SFIN-260513-0900

Call the Senate Finance Committee to order. Today is May 13th. We're in Senate Finance Committee room in State Capitol. Present today, Chairman Olson, Chairman Steadman, Senator Keehl, Senator Merrick, Senator Kaufman, Senator Cronk, myself, Senator Hoffman. We have a full contingent of Finance members to conduct business.

We are going to have only one item this morning, which will be the presentation of the Donlin Gold Project. The other items will be considered at a later time. Those that are in the audience just to give them notice.

I would invite Mr. Dahlman, the general manager, to the table, and, uh, Lynne Cook, if she wants to assist him, that would be greatly appreciated. Please present us with what's happening with Donlin Gold and the lines, the gas line, and details on the mine itself and on the Kuskokwim.

Please identify yourself and proceed with your presentation. Okay, my name is Todd Donlan. I'm the general manager for Donlan Gold, and I'm here to give an update on the Donlan Gold project in the YK region. And for the record, my name is Wendy Linskug, External Affairs Manager for Donlin Gold. Thank you for this opportunity this morning.

Good morning.

So, a project background, we'll give a very brief background. We have several slides to talk about the background, the timeline of the project, the work that we're doing now, and then some of the benefits of the project. So, as many know, the project sits on land owned by the Chalista Corporation. They have the subsurface rights. We have a land use agreement with Chalista.

It entails our mining the ore body. It includes provisions for shareholder preference hiring, shareholder preference contracting as well. We've done a fair amount of work on the exploration to date, and we contribute significantly to some of their corporate objectives such as scholarships, employee workforce development, what have you. The Chalista— or excuse me, the TKC, uh, Kuskokwim Corporation has the surface rights, and we have a surface use agreement with them.

Many of the same provisions in it for shareholder preference on hiring, contracting, and contributing to some of the Kuskokwim Education Fund and other activities that support the 10 villages that make up the Kuskokwim Corporation.

Excuse me. A layout of the project. As you can see, Anchorage on the far right, Bethel to the far left. So it is a fairly large project. It is centered around the gold deposit itself just north of Crooked Creek, but it does impact quite a bit of the YK region as we have a pipeline for natural gas supply from the Beluga Station over to the job site just north of Crooked Creek, and then we will use the Kuskokwim River for the logistics for materials for construction, and then for the long-term operation of all the consumables that we'll require at site.

As you can see, the pipeline going from just the west side of the inlet, it is a buried pipeline for the majority of the land-to-transverses. It's 316 miles. About just shy of 1,000 yards of that is buried. The rest of the parts that are above surface are around pigging stations and a few around a couple of faults just to make sure that the pipeline is secure and has flexibility around the fault lines. Do you have a—.

Transportation—. I'm sorry? —Your size of the pipeline? The pipeline is permitted at a 14-inch diameter. And that 14-inch diameter, would that be large enough to incapacity to at least address some, if not all, of the gas needs of the region that it's going to?

So the pipeline terminates on the job site, and it is dedicated for an on-site power plant. It has the capacity to carry just a little bit, right at, let's call it right at double the capacity that the project requires. So there is opportunity, and it is permitted as a common carrier pipeline that if villages, establishments along the way were to have a need to tap into it or develop a project that could tap into it, it's permitted to do so. And it has excess capacity designed in. Thank you.

Yep. Senator Steadman. Good. Mr. Chairman, could we have him elaborate a little bit on the power generation plant? You're saying it was double the need of the mine itself.

So would there be ability for villages, if they're within reach of a power extension cable, to hook into that power supply, electrical supply? So just to— I'm sorry, I want to make sure that I follow the protocol. So through the chairman, the power plant itself, and I want to clarify, the gas line has the capacity to carry just about double the gas that's required to operate the power plant. The power plant is sized as needed for the project itself with a bit of extra capacity, and the extra capacity designed in is to allow for shutdowns on part of the plant and operate the other part of the plant to maintain a base level of power production on site, and then a little bit of extra for if there were a plant upset. So it's a 220-megawatt power plant.

We have about a 160-megawatt base need with about a 185-megawatt peak, peak load need. So there's— it's not designed as a utility for supplying power otherwise. It's strictly designed for on-site use. Senator Steadman. Yes, and I know we're in the very beginning, Mr. Chairman, of the presentation, but at some point in the presentation, are we going to talk about the river transfer of fuel?

Yes. Okay. Yes, sir. Please proceed, Mr. Dahlman. Okay.

The— well, we can speak a bit about the transportation on the river right now. Our anticipation is during construction we will have about 50 barges total would go up the river with materials and components for the plant site, equipment for the mine site, about 19 barges for fuel. Once the construction season is over, we'll end up with right about a little less than 3 barges per day on average would be shipping up the river to supply the consumables that are required to operate the plant. And how many gallons per day is that? 3 Barges?

It's— I'm sorry, I don't have the number of gallons per day. We'll need right about 38 million gallons of diesel fuel per annum to operate the mine and backup fuel for the power plant. We've put the natural gas pipeline in to reduce what was originally almost double that number of gallons of diesel fuel.

And because everyone knows that Barge is don't travel in the wintertime. What type of a capacity and storage are you looking at up at the construction site? So during construction, there would be a smaller, smaller quantity of fuel required. The ultimate fuel required on-site would be about a— it's right at a 40 million gallon storage facility for diesel fuel.

Senator Steadman. So just help me again, because if it's 50/50 diesel fuel and natural gas, the electrical generation plant's going to be gas-fired. Is it— is there oil backup, or what's the fuel oil used for other than truck engines and stuff like that? Okay. Mr. Delamere.

Through the chairman, the design of the power plant is a dual-fuel reciprocating engine-driven power plant. There will be 12 power units driving generators. The power units are a dual fuel, primary natural gas with a backup capacity to run on diesel fuel in the event that there were a disruption in the natural gas supply. So for example, if the line were to be shut down for the compression station maintenance or during the pigging of the power line, or the gas line, excuse me, then we would be able to operate the power plant on diesel fuel. Expected to be, you know, we're talking a very few percentage of the time during the year.

Please proceed, Mr. Donald Dahlman. All right. Basic logistics for the project would be point of origin. To, to the ports in Tacoma, Vancouver, Dutch Harbor. It would be transferred onto barges into Bethel.

