NovaGold cuts high-grade gold at Donlin (July 17, 2002)

Vancouver — Stepout drilling by NovaGold Resources (NRI-T) has cut high-grade gold near the Donlin Creek deposit in southwestern Alaska.

The holes were collared halfway between the Acma deposit and the Akivik zone. The highlight was hole DC-723, which intersected 16 metres grading 32.95 grams gold starting at a down-hole depth of 116.5 metres; this was followed by a 3.7-metre interval of 13.13 grams gold starting at 138 metres down-hole. Also, hole DC-727 returned 17.5 metres of 6.81 grams gold starting at 116.5 metres down-hole.

Drill results indicate that the mineralization is near the surface and connected continuously to the modeled Acma pit. The mineralization found at the Akivik zone extends the known Acma mineralization by 1 km to the north.

High grades are also reported from a reverse-circulation (RC) drill program north of Akivik. Hole DR-668 cut 4.6 metres grading 7.2 grams gold, while hole DR-752 intersected 9.1 metres of 9.85 grams gold. Additional, stepout drilling will attempt to define the extent of the new zone, which remains open in all directions and lies outside the existing resource area.

“In-pit expansion drilling is identifying new near-surface, high-grade zones,” says NovaGold President Richard Van Nieuwenhuyse, “and drilling on the new target areas adjacent to the known resources at Acma and Lewis, such as the new Akivik, Southern Lewis and the Far East zones, are all intersecting significant zones of near-surface mineralization. Everything is on-track to complete an expanded resource estimate and economic assessment study this fall.”

The 2002 program includes two diamond core drills and one RC rotary drill, the objective being to expand and upgrade the known gold resource at Donlin Creek.

Based on a cutoff grade of 2 grams gold per tonne, the measured resource is 5 million tonnes grading 3.84 grams gold, or 623,000 contained ounces. The indicated portion amounts to 68.9 million tonnes grading 3.49 grams gold, or 7.7 million contained ounces, whereas the inferred portion consists of 92.4 million tonnes of 3.66 grams gold, or 10.9 million contained ounces.

When the cutoff is elevated to 3.5 grams gold, the measured and indicated resource changes to 26.9 million tonnes grading 5.06 grams gold, or 4.4 million contained ounces, with the inferred portion weighing in at 36.8 million tonnes of 5.22 grams gold, or 6.2 million contained ounces.

Drill crews are trying to delineate additional near-surface, higher-grade resources within, as well as adjacent to, the modeled open-pit boundaries. If these efforts prove successful, the overall stripping ratio would be reduced.

Most of Donlin Creek’s resources are hosted by intrusive dykes and sills, plus high-grade stockworks in surrounding sedimentary rocks. Gold mineralization is structurally controlled and occurs as disseminations and veinlets in association with fine-grained arsenopyrite. NovaGold has determined that low-angle, north-dipping thrust faults help control the distribution of mineralization in the region.

Since the start of summer, NovaGold has drilled 17,800 metres in 155 holes (71 core and 84 RC). Assay results have been reported for 105 of these holes. Significant mineralized intervals of intrusive porphyry and sedimentary rocks have been intercepted in all of the target areas, and an additional 20,000 metres of drilling are planned in the current program, as part of a prefeasibility study.

Drilling east of the Akivik discovery continues to return promising results, with four stepout holes cutting high-grade mineralization. These holes are between the newly discovered Akivik zone and the Vortex zone in the western part of the Lewis deposit. Hole DC-697 intersected three intervals totalling 24.1 metres and with an average grade of 5 grams gold, while hole DC-698 hit 15.2 metres of 5.71 grams gold. These drill holes targeted a mineralized corridor along one of the Vortex dykes.

