By Sarah Hurst
Mining News Editor 

Rock Creek project almost ready to roll

NovaGold prepares to submit permit applications for first mine, on road system outside Nome on Alaska's Seward Peninsula


Last updated 10/30/2005 at Noon

Rock Creek will be one of Alaska's most straightforward mining projects, if all goes according to plan for Vancouver-based Novagold Resources. The company is developing what will be its first producing mine eight miles outside Nome, and the local power utility will provide the required five to seven megawatts. The open pit mine is expected to produce 100,000 ounces of gold annually and capital costs are estimated at $55 million to $60 million.

"Infrastructure is excellent, certainly by Alaska standards, the road goes right from the town out to the project, in fact the State of Alaska straightened the road out for us at their own cost," NovaGold president and CEO Rick Van Nieuwenhuyse said at the Denver Gold Forum Sept. 26. "The road used to go over the hilltop and they made a nice straight road, three-mile Glacier Creek bypass road, at their own expense, that was part of the Roads to Resources program. It's a further indication that Alaska is a very good place to develop mines."

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The road was funded through the Federal-Aid Highway program and cost $3 million to build, over the 2004 and 2005 seasons. In addition to improving access to the Rock Creek project, it also removes traffic from the Nome watershed. Nome is a historic and current placer mining district, but the Seward Peninsula hasn't seen a hard rock mine since World War I. "As we've seen in other alluvial districts, once you get the first mine going, other things seem to keep popping up," Van Nieuwenhuyse said.

Company hopes for permits in early '06

NovaGold is about to submit all its permit applications and hopes to receive the permits in the first quarter of 2006. Construction of the mine is expected to take about nine months. "We are now loading up a barge, it's in Seattle, it'll be on its way to VancouverÂ… we've got the trucks, the loaders, the steel, the cement, all the things you need to start construction," Van Nieuwenhuyse said. "It's a free-milling ore, a combination of gravity and flotation will recover about 96 percent of the gold," he added.

"We don't foresee any huge problems with acid mine drainage from this project," said Ed Fogels, large mine projects permitting manager at the state's Department of Natural Resources. "It's a much smaller operation than some of the others, a fraction of the size of Donlin Creek or Fort Knox. The company has done a lot of public outreach in Nome and there hasn't been a huge outcry. We're feeling pretty comfortable that the community is aware of the project."

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Company working with local corporations

NovaGold has been working closely with Sitnasuak Native Corp., which owns the surface at the Rock Creek property, and Bering Straits Native Corp., which owns the subsurface. For example, as part of the reclamation plan, NovaGold is discussing with Sitnasuak whether land should be used for recreational cabins or reindeer grazing. When the mine closes, the tailings impoundment area will be sealed with a layer of silt and overburden, the pit will become a lake and the whole area will be recontoured and revegetated.

"We've enjoyed our experience, we think the mine will benefit the company and Native corporations," Doug Nicholson, vice president and general manager of NovaGold Alaska told Mining News. "Nome is a mining community; it's got a very rich history in mining." Shareholders of the local Native corporations will be hired whenever possible, he added, suggesting that some might become geology technicians or environmental technicians. One of the few out-of-state hires for the project, Nicholson hopes, is Warren Woods, who came on board recently as Rock Creek mine manager after three years in Nevada. However, prior to that he spent eight years at Fort Knox mine near Fairbanks.

Rock Creek will employ approximately 135 skilled workers to operate the mine and mill operations. As part of the final mine plan, additional material from a satellite deposit called Big Hurrah will also be processed at the Rock Creek facility. Based on historic and NovaGold drilling, the company is targeting the potential to define an initial mineralized zone at Big Hurrah that could contain 150,000 to 200,000 ounces of gold grading five to seven grams per tonne of gold beginning at surface.

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