NOVAGOLD Provides Update on Donlin Gold Project
By NOVAGOLD President and CEO Gregory A. Lang
The second quarter 2020 was dominated by the COVID-19 pandemic, testing the character of all globally and causing a shift in activities at Donlin Gold, with NOVAGOLD’s support, to remotely assist local communities in Alaska after the 2020 drill program was temporarily paused for two months.
NOVAGOLD’s most important objective is to secure the health and safety of its employees, partners, and contractors. The company has implemented policies at its offices in Salt Lake City and Vancouver designed to ensure the safety and well-being of all employees and the people associated with them. In that regard, to reduce risk, our employees have been asked to work from home, avoid all non-essential travel, adhere to good hygiene practices, and engage in social distancing. Additionally, NOVAGOLD and its partner Barrick Gold, through Donlin Gold, have implemented a health and safety policy consistent with State of Alaska Department of Health and Social Services recommendations, travel restrictions and other COVID-19 measures in the region aimed at achieving the same objectives at Donlin Gold’s Anchorage office and the project site. The policy includes requesting all personnel to monitor their health and consult health professionals if feeling any symptoms of illness; requiring all personnel to take a COVID-19 test before coming into the camp, and again when they leave; implementing more frequent sanitization practices; and regularly conducting safety meetings designed to address sound hygiene and sanitization practices. Out-of-state contractors/employees require two negative COVID-19 tests prior to going to camp. Donlin Gold uses charter flights to transport personnel to and from the site. Employees are screened for symptoms and maintain a minimum of six feet of distance in eating areas and living quarters. Should any individual exhibit symptoms of illness, they will be evaluated and, if needed, quarantined, and/or evacuated from the camp.
Donlin Gold was one of the first mining companies in Alaska to respond to the pandemic and its impacts on the communities closest to the project site. The Donlin Gold drill program preparations and work began in February and continued through March but, due to COVID-19 restrictions and for the safety of our personnel, was temporarily paused in April as a precautionary measure. Re-mobilization began in late May in accordance with Donlin Gold’s COVID-19 policies and procedures taking into account all applicable State requirements.
As more than half of Donlin Gold employees are Native Alaskan, prior to re-mobilization of drill rigs and re-opening camp, Donlin Gold held weeks of conversations with community and tribal leaders in the Y-K region to ensure safety precautions for Donlin Gold personnel met the needs of each community. The Company seeks to bring tangible, long-lasting benefits to all of its community partners in the form of training and employment opportunities, service business contracts, and participation agreements as the project advances.
Drilling for Value Enhancement
NOVAGOLD and Barrick continue to study ways to improve the project’s value and to reduce initial capital outlays including enhanced project design and execution, engagement of third-party operators for certain activities, and potential for future financing of some capital-intensive infrastructure. To date, these additional studies have identified key areas that have the potential to add value and maximize the future opportunity and longevity of the project.
The 2020 Donlin Gold drill program is part of this effort. The objective of this drill campaign, the largest in 12 years, is to validate recent geologic and resource modeling concepts developed by the Barrick and NOVAGOLD teams, and to test potential extensions of high-grade zones, most of which would be expected to be mined early in the life of a future mine. The results of the 2020 drill program will provide the necessary data needed for NOVAGOLD and Barrick to decide on the next steps to advance Donlin Gold. The Company will incorporate this data as part of the ongoing optimization work and staged development approach that the owners have been studying to reduce initial capital. This information will provide valuable input into the owners’ decision process to proceed with updating the feasibility study.
As originally stated in January, the owners continue to target completing a majority of the drill program by year-end. The project owners remain committed to advancing the Donlin Gold project in a safe, efficient, and financially disciplined manner with a strong focus on environmental stewardship and social responsibility.
Donlin Gold continues to support the State of Alaska to advance other permits and certificates needed for the project. The field work for the Alaska Dam Safety certificates has been temporarily paused to prioritize the ongoing drill program.
