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WORTH WAITING FOR
Slow but steady progress for the Donlin Gold development
Though placer mines had been in the Middle Kuskokwim area for decades, the official discovery of the Donlin Gold deposit in the late ‘80s led to one of the largest undeveloped gold projects in the world. Expected to take three to four years to construct, the mine aims to produce 1.1 million ounces of gold each year over its twenty-sevenyear lifespan. The deposit is five times the average size of its peer mines,
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according to NOVAGOLD, one of the partners on the project.
Donlin Gold has been conducting environmental studies and developing engineering plans for the site for more than twenty years. In 1996, landowners Calista Corporation and The Kuskokwim Corporation (TKC) came to an agreement that gave a company called Placer Dome mining rights at Donlin Creek. Placer Dome was eventually purchased by Barrick Gold Corporation, and Donlin Gold is now owned in equal parts by Barrick Gold Corporation and NOVAGOLD Resources, both based in Canada.
The Donlin Gold proposal is to develop an open pit, hard rock gold mine about 10 miles north of Crooked Creek. The Kuskokwim Corporation owns most of the surface land rights, and Calista Corporation owns the subsurface mineral rights and some surface land rights. According to the environmental impact statement, “The proposed project would build mining and ore processing facilities at the site, transportation facilities, and a 315-mile buried natural gas pipeline from Cook Inlet to the mine to support electrical generation. The project would also include transportation infrastructure for barge transportation on the Kuskokwim River.”
There’s a long road between concept and reality for the gold mine,
The co-owners of Donlin Gold have yet to make the go-ahead decision, yet exploration and pre-development have kept workers busy at the site for twenty-five years.
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The exploration camp inspects its water quality daily, with plans to restore salmon streams damaged by 20th century placer mining.
Carter Damaska | Alaska Business Results of the 2022 drilling season matched well with theoretical projections of the geologic resource.
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The nearest village, Crooked Creek, is itself in the middle of nowhere, so Donlin Gold built its own town to sustain years of pre-development activity.
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though. All parties involved must first make sure the project is both feasible and worthwhile. Donlin Gold’s environmental review process began in 2012. The National Environmental Policy Act (NEPA) process was initiated to determine potential environmental, social, and economic impacts of the proposed mine. The NEPA process was completed in 2018, as was an environmental impact statement. The US Army Corp of Engineers and the US Bureau of Land Management issued the Record of Decision, which analyzed the impact of the entire project, including the mine site, transportation corridor, pipeline, and associated infrastructure. What’s Happening Now
Exploration of the mine site continued in 2022, as well as further environmental studies and monitoring, engineering studies, and state permitting. The last year saw Donlin Gold’s largest field program in a decade, including 43,000 meters of core drilling and a $60 million budget split between the two co-owners.
Drilling began in late January of 2022, and the last drill shut down in the third week of September, with four drills running for most of that period. Drilling was completed ahead of schedule and under budget. The company’s geologic models have tested well, with projected findings of planned holes matching well with actual results from the drilling.
Donlin also continued some environmental studies, notes Dan Graham, general manager at Donlin Gold. “The Kuskokwim River is the way to get stuff to the mine. We mapped some of the areas that are shallower, and we tested for potential increases in erosion,” he says. The company also revisited some designs and infrastructure for the mine to improve the economics of the project. “So while we’re doing work in the field, we are also doing work on the plans to get the best project moving forward,” Graham adds.
This year’s environmental studies included mapping select areas of the Kuskokwim River, establishing some new erosion testing areas, and extending and expanding the company’s monitoring of Crooked Creek under its established Aquatic Resource Monitor Plan. “These studies are all voluntary and part of our commitment to being good stewards of the land,” says Graham.
Major state and federal permitting for the project is almost complete. The company has been maintaining its permits, defending them from challenges, and building up its environmental compliance system, says Graham.
Economic and Social Impacts
Mine construction would provide thousands of jobs for three to four years, according to Donlin Gold. Then over its 27-plus-year operating life, the mine would support between 400 and 800 jobs, with local hiring being a priority. In fact, 70 to 90 percent of the current site workforce thus far have been residents of the YukonKuskokwim region.
