NovaGold doubles resource at Donlin Creek

Vancouver — NovaGold Resource (NRI-T) has tabled an updated resource estimate of its Donlin Creek gold deposit in Alaska. The deposit’s measured and indicated resource has increased 92% to 4.4 million contained oz. and the inferred resource has increased by a whopping 161% to 6.2 million contained oz.

“Donlin Creek’s assay results from last year exceed our expectations and, no doubt, the gold mining industry’s expectations,” says Rick Van Nieuwenhuyse, president of NovaGold. “This dramatic increase in the gold resource makes Donlin Creek on of the most exciting new North American gold plays in years. The deposit remains open and we are confident we will continue to significantly expand the resource.”

The updated resource was prepared by MRDI of Vancouver and was based on extensive re-logging and three-dimensional modeling using 87,571 metres of core samples in 361 holes, 13,323 metres of reverse circulation samples from 117 drill holes and 21,337 metres of surface trench samples.

Using a gold price of US$250 per oz. and a 3.5-grams-gold-per-tonne cut off grade the measured and indicated resource tallies to 26.93 million tonnes grading 5.06 grams gold per tonne, or 4.38 million contained oz. The inferred resource stands at 36.8 million tonnes grading 5.22 grams gold, or 6.18 million contained oz.

Using a gold price of US$300 per oz. and a cut off grade of 2.5 grams gold per tonne the measured and indicated resource jumps to 52.7 million tonnes grading 4.03 grams gold, or 6.8 million contained oz. gold. The inferred resource tallies to 66.9 million tonnes grading 4.20 grams gold, or 9.0 million contained oz. gold.

At a gold price of US$350 per oz. and a cut off grade of 1.5 grams gold, the measured and indicated resource tallies to 104 million tonnes grading 3.0 grams gold, or 10 million contained oz. gold. The inferred resource jumps to 129 million tonnes grading 3.11 grams gold, or 12.9 million contained oz. gold.

NovaGold’s 2001 exploration program was successful at expanding the extent of the known resource. Of the 42 holes completed, 26 were offset holes that expanded the high-grade mineralization. The other 16 holes were in-fill holes that upgraded the inferred resource category to the measured and indicated category.

The higher-grade gold mineralization remains open at both the nearby Acma and Lewis targets. A follow-up drill program to further define and expand the extent of the mineralized system is scheduled to begin in the spring.

Engineering work on the project is currently underway and should wrap up by March. The study will help define the operating cost parameters and scale of the operation and direct the preliminary feasibility study. Metallurgical test work including bench-scale grinding, flotation, pressure oxidation, bio-oxidation and carbon-in-leach (CIL) cyanidation recovery demonstrate that 95%-to-98% of the gold is contained in the finer grained arsenopyrite mineralization. Gold recoveries are pegged at 90%-to-95% using a conventional sulfide flotation concentration followed by pressure oxidation of the concentrate and CIL cyanidation for gold recovery.

Donlin creek is situated in southwestern Alaska on 109 sq. km of private patented land. The project is 19 km north of a commercial barge site on the Kuskokwim River at the village of Crooked Creek. A government winter road connects the project to the barge site. The project has an all-season exploration camp for 75 people and a 1,500 metre runway that is directly serviced by commercial aircraft as large as the C-130 Hercules freighter. NovaGold stands to earn a 70% interest in the deposit by spending US$10 million on exploration development work within 10 years. The junior intends to fast track development of the project and complete these expenditures by the end of 2002 as part of the preliminary feasibility and project development work.