By Shane Lasley
Mining News 

Calista sees golden future for SW Alaska

45-million-oz Donlin Gold project on Calista-TKC land is a bright economic prospect for remote region of Alaska

 

Last updated 11/1/2019 at 12:37pm

Donlin Gold LLC

Evan Polty, Jr., a Calista shareholder from Russian Mission, pauses for a photo during the 2019 fall program at the Donlin Gold project in Alaska's Yukon-Kuskokwim region.

Calista Corp. and its 31,400 Yup'ik, Cup'ik and Athabascan shareholders are on the cusp of realizing the benefits that will come with the sustainable development of a mine at the 45-million-ounce Donlin Gold project on their land in the Yukon-Kuskokwim region of Southwest Alaska.

With 39 million oz of gold in measured and indicated resources that average 2.24 grams per metric ton, and another 6 million oz in the inferred category averaging 2.02 g/t gold, Donlin Gold is truly a world-class asset in terms of both its size and grade.

And the sheer size of this gold deposit is currently restrained, well, by its sheer size.

Geologists familiar with Donlin have confidence that when the entire trend of gold mineralization identified there is fully explored, upwards of 100 million oz of gold will ultimately be discovered on the Calista-owned property.

"Key geologists that have been involved in the project for many years believe that when Donlin Gold's holdings are explored systematically, the next Donlin may well be found at Donlin," Novagold Resources President and CEO Greg Lang said in October.


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The 45 million oz already discovered, however, provides enough resources to consider a mine capable of churning out more than 1 million oz of gold annually for more than three decades.

Such an outstanding mine on lands owned by the local people will be an economic boon for the Calista region, a remote area covering the lower ends of the mighty Yukon and Kuskokwim rivers where employment opportunities are scarce, and the costs of goods and services are high.

Calista sees the jobs, infrastructure and affordable energy that will come with a responsibly developed mine at Donlin Gold as a means for its shareholders to flourish in this region that they have called home for thousands of years.

"Ultimately, the strong environmental safeguards coupled with the economic development of such a large project will help fulfill the broader goal of self-determination by allowing residents and Calista shareholders to significantly participate in the world economy," said Calista President and CEO Andrew Guy.

And, much like the world-class Red Dog zinc mine, the economic benefits of a Donlin Gold Mine would reach Alaska Native regional and village corporation across the entire state.

Golden selection

It was no accident that Calista chose one of the largest deposits of gold on the planet when the Alaska Native Claims Settlement Act was signed into law nearly 50 years ago.


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Following the 1971 passage of ANCSA, the newly formed Calista and the ANCSA village corporations in the Yukon-Kuskokwim region had just three years to select lands that would sustain the needs of their people.

Nelson Angapak Sr., who worked in the Calista Lands and Natural Resources department during the ANCSA regional corporation's early years, said these selections focused on lands of cultural significance and future economic potential.

"The policy of the lands department was that the village corporations must be advised to select the land with the most resource potential in terms of subsistence resources, mineral potential, and oil and gas potential, or any combination of the three," he explained.

To ensure that the most valuable lands were selected, Calista gathered all the information available on potential resources in its region and shared this data with the village corporations.


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One of the parcels selected by Calista covered a gold prospective area north of the village of Crooked Creek discovered by prospectors in 1909 but never developed. Today, this land package covers Donlin Gold.

"Our early leaders successfully fought for the right to select the land because of its rich mineral deposit, and to maintain oversight as Alaska Native peoples," said Guy.

With The Kuskokwim Corporation (TKC) – an amalgamation of 11 ANCSA village corporations in the area – owning the Donlin Gold surface rights and Calista owning the subsurface rights, as well as a portion of surface estate, this world-class gold mine project is set to catapult Calista on the world stage, as well as provide jobs and other economic opportunities to its roughly 31,400 shareholders.

"The Donlin Gold project provides many opportunities for our shareholders and businesses across the region and state," said Tisha Naviqaq Kuhns, a geologist and interim vice president of lands and resources at Calista. "It also fulfills Calista's land entitlement for development under ANCSA and is our only natural land resource that permits our region to participate in the world economy."

