Galore Creek Receives Environmental Certificate

NovaGold reported in late February that its Galore Creek copper-gold-silver project in northwestern British Columbia had received its Environmental Assessment Certificate (EAC) from the provincial government. Receipt of the certificate cleared the way for issuance of the various permits and authorizations required to construct and operate the mine. NovaGold anticipates that these permits and authorizations will be issued during the second quarter of 2007 and that project construction can begin by mid-year. Start of production is currently scheduled for early 2011.

In this photo taken in mid-February 2007, construction crews were almost ready to pour
concrete for the ball mill piers at Novagold’s Rock Creek project.

Galore Creek is located 150 km northeast of Stewart, British Columbia, where a year-round port is available for shipping the project’s concentrates. Average annual production during the mine’s first five years of operation is forecast at more than 432 million lb of copper, 341,000 oz of gold, and 4 million oz of silver in concentrates at total cash costs of $0.38/lb of copper net of precious metals credits. Overall life-ofmine production is projected to average 23.7 million mt/y of ore for 22 years, yielding an estimated average annual production of 262 million lb of copper, 165,000 oz of gold, and 2.7 million oz of silver in concentrates at total cash costs of $0.62/lb of copper net of precious metals credits.

The final feasibility study for Galore Creek, completed by Hatch Ltd. in October 2006, estimates the project’s proven and probable reserves at 6.6 billion lb of copper, 5.3 million oz of gold, and 92.6 million oz of silver. Capital cost to develop the project is estimated at $1.74 billion, not including debt service and expenses related to financing.

The EAC for Galore Creek contains a series of commitments that NovaGold will implement throughout the various phases of the project. These include ongoing assessment of water treatment options; maintaining aquatic, fisheries, and wildlife monitoring programs; continuing the collection and analysis of water, sediment, and biota; developing a long-term maintenance and mitigation strategy for the tailings impoundment dam and spillway; and developing a wildlife mitigation and monitoring plan to identify measures to further reduce effects on wildlife.

In February 2006, NovaGold entered into a comprehensive agreement with the Tahltan First Nation concerning development of the Galore Creek project. The agreement supports the Tahltan Nation’s principles of environmental stewardship, economic sustainability, and self-determination and ensures collaboration throughout the environmental review and permitting process.

Rock Creek Update: On March 1, 2007, NovaGold reported that the U.S. Army Corps of Engineers would reinstate the wetlands permit for NovaGold’s Rock Creek project near Nome, Alaska. The permit was suspended in December 2006 pending review, following a lawsuit against the Corps challenging the Corps’ issuance of the Clean Water Act wetlands permit for Rock Creek. The lawsuit alleged that the Corps issued the permit in violation of governing legislation.

The Corps completed an extensive review of the permitting process and concluded that the permit was consistent with applicable laws and regulations. Accordingly, the Corps filed notice of its intention to reinstate a modified permit on March 13. The modified permit includes additional stipulations that cover reporting and mitigation.

Construction at Rock Creek continued throughout the winter in upland areas and areas previously disturbed. Work at the plant site proceeded on schedule. However, NovaGold anticipates that the wetlands permit may be challenged again and that construction may be impeded if the court enters an order in the litigation temporarily or permanently enjoining the project. Should the permit be challenged, NovaGold will again support the Army Corps of Engineers and ask to intervene in the lawsuit.

The Rock Creek project is located seven miles from Nome on 14,000 acres of patented private land owned 100% by NovaGold and 20,000 acres of land owned by the Bering Straits and Sitnasuak Native Corporations. The mine is being developed as a 7,000-mt/d conventional open-pit, year-round operation, producing 100,000 oz/y of gold at estimated total cash costs of $260 to $285.