Wed, Oct 22, 2014, 11:12 PM EDT - U.S. Markets closed

Recent

% | $
Quotes you view appear here for quick access.

Kinross Gold Corporation Message Board

  • ckmb54 ckmb54 Apr 15, 2006 10:06 AM Flag

    FORT KNOX's value drops

    Gold mine's value drops
    FORT KNOX: Rising commodity prices cause firm to restate asset.
    By PAULA DOBBYNAnchorage Daily News
    Published: April 15, 2006
    Last Modified: April 15, 2006 at 02:38 AM
    Alaska's largest gold mine has shrunk dramatically in value.
    Kinross Gold Corp., owner of the Fort Knox Mine near Fairbanks, wrote down the open-pit mine's book value by $142 million last year.
    Company executives said higher operating costs, mostly due to rising fuel and electricity prices, forced it to move two satellite deposits, True North and Gil, from reserve to resource status. That means the company has no plans to mine them anytime soon.Lower-than-expected gold recovery from True North also was a factor, according to Kinross.Toronto-based Kinross also formally dropped plans to mine the Ryan Lode deposit near Ester, a Fairbanks suburb. That also shrank the value of Fort Knox as a whole.Because of these decisions, Kinross lowered Fort Knox's book value to $113 million in 2005.
    The write-down hit Kinross' bottom line hard. The company ended the year with a $216 million loss, some two-thirds of that because of Fort Knox. Kinross chief executive Tye Burt told analysts last month that he still considers Fort Knox a core asset and future revenue generator for the company. But there's no doubt that Fort Knox is considered a "mature" mine, meaning it's nearing the end of its life. Production began in 1996 and is expected to wrap up in 2010 or 2011, said Tracey Thom, head of investor relations. Processing of ore stockpiles around Fort Knox could extend the mine's life a couple of years beyond that, said Dan Snodgrass, operations manager at Fort Knox.Exploration might uncover new reserves both within the open pit and elsewhere in the Fairbanks mining district, Thom said.
    "We would love to keep Fort Knox running," she said.
    The cost of operating Fort Knox has jumped significantly.
    "Since 2002, power has increased 61 percent, fuel has increased 117 percent and steel has increased 84 percent," said spokeswoman Lorna Shaw.To bring down costs, Fort Knox is planning to start heap leaching some of its lower grade ore.Instead of running it through the giant, electricity-powered mill that crushes the rock into sand, operators plan to place some of the ore on a lined pad covering some 310 acres, and drizzle a cyanide solution over it to leach out the gold. Recovery rates are lower with heap leaching but it's cheaper than milling, said Delbert Parr, environmental services manager at Fort Knox.Mine executives plan to apply for heap leach permits soon, Shaw said. Fort Knox is forecast to produce 311,379 ounces this year, down from 329,320 ounces last year.
    In 2001, its highest production year, Fort Knox yielded 411,220 ounces. It has declined every year since.http://www.adn.com/money/story/7628911p-7540518c.html

 
KGC
2.78-0.12(-4.14%)Oct 22 4:00 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.
NXP Semiconductors NV
NasdaqGSWed, Oct 22, 2014 4:00 PM EDT
Herbalife Ltd.
NYSEWed, Oct 22, 2014 4:00 PM EDT