Even though the company runs its finances in Houston, Texas, president and CEO of the company, Rick Van Nieuwenhuyse, is based in Fairbanks. He joined the company in 2020, and shortly after, Contango Ore signed a Joint Venture Agreement with Kinross Gold to develop the Manh Choh mine near Tetlin. In his presentation to the Greater Fairbanks Chamber of Commerce, on Tuesday, Van Nieuwenhuyse said it was easy to partner with Kinross Gold, and important to get access to the Fort Knox mill.
“ We decided to do a business arrangement with Kinross, 'cause of Fort Knox and the great track record that has, has operated here. Plus, they had a really big mill that was hungry.”
He says taking advantage of the mill at Fort Knox north of Fairbanks saves the company about five years and 500 million dollars.
That saves a lot of time. To be able to have to permit our own mill and tailings facility, my guess, would take at least five years, um, and cost a lot of money, upwards of 500 million. Whereas using the facilities with infrastructure that's at Fort Knox, and that has been operating flawlessly for 25 years, I'd say, that's a huge advantage. It's a huge capital saving and a huge time saving.”
Van Nieuwenhuyse says over the five-year mine life about 1 million ounces of gold will come out of Manh Choh, and trucked to the mill north of Fairbanks.
“ It's a fairly robust project because of the grade. We're actually using an elevated cutoff grade, to pay for the transport of the ore up to highway. It costs money to do that -- roughly a gram and a half in rough numbers.”
A cutoff grade is the minimum grade calculated in order for a metal to be mined for a profit. It is a ratio of gold to ore.
“So we'll actually be delivering about eight gram per ton or to the mill, which is twice the original resource grade. So this is high grade stuff. Uh, just to put it in perspective, it's about 15 times the average at Fort Knox.”
Contango and Kinross have rights to 675,000 acres of Tetlin Tribal land to prospect for gold.
The Manh Choh project has received the federal permits needed for road construction and early winter work has already started.
“ At site, it's a pretty simple quarry operation. Two open pits, waste dump materials, adjacent on top of the hill. And then the temporary storage facility for any rock that is potentially acid-generating or metal-leaching, which will go back in the bottom of the pit at the end of the mine life. So, there's a fair amount of cost in rehandling that material at the end of the mine life, but it is submerged under water and keeps it the way it was before we started -- before we mined it.”
In addition to the acreage on the Tetlin Tribe’s land, Contango owns the mineral rights to 137,000 acres of Alaska state mining claims in the Tintina Gold Belt which is just up the Alaska Highway from the tribal land, and will likely be explored for gold mining in the coming years.
“ I think we'll have a lot of success in exploring these lands over the next 20, 30 years, and this will be great for Fort Knox and the mine, great for the tribe, great for Tok.
The Company also owns the rights to the Lucky Shot, Coleman and War Baby mines, and approximately 16,600 acres of mining claims located in the Willow Mining District about 75 miles north of Anchorage, Alaska.
