Novagold Resources Inc. and Paulson Advisers LLC have made a significant move by entering into a $1 billion definitive agreement with Barrick Gold Corporation to acquire Barrick's 50% interest in Donlin Gold LLC. This transaction will result in Novagold increasing its ownership interest in Donlin Gold from 50% to 60% and Paulson acquiring a 40% interest in the project. The deal is expected to close in late Q2 or early Q3 of 2025, subject to regulatory approvals and customary closing conditions.
To finance Novagold’s portion of the acquisition, funding commitments were obtained from Paulson, the Electrum Group, and Kopernik Global Investors, LLC to subscribe for up to $170 million of common shares at $3.00 per share, with the balance of $30 million to be funded from Novagold’s treasury. As part of the funding agreement, 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.
Following the closing of the transaction, the partners plan to update the feasibility study of the Donlin Gold project, 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 with partners and landowners.
The Donlin Gold project in Alaska holds approximately 39 million ounces of gold in measured and indicated mineral resources, with an estimated grade of 2.24 grams per tonne, twice the industry average. 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 partners believe there’s considerable exploration potential in the project, as Donlin Gold’s current resources span approximately three kilometers of an eight-kilometer mineralized belt.
Novagold and Paulson expressed their commitment to best practices, ecological stewardship, and the economic health and social wellbeing of the Yukon-Kuskokwim region’s people and communities. The partners also emphasized the importance of traditions and the subsistence way of life, with long-term commitments in place to ensure the land is effectively protected for generations.
In terms of outlook, the partners aim to update Donlin Gold’s fully bankable feasibility study, complete the drill program for reserves and resources conversion, advance technical work and engineering designs, obtain necessary permits, uphold support among stakeholders, and promote safety, sustainability, and environmental culture.
The transaction has been approved by a special committee of Novagold’s board of directors composed entirely of independent directors. Citi is serving as financial advisor, and Dorsey & Whitney LLP, and Blake, Cassels & Graydon LLP are serving as legal counsel to Novagold. Kleinberg, Kaplan, Wolff & Cohen, Goodmans LLP, McCarthy Tétrault LLP, and Stoel Rives LLP are serving as legal counsel to Paulson, while Baker Botts LLP and Stikeman Elliott LLP are serving as legal counsel to Electrum. Today the company's shares have moved 41.3% to a price of $4.39. For the full picture, make sure to review NovaGold Resources's 8-K report.
