Lower grades result in less Fort Knox gold

Kinross Gold Corp. May 8 reported that its Fort Knox Mine near Fairbanks, Alaska, produced 79,928 ounces of gold during the first quarter of 2018, a roughly 14 percent decrease from the 93,038 oz recovered during the same period last year and about 16 percent lower than the last three months of 2017.

"Production at Fort Knox was in line with our expectations for the quarter, although it was lower compared with the fourth quarter of last year. This was mainly due to lower mill grades as well as the seasonal slowdown of ounces recovered from the heap leach," Kinross COO Lauren Roberts said.

The Fort Knox mill processed 3.11 million metric tons of ore averaging 0.70 grams per metric ton gold during the quarter, compared to 2.93 million metric tons averaging 0.75 g/t last year.

Additionally, 5.84 million metric tons of ore averaging 0.20 g/t gold was processed on the heap leach pad, compared to 3.89 million metric tons averaging 0.23 g/t during the first quarter of 2017.

The per-ounce cost of Fort Knox gold sold during the first quarter was US$530, a 14 percent drop from the US$617 production cost of sales during the same period last year.

Kinross attributes the lower production costs largely to the timing of ounces processed through the mill.

In late March, the Fort Knox pit experienced a minor pit wall slide, which, along with anticipated lower grades, are expected to have a slight impact on the mine's production and costs for the balance of 2018.

"It was relatively minor and these occurrences are not uncommon for an operation of this scale," said Roberts. "However, it is limiting access to certain areas of the pit. We are assessing this situation and the remediation efforts are underway."

While it is looking like Fort Knox gold production is going to be lower than expected this year, a feasibility study slated for completion next month could add several more years to the life of this iconic gold mine in Interior Alaska.

"In June, we expect to announce the feasibility study results for the Fort Knox Gilmore project, an opportunity to potentially extend mine life at one of our best performing operations," said Kinross President and CEO J. Paul Rollison.

Gilmore has roughly 2.1 million oz of gold in the measured and indicated resource categories plus 300,000 oz of gold in the lower confidence inferred category.

The feasibility study is considering a multi-phase layback of the Fort Knox pit into the Gilmore area and the construction of a new heap leach pad.

If this assessment shows that mining this area is economic, it is expected that a large portion of the measured and indicated resources will be converted into reserves that will further extend the life of Fort Knox.

–SHANE LASLEY