The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Owner of Alaska's largest gold mine invests in exploration ventures that seek new discoveries in the prospective Tintina Gold Belt
Kinross Gold Corp. - operator of the largest gold mine in the Tintina Gold Belt - has embarked on a treasure hunt in hopes of identifying another Fort Knox-like deposit in this gold-rich province.
The Tintina belt is a boomerang-shaped swath of land that spans the breadth of Alaska, through the Yukon Territory and into northern British Columbia.
While Kinross works to extend the mine life of Fort Knox after 13 years of production through drilling, the Toronto-based miner is also investing in junior explorers with promising prospects and grubstaking others to hunt for new discoveries throughout Tintina's 145 million acres.
"One aspect of our investment in those companies is they have dynamic personnel. The people in those companies impress us in terms of their knowledge of the region and the care they have in being good citizens in the region, being there for the long term," Al Kirkham, Kinross director of North America exploration, told Mining News.
The miner's strategy of sinking cash into juniors is intended to maximize its exposure to new prospects and experienced explorers for a relatively small investment. The mutually beneficial partnership provides tenacious explorers with operating capital and exposure to Kinross' extensive historical database of gold prospects in the region.
Fort Knox exploration
The majority of Kinross' $10.5 million Alaska exploration budget for 2009 will be spent on an aggressive 29,000-meter drill program at Fort Knox, which is located about 20 miles, or 32 kilometers, north of Fairbanks. An $8 million drill program is using two core rigs to add reserves in a phase-8 expansion in the northwest sector of the mine's open pit. The exploration is also targeting deep phase-6 and phase-7 extensions on the southwest side of the pit, as well as South Wall resource expansion.
The drill program, along with a heap-leach facility currently under construction, is expected to extend the mine's productive life by at least six years to 2018 and to double life-of-mine production to 2.9 million ounces of gold.
Kinross also plans to drill another 3,000 meters on various properties in the Fort Knox area, including Steamboat (a satellite deposit to Fort Knox), and a grassroots prospect located on BlackShell Creek about 50 miles southeast of the Interior Alaska gold mine.
The Blackshell area is reported to be geologically similar to Fort Knox.
Gil exploration continues
This year Kinross and Teryl Resources plan to spend US$1.644 million on ground geophysics, reverse circulation and core drilling at the Gil property, about five miles, or eight kilometers, east of Fort Knox.
A ground magnetometer survey will focus on delineating mineralized zones on Sourdough Ridge, while 3,000 meters of RC drilling and 1,800 meters of core drilling will target mineralized zones outlined by the geophysical work.
The Gil claims consist of Main Gil Area, Sourdough Ridge, Intrusive Ridge, All Gold Ridge and Too Much Gold Ridge. In 2004, Kinross initiated an exploration program involving rock and soil sampling, geologic mapping, 310 meters of trenching and 18 reverse circulation drill holes totaling 1,275 in order to define the potential for an exploration program. This work generated several new exploration targets in the Main Gil Area and along Sourdough Ridge.
The joint venture partners (Kinross 80 percent and Teryl 20 percent) have spent about US$7.5 million outlining some 10.1 million tons of ore at Gil with an average grade of 1.25 grams of gold per ton, or 404,000 ounces of gold, at the property, which is next door to Fort Knox.
Eye on Livengood
Though Kinross has not invested in International Tower Hill Mines Ltd., the major is closely watching developments as the junior outlines a multimillion-ounce gold resource at its Livengood project about 70 miles, or 110 kilometers, north of Fairbanks.
Fort Knox former General Manager Larry Radford told the Greater Fairbanks Chamber of Commerce May 19 that the company is watching closely as the junior builds a resource at the nearby gold prospect.
"A future partnership to develop the Livengood property is a possibility," Radford said.
The junior has outlined a 4.04 million-ounce indicated gold resource and a 3.6 million-ounce inferred gold resource at Livengood with grades similar to those being mined at Fort Knox.
International Tower Hill is currently working on a preliminary economic assessment of its Interior Alaska gold project.
