NOVAGOLD is converting a shared Alaskan gold deposit into a single-asset United States developer, and that ownership change is the entire equity story. In late July the British Columbia issuer and Paulson Advisers signed definitive agreements under which Paulson contributes its remaining Donlin Gold interest into a new Delaware parent in exchange for stock. Existing holders keep about 65 percent of the combined company. Paulson receives about 35 percent for the contributed stake. Inclusive of shares already owned, Paulson ends with about 40 percent of the economics. Voting power is capped just under 20 percent. The structure ends the equal-governance stalemate that followed last year's Barrick buyout. The market still prices the name as a pre-revenue warrant rather than as a financed mine.
The tension is that treasury cash funds the study and a discounted Barrick note, not the construction bill. Cash and term deposits stood near $370 million at the May quarter-end. Management has an option to prepay the Barrick promissory note for $100 million before early December. The note's carrying value is near $174 million. The latest technical reports still put initial capital near $9 billion on a full-project basis. After-tax net present value is $5 billion at a $2100 study gold price. Paulson's contribution is priced at a 10 percent discount to implied Donlin equity. The reference is the short volume-weighted average as of the signing date, when the stock closed just under $6. Spot gold now sits far above that study price, which is why the paper value looks generous and why the construction-finance question has become unavoidable.
Second-quarter results showed a $26 million net loss and about $23 million of operating cash use. That print is consistent with a twelve-person developer that sells no ounces. Fluor is integrating the bankable feasibility study with WSP, Worley, and Hatch, with completion aimed at next year. Endeavour Financial and Macquarie Capital were named in August as advisers on project and infrastructure finance. The open question is whether shareholders and the British Columbia court clear the roll-up, and whether the refreshed study still supports a construction case once capital, permits, and a funding stack are forced into the same document.