NovaGold Earns 70% Interest in Donlin

Vancouver–After just 15 months from signing the option agreement, NovaGold Resources (NRI-T) has spent its required US$10 million on exploration to earn a 70% interest in the Donlin Creek gold deposit from Placer Dome (PDG-T). The junior also recently tabled more encouraging results from its continuing pre-feasibility and exploration program.

NovaGold reports that an independent review of the expenditure statement has been completed and Placer Dome has been given notice of its earn-in on the project. The junior’s accelerated exploration program more than doubled the higher grade contained gold resource at Donlin Creek.

Now that NovaGold has vested its interest, Placer Dome has 90 days to decide on one of three options:

• 1) to remain at a 30% interest and contribute at that level through the development of the project;
• 2) to convert to a non-contributing 5% Net Profits Interest;
• 3) to undertake to exercise a back-in right to re-acquire an additional 40% interest in the project by completing all of the following conditions within the next 5 years:
• a) expending a minimum of US$30 million toward project development;
• b) completing a bankable feasibility study;
c) committing to build a mine that produces not less than 600,000 ounces of gold per year. Placer Dome would not earn any additional interest in the project above their 30% unless all of the above conditions are met within the 5 year time frame. NovaGold would not be required to contribute any additional funding up to the $30 million and at NovaGold’s election Placer Dome would arrange construction financing for NovaGold’s share of the mine development costs that would be repaid out of future mine cash flow.

If Placer decides to back-in, NovaGold states that its shareholders will not have to worry about shareholder dilution through financing. On the other hand, if Placer remains at 30% or converts to a 5% non-contributing net profits interest, NovaGold expects that its shareholders should see additional share value as the project’s gold resource expands and as the project advances through pre-feasibility, feasibility and into production.

The results from 100-by-100 meter step-out expansion drilling directly south of the Acma deposit have continued to intersect gold mineralization. Drilling highlights include:

• Hole DC02-864 intersected seven mineralized intervals starting at 19.1 metres and ending 273 metres down-hole. These include; 8.7 metres averaging 5.3 grams gold; 27.2 metres averaging 4.16 grams gold, 8.0 metres averaging 3.04 grams gold; 6.7 metres averaging 3.08 grams gold; 19.3 metres averaging 3.02 grams gold; 12.0 metres averaging 7.84 grams gold and; 22.0 metres averaging 3.64 grams gold.
• Hole DC02-865 intersected five mineralized intervals starting from 62 metres and ending at 402 metres down-hole. These include; 6.1 metres averaging 3.41 grams gold; 12.0 metres averaging 3.31 grams gold; 9.5 metres averaging 3.24 grams gold; 24.0 metres grading 7.01 grams gold and; 8.8 metres averaging 3.13 grams gold.
• Hole DC02-866 cut seven mineralized intervals starting 56.4 metres and ending 487.0 metres down-hole. These include; 9.6 metres averaging 5.07 grams gold; 46.4 metres grading 4.91 grams gold; 15.0 metres grading 12.75 grams gold, 13.2 metres averaging 4.88 grams gold, 28.0 metres averaging 3.08 grams gold, 3.7 metres averaging 11.95 grams gold and 9.0 metres averaging 3.12 grams gold.
• Hole DC02-867 cut four intervals starting 205.1 metres and ending 358 metres down-hole. These include; 21 metres averaging 3.45 grams gold, 22.4 metres averaging 3.39 grams gold, 5.6 metres averaging 4.42 grams gold and 12.0 metres grading 11.0 grams gold.
• Hole DC02-868 cut 21.2 metres averaging 3.84 grams gold, starting 93.6 metres down-hole.

These results further strengthen the project’s economics by adding new gold resources in areas that fall within the modeled open pits that were not included before.

NovaGold reports that additional follow-up drilling at the new Aurora discovery continues to intersect high-grade gold mineralization. The company currently has four drills spinning which will continue into December. The joint-venture plans to spend US$2.9 million during the next 3 months to upgrade the new high-grade, shallow gold mineralization at the Akivik, Aurora, 400, and South Acma zones to a 50-by-50 metre drill hole density. Once completed Placer Dome and NovaGold will calculate a comprehensive resource estimate which is scheduled to be released by February or March of next year.

The junior also reports that it has nearly completed an interim resource estimate for the Akivik, Aurora and 400 target areas. These new resource areas were discovered during this year’s drill program and are situated outside of the main Acma and Lewis deposit areas. Since these prospects are drilled on 100 metre centres the resources will be reported in the inferred category. The updated resource is expected in the next few weeks.

The total measured and indicated resource as defined in the scoping study released in March was 73.9 million tonnes grading 3.51 grams gold per tonne, or 8.3 million contained oz. An additional resource of 92.43 million tonnes averaging 3.66 grams gold, or 10.9 million contained oz., falls in the inferred category.