Vancouver – A Preliminary Economic Assessment Study of Novagold Resources’ (NG-T) Galore Creek project, in the Stikine Gold Belt of northwestern British Columbia, paints a positive scenario for possible future development.
The independent scoping study has shown the project has potential for a 23 year mine life along with a fairly quick mine capital cost payback of 3.4 years using long-term metal prices.
The preliminary report projects annual production at Galore Creek of 270,000 oz. gold, 1.8 million oz. silver and 200 million pounds of copper over the initial five years of operation. Estimated total cash costs foreseen are US$0.15 per pound of copper, when gold and silver values are factored as credits.
The initial study envisions an open pit operation at a 30,000 tonnes-per-day mining rate.
The next stage in assessing the viability of a mine at Galore Creek will be a pre-feasibility study coupled with an environmental assessment, slated for mid to late 2005. Assuming continued positive economics, a full feasibility study would be initiated in 2006.
The company continues its drill program aimed at upgrading existing inferred resources to the measured and indicated category, as well as possibly expanding resources and higher-grade mineralized zones of the project.
In mid-2003, Novagold, through now amalgamated SpectrumGold, acquired an option for a 100% royalty-free interest in the property from Rio Tinto (RTP-N) and Anglo American (AAUK-Q) by completing a pre-feasibility study and making payments totaling US$20.3 million over 8 years. Rio Tinto and Anglo extensively worked the project from the early-1960s through to the early-1990s.
The Galore Creek deposit hosts an indicated resource of 285.9 million tonnes grading 0.44 grams gold per tonne, 5.7 grams silver per tonne and 0.73% copper. An additional inferred resource of 98.8 million tonnes of 0.37 grams gold, 4.8 grams silver and 0.54% copper exists at the deposit.
Novagold reports 62.8 million shares outstanding and has recently been trading in the $6.00-$6.50 per share range.