NovaGold’s ambitions rely on processing technology

The corporate strategy of NovaGold Resources (TSE), based in Halifax, N.S., is to become a “vertically integrated major mining company,” says company Comptroller Glenn Holmes, and “a world leader in the application of innovative processing technologies.” NovaGold is already well on the way with the successful application of advanced processing technology to its Murray Brook gold-silver mine in New Brunswick and the Mt. Pleasant tin-tungsten project in New Brunswick.

The company also has substantial interests in several other promising mineral properties in New Brunswick, Ontario, the Northwest Territories, Nevada, New Mexico, Alaska and Arizona, including four former gold and base-metal producers.

Brought into production in September, 1989, for $6.4 million, the 100%-owned Murray Brook open-pit mine, 80 kilometres northwest of Bathurst, N.B., uses a year-round indoor vat leaching process to recover gold-silver dore from the mine gossan. The 1000 ton per day operation is the first of its kind in the province and only the third housed vat leaching facility in the world.

The company is also working with CANMET to develop the new Murray Brook ferric chloride leach process, which produces base metal values in excess of 90% from bulk concentrates. A 500 ton per day pilot/demonstration plant is being constructed at Murray Brook to confirm the engineering and economic feasibility of the new technology. In 1990 the mine produced 16,514 oz. of gold and 81,126 oz of silver. Gold recovery has increased from 51% in early 1990 to 90% in 1991; silver recovery is 13%.

Reserves at the mine are estimated at 1.9 million tons grading 0.044 oz per ton gold and 1.91 oz per ton silver.

Research carried out by CANMET last year on the Mt. Pleasant tin-tungsten deposit, 85 kilometres from Saint John, New Brunswick, also demonstrated the viability of the Warren Springs chloridization process to increase production of tin metal from low-grade tin concentrates.

Depending on the results of the second-stage feasibility study, NovaGold now has the option to acquire 100% of the property for US$12 million from owners Lac Minerals (TSE) and Billiton Metals Canada. The company expects to make a production decision by the fourth quarter of 1991.

As of May 1990, approximately $120 million has been spent on exploration and development of the Mt. Pleasant project. Preliminary reserves are estimated at 5.1 million tons grading 0.79% tin and 9 million tons grading 0.40% tungsten and 0.20% molybdenum.

In 1990 NovaGold spent approximately $1.05 million on exploration and drilling programs in New Brunswick and Nevada. “Our exploration budget for 1991 strongly depends on attracting more joint venture partners,” the company spokesmen said.

Exploration priorities in 1991 include the Sewell Brook joint venture lead-zinc project near Plaster Rock, New Brunswick, where drilling continues; the Summit Mine, a joint venture gold-silver project in New Mexico; the wholly owned Sawtooth gold project in Nevada, and the wholly owned Sears Lake grassroots lead-zinc prospect, 25 kilometres east of Sewell Brook.

At the Sewell Brook joint venture, discovered in the fall of 1990, Costigan Gold (COATS) can earn a 40% interest in the property by spending $400,000 on exploration over the next three years.

Last year approximately $300,000 was spent on geophysical and geochemical surveys and diamond drilling of the high-grade lead-zinc horizon. The partners are hoping to raise $1 million in 1991 to fully evaluate the property’s potential.

Joint venture partner Biron Bay Resources (ASE) has just completed a $1.5 million drilling and exploration program at the former Summit gold-silver mine in New Mexico. Biron Bay is the operator and can earn a 60% interest in the NovaGold property by spending $3 million on exploration over three years.

In two years Biron Bay has aggregated 46,000 feet of diamond drilling on the property and expanded preliminary reserves to 1.05 million tons grading 0.183 oz. per ton gold (uncut) and 11.63 oz. per ton silver.

If funds can be raised, NovaGold is planning a small scale drilling operation at the Sawtooth placer/lode gold property in Nevada this year. Two previous summers of reverse circulation drilling and sampling have confirmed the presence of high-grade gold mineralization in outcrop; 1.642 oz. per ton of gold was assayed from a quartz-breccia vein last year.