Blogs & Comment

Donlin Creek’s golden promise

Two Canadian gold producers have made inroads in reaping gold from an undeveloped project in Alaska. Barrick Gold Corp. (TSX: ABX), the worlds largest gold producer, and Vancouvers Nova Gold Resources Inc. (TSX: NG) released this morning their feasibility study on the Donlin Creek project. Each own a 50% stake in the project.
Donlin Creek will be one of the worlds largest gold producers when it is built for an estimated $4.48 billion and will produce an average of 1.5 million ounces of gold during its first 12 full years and 1.25 million ounces of gold during its 21-year lifetime. The total cash costs for the project are expected to be $394/oz. The total proven and probable reserves of the project are 29.3 million ounces of gold.
The feasibility report was prepared for Donlin Creek LLC, a limited liability company jointly owned by Barrick and Nova Gold. On Nova Golds website, the company notes construction is expected to begin in 2012.
At the time of this writing, the spot price of gold is $891.40/oz, Barrick is trading at $35.49 and Nova Gold is trading at $3.20.
The feasibility study brings Donlin Creeks golden promise one step closer to reality especially for investors looking for a large producer in a politically stable region.