635500 636000 636500 637000

Figure4 Figure 4 Kemess Underground Project Mine Site PROJECT # 0196303-0001 GIS # KUG-15-010c February 11 2014

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6322300 Proposed è 6322300 KUG Dewatering Pipeline 6322000 6322000

Proposed Conveyor

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Organics Stockpile Proposed Offices, Workshop, Stores, Electrical Substation, Laydown Area, and Fuel Storage Tanks 6321400 6321400

Proposed Power Line

Proposed Conveyor Proposed Diversion Swale 6321100 6321100

Existing Exploration Road 6320800 6320800

Proposed ?! Proposed Tunnel Location Access Road Existing Road Proposed Conveyor Proposed Diversion Swale

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Metres 6320200 6320200 Projection: NAD 1983 UTM Zone 9N

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Figure 5a Kemess Underground Project Access Corridor PROJECT # 0196303-0001 GIS # KUG-15-010b February 11 2014

635400 635600 635800

Proposed è Proposed Ventilation Access Intake Decline Decline

Proposed Proposed KUG Access, Conveyor Conveyor and Decline Conveyor Portals

6323200 Proposed 6323200 Mine Ventilation and Heating Proposed Ore Proposed Tank Stockpile Farm Platform Proposed KUG Dewatering Pipeline

Proposed Runoff Collection Ditch Proposed Stripped Organics Stockpile Proposed 6323000 Access Corridor 6323000

Proposed Proposed Sedimentation Pond Proposed KUG Concrete Plant, Dewatering Materials Stockpile, Pumphouse and Laydown Area

Proposed Proposed KUG Proposed KUG Dewatering Access Road Clean Water Pipeline Discharge Ditch 6322800 6322800

Proposed Conveyor

Proposed Runoff ?! Proposed Tunnel Location Collection Ditch Existing Road Proposed Underground Decline Proposed Conveyor Culvert Proposed Infrastructure Proposed KUG 6322600 Dewatering Pipeline 6322600

?! End of Tunnel Proposed Access Road Proposed Runoff Collection Ditch 1:4,000 0 50 100

Metres Projection: NAD 1983 UTM Zone 9N

635400 635600 635800

Figure 5b Kemess Underground Project Access Corridor PROJECT # 0196303-0001 GIS # KUG-15-010d February 11 2014 635000 635500 636000 636500 637000 è

6326500 Subsidence Cone 6326500 6326000 6326000

Proposed

Exhaust Ventilation Raise Proposed Exhaust Ventilation Proposed Access Road Access Decline 6325500 6325500

Proposed Ventilation Proposed Intake Decline Conveyor Decline 6325000 6325000 6324500 6324500

Proposed Exhaust Ventilation Access Road 6324000 6324000 Existing Road Proposed Infrastructure Proposed Underground Decline 1:15,000 0 250 500

Metres 6323500 Projection: NAD 1983 UTM Zone 9N 6323500

635000 635500 636000 636500 637000

Figure 6 Kemess Underground Project Underground Infrastructure EXECUTIVE SUMMARY

o ventilation infrastructure:

− ventilation exhaust raise; − ventilation raise access road;

o Access Corridor:

− 3.9 km road (about 50% occurs on KS Mine pre-disturbed ground); − 700 m tunnel including roadway and conveyor easements; − 4.6 km surface conveyor from portal to mill stockpiles; − 3.1 km transmission line extension to portal; − 3.1 km dewatering pipeline;

o Tailings Storage Facility (TSF; former the KS Mine open pit):

− existing KS Mine Pit; − East Dam;

o operational water management:

− water treatment plant; − discharge pipelines from TSF to Attichika Creek; and − diversion infrastructure.

Existing KS Mine infrastructure that will be utilised for the Project includes the following facilities:

o mill;

o ore stockpile area adjacent (north) to the mill;

o transport network for materials and concentrate:

− transportation of concentrate via the existing 400 km ORAR; − rail load-out facility in Mackenzie;

o administration and accommodation facilities;

o potable water facility and sewage facility;

o process water pipeline;

o explosives magazine;

o power network:

− existing 380 km long 230 kV power line from BC Hydro Kennedy substation to plant site; − existing step-down transformers and backup diesel generators;

o 1,500-m all-weather gravel airstrip; and

o access to ventilation raises via existing exploration access roads.

The Project site comprises three areas: the Underground Deposit Area (includes the underground and surface portal facilities, ventilation infrastructure and access to ventilation raises); the Mine Site (includes the TSF, mill processing facility, ore stockpile, explosives magazine, administration and accommodation facilities, potable water, sewage facility, and operational water management infrastructure); and the Access Corridor. Additional Project components include the airstrip, the ORAR,

AURICO GOLD xvii PROJECT DESCRIPTION and the power network as described above. The above-listed Project components will be permanent throughout the life of the Project.

Physical Activities

Construction Phase The construction phase will involve constructing new infrastructure as well as reactivation and upgrades to existing KS Mine infrastructure. New infrastructure to be constructed includes:

o Access Corridor from the Mine Site to the portal area;

o discharge of a volume of TSF water to facilitate initial construction of the East Dam;

o water treatment plant and related facilities;

o production ventilation exhaust raise and access road and upgrades to the ventilation access road;

o portal area facilities including decline ventilation network, contractor facilities, batch plant, sub-station, settling pond, stockpiles, pumphouse, fuel storage tank, and water management infrastructure;

o underground development, including major decline and caving excavations;

o drawbell opening and initial cave development;

o excavation and installation of underground infrastructure, including crusher, conveyer, main sumps and pumps, primary fans and heaters, electrical network, water pipelines, workshop and stores, explosives magazines, truck load-out, and rock pass grizzlies and all associated equipment; and

o extraction of the development ore to commence operations.

During the construction phase, water will be discharged from the TSF pursuant to AuRico’s existing Environmental Management Act (2003a) permit. To perform this task, a water treatment facility using lime treatment will be required to be built and in operation by Year -2 when the mill starts up.

During the construction phase, upgrades/renovations will be made to the existing process plant, camp, kitchen, potable water and sewage facilities and other ancillary infrastructure.

Operations Phase

Underground Mine The operations phase involves the commencement of full-scale underground ore extraction. Mining operations will take place on a single extraction level over a 540-m-wide and 230-m-long footprint. The ore will be recovered using load-haul-dump machines and transferred to the underground crusher. The material will then be transferred to the surface via conveyor, and transported to an existing stockpile and mill via the surface conveyor.

Surface Facilities The existing stockpile, located adjacent to the mill, will be used to manage the throughput of ore within the processing plant. Ore will be processed from the stockpile using three existing apron feeders, delivering ore to a mill conveyor.

