Kinross Gold Corp. said it is proceeding with the initial Gilmore expansion project at its Fort Knox mine in Alaska. The initial Gilmore project is expected to extend mining at Fort Knox by six years to 2027, and leaching to 2030, at a low-initial capital cost of approximately $100 million, and increase life-of-mine production by approximately 1.5 million Au equivalent ounces (oz).

The project 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.

“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 U.S. production profile,” said J. Paul Rollinson, president and CEO. “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.”

The project plan requires minimal construction of new infrastructure and new equipment purchases, including using Fort Knox’s current fleet and leveraging assets from its other North American operations as replacement equipment is required, the company said.

Early construction work on the new heap leach and dewatering is expected to begin in the third quarter of 2018, with stripping commencing in 2019. Initial production from Gilmore is expected in early 2020, with approximately 5% of Gilmore ore expected to be stacked on the existing pad. Approximately 95% of Gilmore ore is expected to be stacked on the new heap leach pad, with stacking commencing in late 2020. Currently, milling at Fort Knox is expected to end in late 2020.

Kinross is a Canadian-based senior gold mining company with mines and projects in the United States, Brazil, Russia, Mauritania, Chile and Ghana.