NovaGold Agrees to
Purchase Ambler Copper-Zinc-Gold-Silver Project
December 22, 2009 - Vancouver, British
Columbia - NovaGold Resources Inc.
(NYSE-AMEX: NG, TSX: NG) today announced that it has entered into an agreement
to purchase a 100% interest in the Ambler property in northern Alaska, which
hosts the high-grade copper-zinc-gold-silver Arctic deposit.
The Ambler property comprises 36,670
hectares (90,614 acres) of Federal patented and unpatented mining claims and
State of Alaska mining claims, covering a major portion of the
precious-metal-rich Ambler volcanogenic massive sulfide (“VMS”) belt. The
Arctic deposit is the most advanced deposit on the property, located
approximately 290 kilometers (180 miles) southeast of Red Dog mine, the
world’s largest zinc mine.
A resource estimate completed in 2008
confirmed the Arctic deposit as one of the world’s largest undeveloped
copper-zinc VMS deposits, with very high grades and significant precious metal
credits. On an equivalent metal basis, the average metal content exceeds 8%
copper equivalent. The Arctic deposit is one of a number of VMS deposits along
the 70-kilometer-long Ambler Schist Belt. The current resource estimate for the
deposit is outlined below.
Resource
Estimate for Arctic Deposit (1)
|
|
In
Situ Grade
|
Total
Contained Metal
|
Resource Category
|
Tonnes
(Millions)
|
Cu
(%)
|
Zn
(%)
|
Au
(g/t)
|
Ag
(g/t)
|
Pb
(%)
|
Cu
(Mlb)
|
Zn
(Mlb)
|
Au
(Moz)
|
Ag
(Moz)
|
Pb
(Mlb)
|
Indicated
|
16.8
|
4.1
|
6.0
|
0.83
|
59.6
|
0.94
|
1,538
|
2,237
|
0.45
|
32.3
|
350
|
Inferred (2)
|
11.9
|
3.6
|
5.0
|
0.67
|
48.4
|
0.80
|
937
|
1,313
|
0.26
|
18.6
|
210
|
(1) Mineral resources that are not
mineral reserves do not have demonstrated economic viability.
(2) Inferred resources are in addition to measured and indicated
resources. Inferred resources have a great amount of uncertainty as to their
existence and whether they can be mined legally or economically. It cannot be
assumed that all or any part of the inferred resources will ever be upgraded to
a higher category. See “Cautionary Note Regarding Reserve & Resource
Estimates”.
(3) US$100 gross metal value/tonne cutoff. Gross metal value was
calculated based on metal prices of Cu US$2.25/lb, ZnUS$1.05/lb, Au US$525/oz,
Ag US$9.5/oz and PbUS$0.55/lb applied to each individual grade. The gross metal
value is equal to the sum of each grade multiplied by the value of the metal
unit. No metallurgical recovery has been applied. The resource estimate for the
Arctic deposit is based on the technical report titled “NI 43-101 Technical
Report on Resources, Ambler Project, Arctic Deposit” dated January 31, 2008,
a copy of which is available on SEDAR at www.sedar.com and on EDGAR at
www.sec.gov. The report was authored by Russ White, PGeo, a qualified person as
defined by NI 43-101.
“The Arctic deposit ranks among the
largest and richest known VMS deposits in the world, based on both total
contained metal and value per tonne. And considerable opportunity exists to identify
similar deposits in the region,” said Rick Van Nieuwenhuyse, President & CEO
of NovaGold. “NovaGold is really going back to its roots by acquiring Ambler.
We have a solid record in identifying opportunities, expanding resources and
advancing those resources to reserves. NovaGold’s exploration team tripled
the size of both the Donlin Creek and Galore Creek deposits through focused
exploration campaigns. With those projects now at a more advanced stage, we can
focus our exploration efforts on Ambler with the goal of adding another
world-class property to NovaGold’s portfolio.”
Under the Purchase Agreement between
NovaGold and its wholly-owned subsidiary, Alaska Gold Company (collectively
“NovaGold”) and Kennecott Exploration Company and Kennecott Arctic Company
(collectively “Kennecott”), NovaGold has agreed to pay Kennecott a total
purchase price of US$29 million for the Ambler property to be paid as: US$5
million by the issuance of NovaGold shares, calculated by the volume weighted average
price per share on the five trading days immediately preceding the effective
date of the transaction; and two installments of US$12 million each, due 12
months and 24 months, respectively, after the effective date of the
transaction. Kennecott will retain a 1% net smelter return royalty that can be
purchased at any time for a one-time payment of US$10 million. The closing of
the transaction is subject to normal conditions including obtaining regulatory
approvals. The Purchase Agreement terminates the exploration agreement between
NovaGold and Kennecott dated March 22, 2004, as amended, under which NovaGold
had the ability to earn a 51% interest in the Ambler property. The securities
described herein have not been registered under the U.S. Securities Act of
1933, as amended, or any state securities laws and may not be offered or sold
in the United States or to U.S. persons unless an exemption from registration
is available. This news release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in the United States.
Developing the Ambler Project
Work at the Ambler property throughout
2008–2009 has focused primarily on community engagement, realizing broad
support for the project in the region. NovaGold has participated in the
Northwestern Alaska Resource Transportation Study, working closely with the
Kobuk River villages, the Northwest Arctic Borough, NANA Corporation and the
State of Alaska to discuss and evaluate various transportation alternatives,
specifically identifying opportunities for synergies in the region. As at all
of its projects, NovaGold is committed to working with local communities and
Alaska Native corporations to build a collaborative relationship, ensuring the
project is developed in a manner that protects the environment and traditional
cultures and brings tangible, lasting benefits to local communities.