Prior to the initiation of milling, a temporary ore stockpile will be developed. This stockpile will also be uncovered and will have a capacity of approximately 1 Mt. The location of this stockpile is still xviii ERM RESCAN | PROJ#0196303-0001 | REV F.1 | FEBRUARY 2014 EXECUTIVE SUMMARY being decided, but is proposed to be immediately northwest of the mill between the proposed Kemess underground conveyor and KS Mine open pit; an area where stockpiles were placed during KS Mine operations.

The Project will use one circuit in the mill. Some alterations to the flotation process will be required to allow independent operation of the flotation banks, as well as a new regrind stir circuit to create a finer target product size. A copper flotation concentrate containing the copper, gold, and silver values will be produced, and tailings will be delivered to the tailings system after recirculation. The flotation process will remove the metals from the circuit through a series of cleaners and scavengers. The material containing the metals is then dewatered to a concentrate.

The water treatment plant will be capable of treating 4,300 m 3/hour, and water will be discharged via a pipeline to Attichika Creek when it meets applicable water quality standards in accordance with the required permits. Long-term sludge management options from water treatment are currently being evaluated and will be addressed in the Application/EIS.

Waste Management The Project will produce approximately 100 Mt of tailings and approximately 2.1 Mt of potentially acid- generating (PAG) and non-acid-generating (NAG) waste rock over the mine life. Waste rock will be hauled to the TSF via the Access Corridor and stored underwater in the TSF. Tailings will be pumped to the TSF.

Construction of an East Dam on the TSF (pit rim; additional height of 25 m and anticipated to be required by Year 7) is required to accommodate the total volumes of tailings, waste rock, free water, and flood storage. The East Dam will be constructed of NAG material, including basal and compacted till.

Air emissions will include particulate matter; NO x, SO x, and greenhouse gas emissions from fuel combustion by surface and underground vehicles; and emissions from diesel generators when in use. Fugitive dust emissions will occur due to vehicle traffic along the ORAR as well as along the Access Corridor and from stockpiles, but will be limited at the Project site as most site vehicle traffic will occur underground. PAG waste rock and tailings will be stored subaqueously (minimizing the need to stockpile material), and blasting and crushing will primarily occur underground, which will limit the potential for fugitive emissions from these sources. Air emissions will be managed through the implementation of environment management plans. Activities included in these plans may include the watering of roads and no idle policies.

Hazardous waste materials, such as used batteries, will be generated throughout the life of the Project, from construction to decommissioning. These materials will be anticipated in advance; they will be segregated, inventoried, and tracked in accordance with federal and provincial legislation and regulations such as the federal Transportation of Dangerous Goods Act (1992). A separate secure storage area will be established with appropriate controls to manage spillages. Hazardous waste will be labelled and stored in appropriate containers for shipment to approved off-site disposal facilities.

Non-hazardous waste management will involve the segregation of waste into appropriate management channels. Project waste collection and disposal facilities will include a permitted landfill, waste collection areas for recyclable waste, and sewage effluent and sludge disposal. Waste collection areas will have provisions to segregate waste according to disposal methods and facilities to address spills, fire, and wildlife attraction.

AURICO GOLD xix PROJECT DESCRIPTION

The existing KS Mine sewage facility will continue to be used for the Project. The facility is currently in operation during the KS Mine care and maintenance period, and requires only modest expansion to manage the ongoing sewage treatment requirements for the Project.

Water Management Project annual precipitation is predicted to range from 600 to 1,000 mm at the underground deposit area, and approximately 730 mm at the Mine Site. The majority of this precipitation falls as rain from June to September. In order to maintain the operational storage levels in the TSF, water extraction, treatment, and discharge is required. Water will be treated and re-used wherever possible. TSF water will be the primary source for mill process water; this water will be recycled through the TSF and mill during operations.

Potable water at the Mine Site is currently obtained from a drilled groundwater well located immediately west of the camp. The well is 88 m deep and provides sufficient potable water to supply an approximately 350-person camp, service complex, and mill. The water is of good quality and is routinely tested for chemical parameters and total and fecal coliform to ensure it meets provincial guidelines for potable water.

Process water will ultimately be reclaimed from the TSF. The process water requirements for the mill have been estimated at 60,000 m 3/day. The barge used during operation of the KS Mine for reclaiming water from the tailings facilities is still on site and operational.

The reclaim pumping system from the TSF will use the existing barge and the reclaim water will be delivered to the mill process water pond via a water pipeline. This pipeline exists and will require minimal upgrading for the Project.

Maximum groundwater inflow, conservatively estimated at 69.7 L/second (Lorax 2012), is predicted to occur just after cave breakthrough. Thereafter, a steady-state inflow is conservatively estimated at 38.4 L/second. In addition, mining process water inflow is estimated to be 13.0 L/second (Lorax 2012). Two dewatering pumps will be installed to remove seepage water from the underground mine. Water will be pumped via a pipeline along the Access Corridor, and disposed of in the TSF.

To ensure the potential for suspended sediment in surface runoff waters is minimized, fresh water diversion channels constructed for the KS Mine will be re-activated to divert water away from the process plant site and around the TSF, and into small tributaries of Attichika Creek. All diversion channels will be upgraded to accommodate high flow events during wet years.

Power Supply At the maximum production level, the electrical load for the Project is expected to average 37 Mega Watts (MW). Electrical power will be delivered to the Mine Site via the existing 380 km, 230 kV power line which delivers power from the BC Hydro Kennedy substation. AuRico owns the power line and all related site electrical infrastructure at the Mine Site (e.g., related stepdown transformers, backup diesel generators, and infrastructure to power the process plant and underground facilities).

Access and Transportation The ORAR will be used to bring construction and operating supplies to the Project site and to haul concentrate to the Mackenzie rail load-out facility for trans-shipment. Minor improvements or upgrades may be required to the ORAR. It is expected 1 truck per day will be required for materials and supplies,

xx ERM RESCAN | PROJ#0196303-0001 | REV F.1 | FEBRUARY 2014 EXECUTIVE SUMMARY and 13 return trips per day will be required to transport concentrate during operations. The access road agreement with the Province is in good standing

Current road access to the Project is via the ORAR from either Mackenzie or from Fort St. James. The 400 km ORAR from Mackenzie is currently being maintained and used on a seasonal basis for site reclamation and care and maintenance of the KS Mine. No improvements or upgrades to the ORAR will be required for the Project.

There is currently a maintained all-weather airstrip at the Project site. Mine personnel will be flown to the Project site. No upgrades or improvements are required to the airstrip. There will up to 18 flights per week (Monday to Thursday).

The loadout facility at Mackenzie is located at a CN rail spur maintained by AuRico. It is anticipated that CN will supply the rail cars for concentrate shipment and will shunt them onto the siding for AuRico from the main CN-owned lines. The Project is expected to ship approximately 7.5 rail cars per day. Market conditions and supply will govern where the concentrate will be shipped and smelted. It is anticipated that no improvements will be required to the Mackenzie trans-shipment facility for the Project.

