NovaGold
and Teck Amend Funding Arrangement on Galore Creek Project
February
13, 2009 - Vancouver, British Columbia - NovaGold Resources Inc. (the “Company” or
"NovaGold") (TSX: NG, NYSE Alternext: NG) announced today that it has
entered into an agreement with Teck Cominco Ltd. (“Teck”) to amend certain
provisions of the Partnership Agreement relating to the Galore Creek Project
(“Galore Creek”). The agreement confirms that NovaGold and Teck each
continue to hold a 50% interest in the Galore Creek Partnership (“the
Partnership”). Under the amended agreement Teck will now fund 100% of Galore
Creek costs until the aggregate amount contributed by Teck after November 1,
2008, together with approximately $15.8 million previously contributed by Teck
on optimization studies equals C$60 million. Teck’s remaining funding
obligation, taking into account the amount 100% funded for November and
December 2008 of $8.5 million, is approximately $35.7 million which is to be
contributed by December 31, 2012. During the period of Teck’s sole funding,
Teck will have a casting vote on the Partnership’s Management Committee with
respect to the timing and nature of expenses to be funded. Following Teck’s
$60 million contribution, all further costs at Galore will be funded by Teck
and NovaGold in accordance with their respective partnership interests. The new
funding arrangements replace the funding arrangements agreed by Teck and
NovaGold in November 2007 which required Teck to spend $72 million on optimization
studies over 5 years and required NovaGold and Teck to jointly fund other
costs.
Galore
Creek Project Update
During 2008,
Galore Creek Mining Corporation (“GCMC”), the operator of the project,
undertook an extensive engineering review to look at optimization of the
development plan for Galore Creek. The results of these engineering
optimization studies have identified a number of modified approaches to the
project that show the potential for significant expansion of the project
throughput, a shorter construction schedule, location of the process facilities
to allow for future expansion, and fewer risks associated with construction and
operations. As currently envisioned the project would have the potential to
annually produce 350 to 700 million pounds of copper, 250,000 to 500,000 ounces
of gold and 3 to 5 million ounces of silver in the initial 5 to 10 years of
operation with an operating life exceeding 17 years of operation. In addition,
current prices for key mine inputs, including diesel, steel, major mechanical
equipment and contract labor have decreased significantly since the peak levels
in 2008 and indicate potential for reduced overall capital costs. An updated
geological model is currently being constructed which will incorporate the
results of 2008 drilling and acid-base accounting tests. The expectation is a
reduction in potentially acid generating waste rock.
Also during
2008, construction work continued on the access road to connect road segments
that were completed during the 2007 construction season to Highway 37. Land
access has now been established to kilometer 40 at a lower cost than originally
estimated. Going forward, in addition to maintaining the infrastructure
investment to date on the project, work is expected to focus on road link-up to
the south terminal of the Galore Creek access tunnel at kilometer 91, and
finalization of optimization studies prior to an update to the project
feasibility study.
Recently,
the Province of British Columbia announced its plans to move forward with the
environmental assessment process and First Nations consultation for the
Northwest Transmission Line along Highway 37. The province will invest the
estimated $10 million to immediately restart the environmental assessment
process -- the first step toward building the Northwest Transmission Line. The
new 287-kilovolt line would extend from the community of Terrace to the beginning
of the Galore Creek access road at Bob Quinn Lake providing access for the
project to the BC Hydro electric grid.
Galore Creek
Mining Corporation is committed to working at Galore Creek in a sustainable and
responsible manner and to meeting all aspects of the participation agreement
with their partners of the Tahltan Nation. The project is situated within the
Traditional Territory of the Tahltan Nation, which includes the Tahltan Band
and the Iskut First Nation. GCMC and the Tahltan Nation have signed an
agreement which defines the terms under which the project will be developed
with the support of the Tahltan Nation.
Technical
and scientific information in this press release has been reviewed by Kevin
Francis, P.Geo Resource Manager of NovaGold and a Qualified Person as defined
by National Instrument 43-101.
About
NovaGold
NovaGold is
a growth-focused precious metals company with exploration, development and
mining properties in Alaska and Western Canada. NovaGold has a 50/50
partnership on the Donlin Creek gold project in Alaska, one of the world’s
largest gold deposits, with Barrick Gold. The Company also has a 50/50
partnership on the Galore Creek copper-gold-silver project in British Columbia
with Teck Cominco. NovaGold owns 100% interest in the Rock Creek, Big Hurrah
and Nome Gold deposits in Nome, Alaska. NovaGold has one of the largest
resource bases of any junior or mid-tier level producing gold company. NovaGold
trades on the TSX and NYSE Alternext under the symbol NG. More information is available
online at www.novagold.net or by e-mail at info@novagold.net.
# # #
NovaGold
Contacts
|
Greg Johnson
|
Don MacDonald
|
|
Vice President, Strategic Development
|
Senior Vice President and CFO
|
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, statements regarding intentions with respect to
obligations due for various projects, strategic alternatives, timing of
permitting, construction and production and other milestones, 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 Cominco 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, and
other risks and uncertainties disclosed in NovaGold’s Annual Information Form
for the year ended November 30, 2007, 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 management beliefs,
opinions, projections, or other factors should they change.
info@novagold.net Toll
free: 866-669-6227 http://www.novagold.net/