North of 60 Mining News - The mining newspaper for Alaska and Canada's North

Kinross Gold Corp. July 29 reported higher gold production and lower costs at its Fort Knox Mine in Alaska.

During the second quarter of 2020, Fort Knox produced 56,031 ounces of gold, which is roughly an 8% increase over the 51,667 oz produced during the first quarter and slightly better than the 55,440 oz produced at the Interior Alaska mine during the second quarter of 2019.

Kinross attributes the increased gold production to higher mill grades and recoveries, when compared to the first quarter.

The per-ounce cost of Fort Knox gold sold during the second quarter of this year was US$1,171, a 9% drop from first quarter costs but about 29% higher than the US$910/oz costs a year ago.

The company said the lower production costs compared to the first three months of this year is primarily due to higher mill grades and lower energy costs.

During the second quarter, the mill at Fort Knox processed 2.05 million metric tons of ore averaging 0.73 grams per metric ton gold, compared to 1.86 million metric tons of ore averaging 0.6 g/t gold, during the first quarter.

In addition, 4.78 million tons of ore averaging 0.23 g/t gold was stacked on the Walter Creek heap leach pad at Fort Knox, compared to 5.69 million metric tons of ore averaging 0.23 g/t gold during the first quarter.

The Gilmore project at Fort Knox remains on schedule, with initial ore from the expansion project expected by early next year.

A feasibility published for the Gilmore expansion during the second half of 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.

This method of gold recovery has been employed at Fort Knox for more than decade and is expected to be the primary source of gold production over the coming decade. To accommodate ore mined from Gilmore, crews are constructing the new Barnes Creek heap leach pad at Fort Knox.

"We are looking forward to stacking first ore on the new Barnes Creek heap leach and completion of the project in the fourth quarter," Kinross Gold Chief Technical Officer Paul Tomory said on July 30.

Earnings soar

Kinross' global second quarter gold output was down marginally during the second quarter due to COVID-19, primarily as a result of global travel constraints and the implementation of rigorous safety protocols and measures at all mines and projects.

The company's mines in the Americas, Russia and West Africa produced 571,978 gold-equivalent oz (which accounts for the value of the silver produced at some of the operations) attributable to Kinross' ownership during the second quarter of 2020, which is about 12% lower than the 648,251 gold-equivalent ounces produced during the same period of 2019.

Shane Lasley

Kinross CEO Paul Rollinson during a 2018 groundbreaking ceremony for the Gilmore expansion at the Fort Knox Mine.

"We have been able to effectively manage COVID-19 impacts on our portfolio of mines during the first half of the year, as our comprehensive pandemic response plan continued to help protect the health of our employees and communities, while supporting the successful continuation of our business," said Kinross Gold President and CEO Paul Rollinson. "Although we prudently withdrew our full-year guidance given the potential impacts of the pandemic on our operations, we continue to work towards the safe delivery of our annual targets."

With second quarter gold fetching an average price of US$1,712/oz, a 31% increase over the US$1,307/oz realized price this time last year, Kinross' earnings soared. The company's net earnings during the second quarter were US$196 million, compared to US$71.1 million during the same period of 2019.

"Kinross had a strong second quarter, as we generated robust free cash flow, more than doubled earnings year-over-year, and continued to strengthen our investment grade balance sheet," Rollinson added.

Author Bio

Shane Lasley, Publisher

Over his more than 15 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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