TORONTO (miningweekly.com) – NovaGold Resources, which has a joint venture at Donlin in Alaska with Barrick Gold, said on Wednesday it has agreed to sell 26.4-million shares for a total $250.8-million bought deal.

The company said it would use the money to fund permitting and continued development at Donlin and engineering studies at the Galore Creek copper-gold project in British Columbia, and to finance the company it plans to unbundle its Ambler project into, NovaCopper.

In November, TSX- and NYSE-quoted NovaGold said it would sell or unbundle all of its other assets to focus on Donlin.

The Vancouver-based company will look to sell its stake in Galore Creek, in which Tech Resources has a 50% stake, and put the Ambler project, a copper-zinc-gold-silver project in north-west Alaska, into NovaCopper, it said at the time.

Analysts have suggested that the separation of Donlin from the rest of NovaGold’s assets might prompt Barrick Gold, which owns 50% of the project, to make another attempt to buy the company, after having failed earlier.

The latest funding deal, led by RBC Capital and JP Morgan, is expected to close on February 7.

The underwriters have the option to buy up to an additional 3.96-million shares at the same $9.50-apiece price tag as the initial 26.4-million shares.

According the results of a feasibility study NovaGold announced in December, Donlin will produce
1.5-million ounces of gold yearly in its first five years at an average cash cost of $409/oz, and an average 1.1-million ounces of gold yearly at an average cash cost of $585/oz over its projected 27-year life.

The partners expect the mine will cost $6.7-billion to build.
 

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