Kinross to Acquire 70 Percent Interest in the High-Quality Peak Gold Project in Alaska

Peak Gold Project Overview

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.

Based on Peak Gold’s 2018 preliminary economic assessment, the project has estimated measured and indicated mineral resources of approximately 1.2 million Au oz. with a grade of 4.1 g/t, and an estimated inferred resource of 116,000 Au oz. with a grade of 2.7 g/t.

Kinross has completed an internal analysis of the project, including building a preliminary block model and mine plan. Kinross’ preliminary mine plan includes crushing ore at the open pit project and trucking the material to Fort Knox’s mill for processing. By utilizing Fort Knox’s existing infrastructure, the mine plan does not require the construction of a mill or tailings facilities at the project site. Kinross expects to receive a management fee and toll mill Contango’s 30 percent of ore mined.

Kinross expects to blend the project’s higher grade ore with Fort Knox’s lower grade ore to reduce Fort Knox’s average life of mine all-in sustaining costs by approximately $70 per Au eq. oz. and extend the mill’s operating life. Extending mill operation is expected to increase recoveries at Fort Knox, as displaced ore that was projected to be placed on the heap leach pads will instead be processed at the mill.

Kinross’ preliminary estimates for the Peak Gold project (on a 100 percent basis), using a $1,200 ounce gold price, include:

• A mine life of 4.5 years, commencing in 2024;
• Total life of mine production of 1 million recovered Au eq. oz. at average mining grades of approximately 6 g/t;
• All-in sustaining costs2 in the range of $750 per Au eq. oz., and;
• Initial project capital expenditures of $110 million.

Kinross 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.

Kinross has completed substantial due diligence at the project, conducting site visits in 2019. The company has also held productive meetings with leaders of the Village of Tetlin, who have indicated their support for the project development plan. Kinross also plans to rename the project in consultation with the Village of Tetlin and looks forward to a productive and mutually beneficial partnership with the community.

“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.”

Kinross’ Fort Knox mine, located near Fairbanks, has an excellent health and safety record and a long, successful history of responsible mining and environmental stewardship. In 2019, the National Mining Association recognized Fort Knox’s safety performance with the Sentinels of Safety Award, the most prestigious safety award in the United States.

Fort Knox has strong relationships with local government and host communities and generates significant value for the state economy. The mine contributed approximately $300 million to Alaska’s economy in 2019 through procurement, taxes, wages, community programs, and donations, providing meaningful livelihoods for employees, opportunities for local suppliers, and support to approximately 90 Alaska non-profits. Fort Knox operations supported 1,150 jobs in the Fairbanks North Star Borough in 2019, including 650 direct jobs with the mine, and conducted business with 350 Alaskan vendors.

Fort Knox’s commitment to environmental stewardship is exemplified by its 27-year partnership with the Alaska Department of Fish and Game in managing a major environment restoration project in the Fish Creek valley. The project successfully restored 1.5 miles the creek and neighbouring wetlands, safeguarding a 175-acre freshwater reservoir that enhanced the fish habitat. Fort Knox also completed reclamation of its nearby True North deposit in 2015 and recently returned the land back to Alaska for future public use.