NovaGold stands pat on Copper Canyon (February 15, 2008)

NovaGold Resources (NG-T, NG-X) will maintain its 60% interest in the Copper Canyon property, choosing not to exercise its option to move up to an 80% interest by paying Copper Canyon Resources (CPY-V) $1 million.

The news coincided with a more than 50% increase, or 20, in Copper Canyon’s share price. It’s shares closed at 58 on nearly 460,000 shares traded on Feb. 15.

The Copper Canyon property is adjacent to NovaGold’s and Teck Cominco‘s (TCK.A, TCK.B-T, TCK-N) Galore Creek project in north-western B.C. a project that is equally joint ventured between the two companies.

That joint venture’s decision last November to wind down the development of Galore Creek due to rising costs, took a toll on Copper Canyon as its shares lost 70% of their value when news of the stoppage was first announced.

The Copper Canyon deposit was touted as a possible high-grade contributor to Galore Creek’s overall copper and gold resources as the target contains over 2.86 million ounces of gold, 37.9 million ounces of silver and 1.16 billion pounds of copper.

Copper Canyon must now hope that Teck and NovaGold can find a way to bring down costs and re-ignite development plans the companies are currently studying their options.

NovaGold met its obligations to earn 60% of Copper Canyon back in November of 2007 by spending $3 million on exploration, delivering of 296,000 NovaGold shares and by paying $250,000 in cash.

Work on the property started in 2004 when it was optioned to Spectrum Gold. Spectrum later transferred the agreement to NovaGold.

Copper Canyon says a new resource estimate will come out soon based on 2007 drill results.

Drilling to date indicates both a large, bulk-tonnage copper-gold mineralized system and zones of high-grade gold mineralization.

The best hole drilled intersected 270.8 metres grading 1.92 grams gold, 22.28 grams silver and 1.05% copper.

In all, NovaGold has drilled 22 holes and overall 44 holes have been drilled on the grounds since 1990.

Copper Canyon says it remains financially stable with $1.4 million in its treasury and another $650,000 tied up in short term investments.