The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Former DNR commissioner and mining engineer responsible for Fort Knox, new ITH CEO Tom Irwin readies 20M-oz Livengood gold project
International Tower Hill Mines Ltd. rang in 2014 with a new chief executive leading a streamlined Alaska-centric company focused on optimizing and safeguarding Livengood until a partner steps up to continue the advancement of the 20-million-ounce gold deposit.
Tom Irwin, who ascended to the role of president and CEO of International Tower Hill Mines on Jan. 1, will lead the company's efforts to develop a mine at the world-class Livengood gold project that would contribute to a brighter future in the Golden Heart of the state he has called home for more than two decades.
Outlining his goals of developing an economically robust and environmentally sound mine at Livengood, Irwin summarized, "Our grandkids deserve an Alaska as good as or better than we received it."
Irwin is a mining engineer who has spent more than 35 years permitting, operating and optimizing major mining projects, including Amax Gold Inc.'s Climax mine in Colorado and Sleeper mine in Nevada.
It was the Fort Knox Mine, though, that brought Irwin to Alaska and more than a decade at that Interior Alaska operation that makes him uniquely suited for leading the development of a mine at Livengood.
"I am very pleased to take on the role of chief executive officer of ITH as our team continues to advance the Livengood gold project," said Irwin. "With the benefit of my long history in Alaska, I am confident the region remains one of the best mining jurisdictions in the world, and I believe in Livengood as a world-class multimillion-ounce gold project."
Rewarding experience
Irwin got his first taste of Alaska in 1992, when Amax asked him to serve as vice president of its subsidiary, Fairbanks Gold Mining Inc., responsible for engineering at Fort Knox during project design and permitting.
Once developed, Irwin continued as Fort Knox operations and general manager, overseeing the start-up and operation of the gold mine that he helped design. Irwin continued at Interior Alaska operation through Amax's merger with Kinross Gold Corp., serving as manager and vice president, business development at the mine until 2003.
"It is a really rewarding experience to develop a really good, producing, environmentally sound project," Irwin reflected during a Jan. 20 interview with Mining News.
Faced with the prospect of leaving Alaska, Irwin had to respectfully refuse Kinross' offer of an executive position in Nevada. Instead, he accepted an opportunity to serve as commissioner of the Alaska Department of Natural Resources.
"It takes a lot of knowledgeable people to manage what DNR does," the former commissioner reflected. "I feel that I contributed from my background, but I learned a tremendous amount from the folks from DNR; and frankly from the other agencies within Alaska."
As DNR commissioner, Irwin oversaw the state's interest in the permitting of resource development projects in Alaska and played a key role in setting up its large mine permitting team. After a six-year tenure that demonstrated his commitment to responsible resource development in Alaska and standing up for what is right, Irwin retired - or so he thought.
Fellow Alaska mining engineer, Karl Hanneman though, lured Irwin out of retirement with the prospect of being involved with the development of another world-class gold mine in Alaska's Interior.
"I would love to be involved with starting another mine, but I want to be involved with a group that has integrity; I want to be involved with a group that absolutely is not going to cut corners," Irwin said.
And with a team of accomplished fellow Alaskans that includes Hanneman as general manger; Chris Puchner as chief geologist; Denise Herzog as manager of environmental affairs; Debbie Evans as controller; and Rick Solie as manager of community and government relations, Irwin believes International Tower Hill and the Livengood project provides that opportunity.
Optimizing Livengood
A large, low-grade gold deposit located alongside a paved highway about 70 miles (110 kilometers) north of Fairbanks, the Livengood project poses many of the challenges and opportunities Irwin faced at Fort Knox.
This time around, though, the International Tower Hill CEO has couple of advantages: he has already proven such a gold mine can be successful in Alaska's Interior; and with resources totaling 20 million ounces, Livengood is starting off as a substantially bigger deposit than the operation about 45 miles to the southeast.
At a US$1,500/oz. gold price, roughly half of this gold reports to the reserves. The Livengood deposit currently has proven reserves of 434 million metric tons averaging 0.69 g/t (9.6 million ounces) gold and probable reserves of 20 million metric tons averaging 0.70 g/t (454,000 oz.) gold.
Utilizing these reserves, a feasibility study completed in July anticipates a 100,000-ton-per-day mill churning out 8.1 million oz. of gold over an initial 14-year mine life. This comes to 577,600 ounces annually; and anticipates an average annual output of 698,500 oz. of gold over the first five years of operation.
The initial capital expenditures to build a mine of this scale at Livengood are estimated to be US$2.8 billion. An additional US$667 million of sustaining capital would be needed over the life of the operation.
The all-in costs to mine an ounce of gold at Livengood with the operation described in the feasibility study are estimated to be US$1,474. This includes US$987/oz. of operating, royalty and smelting costs; US$416/oz. to payback capital expenditures; US$43/oz. for reclamation; and US$27/oz. for taxes.
Applying his foundation as a mining engineer, one of Irwin's top priorities is to optimize the operation outlined in the feasibility study.
The Livengood development team believes that mill throughput and production schedule optimization studies may provide opportunities to reduce project capital costs.
"We have identified several opportunities that we can work on to improve the economics of the project," Irwin said.
These include scenarios which would require less upfront capital to develop the mine as well as ways to reduce the operating costs. Enhancing mill head grades in early years by a more aggressive stockpile management strategy than is assumed in the feasibility study is a key amongst these opportunities.
A similar strategy was successfully implemented at Fort Knox, where the lower grade ore was downgraded to waste and stockpiled for future use. In recent years, this "waste" material is being processed at the operation's heap-leach facility. Roughly 35 percent of the record 428,822 oz. of gold produced at Fort Knox in 2013 came from the heap-leach side of the operation.
"We need to confirm to ourselves and our partner that we have exactly the correct circuit,
The company has identified several other opportunities to improve the performance of the project; including verification of information that suggests the actual resource grade may be 10-15 percent higher than the drill-hole assays indicate.
"We have some higher resource grade based on our metallurgical studies," Irwin explained. "We are always looking at ways to improve the recovery, and we have some credible ideas that we couldn't test at the lab-scale but we can test in a bit bigger bench-scale."
To-do list
Securing a partner to advance Livengood into permitting is another of the items at the top of Irwin's to-do list.
"We know the gold market has been tough for a lot of the gold companies, and yes, they are taking some real write-downs and some hits, but they also need to replenish their resource and 20 million oz. on a paved road in this jurisdiction is a good place to be," observed Irwin.
He told Mining News that a number of companies have expressed interest in Livengood by entering into confidentiality agreements with International Tower Hill.
"Some are heavily engaged, and we are encouraged by that," he added.
Until the time comes that one of these companies steps up to fund the permitting and development of Livengood, International Tower Hill Mines will wisely use its US$15.5 million in cash reserves (as of Sept. 30) to continue the five years of baseline environmental work established at the project while optimizing a mine-plan to take into permitting.
"Right now, at our expenditure rate to do what we need to do - protect the asset, do the environmental work, advance the project - we are good well into 2015," Irwin explained.
"We are encouraged about it; this is going to be a mine," the International Tower Hill Mines said of the progress at Livengood.
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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