NovaGold going ahead with Rock Creek project

Posted: Wednesday, July 30, 2003

ANCHORAGE (AP) NovaGold Resources Inc. is going ahead with a large-scale feasibility drilling program at its Rock Creek project following successful drilling in April near Nome.

The feasibility drilling program is 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.

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.

A feasibility study for the project, about seven miles from Nome, is expected to be complete in mid-2004, according to Petroleum News.

NovaGold must 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.''

The company also started mine engineering work and baseline environmental studies this summer, necessary for permitting work.

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.

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.

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