So NovaGold has size, popularity and grade, but International Tower Hill has some hidden secrets. "When you see the leverage to the price of gold," says Handwerger, who owns this stock, "the higher the price of gold goes the rate of return significantly increases."
International Tower also has cash flow per share of -0.09 while NovaGold has -0.35, putting International Tower in the superior cash position.
International Tower has $120 million in cash after doing a capital raise in the fall of 2010, which should last the company until late 2013, at which point it would be looking for financing options to bring the property to the next level. The company's total capex is $1.3 billion. Adam Graf, director of emerging miners for Dahlman Rose & Co. has a buy rating on the stock and says "we continue to assume greater resource growth at Livengood."
NovaGold has $172.8 million in cash, $75 million in warrants and has enough money for the next two years. However, its total price tag to bring its two projects into production is $4 billion. NovaGold is also currently trying to buy the remaining 40% of Copper Canyon Resources, which owns a property right next to Galore. It is unknown yet how this purchase will affect the company's cash reserves.International Tower Hill also has the superior location position in Alaska.
Although NovaGold and International Tower operate in the same state, it's the "where" that counts. For all intents and purposes, Alaska is still a frontier place where the cost of energy and labor is high, and infrastructure is key. The Livengood project is located right on the eastern infrastructure corridor just 60 miles north of the active Fort Knox mine, owned by Kinross Gold (KGC). The project is near a highway that runs all the way up to Prudhoe Bay and its nearby oilfields. According to Carl Brechtel, COO of International Tower, Alaska has a lot of natural gas on the north slope, and "the state's currently looking at projects and ways to bring nat gas from the north slope down into the Alaskan population center, so that would be an opportunity for us."