Three Alaskan Gold Miners With Golden Promise

NovaGold has to spend millions of dollars a year on social outreach in the form of jobs and training, in order to connect with the surrounding communities. According to Nieuwenhuyse, there are no large commercial fisheries nearby, but the company will still spend about $5 million a year for water and air quality studies as well as monitoring the fish and wild life.

Northern Dynasty has the worst reputation when it comes to location as it is near the Bristol Bay salmon fishery and is 20 miles away from a fault line. CEO, Ron Thiessen, says "if we believe we would damage the fishery, we wouldn't build the mine." But various environmental and native groups disagree and are filing lawsuits to stop the project. Several laws have been proposed in the state legislature to prevent mining in the area, but have since been defeated.

Thiessen contends that if the company outsources its power, builds a spur line to take advantage of Alaska's natural gas pipelines, as well as build a deep sea port facility to import liquid natural gas, that these moves would benefit the whole community. They would bring cheaper energy and more jobs.

Northern Dynasty has done extensive community outreach in the Lake and Peninsula borough, where Thiessen claims the company doesn't have any issues. Now the company must do more outreach to the small 22 surrounding communities.

All three companies are also takeover targets. Northern Dynasty wants to be bought. Thiessen has said when it comes time to raise its $1.8 billion in capital that it would put itself up for sale. NovaGold has also intimated it would be open to a buyout or partnership. Barrick Gold made an offer for the company in 2006 at $16 a share and Paulson owns 9% of the company, which he was rumored to do to press the company to sell itself.

International Tower Hill claims it wants to develop the mine itself but John Paulson also owns 6% of the company and AngloGold Ashanti (AU) owns 11.5%. The company was not interested in partnerships.

Analysts are mostly optimistic on these three junior miners. Northern Dynasty has 3 buy ratings; NovaGold has 2 buys and 3 holds; International Tower Hill has 5 buys and 2 holds.

Adam Graf, director of emerging miners for Dahlman Rose & Co. covers all three and has a buy rating on Northern Dynasty and International Tower Hill but a hold on NovaGold.

Graf sees "greater resource growth at Livengood," a long mine life at Pebble, and, while NovaGold's projects are huge, Graf is worried about the company's $4 billion financial responsibility for all of its mines.

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--Written by Alix Steel in New York.



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