TORONTO (miningweekly.com) – Vancouver-based NovaGold Resources has agreed to buy the Ambler project, in northern Alaska, from subsidiaries of Rio Tinto for $29-million.

Ambler hosts the high-grade Arctic copper/zinc/gold/silver deposit, which is one of the world's largest and richest undeveloped copper/zinc volcanogenic massive sulfide deposits, the company said.

NovaGold already owns stakes in two other large northern projects – the Donlin Creek project, in Alaska, in which Barrick Gold holds the other 50%, and the Galore Creek project in British Columbia, that NovaGold owns with Teck Resources.

The company also has a smaller, wholly-owned mine in Alaska, which it started up last year but then put on care-and-maintenance.

"NovaGold is really going back to its roots by acquiring Ambler,” said NovaGold CEO Rick Van Nieuwenhuyse.

“We have a solid record in identifying opportunities, expanding resources and advancing those resources to reserves,” he said.

NovaGold's exploration team tripled the size of both the Donlin Creek and Galore Creek deposits during the exploration phases, Van Niewenhuyse commented.

“With those projects now at a more advanced stage, we can focus our exploration efforts on Ambler with the goal of adding another world-class property to NovaGold's portfolio."

Besides the Arctic deposit, the company is optimistic that it can make additional discoveries on the 36 670-ha Ambler property.

NovaGold will pay Rio Tinto's Kennecott Exploration and Kennecott Arctic Company $5-million in shares, followed by two instalments of $12-million each, due 12 months and 24 months respectively after the transaction closes.

Kennecott will retain a 1% net smelter return royalty that can be purchased at any time for a one-time payment of $10-million.

The acquisition terminates an existing option agreement, under which NovaGold had the right to earn a 51% interest in the Ambler property.

Shares in the company rose 7% on Tuesday, to C$6,02 apiece by 16:10 in Toronto.

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