NovaGold Resources Inc. Confirms Barrick's Hostile Offer to Purchase Outstanding Shares

Strategic Insights -

Barrick Gold Corporation has increased and extended its hostile offer to purchase all outstanding shares of NovaGold Resources Inc. for US$16.00 per share in cash, with a deadline set for November 7, 2006. NovaGold has achieved significant development milestones, including the start of construction at its Rock Creek mine in Nome, Alaska, and a significant increase in its gold, silver, and copper resources. The Company's Board of Directors is evaluating the revised offer from Barrick and will issue an update to its Directors' Circular and Solicitation/Recommendation Statement, which will contain important information for shareholders.

Key Takeaways:

  • Barrick's amended offer to purchase all outstanding shares of NovaGold Resources Inc. is for US$16.00 per share in cash, with a deadline set for November 7, 2006.
  • NovaGold has achieved significant development milestones, including the start of construction at its Rock Creek mine in Nome, Alaska, and a significant increase in its gold, silver, and copper resources.
  • The Company's Board of Directors is evaluating the revised offer from Barrick and will issue an update to its Directors' Circular and Solicitation/Recommendation Statement.
  • The update will contain important information for shareholders, including the Board's recommendation regarding the amended offer.
  • NovaGold's Board has previously recommended that shareholders reject Barrick's hostile offer to acquire all of the outstanding shares of NovaGold for US$14.50 per share in cash.
  • The Board determined that Barrick's offer was inadequate and significantly undervalued NovaGold's world-class gold and copper projects and the Company's growth potential.
  • NovaGold has engaged RBC Dominion Securities Inc. and Citigroup Global Markets Inc. as financial advisors and Borden Ladner Gervais LLP and Dorsey & Whitney LLP as legal counsel as part of the Special Committee's advisors.

Statistics:

  • U.S. Securities and Exchange Commission (SEC) filing fees for the solicitation/recommendation statement are expected to be approximately US$1 million (Source: NovaGold Resources Inc.).
  • Total gold reserves of 6.3 million ounces (1.9 million ounces measured and indicated; 4.4 million ounces inferred) at 3.3 g/t (Source: NovaGold Resources Inc.).
  • Estimated capital costs for the next year of US$20 million (Source: NovaGold Resources Inc.).
  • Placer mining production at the Rock Creek mine is expected to start in 2006 (Source: NovaGold Resources Inc.).

Sources:

  • NovaGold Resources Inc. (TSX: NG)(AMEX: NG)
  • Barrick Gold Corporation (TSX: ABX)(NYSE: ABX)
  • U.S. Securities and Exchange Commission (SEC)
  • National Instrument 43-101 Standards of Disclosure for Mineral Projects (NI 43-101)
  • Comtex SmarTrend(SM) Alert (CSTADirect.com)