NovaGold
Announces Feasibility Study in Q1-2009 for Donlin Creek Project
June
10, 2008 - Vancouver, British Columbia - NovaGold Resources Inc. (AMEX, TSX: NG) today
provided an update on the Donlin Creek gold project, including initial assay
results from 2008 drilling, a resource estimate incorporating the remainder of
2007 drilling, and the decision that a feasibility study will be completed and
approved by Q1-2009.
Highlights
· Resource
update estimates 31.7 million ounces of measured and indicated gold resources
with an additional 4.2 million ounces of
inferred gold resources
· Initial drill results at East Acma highlight continued resource expansion
· Preferred project design identified — feasibility study to be completed
and approved by Q1-2009
Preferred
Project Design Identified
The
Donlin Creek LLC, a limited liability company owned 50% each by NovaGold and
Barrick Gold U.S. Inc., a wholly-owned subsidiary of Barrick Gold Corporation,
has identified a preferred design for the Donlin Creek project and plans to
complete and approve a feasibility study by Q1-2009. The Donlin Creek project
is expected to have a throughput design of approximately 50,000 tonnes per day
using onsite diesel and wind cogeneration for power. Using this design, Donlin
Creek would operate for 25 to 30 years and produce potentially 1 to 1.5 million
ounces of gold annually. Permitting would start in early 2009 with construction
targeted for 2012.
“We’ve
been working toward this goal since we acquired the property in 2002,” said
Rick Van Nieuwenhuyse, President & CEO of NovaGold. “I am particularly
pleased that after careful consideration and a review of all possible
alternatives, the partners are aligned on the path forward. NovaGold and
Barrick will work together to optimize the final project design, complete a
feasibility study and initiate permitting. We’re one step closer to building
one of the world’s largest gold mines.”
The Donlin
Creek LLC considered building a powerline for the project. Detailed scoping
studies indicated, however, that the increased construction time as well as
permitting and business risks associated with the powerline outweighed the
economic incentives of this option. The feasibility study will provide updated
economics and cost estimates for the project based on onsite diesel and wind
cogeneration and the revised project design.
Resource
Update
The
remaining 20,000 meters of 2007 drilling have been incorporated into an updated
resource estimate for the Donlin Creek project. The resource base has increased
to 31.7 million ounces of measured and indicated gold resources with an
additional 4.2 million ounces of inferred gold resources, representing an 8%
and 20% increase, respectively, from the previous estimate released in February
2008.
Donlin Creek Resource Estimate –
DC8(1)(2)(3)
Effective
Date June 10, 2008
|
Resource
Category
|
Tonnes
(Millions)
|
Grade
(Au g/t)
|
Au
Ounces (Millions)
|
Measured
|
6.2
|
2.87
|
0.58
|
Indicated
|
387.6
|
2.49
|
31.09
|
Total
M+I
|
393.8
|
2.50
|
31.67
|
Inferred
|
55.4
|
2.33
|
4.16
|
Notes:
(1) Mineral resources
that are not mineral reserves do not have demonstrated economic viability. See
“Cautionary Note Concerning Reserve and Resource Estimates.”
(2) Rounding differences may occur.
(3) Resources are constrained within a Lerchs-Grossman (LG) open-pit
shell using the long-term metal price assumption of US$750/oz of gold.
Assumptions for the LG shell included pit slopes variable by sector and pit
area: mining cost is variable with depth, averaging US$1.80/t mined; process
cost is calculated as the percent sulfur grade x US$2.65 + US$12.44; general
and administrative costs, gold selling cost and sustaining capital are
reflected on a per tonne basis. Based on metallurgical testing, average gold recovery
is assumed to be 90%.
The resource
has been constrained within a conceptual pit based on US$750/oz of gold and
using recent estimates of mining, geotechnical and metallurgical parameters. A
variable cutoff grade averaging 0.87 grams per tonne (g/t) gold is based on
recent estimates of mining costs, processing costs (dependent upon sulfur
content), selling costs and royalties.
