FAIRBANKS — A planned gold mine in Livengood can’t break even at today’s gold prices, according to a report released Tuesday by the company planning the mine.
Current gold prices of about $1,340 per ounce of gold are far below the about break-even point of $1,500 per ounce, according to a feasibility report released by International Tower Hill Mines Ltd. (www.ithmines.com) on Tuesday.
With an initial price tag of $2.79 billion to build the mine about 80 miles northwest of Fairbanks, the mine would operate at a steep loss at today’s prices.
However, Tower Hills Vice President Tom Irwin, who oversaw the opening of Fort Knox Gold Mine, said there’s plenty of promise to the mine, which is forecasted to produce more than 8 million ounces of gold in its lifetime.
“We are tied to the price of gold, and at $1,500, we just barely break even,” he said. “This is a good project, but we’re not there today. Gold’s cyclical, and we’ll be there some day.”
Much of the high price tag is because of high energy prices, the need for a work camp and additional environmental protection measures, he said.
The feasibility study offers suggestions that could reduce operating costs and increase the yield.
Irwin believes gold prices likely will rebound and said the company will continue to work on permitting and engineering the mine.
“This is a real project at $1,800, in that range,” he said. “But what’s important is we’re not going to build this today, we’re still going to six months to a year talking with the agencies, and probably three years permitting. That’s when the decision to construct is made. These numbers strongly suggest that this is worth having in a portfolio.”
Contact staff writer Matt Buxton at 459-7544 and follow him on Twitter: @FDNMpolitics.