NOVAGOLD Closes $179 Million Underwritten Upsized Public Offering of Common Shares

Rhea-AI Summary

NOVAGOLD (NYSE American, TSX: NG) has successfully completed an upsized public offering of 47,850,000 common shares at $3.75 per share, raising gross proceeds of approximately $179.4 million. Concurrently, the company closed a private placement of 17,173,853 shares, generating additional gross proceeds of $64.4 million. The total net proceeds of $234.1 million will primarily fund NOVAGOLD's acquisition of an additional 10% ownership interest in Donlin Gold LLC, with remaining funds allocated for general corporate purposes including updating the feasibility study. The underwriters have a 30-day option to purchase up to 7,177,500 additional shares. The offering was managed by several prominent financial institutions, including Citigroup, RBC Capital Markets, BMO Capital Markets, and Canaccord Genuity as joint book-running managers.

Positive

• Successfully raised $234.1 million in combined proceeds from public offering and private placement
• Acquisition will increase ownership stake in Donlin Gold LLC by 10%
• Strong institutional backing with multiple major banks as joint book-running managers
• Additional 30-day option for underwriters to purchase more shares could provide extra capital

Negative

• Significant shareholder dilution due to issuance of 65 million new shares
• Large insider participation in private placement (13.3M shares for $50M) suggests potential governance concerns
• Share offering price of $3.75 may represent a discount to market price

Insights

Capital Markets Analyst

NOVAGOLD raised $234.1M through public offering and private placement to fund a strategic acquisition and feasibility study update.

NOVAGOLD has successfully closed a significant capital raise totaling $234.1 million through dual channels: an upsized public offering and a concurrent private placement. The company sold 47,850,000 common shares at $3.75 per share in the public offering, generating $179.4 million in gross proceeds. Additionally, a private placement of 17,173,853 shares brought in $64.4 million, with a notable 13% of that coming from a significant insider (likely a major existing shareholder).

The strategic timing of this capital raise appears connected to NOVAGOLD's previously announced plans to increase its ownership stake in Donlin Gold LLC by 10%. This acquisition represents a significant strategic move as Donlin Gold is presumably their primary mining asset. The company also allocated funds to update the project's feasibility study, which is a critical step in the mining development process that reassesses economic viability, technical parameters, and potential returns.

The structure of this deal is particularly noteworthy. The public offering was upsized (indicating strong investor demand) and included a 30-day option for underwriters to purchase up to 7,177,500 additional shares. The company assembled a robust syndicate of investment banks led by Citigroup, RBC Capital Markets, BMO Capital Markets, and Canaccord Genuity as joint book-runners, with additional firms participating - suggesting broad market support for this capital raise.

The private placement component included participation from at least one major existing shareholder (contributing $50 million), which typically signals confidence in the company's strategic direction. This substantial capital infusion strengthens NOVAGOLD's balance sheet and provides the financial flexibility needed to advance its growth strategy centered around increasing ownership in its core asset.

All amounts are in U.S. dollars unless otherwise stated

VANCOUVER, British Columbia, May 09, 2025 (GLOBE NEWSWIRE) -- NOVAGOLD RESOURCES INC. (“NOVAGOLD” or “the Company”) (NYSE American, TSX: NG) closed its previously announced upsized public offering of 47,850,000 common shares of NOVAGOLD at a price to the public of $3.75 per share. All of the shares are being offered by NOVAGOLD. Gross proceeds from the upsized offering totaled approximately $179.4 million. NOVAGOLD has granted the underwriters a 30-day option to purchase up to 7,177,500 additional common shares at the public offering price, less underwriting discounts and commissions. 

Concurrently with the proposed upsized public offering, the Company also closed a private placement for 17,173,853 common shares for gross proceeds of approximately $64.4 million.

NOVAGOLD intends to use the net proceeds of $234.1 million from the offering and the concurrent private placement described above to fund the purchase price for NOVAGOLD’s previously announced acquisition¹ of an additional 10% ownership interest in Donlin Gold LLC and to use the remaining net proceeds, if any, for general corporate purposes including updating the feasibility study.

Citigroup, RBC Capital Markets, BMO Capital Markets and Canaccord Genuity acted as joint book-running managers for the public offering. National Bank of Canada Financial Markets, Scotiabank and Morgan Stanley also acted as joint book-running managers for the public offering.  