The updated
resource estimate was based on a 3D geologic and mineralization model that
integrated all exploration work on the project through 2007, including 173,031
assayed sample intervals in 1,678 holes. Metal grades were estimated with
6-meter-long drill hole composites using inverse distance cubed estimation
methods into 6 meter x 6 meter x 6 meter blocks. Geologic controls to
mineralization were applied using lithologic constraints and grade shell.
High-grade outlier composite values were capped based on a review of cumulative
frequency plots for each major rock type.
A rigorous
quality control and quality assurance protocol was used on the project, including
blank and reference samples with each batch of assays. All drill samples were
analyzed by fire assay and ICP at ALS Chemex Labs in Vancouver, BC, Canada. The
2007 drill program and sampling protocol was managed by Barrick, as were assay
quality control and quality assurance standards. The 2008 drill program and
sampling protocol is managed by Donlin Creek LLC, as are assay quality control
and quality assurance standards. Kevin Francis, PGeo, Resource Manager for
NovaGold, who is a Qualified Person as defined by National Instrument 43-101
(“NI 43-101”), has validated the resource estimate above and the drill
results below, and confirms that procedures, protocols and methodology conform
to industry standard.
Preliminary
2008 Drill Results
Just over
19,000 meters of the 21,000 meters of drilling budgeted for Phase 1 drilling in
2008 has been completed to date. Assay results from the initial 15 drill holes
in the East Acma area have been received and indicate that grades and
thicknesses representative of typical Acma-style mineralization continue along
the East Acma structural zone. Highlights include(1):
· DC08-1686
intersected 256.9 meters of 3.25 g/t gold in 19 mineralized intervals
· DC08-1687 intersected 71.5 meters of 4.48 g/t gold in 9 mineralized
intervals
· DC08-1688 intersected 60.0 meters of 4.36 g/t gold in 4 mineralized
intervals
· DC08-1689 intersected 42.1 meters of 6.97 g/t gold in 8 mineralized
intervals
· DC08-1695 intersected 302.6 meters of 3.97 g/t gold in 13 mineralized
intervals
· DC08-1701 intersected 154.5 meters of 3.67 g/t gold in 12 mineralized
intervals
· DC08-1702 intersected 160.6 meters of 5.08 g/t gold in 8 mineralized
intervals
(1) Composites
constructed from assays at a 1.0 g/t gold cutoff grade and a maximum of 4
meters of internal dilution. The true width of these composites has not yet
been determined.
Widely
spaced drilling at East Acma demonstrates that mineralization continues
approximately 500 meters to the east of the current pit-constrained resource
along the Donlin Creek anticline, an important ore-controlling structure. A map
showing the 2007 and 2008 drilling results received to date is available in the
attached Figure. The 2008 holes are intercepting mineralization below and
beyond the current pit limit and highlight the potential to increase the Donlin
Creek resource base with additional infill drilling. The Phase 1 program is
focused on the limits of mineralization and its impact on facilities placement
in the East Acma area versus conversion of mineralization to resources.
While the
Donlin Creek LLC will continue additional infill drilling in the East Acma area
during the remainder of the budgeted Phase 1 program, the Phase 2 program in
2008 will largely be focused on finalizing the feasibility study and preparing
for permitting. Exploration at the project will continue throughout the
permitting process, with a focus on identifying additional high-grade ore that
can enhance grade in the early years of production, reducing the capital payback
period.
