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Three Alaskan Gold Miners With Golden Promise

Stocks in this article: NAK THM NG ABX AU KGC

Northern Dynasty has $40 million in cash and won't need to shell out cash until Anglo funds $1.5 billion, but at some point the company will be responsible for $1.8 billion, and an additional $650 million for infrastructure build out. NovaGold has $151.7 million in cash and will need to spend $21 million this year on Donlin, but until production will have to shell out $2 billion for the project. International Tower Hill has $120 million in cash, which should last until late 2013, at which point the company will be on the hook for $1.3 billion.

All three mines are big, juicy and come with big price tags. For these miners, it's all about location, location, location.

In Alaska, it's the "where" that counts. For all intents and purposes, Alaska is still a frontier place where the cost of energy and labor is high, environmental issues can halt a project and infrastructure is pivotal to success.

The Livengood project is located on the eastern infrastructure corridor just 60 miles north of the active Fort Knox mine, owned by Kinross Gold (KGC). The project is near a highway that runs all the way up to Prudhoe Bay and its nearby oilfields and is 50 miles from a power grid.

According to Carl Brechtel, COO of International Tower, Alaska has a lot of natural gas on the north slope, and "the state's currently looking at projects and ways to bring natural gas from the north slope down into the Alaskan population center, so that would be an opportunity for us." According to the CEO, Jeff Pontius, Alaska is also looking at hydro projects.

The nearest community is 40 miles away, making the mine less vulnerable to environmental issues and, thus far, there are no major native issues. Alaska Mental Health Trust is the primary landowner, according to the company, and the State of Alaska land-use-plan said the main use for the Livengood area was mining.

NovaGold and Northern Dynasty might have to work a little harder.

Donlin is location on private land and NovaGold partners with the native corporation that owns it. "They truly support the project," says CEO Rick Van Nieuwenhuyse, "we've been working in the region for 15 years."

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