NOVAGOLD RESOURCES INC. (TSX:NG)(NYSE MKT:NG) today notified
holders ("Holders") of its outstanding 5.5% Convertible Notes due
May 1, 2015 (the "Notes") that they have the option to require
NOVAGOLD to purchase for cash all or a portion of their Notes held
on May 1, 2013 (the "Put Option"). The Put Option can be exercised
commencing today and expiring at 5:00 pm, Eastern Time, on May 1,
2013. NOVAGOLD will purchase of all of the Notes surrendered at a
price equal to 100% of the principal amount. With approximately
US$300 million in cash and cash equivalents at February 28, 2013,
NOVAGOLD has a strong balance sheet and more than sufficient cash
resources to repay the entire amount of US$95 million of the Notes
outstanding as well as fund the advancement of its flagship Donlin
Gold Project in Alaska through the permitting process.
As required by the rules of the Securities and Exchange
Commission (the SEC), NOVAGOLD will file a Tender Offer Statement
(the "Statement") with the SEC. The Statement will include a notice
to Holders (the "Issuer Put Right Notice") specifying the terms and
conditions of the Put Option and the procedures for its exercise.
The Holders are strongly encouraged to read the Issuer Put Right
Notice and other relevant documents filed with the SEC before
making a decision relating to the exercise of the Put Option.
Materials filed with the SEC will be available electronically
without charge at the SEC's website, www.sec.gov.
Holders may withdraw any Notes previously surrendered for
purchase at any time prior to 5:00 pm, Eastern Time, on May 1,
2013. Notes that are not surrendered pursuant to the Put Option
will remain outstanding in accordance with the terms of the Notes
and the indenture.
NOVAGOLD will pay accrued and unpaid interest on the Notes
through April 30, 2013 to holders of record on April 15, 2013
regardless of whether the Put Option is exercised or not. As a
result, there will be no accrued and unpaid interest on the Notes
on May 1, 2013.
Neither NOVAGOLD nor its Board of Directors or staff is making
any recommendation as to whether any Holder should or should not
exercise the Put Option.
BNY Mellon (formerly known as The Bank of New York) is acting as
paying agent for the Put Option. Copies of the Issuer Put Right
Notice and additional information relating to the Put Option may be
obtained from BNY Mellon by calling (212) 815-4869.
About NOVAGOLD
NOVAGOLD is a well-financed precious metals company engaged in
the exploration and development of mineral properties in North
America. Its flagship asset is the 50%-owned Donlin Gold project in
Alaska, one of the safest jurisdictions in the world. With a total
of approximately 34 million ounces(1) of gold in the Proven and
Probable reserve categories (505 million tonnes at an average grade
of approximately 2.1 grams per tonne), Donlin Gold is regarded to
be one of the largest, and most prospective known gold deposits in
the world. According to the updated Feasibility Study (as defined
below), once in production, Donlin Gold should average
approximately 1.5 million ounces of gold per year for the first
five years, followed by decades of more than one million ounces of
gold per year on a 100% basis. The Donlin Gold project has
substantial exploration potential beyond the designed footprint
which currently covers only three kilometers of an approximately
eight-kilometer strike length of the property. Permitting is
underway for the Donlin Gold project, a clearly defined process
expected to take 3-4 years. NOVAGOLD also owns 50% of the Galore
Creek copper-gold-silver project located in northern British
Columbia. According to the 2011 Pre-Feasibility Study, Galore Creek
is expected to be the largest copper mine in Canada, a tier-one
jurisdiction, when it is put into production. NOVAGOLD is currently
evaluating opportunities to sell all or a portion of its interest
in Galore Creek and would apply the proceeds toward the development
of Donlin Gold. NOVAGOLD has a strong track record of forging
collaborative partnerships, both with local communities and with
major mining companies.
Scientific and Technical Information
Scientific and technical information contained herein with
respect to Donlin Gold is derived from the "Donlin Creek Gold
Project Alaska, USA NI 43-101 Technical Report on Second Updated
Feasibility Study" dated November 18, 2011 compiled by AMEC (the
"Feasibility Study"). Kirk Hanson, P.E., Technical Director, Open
Pit Mining, North America, (AMEC, Reno), Gordon Seibel, R.M. SME,
Principal Geologist, (AMEC, Reno), Tony Lipiec, P.Eng. Manager
Process Engineering (AMEC, Vancouver) are the Qualified Persons
responsible for the preparation of the Feasibility Study, each of
whom are independent "qualified persons" as defined by NI
43-101.
