Overview - Keywords
new project
The Galore Creek mine, located in Northwestern British Columbia, Canada, will be a large tonnage open pit operation with an estimated 540 million tonnes of ore and 840 million tonnes of waste rock. Mining will be carried out via traditional blasting, truck and shovel methods. The process plant will be a conventional milling/flotation concentrator with a pipeline transferring concentrate to a remote filter plant and concentrate truck loading facility near Highway 37, the main overland route through the region. The capital cost of the project is estimated at C$2.23 billion and taking into consideration current commodity prices and Canadian/American dollar exchange rates, the payback period is likely to be less than 4 years.

The construction of the project will involve two phases. The first phase will be to establish access to the Galore valley and the second phase will be to construct the mine and facilities. Phase 1 will involve road, bridge and tunnel construction using helicopter-supported construction activities. The second phase will be constructed using the mine fleet of equipment.

Ownership Summary
Name: Novagold Resources
Interest: 50%
Note: public
Name: Teck Cominco
Interest: 50%
Note: public
Reference: 31 Dec 2006
The project is expected to create approximately 900 to 1,000 jobs during the construction phase and require approximately 500 direct employees during the operations phase. Additional contract employees will be required for many ongoing and intermittent tasks, including camp operation, concentrate hauling, tailings dam expansion and mill relining. Construction is expected to take four years and operations are currently planned for an additional 22 years at a nominal production rate of 65,000 tpd.

...payback period is likely to be less than 4 years.The mine is expected to produce an average of approximately 450,000 tonnes of copper/precious metals concentrate per year. The concentrate will be hauled by truck along Highway 37 to the deep-sea port at Stewart for transfer to ocean-going freighters. The destination for this concentrate will most likely be smelters in Asia.
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Location - The 87,000 hectare (215,000 acre) property is located within the historic Stikine Gold Belt of northwestern British Columbia, 1,030 kilometres northwest of Vancouver, British Columbia and 90 kilometres northeast of Wrangell, Alaska at latitude 57.13N; longitude 131.47W.

The mine is approximately 70 kilometers (43 miles) west of Highway 37 and 150 kilometers (93 miles) northeast of Stewart, British Columbia, where a year-round concentrate shipping port will be available to the project. Access to the site is currently restricted to helicopters. Smithers, British Columbia is the nearest major supply centre located 370 kilometers southeast with a population of approximately 5,500. Location Summary
Nearest Landmark: WRANGELL
Distance from Landmark: 100km
Direction from Landmark: NE
Latitude: 57 deg 9 min N
Longitude: 131 deg 28 min W
Satellite Image: <click to view>

Galore Creek is located in the humid continental climate zone of coastal British Columbia and is characterized by cool summers and cold humid winters, with several months of snow cover. Summer temperatures may be above +20C and minimum winter temperatures may fall to well below -20C. Average annual precipitation is 76 cm with approximately 70% of this falling between September and February, mainly as snowfall. Elevations around the property range from 500 to 2,080 metres above sea level. The terrain over the central and northern portions of the property is gentle and rolling and the surrounding topography is characterized by rugged mountains.
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Property - The Galore Creek property is characterized as a large copper-gold porphyry system consisting of a number of mineralized zones including the Central Replacement Zone, the Southwest Zone, the Junction Zone, Middle Creek, North and South Gold Lenses, Bountiful, Copper Canyon, and the West Fork Zone.

Reserves Summary
Name: Galore Creek
Commodity: copper Class: Proven + Probable
Tonnage: 540.7 Mtonnes
Grade: 0.56 %
Note: The reserves also grade 0.30 g/t gold and 5.32 g/t silver.
Reference: 31 Dec 2006
The Central Zone is the largest and most extensively explored of all the deposits and is characterized by fairly complex geology. Mineralization is exposed in the southern part of the zone, but elsewhere it is covered by up to 75 m of glacial overburden. Between 80% and 90% of the gold-silver-copper occurs as sulphide replacement of the host volcanic rocks. The grade of the mineralization commonly exceeds 1% Cu, decreasing rapidly at the margin of the zone. In addition to the Central Zone, there are three others that have been explored to date and are of interest mineralogically, the Southwest Zone, Junction Zones and West Fork Zone.

The property has been tested with 758 diamond drill holes totaling about 187,267 metres; the assay database for the property contains about 60,000 assay records. A large amount of data has been collected from the property since the early 1960s. In addition to diamond drilling, this data includes soil, stream sediment, rock geochemistry programs, helicopter airborne magnetic and radiometric surveys, ground based IP/resistivity surveys, and seismic refraction surveys.

