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July 10, 2014 --- Vol. 08, No. 28July 2014

Alaska News Nuggets

QUARTERLY UPDATE – Novagold Resources Inc. July 9 released its second-quarter financial results and provided updates for its 50 percent-owned Donlin Gold project in Alaska and its 50 percent-owned Galore Creek copper-gold-silver project in British Columbia. At Donlin Gold, Novagold remains focused on advancing the project through permitting. During the second quarter, the U.S. Army Corps of Engineers and cooperating agencies’ completed the alternatives identification phase of the environmental impact statement, a major step in the permitting process. “The alternatives comprise variations on certain mine-site facility designs, local transportation options, and power supply options,” explained Novagold President Gregory Lang. “Preparations of the remaining components of the preliminary draft EIS are well underway and expected to be completed over the next two quarters. This includes the alternatives development and the analysis of their potential environmental impacts. The Corps anticipates that all outstanding environmental baseline data required to complete the EIS will be compiled by the end of the third quarter. Donlin Gold is working simultaneously with the other permitting agencies on other major permit applications, such as air quality, water discharge and usage, gas pipeline, wetlands and dam safety.” During the second quarter, Donlin Gold LLC, owned equally by subsidiaries of Novagold and Barrick Gold Corp., secured an extension of the Donlin Surface Use Agreement with The Kuskokwim Corp. This agreement now coincides with the terms of Calista Corp.’s exploration and mining lease and incorporates the projected mine life of Donlin Gold. At the Galore Creek project, Novagold and its partner Teck Resources Ltd. continued the technical work related to evaluating opportunities to enhance the economics of the copper-gold-silver project. “During the quarter, we conducted workshops aimed at initiating a review process to evaluate an integrated plan for mining, waste disposal and water management to enhance the economics of the Galore Creek project,” Lang explains. “We expect this effort to further improve the value and marketability of the Galore Creek project, which we continue to work on monetizing, in whole or in part, to strengthen our balance sheet and focus primarily on the permitting of Donlin Gold.” Novagold reports a net loss for the three and six-month periods ending May 31, 2014 of US$10.7 million (US3 cents per share) and US$21.4 million (US7 cents per share), respectively, compared to US$9.8 million (US3 cents per share) and $23.6 million (US8 cents per share), respectively, in 2013. As of May 31, 2014, Novagold had US$176.3 million in cash and term deposits compared to US$182.3 million at the beginning of the quarter. The US$6 million decrease in cash and term deposits in the second quarter was primarily related to funding our share of the Donlin Gold and Galore Creek projects and administrative costs. Novagold says it has sufficient working capital to repay the remaining US$15.8 million of outstanding notes due in May 2015, advance the Donlin Gold project through the expected remaining permitting process, as well as fund the current activities to further enhance the value of Galore Creek. During 2014, the company continues to expect to spend approximately US$15 million to fund our share of expenditures at the Donlin Gold and Galore Creek projects and US$15 million for general and administrative costs, interest, working capital and other corporate purposes.

GOLD – Coeur Mining Inc. July 8 reported preliminary second quarter production of 4.5 million ounces of silver and 61,025 ounces of gold, or 8.1 million silver-equivalent ounces, an increase of 7 percent compared to the first quarter. The Kensington Mine in Southeast Alaska produced 28,089 ounces of gold compared to 25,428 ounces during the first quarter. While the average mill throughput of approximately 1,800 tons per day remained consistent through the first and second quarters, the average gold grade increased to 0.18 ounces per ton in the second quarter from 0.17 oz/t in the first. Coeur reports that gold grades at Kensington averaged 0.22 oz/t during June. A total of 163,749 tons of ore were milled at Kensington during the second quarter.

GOLD – WestMountain Gold, Inc. July 8 reported that 2014 field operations at its Terra gold project in Southwest Alaska. The company has begun processing material at the pilot gold mill facility after refurbishing and repairing equipment from winter damage. WestMountain reports that the mill is processing five to 10 tons of ore daily. Project development, construction, bulk sample mining, milling and exploration will continue through the season. Additionally, work continues on the C130 airstrip construction as well as road construction to the proposed portal site. In February, WestMountain’s Alaska subsidiary, Terra Gold Corp, acquired 100 percent ownership of the Terra PROJECT from Corvus Gold Inc. for US$1.8 million cash and 200,000 shares of WestMountain Gold. “The consolidation of ownership by buying out our JV partner and the continued construction at Terra will provide the foundation for the company to move forward with resource development,” said WestMountain Gold President and CEO Greg Schifrin.

GOLD – Fire River Gold Corp. July 7 said Waterton Global Value Limited Partnership has taken full and unrestricted ownership of the Nixon Fork gold mine and Mystery Creek Resources Inc., the U.S. corporation that owns the high-grade gold mine located in western Alaska. This action is a result of the default by Fire River on the terms of the credit agreement with Waterton. Fire River and Waterton have agreed that Fire River will deliver all rights, debts, properties and obligations of Mystery Creek Resources to Waterton and Waterton will accept such as full and final satisfaction of the indebtedness due to Waterton under the credit agreement. As part of the final settlement agreement, Waterton also agrees to pay to Fire River approximately C$250,000 in cash and other obligations. Fire River intends to use the proceeds of the cash settlement to work toward lifting a cease trade order that is currently in effect with a view to resuming trading on the TSX Venture Exchange. Waterton Global Value L.P. is a fund managed by Waterton Global Resource Management. Waterton, which structures and manages investments in the precious metals sector, has an in-house mine development and operations team that has held high-level positions with the world’s top gold mining companies.

