Donlin Gold is touting the results from its most ambitious drilling program yet. This news follows a recent financial report that said that the mining prospect in the Yukon-Kuskokwim Delta was too expensive to build, and likely not going to happen.
In recent earnings calls, the two Canadian companies developing the Donlin mine, NovaGold and Barrick, are praising the results from Donlin Gold’s most ambitious drilling project to date. Melanie Hennessy, NovaGold’s vice president of corporate communications, said that it shows that both companies are serious about the mine’s potential.
"There is alignment between both companies on the direction and continuing focus on advancement of Donlin Gold," said Hennessy.
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In an earnings call back in March, Barrick Gold CEO Mark Bristow said that the Donlin Gold mine did not meet its criteria to build in its 10 year plan. In May, a short selling financial research firm cited Barrick’s hesitation in a report that shed doubt on the future of the mine.
Now, a few months later, Barrick and Novagold appear pleased with the results from the drilling program so far, according to a transcript from Barrick Gold’s latest earnings call.
Barrick Gold CEO Mark Bristow told investors, “It's a key project for Barrick, and very valuable today.”
But a financial analyst pointed out in the earnings call that comments from Barrick suggested that the company is more likely to sell the prospect before it’s actually built.
Greg Barnes, from TD Securities, told Bristow: "From your comments earlier on about Donlin and some of the other big projects, it sounds like you're more of a seller of those projects than a builder in this kind of environment.”
Barrick CEO Bristow responded to Barnes: “You know that famous saying, everything's got a price? We will sell anything as long as we feel that we're getting more than what it's worth or more. As I said earlier, our view is that whereas our activities in Donlin are still adding value, it's a very substantial gold resource.”
But Bristow said that the biggest challenge is still how expensive it is to build the mine. The proposed site is located in a remote part of the Yukon-Kuskokwim Delta, and is only accessible by plane. A power plant, a 315-mile gas pipeline, and a road to operate the mine would need to be built, at a total cost of nearly $7 billion.
But Hennessy said that the drilling results and Barrick Gold’s comments in the earrings call prove that they are serious about developing the mine.
"All that drilling that's been done to date has been, has been quite positive," Hennessy said.
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Meanwhile, the coronavirus pandemic has slowed down Donlin’s permitting. Hennessy said that the company has delayed work on the dam safety certifications. But back at the camp, none of the workers have tested positive for the virus so far.
Donlin has put in place testing protocols: all employees must have a negative coronavirus test before coming into the camp and before leaving. Village residents who work at the camp must test negative twice before entering the camp, and before heading back to their village. Out-of-state employees also have to test twice before coming into the camp and leaving it.
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Meanwhile, Donlin opponents have challenged the Alaska Department of Natural Resources’ decision to lease Donlin a right of way for its pipeline, and that challenge is still working its way through the procedural process at the agency.