Costs rise again at Pogo gold mine

Construction costs for Alaska's Pogo gold mine near Fairbanks have risen again to $378 million, Japan's Sumitomo Metal Mining said in a release Aug. 23. Sumitomo owns a 51 percent stake in Pogo and the operator is Vancouver-based Teck Cominco.

The original construction cost estimate in May 2004 was $280 million. The latest estimate in October 2005 was $357 million.

Some of the increases were due to rising material prices, including oil and steel. Additional investment of $21 million is now required to install a third filter for the tailings and to modify the handling system for transported filtered tailings.

Pogo began production in February and is expected to produce about 12 tons of gold per year when it reaches full capacity. The life of the mine will be about 10 years.

Sumitomo Metal is Japan's top gold producer and Pogo is the first overseas mine in which Sumitomo has a majority ownership interest.