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Donlin Gold

Technical Report

Operations & Infrastructure

Among the world's most significant gold projects with a 27 year mine life.

Mine Operations

Donlin Gold is expected to be a conventional open pit, truck-and-shovel operation. Mining is expected to occur over 26 years, inclusive of one year of pre-stripping. The process plant will be fed with stockpiled low-grade ore for two additional years following the completion of mining. Peak production rates are expected to reach 155 million tonnes per year (425,000 tonnes per day). The primary mining equipment required includes large hydraulic shovels, front-end loaders, ultra-class haul trucks, rotary blast hole drills, and various support equipment including track dozers, wheel dozers, graders, water trucks, and excavators.

Metallurgy and Processing

The run-of-mine (ROM) ore from the Donlin Gold deposit will be crushed in a gyratory crusher and then milled using semi-autogenous grinding (SAG) and two-stage ball milling. Average throughput is expected to be 53,500 tonnes per day. The gold-bearing sulphides will be recovered by flotation to produce a 7% sulphide concentrate representing around 15% of the original mass with an average gold grade of 12.7 to 13.0 g/t. The concentrate is refractory and will be pre-treated in a pressure oxidation circuit (autoclave) prior to cyanidation (Carbon-In-Leach). Overall gold recovery from flotation, pressure oxidation and cyanidation is estimated at 89.8%. Excess acid from the autoclave circuit will be neutralized with flotation tailings and slaked lime. Prior to being combined with flotation tails, cyanide tails will be detoxed. All tailings from this process will be impounded in the tailings storage facility. During operations, water will be reclaimed for re-use in the process plant.

Supporting Infrastructure

Due to the remote location of Donlin Gold, infrastructure required to support the mine and process operations include a marine cargo port near Bethel, an upriver port near Jungjuk Creek, ocean and river barging operations, an access road from the upriver port to site, a permanent camp, an airstrip, power generation facilities, fuel storage facilities, water management facilities, and a natural gas pipeline.

Natural Gas Pipeline

Donlin Gold is proposing to build a buried natural gas pipeline to serve as the energy source for on-site power generation. The 315 mile-long (507-kilometer-long), 14-inch-diameter (356 mm) (nominal pipe size [NPS]) steel pipeline would transport natural gas from the Cook Inlet region to the project site.

This natural gas pipeline is a better economic alternative over the life of mine to the previously considered barging of diesel fuel. Operating costs assume a delivered gas pricing which includes importing liquefied natural gas (LNG) to Anchorage; total delivery costs associated with purchase, transportation, and regasification of the LNG; delivery through the Cook Inlet pipeline network (existing 20-inch-diameter (508mm) natural gas pipeline near Beluga); and operating costs for the Cook Inlet-to-Donlin Gold pipeline.

Capital Cost Estimate

The total estimated cost to design and build the Donlin Gold project, is $7.4 billion per the the NI 43-101 Technical Report on the Donlin Gold Project, Alaska, USA as announced in June 2021.

The initial capital cost estimate includes direct costs of $422 million for mining, $268 million for site preparation and roads, $1,436 million for process facilities, $140 million for tailing storage facility and reclaim systems, $1,473 million for utilities (including the natural gas pipeline), $351 million for ancillary buildings and facilities, $279 million for off site facilities; indirect costs of $1,557 million; owners’ costs of $354 million; and contingency of $1,111 million.

Sustaining Capital Cost Estimate

The sustaining capital cost estimate for the life of the mine totals $1.7 billion, or $57 per ounce of gold sold.

OPERATING COST ESTIMATE

Operating costs at Donlin Gold, estimated in the NI 43-101 Technical Report on the Donlin Gold Project, Alaska, USA, are generally categorized into mining, processing, general and administrative (G&A), and land & royalty payments. Mine operating costs are expected to total approximately $8.4 billion over the life of mine (LOM), or $2.58 per tonne mined. Process operating costs are expected to total $6.9 billion over the LOM, or $13.70 per tonne processed. G&A costs are expected to total $1.8 billion over the LOM, or $3.49 per tonne processed. Royalty and land use costs are expected to total $2.2 billion over the LOM at a gold price of $1,500 per ounce. Total operating costs over the LOM are estimated to be $19.3 billion or $38.21 per tonne processed or $635 per gold ounce sold. Significant drivers of operating costs include diesel fuel, natural gas (for generating electric power), labor, processing reagents and consumables, explosives, tires, fixed and mobile maintenance supplies, and consulting and contracting services.

Footnotes

Source: Donlin Gold Project NI 43-101 Technical Report entitled "NI 43-101 Technical Report on the Donlin Gold Project, Alaska, USA" effective June 1, 2021. A copy of the Donlin Gold Technical Report is available here as well as at www.sedar.com or www.sec.gov.

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