Second busy summer wraps at Donlin Gold
Bursts of canary yellow on an otherwise deep green landscape indicated Alaska’s infamously fleeting fall had arrived to Western Alaska.
At Donlin Gold’s camp in the upper Kuskokwim drainage, that meant wrapping up another busy drilling season before autumn departs. The last Donlin drilling crew was boring its final hole into the bedrock underlying a valley adjacent to the camp’s rather unique runway — more on that later — when the Journal toured the world-scale gold project with Sen. Lisa Murkowski Sept. 17.
The drill was turning into what could end up being the bottom of the gold mine pit.
“Ahead of schedule and under budget,” Donlin Gold General Manager Dan Graham said of the 2021 summer work season.
Crews drilled approximately 80 holes totaling about 24,000 meters after originally planning to do about 20,000 meters of work at the outset.
Mining major Barrick Gold Corp., the world’s second largest gold producer and a 50 percent owner in Donlin with junior Vancouver-based NovaGold, has been the driving force behind two consecutive drilling-intensive years at the Donlin prospect. About 23,000 meters of core was drilled last year. A little more than 400,000 meters of drilling has been done at Donlin since major exploration started, according to Graham.
The latest core samples are largely needed to improve the companies’ understanding of the ore body before making a final investment decision on the massive mine project, last priced at nearly $7 billion back in 2011. Other geotechnical-focused drilling is informing work on the mine’s tailings storage dam.
As proposed, the open-pit mine in the upper Kuskokwim River drainage would be one of the world’s largest, producing more than 33 million ounces of gold over an initial 27-year life. A 315-mile natural gas pipeline from the west side of Cook Inlet would supply a power plant at the mine and fuel storage tanks would be built at Dutch Harbor, in addition to the very large-scale operation at the mine site.
Donlin representatives have long said the project generally needs sustained, high gold prices because of the extensive network of support infrastructure that needs to be developed but have declined to specify what parameters they believe are needed to green-light development.
The last two active drilling seasons came after a period of general dormancy at the camp from 2013 to 2018 while the company focused on permitting and gold prices were at their lowest.
Spot Gold prices hit a recent peak of nearly $2,100 per ounce in mid-2020 and since have been largely in the range of $1,700 to $1,900 per ounce after bottoming out at less than $1,100 per ounce near the end of 2015.
To that end, Graham said at this point the outlook is for another full season next year.
Executives for Barrick and NovaGold said in a joint statement earlier this month that they are working towards an updated feasibility study, which would likely include a new cost estimate, before deciding whether or not to start construction.
That decision could come in two or three years if Donlin Gold can secure its remaining requisite permits. The company received a favorable record of decision from the Army Corps of Engineers in 2018 on its environmental impact statement following a roughly six-year review. Donlin still needs approvals from state Dam Safety officials in the Department of Natural Resources for its large tailings facility.
Located on land owned by The Kuskokwim Corp., the area’s consolidated Alaska Native village corporation, the Donlin Gold project exemplifies the disconnect that often occurs between local Tribes and Native corporations when it comes to development projects.
More than a dozen Tribes in the region have formally opposed Donlin since the project got its overarching federal approval largely over concerns the project will harm the Kuskokwim’s salmon runs, which have already been in a general state of stress in recent years.
Leaders for Donlin, TKC and Calista Corp., which holds the subsurface and royalty rights to the land and gold, insist locals’ fears often stem from being misinformed; the company will be expected to discharge water treated to a higher quality than it would be if the mine were not there at all, Donlin External Affairs Manager Kristina Woolston said.
“My focus is on the region and Barrick is on board with bringing the benefits (of the project) to the region,” Graham later added.
Those benefits start with up to 3,000 construction jobs during the multi-year development phase and another 1,400 expected during the life of the mine, according to Donlin Gold, but the financial benefits of Donlin would also extend statewide through the Alaska Native Claims Settlement Act Section 7(i) and 7(j) resource revenue sharing programs for regional and village Native corporations, company leaders note.
Currently, Donlin employs more than 100 workers at the camp when activity is high.
As an example of the work the company is doing to understand and minimize the environmental impacts of the project, Graham said Donlin commissioned first-time studies of the Kuskokwim’s Rainbow smelt run — an important spring subsistence resource — this year to get a better understanding of when and how barges supplying the mine should be sent upriver to avoid out-migrating smelt fry.
For her part, Murkowski tries to talk with workers from the region when visiting projects such as Donlin to get their perspectives on how it is viewed locally, she said.
It was Murkowski’s third attempt to reach the project; the first two were weathered out.
Upon approach to the camp, it was easy to grasp why the senator had previously been unlucky. The broken ceiling Sept. 17 allowed for safe travel; however an 8 percent incline to the Donlin camp runway means planes are limited to one-way in and one-way out with few options to account for wind direction or other considerations. The ridges surrounding the project — similar to the one the camp is perched on — also prevent flying in low cloud cover.
The uphill landing at Donlin provides a sensation this reporter had not previously experienced.
“The third time’s the charm,” Murkowski remarked prior to the morning flight from Anchorage, which was held up only briefly on a “weather.”
Elwood Brehmer can be reached at [email protected].