FAIRBANKS, Alaska (AP) — A Canada-based mining company is proceeding with a planned expansion of a gold mine northeast of Fairbanks.

Kinross Gold Corp. announced the decision Tuesday, saying it expects to produce 1.5 million gold equivalent ounces (42,500 kilograms) from the expansion of the Fort Knox gold mine, the Fairbanks Daily News-Miner reported .

A gold equivalent ounce includes byproducts mined with the precious metal.

The company acquired mineral rights to a more than 1-square-mile (2.6-square-kilometer) parcel next to its mine after the U.S. government transferred the land, referred to as the Gilmore parcel, to the state of Alaska in December.

"With additional upside potential at Gilmore and beyond, Fort Knox is a significant asset in our portfolio located in an excellent mining jurisdiction," said J. Paul Rollinson, the company's president and CEO. "The Gilmore project and the addition of estimated mineral resources improves value and is expected to be a key contributor to the future growth of our company."

The new mine is expected to use existing equipment, and the expansion won't require much new construction, the company said. The company estimated the initial capital investment to be about $100 million.

"The project's low initial capital cost is expected to be funded by Fort Knox's cash flow, helping preserve our strong balance sheet and financial flexibility," Rollinson said in a statement.

The company is planning additional exploratory drilling at the site next year. The expansion is expected to extend the life of the mine to 2030.

In a statement, Alaska Gov. Bill Walker said the expansion was made possible through "years of state efforts" to get the land transferred.

"This is a significant development for Alaska's economy and was made possible by our administration, federal agencies, and our congressional delegation cooperating to transfer these lands from federal ownership to state of Alaska ownership," Walker said.

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Information from: Fairbanks (Alaska) Daily News-Miner, http://www.newsminer.com