NovaGold's (NG) Ambler Project Attracting a Lot of Attention

Looking for ways to raise capital for their two flagship projects, NovaGold (AMEX:NG) has been putting feelers out for some time concerning its Ambler project, which includes copper, zinc, gold and silver.

The company says the project is drawing a lot of attention and they're going through what is presumed to be a variety of offers to see which is the best way to go.

CEO and president Rick Van Nieuwenhuyse said, “With copper over $4 and zinc over a dollar, it certainly has attracted a lot of attention from a lot of different places, some of which we didn't really expect to have to consider.

“It's a good news thing, that we have a lot of interest from a lot of different areas but we'll just do a diligent job of assessing them and deciding which is the best.”

This is part of NovaGold's strategy with its main assets, which include 50% holdings in 2 big development projects – the Donlin Creek gold project in Alaska, which it co-owns with Barrick Gold (NYSE:ABX), and the Galore Creek project in British Columbia, where Teck Resources (NYSE:TCK) is the other partner.

NovaGold is looking to divest of non-core assets which will pay for its portion of the capital costs of bringing the projects online.

NovaGold closed Thursday at $13.85, dropping $0.41, or 2.88 percent.

NovaGold (AMEX:NG) Makes Copper Canyon (TSXV:CPY) All-stock Bid

NovaGold (AMEX:NG) has reportedly made a $34.1 million all-stock bid for joint-venture partner Copper Canyon Resources (TSXV:CPY).

The key asset held by Copper Canyon is the percent interest they hold is the Copper Canyon copper-gold-silver property they're partners with NovaGold in, which holds the remaining 60 percent in the venture.

Also held by Copper Canyon is the Abo gold project, located in Harrison, B.C.

NovaGold said in a statement, "Copper Canyon shareholders will have continued upside exposure to the Galore Creek project and will gain exposure to a world class portfolio of North American gold and copper-gold projects."

The offer is subject to two-thirds of shareholders in Copper Canyon tendering their shares, along with the usual regulatory approval and waiver of the rights plan of Copper Canyon shareholders.

Copper Canyon CEO Tim Termuend made the usual comments of the offer being too low and how the assets they hold were of such high quality as to draw the bid.

Termuende said, "By making an offer for Copper Canyon, NovaGold has clearly acknowledged the quality and calibre of the Copper Canyon assets."

The offer from NovaGold was 0.0425 of a common share for each Copper Canyon common share. As of last Friday's closing price, that was equal to 60 cents a share.

The asset in question is right next to the Galore Creek project, which NovaGold and Teck Resources Ltd. (NYSE:TCK) own equally.

NovaGold is also in a 50-50 joint venture with gold mining giant Barrick Gold (NYSE:ABX) with the Donlin Creek property in Alaska.

NovaGold Resources (NYSE:NG) Soars on Gold Prices

Although well off its 52-week high of $9.18, NovaGold Resources (NYSE:NG) was among the gold mining leaders on Friday, surging to close at $7.36, a $0.45 gain, or 6.51 percent.

NovaGold attained its high at the beginning of May.

Hedge fund managers John Paulson and George Soros have both expressed deep interest in the company, investing at least $175 million combined in the gold mining company, with Paulson's hedge fund investing $100 million.

NovaGold holds large stakes in Donlin Creek and Galore Creek, both holding huge reserves of gold, which the company now has the money to develop with its partners.

NovaGold (AMEX:NG) Attracts Big Players, Money

NovaGold Resources (AMEX:NG) (TSE:NG) President and Chief Executive Officer, Rick Van Nieuwenhuyse, seems to have a gift for attracting big players and big money to invest in the company, and that has paid large dividends for them at crucial times of their growth cycle.

Some of those investing in NovaGold Resources include billionaire Thomas Kaplan through his Tigris Financial Group, John Paulson with his Paulson & Co. hedge fund, and George Soros with Quantum Partners Ltd.

In the early part of 2009 they also reached a financing agreement with Electrum Strategic Resources, which saved their major Donlin Creek and Galore Creek projects.

Assuming good gold finds, the secret to success for junior gold miners really isn't a secret, it's who can secure financing for their projects in order to bring them online.

With the track record of Rick Van Nieuwenhuyse and his team, it looks like NovaGold will have a long and successful run, as he recently stated they have enough financing for the next three years.

If they're operationally sound and focus on cutting costs, once they are in strong gold production they should get some great returns for their shareholders.

In addition to gold, they also have copper, silver and zinc resources.

NovaGold (AMEX:NG) CEO Says Company Good for Three Years

NovaGold (AMEX:NG) CEO and President Rick Van Nieuwenhuyse said earlier in the month that the company has reversed its setbacks over the last three years and is now set financially for the next three years, referring to the financing secured by the gold miner.

Much of the financing required by NovaGold was secured through investment from hedge fund Paulson & Co. and Quantum Partners, which brought them $175 million to help with their capital needs.

Another strategic and important source of financing came from Electrum Strategic Resources in the early part of 2009, which allowed NovaGold to retain its interest in important assets of Donlin Creek and Galore Creek. They also had enough to deal with operational issues at its Rock Creek project, which they should be able to comply with regulations and get it back up and running.

Although the company is going through a correction related to the overall gold price correction, it is close to increasing production and getting going on all cylinders, which should make shareholders happy, and the company very profitable.

NovaGold (TSE:NG) Says Galore Creek Study Launched

A day before its quarterly report, NovaGold (TSE:NG) announced they have launched a pre-feasibility study at the Galore Creek project.

Galore Creek is one of the most highly touted projects in the world, and is among the largest undeveloped copper-gold-silver mines known. There is an estimated 1,300 million tons of high-grade copper-gold-silver at the project, with a strong possibility of more.

In a press release, the company said "The pre-feasibility study will provide capital cost estimates using higher copper and gold prices than used in previous studies, as well as permitting, construction and production timelines."

Teck Resources (TSE:TCK-B) has an equal share in the Galore Creek project.

NovaGold (AMEX:NG) Underwhelming to Some

NovaGold a challenge short term, great potential long term

For up to five years, it's possible NovaGold (AMEX:NG) could struggle strongly, even though it has two quality gold projects it has a stake in like Galore Creek and Donlin Creek.

It's not the long term prospects of NovaGold that concerns those following the company, as they are very bright, but it's not as simple as taking a stake in them and letting it ride, because until their large mines start to produce gold, there is a huge liquidity problem they face, which must be addressed and overcome if they're going to reach the day they can truly benefit from their holdings.

Even though John Paulson and George Soros invested $175 million in Novagold, which will help them in the early exploration part of their projects, but isn't much when considering the overall cost and scheme of things.

The two large project mentioned above are estimated to cost about $4 billion each to develop, so you can see that while $175 million helps, it's very little when looking at approximately $8 billion overall.

What NovaGold probably represents is the trend small mining companies which hold solid assets will be experiencing over the next several years, and this is larger companies will have to come in and acquire a large portion of those assets if they're to survive and thrive.

NovaGold has a 50/50 partnership with Barrick Gold (TSE:ABX) in their Donlin Creek project, as part of what we'll see going forward.

If NovaGold can survive the next several years, they do have extraordinary potential, and could generate a lot of profits for those investing in them. One must understand the short-term challenges though to determine how to proceed.

The fact that George Soros and John Paulson invested as they did in them show they understand what the huge potential of the company is, and whatever happens to NovaGold, they will reap the rewards, no matter which way they decide to head in the future.