JUNEAU -- NovaGold Resources Inc. announced Monday that a gold prospect in Southwest Alaska is ready to advance to permitting.
The Canada-based company said an updated feasibility study shows that the total cost of the project is roughly $300 million less than it earlier expected. The report also underscored the benefit of using natural gas instead of diesel for power generation, the company said.
Pending board approval, the permitting process could be initiated for the Donlin Gold project by April. Donlin Gold LLC, which holds the project, is owned by subsidiaries of NovaGold and Canada-based Barrick Gold Corp.
NovaGold President and CEO Rick Van Nieuwenhuyse said in a release the project "has all of the necessary components to be developed into one of the largest, most efficient, environmentally sound and valuable gold producers in the world."
NovaGold said the Donlin Gold project has a projected 27-year life and proven and probable reserves of 33.8 million ounces. The mine-life estimate is based on a nominal processing rate of 53,500 tons per day.
NovaGold said it was confident more discoveries will be made, which could add to the mine's life or lead to expanded production.
The project, expected to be an open-pit mine, is about 155 miles northeast of Bethel, or 280 miles west of Anchorage. It is operated under a mining lease with the Alaska Native corporation Calista Corp., which holds mineral rights, and NovaGold said a lease agreement provides Calista with payments, royalties and economic development rights.
The estimated startup capital costs for the project are $6.7 billion, including $834 million for a natural gas pipeline.