NovaGold Resources Inc. June 10 said it has revised its resource estimate for the Donlin Creek gold project upward to 31.7 million ounces of measured and indicated gold resources with an additional 4.2 million ounces of inferred gold resources. The Vancouver, B.C.-based junior said it will complete a feasibility study for the project by early 2009. NovaGold and its 50 percent partner, Barrick Gold Corp. also have identified a preferred project design for the Donlin Creek project in which about 50,000 metric tons per day of ore will be processed using onsite diesel and wind cogeneration for power.
Using this design, Donlin Creek would operate for 25 to 30 years and produce potentially 1 million to 1.5 million ounces of gold annually. Permitting would start in early 2009 with construction targeted for 2012, NovaGold said.
“We’ve been working toward this goal since we acquired the property in 2002,” said Rick Van Nieuwenhuyse, president and 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.”
NovaGold said the higher resource estimate resulted when the remaining 20,000 meters of 2007 drilling was incorporated into the calculations. Measured and indicated gold resources increased 8 percent to nearly 394 million metric tons, grading 2.5 grams per metric ton gold, while inferred gold resources climbed 20 percent to 55.4 million metric tons, grading 2.33 g/t gold, from the previous estimate released in February 2008.
The resource has been constrained within a conceptual pit based on $750 per ounce of gold and using recent estimates of mining, geotechnical and metallurgical parameters. A variable cutoff grade averaging 0.87 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.
NovaGold said 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:
• Hole 1686 intersected 256.9 meters of 3.25 g/t gold in 19 mineralized intervals.
• Hole 1687 intersected 71.5 meters of 4.48 g/t gold in 9 mineralized intervals.
• Hole 1688 intersected 60.0 meters of 4.36 g/t gold in 4 mineralized intervals.
• Hole 1689 intersected 42.1 meters of 6.97 g/t gold in 8 mineralized intervals.
• Hole 1695 intersected 302.6 meters of 3.97 g/t gold in 13 mineralized intervals.
• Hole 1701 intersected 154.5 meters of 3.67 g/t gold in 12 mineralized intervals.
• Hole 1702 intersected 160.6 meters of 5.08 g/t gold in 8 mineralized intervals.
