The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Production expected to rebound with transition to Gilmore North of 60 Mining News – February 14, 2020
A little more than 200,000 ounces of gold was poured at Fort Knox during 2019. The annual gold output at this Interior Alaska mine is expected to increase this year as mining transitions to Gilmore, a westward expansion of the open pit.
Liner being installed at the Barnes Creek Heap Leach Pad last August. This new gold recovery facility at Fort Knox is slated for completion by the end of this year.
At just over 200,000 ounces, the 2019 gold production at Fort Knox Mine is the lowest in the 24-year history of this open pit operation a few miles north of Fairbanks, Alaska. The good news is there are indications that gold output will trend higher during 2020.
In its end of 2019 results, released on Feb. 12, Kinross Gold Corp. reported a nearly 22 percent drop in gold produced at its Fort Knox mine during 2019, when compared to the previous year.
This operation about 25 miles north of Fairbanks produced 200,263 ounces of gold last year, a 55,306 oz drop from the 255,569 oz produced in 2018.
This marks the second straight year of significant drops in gold production at Fort Knox. These drops, however, were largely expected as the mine transitions away from feeding ore into the mill and into Gilmore, an expansion project that will produce most of its gold from heap leach recovery.
Due to the lower gold output, coupled with higher maintenance expenses, the cost per ounce of Fort Knox gold sold last year was US$1,067, a 27 percent increase over the US$837/oz cost for 2018.
During the fourth quarter, Fort Knox produced 53,183 oz of gold, which is slightly higher than the 52,194 oz recovered during the same period of 2018.
The per-ounce cost of Fort Knox gold sold during the quarter was US$1,197, a nearly 27 percent increase over the US$946 production cost of sales during the final three months of 2018.
The mill processed 2.62 million metric tons of ore averaging 0.43 grams per metric ton gold during the quarter, compared to 2.93 million metric tons averaging 0.44 g/t during the same period of 2018.
Additionally, 5.5 million metric tons of ore averaging 0.2 g/t gold was processed on the heap leach pad during the final quarter of 2019, compared to 2.93 million metric tons averaging 0.19 g/t during the final three months of 2018.
Gilmore transition
While Fort Knox is not expected to reach the more than 300,000 oz/year gold output it enjoyed in the past, production is expected to increase as the mine completes the transition to Gilmore.
"Looking at 2020, we are working through many of the challenges we faced last year and expect production to be in line with the (Gilmore) technical report," said Kinross Gold Executive Vice President and Chief Technical Officer Paul Tomory.
Lying immediately west of the Fort Knox pit, the source of more than 8 million oz of gold produced at the Interior Alaska operation over the past 24 years, the Gilmore expansion detailed in the technical report is expected to add at least 1.5 million oz of gold to the tally by 2030.
A feasibility published for the Gilmore expansion during 2018 envisions nearly all of the gold mined from Gilmore will be recovered via heap leaching, a process that involves stacking the ore on a lined pad and using a mildly acidic leaching agent trickled over the ore to dissolve the gold into a solution that is pumped through a facility that recovers the gold.
To accommodate the ore mined from Gilmore, Kinross is building the Barnes Creek heap leach pad.
Kinross says Gilmore remains on schedule and the first ore from this expansion project was stacked on the existing Walter Creek heap leach pad during the final three months of last year.
The new Barnes Creek heap leach pad, where 95 percent of Gilmore ore is expected to be stacked, remains on target for completion by the end of this year.
Procurement for all planned 2020 activities is largely complete and the resumption of heap leach pad construction is slated to resume in the spring.
A bridge to future expansions
Kinross management views the Gilmore project as a bridge to further extensions to the Fort Knox operation.
During a Gilmore groundbreaking ceremony in 2018, Kinross Gold President and CEO J. Paul Rollinson said, "We see a lot of potential, we are going to keep exploring, and I personally believe this is the first of many phases of expansion."
Going into 2020, Fort Knox has 255.81 million metric tons of proven and probable reserves averaging 0.3 g/t (2.8 million oz) gold.
In addition, the Interior Alaska operation hosts 176.73 million metric tons of measured and indicated resources averaging 0.4 g/t (2.03 million oz) gold; and 86.05 million metric tons of inferred resource averaging 0.3 (774,000 oz) gold.
Kinross said the 2019 exploration at Fort Knox focused on extensions of the ore body.
A total of 7,300 meters of drilling was completed on the property last year, mainly focusing on the western crest of the pit.
The company said the results of this drilling were encouraging and resulted in the addition of 229,000 oz of gold to the Fort Knox measured and indicated resources.
In addition to drilling, Kinross completed a ground gravity survey last year from Fort Knox to Gil-Sourdough to understand the geological settings of the area for future exploration work.
Gil-Sourdough is a deposit about seven miles northeast of the Fort Knox pit.
According to the most recent calculation, Gil hosts 29.5 million metric tons of indicated resource averaging 0.56 g/t (533,000 oz) of gold.
Kinross said it plans to continue to conduct exploration and resource conversion drilling at Fort Knox, Gil-Sourdough and targets across the wider Fairbanks District during 2020.
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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