COPPER/GOLD – Millrock Resources Inc. July 7 reported the completion of geophysical surveying on its Alaska Peninsula Project. The survey involved 1,140 line kilometers of high-resolution airborne magnetic and radiometric data collected over three prospects of interest: Bee Creek, Mallard Duck Bay, and Kawisgag. The completed work was the first of a two-phase summer program, which is being funded by First Quantum Minerals Ltd. The second phase, scheduled to begin in mid-July, is to consist of a geological mapping and geochemical sampling program and will focus on the surveyed areas, all of which have known porphyry occurrences. The Alaska Peninsula project is comprised of roughly 1.6 million acres (650,000 hectares) of lands owned by six Alaska Native village corporations and the Bristol Bay Native Corporation. Millrock has previously made an exploration agreement with option to lease through which it can secure a 100 percent leasehold interest.

FINANCE – NovaCopper Inc. July 7 reported the closing of a non-brokered private placement offering of US$7.5 million in units which was entirely purchased by the company’s largest shareholders, including Electrum Strategic Resources LP and Paulson & Co. Inc. Each unit was priced at US$1.15 and consists of one NovaCopper common share and one purchase warrant. Each warrant will entitle the holder to purchase one NovaCopper common share at US$1.60 for a period of five years from the closing date. The money raised will be used to fund US$2.7 million on program expenditures, up to US$4 million on general and administrative expenses, and US$800,000 on extraordinary expenses incurred in reducing annual general and administrative expenses. NovaCopper intends to carry out a modest field program this summer which will primarily consist of re-logging and re-assaying historical Bornite drill holes at Bornite which were only selectively sampled by Kennecott, the former owner of the property. Targeted historical holes are located within the extensions of the Upper and Lower Reef mineralization captured in the Bornite open pit resource released by NovaCopper in March and the up dip portion of South Reef zone. The company anticipates that the 2014 program will re-sample and re-assay between 10,000 and 13,000 meters of drill core. This effort is a continuation of last year's program of re-sampling and re-assaying which targeted 33 drill holes comprising 11,067 meters originally drilled by Kennecott between 1957 and 1975. Last year’s re-assay program resulted in a significant increase in the low-grade copper mineralization at Bornite and NovaCopper expects that the 2014 re-logging and re-assaying program could add low grade material to the Bornite copper inventory and reduce the strip ratio for a potential open pit mining operation. In its second quarter financial results, released on July 9, NovaCopper said its efforts in the first half of 2014 focused on supporting the Alaska Industrial Development Export Authority in initiating the permitting process on the Ambler Mining District Industrial Access Road which is expected to provide access to Upper Kobuk Mineral Projects. In April, AIDEA’s board of directors approved a resolution authorizing AIDEA to proceed with an application for the Ambler road to the federal agencies that have jurisdiction over the AMDIAR project and to engage a firm to prepare the environmental impact statement for the project under the direction of the federal agencies. “Our strategy in the upcoming months is to build upon the success of last year’s program,” said NovaCopper President and CEO Rick Van Nieuwenhuyse. “An effective program of re-logging and re-assaying at Bornite coupled with our focused effort of working closely with AIDEA on initiating the permitting process for the AMDIAR should allow NovaCopper to continue building shareholder value at a relatively low cost.” For the three-month period ended May 31, NovaCopper reported a net loss of US$2.1 million (US4 cents basic and diluted loss per common share), compared to a net loss of US$5.9 million (US 22 cents basic and diluted loss per common share) for the corresponding period in 2013. NovaCopper attributes the reduction largely to a later field program start-up in 2014. In 2013, the company spent US$2.2 million on mineral property expenses as its field season began in early May. This year’s field program did not start until July. A 26 percent reduction in general and administrative expenses and 17 percent drop in professional fees also contributed to lower expenditures during the second quarter.

CLAIM FEES – The U.S. Bureau of Land Management July 1 said it has published in the Federal Register a final rule that adjusts for inflation the agency’s fees for the location (staking) and maintenance of unpatented mining claims, mill sites, and tunnel sites. The location fee will increase from $34 to $37, and the maintenance fee will rise from $140 to $155. Since Fiscal Year 1993, mining claimants staking new claims or sites have been required to pay a one-time location fee. Claimants must also pay an annual maintenance fee in lieu of performing annual assessment work and making annual filings. The Mining Law of 1872, as amended, requires the BLM to adjust these fees every five years to reflect changes in the Consumer Price Index. The BLM has not adjusted location and maintenance fees since 2009. The adjustments made in this final rule are based on a 9.96 percent increase in the CPI from Dec. 31, 2008, through Dec. 31, 2013, as reported by the Bureau of Labor Statistics. The adjusted annual maintenance fee is due on or before Sept. 1, 2014, for existing claims and sites. Those who have already paid their annual maintenance fee for the 2015 assessment year will be given an opportunity to pay the additional amount without penalty upon notice from the BLM. Additional information about the fee adjustment can be found at: http://www.gpo.gov/fdsys/pkg/FR-2014-06-30/pdf/2014-15259.pdf


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