Companies commit to new work, $322 million bond
Donlin Gold has been given approval by its board to proceed with new geotechnical drilling to support a dam safety permit from the state of Alaska. The work involves 85 new drill holes to be done over several months. The authorization, which involves several million dollars, is important because it is a sign of confidence in the project by owners Barrick Gold and NovaGold Resources, who are 50-50 partners. In a related development, the companies have committed to financial assurances through a $322 million bond to cover closure costs and long-term water management and treatment.
Donlin Gold will be a very large surface gold mine with capital investments estimated at $6 billion-plus, and there have been questions about the willingness of Barrick, the larger partner, to proceed with the project given high costs and the remote location, and financial stress the company has been under. Barrick is one of the world’s largest gold mining companies. Although a 50 percent owner, NovaGold is a small Canada-based “junior” mining company. Barrick has the deeper pockets. The financial assurance bond is required for approval of Donlin Gold’s Reclamation Plan by the state Dept. of Natural Resources. Meanwhile, the state Dept. of Environmental Conservation has issued a Waste Management Permit for the project. This details how solid, liquid and hazardous waste from the project will be handled. Both authorizations came on Jan. 19.