VANCOUVER, BRITISH COLUMBIA -- (Marketwire) -- 02/23/09 -- NovaGold Resources Inc. (TSX: NG)(NYSE Alternext US: NG) today announced the results of its fiscal year ended November 30, 2008 along with an update on the Company's project development activities. Details of the Company's financial results are described in the consolidated financial statements and Management's Discussion and Analysis which, together with further details on each of the Company's projects including resource estimates, will be available on the Company's website at www.novagold.net and on SEDAR at www.sedar.com. All amounts are in Canadian dollars unless otherwise stated.
NovaGold will host a conference call and webcast on Tuesday, February 24, 2009 at 11 am PST (2 pm EST).
Toll-free 1-866-240-8955 or webcast at www.novagold.net
Highlights
- US$75 million financing completed in January 2009
- US$20 million bridge loan repaid through share conversion
- Donlin Creek gold project Feasibility Study results and initiation of permit process expected Q1-2009
- Galore Creek copper-gold project funding arrangements amended with Teck and studies define optimized development approach
- Rock Creek gold project assessment underway
- Conference call Tuesday, February 24, 2009 at 11 am PST (2 pm EST)
2008 represented a period of unprecedented market volatility and uncertainty, with historic changes in the public markets impacting every sector of the economy. Gold itself was one of the few bright spots in the marketplace as one of the only asset classes to maintain and even appreciate in value during the year. The last 12 months have been equally challenging for precious metals stocks including NovaGold. Setbacks at the Company's Rock Creek project and uncertainty over the Company's ability to secure financing and repay its short term debt last fall, combined with the sell off in the general market resulted in tremendous swings in valuation for the Company.
With the announcement in late December of a US$75 million investment by Electrum Strategic Resources, a New York based private equity firm, along with several other investors, and the conversion of the Company's US$20 million bridge loan, NovaGold's share price has outperformed the sector for the first two months of 2009. With one of the largest resource bases of any junior or mid-tier producing gold company, NovaGold is well positioned in 2009 to add value in the current rising Gold market.
Project Update
Donlin Creek Gold Project, Alaska
The Donlin Creek gold project is managed by a limited liability company owned 50% each by NovaGold and Barrick Gold U.S. Inc., a wholly-owned subsidiary of Barrick Gold Corporation. In June a preferred project design was selected for the Donlin Creek project and the partners undertook to complete a feasibility study. The results of this feasibility study are expected to be available by the end of calendar Q1-2009 with the NI 43-101 technical report being available within 45 days thereafter. The Donlin Creek project is expected to have a throughput design of approximately 50,000 tonnes per day using onsite diesel and wind cogeneration for power. Using this design, Donlin Creek would operate for more than 20 years and potentially produce 1 to 1.5 million ounces of gold annually. Permitting would start in early 2009 with construction targeted to start in 2012. The feasibility study will provide updated operating and capital cost estimates for the project based on the revised project development plan.
Drill highlights from 2008 at Donlin Creek show that the deposits remain open to expansion laterally and at depth beyond the current resource pit boundary demonstrating the potential for significant resource expansion. An updated reserve/resource estimate is anticipated to be released as part of the feasibility work showing an overall increase in the contained gold for the project beyond that in the last resource estimate from June 2008.
Donlin Creek is located in southwestern Alaska and is one of the world's largest undeveloped gold deposits. As currently envisioned, the mine would be developed as a high-tonnage open-pit year-round operation. NovaGold and Barrick are moving forward cooperatively to maximize the value of the Donlin Creek deposit by advancing the project through feasibility and permitting while bringing sustainable economic benefits to the local Native Alaskan communities in the region.
Galore Creek Copper-Gold-Silver Project, British Columbia
The Galore Creek project is managed by the Galore Creek Mining Corporation (GCMC), a partnership controlled equally by NovaGold and Teck Cominco. During 2008, an extensive engineering review to optimize the development plan for Galore Creek was undertaken. The results of these engineering optimization studies have identified a number of modified approaches to the project that show the potential for significant expansion of the project throughput, a shorter construction schedule, location of the process facilities to allow for future expansion, and fewer risks associated with construction and operations. As currently envisioned the project would be one of the world's largest undeveloped copper-gold projects. In addition, current prices for key mine inputs including diesel, steel, major mechanical equipment and contract labor have decreased significantly since the peak levels in 2008 and indicate potential for reduced overall capital costs.
Also during 2008, construction work continued on the access road to connect the Galore Creek access road segments that were completed during the 2007 construction season with Highway 37. Land access has now been established to kilometer 40 at a lower cost than originally estimated.
