NovaGold thwarted in blocking Barrick bid

Vancouver – NovaGold (NG-T, NG-X) was dealt a blow following a ruling from the U.S. District Court in Alaska declining to grant a preliminary injunction temporarily suspending Barrick Gold‘s (ABX-T, ABX-N) hostile take-over bid.

Far from giving up its battle, NovaGold is also seeking to fast-track a trial to clarify what Barrick must undertake, under the joint venture agreement, in satisfying its acquisition of an additional 40% in the Donlin Creek gold project in western Alaska. The court has recognized a “genuine dispute” between the two parties over the project.

In late-August NovaGold filed its lawsuit, alleging Barrick violated U.S. securities laws in that it misstated ownership of Donlin Creek. Barrick has repeatedly stated in will earn a 70% interest in the project by meeting contractual back-in requirements (completion of a bankable feasibility study and a decision to commence mine construction) by November 12, 2007, thereby reducing NovaGold’s interest to 30%. The lawsuit also looked to enact a temporary restraining order to block Barrick’s bid.

Novagold currently holds a 70% interest in Donlin Creek with Barrick holding 30% through its subsidiary Placer Dome U.S. The deposit hosts a measured and indicated resource of 167.2 million tonnes grading 2.76 grams gold per tonne for a contained inventory of more than 14.8 million ozs. of gold. A further 156 million tonnes of inferred resource averaging 2.72 grams gold was also tabled, containing 13.6 million ozs of gold.

Barrick’s offer for NovaGold, US$14.50 per share, is set to expire on September 15th unless the major extends its offer. Shares of Novagold have traded at a premium above this level with the market possibly anticipating a sweetened offer.