VOLUME 2 | ISSUE 2 | SPRING 2025 www.AKRDC.org 11 NovaGold, Paulson plan to focus on expanding gold reserves, resources BY TIM BRADNER BARRICK GOLD IS SELLING ITS 50% SHARE OF THE BIG DONLIN GOLD PROJECT IN THE MID-KUSKOKWIM RIVER REGION TO PAULSON ADVISORS LLC AND NOVAGOLD RESOURCES INC. Paulson will pay Barrick $800 million for a 40% share of Donlin Gold, and NovaGold will pay $200 million to increase its current 50% share to 60%, the companies announced in late April. The new partners will shift to updating a project feasibility study done several years ago and will focus a 2025 exploration program toward expanding gold reserves and resources. NovaGold is a “junior” Vancouver B.C. based company whose biggest asset is its 50% holding in Donlin Gold. Paulson is NovaGold’s second largest shareholder and has been involved with the company since 2010. Its chairman, John Paulson, is very familiar with Donlin Gold and sees it as, “one of the most attractive undeveloped gold projects in the world,” with 39 million ounces of gold resources and reserves. Barrick is an experienced gold mining company and its involvement has long been seen as a big plus. While Paulson is considered a savvy investor in gold projects, he has not been engaged in managing development of a large project like Donlin. NovaGold has been engaged with the project for decades as part owner but has similarly not developed a large project. Some in the mining industry see positives including that the new owners will be aggressive in pursuing development, while Barrick, a large company, may have had Donlin on the back burner. The Barrick exit would seem to be bad news for Calista Corp., which owns the subsurface minerals as well as all other Alaska Native corporations that would benefit from the sharing of royalties under the 1971 Alaska Native Claims Settlement Act. But while the change of ownership creates uncertainties, it will be a plus if the new ownership leads to more aggressive development. There are other challenges facing Donlin Gold, a big one being energy. The mine plan includes a pipeline bringing natural gas from Cook Inlet, but gas production there will be winding down. Liquefied natural gas will be imported to supply Southcentral Alaska communities, and while this would presumably also be available to Donlin Gold, it will be more expensive, likely twice the current price of locally produced gas. But if gold prices are high enough, the Donlin Gold project may be able to afford that. There is also litigation pending over the project’s plans to prevent and contain a spill of mine tailings. A consortium of tribal and environmental groups has challenged federal permits and the Environmental Impact Statement for the mine arguing that federal agencies did not assess the effects of a larger spill of tailings than that estimated as possible in the EIS. The case is now in U.S. District Court Judge Sharon Gleason’s court in Anchorage. What’s interesting about the change in ownership is that it brings the project full circle, in a historic sense. Placer Dome, a mining company, became involved in exploration at Donlin in the 1980s. However, due to corporate changes, the company withdrew after doing extensive drilling. NovaGold, even then a partner, stepped in to invest in new drilling, which resulted in expanded gold resources. Placer then came back in for a 50% share of the project with NovaGold holding the other 50%. Barrick Gold then purchased Placer, so Placer’s 50% ownership went to Barrick and the arrangement with NovaGold continued. Now Barrick is exiting and NovaGold is enlarging its share and a new partner, Paulson, is on board. Even though it was not yet in production over the years, Donlin Gold became a major employer in the Yukon-Kuskokwim region of southwest Alaska. The company invested in major drilling programs and development work over several decades even in the exploration phase. Jobs created were high-paying, and their seasonality fit well with subsistence activities that many mine workers focus on. BARRICK GOLD SELLS ITS SHARES OF DONLIN GOLD The new partners will shift to updating a project feasibility study done several years ago and will focus a 2025 exploration program toward expanding gold reserves and resources. NovaGold is a “junior” Vancouver B.C. based company whose biggest asset is its 50% holding in Donlin Gold.
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