Inspired by Red Dog

Donlin Gold will not be the first world-class mine developed on land owned by ANCSA corporations. The Red Dog Mine on lands owned by NANA Inc. provides roughly 5 percent of the global zinc supply and has been an economic boost for the people of Northwest Alaska.

"The Red Dog Mine on NANA lands has operated for 30 years and provides a good case study for how remote communities in Alaska benefit from sustainable resource development," said Guy.

The Red Dog example begins with the healthy paychecks Red Dog delivers to hundreds of people in Northwest Alaska, a remote area where good-paying jobs would otherwise be scarce.

Today, around 57 percent of the roughly 600-person workforce at Red Dog are Alaska Natives, mostly NANA shareholders, who bring home an average annual wage of around US$100,000.

"It has been a revolutionary thing for our region economically and demonstrates the kind of development that can be done that not only benefits the local people but protects the environment," said Willie Hensley, who was active in the founding of NANA and subsequent development of Red Dog.

The income from working at Red Dog provides cash for fuel, snowmachines, boats and other goods and services that make living in rural Alaska easier and more prosperous; and the rotating schedule at the mine ensures the Northwest Alaska residents have the time to hunt, fish, pick berries and other subsistence activities that are important sources of food and cultural connection.

Rosie Barr, a NANA shareholder, said Red Dog has served as "an agent of positive change" in the Northwest Arctic region of Alaska.

"I personally saw how the Red Dog Mine has been a positive transformation for the men, women and children of the Northwest Arctic Borough," Barr penned in a 2018 article in Storyknife, a newsletter published by Calista.


Red Dog's economic impact in the Northwest Arctic goes beyond jobs, thanks to NANA's ownership of lands where this world-class zinc mine is located.

Going into 2019, NANA had received around $2 billion in royalty payments from zinc and other metals produced at Red Dog over the past three decades.

Calista and all the other ANCSA corporations and their shareholders are bolstered by NANA's bounty from Red Dog, due to revenue sharing under sections 7(i) and 7(j) of ANCSA.

ANCSA Section 7(i) requires regional corporations to distribute 70 percent of net revenues from resource development on ANCSA land among the rest of the regional corporations. In turn, Section 7(j) requires that half of the Section 7(i) payments received are distributed to the respective village corporations within each of the ANCSA regions.

"Royalty sharing has historically kept many Alaska Native corporations from going bankrupt," said Guy. "To this day, Red Dog payments are a significant source of income for regional and village corporations."

Calista aspires to be the next contributing regional corporation to the economic health of fellow ANCSA corporations across Alaska.

"Donlin Gold royalties would similarly be shared with other Native corporations for the benefit of their shareholders," the Calista president inked in an Oct. 17 editorial.

Working at home

For many Calista shareholders, one of the greatest economic advantages of a Donlin Mine would be the ability to work within their region on a rotational schedule that provides opportunities to participate in subsistence and other activities during their time off.

To develop a 1-million-oz-per-year gold mine, Donlin Gold LLC anticipates paying out roughly $375 million in wages to around 3,000 workers during the three- to four-year construction phase. Once in production, the company expects a payroll of more than $100 million annually to at least 800 workers that would be needed at the mine currently being considered.

While not all these jobs will be filled by residents of the region, the history indicates that a large portion of them will.

The companies that discovered, explored and hope to develop a mine at Donlin have made local hire a top priority since Placer Dome began exploring the gold deposit more than two decades ago.

"Placer Dome had a policy that was devoted to hiring indigenous people," said June McAtee, former vice president of Calista's land department. "This policy was an enlightened point of view for the time."

Despite a high turnover rate early in the process, Barrick Gold and Novagold remained steadfast in their commitment to hiring and training local residents.

"There has been a continual process of hiring and training shareholders from the very beginning. Even though the original company (Placer Dome) isn't there anymore, the companies that came after it believed in those same concepts and did more than just pay it lip service. They actually acted on that, and took the lead, in fact, in the hiring and training," McAtee said.

By 2008, more than 90 percent of the roughly 200 workers at the advanced exploration project were Calista shareholders, or their descendants.

