ProjeCt Update August 2010

2 “What is Exploration?” Face to Face Sixteen Years of Discovery Persistent prospecting led to discovery of placer gold in the gravel of Donlin Creek in 1909. Since then the prospecting and discovery cycle has repeated several more times, and miners eventually recovered roughly 3 30,000 ounces of gold from near-surface deposits. Safety Exploration continues at Donlin Creek, but unlike the previously mined placer deposits from the past, today’s lode gold deposits are contained in bedrock and can extend to great depths beneath the surface. Exploration of these deeper deposits requires scientific methods 4 as well as boot-and-hammer prospecting to accurately estimate what might lie below the surface. Starting Technical Corner in 1994 and continuing today, Donlin Creek LLC (DCLLC) exploration geologists analyze historical data, and complete extensive trenching, surface sampling, geological mapping, geophysics, core drilling and computer modeling. Geologists then work with metallurgists and mining engineers to determine how to extract gold from the rock, mine the deposit in an environmentally responsible manner and layout 5 the operation so buildings and other mine facilities are not constructed over mineral- Opportunities rich areas. Discovery is only the beginning. This lengthy and complex exploration process also provides engineers and planners with the basic geological information to determine if the gold resource is of sufficient quality to support an actual mining project. 5 Next steps at the Donlin Creek project Stewardship Mines are often in difficult-to-access places. This is certainly the case with the Donlin Creek project. Everything from hardhats to hamburgers have to be shipped or flown into the project site since it is not directly connected to a road, water or rail system, making transportation very costly. This is where feasibility studies come into the picture. Not only does there need to be a mineral deposit to mine, but the economics must make sense. The question of, “can the project be developed profitably?” needs 6 to be answered, and this requires estimating the capital and operating costs of a mine History against the potential revenues from production. The biggest challenge at the Donlin Creek project is access to power. It is estimated the mine operation would require 127 megawatts of energy with peak loads of From the 152 megawatts. This is a significant amount of power; for comparison, Anchorage

ground up continued on page 3 Face to Face with Doug Nicholson

Our condolences go out to the family of a young man from Nevada who died Monday June 21, 2010 following an accident at the Livengood exploration project about 70 miles northwest of Fairbanks. It was reported that the cause of the accident was a piece of clothing caught in moving equipment during exploratory drilling. This is the first mining death in since 2007 and underscores the importance of workplace safety, training and attention to detail in the mining exploratory work environment. Donlin employees and management live by the motto, “Every Person Going Home Safe and Healthy Every Day.” Our culture of safety guides employees’ actions both on and off the worksite. We watch out for one another, share skills and knowledge, and create a supportive environment. This philosophy is not turned off at the end of the day; it is always operating. It is vitally important that the whole team works together to be safe and all employees are focused on their own safety and that of their co-workers. For several years in a row “Every Donlin Creek LLC has been honored with the Barrick Merit of Safety Award, a distinction that recognizes 360 days of zero Lost Time Accidents. This is evidence of our outstanding Person workforce and their commitment to a job well done. Going Donlin Creek has remained a safe workplace because everyone plays his or her part in making it safe, and we thank you for your hard work. Home Safe and Healthy Doug Nicholson President and General Manager Every Day.” Donlin Creek LLC

Timeline

NEPA Process - 3+ years Construction Operation Mine closure On-going mine site and water monitoring Regional and Tribal Consultation with The mine The expected life and reclamation 16 years of exploration State and Federal Regulatory Agencies will continue past the will take of the mine life of the mine. National Environmental Policy Act will require an approximately is determined Environmental Impact Statement 3 years to to span 20 years The proposed Gas Pipeline Feasibility There will be opportunities for formal public comment construct. or more. project is Studies are Studies are during the NEPA process. defined by conducted. conducted. Donlin Creek Agencies define The findings of The final NEPA LLC. the scope of the NEPA processes findings are Continuing exploration NEPA process. are drafted. submitted. Donlin is here 2 permit applications Submitted permit Decision Safety

helicopter operations Environmental and engineering field work being conducted this summer to collect data for reviewing a gas pipeline option will require helicopter support. The length of the proposed pipeline – 325 miles – is such that workers cannot walk to every work site. Therefore, they will be helicoptered in from lodges where they are staying to drop-off spots along the proposed route. They will then walk short distances to each of the sites being studied. The following are general safety rules when traveling by helicopter: 1) Follow the pilot’s instructions – they need to be able to see you at all times and will instruct you where to Prohibited stand and when to move. Acceptable 2) Never approach a helicopter from the rear even if the engine is not running – the pilot will not be able to see you from behind the aircraft, and the moving tail rotor is very dangerous and it is not visible when it is running. 3) Hold onto all light-weight items as they could be blown away; if an item does get blown away, do not chase Preferred after it when the rotors are turning. It's not worth your life. Acceptable 4) Pay close attention to the pilot’s Acceptable pre-flight briefing. Where there are no roads, helicopters provide unrivaled Preferred access, but remember: in a helicopter you are the cargo. Do what you are told, keep your head down and your hands to yourself, and stay safe.

