Power, logistics issues at Donlin Creek

Power, lime and logistics are the three major challenges Placer Dome needs to address this year as it moves ahead with the Donlin Creek gold project in southwest Alaska, project geologist James Fueg told a meeting of the Alaska Miners' Association and Society of Mining Engineers in Anchorage April 13. Placer Dome is the operator of the project, which is a joint venture with NovaGold Resources. Both companies are based in Vancouver.

In terms of the power supply, there is no regional grid or generating capacity. The project is located just north of the Kuskokwim River and the community of Crooked Creek, which has a population of about 137. The estimated peak load at the mine when it is operational will be 80 megawatts, and the average load will be 70 MW, based on processing 30,000 tons of ore per day, although a 40,000 tons-per-day model is also now being evaluated, Fueg said.

Placer Dome is focusing on the prospect of onsite power generation using diesel fuel, but is also retaining the option to use gas. It may be possible to supplement the diesel with wind generation, which could potentially offset 40 percent of the mine's fuel requirements, according to Fueg. This would double the capital costs, however. Fueg showed a slide of a standard blade for a 1.5 MW wind turbine, which is about 135 feet long. Placer Dome needs to collect a year's worth of information to determine whether wind generation is viable. "We are pretty excited about it," Fueg said.

Limestone, logistics also issues

The mine will require an estimated 50,000 tons of limestone per year. This could either be brought in from outside the region or supplied from the very high-grade resource in the relatively close Chulitna basin, but transportation costs make both of these options expensive, Fueg said. Alaska geologist Tom Bundtzen has also identified an onsite calcareous sandstone resource which could offset the requirement for up to 30,000 tons per year of lime.

Donlin Creek's remote location poses an array of logistical challenges. In addition to the lime, Placer Dome expects the mine to need 50,000 tons of general consumables and 140,000 tons of fuel per year (if wind generation is not used). The materials would be barged up the Kuskokwim to a port at Jungjuk Creek. The company will build a 25-mile road from the port to the mine. The state had offered to help with the road construction, but Placer Dome declined state assistance. "We are happy to build and pay for our own infrastructure," Fueg said.

Construction of the mine will require around 250,000 tons of aggregate and additional material from the region - primarily sand and gravel - for the road, runway and port. Placer Dome will build a 6,000-foot surfaced runway as the existing facility is not suitable for larger jet aircraft.

The ore at the deposit is refractory and the dominant sulfide mineral is pyrite, but the gold is almost exclusively in the arsenopyrite, according to Fueg. Placer Dome is investigating the possibility of doing a partial separation of the pyrite and arsenopyrite, which would allow the mine to get away with a smaller oxygen plant, reducing overall power demands.

Prefeasibility study planned for this year

Placer Dome's 2005 objectives include validating the wind generation plan, completing a prefeasibility study and beginning the permitting process. "This is several projects in one," Fueg said. Donlin Creek will be a conventional open-pit mine, with two pits that would eventually merge into one larger pit. The conventional tailings would be disposed of in Upper American Creek, at least for the first 12 years of the projected 15-year mine life. "History has shown that in areas like this you generally end up mining for longer than you expect," Fueg said.

Around 600 people will be employed in construction of the mine and there will be between 300 and 400 full-time jobs at Donlin Creek. Placer Dome currently employs 40 people on the project, of whom around 80 percent are shareholders of Alaska Native corporations from the surrounding villages. Placer Dome is contractually obligated with Calista Corp., the subsurface owner, to hire locally. The Kuskokwim Corp. is the surface owner of the land.