Copper Canyon & NovaGold 40/60 JV
Galore Creek property contains one of the world’s largest undeveloped copper & gold resources.
Copper Canyon Resources Ltd. Cranbrook, BC, (CPY:TSX-V) is a Canadian exploration and development company formed in June 2006 in a spin-off from Eagle Plains Resources (EPL:TSX-V).
Copper Canyon, the most significant property, is located adjacent to the Galore Creek Project in north-western British Columbia, a 50/50 joint venture between Teck Cominco Ltd. and NovaGold Resources.
Copper Canyon Resources and NovaGold Resources have agreed to form a 40/60 joint venture to explore and develop the Copper Canyon property.
On February 15, 2008 Copper Canyon and NovaGold Canada Inc., a wholly-owned subsidiary of NovaGold Resources Inc. (AMEX, TSX:NG) agreed to form a 40/60 joint venture to explore and develop the Copper Canyon property, located adjacent to the Galore Creek project in north-western British Columbia, Canada.
The Galore Creek Project is a 50/50 partnership between Teck Cominco and NovaGold Resources.
NovaGold has satisfied all the requirements under an option agreement with Copper Canyon Resources which saw the completion of $3,000,000 in exploration expenditures, delivery of 296,000 NovaGold shares and cash payments of $250,000. A 2% net smelter royalty (“NSR”) is held by B. Kreft, one-half of which may be purchased at any time for $1,000,000.
In 2005, NovaGold outlined an Inferred Resource at Copper Canyon from 21 drill holes, containing 164.8 million tonnes grading 0.35 per cent copper, 0.54 g/t gold and 7.2 g/t silver for a total metal content of 1.16 billion pounds of copper, 2.86 million ounces of gold and 37.9 million ounces of silver using a 0.35-per-cent-copper-equivalent cut-off grade. (see news release Nov 19, 2007).
During 2007, NovaGold completed a 16,000’ (4,940m), 12-hole diamond drilling program on the Copper Canyon Property.
Below are some of the highlights from the infill drilling results:
- DDH CC07-033 returned 129.0m grading 0.89% copper-equivalent from 76.0m to 205.0m and 158.8 m grading 1.13% copper-equivalent from 438.2m to 597.0m
- DDH CC07-34 returned 118.0 m grading 0 .99% copper- equivalent from 4.60 to 122.60m
- DDH CC07-36 returned high-grade gold mineralization of 31.9 g/t Au over 2.5 m from 183.5m to 186.0m and 26.8g/t Au over 2.7m from 211.8m to 214.5m (true thicknesses undetermined)
- DDH CC07-44 returned 181.0 m grading 0.69% copper equivalent from 26.5m to 207.5m
A new resource estimate is underway and will be released in due course.
Drilling to date at CopperCanyon has indicated the presence of both a large, bulk-tonnage copper-gold mineralized system and zones of high-grade gold mineralization.
The best hole drilled in the Galore Creek district was CC1990-02 on Copper Canyon, which intersected 270.8m (898’) grading 1.92 g/tonne Au, 22.28 g/tonne Ag and 1.05% Cu.
Other notable intersects include hole CC05-030, which returned 2.5m grading 50.6 g/t Au, and hole CC07-36 which returned 31.9 g/t Au over 2.5 m from 183.5m to 186.0m and 26.8g/t Au over 2.7m from 211.8m to 214.5m (true thicknesses undetermined).
A total of 44 holes have been drilled on the property since 1990. A compilation map outlining drill-hole locations can be found here: Copper Canyon Drill-hole Location Map
In November 2007, NovaGold and its 50-50 joint-venture partner Teck Cominco, jointly announced that they had suspended construction on the Galore Creek Project due to rising costs and a longer than anticipated construction schedule.
During 2007, the two companies spent approximately $C660 million developing access roads and infrastructure, completing 66 kilometres of pioneer road, clearing 80% of the 135-kilometer road right-of-way, installing key bridges and initiating work on the access tunnel into the Galore Creek Valley.
During the construction suspension, the partners will maintain the existing infrastructure to ensure the project can be restarted efficiently and have budgeted $72-million toward developing a new plan which is expected to be completed in the next 12 to 18 months; it remains unclear how much additional permitting the company will be required to obtain, or when construction could begin.
In early 2008 NovaGold and Teck Cominco announced the appointment of a highly experienced senior management team to lead an aggressive review of Galore Creek’s development with the objective of producing a modified construction approach and execution plan that will deliver enhanced financial returns.
The Galore Creek property contains one of the world’s largest undeveloped copper and gold resources and CPY management believes that the Copper Canyon project holds considerable strategic value to the development of the Galore Creek area.
With long-term demand for copper and gold projected to remain strong, British Columbia remains a good place to invest. The Company is committed to stand by the merits of this important asset and will work with its partners to develop viable alternatives to the current project.
Copper Canyon Resources was created by way of a Plan of Arrangement on June 2006. Shareholders of Eagle Plains Resources Ltd. approved the plan to reorganize the Company’s mineral property assets in an effort to maximize shareholder value.
Under the terms of the arrangement, three of Eagle Plains’ projects: Copper Canyon, Severance and Abo (Harrison) Gold, were transferred into Copper Canyon on a one-for-one share basis.
Properties – Option Agreements
The Abo Gold Project
The Abo is located in SW British Columbia and is a developed gold property that has seen approximately $8.0 million of previous exploration work resulting in an Indicated Resource of 1,845,000 tonnes averaging 2.79 g/t or 165,200 oz in situ, with a further Inferred Resource of 613,600 tonnes averaging 2.79 g/t or 55,100 oz. These resources are contained within the Jenner and Portal Stock zones.
Egoli Resources Inc. may earn a 75% interest in the Property by completing CDN$7.5M in exploration expenditures, paying Copper Canyon CDN$1.5M in cash and issuing 1,000,000 million common shares of Egoli over a 5 year period.
After these commitments are met, Copper Canyon Resources will own a 25% interest in the Property and retain a 2% net smelter royalty (NSR), 1% of which may be purchased at any time for CDN $1,500,000.
The Copper Canyon Project
In March 2004, Eagle Plains optioned the property to NovaGold Resources. To date, NovaGold Resources has completed the 60% earn-in requirements, having spent C$3 million on exploration and having issued 222,000 shares to Eagle Plains Resources prior to the spin-off of Copper Canyon Resources in June, 2006 and the remaining 74,000 shares to Copper Canyon Resources in February, 2007.
As a result of the completion of works, NovaGold Resources and Copper Canyon Resources have agreed to form a 60/40 joint venture.
The Severance Project
The Severance project is located in the central Yukon and is a grass roots exploration target for gold. Copper Canyon executed an option agreement with Northern Freegold Resources Ltd (TSX-V:NFR) whereby NFR may earn a 100% interest (less 3% NSR) in the Severance Property by making staged cash payments totaling $50,000 and issuing 300,000 common shares to CPY.
An additional 500,000 shares will be issued to CPY in the event of a production decision or change in control of NFR to another company. The 3% NSR may be reduced to 1% by payment of $1,500,000