*** Gold/Copper related post (NovaGold) ***
NovaGold Follows Established Process to Obtain Surface Lease for Galore Creek Project
Tuesday September 5, 7:58 am ET
Surface Lease at Barrick's Eskay Creek Mine Supports NovaGold's Position
VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Sep 5, 2006 -- NovaGold Resources Inc. (TSX:NG.TO - News)(AMEX:NG - News) today reiterated the validity of the process it is following to obtain surface rights in British Columbia, countering statements by Barrick Gold Corporation (TSX:ABX.TO - News)(NYSE:ABX - News) concerning NovaGold's ability to develop its Galore Creek project in a timely manner.
In Barrick Gold Corporation's ("Barrick") Circular dated August 4, 2006 related to its hostile take-over bid for NovaGold, Barrick asserted that NovaGold's plan for developing Galore Creek would be impeded by Pioneer Metals Corporation ("Pioneer"), which holds the subsurface mineral rights at the Grace property adjacent to Galore Creek. On June 21, 2006, NovaGold filed an application with the British Columbia government to obtain a surface lease over the Grace property. NovaGold intends to build a tailings and waste rock storage facility over a portion of the Grace property to facilitate operations at Galore Creek. While the Barrick Circular states "it is highly unlikely that such permits and surface rights could be obtained by NovaGold if the granting of the permits and surface rights was opposed by Pioneer", the facts and historical precedent do not support Barrick's contention.
"Based in part on Barrick's own experience at their Eskay Creek mine in northwestern British Columbia, we believe that Barrick's interpretation of surface lease claims is inaccurate," said Rick Van Nieuwenhuyse, President and CEO of NovaGold. "In 1994, surface rights were granted at Eskay Creek for waste rock and tailings facilities under nearly identical circumstances. Based on the same legislation and process used at Eskay Creek, we expect to obtain surface rights for facilities at our Galore Creek project."
Background
Pioneer holds subsurface mineral rights on the Grace property subject to an option granted to NovaGold. The British Columbia government owns the surface, and has the sole and exclusive right to grant surface rights to third parties.
Barrick's Eskay Creek mine, located near the Galore Creek project, is an example of a mine owner successfully obtaining a surface lease for a tailings site over the objection of the holder of the subsurface mineral rights. The summary below outlines the process through which a surface lease for waste rock disposal was granted at the Eskay Creek mine, and the parallel procedures being used by NovaGold for the Galore Creek project.
------------------------------------------------------------------------
Barrick's Eskay Creek mine NovaGold's Galore Creek project
------------------------------------------------------------------------
- Prime Resources Group Inc. - NovaGold requires an area to
("Prime") required an area to dispose of waste rock and
dispose of waste rock and tailings.
tailings.(1)
------------------------------------------------------------------------
- The area chosen had an existing - The area chosen has an existing
subsurface mining lease held by subsurface mineral claim held by
Tagish Resources ("Tagish"). Pioneer, which is under option by
NovaGold.
------------------------------------------------------------------------
- Prime applied for a license of - On June 21, 2006, NovaGold applied
occupation in August 1993. for a surface lease through the
British Columbia concurrent
permitting process, which allows
the appropriate government
agencies to process the
application prior to issuing the
Environmental Assessment
certificate.
------------------------------------------------------------------------
- Tagish objected to the - On June 29, 2006, Pioneer formally
disposition of the surface requested that the British
rights by the government on Columbia government revoke
September 23, 1993, stating that NovaGold's permit to work on the
this disposition could "impede Grace claims.
the proper and orderly - On July 13, 2006, the British
exploration and development by Columbia Ministry of Energy and
Tagish" on its mining claims. Mines wrote a response to Pioneer
stating that NovaGold's permits
for the 2006 work program would
remain in good standing.
------------------------------------------------------------------------
- On December 22, 1993, the - As part of British Columbia's
Ministry of Energy, Land and Mines Act permitting requirements,
Parks offered Prime a license of the land under any structures or
occupation for condemnation waste dumps must be "sterilized"
drilling and geotechnical through condemnation drilling
evaluation purposes, stating before a permit will be granted,
that an offer of a surface lease to prove that surface development
would be dependent on the will not preclude the ability to
drilling results. extract economic mineralization
- The Ministry established clear from the area.
guidelines for the drill program,
requiring "at least 4
condemnation diamond drill holes
... at least 100 metres in length
to firmly test the area for
potential mineralization at or
near the surface." In a separate
letter, the Ministry stated that
the "purpose of the drilling is
to confirm what, if any,
potential mineralization
development could conceivably be
sterilized by the proposal for
waste rock disposal ..."
------------------------------------------------------------------------
- Prime drilled five holes on the - To comply with the sterilization
claim in 1994 and discovered no procedures, NovaGold conducted a
economic mineralization. condemnation drill program in
2006, drilling a total of six
holes totaling 1,785 meters (5,855
feet) in the area proposed for the
tailings dam. The condemnation
program showed no economic
mineralization in the area.(2)
------------------------------------------------------------------------
- A surface lease was granted to - There have been no significant
Prime by the British Columbia changes to the British Columbia
Government on December 24, 1994 legislation since Prime acquired
for waste rock disposal at the its surface lease in 1994.
Eskay Creek mine. - NovaGold submitted all surface
lease applications, including the
condemnation drilling information,
to the British Columbia government
on June 21, 2006, and expects to
have a surface lease granted
within 60 days of the issuance of
the Environmental Assessment
Certificate.
