NovaGold buying Pine Cove option

Halifax company NovaGold Resources (TSE) has agreed to acquire International Corona’s (TSE) right to earn a 70% stake in the 2,850-hectare Pine Cove gold property in Newfoundland.

Since signing an option deal with Varna Gold (ASE) in 1988, Corona has outlined preliminary reserves of 2.14 million tonnes grading 3.01 grams gold per tonne on the property. However, to earn the interest, Corona has still to make the remaining option payment of $75,000 and deliver a bankable feasibility study by November, 1993.

Subject to a feasibility study to be carried out by Dec. 3, NovaGold will issue $700,000 worth of common shares to Corona and grant the Vancouver company a 7.5% net profits royalty.

“At this stage, it appears that the ore at Pine Cove is amenable to the vat-leaching techniques currently being used at the Murray Brook mine in New Brunswick where NovaGold is achieving 90% recoveries on grades of 1.72 grams, says

NovaGold President Gerald McConnell.

The projected capital cost of a similar mill in Newfoundland is $7-9 million with a projected operating cost of $20 per ton. “With these parameters, the project would be viable even with today’s gold prices.”