SOUTHWEST ALASKA -- Operators of the Donlin Creek project in Southwest Alaska have agreed to pay Calista Corp. an 8 percent royalty if the proposed gold mine is built.

A mining partnership and the regional Native corporation recently renegotiated the lease agreement for Donlin, which sits on Calista land, according to NovaGold Resources Inc., one of the mining partners.

Under the revised agreement, Calista will lease additional acreage to the mining partners and will extend its lease beyond 2031, if certain conditions are met. Also, Calista is giving up its option to acquire an operating interest in the mine and will instead receive the 8 percent royalty from mining profits. The royalty payment will be $500,000 this year and it will increase annually until reaching $1 million, for each year from 2015 to 2024, and $2 million for each year from 2025 to 2030. The royalties being paid in advance of mining operations will be deducted from future royalties.

Donlin is co-owned by British Columbia-based NovaGold and Ontario-based Barrick Gold Corp. They have not yet applied for permits to develop the mine.

If built, Donlin could produce more than 1 million ounces of gold per year. But the mining partnership is having difficulty developing the mine because it lacks a cheap source of energy to power it. The companies are now evaluating the possibility of building a 320-mile natural gas pipeline from Beluga to the mine. Their other main alternative is to barge diesel to the mine.