However, a news service report in mid- January indicated that overall project costs for Donlin Creek could increase significantly. According to Reuters, NovaGold’s 2006 estimate had Donlin costing C$2.1 billion, but project partner Barrick Gold said last year it could cost C$4 billion. Barrick’s plan calls for the use of on-site diesel and wind co-generation, while NovaGold prefers building a lower-cost power line. Speaking at a conference in Toronto, NovaGold Vice President Greg Johnson said the company will soon release an updated cost and resource estimate which will take into account cost inflation and higher resource prices. “We feel that the power line approach could be somewhere around C$3 billion,” he said.

NovaGold owns a 50% interest in the Donlin Creek deposit along with with Barrick, which managed the 2006 and 2007 drill program and sampling protocol. Located in southwestern Alaska, Donlin Creek is one of the world's largest undeveloped gold deposits. As currently envisioned, the mine would be developed as a high-tonnage open-pit operation that would produce over 1 million oz/y of gold.

With the results of 100% of 2006 and more than 90% of 2007 drill programs now reviewed, the company reported that drill holes average 67 m of mineralization grading 3.61 g/t gold; that continuity of inpit inferred resources is confirmed, with the expectation that a majority will convert to the measured and indicated categories; and that the deposit remains open to expansion laterally and at depth.

Drilling in 2006 and 2007 focused primarily on infill drilling to enable completion of a feasibility level study and initiation of the permitting process. Additional drilling was focused on geotechnical and metallurgical studies, engineering design work and facilities location.

NovaGold said work in the first half of 2008 will focus on completing a series of optimizing studies for power, logistics, processing and production levels, and will integrate all data from the 2007 drilling program into a final feasibility study. Once the final feasibility study is completed, it is anticipated that the permitting process will be initiated in cooperation with Native Alaskan Corporations, local communities and Alaska State and U.S. Federal regulators. Further exploration on the project will in part focus on resource expansion and fully testing newly identified targets adjacent to the main Acma and Lewis deposits. The 2006 and 2007 drill results will form the basis for an updated resource estimate on the project in 2008.