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Donlin Gold's world-class value increases

2020 drilling taps high-grade zones at 39M-oz gold project Mining Explorers 2020 - Published January 19, 2021

Donlin Gold LLC, a joint venture partnership owned equally by Barrick Gold Corp. and Novagold Resources Inc., completed 23,400 meters of drilling this year to gain a better understanding of the 39-million-ounce Donlin gold mine project in Southwest Alaska.

"Diligent exploration and detailed geological modeling are essential in establishing a strong foundation on which to deliver optimal value from an asset the size of Donlin," said Barrick Gold President and CEO Mark Bristow.

While there were questions as to whether Barrick would shed Donlin Gold as part of its plans to sell non-core assets following the merger with Randgold Resources Ltd., the mega-gold-miner that emerged has since become even closer involved in the enormous Alaska asset.

"With the changes in Barrick, we got much more involved," said Bristow.

Barrick's top executive said Donlin is "a very valuable asset" to Barrick that is both blessed and challenged by its location.

"If you look at Donlin compared to some of the other assets in our portfolio, it's a pure gold play, it's in a mining-friendly jurisdiction, it's just in a very challenging geographical setting," he expounded.

The Barrick CEO sees three areas of risk for Donlin – construction risk, due to the asset's remote location; capital risk, because of the likely multi-billion-dollar price tag to develop a world-class mine off the grid in Southwest Alaska; and geology risk.

While Barrick and Novagold cannot do much about the location, they can gain a better understanding of the geology. This is why the partners deployed their top geologists to Donlin and invested in the largest drill program to be carried out at the world-class gold project in 12 years.

With 504.81 million metric tons of proven and probable reserves averaging 2.09 grams per metric ton (33.9 million oz) gold, Donlin Gold has plenty of ore to produce more than 1 million oz of gold annually over a 25-year mine detailed in a 2011 feasibility study. The 2020 drilling is providing the partners information about higher grade zones that could refine this mine plan.

"Once we have a clear definition of the reserves and, more importantly, the shapes of the ore bodies, we can then set with confidence the mining plan and, more importantly, the rate at which we can mine," Bristow said.

Exceeding expectations

The Donlin Gold partners launched their 2020 drill program at the 39-million-ounce gold project in March but quickly idled down the rigs and closed the exploration camp as the novel coronavirus outbreak was elevated to pandemic levels.

With more than half the Donlin Gold workforce being Alaska Natives, many from rural communities, working alongside employees and contractors from Alaska hub cities and out of state, it was essential that strict COVID-19 protocols were established before the partners could consider to resume the optimization drilling.

After meeting with Alaska Native leaders in the Yukon-Kuskokwim region, Donlin Gold implemented rigorous COVID19 measures that included testing, chartered flights, social distancing, and increased health screenings before reopening the exploration camp in May.

"We have ensured that our operations are working as safely and responsibly as possible alongside our Native corporation partners, Calista and TKC (The Kuskokwim Corp.), providing extensive resources and support in Alaska, particularly in the remote Yukon-Kuskokwim region closest to the project," said Bristow.

All Donlin Gold camp personnel are asked to monitor their health in and out of camp and consult health professionals if feeling any symptoms of illness. Should any individual exhibit symptoms of illness, on-site health professionals will determine if they need to be quarantined at site or evacuated.

"Novagold's most important objective right now is the health and safety of its employees, partners and contractors," said Novagold Resources President Greg Lang.

Despite the two-month suspension of activities and other challenges related to protecting workers and local communities from COVID-19, Donlin Gold LLC managed to exceed its originally planned 22,000-meter drill program for 2020.

"I'd like to congratulate the joint venture team, as well as thank our Native corporation partners, Calista Corporation and The Kuskokwim Corporation, on successfully completing drilling despite the enormous challenges associated with operating during the COVID-19 pandemic," said Bristow.

Higher than modelled grades

The primary objective of the 2020 drill program at Donlin Gold was to validate and increase the confidence in recent geologic modeling concepts.

"A comprehensive geological understanding of any orebody is a foundational step that few companies in the gold industry do well," said Bristow.

Highlights from this resource modelling drill program include:

45.9 meters averaging 5 g/t gold from a depth of 35.4 meters in hole DC20-1866.

41.9 meters averaging 11.6 g/t gold from 30.4 meters in hole DC20-1871.

7.7 meters averaging 18.4 g/t gold from 60.9 meters in hole DC20-1873.

4.2 meters averaging 80.6 g/t gold from 123.5 meters in hole DC20-1877.

19.8 meters averaging 11.3 g/t gold from 48.9 meters in hole DC20-1878.

6.9 meters averaging 43.1 g/t gold from 178.6 meters in hole DC20-1888.

The Donlin Gold partners said the results from the initial drilling support continued analysis of the updated lithological model and controls of the higher-grade mineralization and exceed the modeled grade-thickness for the deposit.

"With the industry burning through reserves, and grades continuing to decline, great drill results with even higher than modeled grades are exciting for any mining company – and we believe that to be particularly true for Donlin Gold at this late stage of development," said Lang.

The nearly 42 meters of 11.6 g/t gold encountered in DC20-1871 is a prime example of high-grade mineralization near the surface in the Acma zone. Other high-grade intercepts had previously been encountered in this area of moderately dense drilling but not of the same magnitude.

Novagold and Barrick said this higher grade area of Acma has been designated for the early years of mine operation at Donlin.

The data from the 2020 drill program will be incorporated into an updated model for Donlin Gold, which could be further verified with additional drilling in 2021.

Author Bio

Shane Lasley, Publisher

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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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