NovaGold Starts to Seek Buyer for 50% Galore Creek Stake
NovaGold Resources Inc. (NG), a Canadian mining exploration company, is working with two banks to sell its 50 percent stake in the Galore Creek project in British Columbia.
“NovaGold and our bankers at Royal Bank of Canada and J.P. Morgan have begun the process of engaging with potential suitors for our portion of the project,” Chief Executive Officer Greg Lang said today in a statement.
Teck Resources Ltd. (TCK/B), Canada’s biggest diversified mining company, owns the other half of Galore Creek, a copper and gold project in northwestern British Columbia. Teck said on Nov. 16 it has a 90-day right of first refusal in its partnership agreement with NovaGold on the property, which NovaGold says would be the largest copper mine in Canada.
“We have not waived our right of first refusal,” Marcia Smith, a spokeswoman for Teck, said today by telephone. She declined to elaborate.
NovaGold said in November it would “explore opportunities” to sell all or part of its holding in the project. The company intends to concentrate on funding and developing its “flagship” Donlin gold project in Alaska, Lang said today. NovaGold owns 50 percent of Donlin and Barrick Gold Corp., the world’s largest producer of the metal, owns the other half. The mine may require about $6.7 billion in startup capital, according to a Dec. 5 feasibility study.
Investors will vote on March 28 on a plan to spin off the company’s Ambler project in Alaska, NovaGold said yesterday. Shareholders will get one share of the new company, NovaCopper Inc., for every six NovaGold shares they hold.
Lang, previously president of Barrick’s North American unit, joined NovaGold last month. He replaced Rick Van Nieuwenhuyse, who will lead NovaCopper.
To contact the reporter on this story: Liezel Hill in Toronto at lhill30@bloomberg.net
To contact the editor responsible for this story: Simon Casey at scasey4@bloomberg.net
Rate this Page