From: newsout@canada-stockwatch.com
Date: Thu, 14 May 1998 11:42:20 -0700
Subject: Stockwatch: NovaGold Resources Inc - News Release
To: ajanko@erinet.com
Drilling begins at Koala project
NovaGold Resources Inc NRI
Shares issued 9,630,032 May 13 close $0.89
Thu 14 May 98 News Release
Mr. Rick Van Nieuwenhuyse reports
Diamond drilling has begun at the Koala project in Chihuahua State,
northern Mexico. The 2,000 metre program will test coincident geological,
geochemical and geophysical anomalies which could reflect buried
replacement-type lead-zinc-copper-silver mineralization. These anomalies
occur within a corridor of mapped alteration, breceation and mineral
showings. Similar geological situations in northern Mexico led to the
discovery of the Santa Eulalia and Naica mining districts where total
historical production plus current reserves exceed 85 million tonnes of
10-15 per cent combined lead-zinc-copper and 150-350 g/t silver.
The company acquired a 20 per cent interest in the Koala core group of
claims in February 1998. Pursuant to an option agreement with Consolidated
Magna Ventures, the company may earn an additional 25.9 per cent interest
in the core claims (990 hectares) and a 51 per cent interest in the
surrounding claims (11,770 hectares) by financing $3-million (U.S.) in
exploration.
Previous surveys by Magna identified anomalous lead-zinc-copper
mineralization in altered limestones with a coincident IP anomaly
suggesting the presence of sulphide mineralization at depths of 200-300
metres. The current drill program is following immediately on the heels of
an expanded geophysical program that included the extension of the IP
anomaly to the southeast and a gravity survey over the entire IP anomaly.
The zone of high chargeabilities defined by Quantec's real section IP
system has been extended by a further 1,000 metres to the southeast and is
now defined as being 3,500 metres long and up to 800 metres wide. A subtle
but persistent gravity anomaly occurs near the middle of the IP anomaly and
appears to be about 400 metres long and 100 metres wide.
Geological mapping and soil geochemical sampling have also been extended to
the southeast and new zones of alteration have been discovered that
correlate well with the geophysical results. Structural mapping is aiding
the overall interpretation and is a key component of the program as
chimney-and-manto type systems typically show strong structural controls.
The depth to the top of the interpreted sulphide mineralization, as
suggested by the IP data, may be a function of the level of oxidation, as
this geophysical method cannot detect oxide mineralization. Although the
main target of the drill holes will be the sulphide mineralization,
requiring 400-500 metre long holes, it is possible that oxide
mineralization will be intersected closer to the surface.
Consolidated Magna is the project operator. The current $500,000 (Canadian)
program is designed to gain a preliminary understanding of the geological
settings and the controls on mineralization. Both Magna and NovaGold
recognize that the current program will not be sufficient to test an
anomaly of this magnitude.
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