Kinross Gold will continue with the initial Gilmore expansion project at its Fort Knox mine, located in Alaska, US.
Through the expansion project, the company aims to extend the life of the Fort Knox mine by six years to 2027 and leaching to 2030.
The company will initially invest around $100m in the Gilmore project that is expected to increase life-of-mine production by about 1.5 million gold equivalent ounces.
Kinross anticipates the first phase of the project to generate an internal rate of return (IRR) of 17% and net present value (NPV) of $130m based on a $1,200/oz gold price, and an IRR of 26% and NPV of $239m based on a $1,300/oz gold price.
Kinross Gold president and CEO Paul Rollinson said: “We are pleased to proceed with the initial Fort Knox Gilmore project, a low-risk, low-cost brownfield expansion that is expected to extend mine life to 2030 at one of our top performing operations and contribute 1.5 million gold equivalent ounces to strengthen our long-term US production profile.
“The Gilmore project offers an attractive IRR and NPV and adds to our suite of quality development projects at Tasiast, Round Mountain, Bald Mountain and Kupol to enhance our globally diverse portfolio.
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“The Gilmore project and the addition of estimated mineral resources improves value and is expected to be a key contributor to the future growth of our company.”
A feasibility study conducted on the Gilmore project considered the possibility of the first two phases of a potential multi-phase layback of the existing Fort Knox pit and construction of a new heap leach pad.
The company expects to commence early construction work on the new heap leach and dewatering in the third quarter of this year, with stripping to begin next year.
Initial production from Gilmore is slated for early 2020.