“What is Exploration?” continued from cover Municipal Light & Power reaches peak loads of about 180 Permit time megawatts. Therefore, cost–effective sources of energy After the feasibility studies are completed it is anticipated need to be developed or obtained since the project and that DCLLC will file project development permit the area are not connected to a power grid. Over the applications by the end of 2011. Exploration, feasibility next 12 to 18 months DCLLC will conduct further studies and the permitting process are all lengthy but important for a 12-inch, 325-mile natural gas pipeline to bring milestones that mark the Donlin Creek project’s advance gas to the mine site. Once these pipeline studies are towards a construction decision. completed, DCLLC will revise its feasibility study for this new power source option.

3 Technical Corner Reprinted with permission from Barrick’s Corporate Responsibility program

Case study: Cultural understanding key to successful Native hire program in Alaska At the remote Donlin Creek mining project, an innovative • 50% failure of random drug screening tests local hiring program was established to provide employment • 70% voluntary termination - this figure only includes and skills training for the Indigenous peoples of the - employees that passed the drug screening tests and Kuskokwim region. The Native hiring program was first were not terminated established in 1996, and it continues today. The combination of these failures made it clear that significant Presently, the Donlin Creek project is staffed primarily by action was needed. For the program to be successful, the Yup'ik and Athabascan Natives. Although now highly successful, team at Donlin needed to understand why these failures the local Native hire program encountered significant, had occurred and take action. A cross-cultural outreach unanticipated challenges early on, as a variety of social, cultural plan and consultation was undertaken to gain a deeper and economic factors threatened to jeopardize its success. understanding of the social, cultural and economic obstacles these employees were facing. Research and consultation Local Native Alaskans nearest to the Donlin Creek project with project partners, former and current employees and are Yup'ik and live throughout Western, Southwestern surrounding communities led to a comprehensive action plan. and South-central Alaska. The Yup'ik culture in Alaska has endured many years of limited economic opportunities and The new action plan exceedingly high unemployment. Aside from government- • The company’s drug policy was redrafted to include funded work projects, few job prospects had previously hard and fast penalties, yet provide for a period in which existed for Native men and women in the region. employees could reapply for employment following a violation, provided they met certain milestones. The local hire program at Donlin In order to provide stable jobs and develop the skills of local • An on-site professional counselor was hired, Indigenous people, preferential consideration is given to local specializing in substance abuse, family counseling, Alaska Natives in the hiring process. Specifically, the program workplace counseling and stress management. stipulates that members of local Native communities, and their • Worker rotations were adjusted from 20 days on /10 spouse or descendants, should be given first consideration for days off to a two week on / two week off rotation, 12 any job that becomes available for which they are trained (or hours per day. could be trained in a reasonable amount of time) over other • To build trust, a local Alaska Native was hired as the candidates from outside the region. program coordinator. Early challenges • Cultural sensitivity training was conducted for both Alaska In 1996, Placer Dome hired 152 employees in order to keep Native and non-Native employees. 48 full-time positions filled. The program sustained heavy • Camp dining and recreational rooms were constructed injury rates, overwhelming drug screen fail rates, and a high to allow for more traditional, open interaction in a rate of voluntary termination. family-like setting. A cultural barrier that pre-dated the project began to The program today develop and reflected a difficult period of transition. The The program today is yielding impressive results. Currently, historic treatment of Alaska Native people, compounded 92% of exploration camp employees and 90% of crew by attempts to “Westernize” the Native population, had supervisors are Alaska Natives. A stable and increasingly created a significant lack of trust of outsiders among Native effective and productive workforce has emerged, as the Donlin communities. While the Donlin Creek project offered a chance Creek project moves toward the permitting, construction and for meaningful employment, concerns persisted, and this operating phases. Beyond statistics, many of the men and contributed to a lack of trust between Native and non-Native women working at Donlin Creek credit the opportunity to workers. work at Donlin with a renewed sense of purpose, self-esteem and hope for their future. First year results: • 318% overall employee turn-over – this figure As the next phases of the project begins, Donlin Creek represents turn-over due to policy violations from LLC is committed to continuing to work closely with drugs and alcohol, missed rotations, and voluntary and local Alaska Native people to bring significant economic involuntary termination opportunities to the region. 4 Opportunities

