NOVAGOLD Receives $75 Million from Newmont Corporation - Second payment for the sale of NOVAGOLD’s 50% interest in the Galore Creek project
- Treasury exceeds $150 million
VANCOUVER, British Columbia, July 28, 2021 (GLOBE NEWSWIRE) -- NOVAGOLD RESOURCES INC. (TSX, NYSE American: NG) (“NOVAGOLD” or “the Company”) has received $75 million from Newmont Corporation (TSX: NGT, NYSE: NEM) (“Newmont”) as per the 2018 Share Purchase Agreement in which NOVAGOLD agreed to sell its 50% interest in the Galore Creek project (“GCP”) in British Columbia, Canada. All amounts are in U.S. dollars unless otherwise stated.
Under the terms of the July 2018 Agreement1, total consideration payable by Newmont was up to $275 million. NOVAGOLD received $100 million upon closing and $75 million yesterday. The remaining amounts related to the 2018 sale of the GCP are payable as follows:
- $25 million upon the earlier of: (i) completion of a project feasibility study prepared by or for GCP, or (ii) five (5) years from the closing date on July 27, 2023; and,
- $75 million contingent upon GCP construction approval.
The latest payment from Newmont will increase NOVAGOLD’s cash position by $75 million, which consisted of approximately $108 million of cash and term deposits as of May 31, 2021.
As a result of the successful sale of GCP, NOVAGOLD materially increased its treasury, providing the Company with a strong financial foundation to advance its 50%-owned Donlin Gold project (“Donlin Gold”) in Alaska. The Company expects its existing financial resources and future incoming payments to be sufficient to execute on its business plan without resorting to raising more capital until a construction decision on Donlin Gold is made.