Placer to up stake in Donlin Creek project

Vancouver – Placer Dome (PDG-T), North America’s third largest gold producer, is exercising its right to increase its stake in Novagold Resource’s (NRI-T) Donlin Creek deposit in Alaska.

Placer has elected to earn an additional 40% interest in the Donlin Creek project for a total of 70%. In order to do this, the major must spend a minimum of US$30 million toward project development, complete a feasibility study and make a decision to construct a mine that produces no less than 600,000 oz. gold per year – all within a five year time frame.

Novagold is not required to contribute any more funding until Placer has spent its US$30 million. In addition, at NovaGold’s election, Placer is required help it arrange financing for its share of the mine’s development costs.

Placer is currently looking at a high-tonnage operation in the range of 20,000 to 30,000 tonnes per day that could potentially produce 1 million oz. gold per year.

"This is great news for the project, for the Calista and Kuskokwim Native Corporations, and for the State of Alaska," said Rick Van Nieuwenhuyse, President and CEO of NovaGold. "Placer Dome’s decision endorses our view that the project has transitioned from advanced exploration to development. We are very pleased that Placer has shown their support for the project and believe they will be an excellent partner to develop the project into potentially one of the largest gold mines in the world."

NovaGold’s exploration program over the past 16 months has expanded the measured and indicated resources at Donlin Creek to 9.9 million oz. gold averaging 3.0 grams gold per tonne. An additional inferred resource is pegged at 17.9 million oz. averaging 3.0 grams gold using a 1.5 gram per tonne cut off grade.