Technical Report for the Fort Knox Mine - Kinross Gold

Fort Knox Mine Technical Report23.7 Capital and Operating Cost EstimatesA detailed 2008 and LOM budget has been developed for the mine based on an actualoperating cost history and projected future performance. Mining costs are similar tomost mines of this size and equipment age and are presented in Table 23-1. The capitalspending is shown for the LOM in Table 23-2.Table 23-1: Estimated Operating Costs – Fort KnoxTime Period 2008 Budget LOM PlanKtons Mined 49,723 305,171Ktons Milled 15,291 103,632Ktons to Leach Pad 162,037Mining ($/ton) (incl. Maintenance) $1.41 $1.26Milling ($/ton) $4.13 $4.08Leaching ($/ton) $1.08General and Administrative ($ per recoverable oz.) $75.57 $69.05Table 23-2: Fort Knox Life of Mine Capital SpendingCapital Total 2008 2009 2010 2011 2012 2013 2014 2015Mine/MEM/Mill/Sustain $193,447 $65,424 $41,341 $28,109 $34,158 $24,181 $235 $0 $0Heap Leach $101,116 $23,080 $42,979 $0 $11,477 $0 $10,476 $0 $13,104Total $294,563 $88,504 $84,320 $28,109 $45,635 $24,181 $10,711 $0 $13,104Budgeted costs for 2008 reflect mining rates = associated costs that assume no TrueNorth material being used to supplement the Fort Knox mill feed. In 2014, pit mining willhave ceased but stockpile material is expected to continue to be hauled to the leachpad.23.8 Economic AnalysesA profitability estimate was calculated for each mining area that was included in the FortKnox reserves. Revenue was determined by using the mill grade-recovery relationshipand a gold price of US $550 per ounce. Operating costs are based on the expensesdiscussed above plus added expenditures for capital items, such as tailings capacity,reclamation and equipment needed to sustain operations. The discounted cash flowanalysis indicates that the mine generates a positive cash flow. The details of the78