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NovaGold sells Alaskan Rock Creek property

Published: 13:50 11 Jun 2012 EDT

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NovaGold Resources (TSE:NG) reported Monday the divestiture of its Alaskan Rock Creek property to Bering Straits Native Corp. as it seeks to focus on advancing its Donlin gold project.

The sale is expected to simplify NovaGold’s asset structure and reduce cash outflows amounting to roughly US$14 million. No financial details of the transaction were disclosed.

The Donlin gold project, which is jointly owned by NovaGold and Barrick Gold Corp. (NYSE:ABX) (TSE:ABX), is situated in Alaska.

NovaGold considers Donlin to be a key asset because it's expected to be one of just a handful of gold mines worldwide that produces more than one million ounces of gold annually.

Based on a feasibility study revision, the project contains 33.8 million ounces of proven and probable gold reserves with an anticipated mine life of roughly 27 years, producing an average 1.1 million ounces of gold annually.

“This transaction is another important step toward turning NovaGold into an exclusively Donlin Gold focused company,” chief executive Gregory A. Lang said in a statement.

“With the divestiture of Rock Creek, we can now concentrate our efforts on permitting and developing Donlin Gold one of the world's largest and highest-grade known gold projects, to the highest standards of efficiency and environmental stewardship.”

Bering Straits Native, based in Nome, Alaska, offers real estate management and development, tourism, construction, and mining services.

“BSNC is well positioned to utilize its existing infrastructure to support the Nome operations and explore future opportunities in the region,” Bearing Straits’ president Gail Schubert said.

“We will evaluate all environmentally sound options to maximize the value of Rock Creek for BSNC and secure significant economic benefits for the region.”

NovaGold expects to complete the deal over the next six months, subject to some closing conditions set forth in the agreement.

The company, which has a market capitalization of $1.76 billion, saw its share price rise by 0.49 percent to $6.16 on the Toronto Stock Exchange.

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