VANCOUVER – NovaGold Resources Inc. (TSX:NG) said Wednesday it is going to focus on developing its Donlin gold project in Alaska, with plans to spinoff or sell its other major assets.
The company said it will look to sell its stake in the Galore Creek project in B.C. that it is developing with Teck Resources (TSX:TCK.B) and spin off its Ambler project in Alaska into a new company to be led by NovaGold’s current president and chief executive.
“These important changes are the culmination of the earlier announced strategy of the board of directors to unlock the value of NovaGold’s substantial assets for the benefit of all shareholders,” said Gerry McConnell, NovaGold’s outgoing chairman.
Shares in the company were up $ 1.13 or about 13 per cent at $ 10.10 on the Toronto Stock Exchange after the announcement.
Under the restructuring, Rick Van Nieuwenhuyse will leave NovaGold to head NovaCopper Inc., which will be spun off to NovaGold shareholders in a plan that will be voted on by shareholders in January.
NovaCopper will own the Ambler project and any mining project in the recently consolidated 180,000-hectare property located in the Ambler district of northwestern Alaska.
Gregory Lang, most recently president of Barrick Gold’s (TSX:ABX) North American subsidiary, will become president of NovaGold, effective in January.
Barrick holds a 50 per cent stake in the Donlin project, which is expected to cost US$ 7 billion to build.
In 2007, Teck Resources (TSX:TCK.B) acquired a 50 per cent stake in Galore Creek from NovaGold by agreeing to pay C$ 520 million in construction costs with each company responsible for its share of the costs after that. However work was suspended at the project amid rising costs in 2007.
Last month, NovaGold said it hoped a new plan for the mine would soon be completed with the partners to decide before the end of the year whether or not to go ahead with the feasibility study and obtaining the required permits.
A pre-feasibility report earlier this year put the cost at building the mine at $ 5.2 billion.
The company also announced that Thomas Kaplan, chairman and chief executive of the Electrum Group, a privately held resource investment firm, and NovaGold chief operating officer Gil Leathley have joined the firm’s board.
Kaplan was also named NovaGold chairman.
Local news from metronews.ca/vancouver
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