Since its last feasibility study, capital has gone up 30% but the gold price has risen 100%. Although the mine will cost more to build, the gold in the ground will now be worth more. "Unfortunately Barrick put out those numbers, in our opinion, prematurely but they were put out," says van Nieuwenhuyse. "I am sure they had their reasons ... Maybe they have an agenda, maybe not. Maybe they just think it is the way they need to be to do business ... think that Barrick would argue it's not material to them but it is very material to us." NovaGold's stock cratered on the news, down 20% in a week. Shares have continued to free fall another 34.6% in the past month. Two industry insiders said this move by Barrick could have been deliberate, to drag NovaGold's stock down to a price where Barrick could buy it cheaply. In 2006, Barrick made an offer for NovaGold at $14.50 a share when the stock was trading at between $15-$17. NovaGold rejected the offer on the basis that shares weren't adequately valued. Not only could Barrick currently get the company for half its offer price but it would also be a bit of sweet revenge for having been burned before. When Barrick was asked about its intentions, Andy Llyod, senior manager, communications at the company wrote, "We provided updates on all our major projects during investor day, and Donlin was included in that." Donlin has the potential to produce 1.3 million ounces of gold annually, split between the two companies, at around $400 an ounce. Cash costs will be even less now as Barrick and NovaGold build out a natural gas pipeline -- making this project, one of the world's largest undeveloped gold mines, invaluable to both parties. Analysts and industry experts don't think that Barrick's intentions were sinister but that a hostile takeover bid could very much be a reality for NovaGold with shares down 50% for the year. Paolo Lostritto, equity research analyst at National Bank Financial thinks that Barrick was being honest but that the lower NovaGold's stock sinks, the less options they have. "The key for NovaGold is having the data reviewed by a third party to keep Barrick honest."
Alix Steel in New York. >To contact the writer of this article, click here: Alix Steel. Follow TheStreet on Twitter and become a fan on Facebook.