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AMERICAN GOLD RUSH—ONLY JUST BEGUN
By Kathryn G. Arlen
That which is scarce humans often value most.
Civilization’s preoccupation with gold acquisition provides an excellent example. Even after centuries of both recorded and fabled treasure seeking, National Geographic recently reported: “In all of history, only 161,000 tons of gold have been mined, barely enough to fill two Olympic size swimming pools,” yet this precious metal’s power to entrance and motivate seems stronger than ever.
In today’s world gold is still mostly used for jewelry, followed by electronic/industrial purposes, but increasing rapidly in its investment-backing value. Growing demands from China, India, and Russia help create an auspicious environment for any viable American gold exploration/development mining enterprise, and Alaska already boasts several. But perhaps looming largest on the “golden horizon” is the Donlin Creek LLC equal partnership between NovaGold Resources Alaska Inc. and Barrick Gold U.S. Inc
DATELINE: May 2010: “This is a world-class project. There are very few deposits of this size and quality in the world, so it will certainly put Alaska on the forefront of gold production worldwide,” stressed Rick Van Nieuwenhuyse, president and CEO of NovaGold, describing the developing gold mine project in northwestern Alaska, 270 miles NW of Anchorage.
EXPECTED COMPLETION: In production by the end of 2017. “We’re prepared to have submitted permits by fall of 2011, the permitting process to take two to three years, construction about three more, and at that point have a mine operating at about 50-55,500 tons per day throughput…There is really nothing like this in North America. Based on the feasibility study, Donlin Creek will produce on average of about 1.3 million ounces/year of gold for 25 years.”—Van Nieuwenhuyse.
Employment, both current and future, is always a top economic priority: “This will bring a huge number of jobs to the region, probably 500-600 direct jobs when in operation and during construction probably several thousand,” Van Nieuwenhuyse continued. In Alaska we always like to talk about local hire, to “give Alaskan jobs to Alaskans,” and many mining operations attempt to follow this dictum. But NovaGold carries that concept into a priority status, and is particularly proud of the empowering effects it promotes within its corporate policy: “…to work closely with the communities around our operations and potential operations. We have highly effective hiring and training policies.”
When the Donlin camp is up and running, it supports a workforce of about 200, “…90% are from the local region,” the CEO explained, “with training programs specifically designed to advance people.” End result: camp operation is run and managed by people in the area all employed from the cluster of villages spread along the Kuskokwim River.The mine site itself is located on land owned by the Kuskokwim and Calista Corporations, and NovaGold/Barrick leases both surface and subsurface rights respectively from the two native organizations.
NovaGold’s common sense, holistic, and humanistic business approach emphasizes consistent “engagement and collaboration with partners” focusing on “open communication and public meetings…[eliciting] feedback, and incorporates those suggestions into its mine plans.” (www.novagold.net) “You sense an amazing amount of pride when you go out to the Donlin camp and talk with people—it’s their camp, they built it, and they maintain it,” Van Nieuwenhuyse elaborated. Responsible mining practices, including safety and accountability, are an integral part of the native Tahltan “lani etie” philosophy, meaning “to be the best one can be,” an attitude NovaGold has embraced and incorporated into its own corporate identity.
Always a critical challenge to interior Alaskan mining projects is energy production, and NovaGold recently revised its 2009 Donlin Creek feasibility study recommending combining diesel with onsite wind turbines to the more practical potential for routing natural gas as the electric power source. “You look at what you can do to minimize both the financial and the environmental end of burning diesel, and gas is certainly a viable alternative, specifically importing LNG since right now we’re lacking the ability to bring Alaskan natural gas to market” Van Niewenhuyse explained, “…and there’s a pretty good LNG market in the Pacific Rim where you can buy LNG, and it’s no different than if you bought diesel fuel.” Donlin Creek LLC is now considering construction of a 325 mile long underground 12 inch pipeline from somewhere in the upper Cook Inlet area to the proposed mine site which “has the potential to significantly improve operating costs and reduce operating risks,” --May 2010 news release.
Finally, let’s not forget China and all other potential export possibilities as world gold demands accelerate. In a March 2010 analysis the World Gold Council (WGC) described how China’s expected gold consumption will soon exceed its own production capacity: “While China is the world’s sixth largest official holder of gold, its gold reserves currently account for less than two percent of total reserves…the WGC expects Chinese supply growth to be challenging…and likely to decline in the future… Assuming these figures are correct, the WGC estimates suggest that China could exhaust its known gold mining reserves in six years from now.” Six years, and the Donlin Creek project is currently expected to be producing in seven--excellent timing.
Van Nieuwenhuyse concluded, “The developing economies, China, India, Brazil, Russia—they’re going to be moving forward for many, many years. I’m sure they’ll stumble with issues that set back their economies, but the bottom line is there are somewhere about three billion people who want everything that we have in North America, and once the genie is out of the bottle, there’s no stuffing in back in.” The Gold Rush is far from over. [Stock exchange information: AMEX: NG]
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Kathryn Arlen is a member of the Alaska Miners Association, freelance writer and communication consultant, and can be reached at mindmerger@hotmail.com
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