The story
NovaCan Mining Resources was founded in 1984 in Dartmouth, Nova Scotia. The company was renamed to NOVAGOLD Resources Inc. in 1987, as it became listed on the Toronto Stock Exchange with a $2.5 million initial public offering. The company raised additional funds through private placements and they were able to buy and sell numerous mineral exploration properties. They were able to successfully acquire and develop the Murray Brook Mine. It was a small, low-grade mine that began to commercially produced gold and silver in 1989 and despite investment of advanced technology to expand its mine life, closed to 1992 still owing debt to the National Bank of Canada who financed its construction. Seeking to expand, NOVAGOLD sought to take over, but only acquired (71%) controlling interest, in Etruscan Enterprises Ltd. for its properties in the Northwest Territories. After Rick Van Nieuwenhuyse took over as president, and later as CEO, the company purchased the Alaska Gold Co. in 1998 for its Rock Creek property in Alaska.
NOVAGOLD re-located from Dartmouth to Los Gatos, California in 2000 as it pursued an interest in business to business e-commerce with the creation of a new subsidiary company called NovaXchange. However, by 2002, with all its mineral assets located in Alaska and Yukon, the company had re-located again to Vancouver. In 2003 it was listed on the American Stock Exchange. NOVAGOLD acquired SpectrumGold Inc. which had control of several mining prospects in Yukon. Before they were amalgamated, NOVAGOLD used SpectrumGold to purchase RioTinto and Anglo American's Galore Creek property in northwest British Columbia for US$20 million on condition of a pre-feasibility study (that evaluates mining options) was completed. SpectrumGold also acquired an 80% interest in the adjacent Copper Canyon property from Eagle Plains Resources.
With the Galore Creek and Donlin properties emerging as potentially developable mines, the stock price of NOVAGOLD had risen from $0.20 a share in 2000 to $10 in 2005. Share prices would spike to nearly $18 in July 2006 as Barrick Gold launched US$1.54-billion hostile takeover. At the time, Barrick was the world's largest gold mining company and had previously acquired Placer Dome, taking its 30% interest in the Donlin property. Several months prior Galore Creek's neighbouring owner, Pioneer Metals had filed a lawsuit against NOVAGOLD for a breach of contract and NOVAGOLD responded by seeking to acquire the company. At the same time as that Barrick made its offer to NOVAGOLD shareholders, it also made an offer that trumped NOVAGOLD's offer for Pioneer Metals. NOVAGOLD management and largest shareholders, which at the time was Neuberger Berman and Sprott Assets, resisted the takeover believing the shares to be under-priced. Barrick responded by lowering its ambition to just acquiring controlling interest (requiring only 50% of shares) as NOVAGOLD launched two lawsuits attempting to put off Barrick. Barrick successfully acquired Pioneer Metals and increased its offer to NOVAGOLD shareholders by 10%. By December Barrick was only able to acquire 14.8% of shares. A few months later, in 2007 as Barrick sold off its shares, NOVAGOLD and Teck Resources announced a 50-50 joint venture partnership to develop the Galore Creek mine and its shares peaked at $20. However, their stock price would collapse by the end of the year as an updated cost analysis revised the mine cost up to $5 billion and Teck withdrew support for proceeding at that price. A similar independent cost estimate moved Donlin project from US$2.5 to US$5 billion. Meanwhile, NOVAGOLD had developed the small Rock Creek gold mine near Nome, Alaska but it was forced to shut down shortly after beginning production as it defaulted on a loan and failed to fulfill environmental obligations. NOVAGOLD stock would bottom out under a dollar in late-2008, during the 2008 financial crisis.
NOVAGOLD rebuilt by selling a one-third stake in the company to Thomas Kaplan's Electrum Strategic Resources LLC. With this they were able to settle a class-action lawsuit by shareholder over misleading statement regarding the potential of a Galore Creek mine and buy out its partner, Copper Canyon Resources, on the adjacent property to Galore Creek. Meanwhile, they disposed of other assets to re-focused solely on advancing the development of the Galore Creek and Donlin properties. This included splitting off its copper assets to a new company called NovaCopper (later renamed Trilogy Metals) under Rick Van Nieuwenhuyse, with Greg Lang becoming the new CEO of NOVAGOLD, and selling the aborted Rock Creek mine. NOVAGOLD also sought buyers, beginning in 2012, for its stake in Galore Creek but it was not until 2018 that it was able to complete a deal with Newmont, leaving Donlin as its sole mining asset. Since then the company pursued project planning and permitting.
From Wikipedia’s article on NovaGold Resources, shared under CC BY-SA 4.0.6