FAIRBANKS -- The owner of the Fort Knox gold mine north of Fairbanks has agreed to combine operations with another company in the Porcupine district of Ontario, Canada.
Kinross Gold Corp., owner of Fort Knox, and Placer Dome will combine mines and mills. Capital and operating costs also will be split.
Placer Dome will own a 51 percent stake in the Porcupine Area Joint Venture. Kinross will own a 49 percent share.
Placer Dome will contribute its Dome mine and mill. Kinross will contribute the Hoyle Pond, Parnour and Nighthawk Lake mines and the Bell Creek mill.
"This will achieve the ultimate synergies for our Timmins area assets that Kinross has been striving to attain over the past several years," said Robert Buchan, Kinross chairman.
Buchan said the company wants to lower its operating costs and economically process a Parnour pit and other resources while exploring and developing other projects near Timmins in southeast Ontario.
Jay Taylor, president of Placer Dome, said the joint venture between the two companies should prove financially beneficial.
"The Dome mine's 13,000 tons-per-day mill combined with Kinross' large, highly prospective land package will maximize the returns to the shareholders of both partners," said Taylor.
As of Dec. 31, Kinross' reserves in the Porcupine area totaled 1.1 million ounces, while Placer Dome's reserves in the area totaled 1.3 million ounces.
The venture is subject to financial research by both sides and approval of each company's board of directors.
Placer Dome last summer signed an agreement with NovaGold to grant a 70 percent interest in its Donlin Creek prospect, 60 miles northeast of Aniak. Placer Dome had spent five years exploring in the area. NovaGold announced in January that Donlin Creek holds at least 23 million ounces of gold.