About
NovaGold
NovaGold is
a precious metals company engaged in the exploration and development of mineral
properties in Alaska and Western Canada. Production is scheduled for 2008 at
the 100%-owned Nome Operations in Alaska, which includes the Rock Creek, Big
Hurrah and Nome Gold deposits. NovaGold owns 50% of the Donlin Creek gold
project in Alaska, one of the world’s largest gold deposits, with Barrick
Gold (50%). The Company also owns 50% of the Galore Creek copper-gold-silver
project in British Columbia with Teck Cominco (50%). Also in Alaska, NovaGold
is earning a 51% interest as manager of the high-grade Ambler
copper-zinc-silver-gold project in partnership with Rio Tinto. NovaGold has one
of the largest resource bases of any exploration or development-stage precious
metals company. NovaGold trades on the TSX and AMEX under the symbol NG. More
information is available online at www.novagold.net or by e-mail at
info@novagold.net.
Cautionary Note Concerning
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; anticipated dates for receipt of permits and
approvals, construction and production, and other milestones; anticipated
results of drilling programs, feasibility studies and other analyses;
anticipated availability and terms of future financing; estimated timing and
amounts of future expenditures, and NovaGold’s future production, operating
and capital costs, operating or financial performance, are forward-looking
statements. Information concerning mineral reserve and resource estimates also
may be deemed to be forward-looking statements in that it reflects a prediction
of the mineralization that would be encountered if a mineral deposit were
developed and mined. 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. NovaGold’s forward-looking statements
are based on the beliefs, expectations and opinions of management on the date
the statements are made, and NovaGold does not assume any obligation to update
forward-looking statements if circumstances or management’s beliefs,
expectations or opinions should change except as required by law. For the
reasons set forth above, investors should not place undue reliance on
forward-looking statements. Important factors that could cause actual results
to differ materially from NovaGold’s expectations include uncertainties
involved in disputes and litigation; fluctuations in gold, copper and other
commodity prices and currency exchange rates; uncertainties relating to
interpretation of drill results and the geology, continuity and grade of
mineral deposits; uncertainty of estimates of capital and operating costs,
recovery rates, production estimates and estimated economic return; the need
for cooperation of government agencies and native groups in the exploration and
development of properties and the issuance of required permits; the need to
obtain additional financing to develop properties and uncertainty as to the
availability and terms of future financing; the possibility of delay in
exploration or development programs or in construction projects and uncertainty
of meeting anticipated program milestones; uncertainty as to timely
availability of permits and other governmental approvals; 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, NovaGold’s annual report on Form 40-F filed with the United
States Securities and Exchange Commission, and other information released by
NovaGold from time to time and filed with the appropriate regulatory agencies.
Cautionary
Note Concerning Reserve and Resource Estimates
This press release and other information released by
NovaGold uses the terms “reserves��, “resources��, “measured
resources��, “indicated resources�� and “inferred resources��. United States investors are advised that, while such terms are
recognized and required by Canadian securities laws, the United States
Securities and Exchange Commission (the “SEC��) does not recognize them. Under United States 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. Mineral resources that are not mineral reserves do not
have demonstrated economic viability. United States investors are cautioned not
to assume that all or any part of measured or indicated resources will ever be
converted into reserves. Inferred resources are in addition to
measured and indicated resources. Further, inferred resources have a great amount
of uncertainty as to their existence and as to 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. Therefore,
United States investors are also cautioned not to assume that all or any part
of the inferred resources exist, or that they can be mined legally or
economically.
National
Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”)
is a rule developed by the Canadian Securities Administrators, which
established standards for all public disclosure an issuer makes of scientific
and technical information concerning mineral projects. Unless otherwise
indicated, all reserve and resource estimates contained in this press release
or released by NovaGold in the future, have been or will be prepared in
accordance with NI 43-101 and the Canadian Institute of Mining, Metallurgy and
Petroleum Classification System. The requirements of NI 43-101 are not the same
as those of the SEC, and reserves reported by NovaGold in compliance with NI
43-101 may not qualify as reserves under the SEC’s standards.
# #
#
Contacts
Greg Johnson
Vice President, Corporate Communications and Strategic Development
Rhylin
Bailie
Manager, Corporate & Investor Relations
604-669-6227
or 1-866-669-6227