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Friday, September 10, 2010

Time to Invest in NovaGold (AMEX:NG)?

Novagold (AMEX:NG) has a lot going for it from several angles, including the undeveloped resources they own, partners, and major investors.

As far as resources go, especially gold and copper, they hold some of the largest undeveloped deposits among miners. They also enjoy deposits of numerous other metals like silver and zinc.

Expectations are the cost to develop the assets will be about $4 billion. Factoring that in the stock could still easily be valued at double the close of $7.47 it was at close Thursday in New York.

For partners, they have mining giants Barrick Gold (NYSE:ABX) and Teck Resources (NYSE:TCK), both quality companies.

They also have investors like George Soros and John Paulson putting millions into the company via their hedge funds. Paulson has raised his stake NovaGold to 9.1 percent, according to his last filing.

With guaranteed deposits, and metals prices, in most cases, especially gold, sure to increase going forward, the major question becomes their ability to control costs while raising capital and expanding production.

If they are able to do that, this stock could run for some time, and go far beyond the mid-teens that some think it is really worth now.

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