A mine at Livengood project is expected to be similar in design and have comparable economics to Fort Knox.
Strategically aligned with Full Metal
Kinross has built a strategic partnership with the exploration team that manages and operates Vancouver, B.C.-based junior Full Metal Minerals Ltd.
The first formal deal between the global gold miner and the savvy exploration team began in February 2008 when Full Metal and Kinross formed an exploration alliance to seek out gold deposits in the Tintina Gold Belt.
"We've got a really good relationship with Kinross, so it made a lot of sense. We like their technical people, and we felt a strategic alliance in Alaska would work for us," Full Metal President Michael Williams told Mining News.
As a result of the strategic alliance Full Metal optioned the Granite Creek gold property about 55 miles, or 90 kilometers, southwest of the huge Donlin Creek deposit being developed by Barrick Gold Corp. and NovaGold Resources Inc.
About US$200,000 was spent in 2008 on mapping, geochemical sampling and mechanical trenching to identify drill targets at the Granite Creek gold prospect.
The allies plan to continue to seek out gold properties in 2009.
"We are getting ready to kick off the summer program and that might include drilling on some targets identified this year through the (Kinross) program," Williams said. "It's an alliance we would like to keep moving forward. We have a lot of respect for Kinross, both corporately and technically. It's a good fit for us."
Edge at White Gold
Kinross also has purchased a stake in Full Metal's sister company, Underworld Resources Inc., giving the major interest in that junior's exciting new White Gold discovery in the Dawson district of Yukon Territory.
When Underworld said last fall it would raise money to explore the little-known property, Kinross invested C$1 million to acquire 9.7 percent ownership of Underworld, a stake the major has the right to maintain through subsequent financings.
"When Underworld was put together (Kinross was) fond of our management and our technical people and felt they would like to participate in a financing we did in the fall (of 2008), and that's how they became involved in Underworld," Underworld Chairman Michael Williams said.
"The investment in Underworld is part of Kinross' strategy to maximize exposure to new prospects and experienced explorationists at a relatively small capital investment by partnering with promising junior companies on a select basis," the major explained.
The strategy could pay big dividends for the gold miner. Underworld's 2009 drilling at White Gold appears to be unveiling a major gold system. Drilling this year at the property's Golden Saddle Zone has produced multiple 100-meter intersections with assays of more than 3 grams of gold per ton.
Kinross recently increased its interest in Underworld and currently holds nearly 12 percent of the junior, giving the major a competitive edge when it comes to new developments at the White Gold Project.
"On Underworld, if that deposit keeps evolving like it is and we can keep delineating it, I am sure we will have interest (from) companies like Kinross, and it is like a 100-yard dash, and they are on the 10-yard line," Williams said.
Grubstake for Millrock
Millrock Resources Inc. is another promising junior with which Kinross has allied. In May the major invested C$350,000 to purchase a 6.46 percent interest in Millrock.
"Millrock will use these funds to carry out reconnaissance surveys and property acquisitions in a particular area of mutual interest in Alaska, a state in which Kinross is a premier gold producer and in which Millrock has substantial expertise in the discovery and exploration of gold deposits," the junior's president, Greg Beischer, said.
Millrock is currently following up on gold discoveries made in 2008 at the Estelle project in the Rainy Pass region of the Alaska Range. The junior said the geology of Estelle shows remarkable similarity to the 29.4 million-ounce Donlin Creek gold project. The company anticipates drilling the property in September.
Millrock also has four gold exploration prospects near Nome on the Seward Peninsula and 6,560 acres of gold properties in the Fortymile District near the Alaska-Yukon border.
Kinross also claimed a stake in the Eagle Gold Project in central Yukon. The miner acquired its position in the 2.9 million-ounce gold project when Victoria Gold Corp., a company in which Kinross owns 25 percent, merged with StrataGold Corp.
Victoria Gold plans to complete an NI 43-101 pre-feasibility study for Eagle Gold by the end of 2009.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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