NOVAGOLD Resources has signed a series of definitive agreements to acquire the remaining 40% interest in Donlin Gold from Paulson Advisers and its affiliates in an all-share transaction.
The deal will give NOVAGOLD full ownership of Donlin Gold and lead to the creation of a new US-domiciled parent company, NovaGold Corporation, which will seek a listing on the New York Stock Exchange.
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The resulting company is expected to have an equity value of around $4.2bn (C$5.91bn).
Following completion, current NOVAGOLD shareholders, including Paulson’s existing equity interest, are expected to hold around 65% of NovaGold Corporation, while Paulson will receive an approximate 35% stake on a fully diluted basis for its Donlin Gold share.
Paulson’s economic interest in the combined entity will be around 40%, with voting rights capped at 19.99%.
The deal is subject to approvals from NOVAGOLD shareholders, the courts and relevant regulators, as well as customary closing conditions, with closure targeted for the fourth quarter of 2026.
Paulson will have the right to nominate up to two directors should its equity holding remain above 15%, or one director if it drops to between 10% and 15%.
The Donlin Gold project, located in Alaska, hosts around 40 million ounces (moz) of measured and indicated gold resources.
It is projected to produce an average of 1.3moz of gold per year in its first decade and approximately 1.1moz annually over a 27-year mine life.
NOVAGOLD president and CEO Greg Lang said: “We at NOVAGOLD could not be more excited that this exceptional partnership is now heading to the next level.
“Our combination epitomises the ultimate “smart” consolidation transaction in the gold industry that aligns the interest of everyone involved, and I feel immense pride at seeing it happening.”
The arrangement will proceed through a court-approved plan under the Business Corporations Act (British Columbia).
Citi is acting as exclusive financial adviser to NOVAGOLD, with legal representation from Skadden, Arps, Slate, Meagher & Flom and Blake, Cassels & Graydon.
Paulson is being advised by Kleinberg, Kaplan, Wolff & Cohen, P.C., Goodmans and Chipman Brown Cicero & Cole.
