9:41p ET Monday, August 14, 2006
Dear Friend of GATA and Gold:
The Reuters story appended here about NovaGold’s
resistance to Barrick Gold’s low-ball acquisition
offer seems to be the most comprehensive one so
far about today’s developments.
Note that it reports that NovaGold’s management
controls about 10 percent of the company’s shares.
GATA Chairman Bill Murphy’s commentary of August
10 —
http://www.gata.org/node/4302
— listed the institutional holders of about
another 30 percent of NovaGold’s shares, and
urged GATA supporters to contact those
institutions (their e-mail addresses were
provided) to urge them not to tender their
shares to Barrick, on account of Barrick’s
massive shorting of gold and its suppression
of the price.
The primary responsibility of those institutions
is to their investors, and they well may be
ready to take any offer that produces an
immediate profit. But we need to try to make
them understand that their shareholders — both
those directly invested in NovaGold and those
invested in the precious metals sector
generally — may be better served by resisting
any offer from Barrick, no matter how attractive
the price seems, until Barrick ends its
participation in the gold price suppression
scheme and allows gold to find a price that
better reflects a free market. Such a price will
lift the shares of NovaGold and all precious
metals mining companies.
You don’t have rely on those instutitional
investors to do the right thing. You can strike
your own blow on this new and decisive
battlefield of the gold war by buying and
holding your own shares in NovaGold, as GATA
and some of its officers have done. We think
that we’ll do both good and well this way. Even
the purchase of a small number of shares may
help the opposition reach the crucial mark of
50 percent of the shares, plus one. That one
share, the decisive share, could be yours.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
* * *
NovaGold Urges Investors
to Spurn Barrick Bid
>From Reuters
Monday, August 14, 2006
http://yahoo.reuters.com/news/articlehybrid.aspx?
storyID=urn:newsml:reuters.com:20060814:MTFH49827_2006-08-14_21-29-
22_N14274312&type=comktNews&rpc=44
NEW YORK — NovaGold Resources Inc. urged investors on Monday to
reject a hostile $1.28-billion takeover offer from Barrick Gold
Corp., saying the bid “significantly undervalues” the Canadian
company’s projects and its growth potential.
NovaGold said Barrick’s $14.50 a share cash offer was not in the
best interest of the company’s shareholders and failed to reflect
the value of NovaGold’s 70-percent ownership of the Donlin Creek
project in Alaska, which it described as one of the world’s biggest
gold deposits.
Shares of NovaGold closed up 2 percent at C$19.04 on the Toronto
Stock Exchange on Monday and up 25 cents at $16.86 on Amex. Shares
of Barrick, the world’s biggest gold producer, closed 77 Canadian
cents lower at C$34.35 in Toronto.
“Alternative transactions are being pursued by NovaGold with some of
the world’s largest mining companies to generate greater value
for … shareholders,” NovaGold said in a statement.
NovaGold’s directors and management, who hold about 10 percent of
the company’s stock, have said they do not intend to tender their
shares to Barrick’s bid, the company said.
A source familiar with the situation said NovaGold has entered into
discussions with mining companies regarding the acquisition of all
of NovaGold. It is also in discussions with mining companies on
joint ventures at some of its key assets.
In addition, the source said that NovaGold is pursuing the option of
remaining an independent company and that shareholder support for
the Barrick transaction appears to be low. The completion of
Barrick’s offer requires it to have the support of slightly more
than 50 percent of NovaGold’s investors.
“I think shareholders recognize that Barrick is forestalling a
tremendous amount of upside in the stock,” the source said.
Separately, NovaGold said it is suing Barrick for allegedly misusing
confidential information in its competing bid for Pioneer Metals
Corp.
NovaGold, which has also bid for Pioneer, alleges Barrick misused
confidential information that belongs to NovaGold in making its
offer for Pioneer.
NovaGold is seeking a court order that any shares of Pioneer bought
by Barrick under its bid be held under a “constructive trust” for
the benefit of NovaGold.
A spokesman for Barrick said the company is reviewing the circular
and the complaint and “will offer a response in due course.”