Gold prices rising as Donlin mine keeps plugging on EIS

With gold prices on the rebound, it’s full steam ahead for the Donlin Gold mine in Western Alaska.

Donlin Gold spokesman Kurt Parkan said in an interview that “things are moving along pretty steadily” as the company continues through the federal environmental impact statement, or EIS, process.

A variety of other state and federal permits are being sought in concert with the multi-year EIS process, according to Parkan.

As far as the EIS goes, the ball is the U.S. Army Corps of Engineers’ court for now. The Corps is the lead permitting agency for the project.

“We’re still waiting to hear back from the Corps of Engineers on follow-up that might be necessary after they had a chance to review the (public) comments that they’ve received,” Parkan said.

The Corps, which received about 540 written comments during an extended public comment period, is expected to come back to Donlin with any unresolved issues that arose from public comments or that it discovered by the end of September, he added.

Release last November of the draft EIS marked, to that point, the culmination of 20 years of work on Donlin. Early resource definition of the gold prospect began in 1995.

Donlin Gold is a 50-50 joint venture of Canadian mining companies Barrick Gold Corp. and NovaGold Resources.

A $6.7 billion endeavor with a footprint from Cook Inlet to the Aleutian Islands, the Donlin Gold mine is the definition of a megaproject.

At the heart of the project is a prospective conventional open-pit gold mine 1.5 miles across and up to 1,200 feet deep located about 10 miles north of the village of Crooked Creek in the Upper Kuskokwim River drainage. At that size, Donlin is projected to be the largest open-pit gold mine on Earth.

As initially planned, Donlin Gold would produce about 1.1 million ounces of gold per year over a 27-year mine life for a total of about 33 million ounces of the precious metal.

The mine site, on lands owned by The Kuskokwim Corp. and Calista Corp., the area village and regional Native corporations, respectively, would also include a fully lined, 2,300-acre tailings facility to store the processed ore.

Support infrastructure would include a 315-mile, 14-inch diameter natural gas pipeline originating on the west side of Cook Inlet need to supply fuel to the 227-megawatt capacity power plant at the mine site.

The pipeline has also been viewed as a first, indirect step to getting lower cost natural gas to numerous villages in Western Alaska that currently rely on fuel oil their primary heat and electricity sources.

A 30-mile road would connect the mine to a new barge port on the Kuskokwim. Further down the Kuskokwim, port cargo facilities would be expanded in Bethel, and new diesel storage tanks would be needed Dutch Harbor to supply fuel for equipment at the mine.

The EIS includes an alternative that calls for LNG-powered equipment, which would reduce the risk of a barged fuel spill on the Kuskokwim, but also require construction of an on-site natural gas liquefaction plant.

Once Donlin has heard back from the Corps, Parkan said it would likely take the company until late 2017 to release the final EIS, pushing back the overall timeline slightly. The Corps of Engineers’ project EIS website estimates a final EIS early next year.

“It always takes a little longer than you hope it would,” Parkan said.

The public comments on the project were mostly in line with what was expected, he said. However, a stance opposing the project emerged from the Yukon-Kuskokwim Health Corp. because jobs at the mine could provide a means for people in the region to move elsewhere while making a long range commute to the mine on a rotating work schedule.

Parkan said simply that Donlin Gold feels the up to 1,400 jobs the mine would support would ultimately be a significant benefit to the Yukon-Kuskokwim region that is one of the poorest in the country.

“People are already moving out of the region because they don’t have jobs,” he said. “If you bring jobs into the region you might stop that flow of outmigration. People could stay home and take care of their families; they could afford to hunt and fish, which is part of the problem that exists now.”

Donlin estimates up to 3,000 workers will be needed during construction if the mine is built. The company has often touted its record of about 90 percent local hire during the exploration and study phases of the project.

The concerns over outmigration were one of several points raised by the Yukon-Kuskokwim Health Corp. in opposition to Donlin, which included potential damage to the salmon and wildlife resources people in the region rely on for subsistence harvest.

When the draft EIS was released last year, Donlin General Manager Stan Foo said the project would not be built at gold prices at the time of less than $1,100 per ounce; and while the long-term viability of the project is not completely at the mercy of metal prices any one day, gold is currently trading at about $1,350 per ounce.

Parkan said there is no definitive price at which the mine is a go. Donlin’s owners are committed to getting through permitting and then will evaluate how gold prices could impact the project, he said.

“The more above $1,200 (per ounce of gold) the happier we are,” Parkan added.

Elwood Brehmer can be reached at [email protected].


09/10/2016 - 7:59am