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Kinross Gold OKs initial Gilmore expansion at Fort Knox on feasibility results

Kinross Gold Corp. will proceed with the initial Gilmore expansion at its Fort Knox gold mine in Alaska after completing a feasibility study on the brownfields project.

Based on a gold price of US$1,200/oz, the analysis defined an after-tax net present value of US$130 million, using a 5% discount rate from July 1, with a 17% internal rate of return.

Initial capital costs are estimated at approximately US$100 million, which Kinross plans to finance with Fort Knox cash flow.

Early construction on a new heap leach and dewatering are scheduled to start in the third quarter, with stripping to start in 2019.

First production from Gilmore is expected in early 2020, the company said June 12. The initial expansion will extend mining at Fort Knox by six years to 2027, with leaching extending to 2030.

Gilmore is expected to increase annual life-of-mine production at Fort Knox by approximately 1.5 million gold equivalent ounces, with all-in sustaining costs of US$950/oz of gold equivalent.

The feasibility study resulted in updated estimates of reserves and resources at Fort Knox, with contained gold in reserves increasing by 2.1 million ounces.

The mine now hosts proven and probable reserves containing 3.4 million ounces of gold within 282.2 million tonnes grading 0.37 g/t of gold, as of the end of 2017.

Kinross secured the mineral rights for the Gilmore property in late 2017 and increased measured and indicated gold at Fort Knox by 2.1 million ounces.