9th Circuit upholds Rock Creek permit

The U.S. 9th Circuit Court of Appeals ruled Jan. 3 in favor on all counts of a permit that allows NovaGold Resources Inc to develop the Rock Creek Mine Project near Nome. In a 29-page decision, a three-judge panel of the appeals court affirmed the June 2007 decision of the United States District Court for Alaska dismissing a lawsuit initiated by Bering Straits Citizens for Responsible Resource Development.

Bering Straits and two individuals had challenged a permit issued for the mine project by the U.S. Army Corps of Engineers, claiming the agency violated the federal Clean Water Act and the National Environmental Policy Act by granting the permit.

The district court denied a motion by Bering Straits for a temporary restraining order and a preliminary injunction, and then dismissed the suit on summary judgment.

The appeals court rejected numerous arguments from Bering Straits that the Corps acted arbitrarily and capriciously in granting the permit for Rock Creek. The court also concluded that the project met federal requirements, did not harm the environment and would make a favorable impact on the Nome area.

The Rock Creek Mine Project has an initial projected life of four to five years and is expected to process 7,000 tons of gold ore per day.

As a result of the ruling, wWork at the mine under the Clean Water Act permit, which the Corps issued in March, continues without interruption and the mine is expected to begin commercial production by March April 1 and achieve full commercial outputproduction some time in the second quarter, NovaGold said Jan. 4.

NovaGold said the Court's decision acknowledges acknowledged the company's commitment to operate its projects to the highest environmental and safety standards.

Vicki Clark, legal director for Trustees for Alaska, which represented Bering Straits Citizens in the lawsuit said the ruling was "very disappointing."

"The federal laws that protect the public's right to meaningful public process failed us in this case," Clark said, adding that her legal team was still analyzing the court's decision and the possibility of requesting for a rehearing of the case.

Bering Straits Citizens has until mid-February to make such a request, she added.

Rock Creek headed heads toward first ore

After 17 months, construction nears completion at Rock Creek and testing of processing circuits is under way, NovaGold reported in January. Development of an open pit is ongoing, with ore being stockpiled for processing. With the completion of the tailings storage and process water recycle facilities, the main mill processing complex should be ready for commercial level production by the end of the first quarter, with full commercial-level output targeted for the second quarter.

Rock Creek is expected to process 7,000 metric tons, or 7,700 imperial tons, of ore per day and produce 100,000 ounces of gold annually, with . an initial projected mine life of four to five years.

Once in production, NovaGold the operation is expects expected to generate $25 million to $30 million a year from the operationfor NovaGold, with total cash costs averaging $400 an ounce.

In addition,The company is also evaluation evaluating of other nearby deposits, including Saddle and Nome Gold, will continue with the goal of extending the mine's life and potentially increasing production levels at Rock Creek.

NovaGold completed 10,220 meters of reverse circulation drilling in 2007 focused on exploration leases around the Rock Creek mine, including significant work on the Saddle deposit. Drilling around the pit margin at Rock Creek continues to show positive results indicating potential resource expansion. At Big Hurrah, an extensive soil sample program has identified at least three significant new gold-in-soil targets for further evaluation.

The Nome district has historically produced more than 5 million ounces of alluvial gold from shallow sand-and-gravel deposits. The Rock Creek and Big Hurrah deposits are the first modern, open-pit mines to be developed in this prolific gold district and NovaGold managers believe additional exploration could identify new gold resources which may be processed through the Rock Creek mill.

Test work at Rock Creek has shown more than 75 percent of the gold is recoverable using simple and inexpensive gravity methods. When combined with flotation and cyanidation, overall gold recovery is anticipated at 88 percent with gold Dore poured onsite.

The project will employ 139 140 ful-time skilled workers full time. to handle operations at the mine and mill complex. NovaGold and Alaska Gold Company hosted numerous public meetings in Nome throughout 2003 to 2006 to ensure all community members had the opportunity to ask questions and voice concerns about the mine plan. Both the Bering Straits and Sitnasuak Native Corporations have openly supported the project, as does the Nome Chamber of Commerce.

A NovaGold spokeswoman said the only recourse for the group that challenged the mine's permit is to appeal to the U.S. Supreme Court and that would be highly unlikely.