The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
Gold production expected to increase as the year progresses North of 60 Mining News – May 14, 2021
Kinross' Fort Knox Mine north of Fairbanks, Alaska poured 55,815 ounces of gold during the first three months of 2021.
An aerial view of the Peak Gold deposit on the road accessible Manh Choh project near Tetlin Village in eastern Alaska.
With a strong gold production at Fort Knox, the start of development at the Gil-Sourdough satellite pits, and the programs aimed at Manh Choh into production by 2024, Kinross Gold Corp. got off to a busy start to 2021 in Alaska.
During the first three months of 2021, the company's Fort Knox Mine north of Fairbanks produced 55,815 ounces of gold, which is slightly less than the 57,523 oz produced during the previous quarter but roughly 8% higher than the 51,667 oz of gold produced at the Interior Alaska mine during the first quarter of 2020.
Kinross said the higher gold production compared to the same period last year is primarily a result of timing of gold processed through the mill and an increase in ounces recovered from the heap leach pads.
The per-ounce cost of Fort Knox gold sold during the first quarter of this year was US$1,038, an 18% drop from the US$1,272 production cost of sales during the first three months of 2020.
Last year's first quarter costs, however, were higher than normal due to an increase in the amount of operating waste being stripped off to reach ore at the Gilmore project and impacts from COVID-19, which slowed mining rates.
During the first quarter of 2021, 7.4 million metric tons of ore averaging 0.20 grams per metric ton gold was stacked on the Barnes Creek heap leach pad at Fort Knox, compared to 5.69 million metric tons averaging 0.23 g/t gold stacked on the Walter Creek pad during the same period last year.
In addition, the mill at Fort Knox processed 1.75 million metric tons of ore averaging 0.57 g/t gold, compared to 1.86 million metric tons averaging 0.6 g/t gold processed during the first three months of last year.
Kinross Gold Chief Technical Officer Paul Tomory told analysts and investors during a May 11 conference call that he expects gold production at Fort Knox to increase as the year progresses, reaching nearly 80,000 oz in the fourth quarter.
Increased gold production is expected to continue into 2022 as ore from Gil-Sourdough is anticipated to be delivered to the Fort Knox mill by the end of this year.
Gil-Sourdough
In April, Kinross announced that it would be developing Gil-Sourdough, a satellite gold deposit about eight miles east of the Kinross Alaska mill.
Gil-Sourdough is not a new discovery for Kinross. The company has been involved in its exploration for decades and bought full ownership of the project on the eastern edge of the Fort Knox property in 2011.
These satellite deposits, however, did not fit into the mine plan until the recent Kinross Alaska strategy that leverages the underutilized 14-million-metric-ton-per-year mill at the Interior Alaska gold mine.
"While the Gil deposit has been part of the company resource portfolio for many years, it is only with the recent paradigm shift to leverage the Fort Knox mill and today's continued strong gold price environment that the company sees a timely opportunity for development," Kinross Alaska External Affairs Manager Anna Atchison told Mining News.
In preparation for this Fort Knox Alaska strategy, which involves seeking higher-grade ore from projects within a roughly 300-mile radius of Fort Knox, Kinross invested heavily in dewatering the current tailings storage facility and gained permits to begin stacking tailings in the pit that has been providing ore to the mill and heap leach pads at Fort Knox for the past 25 years.
According to the current plan, roughly 10 million metric tons of ore averaging 0.60 g/t gold is expected to be mined from smaller pits at Gil-Sourdough and trucked on existing roads on the property to the Fort Knox mill for processing. At mill recovery rates of around 83%, Gil-Sourdough is expected to contribute roughly 160,000 oz of gold to Fort Knox production over about two years.
Given that the Gil-Sourdough development is basically a quarry operation, and the ore will be transported over an existing road network, Kinross estimates that the initial cost to bring these satellite deposits into production will only be around US$40 million.
First Gil-Sourdough ore is slated to be delivered to the Fort Knox mill during the fourth quarter of this year.
Manh Choh
The two-year mine plan for Gil-Sourdough dovetails nicely with Manh Choh, which is on pace to deliver much higher-grade ore to the Fort Knox mill in 2024.
"Progress continued at our Manh Choh project, which was recently renamed from Peak in close consultation with a local village of Tetlin," Tomory said on March 11. "The scoping study for Manh Choh is advancing as planned and is expected to be completed in the second quarter."
Located about 200 miles southeast of Fort Knox, Manh Choh hosts 9.2 million metric tons of measured and indicated resources averaging 4.08 grams per metric ton (1.21 million ounces) gold and 14.19 g/t (4.2 million oz) silver in two adjacent deposits on the project.
With the idea of processing high-grade ore from Manh Choh in the mill at Fort Knox, Kinross paid US$93.7 million to buy a 70% interest in this project from Contango ORE Inc.
Peak Gold LLC, a joint venture between Kinross (70%) and CORE (30%), budgeted US$18 million for a 2021 program focused on completing a feasibility level study for establishing a mine at Manh Choh.
Based on the resource established prior to its acquisition, Kinross expects to produce 1 million oz of gold-equivalent, which includes the value of both the gold and silver recovered from Peak Gold ore over a 4.5-year mine life, or roughly 222,000 oz per year.
In its first quarter report, Kinross said the JV has completed infill, metallurgical, and geotechnical drilling for a scoping-level study, which is expected to be finished by mid-year.
With engineering, environmental studies, and community engagement initiatives all progressing well, Kinross continues to expect the Manh Choh feasibility study to be completed by the end of 2022 and first production of ore from this higher-grade gold project in 2024.
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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