While the in-pit drilling program, budgeted for about $8 million this year, will make up the bulk of Kinross exploration spending in Alaska, about $2.5 million will go toward other exploration targets outside of the Fort Knox pit, according to Arne Bakke, chief exploration geologist at Fort Knox.

Crews work on the Fort Knox heap leach. The $103 million project will help extend the gold mine's life to 2018, and Fort Knox owner Kinross Gold plans to spend more than $10 million this year to try to expand that timeline. Photo/Patricia Liles/For the Journal

"We have a variety of targets, from early stage to definition drilling next to the mine along the Fort Knox trend," Bakke said. "We're evaluating other properties around Alaska, both early state and advance properties, and we're interested in any opportunities across the state."

The $10 million-plus exploration spending in Alaska is similar to last year's budget, he said, and an increase over annual spending in the recent past.

The increased exploration activity could extend the life of the Fort Knox mine and mill complex, which has been producing gold since 1996. The mine already has surpassed its original 12-year mine life and has increased employment, from the 250 people that began work at Fort Knox in 1996, to the 455 people employed at the end of 2008.

A $103.6 million heap leach project, expected to be completed later this year, has already helped to extend the Fort Knox mine life to 2018, according to Kinross. Approximately 78 percent of the leach pad was completed during the 2008 construction season, the company said in its 2009 first quarter report released May 5.

Inclement weather last September caused construction crews to halt work laying protective liner on the bottom of the large bowl constructed for the heap leach gold processing facility.

Crews should resume the work in early June, according to Delbert Parr, environmental manager at Fort Knox.

By early July, the company expected to have enough of the in-heap storage pond completed to begin placement of ore in the bottom of the pond, he said. The company planned to flood the ore placed in the pond in September with process solution, and begin circulating solutions in September.

Additional clearing of 100 acres began in April, Parr said, which makes the total area cleared for the heap leach nearly 200 acres.

The new heap leach processing project, combined with a $193 million Phase 7 pit expansion that began last October, provides the current mine life at Fort Knox that will conclude in 2018. While mine crews continue development work on the current pit expansion, another extension of the existing open-pit mine is being contemplated.

Fort Knox is undertaking a 95,000-foot drilling program in 2009 aimed at further expanding reserves and extending mine life, including drilling in support of a potential Phase 8 pit expansion, Kinross said in its first quarter report.

The drilling work is targeting additional reserve ounces in the northwest sector of the pit, Kinross said, as well as deep Phase 6 and Phase 7 extensions on the southwest side of the pit and in the south wall, the company said.

That drilling work in and next to the Fort Knox pit began in February, Bakke said, with a combination of reverse circulation and diamond core samples being collected. Between three and four drill rigs are working on that in-pit drilling program, he said.

Additionally, drill crews plan to complete about 16,000 feet of drill samples at the nearby Gil prospect, located about five miles to the east of the Fort Knox pit. Gil is located on mining claims held by Kinross, operator with an 80 percent interest, and junior exploration company Teryl Resources, with 20 percent.

Teryl announced in mid-March that $1.64 million will be spend on Gil this year, with work to include a ground magnetometer survey concentrating on Sourdough Ridge, delineation of mineralized zones and establishing a resource base at Sourdough, and work to expand the resource at North Gil.

In addition, Bakke's exploration group plans to complete another 10,000 feet of drilling work in 2009, spread over a variety of prospects. Those include Steamboat, located between the now-shuttered satellite mine called True North and Fort Knox, and Blackshell, a helicopter-accessible prospect located southeast of Chena Hot Springs, near Blackshell Creek that drains into the East Fork of the Chena River.

"It's a grassroots prospect, with geology similar to Fort Knox," Bakke said. "It's in a belt of rocks showing similar characteristics as Fort Knox. We've always wanted to do work out there and saw open ground and staked it, so it's truly generative."

During 2008, Kinross also participated in grassroots exploration in the Kuskokwim region with junior prospector Full Metal Minerals. The work is on claims not far from the Donlin Creek gold property, Bakke said.