The top executive at
says it's not over for his company, despite this week's setback on a mining project.
NovaGold CEO Rick Van Nieuwenhuyse was in New York on Thursday in an effort to reassure investors that the NovaGold story remains valid and that there is still hope for its joint venture project with
plunged almost 50% Monday after it and Teck announced that they would not be continuing mine construction at Galore Creek, following a jump in development cost estimates to as high as $5 billion from the previous forecast of $2.2 billion.
Not Over for Nova, Says CEO
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Speaking exclusively with
, he acknowledged the tough week Nova's stockholders were having and indicated that he and his team were working closely with Teck and their engineering consultants to get a firmer handle on costs.
Van Nieuwenhuyse says the final estimate may be substantially below the $5 billion, which he says is the high end of a range. Looking relaxed and confident, he brushed off the suggestion by one analyst that investors should bail before the stock is history.
Chile-based gold analyst Clive Maund published a bearish note Tuesday urging investors to dump the shares.
"One should not be tempted to buy on the grounds it is cheap," he writes. "Such a move
with a large gap and huge fall frequently leads to a stock being delisted."
Investors should view any rally as a chance to unload shares at "a somewhat reduced loss," the analyst says.
Van Nieuwenhuyse notes that at least part of the problem with the mine's economics is that lenders insist on using metal price estimates way below current spot prices. That's despite the more general view that the current bullish scenarios for copper, gold and silver look set to continue.
Shares of Nova were recently trading at around $10.11, off 1.3% from the prior close, but half of where they were late last week. Teck shares were losing 1.6% at around $36.