More gold found at Pogo, Fort Knox expansion under way

Photo/Kinross Gold Corp./Judy Patrick

Miners in Interior Alaska are doing well. The Pogo and Fort Knox mines, the Interior’s two big producing gold mines, are playing tag as to which is Alaska’s largest gold producer: Pogo has the honor this year and last, but Fort Knox may reclaim the prize in 2013 when expansions now under way at that mine bear fruit.

Pogo is an underground gold mine near Delta, about 100 miles east of Fairbanks, that is owned and operated by Sumitomo Heavy Metals. Fort Knox is a large surface mine 26 miles northeast of Fairbanks off the Steese Highway that is operated by Fairbanks Gold Mining Inc., a subsidiary of Kinross Gold Corp.

Pogo produced about 385,000 ounces of gold in 2011. Fort Knox produced 289,790 ounces in 2011 and is projected to produce about 358,000 ounces in 2012.

Fort Knox has gold ore that is low-grade, which means that a lot of ore must be mined and processed to extract gold. That is possible with a large surface mine. Pogo, in contrast, has higher-grade ore, which makes it economic to operate as an underground mine.

“The average grade of ore produced in 2011 at Pogo was 0.52 ounces per ton, which classified us as a high-grade mine,” said Raelene Wentz, a Pogo field geologist who presented information on the mine at the Alaska Miners Association annual convention in Anchorage in early November.

Next year, however, Fort Knox will enjoy increased production due to its expanded heap leach processing facility, and it may again surpass Pogo, at least for a while. New processing facilities are being built at the mine to extract gold from a liquid solution circulated through the ore stacked at the heap leach. Gold production at the Walter Creek Valley Fill Heap Leach at Fort Knox has now been expanded through four stages.  

Fort Knox has other plans, too. A “phase 7” expansion of its mine pit began in September and is under way now. When that is completed there are plans for a Phase 8 expansion, according to the Fort Knox technical services director, Dave Quandt, who also spoke at the miners’ convention.

Expansion of the Fort Knox tailings storage facility dam is also continuing. The dam was raised 27 feet in 2011 and will be raised another 25 feet by 2013, according to the report filed with the state.

Reclamation work continues, also. In 2011 the company planted 32,860 seedlings covering approximately 100 acres at True North, a gold deposit near the Fort Knox that was mined.

Fort Knox continued with exploration in the area of the mine, too. In 2011 and 2012, the company conducted drilling and evaluation program at the Gil prospect, an area with gold mineralization east of the existing mine.

In 2011 there was also exploration near the existing mine to establish resources for future expansion.

Meanwhile, things are happening at Pogo too. Sumitomo is now producing gold from the “Liese” underground deposit but three more nearby gold accumulations are being explored: “East Deep”, the “North Zone”, and “4021,” Wentz told the miners’ convention.

Drilling at East Deep in 2011 and 2012 has allowed Pogo to essentially double its known gold resources. North Zone and 4021 are in very preliminary stages of exploration.

There’s enough resources that are known or probable in just two of the ore bodies, the Liese and East Deep, that the mine might have enough gold to continue producing until 2030, and very likely beyond that when gold in the North Zone and 4021 deposits are included, Wentz said.

Pogo is northeast of Delta at the end of a 50-mile access road, and sits on a block of mining claims that cover 87 square miles. Within that area there are about 20 prospects identified by geochemical analysis and other indicators, she said. These are in addition to the four deposits of mineralization identified by drilling.

“As it stands now, there doesn’t seem to be any end to (gold mineralization around) Pogo,” company spokeswoman Lorna Shaw said.

Exploration on top of production has kept things busy at the mine. There were four drilliang rigs working on holes from the surface this year as well as four rigs working underground in mine tunnels.

It varies seasonally, but there are about typically 350 permanent staff working at the mine along with about 100 contract employees.

Fort Knox is a major employer, too. As of the end of 2011, Fairbanks Gold Mining Inc. employed 522 people at the mill and mine, according to state records. According to economic survey data included in the company’s annual activity report filed with the state in 2011, Fort Knox had a $45 million payroll and was the 10th largest employer in the Fairbanks North Star Borough.

Unlike Pogo, which is a remote mine where employees work shifts of several days on-site and off, Fort Knox is close enough to Fairbanks that employees drive home at after work.

Although it isn’t producing yet, there is considerable activity at a potential large surface gold mine at Livengood, northwest of Fairbanks on the Elliot Highway. If it is developed it will be bigger than Fort Knox.

International Hills Mines, or ITH, is exploring the prospect. The company has drilled and found a substantial amount of gold ore that is low-grade like Fort Knox, and which lends itself to a large surface mine. This year ITH is mainly focused on engineering and environmental planning, and geotechnical drilling to plan the location of mine facilities at the site. Plans are for ITH to have the feasibility study for the mine, an important step in its development, completed in the spring of 2013.

11/28/2012 - 11:47am