May 15--Construction costs at the big Donlin Creek gold project are now estimated at $4.418 billion, but mine developers Barrick Gold Corp. and NovaGold Resources Inc. hope to reduce those costs.

The new estimate, 10 percent higher than a previous estimate in 2007, is part of an updated feasibility study released April 28 by NovaGold. The company said an updated cost estimate would be released later this year. The goal is that the capital cost can be reduced by 15 percent, NovaGold said in a press release.

Donlin Creek is a major gold deposit in the middle Kuskokwim River region near the village of Crooked Creek. Subsurface mineral rights are owned by Calista Corp., the Alaska Native regional corporation, and surface lands are owned by the Kuskokwim Corp., the Native village corporation.

The Native corporations are working closely with Barrick and NovaGold in supplying support services and coordinating hiring from small communities in the area.

Donlin Creek is one of the largest undeveloped gold accumulations in the world, and if developed would be one of the world's major gold mines. The deposit was discovered by geologists working for Calista Corp., which then brought in Placer Dome, a mining company, to explore and develop the project.

Placer briefly withdrew as operator and NovaGold, then a small exploration company, stepped in to further explore the deposit. Placer exercised an option to come back in as operator and was purchased by Barrick. Barrick and NovaGold have formed a 50-50 joint venture, Donlin Creek LLC, to develop the mine.

Mining would involve processing 53,500 tons per day through a mill at the mine. The power requirement is estimated at 127 megawatts. In a change from previous information on planning for the mine, the feasibility study indicates power would be provided by combined-cycle gas turbine generators at the mine site, supplemented with power generated by wind turbines.

Previously, the companies had said they would generate power with diesel fuel shipped to the mine, supplemented by wind. About 7.5 percent of the mine's annual energy requirement would be met by wind power from 14 planned wind turbines, the feasibility study indicated.

The information released April 28 did not indicate a source for the gas to fuel turbines.

Infrastructure needed for the mine would include an improved airstrip, buildings and camp support, the mill and power plant and a tailings impoundment area. A 76-mile access road would connect the mine to a port site farther south on the Kuskowkwim River.

The companies had earlier considered a shorter road to a river port near Crooked Creek village, but the river depths during summer on that part of the Kuskokwim could create problems in barge shipping.

A river port farther downstream, where depths are greater, is in the new plan, but a longer access road will have to be built.

Communities in the region are following the development of Donlin Creek closely. Not only would the mine generate revenues to the Native corporations that own land there, but the mine would be a source of high-paying jobs in a region with chronic unemployment and low family incomes.

Even during its exploration Donlin Creek was a major source of jobs, with many people hired from villages in the region to work as drillers, mechanics, logistics and camp staff and other support roles.

Tim Bradner can be reached at timbradner.@alaskajournal.com.

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