Pipeline studies this summer Operations at the Donlin Creek camp Chiulista Services, Inc. (CSI) is Donlin are at a reduced level of activity. There Creek LLC’s Staffing Services provider, will be some limited core sample meaning CSI recruits prospective drilling this summer but most of the employees, conducts hiring, and work for the next year is now focused manages employee payroll and on carrying out environmental and benefits. Since camp operations are engineering studies required to review smaller this summer, there are just a a gas pipeline option. This information select few jobs available. Those wishing will then be integrated into Donlin’s to be considered for employment overall feasibility study to determine should visit www.chiulista.com. how the project would operate using and alcohol free workplaces and gas for on-site power generation Donlin Creek LLC and Chiulista require that commitment from all of rather than the earlier diesel option. Services, Inc. are proud to be drug their employees.

Stewardship

Small drilling footprint Anytime you construct something, To understand the ground conditions, you need to know about the ground it is necessary to drill holes and collect conditions, the surface on which it samples. Due to the remoteness of will rest. In the case of Donlin Creek the area, DCLLC uses helicopters to LLC (DCLLC) gas pipeline studies, transport small mobile drilling rigs understanding the ground conditions is for the sub-surface testing. Unlike oil necessary for planning where and how drilling rigs and exploration drilling rigs, a pipeline would be buried. Some of the these are much smaller and leave a very questions DCLLC would like to answer small footprint. Typically the area to be during this summer’s studies are: drilled is cleared of brush, and the drill is then set in place by helicopter. Drilling • What are the ground conditions operations can take anywhere from a along the study route? few hours to a full day depending on • Where are all of the cultural sites how deep a sample is needed. After for minerals, so the holes drilled do not located along or near the route? completion of the hole, the samples are need to be very deep. Even so, DCLLC • Is the route feasible? bagged, the rig is removed, the fist-sized fills in the holes to minimize impact to hole is filled in with dirt. animals in the area. Using this method, If the ground conditions in any area are Donlin is able to test the ground samples not appropriate for constructing and Drilling operations for selection of a and leave behind a very small indication burying a natural gas pipeline then the potential pipeline route and determining that testing occurred. route would need to be altered. construction needs are not like looking STEP STEP STEP STEP 1STEP 2STEP 3STEP 4 5 6 7 Area cleared Helicopter Drill operations can Operators bag the The fist-sized hole The drill site is The rig is removed. of brush. places drill. take up to a full day. cuttings. is filled in. reclaimed. 5 Prst Standard US Postage PAID Permit No. 630 Anchorage, AK

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mining vocabulary: Native metal A metal occurring in nature in pure form, uncombined with The subsurface gold at Donlin Creek is not in native form, other elements. Gold, silver, copper, iron, mercury, iridium, but instead occurs combined with sulfide minerals. lead, palladium and platinum can occur as native metals. A Therefore metallurgical processes are required to extract gold nugget is a classic example of a native metal. the gold from the ore.

Yukon Kuskokwim Mining History Alaska has a rich mining history, and handle sled dogs. He is famously known that year he the Yukon Kuskokwim (YK) region is no for spreading the word about Felix brought with him exception. Placer gold exploration and Pedro’s gold strike and starting the two sled loads of mining began in the YK region with when he drove one mining equipment, prospectors in the early 1900s, and of E. T. Barnette’s dog teams from the another sled load many unique individuals staked claims trading post (later named Fairbanks) to of miscellaneous and worked gold pans there. . supplies and four Japanese One such character was Jujiro Wada. In early 1912, Wada was in the companions who Japanese musher Jujiro Wada, Born in in the 1870s, Wada was Kuskokwim area, looking for a Japanese would serve as dog, and unidentified man at intrigued by stories of America and man, known locally as Allen, who had assistant dog Dawson City, February 1903. went to in 1890. He disappeared there. In July of that year, drivers. The Japanese and their 20 worked as a cabin boy for the Pacific he and a partner made a gold strike on dogs then drove to the strike on Bear Steam Whaling Company, and later as the Tuluksak River. Wada took about Creek, a large northeast headwater a shore whaler in Barrow for Charles $12,000 in gold (worth about $274,000 tributary to the Tuluksak River, where Brower and the Cape Smythe Whaling in today’s currency) with him when he Wada remained until February of 1913. and Trading Company where he learned went to to report the findings Wada died in 1937 in San Diego, Alaska Native languages and how to to his backers. When he returned later at age 65. 6