Written by GORDON HOEKSTRA
Citizen staff
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Sunday, 19 October 2008 |
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NovaGold said it expects to provide an update on the massive Galore Creek mine in northern B.C. by the end of this year.
That's when the company -- which is a joint partner in the project with Teck Cominco -- anticipates the completion of a study meant to find an alternative way to build the project. The mine, which has received the green light from the provincial and federal governments, was put on hold in November 2007 after an engineering review showed costs had escalated to an estimated $5 billion from $2.2 billion.
"Detailed engineering work has looked at modified project layouts that could potentially expand overall project throughput and it focused on the potential to reduce the construction schedule and reduce risks associated with construction execution and operations," said NovaGold in releasing its $16.7-million third-quarter profit.
"The selection of a new preferred design plan would be the basis for an updated feasibility study and would allow for the initiation of the permitting process for the project," said the company.
The Galore Creek mine has been touted as having benefits -- including direct jobs and supply and servicing work -- throughout northern B.C., including Prince George.
There were 800 people in seven camps working on the project when it was halted.
The project, which had been expected to be complete in 2012, was hailed by the B.C. mining community as a confidence booster as it was the first new, major metal mine to start construction in a decade in the province.
NovaGold's $16.7-million profit was an improvement over the same period last year when it lost $4.2 million.
The third-quarter profit was generated by the sale of its power subsidiary -- which is developing several run-of-the-river projects in northern B.C. -- to an Alberta company for $40 million.
NovaGold also noted that production on Rock Creek Gold Mine in Alaska has started. When the Alaska mine reaches full production it will produce 100,000 ounces of gold a year, which will help the company generate cash flow.
NovaGold noted it was taking steps to strengthen its balance sheet and reduce costs in the wake of the market volatility, including the sale of its power subsidiary.
Stock markets around the world have been plummeting as fears mount of a global economic slowdown.
The financial meltdown has rippled outward from Wall Street which faced a crisis after poor mortgages caused banks and investment firms to topple.
Copper prices have been cut in half since last summer in response to concerns of weakening global demand. Nickel prices have also been cut in half from its high, and Zinc is also down.
Gold remains strong, although it to has been subject to drops in price.
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Last Updated ( Sunday, 19 October 2008 )
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