RE: NG Worth $75 per share?The market is currently giving a value of about $50 CDN per ounce in the ground for the Donlin Creek asset, assuming that we ignore any outstanding debt. No market value is being assigned for any of the other assets. If Donlin Creek was in production, it would be worth $200 - $250 per ounce in the ground. Cost to get into production will be 50% of $2.5 - $5.0 Billion CDN. To a purchaser, the Donlin Creek Resources is worth $100 - $200 per ounce in the ground or about $8.0 to $16.00 per share. A more realistic range is $8.0 - $12.00 CDN per share.
Quite a few shares were issued over the past year at low prices in order to pay off debt, which diluted existing shareholders. Novagold does not have the money to fund a Donlin Creek mine. It will take at least one more year of trading for the 200 day moving average to be repaired. Having said all of this, Novagold shares represent a great buy at $4.00 CDN. The Donlin Creek asset should be worth at least $8.00 - $12.00 per share some day (even up to $16.00 if we are lucky). The other assets do not offer any appeal at this time.
In order to unlock the value of the Rock Creek asset, a new company should be formed and equity raised to start up and fund the mine into production. NG shareholders should be given one share in the new company for each share held. Once in production, this asset could have a market capitalization of $100 - $200 million.
The Galore Creek asset won't be developed yet but will be worth something in the future. It should also be spun off as a stand alone company in order for the stock market to offer a reasonable valuation.
Management has done a great job to prove up the reserve base that they have. Next step is to spin off all assets and bring in a new management team that have mining operational experience.
I'll be a buyer of these shares this upcoming October.