Page 27 - NG_AR_2014

Richard Williams
vice president,
engineering and development
How does Donlin Gold compare to other assets with which you have been associated in terms of permitting and environmental intricacies?
Mr. Rimelman: Donlin Gold is a large and complex project that combines a major mine and processing facility with signi cant infrastructure. As described above, we expected and realistically planned for the EIS to take approximately four years to complete.
We have exceptionally strong working relationships with each of the state and federal agencies involved in the EIS and permitting. The agency team is highly experienced – many of them, in fact, have worked together historically in permitting activities at other projects in Alaska, such as the Red Dog, Fort Knox, Kensington, and Greens Creek mines.
So far, we have not encountered any technical or regulatory issues that lessen our con dence in successfully completing permitting on schedule.
Are there opportunities to lessen the large capital cost for Donlin Gold as presented in the 2011 second updated feasibility study?
Mr. Williams: Donlin Gold’s owners are looking to optimize the project by evaluating a range of opportunities to reduce the upfront capital, including capital cost-sharing opportunities – such as third-party owner/operators for the gas pipeline, the power plant and port facilities (~$1B), as well as equipment leasing. Collectively, we are also investing about $3M (100% basis) on technical studies to identify potential design and execution enhancements.
These days, many big, capital-intensive projects are under scrutiny – some for perfectly legitimate reasons. We believe, however, that capital costs should never be considered in isolation. As we’ve mentioned before, there is a systemic supply/demand disequilibrium in gold, and today’s operating mines cannot ll the gap.
How does your Donlin Gold experience compare with your experience at the Pueblo Viejo mine in the Dominican Republic?
Mr. Williams: Pueblo Viejo is an excellent reference point for the development of Donlin Gold. It took seven years to permit and build the project, which went into production in 2012 on schedule and within capital guidance. We gained a comprehensive understanding of how to construct a very large operation with limited to no infrastructure in extreme weather conditions and a minimally skilled workforce. In some respects, Donlin Gold should have fewer challenges compared to Pueblo Viejo: rst, Alaska has a well- established mining tradition; second, the mineral processing at Donlin Gold is expected to be less complex than at Pueblo Viejo. The pressure oxidation operation at Donlin Gold is on a concentrate where Pueblo Viejo was a whole-ore pressure oxidation operation. This has reduced the size of the autoclaves and the downstream processes.
How up-to-date is the 2011 Donlin Gold second updated feasibility study? What do you think has changed in three years?
Mr. Williams: The Donlin Gold second updated feasibility study was completed at a time of higher costs in the industry. NOVAGOLD and Barrick are expected to update the study as permitting nears completion. Many factors in the industry have changed over the last few years, like innovation in construction practices and execution enhancements, commodity prices (copper, steel, and energy), and challenging project nancing/debt markets for the mining industry.
NG : 25