Novagold expands holdings

Novagold Resources (NRI-T) is strengthening its land position in Alaska by acquiring all the outstanding shares in Alaska Gold from New York-listed owner Mueller Industries.

Alaska Gold holds real estate in both the Nome and Fairbanks districts, as well as 5,666 ha of patented mining claims in the former and 3,440 ha in the latter. Among these holdings are the Rock Creek lode gold deposit (9.3 million tonnes grading 2.54 grams gold per tonne), various royalties on producing placer gold deposits (2,000 combined ounces annually) and more than US$7 million in mining and related equipment.

The offer totals US$8 million in cash, shares and royalties, with more than half of the cash and shares to be paid upon signing a definitive agreement.

Another US$1.5 million must be paid on or before Dec. 15, 1999, with the royalties arising from future placer production.

The deal is still subject to a due diligence review, as well as board and regulatory approval.

Novagold currently owns a 47% interest in the Shotgun property, 290 km west of Anchorage, with the remainder held by Cominco (CLT-T). Novagold can increase its interest to 100%, subject to Cominco’s right to a back-in for 51%, provided Novagold increases its interest to between 70% and 90%.

During the 1998 field season, the junior outlined an inferred resource of 32.8 million tonnes grading 0.9 gram gold (T.N.M., Nov. 9-15/98).