NovaGold Dangerously Close to Broke

For NovaGold Resources Inc. (NG) investors, the expected happened on Monday, when the company said it is one step away from being unable to meet its financial obligations.

Shares in NovaGold have fallen more than 75% to C$0.53 in late morning trading.

NovaGold said it received a cash call related to its Galore Creek partnership for about C$1.9-million due today, and does not intend to make the payment. It does, however, intend to make a payment related to a cash call for its Donlin Creek project of approximately $3.9 million due on or about November 27, 2008.

NovaGold also said its cash position has dwindled to just C$10-million due to cost overruns and may need to sell assets in order to repay a C$20-million loan that comes due at the end of this year, because it has been unable to secure financing.

If that weren't enough, the company suspended the startup of its Rock Creek operation in Alaska after it failed to meet environmental requirements.

Comments

[ThinkRight:]

First of many ?

2008 Nov 24 08:18 PM

[Chipset35:]

Analyst Paolo Lostritto of Wellington West Capital Markets wrote that the future actually looks promising for NovaGold Resources Inc. (NG) in an article on this website...Does he still haev a job?
LOL

2008 Nov 25 10:07 AM