This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Can International Tower Hill Outshine NovaGold?

Stocks in this article: THM NG

NEW YORK ( TheStreet ) -- NovaGold (NG) is the sexy, high profile junior gold miner in Alaska, but investors shouldn't forget about its nearby competitor International Tower Hill (THM).

As the below chart shows, NovaGold and International Tower mirrored each other last year until September, when NovaGold broke out on takeover rumors that helped push the company to a 125% return for 2010. International Tower Hill, on the other hand, returned only 38%, but if it follows its peer, it should be ready for a breakout. Jeb Handwerger, editor of GoldStockTrades.com, thinks that THM is ready to make a move and that at "under $8 it's a steal."

If NovaGold is the sophisticated adult commanding investors' attention, it's fair to say that International Tower is the gangly teenager that has yet to be taken seriously. NovaGold has two of the largest gold and copper deposits in the world -- Donlin Creek and Galore Creek -- where it has 50/50 partnerships with Barrick Gold (ABX) and Teck Resources (TCK), respectively. While NovaGold is four to seven years away from production, its net interest in the two projects is staggering at 30 million ounces of gold, 157 million ounces of silver and 9.1 billion pounds of copper.


International Tower has 100% ownership of the Livengood gold project, which has 13 million ounces of resource, one of the biggest discoveries in the past 20 years, but still not as big as NovaGold's. International Tower doesn't have to share the gold with anyone, though, but it doesn't have big early stage funding either.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

NovaGold also has another thing going for it -- the quality of its gold.

NovaGold's Donlin Creek near Port of Bethel in Western Alaska is a 33.6 million an ounce gold deposit, according to reserve estimates, averaging 2.2 grams. The miner will be able to produce the gold for around $400 an ounce.

International Tower's grade is about 0.5 grams with rough cash costs of $490-$530 an ounce. The higher the grade of gold the more you can sell it for, but the more money it takes to refine, and vice versa for a lower grade. The only way a miner can compensate for low grade gold is by mining a lot of it as cheaply as possible.

International Tower Hill is lucky in that its deposit is so big, but it needs gold to stay above $950 an ounce for its deposit to make sense. Luckily, "no one in the business thinks gold will fall below $1,000," says John Doody, editor of GoldStockAnalyst.com.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs