Vancouver – After tallying last years drill data, NovaGold Resources (NG-T, NG-X) has boosted resource estimates for its Galore Creek copper-gold deposit in northwestern British Columbia.
Measured and indicated resources of copper, gold and silver increased 20%, 12% and 21% respectively while inferred resources for the three metals are up 32%, 23% and 33% respectively.
Previous proven and probable reserves of 540.7 million tonnes grading 0.56% copper, 0.3 gram gold per tonne and 5.3 grams silver per tonne remain unchanged from the October 2006 feasibility study. However, new measured and indicated resources now stand at 387.6 million tonnes grading 0.42% copper, 0.24 gram gold and 3.9 grams silver. The contained metal tally in the reserves plus measured and indicated resources is about 10.2 billion lbs. of copper, 8.3 million oz. gold and 141.8 million oz. silver using an NSR cutoff of C$3.82 (0.21% copper-equivalent cut-off grade).
The inferred resource, excluding the Copper Canyon project, has risen to 401.6 million tonnes of 0.37% copper, 0.19 gram gold and 3.7 grams silver in the updated review.
The new estimates used the same metals prices as in the mid-2006 calculation: US$1.25 per lb. for copper, US$450 per oz. for gold and US$7 per oz. for silver.
With hopes to further expand the Galore Creek resource from this years drilling, NovaGold vice president of exploration Joe Piekenbrock tabled a goal of “increasing projected metal production during the first 10 years of operation.”
The company has earmarked funds for at least 15,000 metres of drilling in 2007.
Planned development of the Galore Creek deposit sees a 65,000 tonnes-per-day open pit mine operating for at least 20 years.
“The project is on target to start construction in Q2-2007, once financing is in place and the necessary permits have been received,” stated company president and CEO Rick Van Nieuwenhuyse.
Galore Creek construction has been planned in two phases. The initial phase, expected to take about 2 years, will see access infrastructure emplaced including roads, bridges, tunnels, concentrate and diesel pipelines, and a 130-km long power line from Bob Quinn to the Galore Creek valley. Phase 2 development encompasses mine infrastructure construction, a tailings dam, open pit stripping and building of processing facilities. NovaGold projects start-up of production around mid-2012.
NovaGold is earning a 100% interest in Galore Creek project from subsidiaries of Rio Tinto (RTP-N, RIO-L) and HudBay Minerals (HBM-T, HBMFF-O).
NovaGold can also acquire up to an 80% interest in the adjoining Copper Canyon property from Copper Canyon Resources (CPY-V, CAYRF-O) for total payments of $1.25 million, issuing 296,000 shares and completion of a feasibility study by October 1, 2011. The project contains an inferred resource of 164.8 million tonnes of 0.35% copper, 0.54 gram gold and 7.2 grams silver.
The company also has an option to earn 60% interest in the adjoining Grace property from Pioneer Metals, now a wholly owned subsidiary of Barrick Gold (ABX-T, ABX-N). NovaGold, that is planning a tailings disposal site on the claims, is in litigation with Pioneer on the option agreement.
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