The mill at Fort Knox Mine in Interior Alaska will likely be churning out gold for several more years, thanks to Kinross Gold Corp. gaining mineral rights to the Gilmore land parcel immediately west of the current open-pit.
The long-lived gold mine was beginning to get to the end of its reserves, especially those of high enough grade to support keeping the mill in operation. This was not good news for the some 900 direct and contract workers who take home healthy paychecks from working at the mine, or the Fairbanks North Star Borough, which benefits from the tax revenue the 400,000-ounce-per-year gold operation generates.
With roughly 2.4 million oz of gold already identified at Gilmore, this expansion area could add roughly another five years to this iconic open-pit mine about 25 miles north of Fairbanks.
"Gilmore is a promising organic development opportunity that can potentially extend mine life at our Fort Knox Mine in Alaska, one of our top producing and high performing operations," said Kinross President and CEO J. Paul Rollinson.
Long-term growth
Extending the life of its existing operations by finding more gold around the mines is a key facet to Kinross’ exploration strategy – a brownsfield growth plan that has proven to be successful at Fort Knox.
When Kinross opened the Fort Knox Mine in 1996, the deposit there had 4.1 million oz of gold in reserves, which was enough to last about eight years. Going into 2017, its 21st year of operation, the mine continued to boast 1.51 million oz of reserves.
Kinross has long viewed Gilmore as an area that could further extend the life of the Fort Knox Mine. The only problem was, this potential expansion area extended onto National Oceanic and Atmospheric Administration land that hosts the Fairbanks Command and Data Acquisition Station, a facility about three miles southwest of the Fort Knox property more commonly known as the Gilmore Creek Satellite Tracking Station.
In 2014, the U.S. Bureau of Land Management authorized Kinross to carry out exploration on this 709-acre prospective parcel just west of the pit. Over the ensuing years, Kinross completed 73,000 meters of drilling to evaluate the potential of expanding the pit westward.
While the drilling confirmed that Gilmore hosts potentially ore grade gold, this area was not open for mining.
Working in cooperation with Kinross, NOAA filed a notice of intent to relinquish this golden parcel of land to the state of Alaska, which would make it available for mining.
Following an environmental assessment under the National Environmental Policy Act, BLM determined that the land is suitable for return to the public domain and turned the Gilmore parcel over to the state on Dec. 11.
With Kinross’ state mining claims over this area now activated, the company was able to add 2.1 million oz of gold to Fort Knox’s measured and indicated resources and another 300,000 oz to the lower confidence inferred resource category.
Kinross is now carrying out a feasibility study for Gilmore. If the assessment shows that mining this area is economic, it is expected that a large portion of the measured and indicated resources will be converted into reserves that will further extend the life of Fort Knox.
"With the Gilmore project, we continue to deliver on our strategy of pursuing low-risk, high-potential brownfield projects that can contribute to the long-term future growth of our company," said Rollinson.
Added reserves
While Kinross studies the viability of westward expansion at Fort Knox, the company has added nearly another year of reserves to the east side of the open-pit.
Drilling had recently encountered minable gold in the East and South Wall regions of the pit at Fort Knox, including 35 meters averaging 0.9 grams per metric ton gold; 13.7 meters of 1.7 g/t gold; and 24.4 meters of 1.8 g/t gold.
While recalculating the Fort Knox resources to include Gilmore, Kinross converted 260,000 oz of gold resources along the east side of the pit to reserves.
These added reserves replaced much of the gold mined at the Interior Alaska mine this year.
According to the updated calculation, effective Nov. 30, Fort Knox now has 1.32 million oz of gold in 92.17 million metric tons of proven and probable reserves averaging 0.44 g/t gold.
This is enough ore to last more than two years, providing time to complete the feasibility study, expected by mid-2018 and permitting for Gilmore.
During the first nine months of 2017, Fort Knox produced 285,933 oz of gold, putting the Interior Alaska mine on pace to produce just under 400,000 oz of the precious metal this year.