Closure and Reclamation Phase Consistent with requirements of the BC Mines Act (1996f) and the Health, Safety and Reclamation Code for Mines in British Columbia (BC MEMPR 2008), a closure and reclamation plan will be developed for the Project. The objective of a closure plan is to detail the transition of the site from mining to establishing conditions that approximate pre-mine land use in a manner that meets regulatory requirements. This includes a requirement for financial assurance from the proponent. The plan will be regularly reviewed and updated throughout the mine life to reflect Project development. At this time, a very conceptual closure plan is presented. This will be further developed as new information (particularly related to metal leaching and acid rock generation [ML/ARD]) becomes available through the environmental assessment and permitting process. Progressive reclamation of disturbed areas will be undertaken throughout the life of the Project.

At closure, the underground mine will be flooded and water-retaining bulkheads established at the portals. The pipeline from the mine will also be re-configured to deliver mine water directly to the water treatment plant (rather than to the pit). The water treatment plant will be re-configured for long-term use in annual seasonal campaigns (projected to be operational during the months of June and July).

Final deposition of waste rock and tailings into the TSF will be done to ensure adequate water cover over materials during droughts and low flow periods. A long-term monitoring program will be established to ensure the water cover is maintained and to monitor the water quality of the downstream receiving environment.

After milling and tailings deposition ceases, water quality in the TSF is expected to improve. Once it meets discharge criteria without treatment, TSF water will be allowed to flow to Attichika Creek via Waste Rock Creek through the TSF closure spillway, and diversion channels will be reclaimed.

Other surface infrastructure, including buildings, roads, and stockpiles, will be dismantled and the land reclaimed.

Post-closure Phase Following mine closure and decommissioning of infrastructure, ongoing monitoring and management will be required. The primary activities post closure will be waste water and tailings management.

AURICO GOLD xxi PROJECT DESCRIPTION

It is expected to take approximately 14 years for the mine to flood to the portal level. Thereafter, two options exist for water treatment and discharge:

o Option 1 — water quality is similar to baseline water quality in East Cirque Creek; the underground will be allowed to flood to the pre-mining levels and eventually discharge to East Cirque Creek; and

o Option 2 — water quality is worse than baseline water quality with groundwater levels underground being managed by the discharge of water through the portal. Groundwater discharged from the portal may involve active treatment and temporary storage within the TSF followed by discharge to Attichika Creek. The treatment plant is proposed to remain connected to the BC Hydro Grid for the life of operation, with generator power to provide a contingency.

PROJECT SCHEDULE Table 2 presents the Project’s proposed schedules for permitting, construction, operations, closure and decommissioning, and post-closure monitoring. Permitting is predicted to take one to two years, from Year -7 to Year -6. Project construction will occur for five years, from Year -5 to Year -1. Project operations are scheduled to occur for twelve years, from Year 1 to Year 12. The length of the Project’s closure and post-closure phases are dependent upon when the Project’s waste water discharge meets receiving environment water quality standards. However, removal of infrastructure that is no longer required is predicted to start in Year 13, and monitoring will occur for at least four years in post-closure.

EXISTING ENVIRONMENT This summary of the existing environment is drawn from an extensive baseline program in the immediate Project area. This program was initiated in a limited fashion in 1992 by Northgate for studies on the KS Mine. In-depth studies were initiated in 1995, continued during the EA for the Kemess North (KN) Project, and are still underway today for the Project.

The Project is located in the Peace River Regional District in north-central British Columbia near Thutade Lake. The Project Area is located between approximately 1,600 m and 1,800 m above sea level and is characterized by warm dry summers and cold wet winters. Temperatures range from -35ºC, to 25ºC, with November through March being the coldest months. Annual precipitation is approximately 700 mm. Maximum snowpack at the end of March at the KS Mine Site averages approximately 550 mm snow water equivalents.

The Project area can be roughly divided into three zones: the high U-shaped hanging valley of South Kemess Creek, the narrow valleys of Kemess Lake, North Kemess and Kemess Creeks (with numerous glaciofluvial terraces and aggregate deposits), and the broad valley outwash deposits of Attichika Creek (Figure 7). The Project is located between two inlet tributaries to Thutade Lake located in the upper Finlay River watershed: Attichika and Attycelley creeks . The rivers ultimately drain northeast to the Peace River, east through the Athabasca-Mackenzie delta and into the Arctic Ocean.

In general, the hydrogeological setting of the Project area is topographically driven, consisting of upland recharge areas and valley discharge zones. Groundwater flows radially away from the underground deposit summit predominantly through the bedrock mass, as surficial deposits are limited in the rocky upland area. Overall, groundwater flow of the Project area is northward from the ridges at the southern edge of the deposit, through the cirque area and towards the Attycelley Creek; however, groundwater also flows westward to Amazay (Duncan) Lake, southward to Kemess Creek and to the east. Artesian flows are observed in the cirque (underground deposit) area; likely the result of groundwater flow through the steep talus that drape the ridges surrounding the cirque.

xxii ERM RESCAN | PROJ#0196303-0001 | REV F.1 | FEBRUARY 2014

Table 2. Kemess Underground Project Schedule

EA/Permits (Year) Construction (Year) Operations (Year) Closure/Decommissioning/Monitoring (Year) Activity -7 -6 -5 -4 -3 -2 -1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 Submission Project Description AIR Application/EIS Permits Access Road to portals Portals, facilities Power to portals Declines Ventilation raises/fans Conveyors Underground facilities Underground lateral development Undercutting Drawbell opening Cave production (Mt) 1.0 3.0 5.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 9.0 8.4 2.0 Camp upgrades Underground dewatering Treatment Plant (Mm 3/a) 6.0 6.0 6.0 6.0 6.0 6.0 1.5 1.5 1.5 1.5 1.5 1.5 1.5 Concentrate shipping Removal of mill, admin complex, camp* Removal of infrastructure support Monitoring Underground dewatering Underground workings expected to flood 14 years after mining finished Treatment Plant (Mm 3/a) Continues until water Treatment plant (seasonal discharge 0.9 Mm 3/a) meets requirements continues in perpetuity (year uncertain)

* Camp/facilities required to maintain water treatment plant would remain in place

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6330000 6325000 6320000 6315000 6310000 Figure 7 PROJECT DESCRIPTION

Groundwater within the vicinity of Project is circumneutral to alkaline ranging from pH 6.5 to pH 9.5. Groundwater impacted by ML/ARD was observed in an unscreened artesian borehole located within the gossan material of the cirque. In general, groundwater chemistry varies with depth and lithology.

Overburden porewater is a calcium-bicarbonate (Ca-HCO 3) type water representative of recent recharge. Volcanic rocks tend to be of a calcium-sulfate (Ca-SO 4) type water. The Black Lake intrusive bedrock, in general, trends from Ca-HCO 3 at shallow depths to a sodium-sulphate (Na-SO 4) type water at depth.

