NovaGold boosts Galore Creek resource base

Vancouver – NovaGold Resources (NG-T) received a significant resource increase for its Galore Creek gold-silver-copper project in northwestern British Columbia.

Measured and indicated resources increased about 25% and now stand at 353.3 million tonnes grading 0.45 gram gold per tonne, 5.3 grams silver per tonne and 0.72% copper (for a total grade of 0.98% copper equivalent) using a 0.5% copper equivalent cut-off grade. Contained metals stand at 5.1 million oz. of gold, 60 million oz. of silver and 2.5 million tonnes (5.6 billion pounds) of copper.

Engineering firm Hatch also calculated a more than 250% increase in inferred resources to 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) using the same cut-off grade. Inferred metal content comes in at 6 million oz. of gold, 61 million oz. of silver and 1.7 million tonnes (3.9 billion pounds) of copper.

The estimates were based on over 133,000 metres of drilling in 537 holes at the Central, Southwest, Junction and West Fork deposits and also included the satellite Copper Canyon project under option from Eagle Plains Resources (EPL-V).

A pre-feasibility study slated for this year will review a proposed mining rate of up to 60,000-tonnes-per-day, double the figure used in the preliminary economic assessment completed in mid-2004 (TNM, August 20/04).

NovaGold’s 2005 Galore Creek exploration program, anticipated to begin by June, will include seven drill rigs with a budget for at least 50,000 metres of core drilling enroute to a full feasibility study in 2006.

In mid-2003, Novagold acquired an option for a 100% royalty-free interest in the property from Rio Tinto (RTP-N) and Anglo American (AAUK-Q) by completing a pre-feasibility study and making payments totaling US$20.3 million over 8 years.

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