Heap-leach operation planned by Novagold

An open-pit gold-silver mine is planned by Novagold Resources (TSE) at Restigouche Cty., N.B., in the Bathurst area.

Capital cost of the mine is estimated at $6.1 million. The Atlantic Canada Opportunities Agency (ACOA) is providing an 85% loan guarantee on $4-million of that. Novagold President Gerald McConnell says his company plans to raise the remaining $2.1 million through a limited partnership agreement.

The mine will have a 6-year lifespan and is expected to produce a total of 58,000 oz gold and about 1.24 million oz silver.

A cyanide heap-leach process will be used to extract gold and silver from low grade ore. An enclosed plant will operate year- round. Estimated cost to place the Murray Brook mine into production is $6.1 million.

A feasibility study for the project had been completed in 1986 by Kilborn Engineering. ACOA is contributing the full cost of $18,750 for an update of the study that was done prior to an attempt by NovaGold earlier this year to raise $12 million in a public financing. That public offering was withdrawn earlier this summer due to unfavorable market conditions McConnell says.

The public financing that was withdrawn would have funded other corporate purposes as well as the mine construction. The $6.1 million earmarked for the mine is the full estimated cost of the project.

Because the mine is situated in Restigouche County it is eligible for a 40% investment tax credit which will be available to members of the limited partnership.

ACOA is a federal government agency created in April, 1987, to provide support to entrepreneurs in the Atlantic region.

The ACOA says the mine will create 25 jobs.