Vancouver — After tallying last year’s drill data, NovaGold Resources (NG-T, NG-X) has boosted resource estimates for its Galore Creek copper-gold deposit in northwestern British Columbia.
Measured and indicated resources of copper, gold and silver increased 20%, 12% and 21%, respectively, while inferred resources for the three metals are up 32%, 23% and 33%.
Previous proven and probable reserves of 540.7 million tonnes grading 0.56% copper, 0.3 gram gold per tonne and 5.3 grams silver remain unchanged from the October 2006 feasibility study. However, measured and indicated resources now stand at 387.6 million tonnes grading 0.42% copper, 0.24 gram gold and 3.9 grams silver. The contained metal tally in the reserves plus measured and indicated resources is about 10.2 billion lbs. of contained copper, 8.3 million oz. gold and 141.8 million oz. silver using a net smelter return cutoff of C$3.82 (0.21% copper-equivalent cutoff grade).
The inferred resource, excluding the Copper Canyon project, has risen to 401.6 million tonnes of 0.37% copper, 0.19 gram gold and 3.7 grams silver in the updated review.
The new estimates used the same metals prices as in the mid-2006 calculation: US$1.25 per lb. for copper, US$450 per oz. for gold and US$7 per oz. for silver.
With hopes to further expand the Galore Creek resource from this year’s drilling, NovaGold vice-president of exploration Joe Piekenbrock tabled a goal of “increasing projected metal production during the first 10 years of operation.”
The company has earmarked funds for at least 15,000 metres of drilling in 2007.
Planned development of the Galore Creek deposit sees a 65,000-tonne-per-day open-pit mine operating for at least 20 years.
Company president and CEO Rick Van Nieuwenhuyse says the project is on target for construction to begin in the second quarter, once financing and permits are in place.
Galore Creek construction has been planned in two phases. The initial one, expected to take about two years, will see the building of access infrastructure, including roads, bridges, tunnels, concentrate and diesel pipelines, and a 130-km-long power line from Bob Quinn to the Galore Creek Valley. Phase-two development will see mine infrastructure, a tailings dam and processing facilities built, as well as open-pit stripping. NovaGold expects production to begin around mid-2012.
The company recently exercised an option to purchase the core claim area of the Galore Creek project from subsidiaries of Rio Tinto (rtp-n, rio-l) and HudBay Minerals (HBM-T, HBMFF-O).
NovaGold can also acquire up to an 80% interest in the adjoining Copper Canyon property from Copper Canyon Resources (CPY-T, CAYRF-O) for total payments of $1.25 million, 296,000 shares and completion of a feasibility study by Oct. 1, 2011. The project contains an inferred resource of 164.8 million tonnes of 0.35% copper, 0.54 gram gold and 7.2 grams silver.
In addition, the company has an option to earn a 60% stake in the adjoining Grace property from Pioneer Metals, a subsidiary of Barrick Gold (ABX-T, ABX-N). NovaGold, which is planning a tailings disposal site on the claims, is in litigation with Pioneer on the option agreement.
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