The recent news tells us it's worth going after.
"Last year's exploration program yielded excellent drill results with impressive widths and gold grades which have extended the mineralization well beyond the current pit,” said Greg Lang, NOVAGOLD's President and Chief Executive Officer. "More importantly, 2012 drilling at Galore Creek led to the discovery of the new Legacy zone located in close proximity to the projected pit. With these positive drill results, we are now well positioned to update our reserves and resources and further improve the overall economics of this project as we pursue the sale of our share of this exceptional asset. If developed as envisioned in the PFS, Galore Creek is expected to become the largest and lowest-cost copper mine in Canada, one of the last geo-politically safe jurisdictions where copper miners can build new mines. This factor is particularly important considering the critical challenges copper miners face today in jurisdictions such as the Democratic Republic of Congo, Indonesia, Argentina, Mongolia and Peru.”
We've been waiting for this catalyst for some time now. The results came very slow but they've finally been put on display. What a lot of investors knew was that GC needed to be bigger. 95kt/d was not enough and the LOM needed to be extended. With the new discovery there is now enough to ramp up the tonnes per day and extend the Life of Mine.
Grades were never an issue. Tunnels and hardness were. Now they have enough proof to add size while extending life. They should want to see 130kt/d and about 20-25 years of mine life. What the new discovery suggests is a strike greater than 700 meters adjacent to the main pit. as they drill deeper they are likely to fill in the bottom. At 300 meters North of the Bountiful zone these are basically connected and it will be cheap to get at it. This is going be easy to add to the pit design and should reduce costs even more.
I would expect a buyer to step up to the plate. Teck already owns an option on the high quality Schaft Creek deposit that also just keeps growing in size and quality. Together, these form an incredibly attractive investment district. I think the majors have been waiting for the proof at GC because they need to see the big picture. This adds to the geo political safety. At this point there would be a public backlash should a new government in BC attempt to stop any of the projects connected to this area. After all, the public are building the power line to feed these monsters.
I've heard the political rumblings. Tax hikes and labour changes. Looking at the PFS and BFS numbers from just these two projects shows there's a great deal of sensitivity here. However, the Golden Triangle is now approaching "too big to fail" status. Additionally, the environmental challenges are starting to abate. A lot of the focus will be on the pipe lines. There's only so much attention span you can get so I suspect more will be on the oil patch and a lot less on mining. There might even be some grumbling about interference by foreign interests at the highest levels. So for it's just been lip service. But, do the Americans want to be excluded from future projects?
With 2 word class deposits within stones throw of each other, one in BFS and the other ready to update this is the catalyst the area has been waiting for. I have no doubt that with new numbers and this year's drilling at GC and SC we will see a new robust forecast.The question is will a buyer wait or buy before the value skyrockets on both. I think they will strike now.
Looking back at the reasons for buyers not stepping up when they could have paid a lot less didn't quite justify their waiting. With the global geo political situation deteriorating there was an impudence in the majors who stayed the course in those countries. They are paying the price. Now to get assets in a safer jurisdiction they will pay a higher price and may even be excluded entirely as the social circle tightens amongst the majors who cooperate in tough times.