NovaGold buoyed by drill results at Galore Creek

Vancouver — Recent drill results have given NovaGold Resources (NG-T) more confidence that resources can be expanded at its Galore Creek copper-gold deposit in northwestern British Columbia, already one of the largest undeveloped deposits in the province.

The Vancouver-based company is earning a 100% interest in the project from subsidiaries of Rio Tinto (RTP-N) and Anglo American (AAUK-Q). This year’s program includes 60,000 metres of drilling aimed at advancing the project to the prefeasibility stage by year-end, and to full feasibility by the second half of 2006.

Also under way is mine-design work, including geotechnical drilling for plant-site locations, pit-wall parameters, and water-balance studies.

Earlier this year, NovaGold reported that the project (primarily in the Central zone) hosted measured and indicated resources totaling 516.7 million tonnes grading 0.59% copper, 0.36 gram gold, and 4.54 grams silver per tonne, or 0.8% copper-equivalent, based on a 0.35% copper-equivalent cutoff grade. Inferred resources add another 578.3 million tonnes of 0.41% copper, 0.42 gram gold, 4.35 grams silver, or a copper-equivalent grade of 0.68%, at the same cutoff grade.

If the copper-equivalent cutoff grade is raised to 1%, measured and indicated resources stand at 116.6 million tonnes of 1.08% copper, 0.82 gram gold, and 7.2 grams silver, or 1.56% copper-equivalent. Inferred resources at the same cutoff grade add another 81.2 million tonnes of 0.79% copper, 0.98 gram gold and 8.16 grams silver, or 1.44% copper-equivalent.

The company has completed about 35,000 metres of drilling so far this year, with the program including expansion and infill holes at the main Central, Junction and West Fork deposits, which collectively compose the existing resources at Galore Creek.

Several holes returned high-grade intersections. Drill-hole 05-512 intersected two composite intervals totalling 182 metres grading 0.9% copper, 2.1 grams gold, and 5.4 grams silver, while hole 05-514 returned 187 metres of 1.6% copper, 2.5 grams gold and 11 grams silver.

These new holes also extended known high-grade mineralization at the northernmost edge of the main Central deposit.

Drilling south of the West Fork deposit also extended known mineralization. Hole 05-533 returned two intervals totalling 104.1 metres grading 2.21% copper, 1.55 grams gold and 5.18 grams silver. Several other zones also returned encouraging results that add to the potential of the project.

NovaGold says results to date demonstrate “that all mineralized zones at the Galore Creek project remain open to further expansion.”

Much of NovaGold’s focus is now directed at delineating near-surface, higher-grade copper and gold resources in the vicinity of the Central, Southwest, Junction and West Fork zones. The effort is to develop potential “starter pits” for initial mining at Galore Creek.

Results from this year’s drilling campaign will be incorporated into an updated resource estimate scheduled for completion in the first half of 2006. The ultimate scale of the project, and final capital cost estimates, will be determined by the 2006 feasibility study.

NovaGold’s latest Galore Creek mine model is based on four distinct pits and uses an increased 65,000-tonne-per-day milling rate plan. Production in the initial five years is estimated at 174,000 tonnes (384 million lbs.) of copper and 318,000 oz. gold annually. Life of mine production is expected at 138,000 tonnes (305 million lbs.) of copper and 195,000 oz. gold annually. Over 80% of the current measured and indicated ore blocks are in the designed pit shells.

Galore Creek is situated about 150 km northeast of Stewart, a tidewater shipping port, but has no road access or related infrastructure. Engineering studies have reviewed a number of road construction scenarios through the rugged terrain, ranging from about 70 to 160 km, with the favoured plan now being a modified northern route.

The 125-km road would run west to the planned mine site along the More and Sphaler Creek valleys, from Bob Quinn on Highway 37. A final 4-km tunnel would access the Galore Creek Valley. Road construction would be single lane, with pullouts, and include a parallel concentrate slurry pipeline and 138 KV power line. Concentrate dewatering, storage and load out facilities are planned next to Highway 37, with truck haulage to Stewart, B.C. The proposed 6-inch diameter pipeline has an estimated cost in the order of $40 million.

NovaGold also holds rights to earn 80% of the adjoining Copper Canyon property, under option from Eagle Plains Resources (EPL-V). This project offers good potential for additional copper-gold resources to be developed in future exploration programs.

In addition, NovaGold can earn a 60% interest in the adjoining Grace copper-gold property from Pioneer Metals (PSM-T) by spending $5 million on exploration over five years.