Deposit Summary
Deposit Type: massive sulphide
Primary Commodity: copper
The Galore Creek deposit contains about 749 million tonnes of Measured and Indicated Mineral Resources at a 0.25% copper equivalent cut-off grade with a grading of 0.52% copper, 0.30 g/t gold, and 4.9 g/t silver.
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Operation - Mining of the open pits will employ conventional truck and shovel methods over a twenty year period. Results from a fleet selection study showed that the lowest cost/tonne fleet of cable shovels and haul trucks is the P&H4100XPB matched with CAT 797B haulers. Mining will be performed top-down, in bench-like steps, within multiple pits simultaneously. A Terex O&K RH400 hydraulic shovel is required for operation in satellite pits along with CAT 797 haul trucks. The slopes of the pit sides have been designed specifically for stability under local geological and groundwater conditions.

The ore deposits are near the surface, so little pre-stripping will be necessary. Both electric (P&H 120A) and diesel (P&H 250XP and Sandvik D245S) blast hole drills will be used to extract ore and load the fleet of 23 345 tonne capacity CAT 797's. Mining operations are scheduled to allow an even flow of materials to the mill.

Overburden and topsoil stockpiled during mining operations will be used later for reclamation purposes. Waste rock will be hauled to several dump areas. Waste rock that has been determined to be not potentially-acid-generating will be used to construct a tailings dam and other water management structures, while acid-generating waste will be hauled to a designated engineered dump for long term management under water. Mine Production Summary
Mine - Galore Creek
Capacity: 65,000 tonnes/day
Rate: NA
Note: Hoisting capacity.
Reference: 31 Dec 2006

The Galore Creek mine is expected to generate a total of 1,016 million tonnes of waste rock. This waste rock will be hauled by the mine fleet to a designated dump in the middle of the Galore Creek valley. To prevent tailings from mixing with the waste rock dump, a waste dump divider will be constructed 2.6 kilometres upstream of the tailings dam, and will be built up throughout the life of the mine so that its crest remains above the top of the tailings.

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Process - A conventional crushing, grinding and flotation process plant is proposed for the project, utilizing standard unit processes and equipment. The plant will ess a blend of open pit ore from the Central Zone, Southwest Zone, Junction and West Fork. Approximately 80% of the ore will be from the Central Zone. The same process can be used for all ore types.

Ore will be hauled from the open pit mining operation to the primary crushing facilities and dumped directly into the dump pocket with a capacity of two haul trucks or 700 t. There will be two dumping locations directly opposite one another and barricades will be installed to ensure safety for the haul truck drivers when approaching the precipice on which the dump pocket lies. A rock breaker will be installed over the dump pocket to break large pieces and avoid plugging. An atomizing spray fog system utilizing compressed air and fresh water will be activated during truck dump to control dust emissions.

A R.O.M stockpile, which is located just north of the primary crusher, will have a nine day storage capacity and can be transferred via front end loader to the primary crusher dump pocket at a reduced rate. This stockpile will only be used during periods in which there are no haul trucks reporting from the mine such as during times of limited visibility. Processing Summary
Facility - Galore Creek
Capacity: 71,000 tonnes/day
Rate: NA
Commodity: gold
Quantity: NA
Cost: 0.38 US$/lb
Note: In terms of gold the cash cost would be US$600/oz.
Reference: 31 Dec 2006

The 71,500 dry tpd concentrator will be located adjacent to Central pit and will be built solely on cut. Ore will be dumped into the primary crusher located 500 m north of the concentrator. The crushed ore will then be conveyed to a coarse stockpile where it will subsequently be fed to the grinding circuit which consists of one SAG mill, two ball mills and two pebble crushers. Once the ore has been ground to 200 microns, it will be fed to the rougher flotation cells via the overflow of a cyclopac. All of the rougher concentrate will be further reduced in size to 40 microns using three vertimills and then pumped to three cleaner flotation stages while the rougher tails will report to the tailings thickener. The third cleaner concentrate will be thickened, stored and then pumped via a 135 km pipeline to the Bob Quinn site where it will be dewatered. Copper concentrate at a nominal tonnage of 1,722 tpd and 28% copper grade and 8% moisture will be the final product. The plant will operate 24 hours per day, 365 days per year with scheduled downtime for equipment maintenance.
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Environment and Community - Galore Creek receives support from the local community and First Nations groups, and the British Columbia and Alaska Governments.

The Galore Creek project is located within the traditional territory of the Tahltan First Nation and in February 2006 NovaGold entered into a comprehensive Participation Agreement with the Tahltan First Nation for their support and participation in the development of the project. This agreement ensures collaboration between both parties for mine planning, mine operation and environmental protection.

The Participation Agreement also guarantees financial contributions by NovaGold to the Tahltan Heritage Trust Fund, which will be used to mitigate any adverse social and cultural impacts resulting from the projects development. The partnership between NovaGold and Teck Cominco does not affect the Participation Agreement