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Fort Knox findings.

Fort Knox Findings. The production of more than 4 million ounces of gold at the Fort Knox gold deposit 15 miles northeast of Fairbanks would be economically feasible over a 12- or 16-year project life, according to a recent prefeasibility study. The open-pit mine, on state-owned land leased by Fairbanks Gold Ltd. of Vancouver, British Columbia, would be the largest gold producer in Alaska and one of the largest in the United States, says a company spokesman.

It also would have the largest throughput of any gold milling operation in North America. Total gold production in Alaska last year was 232,000 ounces.

The independent prefeasibility study by Davy McKee indicates that conventional, comparatively inexpensive methods of ore extraction could be used effectively on the Fort Knox gold. Under one recovery option, 1 million ounces of gold would be produced in the first three years, with total production over a 16-year period at 4.1 million ounces. Total investment for this project would be $209 million. A larger-scale, alternative plan calls for production of 400,000 ounces of gold per year during the first three years, with total production over a 12-year period at 4.3 million ounces.

A Fairbanks Gold spokesman says that the project's economics are strong with gold selling at $350 per ounce. Development and operation of the mine would create hundreds of jobs in the area and would generate royalty and tax revenues for the state.

According to John Wood and Judd Peterson of the Alaska Division of Mining, the $1.5 million per year collected in state royalties during years when production was 250,000 ounces or more could swell fourfold once the mining license tax goes into effect in the mine's fourth year.

Wood notes that the Fort Knox claim has been under exploration since 1987, in an area that has seen extensive gold production since the early 1900s. "The people who have walked over Fort Knox's gold and didn't know it was there reads like a Who's Who of Miners in America," says Wood.
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Title Annotation:Fairbanks Gold Ltd. discovers gold in Fort Knox, Alaska
Publication:Alaska Business Monthly
Date:Jul 1, 1991
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