Canadian Mining Journal

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CAPITAL DEMAND: Cost of Donlin gold development expected to be US$6 billion

ALASKA - The feasibility study completed on the Donlin gold project (formerly Donlin Creek) in 2009 is being updated to include power generation utilizing natural gas delivered to site via a proposed 500-km natural gas pipeline from the Cook...



ALASKA – The feasibility study completed on the Donlin gold project (formerly Donlin Creek) in 2009 is being updated to include power generation utilizing natural gas delivered to site via a proposed 500-km natural gas pipeline from the Cook Inlet. Utilizing natural gas is expected to lower costs to generate power and reduce operating risk.

In connection with this update, Donlin Gold, owned equally by wholly-owned subsidiaries of Vancouver’s NovaGold Resources and Toronto’s Barrick Gold, has provided a preliminary capital cost estimate of approximately US$6 billion for the project with an additional approximately US$1 billion for the natural gas pipeline. The previous capital cost estimate for Donlin, released in April 2009, was US$4.5 billion and did not include a natural gas pipeline.

“Since April 2009 the price of gold has more than doubled, yet capital costs have increased in line with the industry trends,” commented Rick Van Nieuwenhuyse, NovaGold president and CEO. “We are encouraged by these developments and look forward to receiving the updated feasibility study before the end of the year.”

It is anticipated that the feasibility study update, including a revised National Instrument 43-101 compliant technical report by AMEC will be completed before the end of 2011. Learn more about the Donlin project at www.NovaGold.com.