Mining News: 7 million oz. of gold

In its 20th year of operation, Fort Knox Mine near Fairbanks is still pouring a million ounces of gold every two and a half years; more milestones likely

Shane Lasley

Mining News

On July 13, a fountain of molten gold cascades into awaiting molds at the Fort Knox Mine, which is among the largest and lowest-cost gold operations owned by Kinross Gold Corp.

While gold pours such as this one are a regular occurrence at this roughly 1,100-ounce-per-day operation, somewhere in this particular glowing stream was the seven-millionth ounce of gold produced at the iconic mine, located a few miles north of Fairbanks, Alaska.

Fort Knox General Manager Eric Hill would like to see a second generation of workers at the Interior Alaska mine have the opportunity to witness more of these milestones.

“Fort Knox recently celebrated our 7 millionth ounce pour along with the many employees who have been with us since our very first pour in 1996,” he told Mining News via email. “It is our honor to now have a second generation of employees joining us, and it is our hope to continue employing families for many years to come.”

The seven-millionth-ounce of gold at Fort Knox was recovered during the mine’s 20th year of production – both are milestones achieved well beyond the original mine plan.

“We are very, very proud of those two achievements and most of all for being here a lot longer than we ever thought we would be in the beginning,” Kinross COO Warwick Morley-Jepson said during a keynote address at the Alaska Miners Association’s spring convention in Fairbanks.

Calling Fort Knox “one of the best run mines in the Kinross portfolio,” the company executive hinted that more milestone celebrations may be in Fort Knox’s future.

Golden years

The continued strong gold output is the result of the Walter Creek heap leach facility. Now, lower grade material that would have either been run through the mill or rejected as waste can be stacked on the heap leach pad, making space for higher grade ore in the mill.

Since its completion in 2009, the Walter Creek heap leach facility has produced roughly 750,000 oz. of gold and currently accounts for nearly 40 percent of the overall gold production at Fort Knox.

The Interior Alaska mine recovered 401,553 oz. of gold in 2015 and started this year at an even faster pace – recovering 87,800 oz. of the yellow metal through the first three months of the year. While seeming to not set a 400,000-oz.-per-year pace, the output is roughly six percent higher than the 82,673 oz. recovered during the same period a year earlier.

Gold production during the winter months is typically lower at Fort Knox due to the chilling effects of Fairbanks area weather on recoveries from the heap leach facility, an increasingly important portion of the production profile at Fort Knox.

According to a 2015 technical report, the mill portion of the operation would be phased out in 2017 and the last new ore would be stacked on the heap leach pad in 2019. Indications, however, are that a couple of years have been added to the life of the mine since that assessment.

Bartley Kleven, environmental manager at Fort Knox, told a crowd at the spring AMA gathering that the mill is currently scheduled to continue operations until about 2019.

“The current life-of-mine is out to 2020. Once we are done mining, we will have some subsequent years of heap leaching,” Hill added.

Once mining ends, Fort Knox will continue recovering gold through ongoing heap-leach processing as long as the value of the gold recovered outweighs the cost of operating the pad. According to the technical report, this balance could be maintained until about 2027. Additional ore stacked on the pad and a continued strong gold price seems likely to push this final phase of Fort Knox out farther.

Fort Knox ended 2015 with 147.32 million metric tons of proven and probable reserves averaging 0.4 g/t (2.02 million oz.) gold.

Many years to come

“Kinross’ exploration is focused on brownfield projects around existing operations and we continue to look for ways to further extend our operation,” he explained. “We believe Alaska is an attractive mining jurisdiction and a good place to do business – we have successfully operated Fort Knox for 20 years, and the mine is now 12 years beyond our original plan.”

In addition to the reserves, Fort Knox had 95.82 million metric tons of measured and indicated resources averaging 0.5 g/t (1.42 million oz.) gold at the end of 2015. This is a significant increase to both the tonnage and grade compared with the 75.9 million metric tons of measured and indicated resources, averaging 0.37 g/t (912,000 oz.) gold available to the mine a year earlier.

While the economic viability of mining these resources have not yet been calculated, which could raise them to reserve status, the increased tonnage and grade is a good sign that the mill may keep churning out gold for a while longer.

The Gil gold property, located about five miles east of Fort Knox, and Gilmore, an area immediately west of the current mine plan are two such expansion targets.

Kinross purchased full ownership of Gil in 2011 and in 2014 gained authorization from the U.S. Bureau of Land Management to conduct mineral assessment work on Gilmore lands that were previously withdrawn for use by the National Oceanic and Atmospheric Administration.

While Kinross has yet to disclose any information on the advancement of these two potential mine extensions, the fact that Fort Knox is the second-lowest cost and among the highest-producing gold operations in its portfolio provides the global mining company plenty of incentive to keep the Interior Alaska mine going.

Kinross COO Morley-Jepson indicated that Fort Knox has at least a few more golden years left.

“The original mine plan projected mining to the end of 2008 at Fort Knox; here we are in 2016, looking forward to mining many years to come,” he said.