Fort Knox reaches commercial production

The Fort Knox mine in Alaska recently celebrated its first gold pour.

Amax Gold (AU-N) reports that the 36,000-ton-per-day mill has been approaching capacity since production began, and the company expects to reach full throughput levels by mid-year.

“Fort Knox is at the point at which we are satisfied with its sustainability,” says Amax President Scott Shellhaus. “The plant is running at above 90% capacity, and the deposit is conforming to our block models.” Situated northeast of Fairbanks, the operation experienced delays and cost overruns during its development. The company made several design changes and incurred additional expenses in the construction of the tailings facilities.

The total cost of development, however, is estimated at US$375 million (including capitalized interest) — roughly US$20 million below budget.

The mine is expected to produce 300,000 oz. gold in 1997 at a cash cost of US$220 per oz. Now that production has begun, the company will formulate exploration plans to replace reserves.