Last year Vancouver-based NovaGold (NYSEMKT:NG) was the center of attention due to the hostile takeover bid launched by Toronto-based Barrick Gold Corp. (NYSE:ABX). NovaGold shareholders weren't enthralled with Barrick's all-cash bid. By the time the offer expired in December, Barrick had collected just under 14.8% of NovaGold's shares.
The David-and-Goliath battle was fun to watch as NovaGold's scrappy CEO, Rick Van Nieuwenhuyse, did all he could to belittle the offer from Barrick, the world's largest gold producer.
Speaking at PDAC on Tuesday, Mr. Van Nieuwenhuyse pointed out that 2007 will mark the year NovaGold transforms itself from junior development company to gold producer. One of NovaGold's projects, the Rock Creek mine near Nome, Alaska, is under construction and should be in production this year. Full capacity for the project is 100,000 ounces a year. Meanwhile, spades are also expected to hit the ground for another project, Galore Creek, which could be in production by 2012. "It's going to be a busy year," Mr. Van Nieuwenhuyse said.
And what about arch-rival Barrick? The big miner remains a partner with NovaGold on another project in Alaska, Donlin Creek. Barrick owns 30%, but can boost that to 70% if it completes a bankable feasibility study by Nov. 13, 2007. If it doesn't, NovaGold will retain its current 30% stake in the project. Expect more fireworks between Barrick and NovaGold as that November deadline looms, and both companies assert their claim to majority control of the project.