NovaGold hits the road to raise $4-$20 million

With a successful financing, NovaGold Resources (TSE) of Halifax, N.S. could have its first gold mine in production by the end of the year, says president Gerald McConnell.

Speaking at an information session for brokers and investors in Toronto, McConnell said his company has passed all the environmental hurdles with the government of New Brunswick to put the Murray Brook mine into production.

Meetings were held in three cities in Atlantic Canada and three in Ontario to prepare investors for a major underwriting, which is expected to raise between $4 million and $20 million for the company.

The offering, which is being handled by Levesque, Beaubien, Midland Doherty and Lynch Investments, will consist of units made up of 250 common shares and 250 flow through shares.

A big chunk of the proceeds ($2.63 million) would go to putting the Murray Brook deposit into production at a cost of $6.1 million. The project would strip the top 135 ft of gold- and silver-rich gossan material from the top of the copper- rich sulphide deposit located near Bathurst, N.B. Gold and silver would be leached from the very friable ore in huge vats.

Such an operation could yield 11,000 oz of gold and 234,000 oz of silver per year for five years. Operating costs are estimated by Kilborn Engineering at $197(US) per oz gold equivalent, resulting in what David Scott of Levesque, Beaubien calls a decent cash flow.

Several other properties, which NovaGold hopes to develop into mines in the months and years ahead, include the Goldenville, Cochrane Hill and Fifteen Mile Stream properties in Nova Scotia and the Summit property in New Mexico.