Looking for more gold

In an effort to extend life of Interior Alaska gold mine, Fairbanks Gold Mining geologists plan to drill closed Ryan Lode mine, NOAA prospect

Patricia Jones

Petroleum News Contributing Writer

Fairbanks Gold Mining, operator of the Fort Knox gold mine, plans to complete exploration drilling this summer at the shuttered and partially reclaimed Ryan Lode mine located on Ester Dome, about 10 miles west of Fairbanks, Alaska.

Drilling crews are currently working on a grassroots exploration property located less than a mile west from the existing Fort Knox pit on federal land used by the National Environmental Satellite, Data and Information Service. NESDIS operates satellites and processes their data for the National Oceanic and Atmospheric Administration’s National Weather Service.

“We’re putting a lot of energy into exploration … we’ve changed our focus and priorities,” Rick Dye, general manager of the 400,000-plus ounce per year Fort Knox gold mine, told Petroleum News April 10.

Finding mineralization that could replace those gold ounces mined and milled before the end of the mine’s expected life in 2010 is the new exploration goal, he said. The company plans to spend $3.2 million this year on exploration.

“If it’s going to take six years to drill up, it won’t fit in Fort Knox’s expected life,” Dye said, referring to neighboring prospects that are not being worked this year. “There’s no point in spending money on those until we get our holdings in order.”

Gil prospect will get $850,000

Another $285,000 is budgeted for exploration on the True North mine, where crews are currently digging up and trucking ore to Fort Knox.

Geologists working for Fairbanks Gold, a subsidiary of Kinross Gold, are also focused on the existing pit at Fort Knox, with plans to spend $710,000.

It’s all part of an effort to extend the life of the 425-employee operation, and the chances of doing so are “good,” Dye said. “We think it will, especially if the gold price stays where it is.”

New look at Ryan Lode

Company geologists conducted some exploratory drilling then and in 2000, but opted not to continue that effort in the last two years. Instead, more than $800,000 worth of reclamation and cleanup began at Ryan Lode, work that will continue this year.

The company submitted plans last year to state regulators to close the process facilities at Ryan Lode, but told Petroleum News in January that higher gold prices could spark interest in additional exploration.

Fairbanks Gold submitted to state regulators on April 14 final plans for this year’s exploration program on Ryan Lode, scheduled to begin as early as June 1. An informational meeting outlining the company’s plans, which is not required, is scheduled for April 23, starting at 7 p.m. at the Noel Wien Library in Fairbanks.

Plans call for 68 drill holes, involving both diamond core and reverse-circulation rigs, spaced on either end of an existing trench-like pit that formerly provided ore for the mine’s heap leach pads.

“The drilling is essentially a step out from where we know mineralization is at this point,” Ted Wilton, chief geologist for Fairbanks Gold, told Petroleum News April 15.

The maximum depth of drill holes will be 300 feet, shallow for typical mining exploration holes. However, portions of the Ryan Lode deposit previously mined were less than 100 feet from the surface, Wilton said.

“That’s part of the nature of that mineral system … there’s no great advantage to drilling at great depth,” Wilton said. “Below the base of oxidation there may be some mineralization … but gold occurs in a more complex fashion and is not economic to process it. All sorts of gold deposits have that same problem.”

Access will be from existing roads and trails on the property. How long the work will take this summer is unknown, Wilton said.

“It’s driven by three things: how hard is the rock, is it going to rain or snow some time while we’re in there and will we have any breakdowns on the drill rigs. Those things we cannot predict,” he said.

Prospecting on NOAA

Managed by the U.S. Bureau of Land Management, the NOAA property adjoins the west side of the Fort Knox claim block, less than a mile from the existing mine pit on the east side of Gilmore Dome.

Fairbanks Gold received permission from BLM to drill seven reverse circulation drill holes on the property this spring, starting in late February. The company has until June 30 to complete work, which is currently partially finished, Wilton said. “We’re fighting wet ground conditions.”

Access is via the Gilmore Creek road and existing roads along the west side of Gilmore Dome, with short sections of new roads constructed for the project, according to the permit application.

Soil samples previously taken at one of the drill prospects show some areas with more than 80 parts per billion of gold, according to Kinross Gold’s website. Wilton said it is too early to talk about the size of the NOAA property’s geologic formation.

“We have no information at this point to be able to make an educated guess,” he said.

While close to the existing Fort Knox deposit, Wilton said that the NOAA exploration property is not necessarily a step out.

“Fort Knox does not have a trend, not to speak of,” Wilton said. “We understood there might be some geologic features that were worth a look — essentially that was what attracted us over there.”

Mineralization is similar to that found in other areas of the Fairbanks Mining District, he added. “There’s a small granite exposure on the north, and spread hornfels. For every mine, there’s going to be 1,000 prospects. This is a prospect and until we do our work, we don’t know any more than that.”