The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
With Gil, Manh Choh on the horizon, trend likely to continue North of 60 Mining News Newsletter Exclusive – July 30, 2021
The Barnes Creek heap leach pad, which was completed on Sept. 30, 2020, is contributing gold to Fort Knox production.
Drilling has encountered mineralization below the current resource in the North Peak deposit at Manh Choh.
Kinross Gold Corp. July 29 reported the new Barnes Creek heap leach pad is contributing to increased gold production at its Fort Knox gold mine about 25 miles north of Fairbanks, Alaska.
During the second quarter of 2021, Fort Knox produced 63,302 ounces of gold, which is a more than 13% percent increase over the 55,815 oz produced during the first quarter and roughly 13% higher than the 56,031 oz of gold produced at the Interior Alaska mine during the second quarter of 2020.
Kinross attributes these increases to more gold being produced from the Barnes Creek heap leach pad, which was built to support the Gilmore expansion at Fort Knox.
During the second quarter of 2021, 7.9 million metric tons of ore averaging 0.22 grams per metric ton gold was stacked on the Barnes Creek heap leach pad at Fort Knox, compared to 4.8 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 1.9 million metric tons of ore averaging 0.7 g/t gold during the second quarter, compared to 2 million metric tons averaging 0.73 g/t gold processed during the same period last year.
Earlier this year, Kinross Gold Chief Technical Officer Paul Tomory said he expects gold production at Fort Knox to continue 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 the Gil-Sourdough satellite deposits is anticipated to be delivered to the Fort Knox mill by the end of this year.
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 roughly eight miles (13 kilometers) east on existing roads on the Fort Knox property to the 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.
In its second quarter report, Fort Knox said the development work at Gil is proceeding as planned, with production expected to begin in the fourth quarter.
The two-year mine plan for Gil-Sourdough dovetails nicely with Manh Choh, which remains on pace to deliver much higher-grade ore to the Fort Knox mill in 2024.
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.
A scoping study completed during the second quarter confirms the initial estimates that trucking ore from Manh Choh to Fort Knox for processing results in a low-cost, high-margin project.
"Many of the key metrics in the study remain comparable to our view at the time of the acquisition, including grades, recoveries, life-of-mine production of approximately 1 million ounces, with first production expected in 2024," Tomory informed investors on July 29.
The scoping study, however, estimates the capital expenditure to develop Manh Choh to be US$150 million, which is roughly US$50 million higher than originally estimated. Kinross says this increase is in part due to strategic decisions that are expected to de-risk the project and improve operational cost efficiencies, including reducing the use of contractors. A better understanding of project site conditions such as topography and environment also contributed to the capital estimate increase.
During the first half of 2021, Peak Gold JV completed roughly 3,900 meters of drilling targeting near-mine extensions at Manh Choh. This included exploration drilling at the East Peak, Forks, and Ridgeline targets, as well as four holes at North Peak, one of the two Peak deposits that host the current resource. Kinross says two of the North Peak holes cut mineralization below the scoping study depth, indicating the potential for resource expansion.
Manh Choh is now proceeding to a feasibility study, which is expected to be completed by the end of 2022, with production remaining on schedule to begin 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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