Additionally, Alaska Department of Natural Resources’ (ADNR) Division of Oil and Gas (DOG), issued the final State Right-of-Way (ROW) lease for the buried natural gas pipeline on January 17, 2020. On February 6, 2020, Cook Inletkeeper, on behalf of the Orutsararmiut Native Council (ONC), Susitna River Coalition, Kasigluk Traditional Council, and Tununak IRA Council, requested that the Commissioner of ADNR reconsider the decision to issue the ROW lease for the pipeline. The ADNR Commissioner denied the request for reconsideration on February 18, 2020. On March 19, 2020, Earthjustice, representing ONC, Chevak Native Village, Chuloonawick Native Village, Native Village of Eek, and Cook Inletkeeper, filed an appeal of the denial of the ROW lease issuance reconsideration request in the Superior Court of the State of Alaska at Anchorage (“Alaska Superior Court”). On April 30, 2020, ADNR reversed and agreed to reconsider the decision to issue the ROW lease in accordance with the February 6, 2020 request made by Cook Inletkeeper. As a result, the appeal filed in the Alaska Superior Court was dismissed without prejudice on May 20, 2020. Donlin Gold supported the State’s decision to accept the reconsideration request and the subsequent withdrawal of the appeal filed in Alaska Superior Court. The Company supports the efforts of the State to address the narrow issues related to cumulative effects that have been raised by Cook Inletkeeper. The Company will work with the State wherever needed to ensure they have the information they require. NOVAGOLD expects a final decision in approximately six months. The Company believes the ROW lease offer will be upheld by ADNR.
Deepening Partnerships with Stakeholders during the Pandemic
Calista and TKC have been our Native Corporation partners in the project for many years and, like Barrick, share our vision of building value for the future generations of their shareholders with this project. The COVID-19 pandemic created significant concern in the Y-K region due to Elders’ memories of the toll taken by the Spanish Flu early in the 20th Century when Native Alaskans suffered the highest casualty rate in North America. When concerns emerged about the spread of COVID-19 to Alaska, our Native Corporation partners immediately engaged with the community to determine their most immediate needs of small villages in the region, and Donlin Gold contacted Calista and TKC to offer help with transportation, food and supplies.
A priority early on was partnering with the village of Aniak, a regional hub for the eight middle Kuskokwim villages closest to the project, to distribute food and supplies to residents homebound due to health issues, quarantine requirements, or other reasons. Additionally, Donlin Gold donated thousands of pounds of food to food banks and homeless shelters when the Donlin Gold camp was temporarily closed in April. In partnership with TKC and Tribal councils, Donlin Gold continues to coordinate the delivery of food and supplies to communities now without regular air carrier service after the regional airline went into bankruptcy.
Practical sanitation issues were also addressed, including delivery of five-gallon buckets sent to middle Kuskokwim villages with water supply issues and disinfecting soap sent to all the homes in the Y-K region (distribution took place from Anchorage and all packages were sent to the Tribes for each village). Donlin Gold coordinated with Tribal administrators to identify community members to make face masks for the protection of Elders and COVID-susceptible people, then assembled and shipped the 1,400 mask making kits to 56 Y-K villages.
NOVAGOLD is proud of the immediate response from Donlin Gold to urgent community needs during the COVID-19 pandemic and partnering with Calista and TKC in ongoing community engagement in environmental management, safety, training, educational, health, and cultural initiatives, as well as providing economic assistance through community funds such as the Bethel COVID-19 Resiliency Fund. As part of an ongoing environmental commitment, Clean Up Green Up initiatives, funded in part by Donlin Gold, took place in 32 villages.
At the end of the quarter, we were delighted to report that Dan Graham was promoted to the position of General Manager for the Donlin Gold project, replacing Andy Cole who has retired. Mr. Graham was previously the Manager, Permitting and Environmental Department at Donlin Gold and has worked in Alaska’s mining industry for over 35 years. Dan is a long-term Alaska resident and a member of the board for the Council of Alaska Producers, Alaska Sealife Center, and the Tyonek Tribal Conservation District and past board member of the Alaska State Hockey Association, Alaska Miners Association, and the Resource Development Council. The Company would like to thank Andy for his years of service to the Donlin Gold project and wish him well in his retirement.
In This Issue
Alaska Problems Require Alaska Solutions
On January 16, a fire destroyed the water plant and washeteria in the southwest Alaska village of Tuluksak. For the village of about 350 people, it was a devastating blow. The water plant was the only source of drinking water in the village, in which the primarily Yup’ik residents lack indoor plumbing and rely on honey buckets, not uncommon in the flat, swampy region.