September 12, 2011 - Vancouver, British Columbia -
NovaGold Resources Inc. (NYSE-AMEX: NG, TSX:NG) NovaGold today filed a National Instrument 43-101 technical report
regarding the Prefeasibility Study on its 50% owned Galore Creek
copper-gold-silver project in Northwestern British Columbia, Canada. A summary
of the technical report was announced on July 27, 2011. The independent
technical report was completed by AMEC Americas Limited ("AMEC��) and Lemley International ("Lemley��) and was based on the Prefeasibility Study completed by the Galore
Creek Mining Company ("GCMC��).
The Prefeasibility Study outlined a large-scale
open-pit mine with a conventional 95,000 tonne-per-day milling and
concentrating facility. Highlights of the Prefeasibility Study included[1]:
· Proven and probable mineral reserves totaling 528
million tonnes grading 0.6% copper, 0.32 grams per tonne gold and 6.02 grams
per tonne silver.
· Production of 6.2 billion pounds of copper, 4.0
million ounces of gold and 65.8 million ounces of silver over an 18 year mine
life.
· Cash
costs averaging $0.80 per pound of copper at Base Price Case assumptions and
$0.42 per pound of copper at Current Price Case assumptions.[2]
·
Construction capital costs of $5,160 million.
·
Separating the mine infrastructure from the mill infrastructure, each located
in adjacent valleys thereby increasing flexibility to enable open-pit mine
expansion, higher mill throughput and additional exploration.
· Measured
and indicated mineral resources exclusive of reserves totaling 287 million
tonnes grading 0.33% copper and 0.33 grams per tonnes gold and inferred mineral
resources totaling 347 million tonnes grading 0.42% copper and 0.24 grams per
tonne gold.
·
Exploration on the property remains very prospective both within current
deposit areas and on identified targets in the Galore Valley.
In addition
to the Project net present values ("NPVs”) calculated using discounted
cash flow ("DCF”) method that were previously announced, the technical
report also includes an analysis of Project NPV using the Real Option
("RO”) method. The RO method seeks to dynamically model the uncertainty
of metal prices over time and explicitly risk adjust future cash flows for
metal price uncertainty. The RO analysis uses copper prices that start at a
spot price of US$4.14 per pound and revert to a long-term metal price of
US$2.65 per pound and gold prices of US$1,100 per ounce (the same uninflated
long-term metal prices as were used in the AMEC discounted cash flow analysis).
The RO analysis yields an after-tax NPV for the Project of $811 million versus
$137 million (NPV7%) as determined with the DCF method.
NovaGold
considers RO analysis as useful additional information for investors in
assessing long-life projects, particularly long-life polymetallic projects like
Galore Creek which have significant diversified cash flows generated by both
copper and gold, and investors are encouraged to read the RO section in the NI
43-101 technical report in its entirety.
In reviewing
the Prefeasibility Study plan and opportunities identified, the Partners have
determined to move forward with an enhanced project plan ("Enhanced Plan”)
for the project description required for permitting and to support a
feasibility decision. GCMC is on track with the engineering required to define
the project description before year-end 2011. The Enhanced Plan envisions
adding mineral resources that are within an optimized measured, indicated and
inferred pit shell but due to comingled inferred mineral resources were
excluded from the optimized measured and indicated pit that was the basis for
clarification of mineral reserves. These mineral resources are considered to
have high potential for upgrading of confidence categories with additional
drilling.[3] The Enhanced Plan also considers the addition of a second
Semi-Autogenous Grinding (SAG) mill in the fifth or sixth year of operations to
maintain throughput at or above the nominal 95,000 tonne-per-day throughput
rate as harder rock types are expected to be encountered as the pit deepens.
The Enhanced Plan will also re-evaluate two other areas of the PFS Plan: the
use of a pipeline to transport concentrate to the highway; and alternative port
facilities. Both issues are important elements for the project description and
scope for permitting.
The NI 43-101
technical report was authored by Robert Gill, P.Eng., Jay Melnyk, P.Eng., Greg
Kulla, P.Geo. and Gregory Wortman, P.Eng. of AMEC Americas Limited and Dana
Rogers, P.Eng. of Lemley International. The Qualified Persons were responsible
for preparation of the technical report that is based on the GCMC
Prefeasibility Study.
The
technical information contained in this press release was reviewed by Kevin
Francis, SME Registered Member, VP, Resources for NovaGold and a Qualified
Person as defined by NI 43-101. Readers are cautioned that the conclusions,
projections and estimates set out in this press release are subject to
important qualifications, assumptions and exclusions, all of which are detailed
in the Prefeasibility Study and technical report. To fully understand the
summary information set out above, the technical report that will be filed on
SEDAR at www.sedar.com and on EDGAR at www.sec.gov should be read in its
entirety.
About
NovaGold
NovaGold is a precious metals company engaged in the
exploration and development of mineral properties located principally in
Alaska, U.S.A. and British Columbia, Canada. The Company is focused on advancing
its two core properties, Donlin Gold and Galore Creek, with the objective of
becoming a low-cost, million-ounce-a-year gold producer, and offers superior
leverage to gold and copper with one of the largest mineral reserve and mineral
resource bases of any junior or mid-tier gold company. NovaGold has a strong
track record of expanding deposits through exploration success and forging
collaborative partnerships, both with local communities and with major mining
companies. The Donlin Gold project in Alaska, one of the world's largest
undeveloped gold deposits, is held by a limited liability company owned equally
by wholly-owned subsidiaries of NovaGold and Barrick Gold Corporation. The
Galore Creek project in British Columbia, a large copper-gold-silver deposit,
is held by a partnership owned equally by wholly-owned subsidiaries of NovaGold
and Teck Resources Limited. NovaGold also owns a 100% interest in the
high-grade Ambler copper-zinc-lead-gold-silver deposit in northern Alaska and
has other earlier-stage exploration properties. NovaGold trades on the TSX and
NYSE-AMEX under the symbol NG. More information is available at
www.novagold.net or by emailing info@novagold.net.
