Exploring Fort Knox.

• Author: Martin, Ingrid
• Position: Includes related article - Special Section: Mining's Rough Ride

A preliminary feasibility study suggests that there may be enough gold on Gilmore Dome, near Fairbanks, to justify building one of the nation's largest open pit mines. According to the study, the Fort Knox deposit could yield as much as 4.3 million ounces of gold over a 12-year period.

Additional studies and analysis will be necessary before Fairbanks Gold can begin development of a $100 million mine at the site. And ultimately, it may take the experience and resources of a much bigger company than Fairbanks Gold to tackle the job.

Based on existing data, Fairbanks Gold anticipates that building the eine would entail digging a pit 1,000 feet deep and nearly a mile wide. The effort could create as many as 600 construction jobs for almost two years. At the height of operations, when the mine becomes fully productive, it could employ 400 people.

Fairbanks Gold Ltd., a Canadian company based in Vancouver, British Columbia, was founded four years ago by Eric Friedland, 28, a graduate of the Colorado School of Mines. Exploration at the Fort Knox project has been conducted as a joint venture between Fairbanks Gold Ltd., which holds a 51 percent controlling interest and acts as project operator, and Ventures Trident Ltd. of Colorado.

In 1989, Fairbanks Gold Ltd. began work to explore a 2,700-by-1,600-foot area on Gilmore Dome. Samples taken last summer indicated gold in an area as large as 5,000 feet by 1,700 feet. Early tests suggested mineralization of as much as .04 ounces of gold per ton of one, and the company predicted that the deposit contained about 4 million ounces of gold.

John Wood, northern regional manager for the state Division of Mining, notes that the Fort Knox project so far appears to be economically viable. "There's a tremendous ore body out there," he says. "The grade may be marginal, but they're attempting to define it better, and it may turn out to be a highly profitable operation."

"Marginal" means the amount of gold per ton of ore makes the economics of mining the ore questionable. But in the mine's favor, the gold appears to be close to the surface and a milling operation might allow the project's operators to recover gold profitably. The mine also is close to the city of Fairbanks, which means lower operating costs.

Wood points out that Fort Knox could serve as a new geological model. "They found gold where conventional wisdom says you shouldn't find it," he says.

"This gold, rather than occurring in gold quartz veins...