NovaGold boosts resource estimates based on drilling program
Friday, August 25th 2006
NovaGold Resources Inc., the target of a hostile takeover bid from Barrick Gold Corp. (TSX:ABX), increased its mineral resource estimates Thursday based on results from a drilling program at its Donlin Creek and Galore Creek projects.
The Vancouver miner said its gold measured and indicated resources had been revised upwards by 14 per cent to 20.6 million ounces, while copper was up 25 per cent to 8.5 billion pounds and silver rose 55 per cent to 117.1 million ounces.
“The estimates released today provide further evidence of the value being created for NovaGold shareholders at the company’s world-class assets,” stated CEO Rick Van Nieuwenhuyse.
“Barrick’s hostile bid does not recognize NovaGold’s solid growth record or the potential of our projects. This enhanced resource base provides further support for shareholders to reject the hostile Barrick bid.”
NovaGold has urged shareholders to reject Barrick’s $1.5-billion offer and filed a lawsuit against the gold giant, claiming Barrick misused confidential information belonging to NovaGold when it made a competing bid for Pioneer Metals Corp.
Pioneer owns rights on a property adjacent to NovaGold’s Galore Creek project in B.C.
NovaGold went after Pioneer with a 57-cents-a-share takeover offer after it failed to purchase certain claims directly in June. In July, Barrick announced its own $65-million-Cdn offer for Pioneer, as well as the hostile offer for NovaGold.
Barrick has dismissed the lawsuit, calling it “unfounded” and saying its offer reflects full and fair value to NovaGold’s shareholders.
NovaGold owns a 70 per cent interest in the Donlin Creek project in Alaska, considered one of the world’s largest gold deposits.