Teck Cominco and NovaGold Resources have reached a deal to build the Galore Creek open pit copper-gold mine in northwestern British Columbia, the companies said Wednesday.

Teck will invest $520 million in construction costs to earn its share in the new 50:50 partnership called Galore Creek Mining Corp., while NovaGold will contribute all of the Galore Creek project assets.

Teck's investment of $478 million US ($520 million CDN) equals NovaGold's spending of $128 million US on construction and pre-construction, plus $350 million US of anticipated project expenditures, the companies said in a joint release.

Galore Creek is expected 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. First production is expected in 2012.

"With over 540 million tonnes of reserves and approximately one billion tonnes of resources, there remains considerable potential to increase annual production and extend the mine life beyond 20 years," the release said.

The property is located in the Stikine Gold Belt, in the Tahltan First Nation about 70 kilometres west of B.C. Highway 37 and 150 kilometres northeast of Stewart.  

After Teck spends $520 million, each partner will be responsible for its share of additional costs. The companies said the project could cost $2 billion US.

NovaGold signed a participation agreement with the Tahltan First Nation last year.

The project is expected to create 1,000 construction and 500 full-time jobs.

Teck B stock closed down 30 cents at $43.40, while Novagold added $1.12 to $16.37.