Overview
The Donlin Gold Project is an intrusion-related gold deposit in southwest Alaska, USA. It is currently in the late feasibility stage of development and is 50/50 owned by NovaGold (TSX:NG) and Barrick Gold (TSX:ABX).
Regional Geology
The Donlin Project is located in the southwest arm of what is known as the Tintina Gold Belt, or Tintina Gold Province (TGP). The TGP is a 1200 km (745 mi) long and 200 km wide (125 mile) belt bounded by two large fault systems and extending across the Yukon and Alaska.
More locally, the project itself is located in what is known as the Kuskokwim basin, a back-arc continental margin basin made up of sedimentary and volcanic rocks of varying ages.
Deposit Geology
Gold mineralization occurs in both small discontinuous veinlets (<1 cm wide) and less commonly as disseminated (dispersed) sulfides within the older sedimentary and volcanic host rocks of the area. The gold is primarily hosted within the matrix of Arsenopyrite, an iron-arsenic sulfide and pyrite, an iron sulfide.
The deposit is young by geologic standards being less than 65 million years old. (Compare that to the deposits of Northern Ontario or South Africa which are billions of years old.) Gold mobilization and concentration are believed to be associated with hydrothermal activity caused by the nearby granitic intrusions.
Discussion
The Donlin Project is a good example of a late stage project ready for development. There has been more than 1.2 million feet of core drilled on the site along with numerous geophysical and geochemical and geological studies over more than 25 years.
Measured and indicated resources stand at 39 Moz of gold contained in 541 Mt at an average grade of 2.24 g/t, inclusive of Proven and Probable Mineral Reserves of 34 million ounces of gold at an average grade of 2.09 g/t. Inferred resources stand at an additional 6 Moz contained in 92 Mt at 2.02 g/t. While these grades don’t sound particularly great for a gold mine, they are quite good for the open pit gold mine that NovaGold is proposing. Given the geology of the area, it is not unreasonable for them to predict that the reserve may increase as production commences.
These resources are extremely large, making Donlin one of the largest undeveloped high-grade gold deposits in the world. At $2000 an oz, well below current prices, net present value is estimated at $7.2 billion.
This size is something of a double edged sword. Capital costs are estimated at $7.4 billion, with further sustaining costs of $1.7 billion over a 27 year mine life. Doing anything in the North is very costly. The bigger problem, however, may be the environmental impacts. Much like the proposed Pebble Mine, Donlin’s sheer size and location close to salmon spawning areas has fueled concerns over watershed contamination. The project is strongly opposed by several local groups, and has been delayed for many years with no end in sight.
Further Reading
Nova Gold Press Release Reviews
NovaGold (Corporate Site)
Barrick (Corporate Site)