The primary streams in the Project area are Attichika and Attycelley creeks. Major tributaries of lower Attichika Creek relevant to the Project include Kemess Creek (and its tributaries: North Kemess, El Condor, and South Kemess creeks), and Waste Rock Creek. The largest tributary to Attycelley Creek is Amazay (Duncan) Creek, which drains Amazay (Duncan) Lake. The Amazay (Duncan) Creek watershed is outside the footprint of the Project and is not expected to be affected by the Project.

Water quality in the Attycelley Creek watershed is influenced by mineralized rocks in the area of the underground deposit and in the east end of the watershed. Water quality draining from the underground deposit area is naturally acidic and carries high metal loads. The Attycelley Creek mainstem water quality is also influenced by acidic waters draining from the east cirque of the underground deposit and from mineralized areas in the upper watershed. There are not anticipated to be any long term water quality effects due to subsidence in the Attycelley Creek watershed, although this will be considered as part of the Effects Assessment within the Application / EIS.

Between 2002 and 2007, and 2011 to present, baseline water quality in Attycelley Creek has been found to naturally exceed BC Water Quality Guidelines for the protection of Freshwater Aquatic Life (Nagpal, Pommen, and Swain 2006) for total cadmium and dissolved aluminum. Elevated levels of other metals such as copper and manganese and iron were also recorded. Surface water chemistry was found to be spatially and temporally variable based on a variety of factors, primarily flow conditions. Maximum conductivity values were recorded during winter low flow periods, decreased during the spring freshet due to dilution, and show increasing values as stream flows decrease from July to December.

Where depositional sediments have been found and sampled from both Attycelley and Attichika creeks, they have been predominantly sand, and have shown metals concentrations below CCME (ISQG) guidelines (CCME 2013). Aquatic productivity of these creeks is generally low. Dissolved nutrient concentrations in waters of both creeks are low (typically non-detectable), as is periphyton biomass in most reaches, although monitoring indicates that lower Attichika Creek and its tributary Kemess Creek may support high biomass of the diatom Didymosphaenia geminata (Hatfield 2010). Benthic communities are dominated by mayflies, stoneflies, caddisflies, and chironomid midge larvae (Hatfield 2004, 2010).

Seven fish species have been recorded in the Kemess North regional study area, including kokanee that are only present in Thutade Lake (Table 3), and bull trout, which is a provincially blue-listed species (BC CDC 2013). No aquatic or fish species listed under the Species at Risk Act (2002b) occur in the Project area.

Four ecological communities of conservation concern have the potential to occur in the Project area. However, only one, the BC CDC blue-listed Picea mariana / Equisetum arvense / Sphagnum spp. (Black spruce / common horsetail / peat-moss) wetland (BC CDC 2013) has been identified as occurring in the Project area. It was identified within the lower Attichika Creek floodplain, south of Amazay Lake, and southwest of the Mine Site.

Fifty-two plants of provincial conservation concern have the potential to be located in the vicinity of the Project; no plant species of federal conservation concern, including those listed by Committee on the Status of Endangered Wildlife in Canada (COSEWIC) or under the Species at Risk Act (2002b), have the potential to be located in the Project area (BC CDC 2013). During baseline investigations, all of the identified rare plants were located well outside of the Project footprint. xxvi ERM RESCAN | PROJ#0196303-0001 | REV F.1 | FEBRUARY 2014 EXECUTIVE SUMMARY

Table 3. Fish Species Present in the Project Fish and Fish Habitat Study Area

Common Name Scientific Listing 1 Waterbody Bull trout Salvelinus confluentus Provincial blue ATC; AC; KC; TL; WRC Dolly Varden Salvelinus malma Provincial yellow AC; AL; KC; KL; WRC; ATC Rainbow trout Oncorhynchus mykiss Provincial yellow ATC; AC; KC; KL, ECC, AL; TL; WRC Mountain whitefish Prosopium williamsoni Provincial yellow ATC; AC; ECC; KC; TL Slimy sculpin Cottus cognatus Provincial yellow ATC; AC; KC; TL Longnose sucker Catostomus catostomus Provincial yellow ATC; AC Kokanee Oncorhynchus nerka Provincial yellow TL

1 Blue-listed species are of special concern because of characteristics that make them particularly sensitive to human activities or natural events, or because of insufficient data exist about their populations. Yellow-listed species are not at risk in BC. Notes: AC = Attycelly Creek; KC = Kemess Creek; TL = Thutade Lake; KL = Kemess Lake; ECC = El Condor Creek; AL = Amazay Lake; ATC = Attichika Creek; WRC = Waste Rock Creek.

A total of 24 wildlife species of conservation concern are likely or probable to occur in the vicinity of the Project (Table 4), including five species of invertebrates, five species of mammals, one amphibian, ten species of migratory birds as per the Migratory Birds Convention Act (MBCA; 1994), one kingfisher, and two raptors. The provincial designation includes one red-listed species (Cape May warbler) and five yellow- listed species. Federally, five species are listed on schedule 1 of the Species at Risk Act (2002b), including the Olive-sided Flycatcher (classified as threatened) and an additional four species (belted kingfisher, horned grebe, grizzly bear, and wolverine—western population) classified as special concern under COSEWIC. Thirteen species were recorded as actually occurring in the regional area including three provincially yellow-listed species and three schedule 1 species under the Species at Risk Act (2002b).

Table 4. Wildlife Species of Conservation Concern, including Migratory Birds, Likely or Probable to Occur in the Project Area

Conservation Status Detected during Identified Species Scientific Name Studies BC List Wildlife COSEWIC SARA MBCA Invertebrates Beaverpond Baskettail Epitheca canis Blue Forcipate Emerald Somatochlora Blue forcipata Hagen's Bluet Enallagma hageni Blue Quebec Emerald Somatochlora Blue brevicincta Rocky Mountain Capshell Acroloxus Blue NAR coloradensis Amphibians Western Toad Anaxyrus boreas Y Blue SC 1 Birds Barn Swallow Hirundo rustica Y Blue T Y Belted Kingfisher Ceryle alcyon Y Yellow SC

(continued)

AURICO GOLD xxvii PROJECT DESCRIPTION

Table 4. Wildlife Species of Conservation Concern, Including Migratory Birds, Likely or Probable to Occur in the Project Area (completed)

