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Alaska Gold Mine Developer Files for Gas Pipeline

The backer of a project in Alaska's Yukon Kuskokwim region to mine one of the largest known undeveloped gold deposits in the world has applied for a pipeline right-of-way in Southcentral Alaska for a 315-mile gasline that would fuel a power generation plant at the mine.

Construction of the 14-inch diameter pipeline from Alaska's Cook Inlet could begin in 2016 with fuel delivery beginning in 2019, according to Donlin Gold. A gas pipeline is an alternative to barging diesel fuel from Bethel, AK. "Many other options to provide power, such as coal, hydroelectricity, a power line intertie, biofuel, and even nuclear energy, were considered during the feasibility analysis, but did not meet the current needs of the project," Donlin says on its website.

Once in decline, gas production in Alaska's Cook Inlet region has enjoyed a renaissance as the state has sought to incentivize production and ensure markets for the gas (see Daily GPISept. 18, 2013).

The Donlin Gold project would be an open-pit gold mine about 10 miles from Crooked Creek Village. It would process about 59,000 short tons of ore per day. The project would provide up to 3,000 jobs during construction, which is estimated to take three to four years. Between 800 and 1,400 jobs are projected throughout the estimated 27-plus year operational phase.

The pipeline is expected to cost about $1 billion and would be privately financed, according to Donlin.

Infrastructure plans call for the power plant and gas pipeline, a water treatment plant, access roads, housing, two ports and an airstrip. The mine is expected to produce on average 1.3 million ounces of gold annually during operation. Such a production level would make Donlin Gold one of the world's largest gold-producing mines.

A separate gold mine project in Livengood, AK, about 70 miles northwest of Fairbanks and backed by International Tower Hill Mines, has been tipped as a potential future off-taker of natural gas from the pipeline the state, TransCanada Corp. and major Alaska producers are planning from the North Slope (see Daily GPIMay 7).

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