Barrick Gold, NovaGold shares rise following sale of Donlin Gold stake

Investing.com -- Shares of Barrick Gold (LON:0R22) Corp (TSX:ABX) edged up 1.2% while NovaGold Resources Inc (TSX:NG) soared 9.7% after Barrick announced the sale of its 50% interest in the Donlin Gold Project in Alaska. The stake held by Barrick’s subsidiary, Barrick Gold U.S. Inc., was sold to affiliates of Paulson Advisers LLC and NovaGold Resources Inc. for $1 billion in cash.

The deal also includes an option for NovaGold to purchase the outstanding debt related to the Donlin Gold Project for $90 million if acquired before closing, or $100 million within 18 months from closing. If NovaGold does not exercise this option, the debt will remain as per its current terms.

Barrick stated that the proceeds from this transaction would be utilized to bolster its balance sheet, fund future investments, and support its commitment to delivering shareholder returns. The company's President and CEO, Mark Bristow, remarked that this agreement allows Barrick to divest from the Donlin Gold Project at a favorable valuation, enabling NovaGold and Paulson to advance the project's development.

Bristow emphasized Barrick's strategy to optimize its portfolio by focusing on sustainable, long-life Tier One gold and copper operations and progressing its priority growth projects. He noted that the sale is an example of how certain assets may be more appropriate for other entities while Barrick concentrates on its managed growth initiatives.

Completion of the transaction is contingent on customary closing conditions and the acquisition of necessary regulatory approvals, with an expected closure late in the second quarter or early in the third quarter of 2025. CIBC (TSX:CM) World Markets Inc. is serving as Barrick's financial advisor, with Citi as NovaGold's financial advisor.

Investor reaction to the $1 billion deal was swift, with NovaGold shares jumping nearly 10% and Barrick rising modestly. The strong market response underscores confidence in NovaGold’s advancement of the Donlin project and Barrick’s continued portfolio optimization strategy.