Teryl Resources Corp

Kinross' Fort Knox heap leach is key to making use of Kinross’ low grade output, and very useful to production from the Teryl/Kinross Gil Venture. Success at the heap leach makes the Gil more attractive for its better-grade ore, notwithstanding Kinross’ efforts to downplay it.

Below is an announcement of first gold from Kinross’ Fort Knox heap leach. For environmental and geotechnical reasons, it was not a foregone conclusion that the Alaska government would give them the ok for the heap leach, but Kinross stated that it would shut down Fort Knox if approval was not forthcoming, and after years of preparation it is in full operation, albeit not yet at normal full output.

The establishment of the heap leach is fortunate for Teryl, as it is integral to Kinross plans to make use of the Gil. Although Gil ore is high enough grade to send to the mill on its own, sending the Gil ore to the heap leach means being a lot less fussy about interleaved overburden, and picking and choosing the best rock, and use of the Gil ore allows the very lowest grade ore from Kinross' Fort Knox pit to be blended in and still be profitable to mine. Kinross embarked on the Fort Knox Expansion project in the 4th quarter of 2009 (see http://www.kinross.com/investor-centre/the-kinross-difference.aspx ), which will provide greater ore reserves although at a low grade. The heap leach offers high extraction rates and allows the lowest grade ore from the Fort Knox pit to be useful, and even moreso when mixed with the Gil. The Main Gil ore was tested for recovery and would be 90% extracted, a very good rate.

Kinross' Fort Knox heap leach has only been operating 3 months (4th quarter 2009) producing an expected 7,400 ounces; it will be interesting to see how much it produces in a full year and how it improves the Fort Knox economics. Production costs are only about $250/ton, just over half of Kinross’ average cost of about $450/oz. Kinross produced about 370,000 ounces of gold from the Fort Knox mine overall in 2009, out of 2.23 million ounces Kinross global production (final figures will likely be out in February 2010; the 2009 report is at
http://dnr.alaska.gov/mlw/mining/largemine/fortknox/pdf/fkann2008.pdf. ). Today’s news summary on 2009 Kinross production and expectations for 2010 is provided here:

http://money.cnn.com/news/newsfeeds/articles/marketwire/0577195.htm

The heap leach is very well placed for exploitation of the Gil - it is about 3 miles directly upstream from the Gil, closer than the existing Fort Knox pit and the Fort Knox mill. Construction of a Gil pit may likely start at All Gold Creek. The question might also be asked - if Kinross cannot exploit the Gil, would they have enough ore overall to bring to the heap leach until 2018, which is its projected life, or would the heap leach have to be shut down sooner?

Here is a November 2009 announcement on first gold on the heap leach: (full article at http://www.petroleumnews.com/pntruncate/696029652.shtml but it’s paid site):