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Novagold (NG), ABX target: Barrick Conspiracy anyone?

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Whilst i am not big on conspiracy theories i do believe market manipulation occurs.

 

In the Gold world there are a host of commentators claiming barrack manipulates the market and is in the Feds pockets. Could today’s drop be engineered to encourage Nova Gold shareholders to turn in there shares to barrack as they fear a significant drop as the offer expires today and hance increase Barricks market control??

 

 

Just a thought…..

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NG up yesterday: $17.03 Change: +$0.40 / Percent Change: +2.41%

 

while gold was lower :: GLD : $ 72.53 -0.87 / Change: -1.19%

- and so was Barrick :: ABX : $ 40.55 -0.37 / Change: -0.90%

 

Update on NovaGold (NG)

sczl7.png

Update on NG-to-ABX ratio

scor1.png

 

With the relative outperformance of Barrick, it is now an excellent time for ABX

to make a fresh bid.

 

If they bid 60% of their share price, that would be: just over $ 24.

More than enough to win NG, I reckon. $20-22 might do it too.

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VOLUME and OPTIONS

 

The price move happened about 2:45pm NYT on some decent volume: ... update

bigzp1.gif

chart : NG compared w/ ABX and GLD

 

Good buying in the options too:

 

Nov.$17.50 calls:

NGKW 0.90 +0.05 177.00 0.80 0.90 689.00 17.50

 

Dec.$20.00 calls:

NGLD 0.65 +0.15 84.00 0.55 0.70 2,305.00 20.00

 

A total of 261 contracts (177+84), that's : 261 x $100 x $17.00 = $xxx value

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Should Novagold be Renamed Novacopper? The Answer Will Affect Your Investment Strategy

posted on: August 17, 2006 | about stocks: NG

 

Roland Watson (The New Era Investor) submits: Amidst the recent debate about the Barrick (ABX) takeover bid for Novagold (NG), one fact emerged that changed my perception of this company. The question was whether Novagold should be renamed Novacopper? Or to be more precise, should Novagold be classed primarily as a gold or copper producer?

 

Now this needs some qualification because at this point in time Novagold are not producing any metals in commercial quantities. What we have just now are various projects which are due to come online this year and increasingly so over the next few years. So for the sake of answering the question, we need to look at predictions rather than actual product reaching the markets.

 

If we look at the stated resources of the company and take into account partial ownership of certain sites, Novagold has the following resources with their current market values if extracted today:

 

• COPPER - 13.39 billion pounds giving $46.73 billion at a price of $3.49 per lb

• GOLD - 37.24 million ounces giving $23.41 billion at a price of $628.60 per ounce

• SILVER - 181.5 million ounces giving $2.23 billion at a price of $12.27 per ounce

• ZINC - 2.24 billion pounds giving $3.4 billion at a price of $1.52 per lb

 

TOTAL resource value = $75.77 billion

 

At these stated prices, copper constitutes 61.6% of the total value while gold is 30.9%, silver 2.9% and zinc 4.5%. We have excluded any other metals from this analysis which form less than 1% of total value. Okay, but what about production levels? Since annual revenue is what really counts, what kind of numbers can we anticipate from Novagold’s main mines? Thankfully, Novagold have stated the following expectations for annual production by 2010 to 2011:

 

• COPPER - 200 million pounds giving $698 million at a price of $3.49 per lb

• GOLD - 700,000 ounces giving $440 million at a price of $628.60 per ounce

• SILVER - 2 million ounces giving $24.5 million at a price of $12.27 per ounce

 

/more: http://seekingalpha.com/article/15668-shou...stment-strategy

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GOLD MILLING - NovaGold turns over Rock Creek crusher

 

 

ALASKA - Vancouver-based NOVAGOLD RESOURCES has started testing the crushing circuit at its Rock Creek gold mine, 12 km from Nome. Starting the crusher is the first step toward running in the mill and reaching commercial production by the end of this year.

 

The Rock Creek deposit will be mined by open pit, with ore going to a 7,000-t/d mill. Annual production will be 100,000 oz of gold at a total cash cost of less than US$300/oz. Approximately 135 permanent jobs will be created.

 

Detailed information about NovaGolds Rock Creek project will appear in the October 2007 issue of CMJ.