While Placer Dome, Barrick and Novagold deserve credit for their longstanding commitment to local hire and training, such a success is also a testament to the people of the Yukon-Kuskokwim region.

"The people of our region are adaptable, talented and strong," Kuhns, a Calista shareholder from Bethel, inked in an article for Storyknife.

The Calista geologist said being able to work at Donlin was a homecoming of sorts.

"Walking off the plane at the Donlin project, I was welcomed. I was able to use my technical skills but also had the deep family root connection to the region; I was at home," Kuhns wrote.

And, while working just 150 miles northeast of her hometown, Kuhns has broadened her technical skills.

"During my 11 years at Donlin, I had been given further opportunity to expand my skillset and moved laterally into the environmental department to manage the water quality baseline program," she said.

With roughly 30 years of gold in reserves at Donlin and the potential of a few more decades of ore yet to be outlined, Kuhns and upcoming Calista shareholders could have lifetime careers at this mine in their region.


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"There has been a generational turnover since the project started," said McAtee. "It's the next generation of employees now."

Brightest economic prospect

Donlin Gold's enlightened shareholder hire program, coupled with unparalleled community engagement and a strong commitment to environmental safeguards, has earned the endorsements from many leaders in the Calista region.

"Calista supports Donlin Gold because modern mines have a positive track record of environmental protections. It is the brightest economic prospect in our region, with the potential to reduce unemployment and the cost of living in many of our communities," said Guy.

Above being an economic generator, a mine at Donlin Gold would deliver natural gas and fiber optic connectivity to this remote region of Southwest Alaska.

"The excess pipeline capacity and fiber optic expansion gives us the opportunity to consider and identify the potential to pursue electrical power interties and increase internet services for communities in our region," the Calista CEO added.

For now, however, Novagold and Barrick are collecting the final bits of information needed to ensure that any mine developed at Donlin is both environmentally and economically viable.

A summer field program aimed at collecting data needed to ensure dams and other structures at the proposed mine are designed and built for permanent stability was cut short in July due to the evacuation of the Donlin Gold camp as a result of a wildfire in the area.

Crews were evacuated for their own safety and to accommodate firefighting crews, which were able to keep the fire from damaging the camp.

"All personnel returned to the site in early September to resume work on the field program which will continue through the winter and is expected to be completed in 2020," Novagold CEO Lang wrote.

This is the first time the Donlin Gold camp has remained open through the winter months since 2013-14.

At the end of the program, it is expected that Donlin Gold will have all the information needed to design a state-of-the-art mine that is both environmentally sound and economically robust.

"We all agree that Donlin Gold must be advanced in a financially disciplined manner while emphasizing recently updated geological data, modern engineering, and with particular attention to strong environmental and social stewardship as well as safety practices," said Lang.

Such careful engineering will not only be good for the companies hoping to develop the Donlin Mine, but also for the 31,400 Calista shareholders that own the land that hosts one of the richest stores of gold on Earth.


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"At Calista, we are committed to sustainable development and protecting our way of life for generations of shareholders," said Guy. "This is our prerequisite for Donlin Gold and any other use of Calista lands."

EDITOR'S NOTE: "Calista sees golden future for SW Alaska" is the 10th article in a 13-part series that investigates what the Alaska Native Claims Settlement Act means for Alaska's mining sector and its future. The remaining articles will continue to dig deeper into each of the land-holding Regional corporations; the mining lands that they own; and the services they offer to the mining sector. As a life-long Alaskan that has written about mining here for more than a decade, it is my hope that this series will provide a better understanding of ANCSA and serve as a guide to mining companies seeking to do business in The Last Frontier. For further information on ANCSA see An Alaska Native claims primer for miners published in the February edition of North of 60 Mining News.

Donlin Gold LLC

Daryl, a Calista shareholder from McGrath, is a heavy equipment operator and mechanic at the Donlin Gold project.

Author Bio

Shane Lasley, Publisher

Over his more than 11 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.

Email: publisher@miningnewsnorth.com
Phone: (907) 726-1095
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