NovaGold Agrees to Purchase Ambler Copper-Zinc-Gold-Silver Project
December 22, 2009 - Vancouver, British Columbia - NovaGold Resources Inc. (NYSE-AMEX: NG, TSX: NG) today announced that it has entered into an agreement to purchase a 100% interest in the Ambler property in northern Alaska, which hosts the high-grade copper-zinc-gold-silver Arctic deposit.
The Ambler property comprises 36,670 hectares (90,614 acres) of Federal patented and unpatented mining claims and State of Alaska mining claims, covering a major portion of the precious-metal-rich Ambler volcanogenic massive sulfide ("VMS") belt. The Arctic deposit is the most advanced deposit on the property, located approximately 290 kilometers (180 miles) southeast of Red Dog mine, the world's largest zinc mine.
A resource estimate completed in 2008 confirmed the Arctic deposit as one of the world's largest undeveloped copper-zinc VMS deposits, with very high grades and significant precious metal credits. On an equivalent metal basis, the average metal content exceeds 8% copper equivalent. The Arctic deposit is one of a number of VMS deposits along the 70-kilometer-long Ambler Schist Belt. The current resource estimate for the deposit is outlined below.
Resource Estimate for Arctic Deposit (1)
In Situ Grade
Total Contained Metal
(1) Mineral resources that are not mineral reserves do not have demonstrated economic viability.
(2) Inferred resources are in addition to measured and indicated resources. Inferred resources have a great amount of uncertainty as to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher category. See "Cautionary Note Regarding Reserve & Resource Estimates".
(3) US$100 gross metal value/tonne cutoff. Gross metal value was calculated based on metal prices of Cu US$2.25/lb, ZnUS$1.05/lb, Au US$525/oz, Ag US$9.5/oz and PbUS$0.55/lb applied to each individual grade. The gross metal value is equal to the sum of each grade multiplied by the value of the metal unit. No metallurgical recovery has been applied. The resource estimate for the Arctic deposit is based on the technical report titled "NI 43-101 Technical Report on Resources, Ambler Project, Arctic Deposit" dated January 31, 2008, a copy of which is available on SEDAR at www.sedar.com and on EDGAR at www.sec.gov. The report was authored by Russ White, PGeo, a qualified person as defined by NI 43-101.
"The Arctic deposit ranks among the largest and richest known VMS deposits in the world, based on both total contained metal and value per tonne. And considerable opportunity exists to identify similar deposits in the region," said Rick Van Nieuwenhuyse, President & CEO of NovaGold. "NovaGold is really going back to its roots by acquiring Ambler. We have a solid record in identifying opportunities, expanding resources and advancing those resources to reserves. NovaGold's exploration team tripled the size of both the Donlin Creek and Galore Creek deposits through focused exploration campaigns. With those projects now at a more advanced stage, we can focus our exploration efforts on Ambler with the goal of adding another world-class property to NovaGold's portfolio."
Under the Purchase Agreement between NovaGold and its wholly-owned subsidiary, Alaska Gold Company (collectively "NovaGold") and Kennecott Exploration Company and Kennecott Arctic Company (collectively "Kennecott"), NovaGold has agreed to pay Kennecott a total purchase price of US$29 million for the Ambler property to be paid as: US$5 million by the issuance of NovaGold shares, calculated by the volume weighted average price per share on the five trading days immediately preceding the effective date of the transaction; and two installments of US$12 million each, due 12 months and 24 months, respectively, after the effective date of the transaction. Kennecott will retain a 1% net smelter return royalty that can be purchased at any time for a one-time payment of US$10 million. The closing of the transaction is subject to normal conditions including obtaining regulatory approvals. The Purchase Agreement terminates the exploration agreement between NovaGold and Kennecott dated March 22, 2004, as amended, under which NovaGold had the ability to earn a 51% interest in the Ambler property. The securities described herein have not been registered under the U.S. Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold in the United States or to U.S. persons unless an exemption from registration is available. This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States.
Developing the Ambler Project
Work at the Ambler property throughout 2008-2009 has focused primarily on community engagement, realizing broad support for the project in the region. NovaGold has participated in the Northwestern Alaska Resource Transportation Study, working closely with the Kobuk River villages, the Northwest Arctic Borough, NANA Corporation and the State of Alaska to discuss and evaluate various transportation alternatives, specifically identifying opportunities for synergies in the region. As at all of its projects, NovaGold is committed to working with local communities and Alaska Native corporations to build a collaborative relationship, ensuring the project is developed in a manner that protects the environment and traditional cultures and brings tangible, lasting benefits to local communities.
NovaGold will continue its community engagement programs in 2010, and has appointed a project team to plan exploration activities, advance environmental baseline studies and conduct engineering and technical studies at the Ambler project with the goal of gaining a better understanding of the true size and potential of the district as well as the continuity and mineability of the other deposits in the Ambler VMS belt.
NovaGold is a growth-focused precious metals company engaged in the exploration and development of mineral properties in North America. The Company has a portfolio of mineral properties located in Alaska, USA, and British Columbia, Canada. The Company's largest projects are being advanced with major mining companies. The Donlin Creek project is held by a limited liability company owned equally by NovaGold and Barrick Gold U.S. Inc. The Galore Creek project is held by a partnership owned equally by NovaGold and Teck Resources Limited. NovaGold owns a 100% interest in the Rock Creek, Big Hurrah and Nome Gold deposits in Nome, Alaska. NovaGold has one of the largest reserve/resource bases of any junior or mid-tier level producing gold company, and trades on the TSX and NYSE-AMEX under the symbol NG. More information is available at www.novagold.net or by e-mail at firstname.lastname@example.org.