Barrick Gold Corp., a global mining giant, announced its decision to exit the Donlin Gold project in Western Alaska, selling its 50% stake for approximately $1 billion. The transaction will see Canadian mining company Novagold Resources Inc., Barrick’s partner in the project, acquire an additional 10% ownership, bringing its stake to 60%. Meanwhile, billionaire investor John Paulson’s investment firm, a major shareholder in Novagold, will assume control of 40% of the project.
The deal, which is expected to close by mid-year, marks a significant shift in the future of the Donlin Gold project, with Barrick shifting its focus towards copper assets as part of a broader strategic realignment.
Strategic Exit and Future Development
Barrick’s decision to divest from Donlin Gold is seen as part of the company’s strategy to prioritize copper, a key metal in the transition to renewable energy. Barrick President and CEO Mark Bristow explained that while the Donlin project held strong potential, the asset is better suited to the hands of Novagold and Paulson’s investment group.
In a statement, Bristow emphasized that the sale provides Barrick with an opportunity to focus on its core portfolio of growth projects. “This is a good example of an instance where an asset we own might be better suited in the hands of others, while we pursue our priority portfolio of Barrick-managed growth projects,” he said.
Paulson’s Vision for Donlin Gold
John Paulson, a well-known investor with a history of gold-related investments, expressed confidence in the Donlin project’s potential. In a joint statement, Paulson praised Donlin Gold as “one of the most attractive development gold projects in the world.” With an estimated 39 million ounces of gold at twice the industry’s average grade, the project holds significant promise, Paulson said, adding that the location in Alaska—already the second-largest gold-producing state in the U.S.—enhances its long-term value.
Paulson, who has made investments in other mining ventures, including International Tower Hill Mines, sees potential for the project to generate returns over the long term. “We believe the project could create value for decades to come,” he noted.
Controversy and Opposition
The Donlin Gold project has been a contentious issue in Western Alaska, with strong opposition from some local communities and environmental groups. Supporters argue that the project could provide significant economic benefits to an impoverished region, including revenue-sharing for Native corporations such as Calista Corp. and The Kuskokwim Corp., which own the mineral rights and surface lands where the mine is proposed.
However, opposition from local tribes and environmental advocates, including the anti-Donlin coalition Mother Kuskokwim, has been fierce. Critics point to concerns about the mine’s potential impact on the region’s ecosystem, particularly its water resources and fisheries. A proposed 471-foot tailings dam has been a focal point of contention, along with the anticipated increase in barge traffic along the Kuskokwim River.
Sophie Swope, Executive Director of Mother Kuskokwim, called Barrick’s exit a sign of the project’s inherent risks. “The Donlin Gold Mine is a bad investment—plain and simple. It’s riddled with environmental, economic, operational, reputational, regulatory, and legal risks,” Swope said. “It completely lacks a social license to operate.”
A Shift in the Project’s Leadership
Despite securing key permits, the Donlin project has faced delays and disagreements between Barrick and Novagold over how to proceed. The shift in ownership raises questions about the future leadership and operational expertise for the project. While Novagold has some experience in mining, its track record has been mixed. The company previously operated the Rock Creek Mine near Nome, which faced multiple challenges, including worker fatalities and environmental violations.
This change in leadership mirrors a similar trend in other controversial mining projects in Alaska. In 2013, Anglo American withdrew from the Pebble copper project, and in 2014, Rio Tinto divested its stake in Northern Dynasty Minerals, which now solely owns the project. Like Donlin, the Pebble project has faced intense opposition, particularly due to concerns about its potential environmental impact on the region’s salmon habitats.
Looking Ahead
As Barrick exits Donlin Gold, Novagold and Paulson’s investment group will have the opportunity to drive the project forward, although challenges remain. The project’s future will depend on continued regulatory approvals, overcoming local opposition, and securing the necessary financing for development. With the focus now shifting to Novagold and Paulson’s leadership, the fate of the Donlin Gold mine remains uncertain, but the potential rewards from the project’s vast gold reserves keep investors watching closely.
While the exit of a major player like Barrick may raise doubts among critics, it also sets the stage for a new chapter in the Donlin Gold project’s evolution. Whether the project can overcome its contentious past and move into production remains to be seen, but its impact on the Alaskan economy—and the broader gold market—could be significant in the years to come.
Related topics:
- India Surpasses China in Gold Purchases, Buying 51% More in Three Months
- Qilu Bank Enhances Support for Small Businesses with Innovative Financial Tools
- Bitcoin Poised for a Surge Amid Gold’s Delivery Delays, Expert Claims
