Novagold Talks Expansion, Mine Development In Latest Earnings Call
Novagold, one of two companies developing the proposed Donlin Gold mine in the Yukon-Kuskokwim Delta, is looking at building the mine in stages to reduce construction costs. That’s according to its latest quarterly earnings call.
Donlin plans to build a mine consisting of two pits that will eventually merge into one. At its peak, the mine would be two miles long and more than a mile wide. That will require a lot of infrastructure, including a road, an airstrip, and a 315-mile gas pipeline. All of that comes with a $6.7 billion price tag, and Donlin’s developers need to trim costs.
Novagold is one of the two companies that has formed Donlin Gold to build and operate the mine. The company is exploring how to build the mine in stages. Novagold Vice President of Communications Melanie Hennessey says that the plan is not finalized.
"We’re just looking at the better ways to reduce the capital expenditure from the front end, but it’s one of many options that we’ve studied that we’re looking at," Hennessy said.
Donlin says that it could take 3,000 people to build the mine, and 800 to operate it annually. Hennessey says that the company can’t say how building the mine in stages might change the number of jobs that the construction would generate.
"So we don’t have that level of detail, and in addition to that, given the population in the region, I think there are ample opportunities for those who are qualified and willing to work," Hennessey said.
As part of its lease agreements with the two Native corporations that own the land and mineral rights, Donlin has promised to prioritize hiring local shareholders. Hennessy says that the mine, as currently designed, holds almost 40 million ounces of gold to be mined over 27 years. But there's a big chance that can be extended.
Novagold's board chair, Thomas Kaplan, said in the earnings call that "another part of the asset that people rarely think about is the unbelievable white swan that exists that the next Donlin could be at Donlin. My geologist from Electrum believes that there is great potential to be able to find another Donlin at Donlin."
Hennessey said that she doesn’t know when they will wrap up the feasibility study, which would update how Donlin plans to build the mine. She said that the next earnings call should provide more details.