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

Kinross Gold Corp. Nov. 4 reported a significant increase in gold production and drop in costs at its Fort Knox Mine about 20 miles north of Fairbanks, Alaska.

"At Fort Knox, we are very pleased with the results achieved during the quarter. And I'm happy to say we expect continuation of strong results going forward," Kinross Gold Chief Technical Officer Paul Tomory informed investors and analysts on Nov. 5.

During the third quarter of 2020, Fort Knox produced 72,705 ounces of gold, a 30% increase over the 56,031 oz produced during the second quarter and nearly 35% better than the 55,027 oz produced at the Interior Alaska mine during the third quarter of 2019.

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

The per-ounce cost of Fort Knox gold sold during the third quarter of this year was US$949, a 19% drop from the US$1,171/oz sales costs for the second quarter costs and about 16% lower than the US$1,130/oz costs a year ago.

The company said the lower production costs compared to the previous 2020 quarter is primarily due to increased production, partially offset by increased investment in mining waste material in order to expose more ore.

During the third quarter of this year, the mill at Fort Knox processed 2.66 million metric tons of ore averaging 0.67 grams per metric ton gold, compared to 2.05 million metric tons of ore averaging 0.73 g/t gold, during the second quarter.

In addition, 5.5 million tons of ore averaging 0.19 g/t gold was stacked on the heap leach pad at Fort Knox during the third quarter of this year, compared to 4.78 million metric tons of ore averaging 0.23 g/t gold during the previous quarter.

Through the first nine months of 2020, Fort Knox has produced 180,402 oz of gold, which is about nearly 23% more than the 147,080 oz produced through the end of September of last year. At its current pace, the Interior Alaska mine would produce around 250,000 oz of gold this year.

Kinross also reported that the Gilmore expansion project at Fort Knox is now substantially complete.

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.

In early October, the first ore was stacked on the Barnes Creek heap leach pad, a new facility constructed for ore from Gilmore.

Kinross recently announced a strategy to increase Fort Knox' annual gold production to roughly 400,000 oz by 2023.

This strategy includes accelerating production at the Gilmore project to bring ounces forward in the mine plan.

"We have opportunistically lowered the cut-off grade which is allowing us to economically send more ore to the mill that would have previously gone to leach pads, and of course, achieving higher recoveries," said Tomory.

Looking beyond 2023, Kinross recently acquired a 70% interest in the Peak Gold project about 250 miles southeast of Fort Knox in a deal valued at US$93.7 million.

"This transaction demonstrates our ability to find high-return low-capital opportunities that leverage our existing infrastructure and technical expertise," said Kinross Gold President and CEO Paul Rollinson.

As the project operator, Kinross expects to truck Peak Gold ore to its Fort Knox mill. Processing ore at Fort Knox avoids mill construction at Peak and is expected to decrease execution risk, lower capital expenditures, drive attractive returns, and reduce the project's environmental footprint and permitting requirements.

Kinross Gold Corp.

With Fairbanks Chamber of Commerce President Marisa Sharrah (left) and Fort Knox General Manager Jeremy Brans (right) looking on, Fort Knox Projects Manager Jason Perino cuts the ribbon on the Barnes Creek heap leach facility at Kinross' Fort Knox gold mine north of Fairbanks, Alaska.

Blending the higher grade ore from Peak, which runs about 6 g/t gold, with Fort Knox ore is expected to extend mill operation at Fort Knox, reduce overall costs and increase cash flow. The project is expected to benefit the state and local communities, in particular, the Upper Tanana Athabascan Village of Tetlin.

Kinross expects to commence production at Peak in 2024, with total production of roughly 1 million gold-equivalent oz, which accounts for the value of both the gold and silver, over an initial 4.5 years of mining.

Kinross plans to commence a drilling program before the end of 2020 to further develop the project's resource base and expects to complete permitting and a feasibility study by the end of 2022.

More information on Kinross Gold's increased gold production strategy at Fort Knox and the acquisition of Peak Gold can be read at Golden decade coming to Fort Knox Mine in the Oct. 23 edition of North of 60 Mining News.

Author Bio

Shane Lasley, Publisher

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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