NovaGold explores Donlin Creek gold project

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

Earlier this year, the California-based company agreed to acquire a 70% interest in the multi-million-ounce deposit from Placer Dome (PDG-N).

NovaGold will 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. It also retains a back-in right to regain control of the property.

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

NovaGold is using 3-D 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 dykes and sills, as well as in high-grade stockwork veins in the surrounding sedimentary rocks.

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

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

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

NovaGold plans to upgrade the resource using structural mapping from trenches and oriented drill core, combined with multi-element geochemistry and geophysics. The feasibility phase would follow.

Although Donlin Creek contains significant gold, its remote location, 500 km west of Anchorage, is problematic. All men and materials must be flown in or brought by barge up the Kuskokwim River.