Conservation Status Detected during BC Identified Species Scientific Name Studies List Wildlife COSEWIC SARA MBCA Birds (cont’d) Cape May Warbler Setophaga tigrina Red Y Y Common Nighthawk Chordeiles minor Y Yellow T Y Horned Grebe Podiceps auritus Y Yellow SC Y Long-tailed Duck Clangula hyemalis Y Blue Y Olive-sided Flycatcher Contopus cooperi Y Blue T 1 Y Rusty Blackbird Euphagus Blue SC 1 Y carolinus Sandhill Crane Grus canadensis Yellow Y NAR Y Sharp-Shinned Hawk Accipiter striatus Yellow NAR Short-eared Owl Asio flammeus Y Blue Y SC 1 Surf Scoter Melanitta Y Blue Y perspicillata Tundra Swan Cygnus Y Blue Y colombianus Mammals Fisher Martes pennanti Blue Y Grizzly Bear Ursus arctos Y Blue Y SC Northern Myotis Myotis Blue EN septentrionalis Wolverine – western Gulo gulo subsp. Y Blue Y SC population luscus Woodland Caribou (northern Rangifer Y Blue Y SC 1 mountain population) tarandus

Notes: Observations of bird species from four sources are listed under the Detected column (Hallam Knight Piésold 1993a, 1993b, 1997; Mahon, Turney, and MacLeod 2006; Sauer and Pardieck 2006; Turney et al. 2006). COSEWIC Codes: EN = Endangered, SC = Species of Special Concern, T = Threatened, NAR = Not at Risk SARA= Species at Risk Act; MCBA = Migratory Birds Convention Act

Moderate- to high-quality habitat for other species, such as moose (Alces alces), mountain goat (Oreamnus americanus), hoary marmot (Marmota caligata), and black bear (Ursus americanus) also exists in the Project area.

The most commonly observed migratory birds, as per the Migratory Birds Convention Act (1994), in the Project area include Wilson’s warbler (Wilsonia pusilla), ruby-crowned kinglet (Regulus calendula), pine siskin (Spinus pinus), and yellow-rumped warbler (Dendroica coronata).

POTENTIAL ENVIRONMENTAL EFFECTS Project infrastructure has been designed to minimize environmental effects wherever possible. For example, new ground disturbance along the Access Corridor and portal areas will not occur in areas of fish habitat, and the overland conveyer within the Access Corridor will be elevated so as not to impede wildlife movement.

xxviii ERM RESCAN | PROJ#0196303-0001 | REV F.1 | FEBRUARY 2014 EXECUTIVE SUMMARY

Additional environmental baseline studies including a comprehensive mine water balance study, are currently being undertaken in support of the Project. Potential environmental effects from the Project include localized degradation of surface and ground water quality (during the operations and closure phases of the Project), alteration of flows in the subsidence cone (during the construction to post-closure phases of the Project), and localized disturbance to wildlife during the construction and operations phases.

Because of the underground workings, the Project has the potential to affect groundwater quantity (i.e., flow volume and movement) and groundwater quality. Mine inflow water quality is expected to be influenced from metal leaching as a result of contact with gossan material within the subsidence zone. Mine water seepage (inflow) is expected to peak during Year 5 of Operations at 44.7 L/s (equivalent to 1.4 Mm 3/y), decrease to 39 L/s (equivalent to 1.2 Mm 3/y) through the remainder of the operations phase, and then decrease to a steady-state value of 29.2 L/s (equivalent to 0.9 Mm 3/y) after Year 28 (post-closure phase).

Water will be reclaimed from the TSF for use in ore processing in the mill. The water treatment plant will improve water quality from dewatering activities related to underground mining during the operations, closure, and post-closure phases of the Project.

Excess treated water is proposed to be discharged from the treatment plant into Attichika Creek via a pipeline during operations and via a spillway at closure to Waste Rock Creek, subject to permitted discharge levels (see Figure 7.1-1).

The proposed block caving operations will produce a cave-zone, which will alter the hydraulic conductivity of the overlying rock by orders of magnitude and as a result, increase the connectivity of deeper groundwater to surface events. Effects to flows within East Cirque Creek are not anticipated until the cave zone from underground mining operations breaks through to surface, which is anticipated to occur following two to three years of mining. Following breakthrough, surface runoff within the Cirque Creek watershed will drain to the underground, thus reducing flows in East Cirque Creek. It is anticipated that there may be a 10 to 20% reduction of flow in East Cirque Creek. Flows to other perennial-flowing creeks and ephemeral streams may also be reduced.

Mitigation will reduce Project effects on groundwater and surface water. During the Project’s operation phase, groundwater from dewatering will be directed to the TSF for temporary storage and then will eventually discharge, following treatment if required, to Attichika Creek via a pipeline and ultimately to Waste Rock Creek via a spillway. At closure, the underground mine workings will be allowed to flood. The management of groundwater during the post-closure phase will be dependent on groundwater quality. Two options are being considered, which are as previously discussed in the “Post- Closure” section of this Executive Summary.

Under Option 1, effects on flows within East Cirque Creek are expected to be minimal; however, the discharge of water through the portal under Option 2 could see a reduction in flow to East Cirque Creek extending into the post-closure phase by 10 to 20%. A Water Management Plan will be developed and implemented.

Water within the surface water diversion and collection ditches will be directed to sediment ponds for treatment prior to discharging to receiving environment.

Other potential environmental effects that may occur include removal of soil and vegetation within the footprint of the Access Corridor and portal area during the Project’s construction phase, potentially causing habitat loss and degradation. Reclamation activities during the closure and post-closure phases of the Project will approximate pre-disturbance conditions as closely as possible. Reclamation activities

AURICO GOLD xxix PROJECT DESCRIPTION will also include returning the existing KS Mine site (i.e.; a brownfield site) as closely as possible to conditions that existed prior to KS Mine operations.

Air quality may be affected from fugitive dust emissions during construction, crushing during mining operations, and particulate matter and greenhouse gas emissions from fuel combustion by vehicles and generators as well as from waste incineration. However, since mining and crushing will occur underground and most of the waste rock and tailings will be stored sub-aqueously, effects from fugitive dust emissions are anticipated to be minor. An Air Management Plan will be developed and implemented.

Noise effects will be limited to workers on-site during construction and operations. Local wildlife species may also experience intermittent sensory disturbance due to exposure to increased noise levels in the immediate vicinity of the local Project area. However, due to the primarily underground operations, surface noise levels are expected to be of minor magnitude.

Federal Areas of Concern The areas of federal concern are fish and fish habitat, aquatic species as defined in the Species At Risk Act (i.e,. fish [and their parts and eggs, etc.] and marine plants, which are benthic and detached algae, marine flowering plants, brown algae, red algae, green algae and phytoplankton), and migratory birds.

The Project will not directly impact aquatic species, including fish species, and plant species listed under the Species at Risk Act (2002b) or the COSEWIC, as no such species occur in the Project area. Any aquatic species, fish species, and plant species of federal conservation concern that occur along the ORAR may be affected through dust deposition and sedimentation. The Project will not directly or indirectly effect marine plants.

