Peak Gold JV to invest $18M during 2021
Infill drilling, environmental work, and exploration planned North of 60 Mining News – December 18, 2020
Last updated 12/17/2020 at 6:18pm
Peak Gold LLC, a joint venture between Kinross Gold Corp. (70%) and Contango ORE Inc. (30%), have agreed to invest US$18 million during 2021 to carry out the work needed to complete a feasibility level study for establishing a mine at Peak Gold project in eastern Alaska.
Toward a new strategy of acquiring high-grade gold from projects across Alaska to provide feedstock for the mill at its Fort Knox Mine about 25 miles north of Fairbanks, Kinross acquired a 70% JV interest in the Peak Gold project in October.
Two deposits that come to the surface at Peak Gold – Main Peak and North Peak – host 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.
Based on this resource, 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.
"The relatively high-grade, low-cost Peak Gold project is an excellent addition to our portfolio, as it allows us to leverage our existing mill and infrastructure at Fort Knox and strengthens our medium-term production and cash flow profile," Kinross Gold President and CEO Paul Rollinson said at the time of the acquisition.
Further details on the Peak Gold JV can be read at Kinross cuts deal for Alaskan Peak Gold in the October 2 edition of North of 60 Mining News.
For Contango ORE, this partnership allows for mining of the gold-rich deposits it has outlined over the past decade by an established Alaska gold producer and without the permitting and capital that would have been required to develop a full-scale mining and milling operation on the 675,000-acre property leased from the Tetlin Tribe.
"CORE's stockholders have overwhelmingly supported the board and management as we chart a clear path to achieve commercial production at the Peak Gold project along with our partners at Kinross Gold and the Tetlin Alaska Native Tribe," said CORE President and CEO Rick Van Nieuwenhuyse.
Though the Peak Gold JV was not formalized until late in September, the partners are expected to complete US$3.6 million in drilling and environmental work by the end of this year. This quick start will help Kinross and CORE achieve their goal of producing the first gold from Peak ore by 2024.
"It is exciting to see the tangible progress being made to advance the Peak Gold resource," said Van Nieuwenhuyse.
The US$18 million Peak Gold budget for 2021, which is split between the partners according to their JV ownership, will fund the in-fill drilling, engineering, and environmental studies needed to complete a feasibility level study for a Peak Gold Mine; exploration to test other intriguing targets across the large Tetlin property; and to the community relations activities begun by Kinross and CORE.
Kinross expects to complete permitting and a feasibility study for Peak Gold by the end of 2022 and, with little in the way of onsite infrastructure needed, first ore is expected to be delivered to the recently rebranded Kinross Alaska mill at Fort Knox by 2024.
Further details on the Kinross Alaska strategy to utilize excess mill and tailings storage capacity at Fort Knox to process higher grade gold ore from Peak and other Alaska projects can be found at Golden decade coming to Fort Knox Mine in the October 23 edition of North of 60 Mining News.