Donlin creek gold deposit joins exclusive club: This find ranks as the 22nd largest gold deposit in the world.

• Author: Freeman, Curtis J.
• Position: Brief Article - Statistical Data Included

In late January, the world's gold mining industry welcomed a new member to one of its most exclusive clubs--a club consisting only of gold deposits with reserves in excess of 20 million troy ounces of gold. That new club member was the Donlin Creek deposit located on Calista Corp. lands about 44 miles northeast of Aniak upriver from Bethel.

The announcement that Donlin Creek has joined the big leagues was made by NovaGold Resources Inc., a Canadian junior mining company that acquired an option in early 2001 to earn a 70 percent interest in the deposit from mining giant Placer Dome. NovaGold must spend $10 million within 10 years to earn its interest.

NovaGold has already completed $3 million toward its earn-in and plans to complete the remainder of its expenditures over the next year. Once NovaGold is vested at 70 percent, Placer Dome would have the option to remain as a contributing 30 percent partner, convert its interest to a 5 percent net proceeds interest or earn back a 70 percent interest in the venture by spending three times what NovaGold has expended on the project at the time the back-in is elected. In the latter case, they also must conduct a feasibility study and make a decision to mine at a production of not less than 600,000 ounces per year.

Unlike Nome, Fairbanks or Juneau, Donlin Creek does not come immediately to mind when talk turns to large Alaska gold districts. In fact, only 30,000 ounces of placer gold have been recovered from the area since gold was first discovered in the gravels of Donlin Creek in 1909.

Initial discoveries relating to the source of this gold took place in the early 1970s as part of Calista Corp.'s land selection process as mandated by the Alaska Native Claims Settlement Act. Small amounts of work were completed on the property during the next 20 years, but it wasn't until Placer Dome geologists visited the property and reviewed the data in 1994 that things began to happen. Between 1995 and 2000, Placer Dome completed extensive drilling, trenching and metallurgical studies on the property and increased resources to nearly 13 million ounces of gold. By the end of 2000, the property had received over 400,000 feet of drilling and some $37 million had been expended on it.

The low gold prices and low average grade of the deposit (2.7 grams of gold per tonne) prompted Placer Dome to look for a partner to share the exploration and development risk at Donlin Creek. As...