Novagold Resources Inc. and Paulson Advisers LLC have announced a significant transaction to acquire a 50% interest in the Donlin Gold Project from Barrick Gold Corporation for a total of $1 billion in cash. This transaction will result in Novagold increasing its ownership interest in Donlin Gold from 50% to 60%, while Paulson will acquire a 40% ownership interest in the project.
To finance Novagold's portion of the acquisition, funding commitments were obtained from Paulson, the Electrum Group, and Kopernik Global Investors, LLC. In addition, Novagold was granted an option to purchase the outstanding debt owed to Barrick in connection with the Donlin Gold Project for $90 million if purchased prior to closing, or for $100 million if purchased within 18 months from closing.
Following the closing of the transaction, Donlin Gold expects to immediately update the feasibility study, shift the 2025 drill program's focus to the conversion and expansion of reserves and resources, advance technical work and engineering designs, support state permitting efforts, and enhance social license through community outreach and investment initiatives.
Donlin Gold, located in the Kuskokwim region in southwest Alaska, hosts approximately 39 million ounces of gold in measured and indicated mineral resources, with an estimated grade of 2.24 grams per tonne, exceeding the industry average of 1.03 grams per tonne. If developed as contemplated, Donlin Gold is projected to have a 27-year mine life, with average annual production expected to reach approximately 1.1 million ounces.
The new partnership between Novagold and Paulson emphasizes a commitment to best practices, ecological stewardship, and the economic health and social wellbeing of the Yukon-Kuskokwim region's people and communities.
The transaction is subject to regulatory approvals and customary closing conditions and is expected to close late in the second or early in the third quarter of 2025. The announcement of the new partnership marks a significant milestone in unlocking the full value of the Donlin Gold Project and advancing it through feasibility and financing. The market has reacted to these announcements by moving the company's shares 15.9% to a price of $3.6. If you want to know more, read the company's complete 8-K report here.
