NovaGold, Barrick Decide on Donlin Creek Project Design
Donlin Creek LLC considered building a power line for the project. However, detailed scoping studies indicated that the increased construction time as well as permitting and business risks associated with this option outweighed its economic incentives.
NovaGold also announced that recently updated gold resources at Donlin Creek now total 31.7 million oz measured and indicated plus 4.2 million oz inferred, representing increases of 8% and 20%, respectively, from previous estimates released in February 2008. Resources are constrained within a Lerchs-Grossman (LG) open-pit shell, using the long-term metal price assumption of $750/oz of gold. Other assumptions for the LG shell included pit slopes variable by sector and pit area; mining costs variable with depth but averaging $1.80/t mined; process cost calculated as the percent sulphur grade x $2.65 + $12.44; and general and administrative costs, gold selling costs, and sustaining capital reflected on a per-mt basis. Based on metallurgical testing, average gold recovery is assumed to be 90%. A variable cutoff grade averaging 0.87 g/mt gold is based on recent estimates of mining costs, processing costs (dependent upon sulphur content), selling costs, and royalties.