Wildlife Species listed under the Species at Risk Act (2002b) or COSEWIC have the potential to occur, or have been identified, within the Project area (see Table 4). These species may be affected via direct mortality with vehicles; however, the anticipated low traffic frequency (estimated at 14 vehicles per day) will limit the potential for direct vehicle-wildlife interactions. Indirect effects associated with the Access Corridor include habitat fragmentation and the potential disruption of wildlife movement patterns. In addition, noise and general human activity may result in the avoidance by or displacement of wildlife from preferred habitat features. The Access Corridor and portals in the area between Kemess Lake and Amazay (Duncan) Lake will affect a known wildlife trail in the area, although the overland conveyer will be elevated, and should not pose a barrier to wildlife movement.

The uptake of contaminants and heavy metals by wildlife, including species of federal concern—either directly from receiving environment surface waters, through increased exposure of food resources (e.g., plants, aquatic invertebrates, fish), or indirectly through dry deposition on plants—may occur; however, these effects are expected to be limited as receiving environment surface waters are not anticipated to have elevated metal concentrations as a result of the Project, and dry deposition of particles with elevated metal content on plants will be minimal due to limited fugitive dust events, including use of the ORAR.

Most identified wildlife, including species of federal concern, may have small amounts of moderate- to high-value habitats affected during the construction and operations phases of the Project as the Access Corridor, portals, and subsidence cone areas are developed. It is not expected that direct habitat loss associated with the footprint would be significant in comparison to regional habitat availability.

Migratory birds, as identified under the Migratory Birds Convention Act (1994), may be affected via direct mortality from collisions with transmission lines, buildings, or vehicles, removal or disruption of

xxx ERM RESCAN | PROJ#0196303-0001 | REV F.1 | FEBRUARY 2014 EXECUTIVE SUMMARY nests, loss of habitat due to vegetation clearing, interference from Project lighting and noise, and effects to health from potential degradation of air and water quality (i.e., exposure to the TSF). Clearing of vegetation during the breeding season may affect nesting habitats of certain species and require mitigation measures such as adhering to timing windows to avoid clearing or conducting pre- clearing nest surveys to ensure the absence of nesting activity.

POTENTIAL SOCIO-ECONOMIC AND LAND-USE EFFECTS The Project has the potential to impact trapping and guide outfitting tenures, primarily during the construction and operations phases. AuRico has established positive working relationships with potentially affected stakeholders in the area of the Project and is committed to ensuring that these relationships continue. AuRico has an agreement in place with the holder of guide outfitting licence 600447. Northgate had an agreement with the holder of guide outfitting licence 700004 during KS Mine operations, and AuRico intends to negotiate a similar agreement with this licence holder. During operations of the KS Mine, Northgate Minerals reached a compensation agreement with the holder of trapline tenure T739T006 in 2001 and another agreement in 2005. A third agreement was negotiated in 2007 for the proposed Kemess North project. AuRico is currently in discussions with the trapline holder relating to a fourth compensation agreement.

The Project is expected to generate an estimated $236 million will be paid in provincial and federal taxes and approximately 4,000 person years of employment from construction through to closure.

The Project will be operated on a fly-in, fly-out basis with the majority of workers following a work duty cycle of two weeks on, and two weeks off. No potential effects on community infrastructure and services in the region, including education and health care facilities, are predicted as a significant portion of the workforce will come from communities outside of the region.

POTENTIAL HUMAN HEALTH EFFECTS The Project is expected to have minimal effects to human health resulting from noise. Noise effects will primarily be limited to workers on-site during the construction and operations phases of the Project. The Project is not in close proximity to temporary or permanent residences, and dust and noise are not expected to affect any communities in the region. There is potential for changes in air quality to affect workers at the mine including particulate matter from fuel combustion by vehicles, and diesel generators. Project construction and vehicle traffic may also affect air quality through the creation of fugitive dust.

No effects on the potability of the groundwater drinking well are expected as a result of the Project, as the well is located away from naturally mineralized areas.

There are potential effects to human health associated with the consumption of country foods in the regional area of the Project (i.e., harvested game and plants) through exposure to metals and other chemicals from dust and water. Pathways for elevated metal concentrations include transmission through surface water, groundwater, soil and sedimentation, and particulate transmission (i.e., dust) and likely a localized effect proximal to the immediate source. Given the naturally elevated concentrations of metals in the ground and surface water (i.e., in East Cirque Creek), it is anticipated that there may be some potential for human health effects through the consumption of country foods. Effects on country foods will be assessed following Health Canada guidelines (Health Canada 2010).

There are not anticipated to be any effects on human health as a result of subsidence due to the remote, high alpine location of the anticipated subsidence cone, although this will be considered as part of the Human Health Effects Assessment in the Application/EIS.

AURICO GOLD xxxi PROJECT DESCRIPTION

POTENTIAL HERITAGE EFFECTS An Archaeological Overview Assessment (AOA) was completed in 2013 to confirm the presence of previously recorded archaeological sites and identify the likelihood of unrecorded sites being present. The AOA confirmed that the proposed impact zone of the Project has high archaeological potential based on the existence of previously identified archaeological sites, features on the landscapes, and discussions with First Nations who identified the area of impact as being located within traditional hunting grounds.

Fourteen archaeological sites are located along or near the shore of Amazay (Duncan) Lake, and three are in the vicinity of Kemess Lake. All of these sites are small- or medium-sized lithic scatters containing some or all of the following: basalt, chert, and obsidian waste flakes, utilized and retouched flakes, microblades, scrapers, and projectile points. Two of these sites also contain hearths. Radiocarbon dates for these sites have come in at 1350 +/- 70 years BP and between 760 and 910 +/- 40 years BP (Craig 2006). Two of the lithic sites located in the vicinity of Kemess Lake are potentially as old as 3500 BP based on micro blade type (Rousseau, Frank, and Bailey 1993). This is a small number of sites that represents a large area with a long history of use and occupation.

Potential effects of the Project on heritage resources include the destruction or alteration of heritage sites due to land disturbance, isolation of a site from its natural setting, and the modification of a site’s natural setting.

Avoidance of known heritage sites and areas with high archaeological potential is the preferred management strategy. If it not possible to avoid sites, then mitigation, to be determined in consultation with the provincial Archaeology Branch and TKN, may include systematic data recovery, capping, and/or monitoring during Project construction. A Heritage Resources Monitoring and Management Plan would ensure protection of known heritage sites, or, if avoidance is not possible, that archaeological site information is recovered prior to any land altering activities.

POTENTIAL EFFECTS ON ABORIGINAL GROUPS The Project has the potential for adverse environmental effects that may cause indirect effects on Aboriginal people, including effects on physical and cultural heritage, health, socio-economic conditions, and current use of lands and resources for traditional purposes. As part of the IMA, and at the request of TKN, AuRico commissioned two reports - The Proposed Kemess Underground Mine: A Socio-Economic Review of the Impacted Tse Keh Nay Communities (Miller 2013) and Tse Keh Nay/ Kemess Underground: Archaeological Overview Assessment Final Report (Budhwa 2013).

