Mega-sized projects for NovaGold: construction starts at Galore, exploration continues at Ambler and Donlin.

• Author: Liles, Patricia
• Position: SPECIAL SECTION: MINING ISSUE

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While historically a small company, in its decade of exploring for gold and other valuable metals, NovaGold Resources takes on big projects--mineral resources measured in billions of pounds or millions of ounces.

Total mineral resources for the Vancouver, British Columbia-based exploration company, include 38.5 million ounces of gold, nearly 220 million ounces of silver and almost 15 billion pounds of copper.

Those metals come from the company's Nome area projects being developed, as well as three large-scale exploration projects. Those include the Donlin Creek gold project in Southwest Alaska, the Ambler polymetallic project in Northwestern Alaska and the Galore Creek copper-gold-silver mine being built in northwestern British Columbia, less than 60 miles from Wrangell.

"The first three or four years were tough, but the wind has been at our back the last five years plus," said Rick Van Nieuwenhuyse, NovaGold president and CEO. "Finding ore bodies is a matter of finding the right property and good exploration."

Since founding the company in 1998, Van Nieuwenhuyse's team has done just that--conducted good exploration on the right properties. Other strategies include aggressive exploration that quickly advances properties, working closely with local Alaska Native and First Nations business groups and striking deals--either property acquisition agreements or joint-venture working relationships--with large mining companies.

Showing incredible financial moxy, NovaGold financed the entire capital cost to construct Rock Creek through stock market offerings, while at the same time retaining enough cash to complete permitting work and to start construction on Galore Creek.

"Most junior companies do not have the luxury to do something like that themselves," said Van Nieuwenhuyse. "We raised more than $200 million earlier this year, which is unusual for a junior--they usually don't have the share price to do that."

CONSTRUCTION STARTS AT GALORE CREEK

A mammoth-sized project with a big price tag--about $1.8 billion--Galore Creek is expected to employ more than 1,000 construction workers and about 500 mine and mill employees once the mine is producing during its anticipated 20-year mine life.

"I'm a firm believer in limiting the amount of debt I have, both corporately and personally," said Van Nieuwenhuyse. "On Galore, it's not likely that we'll raise enough equity to be debt-free on that project like Rock Creek, but it's a good corporate goal."

According to a geological estimate released in March, Galore Creek is believed to contain a total of 14.3 billion pounds of copper, 13.1 million ounces of gold and 219.6 million ounces of silver.

Construction began in early June on the first phase of development at Galore Creek, which includes road access and infrastructure costs. Spending should total $262 million in 2007, according to the company's first-quarter report released in April.

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