Donlin Gold notches wins in 2018, but still far from finish line

  • Acting Bureau of Land Management Alaska Director Karen Mouritsen signs permit documents for the proposed Donlin gold mine alongside Interior Department Assistant Secretary of Land and Minerals Management Joe Balash, center, and Donlin Gold General Manager Andy Cole on Aug. 13 at U.S. Army Corps of Engineers Alaska District headquarters on Joint Base Elmendorf-Richardson in Anchorage. (Photo/Elwood Brehmer/AJOC)

This has been a big year for those behind the Donlin Gold project.

They received a favorable record of decision from the U.S. Army Corps of Engineers and the Bureau of Land Management Aug. 13 — a first-of-its-kind joint decision for the project’s environmental impact statement and right-of-way approval for a natural gas pipeline across federal lands.

Later that month the Alaska Department of Fish and Game approved a slew of Title 16 permits for development activity in salmon habitat.

Donlin Gold was also one of the primary players in the successful effort to defeat Ballot Measure 1, which would have greatly increased the state’s requirements for obtaining a Title 16 permit and would have seriously challenged development of the mine, especially under its current plan.

However, there are still many unknowns surrounding the development and plenty left to do, according to Donlin Gold spokesman Kurt Parkan.

A 50-50 joint venture between Canadian companies Barrick Gold Corp., the world’s largest gold producer, and NovaGold, Donlin Gold LLC has spent roughly $500 million exploring and permitting the open-pit gold project over nearly 25 years, Parkan told a gathering at the Alaska Miners Association conference Nov. 8.

Still, that money is not factored into the $6.7 billion estimated construction cost calculated during a 2011 economic study of the project. Parkan said in an interview that the seven-year-old figure is what the company continues to work from; the focus now is on bringing it down.

As a result, Donlin’s owners are resistant to putting a definitive timeline on the project, according to Parkan. And the price of gold plays a big role in that, too.

It’s safe to say, however, that current prices of about $1,200 per ounce will not suffice.

“They hesitate to really reveal what they feel is the trigger point because if we hit it that still may not be the time to pull the trigger,” he said while emphasizing the company is focused on the process of the project and letting extraneous factors settle themselves.

“It’s not going anywhere. The price of gold is going to go up, it’s just a matter of when and how much,” Parkan added. “This project will be developed at some point.”

As envisioned, Donlin would be one of the world’s largest open-pit gold mines, extracting about 33 million ounces of gold over an initial 27-year life.The company is open to partnerships to help build out much of its support infrastructure, which could help mitigate some of the high fixed costs the project faces, he said.

“If somebody wants to finance the pipeline, we’ll buy the gas. If somebody wants to build the power plant, we’ll buy the power,” Parkan said.

The 14-inch, 315-mile natural gas pipeline the company plans to build from Cook Inlet to provide feedstock for the 220-megawatt power plant at the Southwest Alaska mine site has been estimated to cost about $1 billion.

Additionally, the project will require about 30 miles of new roads and two new ports.

Parkan also noted that technical changes might need to be made to the current design in order to secure the remaining necessary permits, which could add cost as well.

While Donlin has its federal Clean Water Act Section 404 wetlands permit, the BLM right-of-way and a special permit from the Pipeline and Hazardous Materials Safety Administration, it still needs state approvals that will take several more years to acquire.

Parkan said Donlin is waiting on for rulings on its reclamation and closure plan and integrated waste management permit yet this year; the public comment periods for both are closed. In the coming years the company will look to get its pipeline right-of-way and other land authorizations from the State of Alaska as well as its water rights and dam safety permits.

The tailings dam safety permit will require additional field seasons for geotechnical drilling, he said.

All that work means the project is still a long ways from completion; the mine and associated infrastructure will take another three to four years to build whenever the last of the preconstruction work is wrapped up.

Elwood Brehmer can be reached at [email protected].

11/16/2018 - 10:02am