NovaGold Resources Inc. - $18.5 Million Financing Completed and Donlin Pre-Feasibility Started
Vancouver, British Columbia --
NovaGold Resources Inc. (TSE:NRI ; OTCBB:NVGLF) announced today
that it has completed its equity offering with agents Salman
Partners Inc., BMO Nesbitt Burns Inc. and Griffiths McBurney &
Partners. The issue was oversubscribed at 5,295,000 units at a
price of C$3.50 per unit for gross proceeds of C$18,532,500
(US$11.7 million). Each unit consists of one common share of the
Company and one-half of a common share purchase warrant. Each full
warrant will have a term of 18 months and an exercise price of
C$4.50.
The proceeds will be directed at completing the Pre-Feasibility
Study exploration and development work at Donlin Creek by years
end. NovaGold expects to spend approximately US$8 million on
completing the Pre-Feasibility Study and thereby earn its 70%
interest in the Donlin Creek Project. The current budget includes
approximately US$6 million on drilling and US$2 million on
engineering, permitting and related pre-feasibility issues. A
multi-staged drill program has been designed to raise the level of
confidence in the inferred drilled category and to expand the
currently defined resource. The focus of the drill program will be
on delineating additional near-surface, high-grade (+5 g/t) ounces.
Drill results will be released upon completion of each phase on
roughly a monthly basis.
NovaGold initiated the 2002 Pre-Feasibility drill program on April
8, 2002. Two diamond core drills and one reverse circulation rotary
drill (RVC) are currently working on the property. To date a total
of 1,076 meters (3,530 feet) of core and RVC drilling has been
completed in eleven holes. One diamond core drill is testing
exploration targets on a 100 meter by 100 meter drill grid around
the perimeter of the modeled $300/oz pit boundary that is adjacent
to the existing Acma and Lewis resource areas. The other diamond
core drill is in-fill drilling a series of holes perpendicular to
the dominant drill direction in Acma to verify grade continuity.
As expected, these holes have intercepted thick zones of dense
quartz and arsenopyrite veining. All holes drilled to date have
intercepted significant intervals of strongly mineralized porphyry.
The RVC drill is testing new exploration targets outside the
existing resource areas at Acma and Lewis. Significant mineralized
intervals of porphyry and sedimentary rocks have also been
intercepted in these holes.
Donlin Creek is one of the largest undeveloped gold deposits in the
world. The deposit is located in Southwestern Alaska on 109 square
kilometers (42 square miles) of private patented land. The project
is 19 km (12 miles) north of a commercial barge site on the
Kuskokwim River at the village of Crooked Creek, Alaska. A State of
Alaska designated winter road connects the project to the barge
site. The project has an all-season exploration camp for up to 75
people with an adjacent 1,500 meter (5,000 ft) runway that is
directly serviced by commercial aircraft as large as the C-130
Hercules freighter.
NovaGold will earn a 70% interest in the deposit by spending at
least US$10 million on exploration and development within 10 years.
NovaGold intends to complete its earn-in expenditures by the end of
2002 as part of the preliminary feasibility and project development
work. Upon vesting by NovaGold, a joint venture between NovaGold
and Placer Dome would be established, and Placer Dome would have 90
days to decide on one of three options: a) to remain at 30%
interest and participate as a minority partner; or b) to convert to
a 5% Net Profits Interest (NPI); or c) to exercise a back-in right
to re-acquire a majority interest in the project (70% Placer Dome
/ 30% NovaGold) by expending three times that expended by NovaGold
at the time the back-in is exercised, conducting a feasibility
study, and making a decision to mine at a production rate of not
less than 600,000 ounces of gold per year within a five year period
from the exercise of the back-in.
The company is also pleased to announce that the Annual and Special
General Meeting of the Shareholders of NovaGold Resources Inc. will
be held at the Hyatt Regency Vancouver, 655 Burrard Street,
Vancouver, British Columbia, in the Georgia B Meeting Room, on
Wednesday, May 22, 2002, at 2:00 p.m. (Vancouver time). The Notice
of Meeting, Annual Report and Management Information Circular are
being mailed to all shareholders of record as of April 17, 2002.
In addition, the company recently completed its Annual Information
Form (AIF). These documents will be available online at
www.sedar.com and on the NovaGold website at www.novagold.net. |
