The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
KGC: NYSE/K: TSX
Chairman: John Oliver
President and CEO: Tye Burt
Director of North America Exploration: Al Kirkham
From the humble beginnings of a greenfield copper-gold project in Southwest Alaska to adding years of gold production to its Fort Knox Mine in the heart of the Tintina Gold Belt, Kinross Gold Corp. is spending some US$17 million in search of valuable minerals in the Yukon Territory and the neighboring Far North state.
About US$8 million of Kinross' 2011 exploration budget was earmarked for seeking new sources of gold in the vicinity of Fort Knox in Interior Alaska.
The Toronto-based miner's success in expanding the reserves at this operation is exemplified by the 5-millionth ounce of gold poured there early in 2011.
When Kinross began mining at Fort Knox in 1996, the deposit had 4.1 million ounces of proven and probable gold reserves; upon reaching the 5-million-ounce milestone, the major estimated some 3.5 million ounces of the yellow metal remained.
Kinross believes this is enough ore to operate the mill into 2017 and feed a recently built heap-leach pad at the mine until 2021.
To continue the growth of the reserves, Kinross has drills defining ore in the phase-8 expansion areas of the pit at Fort Knox.
The Gil gold property, located about 8 kilometers (5 miles) east of Fort Knox, is another potential source of ore to extend the life of the mine.
Kinross, which has held a longstanding partnership with junior explorer Teryl Resources Corp. at the Gil gold property, entered into an agreement in September to buy out the junior's 20 percent stake in the project.
The agreed purchase price for Teryl's interest in Gil is a US$2.5 million advance royalty payment upon the closing of the deal; a C$1.5 million advance royalty payment upon commencement of commercial production from the property; and a 1 percent royalty of net smelter returns until C$15 is received and thereafter a 0.5 percent NSR royalty for the remainder of the life of the mine.
Over the term of their 80-20 partnership, Kinross and Teryl have spent more than US$10.5 million outlining some 10.1 million tons of ore at Gil with an average grade of 1.25 grams per ton, or 404,000 ounces of gold.
In March, Teryl reported an NI 43-101-compliant pre-feasibility resource estimate for the Gil joint venture property that outlines a heap leach resource of 514,916 ounces of gold contained in 19.86 million tons of mineralized rock.
A cut-off grade for a hypothetical heap leaching operation at the Gil is expected to be 0.51 grams per metric ton gold, which corresponds to the heap leach cut-off grade currently being used at Fort Knox.
A grade cut-off for material that could be sent to the mill is 0.77 grams per metric ton gold.
Teryl said total gold resources at Gil for a run-of-mill scenario are 309,304 ounces of gold contained in 8.51 million short tons of ore.
Kinross spent about US$7 million in 2011 on a 14,000-meter drill program at its White Gold and JP Ross projects in Yukon Territory.
The gold miner said this year's drilling at the White Gold project focused on the Arc, West Saddle and McKinnon targets on the White Gold property and at JP Ross, a 312-square-kilometer (121-square-mile)land-package located some 35 kilometers (22 miles) north of White Gold, the company investigated the Sabotage, Frenzy and Rebecca targets.
The 40-kilometer- (25-mile-) long JP Ross trend includes the headwaters to multiple active, and past producing placer operations, including: Henderson, Maisy May and Black Hills creeks.
Production records from the Yukon Geological Survey (2009) report more than 177,689 ounces of gold mined from these operations.
Frenzy is a gold-in-soil anomaly on the JP Ross property that measures 2,700 meters by 1,000 meters.
The average gold grade of 459 samples collected at this prospect is 18 parts per billion, ranging from trace to 1,142 ppb.
The prospect is underlain by similar host rocks to the Golden Saddle deposit on the White Gold property and has a similar geochemical signature.
As a comparison, the Golden Saddle soil anomaly measures 1,800 meters by 900 meters, and consists of 348 samples, which outlines a u-shaped anomaly with an average grade of 22 ppb gold, ranging from trace to 364 ppb gold.
Sabotage, which is a 1,600-meter-long, single ridge line gold anomaly, was discovered as part of a ridge and spur sampling program completed by former White Gold/JP Ross owner Underworld Resources Inc. Soil samples collected at Sabotage ranged from trace to 132 ppb gold, averaging 23 ppb of the yellow metal.
Kinross also continues to be focused on establishing mutually-beneficial partnerships with promising junior exploration companies.
Kinross has an equity stake in Full Metal Minerals Ltd., Millrock Resources Inc. and Victoria Gold Corp. - three other juniors exploring the Tintina Gold Belt.
In 2008, the Toronto-based gold producer Kinross formed a strategic partnership with Full Metal Minerals, a junior with management and technical team ties to Underworld, to seek out gold deposits in the Tintina Gold Belt.
The strategic partners have not revealed any new prospects turned up in 2011.Kinross forged alliances with Millrock Resources Inc. to explore to properties in Alaska, Council and Humble.
The 2011 exploration at Council - a project that includes more than 900 square kilometers (350 square miles) of gold properties in the Council Mining District about 100 kilometers (60 miles) east of Nome, Alaska - was limited to mapping and sampling in preparation for an anticipated drill program in 2012.
Humble is a porphyry copper-gold project with attributes similar to those at the Pebble deposit some 130 kilometers (80 miles) east.
An early season mapping and geochemical survey prepared the project for a drill program that began in August.
In September, Millrock reported that the drilling was progressing poorly and it was questionable whether the program would produce drill core for assaying.
Kinross also owns a 19.1 percent stake in Victoria Gold, which is exploring the Dublin Gulch Project in central Yukon.
The Eagle Gold deposit at Dublin Gulch - which appears to be a geological twin to Kinross' Fort Knox Mine in Alaska - boasts probable reserves of 1.75 million ounces of gold plus an indicated resource of 4.8 million ounces of gold.
In addition to working toward the completion of a feasibility study for Eagle Gold, Victoria Gold President and CEO John McConnell said the company is spending around C$10 million on exploration with about one-third being spent at the Eagle deposit, another third in the area immediately surrounding Eagle Gold, with the remainder being spent on regional exploration.
The company is particularly excited about a discovery exploration crews have made at Rex Peso, a regional prospect about 4 kilometers (2.5 miles) of the Eagle Gold deposit.
Grab samples taken here returned assays as high as 1.8 g/t gold and 6,410 g/t silver.
Cash and Short-term Deposits: US$2.41 billion (June 30, 2011)
Working Capital: US$1.53 billion (June 30, 2011)
Market Capitalization: US$17.29 billion (Sept. 23, 2011)
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