Novagold eyes Donlin deposit

Vancouver — Junior Novagold Resources (NRI-T) has inked a deal with Placer Dome (PDG-T) to earn a majority interest in the 13-million-oz. Donlin Creek gold deposit in southwestern Alaska.

“Our strategy will be to work closely with our partners and the state of Alaska to develop Donlin Creek it into a premier operation,” says Rick Van Nieuwenhuyse, Novagold’s chief executive officer.

Situated 480 km west of Anchorage, Donlin Creek hosts measured and indicated resources of 70.1 million tonnes grading 3.06 grams gold per tonne. The estimate is based on a cutoff grade of 1.5 grams gold and excludes 66.2 million tonnes, averaging 2.83 grams gold, that are classified as an inferred resource.

Owing to the historically low gold price, the company will focus on a higher-grade core of 18.8 million tonnes grading 5.2 grams gold. This portion is based on cutoff grade of 3.5 grams gold.

“With the financing we have in place as a result of our land and construction aggregate businesses in Nome, we have sufficient funds to advance the project,” says Van Nieuwenhuyse.

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.

Metallurgical work by Placer Dome indicates that 89-95% of the gold can be recovered from the intrusive-hosted zones and 76-78%, from the sedimentary-hosted portion.

“The objective of this year’s program will be to increase the drill definition of the higher-grade resource,” Van Nieuwenhuyse says.

The Donlin Creek property covers 109 sq. km of private patented land under lease from the regional and village corporations of the lower Kuskokwim region. Novagold must spend US$12 million over 10 years to earn a 70% stake in that ground.

A definitive agreement is expected to be signed shortly.

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