North of 60 Mining News - The mining newspaper for Alaska and Canada's North

The Prospectors and Developers Association of Canada is set to recognize Richard Garnett and Novagold Resources Inc. for their role in the discovery and exploration of the multimillion-ounce Donlin Creek gold deposit in Southwest Alaska.

The Thayer Lindsley Award for an international mineral discovery will be presented to the explorers March 2 at the organization's 2009 International Convention, Trade Show and Investors Exchange.

This annual award, which honors the memory of one of Canada's greatest mine finders, recognizes an individual or exploration team credited with a recent significant mineral discovery anywhere in the world.

WestGold explores Donlin

WestGold was introduced to the Southwest Alaska gold project by Bruce Hickok, Calista Corp. land department vice president, in 1988.

Prior to going to work for Calista, Hickok had researched the property with Alaska Earth Sciences, the geological firm he co-founded. After becoming convinced of the potential at Donlin, Hickok encouraged WestGold to explore what he believed would be an exciting grassroots gold discovery.

In 1988, convinced Hickok was onto something, WestGold acquired the exploration rights to the Donlin Creek prospect, owned by Calista, an Alaska Native regional corporation. That same year, WestGold also acquired placer gold deposits off the shore Nome, Alaska.

WestGold, led by Garnett, began exploring the Donlin Creek property in 1988. During the first year, the company completed an extensive grassroots exploration program that included trenching, rock and soil sampling, mapping, drilling and airborne surveys. The program identified several areas of mineralization, including Lewis, which is now the primary focus of the current resource at Donlin.

WestGold employed a reverse circulation drill rig during its second season on the property. The drilling conducted in 1989 led to the first gold resource calculation at the deposit, but it was the last year of WestGold's exploration at Donlin. The explorer went out of business the following year and despite the encouraging results only limited exploration was carried out until Placer Dome picked up the prospect in 1995.

Meanwhile, Garnett pioneered the use of an offshore crawler to mine the placers off the beaches of Nome in 1989. His innovative design is still being used to recover placer diamonds off the coast of Namibia, and is considered by many as the best mining system for marine placer deposits.

Placer Dome revives exploration

Rob Retherford, another co-founder of Alaska Earth Sciences, took over the role of land department vice president for Calista after Hickok, his former partner died in an avalanche in 1991. Retherford, convinced that Calista held a significant deposit at Donlin, presented the project to Placer Dome in the fall of 1993.

After looking over the previous work done at Donlin Creek, it did not take Placer Dome director of property acquisition Richard Duncan long to grab the prospect.

Anxious to follow up on WestGold's work, Placer Dome had the first drill turning on the property in April 1994 and had about six drills turning by fall. Over the next six years, Placer Dome spent about $30 million outlining a 13-million-ounce gold resource.

Novagold Resources Inc., in a 2001 joint venture agreement with Placer Dome, agreed to spend $12 million over 10 years to earn a 70 percent interest in Donlin Creek.

NovaGold outlines 31.7 million ounces

Much of NovaGold's senior management team was part of Placer Dome's Alaska Exploration Group at the time the company acquired Donlin Creek.

NovaGold President and CEO Rick Van Nieuwenhuyse and NovaGold Vice President of Strategic Development Greg Johnson are both former members of the Placer Dome Alaska Exploration Team, and founding members of NovaGold. Van Nieuwenhuyse was the vice president of exploration for Placer Dome and Johnson was a geologist at the Donlin Creek project. Another member of the Placer Dome Alaska Exploration Group was NovaGold Vice President of Exploration Joe Piekenbrock.

This continuity, in large part, has contributed to the explorers' success at Donlin Creek. NovaGold had a phenomenal 2001 season at Donlin Creek. The 42-hole program that year increased the measured and indicated gold resource at Donlin by 92 percent to 4.4 million ounces of gold, and escalated the inferred resource by 161 percent to 6.2 million ounces of gold.

After eight years of exploration, NovaGold has outlined one of the largest undeveloped gold deposits in the world. Recent drill results have identified measured and indicated gold resources of 31.7 million ounces grading about 2.5 grams per metric ton, with an additional 4.2-million-ounce inferred gold resource.

Construction targeted for 2012

Barrick Gold Corp. purchased Placer Dome in 2006, taking control of Placer Dome's stake in Donlin Creek. Barrick also tried to buy out NovaGold, but the junior resisted the gold giant's overtures. The aggressive takeover bid by Barrick and NovaGold's resistance caused contention between the Donlin Creek partners.

In late 2007 the two companies set aside their differences and formed the Donlin Creek LLC, a 50-50 partnership between the junior and the major to advance the development of the multi-million-ounce gold property.

Working together the partners have developed a preferred project design for the world-class gold project and are working on a feasibility study expected to be complete by April. The partners foresee a mine at Donlin producing about 50,000 metric tons per day using onsite diesel and wind cogeneration for power. Using this design, Donlin Creek would operate for more than 20 years and potentially produce 1 million to 1.5 million ounces of gold per year. The companies plan to start permitting by the end of 2009 and begin construction in 2012.

Author Bio

Shane Lasley, Publisher

Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.

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• Phone: (907) 726-1095
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