Barrick offloads entire stake in NovaGold (April 20, 2007)

Vancouver – Making good on the planned sale of its 14.8% stake in NovaGold Resources (NG-T, NG-N), Barrick Gold (ABX-T, ABX-N) has divested its 13.6-million share position in the company that it targeted in a hostile takeover attempt last year.

Just after the April 20th opening bell in American Stock Exchange trading, a pair of large NovaGold transactions (9 million and just over 3 million shares respectively) were lodged at US$16.25 per share. Earlier in the week Barrick also sold about 1.5 million NovaGold shares through the markets.

In early April, Barrick tipped the market to its intentions announcing the planned regulatory filings to clear the way for it to “dispose of all or a portion of the NovaGold shares owned by it in the open market.”

The divesture comes after a heated hostile takeover attempt of NovaGold by Barrick where the senior gold producer came up short in acquiring sufficient shares to take control. Barrick allowed its US$16 per share offer expire last December with only a minority interest tendered.

“We had that stake and decided that it didnt make much sense and there were better opportunities to deploy that capital elsewhere,” stated Barrick VP of Corporate Communications Vincent Borg.

Barrick recently entered into a purchase agreement to acquire Emperor Mines‘ (EMP-A) 20% interest in the Porgera gold mine in Papua New Guinea for US$250 million. The acquisition will give Barrick 95% interest in the mine that produced about 542,000 oz. of gold in 2006.

NovaGold recently priced a planned public offering of 12.5 million shares at US$16.25 apiece to raise gross proceeds of US$203 million. Funds are earmarked for exploration and construction at the Galore Creek copper gold project in northwestern British Columbia that holds proven and probable reserves of 540.7 million tonnes grading 0.56% copper, 0.3 gram gold per tonne and 5.3 grams silver per tonne.

Both Barrick (30%) and NovaGold (70%) are partnered on the Donlin Creek gold project in Alaska. Barrick can earn a further 40% interest by completing a bankable feasibility study and make a positive decision to construct a mine by November 2007. The project hosts a measured and indicated resource of 215 million tonnes of 2.4 grams gold (about 16.6 million contained oz.) plus an additional 227 million inferred tonnes at 2.34 grams gold (about 17.1 million contained oz.).

Shares of NovaGold edged up 9 to close at $18.15 apiece in April 20th TSX trading. Based on its 92-million shares outstanding, the company posts an almost $1.7-billion market capitalization and has a 52-week trading range of $11.62-to-$20.44. Barrick shares closed up a dime at $32.55.