NovaGold commences exploration at Donlin Creek

Denver — In preparation for further drilling in July, NovaGold Resources (NRI-T) has begun to model the Donlin Creek deposit in southwestern Alaska.

Earlier this year, the California-based junior signed an agreement to acquire a 70% interest in the multi-million-ounce deposit from Placer Dome (PDG-T).

The junior agreed to pay US$12 million over 10 years for the 109 sq.-km property. Placer can retain a 30% interest or dilute to a net profits interest. Placer retains a back-in right to regain control of the property.

Formal agreements should be finalized by the end of June with Placer and Calista, the Alaska native corporation that owns the land. Calista’s board has already given the green light.

NovaGold is using 3D imaging to focus on the higher-grade structural corridors in the deposit. Mineralization, which stretches over 6 km, is structurally controlled and related to an intrusive. Gold occurs within dikes and sills, as well as in high-grade stockwork veins in the surrounding sedimentary rocks.

Placer spend US$37 million developing the property. This included more than 110,000 metres of drilling and 25,800 metres of trenching.

NovaGold expects to begin drilling in July. The company hopes to increase drill definition of the high-grade resource in preparation for detailed engineering and feasibility work.

The high-grade resource stands at 5.5 million oz. within 33.5 million tonnes grading 5.1 grams gold per tonne, using a 3.5-gram cutoff. Nearly 60% of the resource falls within the measured and indicated category. The remainder is inferred.

NovaGold plans to use detailed structural mapping from trenches and oriented drill core, combined with multi-element geochemistry and geophysics, to upgrade the resource. The company hopes to then proceed toward feasibility.

While Donlin Creek contains significant gold, its location remains a problem, particularly for a junior company. It is nearly 500 km west of Anchorage. All workers and materials must be flown in or brought by barge up the Kuskokwim river, making the project potentially more expensive.