The “Big Short” Billionaire investor John Paulson struck a deal with NOVAGOLD RESOURCES INC. (AMEX:NG) to consolidate ownership of the Donlin Gold project in Alaska. The transaction combines NOVAGOLD’s existing 60% interest in Donlin Gold with Paulson’s remaining 40% stake in an enterprise worth about $4.2 billion.
“Consolidating our interest in Donlin into NOVAGOLD enhances Donlin’s organizational structure and will facilitate, streamline and expedite the development of the Donlin mine,” Paulson said in the news release. “As the major shareholder of New NG, I share the conviction that Donlin Gold is a world-class gold investment.”
Under the agreement, NOVAGOLD will acquire Paulson’s interest in Donlin Gold through an all-stock transaction. Through a new company, NovaGold Corporation domiciled in Delaware, existing NOVAGOLD shareholders will own around 65% of the combined company, while Paulson will receive roughly 35% of shares. The firm is expected to list on the New York Stock Exchange.
When accounting for NOVAGOLD shares Paulson already owns, he will hold about 40% of the new company, although his voting rights will be capped at 19.99%. He will be a co-chair, alongside NOVAGOLD Chairman Thomas Kaplan.
Streamlining a World-Class Project
The consolidation should strengthen NOVAGOLD across key project attributes. By acquiring the remaining interest in Donlin Gold, the company adds more than 16 million attributable measured and indicated gold ounces, including 13 million of proven and probable reserves.
Its attributable annual gold production during the project’s first decade is projected to increase by more than 520,000 ounces, while a single corporate structure is also expected to simplify project financing and engagement with government agencies, sovereign wealth funds and local stakeholders.
Donlin Gold is widely regarded as one of the premier undeveloped gold projects globally. The deposit contains approximately 40 million ounces of measured and indicated gold resources grading 2.22 grams per ton—more than double the industry’s average grade.
The project has the potential to produce about 1.1 million gold ounces annually over a 27-year mine life, with production up to 1.3 million gold ounces in the first decade while mining higher-grade ore.
Notably, current resources cover only about three kilometers of an eight-kilometer mineralized trend, leaving significant exploration upside across the broader property.
Our combination epitomizes the ultimate ‘smart’ consolidation transaction in the gold industry that aligns the interests of everyone involved,” NOVAGOLD President and CEO Greg Lang said.
The transaction is expected to close in the fourth quarter of 2026.
NG Price Action: NOVAGOLD RESOURCES shares were down 0.16% at $6.20 during premarket trading on Thursday, according to Benzinga Pro data. The stock gained 10.3% in the previous trading session.
Image via Shutterstock
Recent Comments