At Bethel, they would either be lightered onto river barges or off to the Bethel yards, and then sequenced for transportation up the river on river barges. At the terminus of the river transport is at Juneau Port, which is designed— I think it's about 10 miles downriver from Crooked Creek. And from the Juneau Port, there'll be a 30— well, 27-mile road up to the job site. There'll be about a 2 million gallon storage for diesel for the offloading of diesel, and then they transit onto trucks to take it up to the job site. Where the storage tanks will be, and then there'll be a storage yard on the Juneau port as well for equipment and consumables that will require during the daily operation of the mine.

Senator Steadman. Thank you. I don't want to be like Mr. Question, but it's kind of new to me. This is an exciting project.

So in Bethel, you're going to have a tank farm there to offload or help the committee with a little bit of information on the community of Bethel, what kind of infrastructure is there, what is needed there, and is there any financial assistance that the community of Bethel is giving your company to facilitate the construction of this project? Through the Chairman, the design of the logistics of the project are still somewhat in the works, so the final uh, design is not confirmed yet. We are in the middle of our feasibility work, and that feasibility work includes fine-tuning logistics, fine-tuning some of the mill operations, and sizing of equipment. So much of that is still in the.

Works. One of the options that is floating, let's say, very near to the top is with the amount of fuel that you bring in, you would bring in one large fuel tanker. It would anchor out off of the mouth of the river, and then you would lighter the fuel into river barges and take it straight up from there. There will be some storage required in Bethel. I'm not— I don't think it's determined at this point if they'll require an expansion of the fuel farm that's on the Bethel port yet or not.

It's not confirmed at this point. As far as Bethel providing any financial incentives to the project, it's— I don't think that that is a part of the project design at all. So the reason for transport up the Kuskokwim to, to Jung Jung Port. We have on the Kuskokwim what's known as the Tuliksak Flats, and people that are transferring the— transporting themselves up and down the Kuskokwim, many of them get stuck at low tides themselves because that's a very difficult difficult point in the river, very, very shallow. So there's a need for low-draft barges that go up and down the Kuskokwim to accommodate those, those conditions.

Is that correct? Mr. Chairman, that is correct. We're currently going— working a barge simulation program. It includes a bathymetry of the river It includes absolute consultation with experienced barge captains on the river. As we do understand, there's a lot of science to it, but that river is, is a very dynamic river and it is a bit of an art and we understand that.

So we're bringing in the people that are operating barges on there currently, ones who have over the past few years and some that have got a fairly long history of barge work on the river. To make sure that we're including all of those in our barge simulation.

Please proceed. I may want to also highlight the point that even though we're still a few years away from barging on that river, we've, we've have a barge communication plan that we've developed in concert with the inhabitants along the river. So we have a subsistence committee, an advisory committee And our barge plan includes communications with the local river use, with the subsistence fishermen. It includes communication tracking of barges and where the river is in a— if it's a tight corners or that where there's a pilot car or a pilot boat, if you will, with the barges to get up ahead of river and make sure that people are aware the barges are coming.

Were you going to get into the magnitude of the project in terms of value, how many ounces, and that sort of thing later on in your presentation? I will, yes, sir. Thank you. All right, we'll move on to the next slide. We have a question from Senator Kaufman.

Thank you. We talked a little bit about the diesel end of it. The gas supply end of it is interesting. From a rail belt perspective. And I'm just wondering if there's been any work or any consideration of some kind of tie-in or some sort of collaboration with the gas supplies in the rail belt where if the systems were somehow beneficial for each other, if we could feed one system, feed this as well as the rail belt.

And if we're purchasing gas, it might represent volume opportunities that somehow reduce the price. So just wondering what sort of thought or work has been done around that. Mr. Dahlman. Mr. Chairman, through the work that we've done over the past year, we've been in communication with multiple projects that are in either design or permitting for a gas supply, whether it be import, the drilling of additional sources in the inlet and the AK LNG. So we've talked with many.

We're, we're doing our feasibility work on baseline fuel prices. If there is quantity discounting that would advantage the project, we're absolutely supportive of that. Our tie-in is currently into the network at Beluga.

The one thing I can say that we've— that's been the common thread through all of our discussions with natural gas suppliers is that the— it's kind of the demand will help anchor the supply where we offer a very static demand level. It does not fluctuate. There's a little bit of fluctuation at the top for heating, but the majority— and we're talking the 95% of our fuel consumption is in power generation that is very steady state, so we offer a very solid anchor customer regardless of the supply, however that supply manifests itself. Senator Kaufman. Thank you.

Thank you. Senator Kiel. Thank you, Mr. Chairman. On that point, can you give us a ballpark— I'm not a gas generator guy— can you give us a ballpark of how many million cubic feet day we're talking about in terms of gas. How heavy is that anchor?

Through the Chairman, our natural gas consumption at this point is set by just north of 11 billion cubic feet per year. So we're just shy of a billion cubic feet per month. Now there is opportunity in our process where that could grow. There's developments in the internal combustion engine markets for for the haulage equipment that could significantly lighten the load on diesel fuel and increase our consumption on natural gas. But those are some of the trade-offs that we're working out.

We're working with vendors to see what their appetite for developing those engines are. But right now it's centered at just north of 11 billion cubic feet per year. Sen. Kiel. Thank you, Mr. Chairman. Thank you, Senator Kiel.

I'll just do math over here. Senator Steadman. I just need a little bit of help because gas is an anomaly for us down in the Southeast. So I think Anchorage uses 250 million a year to 300, something like— is that correct? Do you guys know what the load currently in the rail belt is relative to the demand of your project?

I'm just trying to figure out a percentage. Increase of the baseload. I don't know if he knows that information, but we could get that information for the committee in comparing the load in the rail belt versus the load of Donlin Creek. Yeah, Mr. Chairman, we will take that as a takeaway to deliver back to the committee, but I don't have those numbers at the top of my head right now. I'm sorry.

Please proceed, Mr. Dahlman. Okay, the slide in front of us now speaks to the timeline, and on the left you can see where the project has been, a feasibility study. Before you leave that—. I'm sorry. The first slide, can you talk about river crossings, how those are accomplished along this 360 —mile route.

