Costs rise at NovaGold’s Alaskan project

NovaGold, the Vancouver-based gold miner, has reported that during the second quarter of 2007 its internal project and construction management team conducted a complete review of its Rock Creek project in Alaska.

The assessment identified increased project costs and the company now anticipates spending an additional $40 million at Rock Creek during the remainder of 2007.

The increase is attributable to a number of factors, such as permit delays that have meant major construction work will now be undertaken in mid-winter.

There have also been unexpected costs involved in the repair and replacement of supplied equipment, and the requirement for additional labour to maintain the project’s completion schedule.

Taking these matters into account, the total capital cost of the Rock Creek mine, including start-up and working capital, is now estimated to be $120 million.

NovaGold has also begun construction at the Galore Creek copper-gold deposit in northwestern British Columbia.

The project is expected to produce roughly 432 million pounds of copper, 341,000 ounces of gold and 4 million ounces silver annually during its first five years of operations.

Finally, NovaGold will be proceeding with its Galore Creek activities during 2007 and these will be funded, in part, from available cash and the sale of temporary investments. Teck Cominco will be funding the next US$478 million in construction costs.