Teck joins NovaGold to develop Galore Creek

NovaGold Resources (NG-T, NG-X) has struck a deal with Teck Cominco (TCK.B-T, TCK-N)to develop on a 50-50 basis the junior’s massive, wholly owned Galore Creek copper-gold project in remote, northwestern B.C.

To earn a half interest the new Galore Creek partnership, Teck must fund US$478 million (C$520 million) in construction costs, with each company responsible for its pro rata share of funding thereafter. Building the mine should cost about US$2 billion in total.

NovaGold believes it can raise its own US$500-million portion of future development costs by issuing debt. It is also pondering selling off its portion of silver production, which could raise about US$200 million.

Under a feasibility study completed last year, Galore Creek looks capable of producing at a 65,000-tonne-per-day rate for a bare minimum of 20 years, cranking out 432 million lbs. copper, 341,000 oz. gold and 4 million oz. silver annually for the first five years of production, tapping into over 540 million tonnes of reserves and about 1 billion tonnes of resources.

Both partners remain committed to significantly expanding the district’s reserve base with continued aggressive exploration.

Teck also fully supports a comprehensive agreement NovaGold entered into with the Tahltan First Nation in February 2006 to support development of the Galore Creek project. This agreement supports the Tahltan’s stated principles of environmental stewardship, economic sustainability and self-determination, and ensures the tribe’s collaboration throughout the project’s environmental assessment review and permitting.

The partners are maintaining NovaGold’s previous goal of attaining production in 2012.