Commodities Buzz: Kinross going ahead with expansion of Alaska gold mine

Kinross Mine Canadian miner announced is going ahead with an initial expansion of its Fort Knox mine, located in one of Alaskas largest gold producing areas. The project, to be carried out over an area known as Gilmore, immediately west of Fort Knox, is expected to initially extend the mine life of the open-pit operation by six years to 2027, and leaching to 2030.

Kinross says itll spend an initial capital cost of only $ 100 million, increasing life-of-mine production by about 1.5 million gold equivalent ounces.The first phase of the Gilmore expansion 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/oz. gold price, and an IRR of 26% and NPV of $ 239 million based on a $ 1,300/oz. gold price, the company said.

Kinross started drilling on Gilmore land back in 2014, having determined that the Fort Knox orebody continued to the west, with the area containing 2.1 million gold ounces in proven and probable reserves. About 73,000 metres of core and reverse-circulation drilling enabled Kinross to add to Fort Knox reserves and put resource numbers on the Gilmore ground, where it obtained mineral rights in December.