One of the two major investors in the proposed Donlin Gold mine project is selling its share of the project for over $1 billion.
Barrick Gold Corporation – based in Ontario, Canada – announced on Tuesday (April 22) that it had signed a roughly $1 billion deal to sell its 50% stake in the Donlin Gold project. Novagold Resources, also headquartered in Canada, will now hold 60% of Donlin Gold, making it the primary owner of the project.
Private investment firm Paulson Advisers, based in Palm Beach, Florida, will now own 40% of the Donlin Gold project. The firm has been a large shareholder in Novagold itself. Its chair, billionaire John Paulson, has a history of gold mine investment, according to reporting from the Alaska Beacon.
The proposed Donlin Gold project is situated 10 miles from the middle Kuskokwim River community of Crooked Creek and would be among the largest open-pit gold mines in the world if constructed.
Local and regional Alaska Native corporations own the surface and subsurface rights for the proposed mine site. Calista – the regional Alaska Native corporation – says it originally scouted the site of the mine in the 1970s as a place for potential development.
Calista announced its support of the change in ownership in a press release (April 22), stating that its focus as a project shareholder “remains on environmental protections and cultural values.”
The Donlin Mine project also faces pushback, much of it rooted in the environmental impacts that could reach beyond the mine’s estimated 27-year lifespan. Much of the controversy surrounds the mine's proposed tailings dam, designed to hold more than 500 million tons of toxic mine waste, according to state court filings.
Critics fear the potential for chemical contamination to the surrounding natural resources, which could threaten vital fish habitats and resident livelihoods if the dam were to fail.
Mother Kuskokwim Tribal Coalition, a group formed in opposition to the Donlin Gold project, voiced its continued opposition to the project in a statement on the change in ownership, and questioned Barrick Gold’s reasoning for pulling out of the project, citing legal, economic and environmental risks associated with the Donlin Gold mine.
“The Donlin mine threatens both the ecosystem and traditional subsistence way of life that has sustained our communities for generations,” Mother Kuskokwim Executive Director Sophie Swope wrote.
Donlin has obtained nearly all of the necessary federal and state permits to operate, but faces legal roadblocks in state and federal courts, including three pending state lawsuits and final judgement in a federal district court case challenging the environmental permitting underpinning the mine.
The change in share ownership is expected to be finalized sometime later this year. Novagold and Paulson say once the deal goes through, their first order of business will be updating the mine’s feasibility study.
