Name of the Project
Donlin gold project.

Location
Alaska, in the US.

Project Owner/s
Donlin Gold is equally owned by Canada-based miners Barrick Gold Corp and NovaGold Resources, while the land is owned by the Calista Corporation – a community organisation comprising the Kuskokwim Corporation (TKC) and Alaska Native corporation for the Yukon–Kuskokwim region – owns the mineral rights.

Project Description
The Donlin gold (formerly Donlin Creek) project, as currently envisioned, will be one of only a handful of gold mines worldwide that produce more than one-million ounces of gold a year.

The 109 km² Donlin Creek property, which is part of the Kuskokwim gold belt, is one of the largest undeveloped gold resources in the world, containing estimated proven and probable reserves of about 504.8-million ounces of gold at a grade of 2.09 g/t, and measured and indicated resources of 541.3-million ounces, as well as inferred resources of 92.2-million ounces of gold.

The project is expected to be capable of producing 1.5-million ounces of gold a year in the first five years of operation, and an average of 1.1-million ounces of gold a year over its projected 27-year mine life.

The project is also being updated to include power generation using natural gas delivered to the site through a 500 km pipeline from the Cook Inlet to the mine site.

Net Present Value/Internal Rate of Return
At a base case gold price of $1 200/oz, the Donlin feasibility study, which was last updated in 2011, calculated an internal rate of return (IRR) of 6% and a net present value, at a 5% discount rate, of $547-million.

Potential Job Creation
Up to 3 000 jobs will be created during construction and up to 1 400 jobs during operation.

Capital Expenditure
Initial capital costs for the project in April 2009 were estimated at $4.5-billion. This has now been revised upwards to $6.7-billion.

Planned Start/End Date
Production is expected to begin in late 2017 or early 2018.

Latest Development
Novagold and Barrick Gold are set to announce the next set of assay results for Donlin in the next few weeks and will be in a position to decide on a potential feasibility update in the next few months.

The first set of results from the 2020 campaign encountered grades higher than predicted by the previous modelling. The results included 41.91 m grading 11.61 g/t, starting at 30.35 m drilled depth.

The first results, announced in August, were for about 10% of the planned 80-hole drill programme. The companies have cautioned that assay results turnaround times have been slow this year, and that final results are not expected before year-end.

Despite an initial interruption, owing to Covid-19, the 2020 drill programme is nearing completion and will be concluded in the next two weeks.

The campaign’s objectives are to validate geological and resource modelling controls and to test potential extensions of high-grade zones, most of which will be mined in the early life of a future mine.

Barrick looks at projects through the prism of $1 200/oz, with a 15% IRR. The current programme is intended to investigate whether Donlin can meet that threshold by adding high-grade mineralisation early in life.

CEO Greg Lang has stated that the feasibility study is “a bit stale” and that a new study should provide an enhanced economic picture.

Using results from the drill programme to determine their next steps, the partners could be in a position to decide on a feasibility study update “sometime later this year or early next year”, he has added.

Novagold is in a strong financial position and would be able to see the project through feasibility study stage, Lang contends.

Barrick CEO Mark Bristow said during Barrick’s second-quarter webcast in August that Donlin was a “key project” for the company, describing it as a “nice, clean gold opportunity” and that, “at these gold prices, it’s a very valuable asset. We are still adding value to it”.

Bristow adds that, based on early drill results, they underscored Donlin’s “significant potential, as well as extraordinary optionality to the gold price over multiple cycles and in a mining friendly jurisdiction”.

Key Contracts, Suppliers and Consultants
SRK Consulting (technical report) and AMEC Americas (lead feasibility study consultant).

Contact Details for Project Information
Barrick Gold investor relations manager Joyce Davies, tel +1 416 307 7354, fax +1 416 861 0727 or email jdavies@barrick.com.
NovaGold Donlin Creek, tel +1 888 225 7590, fax +1 907 273 0201 or email info@donlincreek.com.
SRK Consulting, tel +1 907 677 3520, fax +1 907 677 3620 or email anchorage@srk.com.