Yes. I'm assuming that there are numerous river crossings that have to take place. Yes, Mr. Chairman, there are 7 river crossings in the design of this pipeline. They're all going to be conducted through horizontal directional drilling where the— you've trenched up alongside the bank of the river and then it's a horizontal drill under the river. And then, and it just continues in a trench alongside of the— or down the path of the pipeline.

And the other question regarding this first slide is right-of-ways. Where are you and the project on acquiring all the right-of-ways that are necessary and the permits that are necessary for this project? Mr. Chairman, the right-of-ways are all secured. We have all the permits required for the pipeline other than the notice to proceed, the actual construction permits, but the large-scale permits are all in hand. And I have a slide later on in the presentation to speak to our permits.

Senator Kaufman. Just wanted to follow up some quick information sent to me. Good staff work. Indicates that demand— Anchorage, South Central demands 68 billion cubic feet of natural gas per year. This averages to 5.67 BCF per month, of course with peak demand in the winter, which really spikes the demand.

So that gives us a comparison. Thank you, Senator Kaufman. Please proceed.

Are there any questions regarding this slide before I move on?

No. Please proceed.

To the timeline, as I mentioned earlier, in 2011 there was a feasibility study conducted. There has been updates to that feasibility study along the way with pricing, some of the trade-offs in the work that was done. In a project such as this, there's oftentimes a concept put forward and then the study's done and perhaps it passes or perhaps it does not, and then that requires an update of the feasibility. So for example, just throughput on the mill to find that optimal number between capital and operating costs to make sure that we're working at an optimal level. So that work has been done up to this point.

There are still some tradeoffs that are underway. We received all the majority of the permits in 2018. In 2020 through now, there's been— the state permits have been secured and probably very notable in 2025. In April was announced an exit of the project by Barrick, who is a 50% owner, and an entry into the ownership position by Paul Poulson Group, where they purchased 40% of the Donlin Project. NovaGold purchased the other 10 points that Barrick had held, resulting in a 60% NovaGold ownership and a 40% Poulson ownership of the Donlin Project.

Thank you, Edmund. Could you help us? I know it's— corporate environment is a little different. From our other project here we're looking at, but can you give us a little insight on the financing of it, the difficulty of it or non-difficulty of it, and is, you know, are you guys going to use a lot of leverage on this or if you could even go into that, is it all equity or can you help us with any of the financing terms? Through the Chairman, I can.

On the lower right hand of the slide in front of us, it shows potential sources of funding And I can say that at this point in the project, it's really— it's early on to have a defined financing structure because there are still a lot of moving parts through the feasibility. But we are looking at anything through equity or a debt mix. There's the potential for offtake agreements with the, with the sale of our product to the refineries. Oftentimes they'll purchase forward for several years of product and take a percentage by putting capital up front. There are sovereign wealth funds, there are private equity funds, and then there's, you know, potential for joint venturing with larger mining companies.

So all of those are are available to us, but it's not a set-in-stone-yet structure for how this will be financed. It's really important that we get through the feasibility work first so that then we can present that to the investment, and we'll work with investment advisors to develop a proper structure for the project. Senator Steadman. Can you help us? Are we looking at a $100 million project or— $10 billion project.

$10 Billion project, what do we got here? So the scale of this, through the chair, earlier work had resulted in the kind of the cost of the project capital was about $7.5 billion, give or take. Now with price escalation and just simple back of the envelope, you're looking at the $10 billion, give or take. But this is the final number. Really will come out of the feasibility work where we— first step is to do a Level 3 estimate.

That gives you, you know, kind of the ballpark you're going to be in. The Level 2 estimate will get us down to quoted prices and fixed contract prices with the labor and the construction. But we're, you know, we're— let's say we're kind of sticker-shocked ourselves looking at the, uh, at the $10 billion range. Senator Steadman. And then maybe you can touch on what the anticipation or, or what you've faced with the last 5, 6 years, or however we go back here to '11, I guess 2011, almost 15 years.

The price escalation, um, has it been fairly significant the last 4 or 5 years or 10 years, or just, you know, ballpark, assuming it's a $10 billion project today. So, so through the chair, I believe the escalation is really kind of based on the CPI plus some of the industry highlights, you know, where we spend the 80% of the money. The price escalation is, is a As I say, it went from around $7.5 billion in 2017 to what we're anticipating, about $10 billion now. A lot of factors have entered into that where the price of generation equipment has gone up a fair bit more than what the average would be. Haul truck tires are probably staying with the average.

They're, they're a fairly high value commodity for the project. Steel is, is where you can see steel is in the market. So there's some of the components are a little bit higher than average, some are significantly higher, others are staying right where the average would be. Mr. Statement.

Yeah.

Some of us have sat through a couple of classes, well it's the same class, some of us repeated it twice because we learn slow or we've been here a long time. So they're repeated and that's on megaprojects and cost overruns and how to manage megaprojects. Megaproject being projects over $1 billion. So this clearly is in the megaproject range. It's not fixing the pothole on Main Street.

And as I recall, some of the concerns was a megaproject classifying as being successful would only have a 20% or roughly cost overrun. Very rarely, if ever, do they come in on target. So if you were, in this example, targeting $10 billion, it would be classified as a successful project if it only cost $12 billion, which is a choker because that's $2 billion more, right? And then some of them have gone, you know, double or 50% more, what have you. So when the But when you're putting this project together, this mega project, what kind of considerations do you give for cost overruns and how do you kind of deal with that?

Well, through the chair, the approach that we've taken this is understanding the scale and the magnitude of this project. We went out to the major engineering firms. We looked at the components of the project and rather than award this to one firm where there would be a significant amount of work and as you said, you know, we're from the $1 billion to the 10 times that. So when I say significant, it's a significant amount of work. And we took the approach to divide the project up and carve out a few different pieces.

So for example, the power plant, we've given that to one engineering firm. The pipeline is to a different engineering firm, and these are all the major firms. We're talking Worley, Fluor, WSP, so we've— Hatch Engineering. So we've carved these out to ensure that they have the capacity to do a thorough job and to do a rigorous examination of the logistics of the components that are required, labor cost studies, and then the construction activities. So I think the key part in controlling the overruns is to do the thorough work up front, and by dividing that amongst 4 major engineering firms, we've, we've set ourselves so that there's an appropriate capacity to do so.