Intrusive porphyry

Meanwhile, stepout drilling half a kilometre south of the modeled Lewis pit has intercepted significant mineralized intervals of intrusive porphyry. The first phase of testing targets on a 100-by-100-metre grid in this area is nearly complete. Hole DC-712 intersected three mineralized zones totalling 10.3 metres with an average grade of 6.8 grams gold, and hole DC-722 cut 10 metres of 3.1 grams gold and 12.3 metres of 3.9 grams gold. Additional assay results for this new zone are pending.

Follow-up drilling at the Far East zone, half a kilometre east of the Lewis deposit, has now wrapped, with assays pending. This target was discovered with a single hole, which tested a gold-in-soil anomaly and a coincident geophysical target. That hole, DC-436, intersected 17.9 metres grading 5.9 grams gold within a strongly mineralized intrusive porphyry. A total of 11 RC drill holes have been completed, all of which intersected the eastern extension on the Lewis sill. Also, several strongly mineralized sections of intrusive porphyry were logged.

Once the US$8-million preliminary feasibility study is completed, NovaGold will have earned its 70% interest in the property from Placer Dome (PDG-T). Placer will then have 90 days to decide on one of three options: retain a 30% interest and participate as a minority partner; convert to a 5% net profits interest; or exercise a back-in-right for a 70% stake by spending three times that of NovaGold, conduct a feasibility study, and decide to mine not less than 600,000 oz. gold per year over five years.

The Donlin Creek property is 480 km west of Anchorage, roughly 19 km north of a commercial barge site on the Kuskokwim River. The property has an all-season, 100-man capacity exploration camp, as well as a 1,500-metre runway that can handle aircraft as large as the C-130 Hercules freighter.

Recent results from NovaGold’s drill program on the property are as follows:

• Hole DC-693, collared in the Vortex zone, cut 5.4 metres grading 5.89 grams gold, starting 78.0 metres down-hole.
• Hole DC-697, also in the Vortex zone, cut 3.0 metres averaging 6.60 grams gold, starting 29.0 metres down-hole. This was followed by a 14.2-metre interval that averaged 5.22 grams gold as well as a 6.9-metre section that averaged 3.86 grams gold.
• Hole DC-698, collared in the Vortex zone, intersected 15.2 metres averaging 5.71 grams gold, starting 45.1 metres down-hole.
• Hole DC-703, collared in the Akivik zone, intersected 12.1 metres averaging 5.26 grams gold, starting 36.0 metres down-hole.
• Hole DC-705, collared in the Akivik zone, cut 6.0 metres averaging 3.17 grams gold starting 92.0 metres down-hole. This was followed by a 4.0-metre interval that averaged 8.91 grams gold.
• Hole DC-708, collared in the South Lewis zone, cut 5.0 metres averaging 5.70 grams gold, starting 60.0 metres down-hole.
• Hole DC-711, collared in the Akivik zone, intersected 7.6 metres grading 10.41 grams gold, starting 97 metres down-hole. This was followed by a 3.1-metre section that averaged 6.63 grams gold.
• Hole DC-712, collared in the South Lewis zone, intersected 5.7 metres averaging 7.76 grams gold, starting 151.3 metres down-hole. This was followed by a 2.9-metre interval that assayed 4.64 grams gold.
• Hole DC-722 was collared in the South Lewis zone and intersected 10.0 metres averaging 3.10 grams gold, starting 77 metres down-hole. This was followed by a 4.5-metre interval that averaged 5.45 grams gold and a 12.3-metre section that averaged 3.90 grams gold.
• Hole DR-668 was collared in the North Acma zone and intersected 4.6 metres averaging 7.20 grams gold, starting 32 metres down-hole.
• Hole DR-752 was also collared in the North Acma zone and intersected 9.1 metres averaging 9.85 grams gold, starting 25.9 metres down-hole.
• Hole DR-753 cut 3.1 metres averaging 6.62 grams gold, starting 76.2 metres down-hole.
• Hole DR-761 intersected 5.4 metres averaging 5.89 grams gold, starting 78 metres down-hole.

All drill samples were analyzed by fire assay at ALS Chemex Labs in Vancouver.