|
Fast-track for Rock Creek NovaGold starts second phase of feasibility drilling near Nome, spring work showed some high-grade veins in one million ounce gold deposit Patricia Jones Petroleum News Contributing Writer
Following successful drilling in April on its Nome, Alaska-area project called Rock Creek, NovaGold Resources Inc. started a large-scale feasibility drilling program in mid-July.
It’s the next step in the process for the gold exploration property that NovaGold has put on a fast track to development. Results from this summer’s drilling will be incorporated in a new resource calculation due later this year. A feasibility study for the project, about seven miles from Nome, is expected to be complete in mid-2004.
The company also started mine engineering work and baseline environmental studies this summer, necessary for permitting work that could follow a feasibility study.
Allowing a year for permitting, NovaGold could face a construction decision at Rock Creek as early as mid-2005, said Greg Johnson, vice president of corporate development.
Construction of an open-pit mine and a hardrock mill capable of processing about 100,000 ounces of gold a year would take about three months, he said.
“We could be starting to build in late 2005, with the first production in 2006 … that is an optimistic but a doable schedule,” Johnson said, in a telephone interview with Petroleum News on July 15. “This could be the first step to becoming a gold producer.”
NovaGold, a junior exploration company with a number of gold properties in Alaska, is the sole operator of the Rock Creek deposit. The Bering Straits Native Corp. has a one-third share of the property, part of the company’s exploration agreement for area lands.
TNR Resources, a Vancouver, British Columbia-based company, dropped its option this spring to earn a share of Rock Creek, Johnson said. The two companies are continuing to work together on the Shotgun gold deposit in southwest Alaska. “TNR is a smaller Canadian company … they recognized that NovaGold would fast-track Rock Creek so they are focused on the Shotgun property.” Determining economics NovaGold must first determine whether the shallow, underground gold at Rock Creek will be economic to mine. Based on past exploration drilling and geological modeling, NovaGold believes it contains at least 1 million ounces of gold.
“We’ll look at the economics of it,” Johnson said. “It looks like it should be a good project at $325 (per ounce) gold and higher.”
One step in that evaluation is an independently produced scoping study. NovaGold anticipates releasing this week the Economic Assessment Study completed by Norwest Corp. and AMEC E&C Services Ltd., both engineering services companies.
Doug Nicholson, senior projects engineer for NovaGold, described it as a “good study … it’s showing us where to drill, and where to focus our efforts on the engineering side.” 50-hole drill program Crews started drilling “this week,” Johnson said on July 15, and should conclude this fall. “Two drills will be completing over 26,000 feet of drilling, a very significant project.”
About 50 holes, each roughly 500 to 600 feet deep, will be drilled. The work is designed to increase the in-fill drill definition, he said, from roughly 200-foot intervals to 100-foot spacing between drill holes on the property.
Increasing the number of drill holes will allow NovaGold to calculate a new mineral resource number in a more refined or accurate category.
The 1 million ounce resource at Rock Creek is listed in the inferred category, Johnson said. Drilling this year may move those ounces to the measured and indicated category, and perhaps add to the amount of gold. More gold? Mineralization at Rock Creek is open at depth and on both ends of the elongated, southwest-to-northeast trend, Johnson said. The main ore body is a little more than a mile long and about 1,500 feet wide, he said. Previously drilled areas indicate gold mineralization from the surface down to about 500 feet.
In addition, a number of other potential future exploration targets are contained within a 10-mile long mineralized trend, Johnson said, identified by past surface sampling.
“That’s the kind of typical progression. You find one (ore body) to mine and then you find additional deposits that can be developed and processed through the mill,” Johnson said. “We’re focused on working on Rock Creek to get it into production, and in the long term, we’ll look at the rest of the district.” Successful spring program NovaGold crews drilled about 4,800 feet of core this spring, completing 12 holes. Results from eight holes posted on the company’s Web site show some high-grade intercepts, including 32 feet of rock containing 0.30 ounces of gold per ton of rock. That’s more than three times the average grade of the deposit, 0.08 ounces of gold per ton of rock.
That high-grade zone was “similar, a little better grade than we had seen before,” Johnson said.
In addition, some drill holes produced visible gold, indicative of the native or free gold contained in the near-surface deposit. Past weathering of that rock produced some of the 4 million ounces of gold mined by placer miners in that portion of the Nome district.
Presence of visible gold is a good indication for Rock Creek, Johnson said. “We can crush the rock and use a gravity process to recover most of the gold. That’s a low-cost way to do that type of processing.”
According to the company’s press release, past metallurgical tests show that 67 percent of Rock Creek gold can be recovered using a grind and gravity method. More than 92 percent can be recovered using conventional cyanidation.
“We need to determine how to best balance the overall gold processing,” Johnson said.
The spring drilling was “… pretty much on line with what we expected,” he said. “It’s assuring us that what we’ve seen (in the past) is what we’ll get.”
| 