FAIRBANKS -  Kinross Gold Corp. announced Tuesday that it will proceed with an expansion of its Fort Knox gold mine northeast of Fairbanks, extending the mine's life to 2030.

The company expects the expansion will produce 1.5 million gold equivalent ounces, a term that includes byproducts mined along with the gold. Kinross possessed mineral rights to 709 acres immediately west of the Fort Knox in December but could not exercise the rights until the land came into state ownership. 

The land, referred to as the Gilmore parcel, was transferred from the federal government to the state on Dec. 11.

 “With additional upside potential at Gilmore and beyond, Fort Knox is a significant asset in our portfolio located in an excellent mining jurisdiction," Kinross President and CEO J. Paul Rollinson stated in a Tuesday news release. "The Gilmore project and the addition of estimated mineral resources improves value and is expected to be a key contributor to the future growth of our company.” 

The expansion won't require much in new construction, the news release stated. Mining will be conducted using Fort Knox’s existing equipment and by bringing up equipment from other Kinross operations as needed for replacements. The initial capital investment cost is estimated to be about $100 million, according to the company.

 "The project’s low initial capital cost is expected to be funded by Fort Knox’s cash flow, helping preserve our strong balance sheet and financial flexibility," Rollinson stated. 

Additional exploratory drilling at the site is expected in 2019. The decision to proceed with the Gilmore project extends actual mining at Fort Knox by six years to 2027 and leaching, the process by which gold is extracted from ore, until 2030. 

Gov. Bill Walker issued a statement lauding the expansion and calling it the result of "years of state efforts" to get the land transferred from federal government.

 “We are excited to see the Fort Knox gold mine plan an extension onto newly state-owned land, potentially extending the life of the mine to 2030,” Walker said. “This is a significant development for Alaska’s economy and was made possible by our administration, federal agencies, and our congressional delegation cooperating to transfer these lands from federal ownership to state of Alaska ownership.” 

Fort Knox employs approximately 630 people. 

Contact Editor Rod Boyce at 459-7585. Follow him on Twitter: @FDNMeditor.