Welcome to AlaskaJournal.com - Alaska's longest running weekly business publication, covering issues that matter in the 49th state
width
Web posted Friday, February 13, 2009

Donlin Creek developers roll out gold mine proposal

By Patricia Liles
For the Journal

Developers of the Donlin Creek gold deposit in Southwest Alaska have begun a series of regional public meetings to share current information and to take comments about the proposed large-scale hard rock mine project, prior to the planned start of permitting later this spring.

Beginning in December, the first three of a series of public meetings were held in Crooked Creek, Aniak and Kwethluk, three Kuskokwim River villages that would be impacted by the proposed gold mine development, located 13 miles north of the Kuskokwim River at Crooked Creek.

Another three public meetings were held in late January, in St. Marys, Hooper Bay and Quinhagak.

The series of regional public meetings will continue through April, said Doug Nicholson, president and general manager of Donlin Creek LLC, the development entity created by project owners NovaGold Resources and Barrick Gold.

"We're just trying to get out information about what the project is, essentially an overview of the project as we see it now," he said.

Developers in May plan to submit to state and federal regulatory agencies the formal draft permit applications for the gold mine development project. That will kick off the federal environmental permitting process, where regulators review the project proposal and determine whether it can be built and operated.

Another round of public meetings and comments, scheduled by the regulatory agencies, will be held as part of that process. The meetings this winter and spring are designed so that the developer can share information with locals and gather comments and concerns about the project prior to the permitting process, Nicholson said.

"More than anything, we want people to be informed," he said. "We've been out working in the region for a number of years and we want people to be confident that we're doing this correctly."

Gathering comments before the permitting process allows developers to draft permit applications to address those concerns before submitting them to the regulatory agencies, the company said in an open letter Yukon Kuskokwim area residents. The letter was included in a 32-page color booklet describing details about the proposed project.

Holding public meetings during winter months also allows villagers to travel by snowmachines to the scheduled venues.

"There are 56 villages in the region. We want to give everyone a chance to participate, but it's hard to visit 56 villages," Nicholson said. "So we're going to a central hub village and inviting surrounding villages."

Based on extensive exploration drilling that started in 1995, Donlin Creek is believed to contain about 30 million ounces of gold, according to the brochure. The hard rock gold resource would be accessed by traditional open-pit mining methods. At its largest, the pit would be about two miles long by one mile wide.

Proposed development plans currently call for a 20-year mine life, employing 600 to 800 people year round. Construction of the open pit mine, mill and related infrastructure would require about 1,500 to 2,000 workers.

New infrastructure to be constructed would include an on-site diesel power generation plant and a 35 megawatt wind turbine farm, which would provide the estimated 127 megawatts of electricity the gold processing plant would require.

A mine at Donlin Creek would also require construction of a new 5,000-foot runway, proposed to be located about seven miles west of the mine site. The existing runway overlays mineralization that would likely be mined, Nicholson said.

The development would also require a barge landing and materials storage site on the Kuskokwim River, proposed to be built at Birch Tree Crossing, located a few miles downriver from Aniak. The barge port site would be connected to the mine by a 74-mile access road.

Additional gold resources near Donlin Creek have been identified by past exploration work, which could provide an extended mine life. That topic has been addressed during the recent regional public meetings, Nicholson said.

"We've said that the goal of any mine operation is to replace the reserves you mine in a year, to extend the mine life," he said. "We know there's additional mineralization out there in the region, but we aren't able to quantify the quality of it yet, so we don't know if it could be mined at a profit. Instead of additional exploration, right now we're focused on bringing the mine into reality."

The shifting of work from exploration to permitting will be reflected in this year's spending on Donlin Creek. Last year, the partners spent about $65 million, mainly on exploration drilling that employed about 200 people and continued through much of the year.

In past years, Donlin Creek employed as many as 240 people at the remote camp, workers who conducted or supported the extensive exploration drilling, as well as the environmental baseline data gathering and engineering work.

"Those big programs will be curtailed for a while," Nicholson said. "We've spent 13 years exploring, planning and conducting engineering. Now is the time to see if we can actually permit something."

Donlin Creek's anticipated budget for 2009 is about $28 million, according to NovaGold President Rick Van Nieuwenhuyse, a modest spending plan compared to recent years.

"The (federal permitting) process is time and resource intensive. Our resources must be dedicated to this process, not to continued exploration, the task that has made Donlin camp a vital employment center in the region maintaining 90 percent Native hire for more than 10 years now," the partners said, in the letter to the Y-K region.

The Donlin Creek gold resource is located on Native-owned lands. Calista Corp. holds the subsurface mineral rights and the Kuskokwim Corp., a consortium of 10 upriver villages closest to Donlin Creek, owns most of the surface land in the proposed mine area.

width

AlaskaJournal.com | AlaskaStar.com | AlaskanEquipmentTrader.com

Add to My Yahoo! | Contact Us | Jobs | Subscribe

Copyright © 2007-2008 Alaska Journal of Commerce & Morris Communications Inc