NOVAGOLD RESOURCES is selling shares to raise money and has earmarked some of that for its Galore Creek copper-gold project north of here.
The deal, announced last week, features a syndicate of underwriters agreeing to buy (US) $332.5 million worth of common shares at $9.50 each and to then resell them to the public.
The company wants to spend the money at its Donlin gold project in Alaska and on “care and maintenance activities and continued exploration and advanced engineering studies at the Galore Creek project prior to any sale of the company’s interest in the project,” NovaGold said in a release.
Last year the company announced plans to sell its half ownership in the Galore project (Teck Cominco owns the other half) so it could concentrate on its Donlin project.
At the time the company said it was very pleased with the development work it was doing that could lead to a production decision at Galore Creek.
But the project would have to go through an environmental review, estimated to take two years, before mine development could start.
The projected capital cost of the project is in the $5 billion range.
There’s been no further word on NovaGold’s plans to sell its share of Galore Creek.
This would be the second attempt by NovaGold to develop the Galore ore body. A first attempt shut down in 2007 when construction costs spiraled out of control.
NovaGold also wants to spin off its copper holdings into NovaCopper to better boost shareholder value.