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Gold/Mining/Energy : Mining News of Note

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To: LoneClone who wrote (17654)	4/14/2008 9:16:51 PM
From: LoneClone	Read Replies (1) of 194001

NovaGold reports Q1 profit of $28 million or 26 cents per share Mon Apr 14, 5:50 PM The Canadian Press ca.news.finance.yahoo.com By The Canadian Press VANCOUVER - NovaGold Resources Inc. (TSX: NG.TO) turned a $28 million profit in the first quarter thanks to gains from the sale of shares in US Gold Corp. (TSX: USG.TO) and recovery costs at its Galore Creek copper and gold project in British Columbia. Vancouver-based Nova Gold said Monday its earnings amounted to 26 cents per share for the first quarter ended Feb. 29 compared with a loss of $4.9 million or five cents per share for the same quarter last year. A $15.3 million gain on the sale of the shares in US Gold Corp. and $15.2 million in cost recovery from the suspension of construction at Galore Creek led to the year-over-year increase. Revenues were $1.7 million in the quarter compared to $1.1 million for the same period last year, due to increased land sales. Expenses were $3.2 million compared to $5.7 million for the same period in 2007. Nova Gold is seeking to develop the Galore Creek project with Teck Cominco (TSX: TCK-B.TO). A new management team for the project was named earlier this year after construction was suspended in November amid bloating cost estimates. NovaGold also holds the Donlin Creek gold project in Alaska with Barrick Gold (TSX: ABX.TO). "This continues to be a challenging time to build mines, with strong inflationary pressures and intense industry competition for staff, contractors and equipment," the company said in a release after markets closed Monday. "The setback at Galore in late November had a significant impact on shareholder value, which we are determined to rebuild." Nova Gold shares closed up a penny to $7.86 on the Toronto Stock Exchange prior to the earnings announcement Monday. The shares have traded to a 52-week high of $20.19 in November 2007 before the Galore Creek delay was announced, and as low as $5.90 in December. Nova Gold said it hopes to come up with "an alternative development strategy" this year and advance the Galore project to feasibility within the next 12 to 18 months. "A significant achievement in the last quarter was the decision to purchase some equipment from contractors rather than settling the contracts, allowing us to reduce project suspension costs and also secure equipment for when we are able to restart construction." Nova Gold said it has revised the demobilization costs at Galore Creek to $62.7 million from the estimate of $93.1 million as a result of the settlement of six of the major contracts. The $30.4 million reduction is recorded as a recovery after $15.2 million in interest and future income tax expense of $4 million.

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