Extensive research into the ethnographic, historical and archaeological background of TKN traditionally claimed territories were part of the AOA noted above. Community representatives from each Nation were involved in all aspects of the project and traditional knowledge and traditional use information was gathered at all stages. Interviews with TKN elders and community meetings enhanced the report, and built upon the existing TKN information and knowledge base. A database of the information for each Nation was developed, and in keeping with the confidential nature of TK, are available only to each respective Nation.

Current Use of Lands and Resources for Traditional Purposes A “Sense of Place” and “Gathering Places” such as Moose Valley, Thutade Lake, Amazay (Duncan) Lake, Metsantan, and Caribou Hide are highlighted in the AOA (GWA 2004).

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Takla Lake First Nation A number of Takla Lake First Nation members maintain a subsistence-based economy focused on hunting, trapping and trading (Miller 2013). Harvested animals include moose, elk, caribou, sheep, goat, rabbit, beaver, marten, weasel, muskrat, marmot, bear, lynx, mink and porcupine. Harvested birds include grouse, goose, duck, ptarmigan and partridge. Harvested fish include salmon, trout, arctic char and grayling. In addition, Takla Lake First Nation members collect plants and medicines, including barks, berries, balsam and pine pitch, devil’s club, rhubarb, snowberries, huckleberries, and blueberries (IRHC 2010; Miller 2013). Takla members continue to construct homes and buildings on the Reserves and in Takla traditional territory, many of which are related to gatherings with traditional purposes (i.e., Potlatch House), or cabins relating to hunting and fishing.

Thutade Lake opposite of Attichika Creek is identified by Takla Lake hunters as a good place to find caribou. Other species harvested at the site include goat, moose, beaver and bear. The lake is also used for fishing trout, suckers and Dolly Varden. Amazay (Duncan) Lake is also an important location, used for harvesting species such as caribou, moose, bear, marmot and fish, as well as berry picking (Littlefield, Dorricott, and Cullon 2007).

Tsay Keh Dene First Nation Lakes and rivers in general are central to the way of life of the Tsay Keh Dene and other Sekani. They have special sociocultural and spiritual significance for the Tsay Keh Dene as gathering places, harvesting areas and places for spiritual practice and fulfilment. Thudade Lake and Amazay Lake (also known as Duncan Lake) in particular are lakes in the Project area with a long history of Sekani use, occupation and reverence. For Tsay Keh Dene, these lakes are an integral part of their cultural heritage that must be protected for present and future generations (Tsay Keh Dene, written comment).

A key feature of this way of life was the seasonal round, an annual cycle that was determined by the availablility of food and other resources at different times of the year. In the spring and summer, plants are gathered for food and medicinal uses. Berries are a significant food source, and during the spring, summer and fall fishing provided an additional source of protein to supplement meat, the mainstay of the Tsay Keh Dene diet. Fall and winter are the main seasons for hunting and trapping by Tsay Keh Dene members. Moose, caribou, mountain goat, bear and marmot feature prominently in the Tsay Keh Dene diet when available (Tsay Keh Dene, per. comm).

Kwadacha Nation Approximately one-third of Kwadacha Nation members hunt, gather traditional plants and share through a traditional gift economy (Miller 2013). Harvested animals include bear, goat, sheep, moose, elk, caribou, marmot, and wolf. Harvested birds include grouse. In addition, the Kwadacha collect plants, including huckleberries, Labrador tea, balsam bark, red willow and devil’s club. A Kwadacha elder identified the head of Ingenika River as a place where family members hunted, fished and gathered berries during the summer. Kwadacha host annual culture camps to promote generational cultural sharing among Elders, family and youth. Kwadacha established a formal Elders Program in 2010 which involves many aspects including Elder gatherings outside the community, as well as documenting through a database, the Elders understanding of Tsek’ene traditions and historical land use throughout their traditional territory (Miller 2013).

Gitxsan Nation One particularly important battle between the Gitxsan and the Tsek’ehne is said to have happened at Thutade Lake (Littlefield, Dorricott, and Cullon 2007). Sites around Thutade Lake that are linked to

AURICO GOLD xxxiii PROJECT DESCRIPTION this story have been identified, such as the place where the Tsek’ehne were camped at the time of battle; the site where the battle took place; and a burial site.

Within their traditional territory, Gitxsan seasonally harvest and process chinook, coho, sockeye, and chum salmon, as well as steelhead trout, near their spawning grounds and is a dietary staple for the Gitxsan (GWA 2004). Species hunted for subsistence include deer, moose, mountain goat, black and grizzly bear, and species trapped include beaver, mink, marten, fisher, red fox, wolf, coyote, weasel, and otter for their fur (People of 'Ksan 1980; Halpin and Seguin 1990). The Gitxsan harvest saskatoon berries, hazelnuts, chokecherries, rosehips, gooseberries, squash berries, raspberries, thimbleberries, and soapberries and medicinal plants such as devil’s club and yellow pond lily (Rescan 2009).

Treaty 8 BC First Nations The use of the Project area, by any or all of the Treaty 8 BC First Nations, is not known and will be confirmed through desk-based research, as well as during consultation with the Treaty 8 First Nations as required.

Métis The use of the area by the Métis is not known and will be confirmed through desk-based research, as well as through consultation activities with the Métis.

Potential Project-induced Effects The Project has the potential to cause environmental effects, which in turn may cause an indirect effect on Aboriginal peoples related to their current use of lands and resources for traditional purposes, socio-economic and health conditions, and heritage (i.e., physical and cultural) values.

Project construction and operations activities have the potential to cause environmental effects on air quality (e.g., dust deposition on culturally important plants along the ORAR and Access Corridor), wildlife (e.g., physical and sensory disturbance to harvested wildlife species), and fish (e.g., increased metals concentrations in waterbodies related to increased erosion and sedimentation, and dust deposition). These environmental effects may indirectly affect the ability of Aboriginal peoples in the area of the Project to carry out traditional activities such as hunting/trapping, fishing, and gathering due to loss or degradation of resources.

The Project may also create direct socio-cultural effects on Aboriginal groups. Project-related job creation may result in positive outcomes through increased income and economic status for Aboriginal groups. Economic growth may lead to potential negative outcomes due to increased income. AuRico is aware that employment and income can bring social challenges to communities and plan to implement social support programs such as financial planning for Project employees that may help mitigate adverse social effects arising from the Project.

Adverse indirect and direct effects of the Project on Aboriginal peoples can be avoided or minimized if hunting, gathering, harvesting, and site specific areas used for cultural practices and customs are known. Collecting local knowledge and documenting traditional use in the area such as the Miller (2013) and Budhwa (2013) reports prepared with TKN guidance, input and participation is an integral component of minimizing potential effects on Aboriginal peoples, and will serve as a reference for such activities.