And then as we go through the work from stage to stage, We'll have third-party reviews of the work to make sure that we're not in so deep that we can't see the forest for the trees. One of the firms is looking at something that we've also got outside sources looking at it to make sure that we're collecting the appropriate data we need and that the data that we're collecting is valid. So to, you know, kind of that's the long answer to applying the rigor up front is the key to managing the overruns or the potential for overruns in the future to make sure that we've got an all-inclusive.

Cost estimate.

The, the other points that we're working to do is we have what we call early contractor engagement so that the contractors that we believe will be a part of the project are engaged early so that we were not just going with the, the one side of the project experience estimating the project, but we also have the, the folks that will be doing the hands-on work, the construction, the assembly, that they're involved in it as well to make sure that we're covering all the bases as we move forward with our estimate. Senator Stapley. Just touch on this because this is— I mean, this is significant for the state, even though I live a long, long ways away. A $10 billion project. We don't see this every day at the finance table.

Can you give me a rough idea how much in percentage of the $10 billion would be the 14-inch pipe and installation versus the shore side and versus your power plant? Just ballpark figures in percentages is close enough. I'm just curious. So through the chair, I can only base that on the work that was done in 2017, and it's approximately 15%, give or take, of the project is the pipeline. On the capital cost.

Okay. And then I assume that there's not the workforce in Bethel to build this. And could you spin us up on the workforce? Because that's an important issue. Yes.

So, Mr. Chairman, we recognize that both the number of employees required for construction And the skill sets required for construction are both in, in short supply and in large demand with some of the other projects that are on our horizon. So a step that we've taken early on is we're working with the Donlin team in concert with Chalista's workforce development and TKC's workforce development to put together a plan of the available workforce in the region, the mechanisms we have for training and upskilling employees. So whether it be NIT, the local training facility in Bethel, the local training facility in Aniak, the multiple other MAPS, Excel Alaska, various other training sources, and then where we need those those people and when we need them. So we're putting together a plan to work with the two landowners and with the training facilities to, to build the workforce and build the skill sets that we need, recognizing that it will be very difficult to completely fill that out of the local area. And so then the next expansion would be to move into, to the other areas within Alaska and draw resources from there as well.

Senator Sedna. I don't want to insult any of our workers in the state of Alaska, but looking at our other project, I think they were talking about 8,000 people. Yeah. And of which pretty much everybody with the skill set that wants to work in the oil industry can get a job today. So I don't know if we're going to import 7,000 people for that, you know, for the other pipeline.

Get 1,000 of Alaskans working, but can you give me a rough number of how many employees and the payroll size? And it doesn't— our job here, just to be clear, our job here is to try to put the facilities in place so our Alaskan residents can be trained up so you'll hire them. And it's cheaper to hire them than bring somebody in from Oklahoma or Texas or Alberta. So can you just give us a kind of a rundown? Because we do have funds in the capital budget this year for training, and we're trying to gear that up so you have the, you know, the residents in the region that want to work in the construction and management of the mine could get trained up to do that.

And even in Southeast, if they want to go north and work in the mines. Mr. Dahmer. Yes, so, Mr. Chairman, so the construction phase and the operation phase are two different phases and two somewhat different workforces required. In the construction phase, we'll be looking at somewhere between 2,000 and 3,000 employees required, and not 100%, you know, not like fixed rate, but cycling with the different phases of construction and the different work that's required. So there's a lot of earthwork done early on.

There's assembly work done later with electricians and welders and what have you.

Again, about 2,000 to 3,000 employees. Excuse me. Once we're into steady-state operation, The design of the facility looks like it'll require about 750 employees that'll be direct-hired Donlen employees, and that'll be plant operators, maintainers, equipment operators, and then the plethora of other activities that we do. And so when you break that down— thank you very much— when you break that down, it comes out to a plant operator, equipment operator, direct production people, And then nonproduction employment is about a 1-to-1 ratio. So I have a slide later on in here that shows many of the, many of the occupations that will be on the job site.

With alongside of the 750 steady state employment, we'll also have, generally have about 20-25% of that number that are either seasonal help for peak labor or consulting or contracting work for non-steady-state work. Can you address his question about during construction, what's the annual payroll for those 3 years? Annual payroll is— this isn't the annual, this is through the course of the construction. We're anticipating about $1.7 billion worth of labor. As we get into steady-state operation, that will settle in around $120 million per annum.

Thank you.

Please proceed. Through the next steps of our project, I mentioned that we have engaged the top-tier firms for the feasibility work. We anticipate that that work will be completed right at Q1, Q2 of 2027. At that point, we will be in a position to make an investment decision. Now, based on the investment decision being go, go forward, then we will start the early works construction and be in construction through 2031.

Very aggressive schedule. There's a lot of work to do. We're the first step that the engineering houses have in front of them is to put together the overall project schedule. So it's what work needs to be done in engineering, what work needs to be done in design, and then what work and timing needs to be done in construction. So we're anticipating to have that work done about this time next month.

And then, and alongside of that, they're doing much of the engineering, but the primary objective is to get that schedule out. And then that schedule will inform us employee development schedules. It'll inform us for our lead time, our early lead time ordering of equipment schedule, and it'll inform us on our final construction schedule.

So moving on to work that is planned for this year. We're currently doing a fair amount of field work at the job site. There's a lot of geotechnical work that's required to be done prior to construction and to finalize engineering to make sure that we're setting our plant on solid ground, to understand the ground conditions around the port, to ensure that we put our road on solid footing as it's going to be transporting some very significant loads. There's a fair amount of work to be done around the pipeline. There was the initial work that was done in the design.

There was some realignments that were required through consultation with some of the local entities and looking at some of the engineering. We'd made decisions to realign that, so we need to do some infill geotechnical work. And then around the, the final geotechnical work for the mine design to make sure that we have an optimal design for the open pit. Other work that we're currently doing is we're bolstering our data set for the air permits, for our water quality. We're continuing work around some reclamation.

On both work that Donlin has done in the past on some of the exploration and on some of the historic and legacy mining that has occurred in the region. So Snow Gulch rehabilitation is one example of that. And the photo that there happens to be at the Snow Gulch restoration project. And advanced technical studies, as I'd mentioned, is we've got the primary design for the for the operation and the flow sheets, but there's some, you know, the way I'd put it is the big knob has been pretty well set, but now we're turning the fine-tuning knob in to make sure that we have the ultimate, the top end of the recovery that we can for the resource.

