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Toronto-based giant Barrick Gold takes over Placer Dome, Donlin Creek

 

Last updated 1/29/2006 at Noon



Barrick Gold's takeover of Placer Dome could light a fire under the Donlin Creek project in southwest Alaska. Toronto-based Barrick, the world's No. 3 gold producer, mounted an initially hostile bid to purchase Vancouver-based Placer Dome late last year, but the two companies subsequently agreed on an offer of $10.4 billion that they believe will benefit them both.

"One of the significant rationales behind the takeover bid was to build up the project pipeline," Vincent Borg, Barrick's vice president for communications, told Mining News. "Donlin Creek is a key project in the new combined pipeline. Barrick has been known to aggressively develop projects, and if there is any leeway for us to aggressively develop Donlin Creek, we'll review what we can do." In this region Barrick owns the Eskay Creek gold-silver mine in British Columbia, which produced 289,568 ounces of gold and 15,751 million ounces of silver in 2004.

Placer Dome is the manager and operator of the Donlin Creek project, with a 30 percent stake.

Vancouver-based Novagold Resources owns 70 percent of the project in a joint venture agreement.

The planned open pit mine is currently in the pre-feasibility stage.

On Jan. 20, the day after Barrick's takeover of Placer Dome, NovaGold announced that based on an updated 3-D geologic and mineralization model, a new resource estimate had increased Donlin Creek's measured and indicated resource category by 3.7 million ounces or 33 percent to 14.8 million ounces of gold grading an average of 2.76 grams per metric ton.

The inferred resource decreased by 0.7 million ounces to 13.6 million ounces of gold grading 2.72 grams per ton through conversion to the measured and indicated category.

This is the first new resource estimate for the project since April 2003.

"Right now our plans for 2006 have not changed. It's business as usual as we start the year," Stan Foo, Placer Dome's project manager for Alaska, told Mining News. "We're looking at starting the Donlin Creek feasibility study in mid-2006 and doing some pretty active drilling. We're trying to keep it moving forward at a good speed." Foo hasn't discussed Donlin Creek with anyone from Barrick yet, he added.

 

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