Novagold hits back at short-seller with line-by-line dissection
Novagold Resources on Monday hit back against a report from J Capital Research released late May that accused managers of the Vancouver-based explorer of “systematically” misleading investors about its proposed Alaska gold mine over the last 15 years.
J Cap, a company founded in China a decade ago which usually targets overvalued media and tech companies for short-selling, said the Donlin Gold project, which is 50-50 owned by Novagold and Barrick, “will never be built” and “in short, this is a stock promote, not a mining plan.”
Shares in Novagold (NYSE: AMERICAN, TSX: NG) fell by more than 12% on Monday and are now down 25% since the publication of the report, pushing the company’s market value to $2.6 billion.
Greg Lang, Novagold president and CEO said the response, which includes a 40 page line-by-line rebuttal of the original J Cap report, explains why the company is “so determinedly assessing all of the legal options available to it in various jurisdictions.”
Among other points, Novagold says its response demonstrates:
- Donlin Gold (the “project”), 50%-owned by NOVAGOLD, is clearly feasible as well as one of the world’s largest and highest-grade known open-pit gold deposits, as supported by extensive environmental, technical, and social studies conducted by numerous reputable firms;
- NOVAGOLD and its partner Barrick Gold are advancing Donlin Gold toward development in a fiscally and socially responsible manner with a strong focus on technical excellence, safety, and environmental stewardship;
- The company’s highly experienced and well-regarded management team is steadfast in its strategy toward successful execution of the project when the gold price, market conditions, and project optimization render it ready for development;
- JCAP exhibited a fundamental lack of knowledge of geology, engineering, topography, technology, accounting and financial assessment methodology as it attempted to denigrate NOVAGOLD and its assets; and
- JCAP’s misrepresentations, convenient omissions, and intentional muddling of chronology, events and data, as well as inappropriate comparisons and consistent reliance on unidentified, questionably credentialed “experts” exposed its deep lack of legitimacy.