Other parts of the technical study that are being done, as I mentioned earlier, there's a bargine simulation that's being done. There is the employee requirements and the workforce development work that's being done. So all of that's occurring over this year and into 2027. And then we've significantly stepped our community and stakeholder outreach as a project had not been moving very far forward and not really making a lot of change. Post-COVID, everything kind of got slowed down a bit.

This past year, we stepped up our outreach and our community visits. I'll show some pictures of some of that work here later on.

And we've basically doubled our budget for community outreach this year. I really put a significant effort into making sure that the people that are along the river, the people in the region that are going to have opportunity to employ here, that they're being heard, that they're people whose who will be interacting along the river with that their voices are in the design of this project. So Nils and Lexi sitting on a Home Depot 5-gallon bucket. What you doing there? Well, Mr. Chairman, last year I had the opportunity to go out on the river with— we do an annual life preserver distribution and buckets as well.

And for every life preserver, there was 2 buckets, and they went fast. So what's he holding there, Mr. Lexie? Do you know? In the photo, in the back. What's he holding in the bag?

Oh, I'm sorry. I'm sorry. I missed the name on that. So in the, in the Snow Gulch restoration, there's, there's a fairly large pond that had been disrupted through placer mining. And we did a workaround restoring that pond.

And the objective was for fish rearing. So he's, he's holding one of the fish that was caught in that pond for the fish rearing. And we haven't witnessed breeding in the pond yet, but we have witnessed fish rearing in the pond. So we've counted that as quite a success. There's a lot of work being done now around the streams entering into the pond to ensure that the stream velocity doesn't induce erosion into the pond.

But it's really an amazing project. And, you know, I would just categorically make the offer that we do like to bring people out there. To the job site, though. You can actually see what's going on, and that is a must-stop on the tour if you have the opportunity to go there. Go in the summertime.

I would recommend people to go out. I'd recommend the summer. Mosquitoes like different types of food supply. Yeah, please proceed. All right, moving along.

Along with some of the activities I'd mentioned, this kind of highlights where some of the drilling along the pipeline is scheduled.

It's at the river crossing and you can see on the— I think it's the lower half of this, it shows the areas where we'll be crossing under the rivers. There's 7 of those on the schedule and then through the pass. So there's horizontal directional drilling that'll occur in each of those. There's also some shallow drilling that's required to— for the borrow pits for construction. The work that people will actually see out there really be around helicopters.

There's no road developments, there's no permanent installations or anything being conducted this year. It's really just about geotechnical work. During construction, will there be a road built? And to construct the pipeline, Mr. Chairman, there will be accesses built along the pipeline for construction only and then, then reclaimed after the construction is in place.

There's no permanent roads as a part of this pipeline project. Reclaimed. That means—. What does that mean, Mr. Chairman? It's just so that when you go there, there'll be a pipeline.

A buried pipeline. There is an easement, the clearing and what have you, but there'll be no roads. There's no, no double-track road alongside of it. So how does maintenance of that line, if required, take place? Mr. Chairman, with the, with the remoteness of the pipeline, then I would say the majority of that work, other than what's very close and easily accessible along a river, it would be done through helicopter access.

This. Thank you. Please proceed. All right, I'll move on to the next slide. Uh, we, we spoke about much of this already.

The pipeline is purpose-built. It's 316 miles, all but just under 1,000 yards of it will be buried pipeline. So there is a few surface occurrences at the origin, at the destination, at the Piggins Station and at two of the faults where it crosses a fault. We mentioned the steady gas demand and how that anchors in the supply side. Did talk about the pipeline selected is, is really in a response to some community input on barging, and it was an opportunity to reduce barging along the river.

So significant. And I spoke already to the potential benefits that if people were to, along the pipeline, want to tap into it, and there's additional capacity on that pipeline if required. Or someone put the project together that they felt was feasible. Senator Kaufman. Thank you.

I love the gold play of this, but with our energy needs, I keep focusing on the pipeline. This is exciting. Aside from the gold, it's creation of a new gas transmission distribution utility. Just wondering how your interface with RCA, the Regulatory Commission of Alaska, is going.

So, Mr. Chairman, In all of my interactions with, with any of the regulatory units in the government have been very, very supportive of the project. They've been very, I'd say, open to, to the work that we have planned. They've been very, very helpful in their contribution to the project. So I'm not sure if that's answering your question, but I think the regulatory environment has been very strong. It's been very robust.

And I think we have a very good relation with them and something that we really hope to continue. Yes, please. For the record, this is Wendy Lindskug. Senator— through the chair, Senator Kaufman. There have been discussions with RCA because we are a contract carrier pipeline.

And so whether there needs to be new regs developed as a result of that or it can be handled in some other way. So not sure what the answer will be, but we are in conversation with RCA. Senator Kaufman, thank you. Thank you, Senator Kaufman. Senator Steadman, can you help me with that?

What is a contract carrier pipeline versus a common carrier versus a private pipeline? What do you want to say about that? Please. Through the chair, Senator Steadman, I'll try to answer that question. I may not get it completely right, but people can buy space in the pipeline.

And so what does that look like? So they basically, if we're taking up half the volume, then there's this volume available and people can contract for that space.

Senator Steadman. And the common carrier pipeline, do you have that? What that is for those watching at home trying to figure out all this stuff. So for the record, this is Todd Dahlman to the chairman. So my understanding of the difference is in a contract carrier, we have a pipeline.

And if you were to choose to transport natural gas that you own, you purchase from someone through that pipeline, then you can do that. As a common carrier, I believe the difference on that would be that we would transport natural gas and then sell it to you at the terminal point. I believe that's the base difference. Thank you, Senator Stidman.

Senator Kiel. Thank you, Mr. Chairman. Has the RCA ever done a contract carrier pipeline before?

I don't know if they can speak for the—. Yeah, I think we better— Yeah, I— Through the Chairman, I believe that's one that I would leave to the RCA. Thank you, Mr. Chairman. That's completely fair. I guess the reason I ask is What are your timeline expectations for the RCA process?