 

/see: http://www.canadianminingjournal.com/issue...;issue=10072007

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Citigroup ups Barrick, gold, silver price targets

Mon Oct 8, 2007 2:52 PM BST

 

(Recasts, updates with gold, silver, NovaGold forecast)

 

NEW YORK, Oct 8 (Reuters) - Citigroup on Monday lifted the price targets of gold miners including Barrick Gold Corp (ABX.TO: Quote, Profile , Research)(ABX.N: Quote, Profile , Research) and Freeport-McMoran Copper & Gold Inc (FCX.N: Quote, Profile , Research), boosted by higher forecast for gold prices based on strong market fundamentals.

 

John Hill, director, metals research at Citigroup in San Francisco, said in a client note that gold should benefit from safe-haven buying, favorable exchange rates and seasonal demand.

 

Hill said he now expects gold to rise to $750 per ounce for 2008, $800 for 2009 and $820 for 2010.

 

"Within this, a test of $850 to $1,000 per ounce is likely. Corrections, possibly in early 2008, should be treated as opportunities," Hill said.

 

He also raised his estimates for silver based on robust bullion prices. Hill now forecast silver to hit $15 per ounce for 2008, $15.50 for 2009 and $16 for 2010.

 

On gold mining shares, Hill said he now pegged the share target of the world's largest gold producer, Barrick, at $48, up from his previous estimate of $43 a share. He also raised Freeport's price target to $122 per share from $120.

 

Hill also raised the fourth-quarter and 2007 earnings estimates for the world's No. 2 gold producer, Newmont Mining Corp (NEM.N: Quote, Profile , Research), while holding its price target unchanged at $54 per share.

 

In addition, Hill upgraded the shares of NovaGold Resources Inc (NG.TO: Quote, Profile , Research) to "buy" from "hold."

 

/see: http://investing.reuters.co.uk/news/articl...LD-UPDATE-1.XML

 

= =

 

Gold is virtually $750, and NEM is above his target

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Citigroup ups Barrick, gold, silver price targets

Mon Oct 8, 2007 2:52 PM BST

 

(Recasts, updates with gold, silver, NovaGold forecast)

 

NEW YORK, Oct 8 (Reuters) - Citigroup on Monday lifted the price targets of gold miners including Barrick Gold Corp (ABX.TO: Quote, Profile , Research)(ABX.N: Quote, Profile , Research) and Freeport-McMoran Copper & Gold Inc (FCX.N: Quote, Profile , Research), boosted by higher forecast for gold prices based on strong market fundamentals.

 

John Hill, director, metals research at Citigroup in San Francisco, said in a client note that gold should benefit from safe-haven buying, favorable exchange rates and seasonal demand.

 

 

= =

 

 

The following is a link to the full report mentioned in this article - useful info on NG

 

http://www.jsmineset.com/cwsimages/Miscfil...SNA09572FCR.PDF

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thnx, Dave.

 

My intuition tells me that this share bares watching over the next few weeks.

 

I hold NG.wts and Dec. calls

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thnx, Dave.

 

My intuition tells me that this share bares watching over the next few weeks.

 

I hold NG.wts and Dec. calls

 

I hope you are correct... my holding dates from early 2004 .... ex SpectrumGold- the canadian holidings.

 

Your secenario with ABX seems plausible - my only dissenting comment would come from the dumping by ABX of NG shares in April - I took this to be the spiteful end to the bid - wouldn't it be a bit strange for ABX to try and buy back at higher cost??

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I hope you are correct... my holding dates from early 2004 .... ex SpectrumGold- the canadian holidings.

 

Your secenario with ABX seems plausible - my only dissenting comment would come from the dumping by ABX of NG shares in April - I took this to be the spiteful end to the bid - wouldn't it be a bit strange for ABX to try and buy back at higher cost??

 

NG management would accept a bid - if it was high enough.

 

At $24, they could walk away heros, but not at $18-20

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UP AGAIN today - and on decent volume

(11:00 am- approx.)

US$17.44 Change: +$0.41 // Percent Change: +2.41%

Open: 17.00 High: 17.65 Low: 16.93

Volume: 269,400 (11:00 am)

 

NG.WT - T 3.5 10.49 · 10.66 2.2 c$10.44 +0.70 7.2 4.0 42

 

Where there's smoke, there's fire... hopefully

 

Anyone else long this one?

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= =

The following is a link to the full report mentioned in this article - useful info on NG

 

http://www.jsmineset.com/cwsimages/Miscfil...SNA09572FCR.PDF

 

 

The following is an excerpt from the above report

 

Potential strategic catalysts from Teck involvement – Canadian major Teck

could potentially create an innovative, negotiated solution to the Donlin

impasse with Barrick. This might involve contributing Donlin, Galore, and

Teck's large Pogo gold mine to "Nova-Teck," with Barrick taking a minority

shareholding in exchange for some/all of its Donlin stake plus the Grace claims

near Galore. In this way, expensive, time-consuming litigation might be

avoided, while providing investors an exciting new mid-tier North Americanbased

gold/copper miner. We believe this approach would be welcomed by

investors positive on the commodities and seeking asset quality plus growth.

