TORONTO (miningweekly.com) – If all goes to plan, production could begin at the large Donlin Creek gold mine, in Alaska, about six years from now, NovaGold Resources president and CEO Rick Van Nieuwenhuyse said on Tuesday.
NovaGold and gold giant Barrick Gold own 50% each of the project.
The firms will complete a feasibility study on Donlin Creek during the current quarter, and will then begin permitting for the mine.
The permitting process is expected to take between two and three years, followed by construction, which is targeted to start in 2012.
In June last year, the partners selected a preferred project design for the mine, which is expected to have a throughput design of approximately 50 000 t/d using on site diesel and wind cogeneration for power.
At this rate, Donlin Creek will produce between 1-million and 1,5-million ounces of gold a year, for more than 20 years.
The firms had studied building a larger operation, and constructing an electrical power line for the project, but had decided that the longer construction time, as well as the additional permitting and other risks associated with the power line, outweighed the economic benefits.
The feasibility study will update the operating and capital cost estimates for the mine, Van Nieuwenhuyse said.
The study will also contained updated, and improved, reserve and resource figures.
In June 2008, Barrick and NovaGold said Donlin Creek contains 31,7-million ounces of measured and indicated resources, plus 4,2-million ounces of inferred gold resources.
NovaGold reported a C$195,3-million loss for the fourth quarter.
Last year, the firm halted operations at its only producing mine, Rock Creek, in Alaska, after battling permitting difficulties and technical setbacks at the mine.
The technical issues have been resolved, and the firm is conducting a “detailed project assessment to determine the cost, timing and requirements to successfully restart the commissioning process”.
The company has also resolved its financing difficulties, after raising $75-million in a private placement of shares and warrants, mainly to privately-held Electrum Strategic Resources.
NovaGold also owns 50% of the Galore Creek copper/gold/silver project in British Columbia. Teck Cominco owns the balance.
Earlier this month, the partners agreed to amend their agreement so that Vancouver-based Teck will fund all the capital required for the project until it has spent a total of C$60-million, but will have more flexibility over how and when the money is spent.
The companies suspended construction on the mine in November 2007, citing ballooning costs, and said they would work on a new development plan and complete a revised feasibility study, before making a production decision.
At the time, they agreed that Teck would spend C$72-million on optimisation studies for the project over five years and the two firms would jointly fund other costs.
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