Again, through the chair, this is Wendy Lindskog. Senator Kiel, as I mentioned, it's still in discussion phase whether there actually needs to be some regulations around that or if there's a way that addresses it in a different manner. So I can't answer that just yet. But I'll mark that question down as something we can explore a little bit for you. Thank you.

And then one more for me. Senator Kiel. Um, you know, and my background in asking about this is that I represent a town where the gold mines built the hydropower, and the hydropower is now a utility, separate. Is your vision that Donlin Gold will be the pipeline operator? That will you have a subsidiary?

Will you spin it off to a completely separate corporate entity? Do you have a sense of what the plan is going to be for that? So through the chairman, our expectation is that we will build and operate the pipeline. If that were to change in the future based on some of the feasibility work we're doing, that's a possibility. But the anticipation right now is that this will be a fully owned and operated constructed pipeline.

By Don Lund. Thank you. Thank you. Senator Kaufman. I just wanted to add to the previous comment.

Those operations also continue to act as a kind of a— the big demand for refined fuels. So the transport and usage of refined fuels in the area is also supported by mining, which helps get the quantities up so that you can get a tank of gas here and not pay $10 for it.

Before we go on, can you give us the life expectancy of this mine? Yes, sir. Mr. Chairman, the current life of mine by design and, and through the scheduling that we've done now is 27 years of operation. If you can— if you would like, I can kind of delve into the parameters that we have around that. Please.

So the, the mine design itself is an open-cut operation. It's a surface mine with a standard milling, uh, very standard to the gold mining industry right now milling setup. It's, uh, crush it, grind it, float, take the flotation product through an autoclave to oxidize it, and then leaching and recovery. So it's a very standard technology. The open pit mining itself is also very standard.

It's drill, blast, load, haul. It's all really very, very common. Our anticipation right now, based on the mine plans that we have in front of us, we'll look at about 70 haul trucks in operation, 5 electric shovels, 1 hydraulic diesel shovel. And so that was another mechanism to reduce our diesel fuel requirements, is to use electric shovels rather than diesel fuel powered ones. All right.

We'll have an airport. We currently have a runway out there now, but the runway is in the footprint of the open pit mine, and it's also not got the length that we require. So we'll be building a new runway. We'll be building an employee village. This is for employees only, not for family.

It's not a residential. It's a fly-in, fly-out operation. It will be complete with the water treatments that's required, the sewage treatments that are required. So about a 650-person environment. We'll do all of the maintenance for the equipment on site.

So there will be a maintenance facility for the haul truck fleet. The other equipment is typically maintained in the field with mobile maintenance. And then the plant site will have a 40-million-gallon fuel storage, a 220-megawatt power plant, an autoclave system, which is for pressure oxidation of the product. It's one of the midstream processes. And then a tailings impoundment for storage of the tails.

Our anticipation is we'll be mining about 360,000 to 400,000 tons per day, and we'll be processing about 60,000 tons of ore per day. The endgame is— there's— its production in the first 5 years will be just around 1.1 million ounces of gold per year, and then it'll, it'll taper off, if you will, to a steady flow of about 1 million ounces per year.

Going back to the construction of the pipeline, would you be starting at one end or the other or combination? What are the construction plans for the pipeline? So, Mr. Chairman, the current look at that process would be multiple segments, either 3 or 4 segments of of construction and tying them in. So if we started at one year, at one end and just went to the other end, it would take quite some time. So the anticipation is they do it in multiple segments.

As the power plant is one of the earlier components of the process that are required, we have to have that in place to do the commissioning of the plant when it comes online. So it's required that we get that done fairly early in the process. Process. Senator Keele. Thank you, Mr. Chairman.

The mines in my district are underground. Yes. So when you say mine about 360,000 tons, mill about 60,000, can you paint a little picture about where the waste rock goes and how you handle it? Yes, through the Chairman. The typical process is you'll— we'll remove the organics, if you will, so the topsoil.

Those go into a segregated stockpile for use at the mine closure or during any of the, uh, reclamation during operation. The overburden will go to separate stockpiles, and they're placed strategically around the mine to reduce footprint and to reduce haulage length, because, you know, distances, it just requires more fuel, more trucks, what have you. So they're strategically placed. Well, We'll do drilling around the mine and make sure that we're— it's called sterilization drilling to make sure that you've got— that there's no mineralized materials in the area. And then again, you'll remove the topsoil from there, set it to the side in a separate stockpile, and then build the overburden stockpiles.

Once the overburden stockpiles are built and I'm gonna— I'll come back to this point, but once they're completed and built and it's finalized, then they're typically sloped to a level where any of the rainfall on it or meteoric doesn't have a water velocity that creates erosion. You get that down there contoured. Back in the old days, they contoured them square level, like they look like little bricks, but now you actually have some landscape engineering to make them contour in with the surrounding environment. And then the topsoil is brought back up around and it's covered. And the intent of the stockpile is that then you put the material that was below there on top of the overburden stockpile and you get a very, very natural regrowth of the organics that were above there before— the grasses, the bushes, the trees, what have you.

Senator Keogh. No, thanks, Mr. Chairman. I did want to finish when I said I would come back to this point. A key piece of the reclamation process is the entire reclamation plan for the project is done before we turn the first shovel of dirt over. So that plan is— it's completed and approved before we move forward with the project.

Thank you. Please proceed, Mr. Dahlman.

Right. So moving on to the project benefits, one significant one that I don't think can escape anyone's attention now is the contribution to the 7 program. This is on, on ANC land, and it does contribute to the 7, which means that this is no longer a a local or a regional effect project, but it actually has a positive impact around the state. Very significant point on the project. Can you go back to that, please?

Do you have— given the estimate.

Amount of gold that's going to come out of the mine over the life of the mine? Do you have any anticipated projections for these 7i and 7j dollars that will be distributed? Mr. Chairman, I believe that at this point in the project, while we're still developing the feasibility work and the operating costs, and with the variations in gold pricing, I think I think it would be premature for me to put a number on that at this point. Thank you. Please proceed.

Project benefits. We did speak to the construction jobs that would be in place for the 3- to 4-year construction phase, being just right in that 2,500 to 3,000 job area. Uh, did say in the operations— I'm going to cover this one fairly quickly as we've pretty much spoke to all of this— the up to 700 direct hire jobs plus contractual employment, and then the fact that both Chalista and TKC have hiring preferences for their shareholders. That's a 27-year life of operation.

