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Corporate 100--Fairbanks Gold Mining Inc. (Alaska Business Monthly's 2003).

Pioneer gold miner and explorer Felix Pedro would certainly be proud of a pair of gold mines that have risen up from some of the same rich ground he worked about a century ago.

He'd be impressed with the technology and innovation used to dig, mill and refine the gold, and with the way gold continues to enrich a local economy in the heart of the Great Land. Pedro founded Fairbanks as a gold rush city on the banks of the Chena River. Today, Fairbanks Gold Mining Inc. is putting plenty of wealth into the modern bank buildings of downtown Fairbanks, which lines the Chena River.

Two gold mines, Fort Knox and True North, make up Fairbanks Gold Mining Inc., which is owned by Toronto, Ontario-based Kinross Gold Corp., the world's seventh largest gold mining company.

FGMI boasts impressive numbers--and impressive trucks. In 2003, the company will process 51 million tons of ore, from which 408,000 ounces of gold will be recovered. Direct payroll is anticipated at $20.9 million, shared among 425 employees, with the total impact on the local economy figured to be $196 million.

At the same time, seven new ore trucks and four new haul trucks have been added to or replaced vehicles in the fleet in 2003 along with one new Hitachi EX 3600 shovel, which carries a sticker price of $3.7 million.

Klondike gold stampeders used basic technology--rockers, sluice boxes, pickaxes, gold pans, steam points--to recover gold that had been washed downstream in rivers dinosaurs drank from eons ago.

In recent times, gold miners have reworked tailings from that era, but FGMI's open-pit hard-rock mines are entirely different. In fact, gold miners of Pedro's day would not have recognized the lodes as having any value whatsoever, explained Lorna Shaw, community affairs director for FGMI. "The gold we're after is not visible, and without new technology and such a large-scale operation, it would be impossible to recover. Even 30 years ago, this couldn't be done."

"We're mining on a scale Felix Pedro never could have imagined," said FGMI general manager Rick Dye. Neither could Pedro have dreamed of gold being used in cell phones, microchips or for new medical technologies.

The mines consist of open pits where a gold-bearing rock is dug out with giant shovels and then sent through a milling process. Each ton of ore at Fort Knox yields just 0.245 ounces of gold. In gold rush days, placer gold was found in flakes or nuggets. The gold in the modem mine is microscopic.

Once the giant shovel lifts the ore, it's taken to a crusher, where it's reduced to 6 inches in size. From there, the ore drops onto a conveyor belt that transports it a half mile to the stockpile. From the stockpile, another conveyor belt moves the ore into the mill. Once in the mill building, it travels through a series of ball mills, where 8-inch and 5-inch steel grinding balls are used to reduce the ore to the size of beach sand.

Some of the fine ore heads to a modem-day sluice box, where the gold is naturally separated from the rock by gravity. Other bits of ore are mixed with chemicals that separate the gold from the non-gold-bearing rock so it can be melted down and poured into a bar of gold dore (pronounced doh rey), about 90 percent pure. The gold dore is then sent to a refinery for further processing to 99.99 percent purity required for legal trade on the international gold market.

FGMI is also exploring for new reserves. In 2002, additional resources were discovered that will extend the life of the Fort Knox Mine to 2010.

"We're always looking to extend the life of the mines, and we've just added two years," said Dye. "We plan to spend about $3.5 million on exploration this year."

One of the mines' greatest impacts on Fairbanks is in the jobs they have created. Wages are 70 percent above the borough average, according to a 2001 study by the McDowell Group. In addition to 425 direct jobs, the mine will create 510 indirect jobs in 2003.

Interestingly, FGMI has found another source of income--and another market for its gold--tourism.

Last season, the mine hosted 3,000 visitors, leading to four new jobs as well as gift shop sales. In addition, some 12,000 schoolchildren have visited the mine free of charge since 1995.

"Without additional construction, we have a $375 million tourist attraction. Until they see for themselves, visitors have no idea that the gold rush in Fairbanks continues," Shaw said.

At first, the mine hosted school groups, but impressed students and teachers wanted to bring friends and family to the mine to experience it as well. In 2003, a tourism program was created with guides and a gift shop featuring Fort Knox souvenirs.

"People are always impressed when they hold a genuine gold bar, worth $90,000," Shaw said. A small amount of gold is refined on site for use in genuine Fort Knox gold souvenirs.

The outlook for Fairbanks Gold Mining is bright. The discovery of new reserves, a steadily increasing gold price, a talented labor pool, and strong community support will guide the way to a golden future.
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Article Details
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Author:Schmitz, Richard F.
Publication:Alaska Business Monthly
Article Type:Company Profile
Geographic Code:1U9AK
Date:Apr 1, 2003
Previous Article:Corporate 100: Alaska USA Federal Credit Union. (Alaska Business Monthly's 2003 Corporate 100).
Next Article:Alaska's air carriers.

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