The massive Donlin gold project, owned by Barrick Gold (TSX:ABX, NYSE:ABX) and NovaGold Resources (TSX:NG, NYSEAmerican:NG), received major permits from the federal government on Tuesday (August 14).
In a joint statement, the companies announced that the US Army Corps of Engineers and Bureau of Land Management issued a joint record of decision for the project four months after the publication of the final environmental impact statement, marking the completion of the multi-year federal environmental review process.
“As one of the largest undeveloped gold deposits in the world, Donlin Gold represents exceptional optionality within our portfolio,” said Barrick executive VP for exploration and growth, Rob Krcmarov.
“Now, with key permits in hand, we can concentrate on further exploring ways of reducing initial capital and unlocking the value of this asset for all of our partners, in keeping with our deep commitment to community engagement and environmental stewardship,” he added.
Donlin gold is located in Alaska, the second-largest gold-producing state in the US. According to a feasibility study, the asset has approximately 39 million ounces of gold grading 2.24 grams per tonne in the measured and indicated resource categories.
Once in production, Donlin has the potential to produce, on average, more than one million ounces per year over a 27-year mine life on a 100-percent basis.
“The record of decision is a very detailed document, which serves as the foundation for issuance of the federal permits required for us to build a technically, environmentally, and financially responsible, as well as a socially sustainable, operation,” Novagold President and CEO Greg Lang said.
According to the joint statement released by Barrick and NovaGold, current activities at Donlin are focused on optimization work and community outreach. Looking ahead, the companies expect to provide further details in the fourth quarter on the path forward to update the project’s feasibility study.
However, the government’s decision was opposed by a group representing Yukon and Kuskokwim region leaders.
“Donlin would be the largest gold mine in the world. The social and environmental impacts could be devastating to our subsistence region and traditional Yup’ik way of life where we have less opportunity for cash income but lots of subsistence foods from the land to keep our communities and families healthy,” said Mary Matthias, Natural Resources Director for Orutsararmiut Native Council.
On Tuesday, shares of Barrick closed down 1.24 percent in Toronto at C$ 13.59. Meanwhile, shares of NovaGold were up 1.06 percent, closing at C$ 5.72.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
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