Cautionary Note Regarding Forward-Looking Statements
This press release includes certain "forward-looking
information" and "forward-looking statements" (collectively
"forward-looking statements") within the meaning of applicable
securities legislation, including the United States Private
Securities Litigation Reform Act of 1995. All statements, other
than statements of historical fact, included herein including,
without limitation, the timing of permitting and potential
development of Donlin Gold, statements relating to NOVAGOLD's
future operating and financial performance, outlook, and the
potential sale of all or part of NOVAGOLD's interest in Galore
Creek are forward-looking statements. Forward-looking statements
are frequently, but not always, identified by words such as
"expects", "anticipates", "believes", "intends", "estimates",
"potential", "possible", and similar expressions, or statements
that events, conditions, or results "will", "may", "could", or
"should" occur or be achieved. These forward-looking statements may
include statements regarding perceived merit of properties;
exploration results and budgets; mineral reserves and resource
estimates; work programs; capital expenditures; timelines;
strategic plans; completion of transactions; market prices for
precious and base metals; intended use of proceeds; or other
statements that are not statements of fact. Forward-looking
statements involve various risks and uncertainties. There can be no
assurance that such statements will prove to be accurate, and
actual results and future events could differ materially from those
anticipated in such statements. Important factors that could cause
actual results to differ materially from NOVAGOLD's expectations
include the uncertainties involving the need for additional
financing to explore and develop properties and availability of
financing in the debt and capital markets; uncertainties involved
in the interpretation of drilling results and geological tests and
the estimation of reserves and resources; the need for continued
cooperation with Barrick Gold Corporation and Teck Resources
Limited for the continued exploration and development of the
Donlin Gold and Galore Creek properties; the need for cooperation
of government agencies and native groups in the development and
operation of properties; the need to obtain permits and
governmental approvals; risks of construction and mining projects
such as accidents, equipment breakdowns, bad weather,
non-compliance with environmental and permit requirements,
unanticipated variation in geological structures, ore grades or
recovery rates; unexpected cost increases, which could include
significant increases in estimated capital and operating costs;
fluctuations in metal prices and currency exchange rates; and other
risk and uncertainties disclosed in NOVAGOLD's Annual Information
Form for the year-ended November 30, 2012, filed with the Canadian
securities regulatory authorities, and NOVAGOLD's annual report on
Form 40-F filed with the United States Securities and Exchange
Commission and in other NOVAGOLD reports and documents filed with
applicable securities regulatory authorities from time to time.
NOVAGOLD's forward-looking statements reflect the beliefs, opinions
and projections on the date the statements are made. NOVAGOLD
assumes no obligation to update the forward-looking statements of
beliefs, opinions, projections, or other factors, should they
change, except as required by law.
Cautionary Note to United States Investors
This press release has been prepared in accordance with the
requirements of the securities laws in effect in Canada, which
differ from the requirements of U.S. securities laws. Unless
otherwise indicated, all resource and reserve estimates included in
this press release have been prepared in accordance with National
Instrument 43-101 Standards of Disclosure for Mineral Projects ("NI
43-101") and the Canadian Institute of Mining, Metallurgy, and
Petroleum Definition Standards on Mineral Resources and Mineral
Reserves. NI 43-101 is a rule developed by the Canadian Securities
Administrators which establishes standards for all public
disclosure an issuer makes of scientific and technical information
concerning mineral projects. Canadian standards, including NI
43-101, differ significantly from the requirements of the United
States Securities and Exchange Commission ("SEC"), and resource and
reserve information contained herein may not be comparable to
similar information disclosed by U.S. companies. In particular, and
without limiting the generality of the foregoing, the term
"resource" does not equate to the term "reserves". Under U.S.
standards, mineralization may not be classified as a "reserve"
unless the determination has been made that the mineralization
could be economically and legally produced or extracted at the time
the reserve determination is made. The SEC's disclosure standards
normally do not permit the inclusion of information concerning
"measured mineral resources", "indicated mineral resources" or
"inferred mineral resources" or other descriptions of the amount of
mineralization in mineral deposits that do not constitute
"reserves" by U.S. standards in documents filed with the SEC.
Investors are cautioned not to assume that any part or all of
mineral deposits in these categories will ever be converted into
reserves. U.S. investors should also understand that "inferred
mineral resources" have a great amount of uncertainty as to their
existence and great uncertainty as to their economic
and legal feasibility. It cannot be assumed that all or any part
of an "inferred mineral resource" will ever be upgraded to a higher
category. Under Canadian rules, estimated "inferred mineral
resources" may not form the basis of feasibility or pre-feasibility
studies except in rare cases. Investors are cautioned not to assume
that all or any part of an "inferred mineral resource" exists or is
economically or legally mineable. Disclosure of "contained ounces"
in a resource is permitted disclosure under Canadian regulations;
however, the SEC normally only permits issuers to report
mineralization that does not constitute "reserves" by SEC standards
as in-place tonnage and grade without reference to unit measures.
The requirements of NI 43-101 for identification of "reserves" are
also not the same as those of the SEC, and reserves reported by
NOVAGOLD in compliance with NI 43-101 may not qualify as "reserves"
under SEC standards. Accordingly, information concerning mineral
deposits set forth herein may not be comparable with information
made public by companies that report in accordance with U.S.
standards.
(1) Proven and Probable reserves of 0.57 million ounces and
33.28 million ounces respectively (504.8 million tonnes at an
average grade of approximately 2.09 grams per tonne) which are
included in Measured and Indicated resources of 0.63 million ounces
and 38.38 million ounces respectively (541 million tonnes at an
average grade of approximately 2.2 grams per tonne). See the
Feasibility Study for further information.
Contacts: NOVAGOLD RESOURCES INC. Melanie Hennessey Vice
President, Corporate Communications 604-669-6227 or 1-866-669-6227
NOVAGOLD RESOURCES INC. Erin O'Toole Analyst, Investor Relations
604-669-6227 or 1-866-669-6227 www.novagold.com
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