- Novagold Resources (TSX:NG) has announced a major agreement with Barrick Gold Corp. (TSX:ABX) to acquire Barrick’s 50 per cent interest in Donlin Gold LLC for $1.0 billion in cash
- This acquisition creates a new partnership between Novagold and Paulson to develop the Donlin Gold project in Alaska
- The main objectives for 2025 include updating the feasibility study, completing the drill program, unlocking exploration potential, advancing technical work, and obtaining necessary permits
- Novagold Resources stock (TSX:NG) last traded at C$4.31
Novagold Resources (TSX:NG) has announced a major agreement with Paulson Advisers LLC and Barrick Gold Corp. (TSX:ABX) to acquire Barrick’s 50 per cent interest in Donlin Gold LLC for $1.0 billion in cash. This acquisition creates a new partnership between Novagold and Paulson to develop the Donlin Gold project in Alaska.
Transaction details
- Novagold’s acquisition: Novagold will acquire a 10 per cent interest in Donlin Gold LLC for $200 million, increasing its ownership from 50 per cent to 60 per cent.
- Paulson’s acquisition: Paulson will acquire a 40 per cent interest in Donlin Gold LLC for $800 million, becoming a full and equal partner in project management.
- Regulatory approvals: The transaction is subject to regulatory approvals and customary closing conditions, expected to close late in the second or early in the third quarter of 2025.
Financing
To finance Novagold’s portion of the acquisition, funding commitments were obtained from Paulson, The Electrum Group, and Kopernik Global Investors, LLC. These commitments include:
- Subscription for common shares: Up to $170 million of common shares at $3.00 per share.
- Treasury funding: The balance of $30 million to be funded from Novagold’s treasury.
- Warrants: Paulson, Electrum, and Kopernik received five-year warrants to purchase an aggregate of 25.5 million common shares of Novagold at $3.00 per share.
Novagold will evaluate alternative financing options to replace all or part of the funding commitments, although it is not required to seek alternative financing under the agreement.
Debt option
Novagold has been granted an option to purchase the outstanding debt owed to Barrick in connection with the Donlin Gold project for $90 million if purchased before closing, or $100 million if purchased within 18 months from closing.
Governance
Upon closing, Novagold and Paulson will enter into an amended and restated limited liability company agreement governing Donlin Gold LLC, granting both parties equal governance rights.
Approval
The transaction has been approved by NOVAGOLD’s Board of Directors and a Special Committee composed entirely of independent directors.
Future plans
Under the direction of the new partners, Donlin Gold expects to:
- Feasibility study update: Commence workstreams to update the Feasibility Study, including assembling a dedicated team.
- Drill program: Focus on converting and expanding reserves and resources, exploring new resources along strike and depth.
- Technical work: Advance technical work and engineering designs.
- Permitting efforts: Support state permitting efforts and maintain existing federal and state permits.
- Community outreach: Enhance social license through community outreach and investment initiatives with partners and landowners, Calista Corporation and The Kuskokwim Corporation (TKC).
Leadership insights
“As with many of our shareholders, we have engaged extensively with Paulson over the years and are grateful for their steadfast solidarity. Our management team welcomes this enormous vote of confidence and looks forward to initiating an updated feasibility study, as well as to allowing our new drill program to move towards reserve and resource expansion,” Greg Lang, Novagold’s president and CEO, said in a news release. “Most importantly, this agreement reaffirms both partners’ pledge to our Native Corporation partners and to the State of Alaska to advance this project.”
2025 outlook
The main objectives for 2025 include updating the feasibility study, completing the drill program, unlocking exploration potential, advancing technical work, and obtaining necessary permits. The previously disclosed 2025 Donlin Gold expenditure of approximately $43.0 million on a 100 per cent basis will be reviewed by the partners.
Novagold Resources Inc. s a precious metals company focused on the development of its Donlin Gold project in Alaska, a development-stage gold project.
Novagold Resources stock (TSX:NG) last traded at C$4.31 and has climbed 7.75 per cent since this time last year.
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