Donlin Gold Project feasibility: new study under way by Barrick Gold and NovaGold.

• Author: Yuille, Brigitte
• Position: SPECIAL SECTION: MINING

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The completion of a revised study that determines whether the parent companies of the world's largest undeveloped gold deposit will move forward or not is expected by the end of the year. The Donlin Gold Project, formerly the Donlin Creek Project, is currently under review by two publicly traded, Canadian mining companies, NovaGold Resources Inc. and the Barrick Gold Corp. If an agreement is made to move forward, Donlin Gold will proceed with the State and federal mine permitting process to operate.

The project is located in the upper Kuskokwim River Valley in Southwestern Alaska. It's a large-scale open-pit mine that uses a conventional truck and shovel operation, and uses "flotation, pressure oxidation of the concentrates followed by conventional leaching to recover the gold," said Greg Lang, regional president of Barrick's North America business unit, at the September Investor Day presentation. Donlin Gold is expected to produce annually 1.3 million ounces of gold during its more than 25-year mine life.

Project plans include a power generation plant, water treatment plant, access road, housing, two ports, a natural gas pipeline and a 5,000-foot airstrip. The exploration potential at the site is high, added Lang, "and several areas have been identified, which have the potential to extend the mine life. The deposit is open to the north and east and is limited only by the current drilling."

All aspects of the project, with input from the parent companies, are overseen by Donlin Creek LLC, which changed its name to Donlin Gold in July. NovaGold Resources Inc., located in Vancouver, British Columbia, Canada, and Barrick Gold Corp., the largest gold mining company in the world, based in Toronto, Canada, both equally own the enterprise, 50/50. The partnership arose in a negotiated settlement to resolve contractual disputes and lawsuits.

FEASIBILITY STUDY

Donlin Gold completed a feasibility study in 2009. An array of heavy machinery at the site is expected to require 127 megawatts of electricity, it claimed in its recent project update. Power costs represent about 25 percent of the projected total operating costs at Donlin Gold under the 2009 feasibility study, according to a NovaGold press release, and the company began exploring ways to cut the operating costs.

"We looked at everything from running a power line to the sites from the Rail Belt enterprise; we looked at burning peat; we looked at wind generation; we looked at even nuclear, every option that...