Kinross To Expand Alaskan Gold Mine
(Kitco News) - Kinross Gold Corp (TSX: K; NYSE: KGC) will proceed with theinitial Gilmore expansion project at its Fort Knox mine in Alaska, the companyannounced Tuesday.
The initial Gilmore project is expected to extend mining at FortKnox by six years to 2027, and leaching to 2030, at an initial capital cost of$100 million. This is expected to increase life-of-mine production byapproximately 1.5 million gold-equivalent ounces, Kinross said.
J. Paul Rollinson,president and chief executive officer of Kinross, said Fort Knox is already “one of our top performingoperations.”
The project is expected to generate an internal rate of return(IRR) of 17% and net present value (NPV) of $130 million based on a$1,200-per-ounce gold price, and an IRR of 26% and NPV of $239 million based on$1,300 gold, Kinross said.
“The project’s low initial capital cost is expected to be fundedby Fort Knox’s cash flow, helping preserve our strong balance sheet andfinancial flexibility,” Rollinson said. “With additional upside potential atGilmore and beyond, Fort Knox is a significant asset in our portfolio locatedin an excellent mining jurisdiction. The Gilmore project and the addition ofestimated mineral resources improves value and is expected to be a keycontributor to the future growth of our company.”
Kinross said plans call for minimal construction of newinfrastructure and new equipment purchases. Plans include mining using FortKnox’s current fleet and leveraging assets from the company’s other NorthAmerican operations as replacement equipment is required.
Early construction on the new heap leach and dewatering isexpected to begin in the third quarter, with stripping in 2019, Kinrossreported. Initial production from Gilmore is expected in early 2020, withapproximately 5% of Gilmore ore expected to be stacked on the existing pad.Approximately 95% of Gilmore ore is expected to be stacked on the new heapleach pad, with stacking beginning in late 2020. Currently, milling at FortKnox is expected to end in late 2020.
Due to the Gilmore feasibility study, estimated proven andprobable mineral reserves at Fort Knox increased to approximately 3.4 million goldounces, with 2.1 million converted from estimated measured and indicatedmineral resources, Kinross said. An additional 0.6 million ounces were added toestimated measured and indicated resources.
The company plans further drilling in 2019.
By Allen SykoraFor Kitco News
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