Kinross Gold buys majority stake in gold project near Tok
FAIRBANKS, Alaska (KTVF) - Kinross Gold Corporation announced on Wednesday that they had entered into agreements to purchase a 70% stake in the Peak Gold project, located near Tok, Alaska. The purchase will end up costing Kinross $93.7 million. As the majority stakeholder Kinross will maintain authority to construct and operate the project with Contango retaining a non-operating minority stake of 30%.
The Peak Gold project is a relatively high-grade deposit with a large estimated resource base that is expected to commence production in 2024 as a low-cost, open-pit mine. The project, which is located approximately 250 miles southeast of the Company’s Fort Knox mine, is a low-risk “tuck-in” to supplement Kinross' existing Alaska operation. Kinross plans to process Peak Gold ore at Fort Knox and utilize the existing mill and infrastructure to benefit both the project and the mine.
“The relatively high-grade, low-cost Peak Gold project is an excellent addition to our portfolio, as it allows us to leverage our existing mill and infrastructure at Fort Knox and strengthens our medium-term production and cash flow profile. In today’s gold price environment, Peak Gold is an attractive, high-margin project that is expected to generate robust returns,” said J. Paul Rollinson, Kinross Gold President and CEO. “The project is also expected to add to our strong record of socio-economic contributions to our host communities in Alaska, one of the top mining jurisdictions in the world.”
Located near Tok, Alaska, the Peak Gold project is accessible by road and is near the Alaska Highway. The project is situated within the 675,000-acre mineral lease with the Village of Tetlin and is a high-grade skarn deposit that extends to surface.
“We look forward to the safe and responsible development of the project and the positive benefits it is expected to generate for our community,” said Village of Tetlin Chief Michael Sam. “We also look forward to further building a relationship with Kinross, a company with a strong track record in Alaska, and are pleased to see further investment plans for the project.”
The Company plans to commence an infill, geotechnical and metallurgical drilling program to further develop the existing resource base. Kinross is also planning to focus on targets across the larger land package identified by previous sampling, mapping and geophysics. Initial permitting activities are expected to commence in parallel with the drilling program. Kinross expects to complete permitting and a feasibility study by the end of 2022. Project construction is expected to take approximately one year, with production planned to commence in 2024.
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