Shares of gold explorer NovaGold Resources Inc. (TSE: NG) (NYSEAMERICAN: NG) soared by approximately 40 per cent after it announced a USD$1 billion transaction, together with Paulson Advisers LLC, to acquire Barrick Gold’s (TSE: ABX) (NYSE: GOLD) 50 per cent stake in the Donlin Gold project.
Announced on Tuesday, the split will include Paulson picking up 80 per cent of Barrick Gold’s interest in Donlin Gold, while Novagold will purchase the remaining 20 per cent. Both companies will contribute to the purchase price in proportion to their respective stakes, according to separate statements from the mining firms.
The Donlin Gold project, previously a 50-50 joint venture between NovaGold and Barrick, is one of the world’s largest undeveloped gold deposits. It boasts over 39 million ounces of gold in measured and indicated resources at an average grade of 2.24 grams per tonne.
The deal is expected to close in Q2 or Q3 of 2025 and represents a significant milestone for NovaGold. By consolidating its control over Donlin Gold, NovaGold strengthens its position as the primary steward of a Tier 1 asset in a stable mining jurisdiction. The involvement of Paulson, a prominent figure in the gold investment space, adds credibility and signals strong financial backing.
Novagold will have the option to buy debt owed to Barrick for USD$90 million if it completes the purchase before closing. Either that or for USD$100 million within 18 months after the deal closes.
Paulson leads the hedge fund Paulson & Co. and already holds a major stake in Novagold. He will become “a full and equal partner” in the project.
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Deal comes at a favourable time
The Donlin Gold project forms a core part of NovaGold’s value proposition. Its size, grade, and Alaskan location—a safe, mining-friendly jurisdiction—make it a rare and highly valuable asset.
Developing the project has proven complex. It has required extensive permitting, feasibility studies, and community engagement. Acquiring Barrick’s stake simplifies ownership and could accelerate development.
The deal comes at a favourable time for gold as geopolitical pressures push investors away from stocks, and into safe haven investments. NovaGold and other gold miners are well-positioned to benefit. Donlin Gold’s high-grade resources and long-term potential make it especially attractive in a rising gold market.
Furthermore, NovaGold’s stock has surged. The move reflects broader market trends favouring gold investments as the metal has gained over 40 per cent since late 2023.
Still, many mining stocks, including NovaGold, trail the metal’s performance. Furthermore, this gap presents opportunities for investors seeking undervalued plays in the sector.
The Donlin Gold deal gives NovaGold greater leverage to gold price movements. Increased ownership strengthens its position in a bullish market.
John Paulson’s involvement further boosts investor confidence. His history of building gold-focused assets reinforces interest in the sector.
Paulson’s bullish stance and reputation likely amplified enthusiasm for NovaGold’s announcement.
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