NovaGold drilling Mount Pleasant to test tin potential

The company is planning to drill at least two deep holes before year- end to test a tin-bearing zone which lies at depths below 1,000 ft on the former tungsten mine property.

NovaGold recently signed a 15-month option agreement to explore the property which is held 50/50 by owners LAC Minerals (TSE) and Billiton Metals Canada. COATS-listed Mount Pleasant Resources retains 10 cents per ton royalty interest in the project.

The current program by NovaGold is designed to re-examine the potential of some known tin-bearing zones. The property also hosts a past-producing tungsten mine developed by Billiton in the early 1980s.

NovaGold is encouraged by a previous intersection in 1988 from one of the tin zones that yielded 130 ft averaging 0.33% tin at a depth of 1,000-1,130 ft. That intersection occurs within a wider interval of 328 ft averaging 0.25% tin.

NovaGold says those intersections came from a new tin zone that occurs near an existing deposit with proven and probable reserves of five million tons grading 0.79% tin, about 1/2 mile from the former tungsten mine. The tin deposit was outlined by previous drilling and underground development work.

A feasibility study completed by LAC and Billiton in 1988 concluded that mining of the north tin zone was uneconomic at a tin price of $3.50(US). However, NovaGold plans to do a feasibility study of its own incorporating innovations in new tin recovery and smelting technologies. The company has a 15-month period to complete the study and may purchase the property for $12 million cash, subject to an adjustment based on the price of tin. For every $1(US) increase in the price of tin (above a $5 per lb base price), the purchase price will increase by 1%.

During the current option period, NovaGold is paying LAC and Billiton’s maintenance cost for the surface facilities, estimated at about $20,000 per month.

Prior to the NovaGold option, Billiton Canada operated a $120- millon tungsten mine on the property 1983-85. It was shut down due to falling tungsten prices. Now, Novagold’s efforts are focusing on a separate tin deposit about one mile from the former Mt. Pleasant tungsten mine.

The key to unlocking the potential of the deposit lies in upgrading tin recovery from the ores to 90% from 70%. “Upgrading the total recovery of tin from ore is the real problem at Mt. Pleasant,” says NovaGold Vice-President William Young.

“Mt. Pleasant is recognized as a major tin-tungsten deposit that everybody has fumbled the ball with,” says Young. “We’ve got our metallurgical program up and running, and CANMET is looking at the use of chloridization as a process to treat the tin ore.” That process would be expected to improve the tin recovery level, Young says.

The deposits have been well documented by geologists and more than 104 different minerals have been identified in the various tin, tungsten and bismuth-bearing zones on the property.

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