Management plans and monitoring activities designed to avoid or minimize effects to air quality, noise, vegetation, water quality and quantity, fish, and wildlife will also reduce the potential for adverse indirect effects on Aboriginal peoples.

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AuRico’s commitment to employee health, safety and well-being will minimize adverse and increase beneficial health and socio-economic effects related to employment and increased income.

AuRico is confident that the IMA with the TKN and any potential updates to that IMA will provide the basis for addressing concerns raised by the TKN.

ABORIGINAL ENGAGEMENT AND CONSULTATION AuRico has initiated consultations with Aboriginal groups potentially affected by the Project. AuRico will continue to engage Aboriginal groups throughout the EA process.

Tse Keh Nay Consultation During the review of the proposed Kemess North Project by the joint review panel established by the federal and provincial governments, the Takla Lake First Nation, Tsay Keh Dene First Nation, and Kwadacha Nation formed the Tse Keh Nay (TKN) to participate in the review. The Panel report (September 17, 2007) identifies 12 commitments made by Northgate (now AuRico) related to First Nations.

Over the past three years, there has been significant dialogue between TKN leadership and community members with AuRico through meetings and asite visit. Since October 2010, AuRico and TKN have had a number of meetings which culminated in the signing of an Interim Measures Agreement (IMA) in June 2012. The IMA is similar to an Impact Benefits Agreement (IBA) document; however, it was signed by the Chiefs of the respective First Nations, yet not ratified by the communities. The IMA addresses many of the commitments made by Northgate (now AuRico) and identified in the panel, and significant work has been undertaken to meet these commitments.

The Project falls within a registered trapline TR739T006 held by a Takla Lake First Nation family. AuRico has met with the trapline holder regarding a compensation agreement.

Pursuant to the IMA, the TKN have had an opportunity to review and comment on the Project Description, prior to submitting the final copy to the BC EAO and CEA Agency. AuRico met with TKN on November 1, 2013 to present a draft copy of this Project Description. TKN had 60 days to provide feedback on the Project Description. Individual feedback from all three First Nations was given consideration and edits were made to the Project Description. AuRico has noted additional recommendations more appropriate for consideration in the Application Information Requirement/ Environmental Impact Statement Guidelines and preparation of the Environmental Assessment.

Issues raised to-date by TKN include the potential for employment opportunities, capacity funding, concerns regarding existing environmental effects from the KS Mine, trapline compensation agreements involvement in the EA process (including review of the Project Description), consultation and engagement activities, third party reviews of existing studies, and archaeology studies. A detailed summary of all issues discussed during consultation with the TKN to date is provided in Section 13, Table 13.3-1.

Gitxsan Consultation AuRico has met with the Gitxsan, including wilp Ni Kyap to discuss the proposed mineral exploration program and to provide an overview of the Project. At these meetings, the Gitxsan expressed interest in employment and business opportunities with the Project.

Treaty 8 BC First Nations Consultation Guidance with respect to consultation with Treaty 8 BC First Nations has not yet been provided to AuRico from the BC EAO and CEA Agency with respect to the KUG Project. Future consultation and

AURICO GOLD xxxv PROJECT DESCRIPTION engagement activities will be undertaken following the direction provided in the Section 11 Order and in accordance with the Project’s approved First Nations Consultation Plan.

Métis Consultation AuRico has contacted the Métis Nation British Columbia and will arrange a meeting with the Acting Director of Natural Resources of the Association. Based on advice from the Association, information on the Project will be provided to the appropriate Métis Chartered Communities.

Proposed Aboriginal Engagement Strategy for the Environmental Assessment Requirements for Aboriginal consultation during the EA process will be set out in the Section 11 Order issued by the BC EAO pursuant to the BC EAA. Aboriginal groups will be invited to participate on the Working Group. AuRico anticipates the Section 11 order will require AuRico to prepare a First Nation Consultation Plan which must be approved by the BC EAO. The Plan will be developed to incorporate consultation requirements as set out in the Section 11 order and relevant provincial and federal guidance materials related to the EA process and Aboriginal consultation. The plan will build on consultations undertaken to-date.

As part of the Interim Measures Agreement, AuRico is committed to completing an Environmental Assessment Conduct Agreement with TKN. During the EA process, AuRico will hold community meetings in Takla Landing, Fort Ware (Kwadacha), Tsay Keh Dene, and Hazelton, and meet individually with First Nation political leaders to provide Project updates and to discuss interests, issues and concerns. Several members of TKN have already been to the site, and additional tours will take place.

AuRico will engage the appropriate members of the Métis communities as advised by the Métis Nation British Columbia.

GOVERNMENT AGENCY, PUBLIC AND STAKEHOLDER ENGAGEMENT AND CONSULTATION Requirements for government agency and public consultation during the EA process will be set out in the Section 11 Order issued by the BC EAO pursuant to the BC EAA (2002a). Government agencies and local governments will be invited to participate on a Working Group. AuRico will also meet individually with government agencies, and local governments as required during the EA.

Consultation activities to-date have included meetings with the BC Ministry of Energy and Mines, BC EAO, BC Ministry of Environment, BC Ministry of Forests, Lands and Natural Resource Operations, CEA Agency, the District of Mackenzie, the cities of Smithers, Terrace and Prince George, the Prince George Chamber of Commerce, Peace River Regional District, the former and current Prince George/ Mackenzie MLA, and the current BC Minister of Jobs, Tourism and Skills Training and Minister Responsible for Labour. A description of all consultation undertaken with government agencies is provided in Section 14.2 and Table 14.2-1. Key issues raised during these meetings include economic opportunities, jobs, training, surface water and groundwater management, potential for ML/ARD, potential effects on caribou, volumes and disposal of mine waste, and overall Project costs. A detailed summary outlining the key issues discussed during consultation is provided in Table 14.2-2.

AuRico anticipates the Section 11 Order will require AuRico to prepare a Public Consultation Plan which must be approved by the BC EAO. The Plan will be developed to incorporate public consultation requirements under CEAA, 2012 (2012), BC EAA (2002a), Public Consultation Policy Regulation (BC Reg. 373/2002), and relevant provincial and federal guidance materials related to the EA process and public consultation.

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AuRico plans to consult provincial and federal government agencies, the communities of Prince George, Mackenzie, Smithers, and Terrace, PRRD, Members of the Legislative Assembly and Members of Parliament, elected local government officials, and third parties with tenures in the Project area. AuRico will also consult economic development organizations, educational institutions, service providers, and businesses and contractors, as required.

AuRico has developed a Project fact sheet, and is preparing an e-newsletter for regular distribution. A Project website will be established and social media will be used to provide information on the Project. Site tours are also planned.

AURICO GOLD xxxvii References

Definitions of the acronyms and abbreviations used in this reference list can be found in the Glossary and Abbreviations section.

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