NovaGold Resources Inc. (TSX:NG) will partner with mining giant Teck Cominco Ltd. (TSX:TCK) to develop one of the world's largest untapped copper and gold mining sites.
Both companies will invest US$2 billion to build the Galore Creek mine in northwestern B.C., which will earn Teck Cominco a 50% share in the mine once it's fully developed.
Teck Cominco will fund about US$478 million of the construction costs; each of the companies will be responsible for their share of the project's remaining expenses.
NovaGold will also receive up to US$50 million of preferential distributions once Galore Creek is fully operational if the project exceeds an agreed minimum level of revenue in its first year of commercial production.
Under the terms of the partnership agreement, joint finance and technical committees will provide decision-making oversight and control over the Galore Creek project.
Galore Creek is projected to produce 432 million pounds of copper, 341,000 ounces of gold and four million ounces of silver annually for the first five years of production. The mine will establish NovaGold as a mid-tier mining firm and increase Teck Cominco's annual copper and gold production.
Novagold's share price range during the past week: between $14.99 and $15.68; 52-week high: $20.44; 52-week low: $11.62.