Mentioned:
Gold prices continue to soar to new all time highs. And now, a publicly traded company and a hedge fund manager are pouring a billion dollars into one of Alaska’s most promising precious metals projects.
What’s happening:
- NovaGold Resources (NYSE: NG) and American hedge fund manager John Paulson have entered into a new deal with Barrick Gold (NYSE: GOLD) to purchase Barrick Gold’s 50% ownership stake in the Donlin Gold Project located in Alaska for $1B USD
By the numbers:
- John Paulson will acquire 40% of the Barrick Gold’s stake in the Donlin Gold Project for $800M USD
- NovaGold Resources will acquire 10% of Barrick Gold’s stake in the Donlin Gold Project for $200M USD
- Prior to the new deal NovaGold Resources already owned 50% of the Donlin Gold Project, which will now give NovaGold Resources and John Paulson full control of the property
Why it matters:
- The Donlin Gold Project is one of the single largest undeveloped gold deposits in North America, with approximately 39M ounces of gold indicated on the property
Going deeper:
- John Paulson’s hedge fund Paulson & Co has been a highly successful investor in gold companies and exploration projects for decades, including being one of the largest shareholders of Detour Gold Corporation prior to the company eventually being acquired by Agnico Eagle Mines (NYSE: AEM)
The fine print:
- The Donlin Gold Project will still ultimately require state permitting prior to being able to go into full scale production, which has been an ongoing challenge due to ongoing environmental and political opposition in Alaska