A shelf registration statement on Form S-3 relating to the offered common shares was filed with the Securities and Exchange Commission (SEC) on April 23, 2025 and automatically became effective upon filing. The final prospectus supplement relating to and describing the terms of the offering has been filed with the SEC and is available on the SEC’s website. Copies of the final prospectus supplement and the accompanying prospectus relating to the offering may be obtained from the joint book-running managers: Citigroup, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, or by telephone at (800) 831-9146; and RBC Capital Markets, LLC, Attention: Equity Capital Markets, 200 Vesey Street, 8th Floor, New York, NY 10281, by telephone at (877) 822-4089, or by email to equityprospectus@rbccm.com; and BMO Capital Markets Corp., Attn: Equity Syndicate Department, 151 W 42nd Street, 32nd Floor, New York, NY 10036 by email to bmoprospectus@bmo.com. You may also obtain these documents free of charge by visiting the SEC’s website at www.sec.gov.

The shares issued in the concurrent private placement have not been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”), and were issued pursuant to an exemption from the Securities Act to investors that qualify as “accredited investors” under the Securities Act. The shares issued in the concurrent private placement have been issued to non-residents of Canada pursuant to exemptions from certain Canadian securities laws and are subject to a four-month and one-day hold period in accordance with applicable Canadian securities laws.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy these securities nor shall there be any sale of these securities in Canada or in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.

The concurrent private placement constitutes a “related party transaction” within the meaning of Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101“) as a certain >10% shareholder of the Company (the “Insider“) subscribed for an aggregate of 13,333,334 Common Shares for aggregate proceeds of $50 million. The Company relied on the exemptions from the valuation and minority shareholder approval requirements of MI 61-101 contained in Sections 5.5(a) and 5.7(1)(a) of MI 61-101 with respect to the Insider participation in the concurrent private placement as the fair market value of the consideration of the securities issued to the related party did not exceed 25% of the Company’s market capitalization. The Company did not file a material change report in respect of the participation of the Insider in the concurrent private placement at least 21 days before closing of the concurrent private placement as the participation of the Insider was not determined at that time.

About NOVAGOLD

NOVAGOLD is a precious metals company focused on the development of the Donlin Gold project. Located in Alaska, one of the safest mining jurisdictions in the world, the Donlin Gold project is regarded as one of the largest, highest-grade, and most prospective known open-pit gold deposits in the world.

NOVAGOLD Contacts:

