NovaGold Resources - Chairman, Thomas Kaplan
Chairman, Thomas Kaplan
Source: The New York Times
  • Novagold Resources (TSX:NG) has responded to a short-selling report from J Capital Research, claiming the report contains numerous inaccuracies
  • Released on May 28, the report alleges that Novagold’s management has consistently misled investors regarding its Donlin gold project in Alaska
  • Novagold has refuted the claims and stressed that the company remains committed to transparency
  • The company says that it will provide a more comprehensive response to the accusations in due course
  • Novagold Resources (NG) is currently down 0.6 per cent to C$13.32 per share, with a market cap of $4.37 billion

Novagold Resources (TSX:NG) has responded to a short-selling report from J Capital Research, claiming the report contains numerous inaccuracies.

Founded in 2010, the China-based firm publishes a range of reports on publicly-traded entities. It has a particular focus on the Chinese market, but also looks at what it considers over-valued companies around the world.

The report on Novagold, published on May 28, alleges that the company’s management has consistently misled investors regarding the cost of its Donlin gold project in Alaska.

Novagold’s proposed natural gas pipeline, which would power the project, was also scrutinised by the report, citing the inhospitable terrain. The report claimed to have spoken with an engineer who worked on costing the project, saying, “he doesn’t know of any engineering company that has the experience to build such a complex pipeline”.

The focus of the report then shifted to the company’s management, referring to Novagold’s “silver-tongued CEO” who “is already preparing the ground for the inevitable pipeline failure”.

“In short,” the report said, “this is a stock promote, not a mining plan”.

Thomas Kaplan, Chairman of Novagold’s Board of Directors, issued a response on behalf of the company.

Thomas said that, under normal circumstance, such a “sloppy and truly meretricious report” would not be met with a corporate response, and that it was strange that J Capital Research had not contacted the company to fact check its contentions.

He also stressed that the company’s management is fully committed to transparency, and that enquiries have always been welcome from both investors and analysts.

Despite what Thomas called a “clearly disingenuous intent to manipulate and not educate,” he noted that a more comprehensive response to the allegations will be released in due course.

“We believe that our shareholders are far too well-informed and knowledgeable about our Donlin gold project, our integrity, and competence to take this report seriously,” he said.

Novagold Resources (NG) is down 0.6 per cent and is trading at C$13.32 per share at 12:50pm EDT.

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