------------------------------------------------------------------------
Notes:
(1) Prime Resources Group Inc., the original developer of the Eskay
Creek Mine, was acquired by Homestake Canada Inc. in 1999, which was
subsequently acquired by Barrick in 2001.
(2) Previously, NovaGold completed two years of exploration drilling on
the Grace claims with cooperation and input from Pioneer's
exploration staff, including Pioneer's VP Exploration. The 16
exploration and 19 geotechnical drillholes, totaling over 3,925
meters (12,885 feet), showed no significant mineralization below the
area proposed to be used for tailings storage.
"In our view, it is clear that the Government of British Columbia has a process whereby it grants surface rights over subsurface mining claims to third parties. Barrick's own corporate history demonstrates that process, and shows that the holder of underlying mineral rights is in no position to block the granting of a surface lease for the development of a large mining project that will have significant benefits for the people and province of British Columbia. As part of the concurrent permitting process, NovaGold has applied to the British Columbia government for a surface lease. In light of the thorough exploration and condemnation drilling carried out on the area underlying the proposed tailings and waste rock facility, we believe there is no impediment to our plan for development of the Galore Creek project," added Van Nieuwenhuyse.
About the Galore Creek Project
NovaGold initiated the British Columbia environmental assessment process in February 2004, and has worked closely with regulators to complete the baseline studies and detailed project description required to define the terms of reference for the environmental assessment application. NovaGold submitted the environmental assessment application on June 26, 2006, thereby initiating the 180-day environmental assessment review for the Galore Creek project. The Company has held public consultation meetings and generally received broad community support. Public review and comment opened July 10th and will close on September 8, 2006. Provincial regulators have indicated that NovaGold should expect to receive the Environmental Assessment Certificate in the first quarter of 2007, with construction able to begin in the second quarter of 2007.
In February 2006, NovaGold entered into a comprehensive agreement with the Tahltan First Nations to support development of the Galore Creek project. The agreement demonstrates that large new mining projects such as Galore Creek can be developed with the active support of local First Nations communities if there is a long-term commitment to establish a cooperative and mutually beneficial working relationship.
Located in northwestern British Columbia, Galore Creek is one of the largest undeveloped copper-gold projects worldwide. As envisioned, the Galore Creek deposit would be developed by conventional open-pit mining methods at a 65,000 tonnes-per-day processing rate over a minimum 20-year mine life.
NovaGold is earning a 100% interest in the Galore Creek project from subsidiaries of Rio Tinto and Hudbay Minerals. NovaGold has an option agreement with Copper Canyon Resources Ltd. on the adjoining Copper Canyon property, under which the Company is earning up to an 80% interest. NovaGold also has an option on the adjoining Grace property with Pioneer Metals Corporation, under which the Company is earning a 60% interest. The option agreement on the Grace property is the subject of litigation between NovaGold and Pioneer.
About NovaGold
NovaGold Resources Inc. owns 70% of the Donlin Creek gold project in Alaska, one of the world's largest gold deposits. The Company is rapidly advancing toward production at its 100%-owned Galore Creek copper-gold project in northwestern British Columbia, and expects to achieve production in mid-2007 at its 100%-owned Nome Operations in Alaska, which include Rock Creek, Big Hurrah and Nome Gold. Also in Alaska, NovaGold is earning a 51% interest as manager of the high-grade Ambler copper-zinc-silver-gold project in partnership with Rio Tinto. NovaGold is well financed with no long-term debt, and has one of the largest resource bases of any exploration or development-stage precious metals company. NovaGold trades on the TSX and AMEX under the symbol NG. More information is available online at: www.novagold.net or by e-mail at: info@novagold.net.
About Barrick's Unsolicited Take-Over Bid for NovaGold
On August 14, 2006 NovaGold filed its Directors' Circular and its recommendation statement in which the NovaGold Board of Directors recommended that shareholders reject the August 4, 2006 hostile offer from Barrick Gold Corporation (TSX:ABX.TO - News)(NYSE:ABX - News). The Circular describes the reasons for the Board's recommendation that shareholders reject the Barrick Offer. Investors and shareholders are strongly advised to read the Directors' Circular and recommendation statement, as well as any amendments and supplements to those documents, because they contain important information. Investors and shareholders may obtain a copy of the Directors' Circular at www.sedar.com or the recommendation statement from the United States Securities and Exchange Commission at www.sec.gov. Free copies of these documents can also be obtained by directing a request to NovaGold at Suite 2300, 200 Granville Street, Vancouver, British Columbia, Canada V6C 1S4, telephone (604) 669-6227, Attn: Corporate Secretary. More information is available online at: www.novagold.net or by e-mail at: info@novagold.net.
Contact:
Contacts:
NovaGold Resources Inc. - Investors
Greg Johnson, Vice President,
Corporate Communications and Strategic Development
(604) 669-6227 or Toll Free: 1-866-669-6227
NovaGold Resources Inc. - Investors
Don MacDonald, CA
Senior Vice President & CFO
(604) 669-6227 or Toll Free: 1-866-669-6227
info@novagold.net
http://www.novagold.net
Innisfree M&A Incorporated - Investors
Mike Brinn
(212) 750-5833
Lute and Company - Media
John Lute
(416) 929-5883
Joele Frank, Wilkinson Brimmer Katcher - Media
Matt Sherman / Jamie Moser
(212) 355-4449
http://biz.yahoo.com/iw/060905/0159744.html