# # #
NovaGold
Contact
Neil MacRae
Director, Investor Relations
Greg Martin
Vice President Business Development & Treasurer
604-669-6227
or 1-866-669-6227
Cautionary
Note Regarding Forward-Looking Statements
This press release includes certain
"forward-looking statements�� within the meaning of the United States Private Securities Litigation
Reform Act of 1995. All statements, other than statements of historical fact,
included herein including, without limitation, statements relating to
NovaGold's future operating or financial performance, are forward-looking
statements. Specifically the information included under Project Economics and
Production Estimates in this news release contain forward-looking information.
Forward-looking statements are frequently, but not always, identified by words
such as "expects��, "anticipates��, "believes��, "intends��, "estimates��, "potential��, "possible��, and similar expressions, or statements that events, conditions, or
results "will��, "may��, "could��, or "should�� occur or be achieved. These forward-looking statements may include
statements regarding perceived merit of properties; exploration results and
budgets; mineral reserves and resource estimates; work programs; capital
expenditures; timelines; strategic plans; completion of transactions; market
prices for precious and base metals; or other statements that are not
statements of fact. Forward-looking statements involve various risks and
uncertainties. There can be no assurance that such statements will prove to be
accurate, and actual results and future events could differ materially from
those anticipated in such statements. Important factors that could cause actual
results to differ materially from NovaGold's expectations include the
uncertainties involving the need for additional financing to explore and
develop properties and availability of financing in the debt and capital
markets; uncertainties involved in the interpretation of drilling results and
geological tests and the estimation of reserves and resources; the need for
continued cooperation with Teck Resources and the Tahltan Nation for
development of the Galore Creek property; the need for cooperation of
government agencies and native groups in the development and operation of
properties; the need to obtain permits and governmental approvals;; risks of
construction and mining projects such as accidents, equipment breakdowns, bad
weather, non-compliance with environmental and permit requirements,
unanticipated variation in geological structures, ore grades or recovery rates;
unexpected cost increases, which could include significant increases in the
capital and operating costs estimated in the prefeasibility study; fluctuations
in metal prices and currency exchange rates; uncertainties and risks regarding
the cost estimates and completion schedule for the proposed access tunnel and
other risk and uncertainties disclosed in NovaGold's Annual Information Form
for the year-ended November 30, 2010, filed with the Canadian securities
regulatory authorities, and NovaGold's annual report on Form 40-F filed with
the United States Securities and Exchange Commission and in other NovaGold
reports and documents filed with applicable securities regulatory authorities
from time to time. NovaGold's forward-looking statements reflect the beliefs,
opinions and projections on the date the statements are made. NovaGold assumes
no obligation to update the forward-looking statements of beliefs, opinions,
projections, or other factors, should they change.
Cautionary Note Regarding Reserve and Resource
Estimates
This press release has been prepared in accordance
with the requirements of the securities laws in effect in Canada, which differ
from the requirements of U.S. securities laws. Unless otherwise indicated, all
resource and reserve estimates included in this press release have been
prepared in accordance with National Instrument 43-101 Standards of Disclosure
for Mineral Projects ("NI 43-101��) and the Canadian Institute of Mining, Metallurgy, and Petroleum
Definition Standards on Mineral Resources and Mineral Reserves. NI 43-101 is a
rule developed by the Canadian Securities Administrators which establishes
standards for all public disclosure an issuer makes of scientific and technical
information concerning mineral projects. Canadian standards, including NI
43-101, differ significantly from the requirements of the United States
Securities and Exchange Commission ("SEC��), and resource and reserve information contained herein may not be
comparable to similar information disclosed by U.S. companies. In particular,
and without limiting the generality of the foregoing, the term "resource�� does not equate to the term "reserves��. Under U.S. standards, mineralization may not be classified as a
"reserve�� unless the determination has been made that the mineralization could be
economically and legally produced or extracted at the time the reserve
determination is made. The SEC's disclosure standards normally do not permit
the inclusion of information concerning "measured mineral resources��, "indicated mineral resources�� or "inferred mineral resources�� or other descriptions of the amount of mineralization in mineral
deposits that do not constitute "reserves�� by U.S. standards in documents filed with the SEC. U.S. investors
should also understand that "inferred mineral resources�� have a great amount of uncertainty as to their existence and great
uncertainty as to their economic and legal feasibility. It cannot be assumed
that all or any part of an "inferred mineral resource�� will ever be upgraded to a higher category. Under Canadian rules,
estimated "inferred mineral resources�� may not form the basis of feasibility or pre-feasibility studies except
in rare cases. Investors are cautioned not to assume that all or any part of an
"inferred mineral resource�� exists or is economically or legally mineable. Disclosure of
"contained ounces�� in a resource is
permitted disclosure under Canadian regulations; however, the SEC normally only
permits issuers to report mineralization that does not constitute
"reserves�� by SEC standards as in-place tonnage and grade without reference to
unit measures. The requirements of NI 43-101 for identification of
"reserves�� are also not the same as those of the SEC, and reserves reported by the
Company in compliance with NI 43-101 may not qualify as "reserves�� under SEC standards. Accordingly, information concerning mineral
deposits set forth herein may not be comparable with information made public by
companies that report in accordance with U.S. standards.