Vancouver — Just 15 months after signing the option agreement,
The junior’s accelerated exploration program more than doubled the higher-grade contained gold resource at Donlin Creek.
Now that NovaGold has vested its interest, Placer Dome has 90 days in which to decide on its options, which are:
1) to remain at a 30% interest and contribute at that level through the development of the project;
2) to convert to a non-contributing 5% net profits interest; or
3) to undertake to exercise a back-in right to re-acquire an additional 40% interest in the project by completing all of the following conditions within the next five years — (a) expending a minimum of US$30 million toward project development; (b) completing a bankable feasibility study; (c) committing to build a mine that produces not fewer than 600,000 oz. gold per year.
Regarding the last option, Placer Dome would not earn any additional interest in the project above its 30% unless all of the above conditions are met within the 5-year time frame.
Also, NovaGold would not be required to contribute any additional funding up to the $30 million, and at NovaGold’s election, Placer Dome would arrange construction financing for NovaGold’s share of the mine development costs that would be repaid out of future mine cash flow.
If Placer decides to back-in, NovaGold says its shareholders will not have to worry about shareholder dilution through financing. On the other hand, if Placer remains at 30% or converts to a 5% non-contributing net profits interest, NovaGold’s shareholders should see additional share value as the project’s gold resource expands and as the project advances through prefeasibility, feasibility and into production.
Meanwhile, NovaGold continues to intersect gold mineralization in a 100-by-100-metre program of stepout drilling south of the Acma deposit at Donlin Creek.
Highlights are as follows:
q Hole 864 intersected seven mineralized intervals starting at a down-hole depth of 19.1 metres and ending at 273 metres down-hole. These include: 8.7 metres averaging 5.3 grams gold; 27.2 metres of 4.16 grams gold, 8 metres of 3.04 grams gold; 6.7 metres of 3.08 grams gold; 19.3 metres of 3.02 grams gold; 12 metres of 7.84 grams gold; and 22 metres of 3.64 grams gold.
q Hole 865 intersected five mineralized intervals starting at 62 metres and ending at 402 metres down-hole. These include: 6.1 metres averaging 3.41 grams gold; 12 metres of 3.31 grams gold; 9.5 metres of 3.24 grams gold; 24 metres of 7.01 grams gold; 8.8 metres of 3.13 grams gold.
q Hole 866 cut seven mineralized intervals starting at 56.4 metres and ending at 487 metres down-hole. These include: 9.6 metres of 5.07 grams gold; 46.4 metres of 4.91 grams gold; 15 metres of 12.75 grams gold; 13.2 metres of 4.88 grams gold; 28 metres of 3.08 grams gold; 3.7 metres of 11.95 grams gold; and 9 metres of 3.12 grams gold.
q Hole 867 cut four intervals starting at 205.1 metres and ending at 358 metres down-hole. These include: 21 metres of 3.45 grams gold, 22.4 metres of 3.39 grams gold, 5.6 metres of 4.42 grams gold, and 12 metres of 11 grams gold.
q Hole 868 cut 21.2 metres averaging 3.84 grams gold starting at 93.6 metres down-hole.
These results strengthen the project’s economics by adding new gold resources in areas that fall within modeled open pits that were not included previously.
Additional follow-up drilling at the new Aurora discovery continues to intersect high-grade gold mineralization. The company currently has four drills spinning, which will continue into December.
The joint-venture plans to spend US$2.9 million during the next three months to upgrade the new high-grade, shallow gold mineralization at the Akivik, Aurora, 400, and South Acma zones to a 50-by-50-metre drill-hole density. Once this is completed, Placer Dome and NovaGold will calculate a comprehensive resource estimate.
The junior has nearly completed an interim resource estimate for the Akivik, Aurora and 400 target areas. These new resource areas were discovered during this year’s drill program and are situated outside of the main Acma and Lewis deposit areas. Since these prospects are drilled on 100-metre centres, the resources will be reported in the inferred category. The updated resource is expected in the next few weeks.
The total measured and indicated resource, as defined in the scoping study released in March, was 73.9 million tonnes grading 3.51 grams gold per tonne, or 8.3 million contained ounces. An additional resource of 92.43 million tonnes averaging 3.66 grams gold, or 10.9 million oz., falls in the inferred category.
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