NovaGold, Barrick Decide on Donlin Creek Project Design



Project camp site and landing strip at the Donlin Creek gold property in southwest Alaska. Owners NovaGold
and Barrick Gold have decided on major design elements and plan to begin permitting for the mine in 2009.
(Photo courtesy NovaGold)
NovaGold reported on June 10, 2008, that Donlin Creek LLC, owned 50% each by NovaGold and Barrick Gold, had identified a preferred design for the Donlin Creek gold project in southwest Alaska. The companies plan to complete and approve a feasibility study by the first quarter of 2009. Current expectations are that Donlin Creek will have a throughput design of about 50,000 mt/d and will use on-site diesel and wind cogeneration for power. Using this design, Donlin Creek could operate for 25 to 30 years and potentially produce 1 million to 1.5 million oz/y of gold. Permitting would start in early 2009, with construction targeted for 2012.

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.


As featured in Womp 08 Vol 6 - www.womp-int.com