 

 

Could this be the fuel for the recent share price action???

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Good find!

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Opening higher again...

 

NG: Last 18.58 + 0.28 / Change 1.53%

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Over the medium to longer term, this is a potential red flag issue for my continued investment in this stock

 

http://www.resourceinvestor.com/pebble.asp?relid=37305

 

http://biz.yahoo.com/ap/071126/novagold_an...oject.html?.v=1

 

Not good. I'd like to see the spreadsheets and assumptions in them that drove this decision. If they've pulled stumps because they don't believe in a continuing secular bull market in gold and copper prices then I'm just irritated. If it's because costs really did spiral out of control then I'm worried that this situation could be repeated in other juniors, especially those with properties inside Canadian borders.

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$12.26 -7.78

Open: 14.80 High: 14.81 Low: 11.92

Volume: 4,121,256

Percent Change: -38.44%

 

= =

I am endeavoring to find out what is happening

 

 

Thankfully, I sold out between $19 - 20, in October

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NovaGold and Teck Cominco Suspend Construction at Galore Creek

11/26/2007

 

Joint investor conference call

 

VANCOUVER, BRITISH COLUMBIA, Nov 26, 2007 (MARKET WIRE via COMTEX News Network) --

NovaGold Resources Inc. (TSX: NG)(AMEX: NG) and Teck Cominco Limited (TSX: TCK.A)(TSX: TCK.:rolleyes:(NYSE: TCK) today announced they will suspend construction activities at the Galore Creek copper-gold-silver project in northwestern British Columbia. A recent review and completion of the first season of construction indicate substantially higher capital costs and a longer construction schedule for the project. This, combined with reduced operating margins as a result of the stronger Canadian dollar, would make the project, as now conceived and permitted, uneconomic at current consensus long-term metal prices. NovaGold and Teck Cominco continue to view the property as a substantial resource and will initiate a comprehensive review to evaluate alternative development strategies. The Galore Creek partnership will conduct an orderly suspension of construction activities and will work with employees, the Tahltan Nation, local communities and other stakeholders to minimize the impacts of this decision.

 

In April 2007, NovaGold retained AMEC Americas Limited ("AMEC"), an independent engineering firm, to review the October 2006 Galore Creek Feasibility Study and commence project engineering. The review covered the entire project with a focus on construction of the mine facilities and tailings and water management structures.

 

By mid-October 2007, AMEC's preliminary work indicated it expected capital costs would be significantly higher than originally estimated. As a result, NovaGold and Teck Cominco commenced a project strategy review, involving seven engineering teams, to assess the AMEC work. Estimated costs have continued to increase during this review, and NovaGold and Teck Cominco now have sufficient information to indicate that the capital cost of the project could approach as much as $5 billion. The engineering review is ongoing.

 

Although there have been changes in scope from the original feasibility study, the largest portion of the capital cost increase is related to the complex sequencing of activities necessary to build the tailings dam and water management structures, and the resulting extension of the construction schedule by 18 to 24 months. The project has also been affected by the rapidly escalating capital costs affecting major construction projects world-wide.

 

In light of these developments, NovaGold and Teck Cominco have agreed to suspend construction and amend the terms of Teck Cominco's earn-in obligations in connection with the project. Under the amended arrangements, Teck Cominco will invest an additional $72 million in the partnership to be used over the next five years principally to reassess the project and evaluate alternative development strategies. In addition, Teck Cominco's sole funding of other project costs incurred after August 1, 2007 will now total $263 million. NovaGold and Teck Cominco will share the next $100 million of project costs 33% and 67% respectively, and will share costs proportionately thereafter.

 

"NovaGold has worked for years to advance this project toward production," said Rick Van Nieuwenhuyse, President and CEO of NovaGold. "We reached this decision after considerable review and we share the disappointment of our employees, the Tahltan Nation, all stakeholders and local communities. We will work closely with Teck Cominco to unlock the potential of this world-class resource. NovaGold will continue to add value for shareholders by advancing the other projects in our portfolio, particularly the Donlin Creek project in Alaska."

