The company has budgeted US$18 million to construct this satellite deposit, 10 km northwest of the giant Fort Knox operation.
Kinross plans to keep things as simple as possible. True North is close enough to Fort Knox that only a bare minimum of work needs to be done to add more than 100,000 oz. of annual production to Fort Knox — enough to boost overall production to 500,000 oz. gold per year.
The project would include two open pits (Hindenburg and the smaller East pit), as well as rock dumps, ore and topsoil stockpiles, and truck shops.
The company will mine up to 10,000 tonnes of ore and 20,000 tonnes of waste per day. The ore will be trucked 12 km to the mill at Fort Knox on a restricted access road using conventional highway trucks. Each truck would carry up to 60 tonnes per load, amounting to nearly 170 truckloads per day.
Once a second review period is over, the state is expected to issue permits, allowing Kinross to begin construction. In all, more than 15 permits will be issued, including approval of the plan of operations, the mining lease and environmental permits.
If everything goes as planned, Kinross will receive the final go-ahead to begin construction before year-end. Production could begin from True North early in 2001.
The ounces from True North will be crucial to the overall Fort Knox operation, because mineralization at the satellite is more than twice the grade of ore coming from the open pit. “True North will contribute 20% of the production, but drive down cash costs by US$10 per oz. for the whole operation,” says Kinross spokesman Gordon McCreary. Total cash costs for 2001 are projected to fall to US$190 per oz.
Proven and probable reserves at True North stand at 6.5 million tonnes grading 2.17 grams per tonne, or 459,000 oz. It also contains additional resources of 644,000 oz. within 8.1 million tonnes grading 2.4 grams per tonne.
Mineralization at True North differs significantly from ore at Fort Knox. True North is hosted in completely oxidized calcareous and carbonate-altered schists, where gold occurs in quartz veins and along fractures. The deposit, controlled by shallow-dipping, brecciated shear zones, measures 1,500 by 400 metres. Gold mineralization at Fort Knox, 25 km northeast of Fairbanks, occurs in and along pegmatite veins, quartz veins, shears and fractures within granite.
Meanwhile, Kinross expects Fort Knox to contribute 360,000 oz. in 2000 — slightly higher than last year’s 351,120 oz. Total cash costs should come in slightly more than US$200 per oz., up from US$194 per oz. The lower production in 1999 was the result of harder ores, which needed extra time to pass through the semi-autogenous grinding mill. In 2000, mining activity has shifted to softer ores, allowing the mill to reach design capacity of 38,000 tonnes per day, while gold recovery is holding steady above 85%.
Shortly after securing Fort Knox in the merger with Amax Gold in 1998, Kinross set its sights on the True North deposit, across the Steese Highway. The 4,000-ha property was then held under a 65-35 joint venture between
Production started at Fort Knox under the ownership of Amax Gold in late 1996, when construction costs ballooned to nearly US$380 million. After total production of 1 million oz., reserves at Fort Knox, excluding True North, stand at 112 million tonnes averaging 0.83 gram per tonne, or 2.97 million oz. gold.
Once Kinross gets going at True North, it will turn its attention to other satellite deposits in the area, including the Ryan Lode deposit, several kilometres west of Fairbanks. The deposit, which is a moderately dipping shear zone up to 60 metres wide hosted in schist, contains reserves of 2.2 million tonnes at 3 grams per tonne, or 214,000 oz. Additional resources amount to 148,000 oz. within 1.7 million tonnes averaging 2.7 grams per tonne. However, there are several environmental concerns related to its proximity to housing developments in western Fairbanks. Trucking ore to the Fort Knox mill would also entail driving through the city.
Another satellite deposit, which perhaps has better potential, is the Gil deposit, 12 km east of Fort Knox. Kinross controls an 80% interest in the Gil, with the remainder held by
In March 1999, the joint venture released a resource at Gil of 9.7 million tones grading 1.4 grams per tonne, equivalent to 433,000 oz., though that number is expected to rise at the end of the year. The joint venture is spending US$1.4 million to drill at least 50 holes at the Gil and the newly discovered Gil North deposits. Results should be released soon.
Between Fort Knox and True North, Kinross and Teryl are evaluating the Westridge-Steamboat deposit. The Amanitaville target, south of the Fort Knox mine and on Kinross ground, also shows promise.
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