NovaGold boosts Galore Creek resource

Vancouver — An independent firm estimates that the Galore Creek project in northwestern British Columbia has a larger gold-silver-copper resource than previously believed.

Hatch has informed NovaGold Resources (NG-T) that the measured and indicated resource consists of 353.3 million tonnes grading 0.45 gram gold and 5.3 grams silver per tonne, plus 0.72% copper, for a total grade of 0.98% copper-equivalent. That’s 25% larger than the previous estimate. Contained in this resource are 5.1 million oz. gold, 60 million oz. silver, and 2.5 million tonnes (5.6 billion lbs.) copper. The estimates are based on a cutoff grade of 0.5% copper-equivalent.

Hatch further estimates that the inferred resouce is a whopping 250% larger than previously believed: 348.5 million tonnes grading 0.54 gram gold, 5.4 grams silver and 0.5% copper, for a total grade of 0.86% copper-equivalent. The same cutoff grade was used. Contained in the inferred resource are 6 million oz. gold, 61 million oz. silver, and 1.7 million tonnes (3.9 billion lbs.) copper.

The estimates are based on 133,000 metres of drilling in 537 holes at the Central, Southwest, Junction and West Fork deposits, as well as the satellite Copper Canyon project, under option from Eagle Plains Resources (epl-v).

A prefeasibility study will consider a mining rate of up to 60,000 tonnes per day — double the figure used in an economic assessment in mid-2004.

Starting in June, NovaGold will carry out 50,000 metres of core drilling at Galore Creek en route to a full feasibility study in 2006.

In mid-2003, Novagold acquired an option for a royalty-free interest in the property from Rio Tinto (RTP-N) and Anglo American (AAUK-Q) by completing a prefeasibility study and paying US$20.3 million over eight years.

The substantial resource increase impressed investors, driving up NovaGold’s stock by about 5%, or 50, to $10.50 per share level on May 2. With 66.1 million shares outstanding, the company has a market capitalization of $690 million.