NovaGold Starts Gold Production at Rock Creek Mine in Nome, Alaska
NovaGold Resources Inc. announced that it has received regulatory authorizations and has begun production at its Rock Creek gold mine near Nome, Alaska. State regulators have approved the start of production, allowing NovaGold to begin fully processing ore and depositing inert tailings material into the Tailings Storage Facility. As part of the start up process under the regulatory authorization from the State of Alaska, NovaGold must complete a number of environmental and operational tasks over the next 15, 30 and 90 days to ensure compliance with environmental requirements for the mine.
The Nome Operations team has been mining and stockpiling ore as part of the commissioning process, and has close to 450,000 tonnes of ore ready, representing approximately 2 months of full throughput. All components of the processing facility have been individually tested and commissioned. Production has begun on site and NovaGold anticipates ramping up throughput levels during the 4th Quarter of 2008.
Upon achieving full commercial production, the Rock Creek mine is expected to produce approximately 100,000 ounces of gold annually with life-of-mine cash costs estimated at approximately US$500 per ounce. At current metal prices, NovaGold anticipates generating $25 to $35 million in cash flow from Rock Creek on a yearly basis.
“We are very pleased with the start of gold operations in Nome for NovaGold,” said Rick Van Nieuwenhuyse, President & CEO of NovaGold. “Achieving production at Rock Creek is a major step toward our long-term business plan of becoming a premier North American precious metals company. The Rock Creek construction and operations crews have worked closely with State and Federal regulators to assure that the project will meet its environmental guidelines even during challenging weather conditions. We believe that the extra time dedicated to commissioning and testing of the mill should facilitate a smooth Rock Creek mine ramp up to full production. The achievement of gold production and the resulting internally generated cash flow from the company’s first mine is a major accomplishment for the entire NovaGold team.”
The Rock Creek mine is a year-round, truck and shovel, conventional open-pit mining operation, designed to process 7,000 tonnes per day using a simple gravity, flotation and CIL recovery process. The Nome Operations, including the Rock Creek mine, has a proven and probable reserve of 510,000 ounces of gold, with 1.81 million ounces of measured and indicated resource and an additional inferred resource of 330,000 ounces of gold. NovaGold believes there is potential to expand production at the Nome operations and extend the mine life beyond 10 years. Exploration this year has focused on further evaluation of the potential to develop the Saddle, Big Hurrah and Nome Gold targets, where resources have already been identified. Drilling around the pit margin at Rock Creek has shown positive results with new gold mineralization identified from ongoing work.
