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Placer Dome says infrastructure is its focus at Donlin Creek
Patricia Jones Petroleum News Contributing Writer
Mining giant Placer Dome remains focused on resolving infrastructure hurdles to developing the remote Donlin Creek gold deposit in southwest Alaska.
Finding affordable and significant sources of power and limestone, needed in the hardrock extraction process, are two key issues that the company has been working this summer, project manager Gregg Bush told Petroleum News Oct. 21.
Transportation to the remote site, 14 miles north of the upper Kuskokwim River at Crooked Creek, is another logistical hurdle to be overcome, he said.
“Transportation is something much more in our control, but we’re sort of at the mercy of the environment, the circumstances” for electric demand in the undeveloped area, he said. “If we can’t solve the power problem, we have a serious dilemma.”
Current plans call for a mill with 80 megawatts of power capacity installed. Peak loads would range from 70 to 75 megawatts, with the average load in the low 60s, he said.
Hires Swiss Energy Placer Dome has hired Swiss Energy as its consultant on the power issue, Bush said. The company is considering a whole host of power generation ideas and hopes to develop a short list of possibilities by the end of the year. (See related story on page 11.)
A final decision on a power source is needed by the end of the second quarter of 2004, when the company’s pre-feasibility study should be complete, Bush said.
Placer Dome has also been researching options for limestone sources in the region. Current plans call for an average consumption of 60,000 tons of limestone per year, although the amount will vary from year to year, depending on the type of ore processed.
The company is also working with the Alaska Department of Transportation and Public Facilities to identify a road route from the Kuskokwim River to the mine site. A winter trail now runs along Crooked Creek to the mining community of Flat. “That established winter trail is not necessarily the best place to build a road,” Bush said. Winter drilling planned After freeze up, Placer Dome plans to drill some additional ground water monitoring wells and conduct some condemnation drilling.
Bush said the company hopes to start a substantial infill drilling program on the deposit next summer, after completing the pre-feasibility study and successful resolution of infrastructure hurdles.
A feasibility study could begin late next year, provided all prior steps pan out. “Typically, Placer does a feasibility study when they’re pretty sure they are going to build a mine,” he said.
The company would also initiate permitting at the start of the feasibility study, he said. “Our timeline target is to have all permits in place by the end of 2006.”
In its agreement with joint venture partner NovaGold Resources Inc., Placer Dome has a little more than four years to bring Donlin Creek to a mine construction decision. Placer Dome’s earn-in requirements include spending $30 million on the property, to include a feasibility plan and acquiring permits.
Bush declined to reveal how much the company has spent since assuming operatorship of Donlin Creek in mid-February. Total spending on the gold deposit, estimated to contain about 28 million ounces of gold, from 1992 through the end of 2002 is $45 million.
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