It seems there has been a lot of bad news for mines in Alaska lately. Here's one seemingly bright spot.

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Fairbanks-area gold mine sees growth ahead

The Associated Press

Published: May 20th, 2009 09:30 PM
Last Modified: May 20th, 2009 09:32 PM

FAIRBANKS -- The Fort Knox Mine outside Fairbanks is planning major exploration and expansion in 2009 despite the woes of the economy, according to the mine general manager.

Larry Radford told the Greater Fairbanks Chamber of Commerce on Tuesday that the gold mine is hiring about five heavy equipment operators per month and carrying through with salary increases.

"We're going a bit counter-trend from the rest of the world," he said.

Despite the global recession, the price of gold has remained relatively high. The spot price on the New York Mercantile Exchange on Tuesday was $926 an ounce. Last year the price averaged $871 an ounce, and a year earlier the average price was $697.

The holding of Kinross Gold Corp. plans to spend about $10 million this year on exploration. Most will be centered at Fort Knox, although some work is anticipated at other sites in interior and southwest Alaska, Radford said.

Digging in earnest at Fort Knox began 13 years ago and company official estimated a mine life span of a decade. Recent land exchanges and successful permitting have extended that estimate through 2015, and Radford said he expected new exploration to add additional years.

"We've had great success drilling off to the west and extending the mine life," Radford said. "We're here for the long term, and we're making that happen through great investment."

The mine employs 500.

The expansion has added high-ticket items to the mine equipment inventory, including a multimillion dollar Hitachi shovel and new 240-ton haul trucks with tires that cost about $30,000 apiece.

Managers have commissioned a new, larger heap-leach facility to separate carbon from rock and strip gold from the carbon. They also have invested in a $1 million simulator to train new employees in operating haul trucks, which stand about two stories off the ground.

Radford said mine managers are tracking progress closely at Livengood, where junior exploration company International Tower Hills has struck gold.

A future partnership to develop the property is a possibility, he said.