Kinross To Expand Alaskan Gold Mine
The initial Gilmore project is expected to extend mining at Fort Knox by six years to 2027, and leaching to 2030, at an initial capital cost of $100 million. This is expected to increase life-of-mine production by approximately 1.5 million gold-equivalent ounces, Kinross said.
J. Paul Rollinson, president and chief executive officer of Kinross, said Fort Knox is already “one of our top performing operations.”
The project is expected to generate an internal rate of return (IRR) of 17% and net present value (NPV) of $130 million based on a $1,200-per-ounce gold price, and an IRR of 26% and NPV of $239 million based on $1,300 gold, Kinross said.
“The project’s low initial capital cost is expected to be funded by Fort Knox’s cash flow, helping preserve our strong balance sheet and financial flexibility,” Rollinson said. “With additional upside potential at Gilmore and beyond, Fort Knox is a significant asset in our portfolio located in an excellent mining jurisdiction. The Gilmore project and the addition of estimated mineral resources improves value and is expected to be a key contributor to the future growth of our company.”
Kinross said plans call for minimal construction of new infrastructure and new equipment purchases. Plans include mining using Fort Knox’s current fleet and leveraging assets from the company’s other North American operations as replacement equipment is required.
Early construction on the new heap leach and dewatering is expected to begin in the third quarter, with stripping in 2019, Kinross reported. Initial production from Gilmore is expected in early 2020, with approximately 5% of Gilmore ore expected to be stacked on the existing pad. Approximately 95% of Gilmore ore is expected to be stacked on the new heap leach pad, with stacking beginning in late 2020. Currently, milling at Fort Knox is expected to end in late 2020.
Due to the Gilmore feasibility study, estimated proven and probable mineral reserves at Fort Knox increased to approximately 3.4 million gold ounces, with 2.1 million converted from estimated measured and indicated mineral resources, Kinross said. An additional 0.6 million ounces were added to estimated measured and indicated resources.
The company plans further drilling in 2019.