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Novagold Resources (NYSEAMERICAN:NG) said it has entered into definitive agreements to acquire 100% ownership of the Donlin Gold project through an all-share transaction with Paulson's Donlin Gold Holdings, consolidating the Alaska gold project under a single U.S.-domiciled parent company.
Greg Lang, Novagold's president and CEO, described the agreement as a "transformative all-share transaction" that would combine Novagold's existing 60% interest in Donlin Gold with Donlin Gold Holdings' 40% stake. The new parent company, referred to during the presentation as New NovaGold, will be a Delaware corporation with an estimated pro forma market capitalization of about $4 billion to $4.2 billion, according to company officials.
On a fully diluted basis, existing Novagold shareholders, including John Paulson's current equity stake in Novagold, are expected to own about 65% of New NovaGold. Former Donlin Gold Holdings shareholders will own about 35%. Paulson's combined economic interest in New NovaGold is expected to be approximately 40%, with his voting interest capped at 19.99%.
Governance Structure and Closing Timeline
Lang said each Novagold share will be exchanged for one voting share of New NovaGold. He added that Novagold's independence would be preserved through lock-up, standstill and voting restrictions tied to Paulson's stake.
The New NovaGold board will be co-chaired by Thomas Kaplan, Novagold's chairman, and Paulson, founder of Paulson. The board is expected to expand from 10 to 11 directors. Paulson will be able to nominate two directors as long as his ownership remains above 15% of New NovaGold's issued and outstanding shares. Lang said Paulson intends to nominate himself as co-chair and Marcelo Kim as the second designee at closing.
The transaction requires approval by at least two-thirds of votes cast by Novagold shareholders, as well as court and regulatory approvals and other customary closing conditions. Lang said the company expects the transaction to close in the fourth quarter.
Company Cites Accretion and Financing Benefits
Novagold executives said the transaction would simplify ownership and decision-making at Donlin Gold while improving access to capital for the project's next phase of development.
Lang said the transaction would make Novagold a "leading U.S. pure-play gold developer" with 100% ownership of Donlin Gold, which he said is expected to produce 1.3 million ounces of gold annually during its first 10 years. He said that would represent an increase of more than 520,000 attributable ounces of annual production for Novagold.
Lang also said the transaction is immediately accretive on net asset value per share and on gold reserves and resources per share. He said it adds 16 million ounces of measured and indicated resources, including 13 million ounces attributable to proven and probable reserves, bringing pro forma totals to 33 million ounces of reserves and 40 million ounces of resources.
Executives said the simplified ownership structure would create a single point of contact for investors, government agencies, potential financing partners and key stakeholders, including Donlin's Native corporation landowners, Calista Corporation and The Kuskokwim Corporation.
Kaplan and Paulson Emphasize Strategic Alignment
Kaplan said the transaction builds on a 16-year partnership between Novagold and Paulson, who has been a shareholder since 2010. Kaplan said the deal follows last year's acquisition by Novagold and Paulson of Barrick Mining Corporation's 50% interest in Donlin Gold.
Kaplan said consolidating Donlin under Novagold would help streamline development and improve access to capital. He also emphasized Donlin's location in Alaska, describing the jurisdiction as central to the company's investment case.
Paulson said his goal in acquiring Barrick's stake in Donlin was "always from day one to merge it into NOVAGOLD." He said consolidating the project under one owner would reduce structural complexity and help expedite the path toward production.
"Instead of having three separate companies manage this Donlin asset," Paulson said, the transaction would combine the structures into one, with Novagold owning 100%.
Development Plans and Alaska Infrastructure
Kaplan said Novagold is well-funded to complete a bankable feasibility study, which he said is on schedule and on budget. He said the timing between completion of the study and the start of construction will depend on development and financing strategies informed by the study, but added that certain engineering, financing and project readiness activities will proceed concurrently.
Kaplan also said Novagold intends to exercise its option to prepay the Barrick promissory note for $100 million before the Dec. 3, 2026, option expiration date.
During the question-and-answer session, BMO Capital Markets analyst Raj Ray asked about the company's non-binding letter of intent with Glenfarne, which is leading an effort to build a natural gas pipeline from Alaska's North Slope to Cook Inlet. Lang said the pipeline could provide a cheaper supply of gas to Cook Inlet, benefiting Donlin and Alaska more broadly. He said Novagold is actively engaged with Glenfarne and is following the project's progress.
Lang closed the call by calling it "a fantastic day for NOVAGOLD."
About Novagold Resources (NYSEAMERICAN:NG)
Novagold Resources Inc is a mineral exploration and development company headquartered in Vancouver, British Columbia. The firm is focused on advancing large-scale precious metals projects through disciplined project management, environmental stewardship and community engagement. Novagold maintains a lean corporate structure while leveraging partnerships and industry expertise to advance its projects toward production.
The company's flagship asset is the Donlin Gold project in Alaska, a 50/50 joint venture with Barrick Gold Corporation.
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