NOVAGOLD IS confident a redone mine plan of the copper and gold rich Galore Creek property north of here will result in a decision to proceed with development.
“That’s certainly our hope,” said company official Rhylin Bailie last week of the release of a pre-feasibility report by the end of June which will set out costs and revenues.
The property, billed as a world-class copper deposit under a partnership of NovaGold and Teck Cominco, was under full swing construction in 2007 until capital costs threatened to rise to an estimated $5 billion, causing the companies to stop work until a new plan could be redone.
The start of construction in mid-2007 set off an economic upswing in the region that was replaced with a corresponding dip in the region’s economic fortunes when work ended the end of November of that year.
The halt also caused the provincial government to stop preparation work on the Northwest Transmission Line because Galore Creek was to be the line’s first customer.
But work continued on a road leading into the property from Bob Quinn on Hwy37 North while the mine plan was redone.
Gone from the new plan is a combined tailings and water storage facility that was to be used closer to the ore body within the Galore Creek Valley, which was one of the largest factors in the ballooning construction cost.
It has been replaced by a more conventional tailings pond outside of the valley and closer to the access road leading in from Bob Quinn.
The proximity of the pond as well as a new location for the ore-processing facility, also closer to the road, have changed the project’s economics, said Bailie.
“With the new location for the process facility, we now have more room to expand it so the throughput [of ore] can increase from 60,000 to 90,000 tonnes a day,” she said.
The revamped project will still require a tunnel into the Galore Creek Valley but the shifting of facilities means the access road length can be chopped by 30 kilometres resulting in more cost savings.
A shortened construction timeline that will result from changes will also mean a reduction in helicopter time and that will also help trim expenses, said Bailie.
The project still has its environmental certification dating back to 2007 but does anticipate some permitting changes because of changes to the mine plan.
“We won’t know for sure the extent of what might be needed until the pre-feasibility study is complete,” said Bailie.
The pre-feasibility study could move the project into a more comprehensive feasibility study and jump start permitting.
NovaGold is credited with developing the project to the advanced development stage and it then took on Teck Cominco to help with financing.
Teck Cominco has spent, as of the end of February, $364.4 million toward a 50 per cent stake in the project and has another $8.9 million to go toward the goal.
The partnership has also been earning income, however, by selling road building and other equipment and supplies that was purchased from subcontractors after mine work stopped at the end of Nov. 2007.
Some of that equipment was mothballed for several years because it was located on sections of access road built thanks to using helicopters to fly in the equipment in the first place.
It couldn’t be moved out until those sections of road were joined together.