The probably one of the, that third bullet point there is a significant one, is over the life of the project to the, we've, you know, this project has been out there for some time. Like they've been working on this for a lot of years. Our record of local hire is right now it sits about 65% of local hire. We have employees from, I believe, 64 different villages in the YK that have worked on the project. And last year alone, we had employees from 21 different villages in the YK working on the job site.

So 700 jobs, 700 individuals, 700 sleeping quarters. What's the plans for housing these individuals? 700 People. So, Mr. Chairman, a part of the project is the— what I call the employee village. You hear the term man camp or camp, but it's the employee village.

It's basically an all-inclusive housing environment for the employees, dorm room style housing, all the provisions required, laundry, housekeeping, the cafeteria-style dining, recreation centers for basketball and that type of thing for the employees while they're on site. We typically operate on a 2-week on, 2-week off schedule. So that, that's for a couple of reasons. One, it reduces the fatigue employees— there's some places will work on a month on, month off, but as you, as you get into that third week, your fatigue starts to go up and it's starts to change the safety environment for the employees. So we work on a 2-week-on, 2-week-off schedule.

And that's something that the employees have asked for themselves because of the subsistence way of life. It gives them time to participate and work during the seasons. Senator Keel. Thank you, Mr. Chairman. One of the challenges that we sometimes face when folks start working in resource industries and work in higher and higher wage jobs is that their opportunities sometimes take them out of the regions from which they were locally hired.

Have you had the opportunity to work with partners around the region and think about the way you structure the schedules, the pay, the incentives to maximize local retention as you work? Even— I appreciate the work on local hire. It's good work. I'm glad you're doing it. Have you thought through that second step?

So through the chairman, we have. We've had conversations with some of the local entities. I can't say that it's a point of where we're settled on, on how we contribute or how we influence people's choice of living, of their location for living. We do provide transportation from Anchorage Airport. We also provide transportation from the villages.

So if we have an employee living in Red Devil, for example, we provide transportation. So I think what we're currently doing is to make it so that they're not induced to move out of the region, they're not induced to move to Bethel or to Anchorage. But I don't think we've really got to that stage where where we're in a position where we're influencing people to move into the region or to maintain where they are. I think really at our point it's to ensure that they have that opportunity and that it works well for them to be able to do so. And then it really becomes a personal choice at that point.

Senator Keele. Thank you, Mr. Chairman. I would never suggest taking away their personal choice. I didn't mean to imply that. No, no, no, no.

I— But I will just say the maximum benefit to any region is for folks who are working in these industries and making good wages to stay and to contribute and be active in their communities. And so I encourage you to work creatively. We're struggling with that in the mines in my region, too. So it's definitely a challenge. Please proceed, Mr. Dahlman.

Just want to— I think I've covered this slide very well, so I would invite you to just have a look at it. We have talked about our regional training that we're working on. I've talked to the commitment for hiring locally and our history of doing so and the partnerships with the different training mechanisms. The piece that I did, I touched on briefly on the first slide, was our participation with both TKC and Chalista in their scholarships. So we work with both organizations because what we find is we have a lot of employment applicants, but we don't have many in the engineering fields or the, you know, the advanced education fields.

So we're working with them to provide opportunity for stakeholders to secure those type of degrees and the credentials required for those roles.

I mentioned earlier about the 1-to-1 type of ratio that we would have when you look at production roles versus non-production roles. And I'll just allow a minute for reading through. You can see there are a significant amount of jobs required to support a an operation of this scale in a remote location. And I will also say this is not inclusive. I mean, it's not all inclusive.

There's a lot of jobs out there. The real key when we go to the region and show this slide is to, to help people understand if they don't want to be a miner, there's still many, many jobs out there from airport managing to catering to just about anything you can think of.

All right, the key permits. I won't walk through this one by one, but you can see that the federal permitting is completed. Our next slide shows a little bit of where we're at with one key permit that we have. We're actually quite well situated for permitting.

The one that most people have heard of is the remand that was issued, and it was not a vacation of our tailings impoundment permit, but it was a remand to study a little bit differently the size of a potential tailings release. So there was a release that was studied in the EIS. It was modeled out to see the effects of what that release would be. The judge felt that there were 4 issues challenged, but the judge felt that this is one where we could perhaps look at a little different scale of release. That has been subjected to the FAST-41 process, the Fixing America's Surface Transportation Act, where it's, it's put on that schedule.

Which means that then all of the— I'm probably telling you what you already know here, but all of the agencies involved have to come together, put together a schedule, and then the office holds that schedule fairly firm. So we're anticipating that in the end of May next year, the process will be completed. It's currently on schedule, and we're about— I want to say about a third of the way through the process, and to date it's on schedule.

Stakeholder engagement, I mentioned that that is a significant effort that we're placing. And I've got a lot of pictures here and there's two things that I would want to point out on this is when you look in there.

You see our very senior employees. So in the top left-hand corner, there's Vern. In the bottom right-hand corner, we have Samantha. Many of you are acquainted with those two people. They're long-term employees.

But the key for me in this stakeholder engagement is we're not just farming it out to one or two, but you've got our senior team out there. In the top right-hand is our senior environmental manager. He's been with the project for, I don't know, 18 years, like forever. So there was a lot of senior involvement. We don't just send a couple of the people on the low end out there.

Myself, I mentioned earlier, I was on the life preserver distribution. That's me in the, in the bottom left-hand corner. In the top right is our senior environmental technician. That's one thing I wanted to point out. Second thing I want to point out is where we go.

So we're out on the river, we're at job site where we've invited community members. We've invited the local, state, and federal regulatory and representatives to site. So we really want to host people out there, get them to see the project and understand what we're doing. So when you talk about it, they've got a real-life example sitting in front of them. And then the center one is— I was presenting to the board of directors for Chilista.

So quite a bit of outreach.

In community investment, you can see we support Pete over there on the left on dog sledding and supported him this year through the Kuskokwim 300 and his victory there and his participation in the Iditarod. We support these helmets for the children through the Iron Dog. We support education, fish study with— it's in partnership with the Paiute down on the bottom right, bottom right. So not just a getting out and shaking hands with people, but actually contributing to the community and working with what the community feels is important with them.

