VANCOUVER – NovaGold Resources Inc. (TSX:NG) says results of a new feasibility study indicate its Donlin Gold joint venture, would be among the world’s most significant low-operating cost and long-lived gold mines.
The company says the mining property, owned along with Barrick Gold Corp. (TSX:ABX), would average 1.5 million ounces of gold per year in its first five years of operation at an average cost of $ 409 per ounce.
Over the Alaskan mine’s projected 27-year life, it is expected to produce 1.1 million ounces of gold per year at an average cost of $ 585 per ounce.
Capital costs would be about $ 6.7 billion, according to the study compiled by AMEC Americas Ltd.
That’s about $ 300 million less than originally estimated.
The study suggests the companies should use natural gas for power generation, which would be delivered to the site through a 500-kilometre pipeline.
NovaGold plans to move forward with permitting as the next step in the mine’s development, once it obtains approval from its board of directors.
“Donlin Gold has all of the necessary components to be developed into one of the largest, most efficient, environmentally sound and valuable gold producers in the world,” said Rick Van Nieuwenhuyse, president and CEO of NovaGold, in a release.
Shares in NovaGold rose 2.2 per cent or 24 cents to $ 11.16 and Barrick shares were up 13 cents to $ 52.01 in morning trading on the Toronto Stock Exchange.
Local news from metronews.ca/vancouver
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