Contractor opportunities would also be plentiful if the project comes to fruition. These opportunities include everything from road construction and maintenance to camp services and supplies, from fuel transport and storage to equipment and tool rental.
Additionally, because of the Alaska Native Claims Settlement Act, benefits of the project would be shared statewide, since section 7(i) requires regional Alaska Native corporations to share 70 percent of the revenue they generate from resource development projects on their lands with other regional corporations. Section 7(j) then requires the regional corporations to share 50 percent of that revenue with the village corporations.
“As a result, 7(i) and 7(j) are the most direct way to spread the benefits of the project statewide. Alaska Native shareholders statewide have benefitted from projects like Red Dog mine in the NANA region, which has shared billions of dollars in ANC revenue over the last forty years,” says Kristina Woolston, external affairs manager for Donlin Gold.
According to Woolston, 7(j) is the primary revenue stream for roughly two-thirds of the 177 Alaska Native village corporations, and Donlin is one of the only major resource projects on the horizon on ANC land that could
Kristina Woolston External Affairs Manager Donlin Gold start to replace revenue from the Red Dog mine. Red Dog has been the primary 7(i)/7(j) contributor for more than thirty years, but activity at the mine is expected to decline within the next decade or so. One of the Donlin Gold project’s goals is to enhance subsistence activities in the Yukon-Kuskokwim region. The jobs that Donlin already provides in the region inject income for local workers to conduct subsistence harvests. “Hunting and fishing equipment costs are high, and the gas needed to operate boats and ATVs is very expensive right now,” says Woolston. “We know the jobs we provide are already a significant help in that regard because of our current employees, most of whom come from the region.” Additionally, Donlin operates on a two week on/two week off camp rotation, which provides employees with blocks of time in which to conduct subsistence activities.
And some are benefiting from the jobs already, notes Graham, who spoke with one local elder who said everyone in their village knows who has jobs with Donlin because they’re the ones who show up with new engines for boats and other supplies.
Donlin Gold, Calista, and TKC have also provided funding and support for local culture camps, youth subsistence training activities, and other traditional practices, and the partners have contributed to scholarship programs. They have helped local communities to get rid of e-waste and set up recycling programs, as well as other community projects.
Environmental Impact
According to Woolston, Donlin Gold has a variety of project-specific plans and policies to mitigate harm to the environment. Its environmental impact plan includes forty-nine mitigation actions to ensure that subsistence activities aren’t disrupted. Those plans cover everything from controls to minimize air emissions to water quality management and treatment. The company plans to use doublehulled barges for safe water transport and natural gas for power generation because of its lower emissions compared to diesel. Reclamation for mining areas no longer being used is another part of the planned environmental protection measures.
Donlin Gold has also received permits for fish and habitat protection, and the company voluntarily led research on the Kuskokwim River’s spring smelt run in order to plan barge traffic around the subsistence resource. And Donlin Gold will work to restore salmon habitat in nearby streams damaged by legacy placer mining.
Even for the exploration camp, there is environmental monitoring taking place that includes daily inspections and water quality, flow, and temperature measurements. The data is then compiled into year-end reports that are used to help further reduce any impact. “Modern mining is heavily regulated and controlled,” says Graham.
“Ultimately, we are being entrusted as stewards of this land along with Calista and TKC, and we take that responsibility seriously,” says Woolston. “Our environmental protection measures are based on best industry practices, which have led to over 40 years of safe mining operations in Alaska, from Red Dog to Greens Creek and more.”
Step By Step
Next steps for the Donlin Gold project include using this year’s drill data to update the project model, closing out that portion of the project. “We may do a little [drilling] next summer, but we’ll continue to advance the project review,” notes Graham. “The next big step would be updating the feasibility study before the owners decide if we’re going to sanction the project. We don’t have a date for the feasibility study yet.” That’s the next big step in the process. “We’re well over $700 million in the project to date and continue to invest in it,” says Graham. “The right mine at the right time.”
“Responsible natural resource development on Alaska Native-owned land is a critical tool, and projects are intended to provide maximum involvement by the shareholders and to promote the health, welfare, economic, and educational opportunities for ANC shareholders and their families,” says Woolston. “Donlin Gold is the invited developer of the project by Alaska Native Corporation land owners. We are grateful for the opportunity to be a partner with them.”
