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July 07 Businessexcellence Nova Gold Resources Inc. 61 200 MW of power for the next millennium.” So even when the mine’s played out, NovaGold will still be in business as a power generation company? “As long as it’s raining in northern BC.” No problem there, then. A similar move is being considered at Nome, in Alaska. “We are working with the city of Nome and its utilities to investigate building two wind turbines to supplement the power, looking at how that would lower the power costs for our project and the entire community. In a place like Nome, you’re never going to replace diesel power completely, because the wind doesn’t always blow, so you have to have that back up system, but if you can reduce your diesel requirements by 50 percent you can make a long-term sustainable difference.” Speaking about the remoteness of mines, I am curious about any other challenges that the climate or local conditions may present. Unlike the diamond mines I have written about recently, none of NovaGold’s mines are dependent upon ice roads for their supplies. Rock Creek is about ten kilometers outside of Nome, so it enjoys the benefi t of a state-maintained highway. “At Galore we’re building an all weather year-round road, 130 kilometers from the existing provincial highway network, Highway 37,” says Van Nieuwenhuyse. “At Donlin Creek, the river will be our road. The Kuskokwim River is the second largest river in Alaska, and they take barges 200 kilometers up river from Donlin Creek fi ve months of the year. It’s not an ice road but it is seasonal, so it works the same way, in reverse, you could say.” Van Nieuwenhuyse surprises me when he says that working in arctic conditions is not really a challenge from a mining standpoint. High snowfall is the big challenge. “Both Rock Creek and Donlin have very low snowfalls, so you have ideal operating conditions there,” he says. “Break-up time is a pain, when it goes from winter conditions to summer conditions in a short period of time.” Galore Creek, however, is a heavy snowfall area and this year was one of the heaviest, he tells me. And they measure heavy snowfall in meters up there, not inches. “One of the things we’ve done in developing our mine plan is to incorporate a whole fl eet of equipment to deal with snow removal. There are two parts to it: one is managing the snow that falls on the ground and the other is managing the snow that falls on the hills around you, to make says Van Nieuwenhuyse. “It’s hard to fi nd accountants. It’s hard to fi nd truck drivers and it’s hard to fi nd drillers. It’s hard to fi nd geologists and engineers.” Environmental techs are more abundant, he notes, as there was a surge of interest in environmental studies some years ago. “Many of the people who might have done geology or engineering went into environmental science. That’s why we can’t fi nd geologists and engineers.” Environmental stewardship is a priority for NovaGold, especially when it comes to the use of fuel. There are also business issues that tie in with caring for the environment. “One of the big infl ationary pressures is coming from the price of fuel,” says Van Nieuwenhuyse. “I believe that pressure is going to continue. Mines are often in remote locations and they need lots of fuel and power. If you’re in a remote location and you’re going to rely on diesel generated power, for a big operation, it’s going to cost between 11 and 15 cents a kilowatt hour, depending on where you’re located. It gets to a point when it’s not practical to move that much fuel.” Even in a less remote location, he points out, diesel power generation is still expensive. “What we are looking at is if we’re going to consume 100 MW of power, how else can we get it, and can we get it in a more environmentally friendly and sustainable manner and at a lower cost?” In August 2006, NovaGold acquired Coast Mountain Power, a “green power” company with three potential hydroelectric projects located near Galore Creek in northwestern British Columbia. The company and its subsidiaries were consolidated into NovaGreenPower. The Forrest Kerr project there will be able to generate between 100 MW and 200 MW of power. “We’re not necessarily saying that facility is going to generate power for this mine,” says Van Nieuwenhuyse, “but it’s something we can do in conjunction with developing the mine, to help pay for the infrastructure to connect the mine and the power generation facility to the BC hydro grid, rather than spending that capital on shipping fuel up to the mine for the next 20 years. It’s just looking at the project a little differently, and yes, the capital’s going to be more, but the operating costs are going to be less, and in my opinion you’ll have a much more environmentally friendly and sustainable mine project, and you’ll be delivering iSP3 has been very fortunate to have partnered with an innovative organization such as NovaGold Resources Inc. The system solutions we created together in JD Edwards to help NovaGold accurately manage and forecast the construction costs at Galore Creek has not been done anywhere else that we have seen in the mining sector. iSP3 FCm Travel Solutions is a full service corporate travel management company. We offer our clients a dedicated account manager who is expert in providing your travelers with impeccable service to ensure we take the stress out of corporate travel; leaving your travelers better placed to focus on the important tasks at hand. We aim to be an indispensable part of your team. FCm Travel Solutions

Businessexcellence June 07 62 sure it doesn’t come down around your head. Avalanche control is a major part, from a safety standpoint and a snow management standpoint.” Another challenge that NovaGold had to face last year was a hostile takeover bid from one of its partners, Barrick. “They launched a takeover bid last year in mid-July and it lasted all the way through December, so it occupied a good part of last year,” says Van Nieuwenhuyse. The bid was unsuccessful, and Barrick acquired only about 14 percent of the company, which it later sold. There are issues still to be resolved, however, as Barrick has until November to fulfi l the terms of a back-in agreement at Donlin. “But we don’t expect them to be able to meet the terms of that agreement to enable them to earn the additional 40 percent interest. “That’s what prompted the takeover bid in the fi rst place,” he explains. “They had made a proposal to us, which we accepted, to settle on Donlin and for them to be a partner at Galore. It was a win-win deal because it settled the Donlin issue. We had agreement with Barrick and while they were putting the legal papers together the gold price came off last June and they decided it would be cheaper to buy us. It was an interesting year last year,” he admits, “but as far as I’m concerned it’s ancient history now.” The key message, he concludes, is that NovaGold is successfully making the transition from explorer to producer. “With our Teck Cominco partnership we are well on our way to realizing our objective of becoming a quality North American mid-tier copper/gold producer. These are world class assets. These mine lives are 20 years plus, so we’re going to be around for a long time, building real value for our shareholders.”