NovaGold will continue its community
engagement programs in 2010, and has appointed a project team to plan
exploration activities, advance environmental baseline studies and conduct
engineering and technical studies at the Ambler project with the goal of
gaining a better understanding of the true size and potential of the district
as well as the continuity and mineability of the other deposits in the Ambler
VMS belt.
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About NovaGold
NovaGold is a growth-focused precious metals
company engaged in the exploration and development of mineral properties in
North America. The Company has a portfolio of mineral properties located in
Alaska, USA, and British Columbia, Canada. The Company’s largest projects are
being advanced with major mining companies. The Donlin Creek project is held by
a limited liability company owned equally by NovaGold and Barrick Gold U.S.
Inc. The Galore Creek project is held by a partnership owned equally by NovaGold
and Teck Resources Limited. NovaGold owns a 100% interest in the Rock Creek,
Big Hurrah and Nome Gold deposits in Nome, Alaska. NovaGold has one of the
largest reserve/resource bases of any junior or mid-tier level producing gold
company, and trades on the TSX and NYSE-AMEX under the symbol NG. More
information is available at www.novagold.net or by email at info@novagold.net.
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NovaGold Contacts
Greg Johnson
Vice President, Strategic Development
Rhylin Bailie
Manager, Corporate & Investor Relations
604-669-6227 or 1-866-669-6227
Cautionary Note Regarding
Forward-Looking Statements
This
press release includes certain “forward-looking statements” within
the meaning of the United States Private Securities Litigation Reform Act of
1995. All statements, other than statements of historical fact, included herein
including, without limitation, completion of the acquisition, exploration plans
at Ambler and resource estimates, and NovaGold’s future operating or
financial performance, are forward-looking statements. Forward-looking statements involve various risks and
uncertainties. There can be no assurance that such statements will prove to be
accurate, and actual results and future events could differ materially from
those anticipated in such statements. Important factors that could cause actual
results to differ materially from NovaGold’s expectations include the
uncertainties involving the need for additional financing to explore and
develop properties and availability of financing in the debt and capital
markets; uncertainties involved in the interpretation of drilling results and
geological tests and the estimation of reserves and resources; the need for
continued cooperation with Barrick Gold and Teck Resources in the exploration
and development of the Donlin Creek and Galore Creek properties; the need for
cooperation of government agencies and native groups in the development and
operation of properties; the need to obtain permits and governmental approvals;
risks of construction and mining projects such as accidents, equipment
breakdowns, bad weather, non-compliance with environmental and permit
requirements, unanticipated variation in geological structures, ore grades or
recovery rates; unexpected cost increases; fluctuations in metal prices and currency
exchange rates; the outcome of litigation pending against the company; and
other risk and uncertainties disclosed in NovaGold’s Annual Information Form
for the year ended November 30, 2008, filed with the Canadian securities
regulatory authorities, and NovaGold’s annual report on Form 40-F filed with
the United States Securities and Exchange Commission and in other NovaGold
reports and documents filed with applicable securities regulatory authorities
from time to time. NovaGold’s forward-looking statements reflect the beliefs,
opinions and projections on the date the statements are made. NovaGold assumes
no obligation to update the forward-looking statements of beliefs, opinions,
projections, or other factors, should they change.
Cautionary Note Regarding Reserve and
Resource Estimates
This press release has been prepared in
accordance with the requirements of the securities laws in effect in Canada,
which differ from the requirements of U.S. securities laws. Unless otherwise
indicated, all resource and reserve estimates included in this press release
have been prepared in accordance with National Instrument 43-101 Standards of
Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of
Mining and Metallurgy Classification System. NI 43-101 is a rule developed by
the Canadian Securities Administrators which establishes standards for all
public disclosure an issuer makes of scientific and technical information
concerning mineral projects. Canadian standards, including NI 43-101, differ
significantly from the requirements of the United States Securities and
Exchange Commission (“SEC”), and resource and reserve information contained
herein may not be comparable to similar information disclosed by U.S.
companies. In particular, and without limiting the generality of the foregoing,
the term “resource” does not equate to the term “reserves”. Under U.S.
standards, mineralization may not be classified as a “reserve” unless the
determination has been made that the mineralization could be economically and
legally produced or extracted at the time the reserve determination is made.
The SEC’s disclosure standards normally do not permit the inclusion of
information concerning “measured mineral resources”, “indicated mineral
resources” or “inferred mineral resources” or other descriptions of the
amount of mineralization in mineral deposits that do not constitute
“reserves” by U.S. standards in documents filed with the SEC. U.S.
investors should also understand that “inferred mineral resources” have a
great amount of uncertainty as to their existence and great uncertainty as to
their economic and legal feasibility. It cannot be assumed that all or any part
of an “inferred mineral resource” will ever be upgraded to a higher
category. Under Canadian rules, estimated “inferred mineral resources” may
not form the basis of feasibility or pre-feasibility studies except in rare
cases. Investors are cautioned not to assume that all or any part of an
“inferred mineral resource” exists or is economically or legally mineable.
Disclosure of “contained ounces” in a resource is permitted disclosure
under Canadian regulations; however, the SEC normally only permits issuers to
report mineralization that does not constitute “reserves” by SEC standards
as in-place tonnage and grade without reference to unit measures. The
requirements of NI 43-101 for identification of “reserves” are also not the
same as those of the SEC, and reserves reported by the Company in compliance
with NI 43-101 may not qualify as “reserves” under SEC standards.
Accordingly, information concerning mineral deposits set forth herein may not
be comparable with information made public by companies that report in
accordance with U.S. standards.