Pete Kaiser's married to one of my nieces, by the way. Oh, is he? He's a 10-time winner of the Cusco Climb 300. Yes. Remarkable man.

And he's a remarkable ambassador for the business as well. So that's the end of the presentation that we had prepared for this committee. And I would just open it up to any questions that you may have. Senator Steadman. Thank you, Mr. Chairman.

I apologize for having to be pulled out of the meeting, so I might have missed this if somebody brought it up, but I'd like to talk a little bit about the taxes.

Is there any boroughs or property tax that this project is applicable to on either end? I was just kind of curious what the structure is of the land ownership along the way. Through the Chairman, I'm sorry, I would have to take that as a takeaway and come back to you on it so that I could give you some factual information. Information on it. I'm just not prepared to answer that question right now.

I don't have that information with me. All of that region is in the unorganized area. And does that include the shore side in the Cook Inlet? I believe so. I'm sorry, I'd have to take that away.

Okay. Senator Steadman. Yeah, and then I don't think the pipeline is subject to the oil and gas property tax. Is that also correct? Because it's a feeder line versus, I guess, another form of line.

We have a 20 mills property tax for oil and gas, and I'm just worried if— or not worried, I'm just curious if this is applicable to it or not. Again, through the chairman, I'm sorry, I don't have that information with me, but I will find that out and bring it back to the committee. We probably didn't get that information information from revenue. Yes, and I would imagine if they were— if it was applicable, they would know that there's going to be a call on the checkbook. Senator Steadman, thank you.

Senator Steadman, Senator Kaufman. Thank you. I think expanding on that, uh, great information on regional beneficial impact. I think there's an opportunity, uh, you know, as the project develops, to develop more explicit what the statewide impact is. You know, the project will be putting, you know, work into some of the contracting and base along the rail belt pulling from other resources, both educational resources for higher education or trades that are affecting the project.

So I think there is a big picture yet to tell. About, you know, that kind of those expanding circles aside from the regional impact, which is a good story. But I think we need to look at it from the big picture in terms of, you know, the revenue to the state, the opportunities statewide, and I guess the workforce development, workforce retention impact to the state would be a good thing to know more about. Very good. Senator Cronk.

Thank you, Mr. Chair. I'm not asking for a direct, but what a project like this, what would a percentage of return back to the Native Corporation, what would be a normal percent of value back to them?

To the Chair, I think that there's a wide spectrum and it really comes down to commodity prices. Mining, mining type and operational setup. So for example, underground mining is a much higher cost than open pit mining. It usually mines higher grade. So there are, there are so many variables there.

I think it'd be really difficult to peg a number or a percentage on that. When, as we get through our process and we better develop the economic picture of this, then I think we could speak better to that. I would just hesitate to throw a number out at this point as I could guarantee I'd be exactly wrong. Through the chair. No, thank you.

I appreciate that because we have the Mansho Mine in our backyard and I was just— I kind of know what the Tetlin Native Corp or, you know, Tetlin Village Council is getting. So I was just like, I just— trying to get an idea. So if I had to ask, what would the bottom line price of gold have to be to make this mine feasible? If it drops, you know, I mean, we got great prices now, obviously, but if you were building this mine, what is it? Hey, we have to have a price of gold of this much to make this feasible.

So through the, through the chair, that, that is really the, uh, one of the primary objectives of the feasibility work is to, to get to that point where you understand that clearly. And again, at this, we're at a fairly early stage, we're still at a Level 3 estimate As we get to a Level 2 estimate and you have hard numbers for the construction and hard numbers for the equipment, then you can build a better picture on that. But at this point, again, I think it would be very premature to state that number. Senator Cronk. Thank you, Mr.

Chair. And last one is just a statement. It's like if you look at a project like this, this is what former Representative Chisholm would call legacy project. A life-changing project. I mean, when you got 27 years of jobs and, you know, that kind of stuff, we reverse these cycles of dependency on, per se, government to being independent, being providing for your family, sense of pride it brings to people.

So I really truly hope that a project like this does come to fruition. So thank you. Thank you. Any additional questions or comments of Mr. Dahlman.

My only— I guess my closing comment would be— I will touch upon what we look at as opportunity. That's the key for me. And it provides people choices. I do agree with the generational impact that this project will have. We absolutely appreciate the support that we've enjoyed because it does impact the state.

It impacts many, many people. The participation and the cooperation we've enjoyed, the guidance that we've gotten from regulatory agencies has been extremely beneficial. And I, I can't overstate how much we appreciate that. And also the opportunity to present our project to this board. So appreciate your taking the time in this very, very busy time of the year to hear our story.

Senator Steadman. I'd like to thank you for coming. Our chairman here is going to retire this year, but I would like to encourage you to invite him to the ribbon-cutting because he's been bringing this project up to us every year for over a decade. We have a pair of scissors with his name on it. But truly, I think that individuals should be aware that FID, or financial investment decision, is anticipated for 2027.

Is that correct? Yes, sir, that's correct. So the— this project is very close to becoming a reality, and we probably will know within.

Within 18 months or so. And it is a very exciting project. As Senator Steadman, this is considered a mega project, certainly the biggest project on the Kuskokwim in our region, and obviously a substantial project even for the state of Alaska. So with that, I thank you for the presentation. It's been very informative.

For this committee. We are also— the state is also planning a little bit larger project for a gas line, but that is still in the works. We just wanted to have a comparison to a small project of what's being presented for a private line. The other project is a public line, and We may have that additional project in the future. We don't know.

But with that, any additional closing comments that Senate Finance members may have?

Sir, may I? Yes, please. I do want to restate my invitation earlier. We do host committees and community members out to the job site to actually see and experience it. And the offer is open.

On that point, is it a one-day invitation— I mean, one-day window that you fly in and fly back out? Is that the—. Mr. Chairman, that'll depend. We can do a 1-day fly-in and fly-out. That's very common.

And we also have that 2-week on, 2-week off. So— so—. Well, that requires car rides. I'll leave that open to the committee. Work done.

Thank you again for the excellent presentation. That concludes this morning's meeting. Our next meeting is scheduled for this afternoon at 1:30. We are adjourned.