MINING NEWS: Barrick still a thorn in NovaGold’s side
Dispute could continue to be costly and time-consuming for NovaGold as it fights to regain control of Donlin Creek project
For Mining News
The problem of bringing power to NovaGold’s remote Donlin Creek project in southwest Alaska is one of the main bones of contention in the Vancouver-based junior’s never-ending battle with its joint venture partner, Barrick Gold. Toronto-based Barrick, the operator at Donlin Creek, envisions a combination of diesel and wind power for the proposed gold mine. NovaGold’s management believes the logistics of transporting huge quantities of diesel fuel upriver are too challenging and expensive, and wants to put in a power line from the existing Railbelt infrastructure at a cost of around $400 million.
Did you find this article interesting?
NovaGold’s president and CEO, Rick Van Nieuwenhuyse, reiterated his dissatisfaction with Barrick during a first-quarter results conference call April 25. Barrick, the world’s largest gold producer, failed in a takeover bid for NovaGold last year. Within the past few weeks Barrick divested itself of the NovaGold shares it had purchased. Partly due to that, NovaGold’s share price dipped, Nieuwenhuyse said, with at least one institutional investor concerned that Barrick might launch another takeover bid in the near future.
Project progress has been rapidMeanwhile, progress on NovaGold’s Rock Creek and Galore Creek projects has been rapid, with Rock Creek (near Nome) set to begin production of gold in the third quarter of this year and permits for Galore Creek (in northwest British Columbia) likely to be issued very soon. NovaGold expects Rock Creek to generate about $100 million in cash flow during its first five years of operations, which will coincide with the construction period for Galore Creek and help to finance that massive project.
A citizens group in Nome has just refiled a lawsuit against the U.S. Army Corps of Engineers, disputing the permit issued for Rock Creek’s construction, but NovaGold expects this to be a “nuisance suit” that won’t affect development of the mine, according to the company’s chief operating officer, Peter Harris.
NovaGold reported a net loss of C$4.9 million for the quarter ended Feb. 28, 2007, compared with a net income of C$0.1 million for the same quarter in 2006. Revenues from the company’s land and gravel sales and gold royalties decreased by C$0.7 million compared with the same period last year, mainly due to a large land sale near Nome that occurred in the first quarter of 2006. NovaGold’s corporate development and communication costs increased by C$0.8 million, and its administrative fees and salaries increased by C$1.6 million due to the company’s increased activities and expanded staff.
Print this story | Email it to an associate.
Tweet it||Digg it|
Click here to subscribe to Mining News North of 60 for as low as $69 per year
Mining News North - Phone: 1-907 522-9469 - Fax: 1-907 522-9583
[email protected] --- http://www.miningnewsnorth.com ---
S U B S C R I B E
Copyright Petroleum Newspapers of Alaska, LLC (North of 60 Mining News)(Petroleum News Bakken)(Petroleum News)(PNA)©2013 All rights reserved. The content of this article and web site may not be copied, replaced, distributed, published, displayed or transferred in any form or by any means except with the prior written permission of Petroleum Newspapers of Alaska, LLC (Petroleum News)(PNA). Copyright infringement is a violation of federal law subject to criminal and civil penalties.
All that glistens is not gold, but that isn’t a problem for Vancouver-based NovaGold Resources, which will be expanding its search for base
metals in Alaska this summer. The company staked claims last summer that now form its Baird Mountain project in the northwest Arctic on the southern edge of the Brooks Range. The target is polymetallic — primarily copper, lead and zinc — NovaGold’s vice president for exploration, Joe Piekenbrock, told Mining News.
NovaGold is already exploring about 60 miles away from Baird Mountain at the Ambler property, also a base metals target. The lack of infrastructure is a major issue in this remote area and the company has been considering the possibility of using hydroelectric power or wind power if Ambler is developed. Baird Mountain itself is at the earliest, grassroots stage of exploration. NovaGold plans to drill a few holes there this year, starting in June, and a team of about 16-18 people will also do mapping and sampling. The budget for Baird Mountain will be just over $500,000, Piekenbrock estimates.
Baird Mountain’s mineral potential is well known from the small amount of exploration that was done in the 1960s, including some drilling by Kennecott. “It’s an area that I’d been interested in for a long time,” Piekenbrock said. “There are good exposures with good grades on the surface that have never been drilled,” he added. The copper in particular at Baird Mountain could be very high-grade, Piekenbrock believes.
The closest community to Baird Mountain is the village of Kivalina, population 377. That community shouldn’t be much affected by the exploration, however, as Baird Mountain will be an entirely helicopter-supported project and NovaGold intends to construct a temporary camp on Bureau of Land Management land for its crew. Water for the camp will be pumped from the Squirrel River. All of the 15 structures that the company brings in will be removed at the end of the season (estimated to be Sept. 30) and the area will be cleaned and reclaimed. If topsoil or vegetation is removed, that material will be redistributed over any reclaimed and re-contoured ground.
NovaGold is continuing to stake claims in Alaska, according to Piekenbrock, but won’t reveal the details yet because they are in a “very competitive area,” he said. The company is currently constructing Rock Creek gold mine near Nome and is in a joint venture with Barrick Gold at the Donlin Creek exploration project in southwest Alaska.