The Latest from McKinley Gold Mine — 2024 Summary
Message from the McKinley Mine Project
Since its inception in 2018, the McKinley Project has reached a critical milestone as it approaches the end of 2024. During an on-site inspection conducted in late November 2024, the project’s progress was thoroughly reviewed, and final adjustments were made to the mining plan for the upcoming year. The inspection confirmed that the project is steadily advancing, with all preparations nearing completion for full-scale mining operations to begin in 2025.
Project Progress: October–December 2024
Significant progress was made in Q4 2024 to prepare for full-scale mining operations. A key achievement was the completion of trailer house installations near the mine access road. These facilities will serve as residential quarters for core management personnl, enabling them to oversee McKinley’s mining operations 24/7. KMS holds high expectations for this project, decided to relocate and reside near the site.
Essential drilling equipment was also delivered on schedule, ensuring steady progress in preparing machinery and infrastructure. Additionally, a pivotal strategic decision was made to shift the mining method from upper-level tunnel mining to mechanized mining from lower-level tunnels. This change was driven by rising material costs, increased labor expenses, and surging demand for skilled miners due to the recent spike in gold prices.
Technical Features of the Mining Method
After extensive analysis, the McKinley Project has adopted a bottom-to-top mining method. The previously considered top-to-bottom approach, while requiring lower initial investment, posed challenges in mechanizing excavation and ore transport, leading to higher labor costs. In contrast, the bottom-to-top method necessitates upfront investment in machinery but allows for mechanization across most processes — from drilling to ore transport. This approach is expected to reduce long-term operational costs and improve efficiency.
Characteristics of Gold Ore and Extraction Process
Understanding the physical properties of gold ore is critical. One ton of ore roughly forms a 70 cm³ cube. At the McKinley Mine, this volume yields 0.4 ounces (approx. 12 grams) of gold, equivalent to 12 pieces the size of a little fingernail.
Gold is primarily found adhering to pyrite, a gold-colored mineral. This unique characteristic makes theft by ordinary miners virtually impossible, distinguishing it from placer gold mining and necessitating a complex extraction process.
The project will initially employ Gravity Separation, a low-cost method capable of extracting 85% of the gold from the ore. This rate is specific to McKinley and may vary based on geological conditions.
As the project scales, Flotation will be introduced to increase extraction efficiency to 97%. Residual minerals from gravity separation will be stored for subsequent processing. This phased approach ensures continuous improvement in profitability.
Efficiency in extraction directly impacts the project’s economic viability. After primary on-site processing, ore will be transported to smelters for further refinement, with integrated planning essential to the project’s success.
McKinley Project’s Gold Content Potential
Recent geological surveys revealed that the project’s average gold content is 0.4 oz/ton, far exceeding initial estimates of 0.13–0.2 oz/ton. This positions McKinley as an exceptionally high-grade deposit globally.
For context, Japan’s largest gold mine, the Hishikari Mine, has a grade of 0.2 oz/ton, while Nevada’s major mines (producing 2.2 million ounces annually) average 0.35 oz/ton. McKinley’s reserves are now estimated to be over double the initial projection of 55,000 ounces, suggesting potential expansion from a small-scale 4–5 year operation to a mid-scale mine with a 10-year lifespan. The gold-bearing zone is also believed to extend into adjacent mines. Eric from KMS’s decision to reside on-site underscores his confidence in this high-grade deposit.
Updated Schedule
A cautious, phased approach guides the mining schedule:
- December 2024–March 2025: Focus on establishing mining techniques and operational expertise. Timelines may accelerate once processes are stabilized.
- April 2025: Transition to small-scale development for revenue generation.
- September 2025: Target ¥150 million/month (USD 1 million) profit through mid-scale operations.
Production targets:
- Small-scale: 50 tons/day
- Mid-scale: 100–200 tons/day
- Full-scale: 300 tons/day
Updated Funding Plan
The shift to bottom-to-top mining requires significant upfront investment in machinery. Additionally, securing working capital is critical due to the time lag between extraction and revenue realization. To address this, additional capital originally planned for late 2025–2026 will be expedited.
2024 Summary
2024 was a year of challenges and opportunities. A historic snowfall in Idaho delayed the project by six months, but soaring gold prices improved its economic outlook. However, industry-wide demand surges caused bottlenecks in testing capacity and labor shortages. KMS’s expertise and strategic shift in mining methods effectively mitigated these issues.
Message for 2025
2025 will mark a transformative year for the McKinley Project. With the discovery of high-grade deposits, efficient mining methods, and scalable operations, we are poised to deliver significant value to investors. Initial projections of a 4–5 year timeline may extend into a larger, long-term venture, reflecting enhanced value creation.
As we transition from preparation to execution, we remain committed to maximizing the project’s potential and exceeding stakeholder expectations.