 

Teck Cominco's President and CEO, Don Lindsay, said, "Very few copper-gold deposits of this quality have been discovered over the last few years even though the industry has invested billions of dollars in exploration world-wide. Galore Creek is a substantial resource and we will continue to work to determine how and when it can best be developed."

 

 

/more: http://www.stockhouse.com/news/news.asp?ne...737&tick=NG

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(stockhouse bboard comment):

 

SUBJECT: Calm down, here is the real situation guys. Posted By: tgzo1234

Post Time: 11/26/2007 10:42

 

Alright, many of you need to really research a company before you buy so you won’t end up asking silly questions.

Novagold’s fair value is between at least $13-$15 without Galore Creek as its largest project is Dolin Creek. AND this is assuming Galore Creek is a complete write-off which, if you actually read the press release, is not the case. It’s simply suspended until they can figure out how to contain costs and when Canadian dollar return to previous levels.

 

I just entered a position into Novagold because the market is again clearly irrational on a bad news which isn’t half as bad as it seems.

 

Good luck to you folks.

 

2/

 

SUBJECT: RE: Calm down, here is the real situation guys. Posted By: iswt

Post Time: 11/26/2007 10:49

 

i think you are right but 50% of donlin if IMO worths now less than 12/13 but 7/8

 

 

/@: www.stockhouse.com/bullboards/viewm...0&TableID=0

 

= =

 

Might buy at $10 - 10.50, probably thru options or wts

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Share Capital Information as at August 31, 2007

 

Issued and Outstanding 104.64 Million

Options 9.12 Million

Warrants 6.58 Million

Fully Diluted 120.35 Million

 

3.1 million warrants are listed on the Toronto Stock Exchange under the symbol TSX: NG.WT.A. Each of these share purchase warrants entitles the holder to purchase 1 share of NovaGold common stock from the Company at a price of C$12.10 per share and is exercisable at anytime until January 7, 2008.

 

An additional 3.5 million warrants are listed on the Toronto Stock Exchange that trade under the symbol TSX: NG.WT. Each of these share purchase warrants entitles the holder to purchase 1 share of NovaGold common stock from the Company at a price of C$7.00 per share and is exercisable at anytime until October 1, 2008.

 

/see: http://www.novagold.com/section.asp?pageid=3340

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Reportdly they were offered $18 per share

 

fat pigs get fatter then slaughtered

 

IDepending on how bullish you are on comoddities you are the value of Donlin is in the 11-14/share, but this too will likely have high than anticipated CAPEX?OPEX

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Nova Gold had so many of the qualities you look for in a mining company. It ticked all the boxes. It had:

 

- Fantastic properties with vast amounts of metal in the ground.

- A personable, determined and charismatic president with an unrivalled, proven record in exploration; a president with vision, who understands gold and what is driving this bull market in metals.

- A decent share structure.

- Plenty of cash in the bank.

- A chart that suggested the company was a buy.

- Low political risk: with properties in Alaska and British Columbia, this was not a company that was going to have its assets snatched by some despot.

- At a late stage of development with plenty of exploration upside.

 

Mining is risky, even in a bull market

Then on Monday, as gold soared to $830, the stock plunged by over 50%.

 

The company had made the following announcement:

 

November 26, 2007 - Vancouver, British Columbia - NovaGold Resources Inc. (AMEX: NG, TSX: NG) and Teck Cominco Limited (TSX: TCK.A, TCK.B; NYSE: TCK) today announced they will suspend construction activities at the Galore Creek copper-gold-silver project in northwestern British Columbia. A recent review and completion of the first season of construction indicate substantially higher capital costs and a longer construction schedule for the project. This, combined with reduced operating margins as a result of the stronger Canadian dollar, would make the project, as now conceived and permitted, uneconomic at current consensus long-term metal prices. NovaGold and Teck Cominco continue to view the property as a substantial resource and will initiate a comprehensive review to evaluate alternative development strategies. The Galore Creek partnership will conduct an orderly suspension of construction activities and will work with employees, the Tahltan Nation, local communities and other stakeholders to minimize the impacts of this decision.

 

Even though we are experiencing one of the greatest metals bull markets in history – possibly the greatest in living memory - mining remains an extremely difficult and high-risk business, and one that ruthlessly punishes even its greatest players. It is not a game for the faint-hearted.

 

If you believe in a commodity, you must own the commodity itself. Companies that produce that commodity will give you greater leverage, yes, but you are also exposing yourself to company risk. Even with a company like Nova that ticks all the boxes, ‘Stercus accidit’.

 

/more: http://www.moneyweek.com/file/38613/why-yo...old-miners.html

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