NOVAGOLD Resources Inc. and investor John Paulson have agreed to consolidate ownership of the Donlin Gold project in Alaska through an all-stock transaction valued at approximately US$4.2 billion. The deal combines NOVAGOLD's existing 60% interest in Donlin Gold with Paulson's remaining 40% stake, creating a new U.S.-domiciled parent company, NovaGold Corporation. This strategic move is designed to streamline the organizational structure and expedite the development of the mine, which is regarded as one of the premier undeveloped gold projects globally.

Under the terms of the agreement, existing NOVAGOLD shareholders will own approximately 65% of the combined company, while Paulson will receive roughly 35% of the shares. When accounting for the NOVAGOLD shares Paulson already owns, his total economic interest in the new entity will be about 40%, though his voting rights will be capped at 19.99%. Paulson will serve as Co-Chair alongside NOVAGOLD Chairman Thomas Kaplan. The new company is expected to list on the New York Stock Exchange, with the transaction anticipated to close in the fourth quarter of 2026.

The consolidation significantly enhances NOVAGOLD's project portfolio by adding more than 16 million attributable measured and indicated gold ounces, including 13 million ounces of proven and probable reserves. The project is projected to produce approximately 1.1 million ounces of gold annually over a 27-year mine life, with production potentially reaching 1.3 million ounces in the first decade as higher-grade ore is mined. The deposit currently contains approximately 40 million ounces of measured and indicated gold resources grading 2.22 grams per ton, more than double the industry average.

Transaction Metrics

NOVAGOLD President and CEO Greg Lang stated that the combination aligns the interests of all parties involved. The single corporate structure is expected to simplify project financing and engagement with government agencies, sovereign wealth funds, and local stakeholders. The transaction remains subject to NOVAGOLD shareholder approval, court approval under the Business Corporations Act (British Columbia), and other regulatory consents.

Morgan Stanley analyst Carlos De Alba has maintained an Overweight rating on Novagold Resources while adjusting the stock's price target downward. The new target is set at $13.6, reduced from the previous estimate of $13.8. This adjustment indicates a modest recalibration of the company's valuation potential by the financial institution.

The rating retention suggests that the firm continues to view the stock favorably relative to the broader market despite the lowered price objective. Novagold Resources is listed on the AMEX under the ticker symbol NG.