SpectrumGold trading high

Galore Creek project owned by Canadian subsidiary of NovaGold sparks investor interest, drill results show high grade mineralization over wide intercepts

Patricia Jones

Petroleum News Contributing Writer

NovaGold Resources’ Canadian subsidiary, SpectrumGold, hit the ground running late last month, as it began trading on the Toronto Stock Exchange on Oct. 27, opening at 75 cents a share and closing that same day at $2.50.

Four days later, SpectrumGold released drill results from its first round of field work on its remote Galore Creek project in northwestern British Columbia, an advanced-stage gold-silver-copper deposit acquired by the junior exploration company in August.

“Most of the excitement is Galore Creek. It’s such a large resource,” said Greg Johnson, vice president of corporate development at NovaGold. “It looks like the market is excited to see the potential for a quality copper-gold sizeable project.”

Past exploration work from the early 1960s to 1991 at Galore Creek outlined a resource of 5 million ounces of gold, 60 million ounces of silver and 5 billion pounds of copper. Mineralization occurs at surface and is open at depth, Johnson told Petroleum News on Nov. 4.

SpectrumGold is focused on increasing knowledge and definition of the precious metals portion of that deposit, viewing the copper mineralization as a complement to gold and silver production. “Previous work focused on the copper, but this has a high content of precious metals,” Johnson said.

Confirmation drilling

The deepest hole was 1,200 feet, he said. “Several of the holes ended in mineralization, but with the drill rigs we had there, we could not go deeper.”

Significant results from four of those holes were released Oct. 31, with assays expected to be released from the other four holes within the next two weeks.

All four holes showed broad swaths of mineralization intercepts, the largest in drill hole 437, which encountered 164.4 meters or 539 feet of mineralization. In that intercept, gold assayed 1.52 grams (0.048 ounces), while silver averaged 8.5 grams (0.273 ounces). Copper mineralization assayed 1.16 percent in that interval.

Drill Hole 436 also encountered a large intercept of mineralization, stretching 148.9 meters (488.5 feet). Gold averaged 1.86 grams (0.059 ounces), silver averaged 5.2 grams (0.167 ounces) and copper measured 0.7 percent.

“We’re very excited about the results in terms of the widths and grades,” Johnson said. “The drill holes seem to support our initial concept that there are higher grades of material within the deposit.”

By targeting these higher-grade zones for production and scaling back the overall size of the target, economics for a mine plan can improve, he said.

Scoping study starts

In addition, detailed metallurgical studies will be completed, using four 50-kilogram bulk composite samples taken from the drill program to characterize the recovery of copper and gold.

Results from that study will direct the 2004 drill program, Johnson said. Currently, the company plans to operate three or four core drills on the property, starting in June and running throughout the summer. An estimated $5 million Canadian will be spent on next year’s drilling, Johnson said. About $1 million was spent this fall.

Four zones of mineralization were targeted by drilling, including a separate deposit located immediately south of the main deposit. About 80 percent of the known mineralization is contained within the Central Zone, which is about two kilometers long and about a half-kilometer wide.

Galore Creek is located about 60 kilometers west of the Cassiar Highway, about 75 kilometers east of Wrangell, Alaska. Current access is by air.