I tried FP on the weekend and it wasn't working.
The only warrants that might be okay and come back are the NG.wt's.
NovaGold, Teck just said no to Galore Creek
2007-11-26 07:48 MT - News Release
Also News Release (C-TCK) Teck Cominco Ltd
Mr. Rick Van Nieuwenhuyse of NovaGold reports
TECK COMINCO AND NOVAGOLD SUSPEND CONSTRUCTION AT GALORE CREEK
NovaGold Resources Inc. and Teck Cominco Ltd. will suspend construction activities at the Galore Creek copper-gold-silver project in northwestern British Columbia. A recent review and completion of the first season of construction indicate substantially higher capital costs and a longer construction schedule for the project. This, combined with reduced operating margins as a result of the stronger Canadian dollar, would make the project, as now conceived and permitted, uneconomic at current consensus long-term metal prices. NovaGold and Teck Cominco continue to view the property as a substantial resource and will initiate a comprehensive review to evaluate alternative development strategies. The Galore Creek partnership will conduct an orderly suspension of construction activities and will work with employees, the Tahltan Nation, local communities and other stakeholders to minimize the impacts of this decision.
In April, 2007, NovaGold retained AMEC Americas Limited, an independent engineering firm, to review the October, 2006, Galore Creek feasibility study and commence project engineering. The review covered the entire project with a focus on construction of the mine facilities, and tailings and water management structures.
By mid-October, 2007, AMEC's preliminary work indicated that capital costs would be significantly higher than originally estimated. As a result, NovaGold and Teck Cominco commenced a project strategy review, involving seven engineering teams, to assess the AMEC work. Estimated costs have continued to increase during this review, and NovaGold and Teck Cominco now have sufficient information to indicate that the capital cost of the project could approach as much as $5-billion. The engineering review is continuing.
Although there have been changes in scope from the original feasibility study, the largest portion of the capital cost increase is related to the complex sequencing of activities necessary to build the tailings dam and water management structures, and the resulting extension of the construction schedule by 18 to 24 months. The project has also been affected by the rapidly escalating capital costs affecting major construction projects worldwide.
In light of these developments, NovaGold and Teck Cominco have agreed to suspend construction and amend the terms of Teck Cominco's earn-in obligations in connection with the project. Under the amended arrangements Teck Cominco will invest an additional $72-million in the partnership to be used principally to reassess the project and evaluate alternative development strategies over the next five years. Teck Cominco's sole financing of other project costs incurred after Aug. 1, 2007, will now total $263-million. NovaGold and Teck Cominco will share the next $100-million of project costs 33 per cent and 67 per cent respectively, and will share costs proportionately thereafter.
"NovaGold has worked for years to advance this project toward production," said Rick Van Nieuwenhuyse, president and chief executive officer of NovaGold. "We reached this decision after considerable review and we share the disappointment of our employees, the Tahltan Nation, all stakeholders and local communities. We will work closely with Teck Cominco to unlock the potential of this world-class resource. NovaGold will continue to add value for shareholders by advancing the other projects in our portfolio, particularly the Donlin Creek project in Alaska."
Teck Cominco's president and CEO, Don Lindsay, said: "Very few copper-gold deposits of this quality have been discovered over the last few years even though the industry has invested billions of dollars in exploration worldwide. Galore Creek is a substantial resource and we will continue to work to determine how and when it can best be developed."
There are over 400 contractors and employees currently working on the Galore Creek project. In order to suspend activities, the partnership will review its personnel and supplier requirements over the weeks ahead. During this period and into 2008, the partnership will work with the Tahltan Nation and government regulators to develop a strategy to put the project on care and maintenance.
The Galore Creek project is owned by a 50/50 partnership between NovaGold and Teck Cominco with all aspects of the project overseen by Galore Creek Mining Corporation, a jointly controlled operating company.
"The Galore Creek team has operated this project to the highest standards," said Doug Brown, president of Galore Creek Mining Corporation. "Exceptional progress was made this year, and the team worked together to deliver on construction and partnership expectations. The partnership is committed to supporting its employees, contractors, suppliers and partners through this difficult period."
Long-term demand for copper and gold is expected to remain strong and the Galore Creek property contains one of the world's largest undeveloped copper and gold resources. British Columbia is a good place to invest and both companies remain committed to working in the province. NovaGold and Teck Cominco will continue to evaluate the project with the goal of identifying a viable development strategy that brings value to shareholders, the Tahltan Nation and local communities.
NovaGold and Teck Cominco expect there will be writedowns on this project and are working to determine the amount and timing.
NovaGold Resources and Teck Cominco will hold an investor teleconference on Monday, Nov. 26, 2007.
Participating in the call will be Mr. Van Nieuwenhuyse and Mr. Lindsay. You can dial in prior to 9 a.m. EST (6 a.m. PST) at 1-866-898-9626 and request the NovaGold/Teck Cominco teleconference
We seek Safe Harbor.
