NovaGold starts gold production at Rock Creek in Alaska

September 19, 2008 - 16:26

THE CANADIAN PRESS

VANCOUVER - NovaGold Resources Inc. (TSX:NG) has begun production at its Rock Creek gold mine near Nome, Alaska after receiving state regulatory approval.

The Vancouver-based company said the nod allows it to begin fully processing ore and depositing inert tailings material into the tailings storage facility.

As part of the start up process, NovaGold must complete a number of environmental and operational tasks over the next 15, 30 and 90 days to ensure compliance with environmental requirements for the mine.

The company said about 450,000 tonnes of ore has been stockpiled already, representing approximately two months of full throughput.

It anticipates a ramp up of throughput levels during the fourth quarter.

The Rock Creek mine is expected to produce about 100,000 ounces of gold annually with life-of-mine cash costs estimated at approximately US$500 per ounce, the company said Friday.

At current metal prices, NovaGold anticipates generating $25 to $35 million in cash flow from Rock Creek on a yearly basis.

"Achieving production at Rock Creek is a major step toward our long-term business plan of becoming a premier North American precious metals company," stated said Rick Van Nieuwenhuyse, NovaGold's president and CEO.

The Rock Creek mine is the first modern, open-pit "hardrock" mine on the Seward Peninsula.

NovaGold shares were trading up 11 cents to $6.79 on the Toronto Stock Exchange Friday.