GVEA users may find gold in Fort Knox

Fairbanks Daily News Miner, 10/29/92
By Kate Ripley
Page B-1

Golden Valley Electric Association customers could see lower rates if the proposed Fort Knox gold mine on Gilmore Dome goes into production.

Representatives of GVEA and Fairbanks Gold Mining Inc., the developer of the proposed open-pit gold mine 15 miles northeast of town, discussed the mine's power needs before an audience of about 120 people at Schaible Auditorium on the University off Alaska Fairbanks campus Wednesday night.

GVEA currently has a surplus of generating capacity, so power purchases by Fort Knox will help spread the costs of maintaining and operating those generators, officials with the electric cooperative said.

Fairbanks currently uses only half the power Golden Valley has available with its 200-megawatt system. The Fort Knox mine would require 35 megawatts.

GVEA officials said they do not know exactly how much rates would be lowered should the mine open.

Fairbanks Gold, a subsidiary of Amax Gold Inc. of Colorado, hopes to win approval from various local, state and federal agencies by next year to begin mining 36,000 tons of ore per day by 1995.

Fairbanks Gold, meanwhile, would have to pay for the $8 million GVEA power line extension, officials said.

Steven Haagenson, GVEA's engineering services manager, said Golden Valley evaluated four possible routes for the lines.

GVEA's preferred route would run a power line from the Gold Hill substation near the Parks Highway to Goldstream Valley. The line would pass throught the Moose Creek drainage to the old Murphy Dome Road, and across the Elliott and Steese highways to the proposed mine are 15 miles northeast of Fairbanks.

Of 27 miles of new transmission line, 7 miles would cross undisturbed land in the Moose Creek drainage, said Greg Wyman, a senior engineer with the utility.

A power line already stretches along a ridge between the new Murphy Dome Road and the old Murphy Dome Road. But the line is too small to carry the electricity needed by the mine. Since the line will need to rebuilt anyway, the Moose Creek route would be cheaper because it would be more direct and require fewer corner poles.

Three other possible routes would take the line along the backside of Farmers Loop and through Fox, from Fort Wainwright up the Steese and from North Pole straight north. Sylvia Ward, of the Northern Alaska Environmental Center said the mine's power demand could force GVEA to fire oil-driven generators in North Pole more often.