New Gold Inc. has extended mine life at its New Afton property by three years — to 2027 — and expects that date could be pushed out further based on exploration results.
New Gold CEO Bob Gallagher spoke Thursday at a ceremony at the mine to recognize the first cheque handed over from the province to First Nations from revenue-sharing on new and expanded mine projects.
Gallagher told workers and government officials that the company keeps pushing to expand production and extend the mine life.
"We're here for a short time," Gallagher said. "We started (in 2012) with 12 years. We've operated for a year and now have 14 more."
Seventy per cent of the current workforce comes from the Kamloops region, Gallagher said.
Venture Kamloops executive director Jim Anderson called news of the minimum three-year extension "huge" for the regional economy.
"There's closer to 500 jobs there . . . Another three years is a big number."
New Gold will spend $20 million this year looking for more high-grade resources at the underground mine beneath the site of a former open-pit mine.
Gallagher said the mine hopes to find more reserves. If it does, a decision will be made whether to expand the operation or push it out for a longer time.
It expects to produce 75 million pounds of copper and 85,000 ounces of gold annually.
Anderson said from the city's perspective, a mine extension is better than expanded production. That decision, he said, may be based on current and forecasted prices.
"If prices are high, you'll want to get as much out of the ground as possible . . . . Certainly we'd want a longer time."
The revenue-sharing deal between Tk'emlups Indian Band, Skeetchestn Indian Band and the province was signed in 2010. The first cheque to the two bands — based on limited production in the last half of 2012 is $730,000.
Tk'emlups Chief Shane Gottfriedson said he expects the annual amount to be at least $1.5 million. Under terms of the agreement, monies are targeted to education, youth measures and social programs.
"Education is No. 1," he said.
Aboriginal Relations and Reconciliation Minister John Rustad acknowledged that money comes out of the provincial treasury. He could not estimate the annual amount from eight similar agreements in B.C.
"There is an investment from the provincial treasury from this . . . (But) it's not existing revenue we're talking about; it's expansion revenue we're bringing in. It's the sharing of that."