Fort Knox gold recovery permit in draft

Fairbanks Gold Mining Inc. is moving ahead with plans to build a heap leach facility at the Fort Knox gold mine that could reduce its gold ore processing costs by as much as two-thirds.

The U.S. Army Corps of Engineers and Alaska departments of Natural Resources and Environmental Conservation released applications, draft permit, public notice and decisions June 29, relating to Fort Knox and the proposal for a 30-day public review and comment period.

Fairbanks Gold is a subsidiary of Kinross Gold Corp.

Fort Knox is an open-pit gold mine 26 miles northeast of Fairbanks. Fairbanks Gold wants to add a heap leach gold recovery facility in the Walter Creek drainage and is updating various existing permits and authorizations. The mine was originally permitted in 1994, and currently produces more than 400,000 ounces of gold annually. The mine site is located primarily on state-owned and Mental Health Trust lands. The mine and mill employs 400-425 employees and operates two shifts, year around.

The valley-fill heap leach is part of $170 million in capital expansions budgeted for Fort Knox in 2006. It will be in the upper end of the Walter Creek drainage immediately upstream from the tailing impoundment. Excluding the haul road and access roads, the heap leach pad with the in-heap storage embankment and base platform will cover about 310 acres and will have a total capacity for 160 million tons. It will be constructed in five stages. The haul road to the pad will cover another 40 acres.

Construction could begin in 2006

Clearing of brush and trees, initial earthwork in preparation of liner construction, the site access road, the portion of the in-heap embankment outside the pad limit, and establishment of drainage control will occur over the entire 319 acres at the beginning of the project. That work could begin later this year, and the project could get under way in 2007.

DNR prepared a draft plan of operations amendment approval (including a draft reclamation plan approval) and a draft addendum to Fort Knox's mill site lease.

DEC prepared a draft waste management permit for disposal of tailings, mined material to be placed on a heap leach facility, and inert solid wastes at the Fort Knox Mine. DEC also anticipated that it will issue a certification of the 404 permit to be prepared by Army Corps authorizing the placement of fill in wetlands.

The permit covers disposal of 50,000 tons per day, as a monthly average, of tailing deposited in the mine's storage area. Relatively low-grade ore mined from the Fort Knox Pit will be crushed and placed in gravity separation cyanide-leaching in a carbon in-pulp circuit. Once separate, the gold will be fashioned into 1,000-ounce gold doré on site.

Heap leaching could reduce costs

From work done by engineering consultant Knight Piésold and Co., Fairbanks Gold defined costs and developed a construction scheduled for the proposed project. As designed, operating costs for the pad will be about one-third of the mine's mill operating costs. The lower cost would allow the mine operator to process gold at a greatly reduced rate.

To meet the conditions of the permit, tailings from the heap leach facility must undergo a cyanide destruct process prior to discharge to the storage area.

The permit also covers disposal of 161 million tons of run-of-mine material, mined from the Fort Knox pit to the Walter Creek Valley Heap Leach facility. Drip or sprinkler emitters will apply cyanide containing solution to the material placed on the heap. The solution will be collected and processed for gold recovery in carbon in-pulp columns in the mine's mill facility.

A spokeswoman for the Army Corps of Engineers said the agency had received two comments in support of Fairbanks Gold's permit application and none in opposition to it as of July 18.

Other government agencies are expected to submit comments by a July 31 deadline.