Novagold Sees Commercial Production at Rock Creek by End of Q1
By Craig Wong
03 Jan 2008 at 12:37 PM GMT-05:00
resourceinvestor.com
VANCOUVER (CP) -- A U.S. appeal court has upheld a decision by the U.S. Army Corps of Engineers to grant a permit to allow a subsidiary of NovaGold Resources Inc. [TSX:NG; AMEX:NG] to go ahead with its Rock Creek project in Alaska.
The U.S. Court of Appeals for the Ninth Circuit ruled Thursday a lower court was right in denying an environmental group's application for a temporary restraining order and preliminary injunction against the project.
''The decisions of the Corps relating to the Rock Creek mining project were not arbitrary and capricious,'' Judge Ronald Gould wrote in the 29-page judgment.
Shares in NovaGold shares were up C$1.44 or 16% at C$10.33 on the Toronto Stock Exchange Thursday.
The Bering Strait Citizens for Responsible Resource Development alleged the Army Cops of Engineers violated the Clean Water Act and the National Environmental Policy Act in granting a permit for the Rock Creek project.
However the appeal court ruled the Army Corps of Engineers acted properly.
''Moreover, the Corps stressed that the wetland that would be filled during the project are not unique to the site and that the U.S. Fish and Wildlife Service has determined that wetlands of the type filled in this project are the 'common habitat in the Alaska and Nome region,''' Gould wrote.
''Accordingly, the Corps concluded that the project will likely have no impact on the greater ecosystem beyond the project site.''
Vicki Clark, legal director of Trustees for Alaska and one of the lawyers who represented the Bering Strait Citizens for Responsible Resource Development, said the law failed to protect the public review process.
''From our perspective it is a disappointing decision,'' Clark said.
She said a decision had not yet been made whether the group would seek a rehearing of the case.
NovaGold CEO Rick Van Nieuwenhuyse said the company hoped to bring the Rock Creek mine into commercial production by the end of the quarter.
''We're very pleased by the outcome and we'll continue to finish up the construction an operation of the project,'' Van Nieuwenhuyse said in an interview.
Van Nieuwenhuyse said the lawsuit set the company back about three months in its construction schedule, but was able to get back on track while the appeal was being heard.
Rock Creek will be the first mine that NovaGold will have brought into production.
''We're glad the appeal is not going to interrupt our plans,'' Van Nieuwenhuyse said.
The Rock Creek project in Alaska includes the Rock Creek open pit mine and mill about 10 kilometres north of Nome and the nearby Big Hurrah open pit mine, about 70 kilometres east of Nome.
The projected life of the project is four to five years and is expected to process about 7,000 tonnes of gold ore per day.
The permit issued by the Army Corps of Engineers requires measures to mitigate environmental damage and mitigate damage from earlier mining activities at the sites.
Taking these mitigation measures into account, the Corps estimates the project will result in a net loss of about 70 hectares of wetlands.
The pop in NovaGold shares follows a sharp drop in the stock last year after a halt to work its Galore Creek joint venture with Teck Cominco Ltd. [TSX:TCK.B; NYSE:TCK] was called when estimated costs to build that mine climbed from US$2 billion to as much as US$5 billion. |
