Gregory Lang, former president of Barrick Gold North America, will take the helm of NovaGold effective immediately. The company will spin off its copper project, Ambler, to create NovaCopper, a subsidiary, led by founder and former CEO Rick Van Nieuwenhuyse, and the company is open to selling half or all of its interest in Galore Creek, which it co-owns with Teck Resoures (TCK).
At the heart of the dramatic shift was money. Costs at Donlin Creek, one of the biggest gold mines in the world, grew from $4.5 billion to $7 billion, to be split evenly between NovaGold and Barrick. Now NovaGold, a $2.11 billion company will have to fork over $3.5 billion over the next 5 years before the mine even enters production.
Donlin has the potential to produce 1.3 million ounces of gold annually at 2 grams per ton at around $400 an ounce. A full updated feasibility study is scheduled to be released by the end of the year.
"The move is being made because the board and management team believe the assets individually are worth more than under one umbrella," says Paolo Lostritto, equity research analyst at National Bank Financial, who has a sector perform rating on the stock. "The move is more to pay for
>To contact the writer of this article, click here: Alix Steel.
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