Novagold has sold its 50 per-cent interest in the Galore Creek project to leading gold and copper producer Newmont Mining Corporation.
Galore Creek is about 150 kilometers northwest of Stewart.
The deal for one of the world’s largest undeveloped copper-gold-silver deposits closed July 27 for $275 million. Galore’s joint-venture partner Teck Recources waived its right of first refusal to acquire Novagold’s interest.
Newmont paid $100 million up front with the remainder due at specified stages of development. The final $75 million is payable upon approval of project construction.
“Galore Creek holds the potential to support decades of profitable copper and gold production in a favorable mining jurisdiction, in line with our strategy to create long-term value for our stakeholders,” Gary Goldberg, Newmont president and CEO said in a press release. “Partnering with Teck allows us to bring both organizations’ considerable technical, financial and sustainability strengths to bear in evaluating and refining development plans for Galore Creek, and to build on the strong relationships Teck has established with the Tahltan First Nation and British Columbia.”
Newmont and Teck will define the scope, budget, and timeline for pre-feasibility studies over the next several months and expect the pre-feasibility studies to be completed over three to four years with an annual budget of $10 to $15 million.
Nova gold will use the revenues of the sale to advance its flagship Donlin Gold project in Alaska.
For more than a decade Novagold has been a major presence in northwest mine development. The Galore Creek project itself was regarded as a key part of the revival of a flagging northwestern economy until work halted in late 2007 when capital cost projections doubled the $2.5-billion price tag.
Galore Creek has also been regarded as a foundation project for the Northwest Transmission Line.
As part of the transaction, Newmont will also acquire the Novagold’s 40 per cent interest in the adjacent Copper Canyon mineral property.