Mélanie Hennessey
Vice President, Corporate Communications

Frank Gagnon
Manager, Investor Relations

604-669-6227 or 1-866-669-6227
www.novagold.com

Cautionary Note Regarding Forward-Looking Statements

This media release includes certain “forward-looking information” and “forward-looking statements” (collectively “forward-looking statements”) within the meaning of applicable securities legislation, including the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements include future-oriented financial information or financial outlook within the meaning of securities laws, including information regarding the benefits of the announced transaction with Paulson, NOVAGOLD’s anticipated expenditures and anticipated plans for the new partnership and Donlin following the completion of the transaction; information regarding the timing of the option granted to underwriters; statements regarding the permitting, potential development, exploration, construction and operation of Donlin Gold; and statements regarding NOVAGOLD’s future operating and financial performance and production estimates. Such information is intended to assist readers in understanding NOVAGOLD’s current expectations and plans relating to the future. Such information may not be appropriate for other purposes. Forward-looking statements are frequently, but not always, identified by words such as “expects”, “continue”, “ongoing”, “anticipates”, “believes”, “intends”, “estimates”, “potential”, “possible”, and similar expressions, or statements that events, conditions, or results “will”, “may”, “could”, “would” or “should” occur or be achieved. Forward-looking statements are necessarily based on several opinions, estimates and assumptions that management of NOVAGOLD considered appropriate and reasonable as of the date such statements are made, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, included herein are forward-looking statements. These forward-looking statements include statements regarding the consummation and timing of the transaction; the expected timing of closing of the transaction; the timing of the option granted to underwriters; the size or terms thereof; the satisfaction of closing conditions; the anticipated timing of certain judicial and/or administrative decisions; the 2025 outlook; the timing and potential for commencing a new feasibility study on the Donlin Gold project; the results of future feasibility studies; our goals and expenditures for 2025; ongoing support provided to key stakeholders including Native Corporation partners; Donlin Gold’s continued support for the state and federal permitting process; sufficiency of working capital; the potential development and construction of the Donlin Gold project; the timing and ability for the Donlin Gold project to hit critical milestones; the ability for the Tier One gold development project to hit the anticipated projections; the sufficiency of funds to continue to advance development of Donlin Gold, including to a construction decision; perceived merit of properties; mineral reserve and mineral resource estimates; Donlin Gold’s ability to secure the permits needed to construct and operate the Donlin Gold project in a timely manner, if at all; legal challenges to Donlin Gold’s existing permits and the timing of decisions in those challenges; whether the Donlin Gold LLC board will continue to advance the Donlin Gold project safely, socially responsibly and to sustainably generate value for our stakeholders; continued cooperation between the owners of Donlin Gold LLC to advance the project; NOVAGOLD’s ability to deliver on its strategy with the Donlin Gold project; the success of the strategic mine plan for the Donlin Gold project; the success of the Donlin Gold community relations plan; the outcome of exploration drilling at the Donlin Gold project and the timing thereof; the completion of test work and modeling and the timing thereof. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances are forward-looking statements. Forward-looking statements are not historical facts but instead represent the expectations of NOVAGOLD management’s estimates and projections regarding future events or circumstances on the date the statements are made. Important factors that could cause actual results to differ materially from expectations include failure to satisfy or waive the closing conditions relating to the transaction or the proposed public offering; the need to obtain additional permits and governmental approvals; the timing and likelihood of obtaining and maintaining permits necessary to construct and operate; the need for additional financing to complete an updated feasibility study and to explore and develop properties and availability of financing in the debt and capital markets; disease pandemics; uncertainties involved in the interpretation of drill results and geological tests and the estimation of reserves and resources; changes in mineral production performance, exploitation and exploration successes; changes in national and local government legislation, taxation, controls or regulations and/or changes in the administration of laws, policies and practices, expropriation or nationalization of property and political or economic developments in the United States or Canada; the need for cooperation of government agencies and Native groups in the development and operation of properties; risks of construction and mining projects such as accidents, equipment breakdowns, bad weather, disease pandemics, non-compliance with environmental and permit requirements, unanticipated variation in geological structures, ore grades or recovery rates; unexpected cost increases, which could include significant increases in estimated capital and operating costs; fluctuations in metal prices and currency exchange rates; whether or when a positive construction decision will be made regarding the Donlin Gold project; and other risks and uncertainties disclosed in NOVAGOLD’s most recent reports on Forms 10-K and 10-Q, particularly the “Risk Factors” sections of those reports and other documents filed by NOVAGOLD with applicable securities regulatory authorities from time to time. Copies of these filings may be obtained by visiting NOVAGOLD’s website at www.novagold.com, or the SEC’s website at www.sec.gov, or on SEDAR+ at www.sedarplus.ca. The forward-looking statements contained herein reflect the beliefs, opinions and projections of NOVAGOLD on the date the statements are made. NOVAGOLD assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change, except as required by law.

__________________________
¹ On April 22, 2025, NOVAGOLD and Paulson Advisers LLC announced that they had entered into an agreement with Barrick Gold Corporation to acquire their 50% interest in Donlin Gold LLC for $1 billion in cash.

FAQ

How much money did NOVAGOLD (NG) raise in its May 2025 public offering?

NOVAGOLD raised $179.4 million in gross proceeds from the public offering of 47,850,000 common shares at $3.75 per share, plus an additional $64.4 million from a concurrent private placement, totaling $234.1 million in net proceeds.

What is the purpose of NOVAGOLD's $234.1 million capital raise?

The primary purpose is to fund the acquisition of an additional 10% ownership interest in Donlin Gold LLC, with remaining proceeds to be used for general corporate purposes including updating the feasibility study.

How many shares did NOVAGOLD (NG) issue in its May 2025 offering?

NOVAGOLD issued 47,850,000 shares in the public offering and 17,173,853 shares in the private placement, totaling 65,023,853 shares, with an option for underwriters to purchase up to 7,177,500 additional shares.

Who were the underwriters for NOVAGOLD's 2025 public offering?

The joint book-running managers were Citigroup, RBC Capital Markets, BMO Capital Markets, Canaccord Genuity, National Bank of Canada Financial Markets, Scotiabank, and Morgan Stanley.

What was the price per share in NOVAGOLD's May 2025 offering?

The shares were offered at a price of $3.75 per share in both the public offering and private placement.