NOVAGOLD Resources Inc. (NG:TSX; NG:NYSE.MKT) released its 2016 financial results on Jan. 25, and provided updates on the 50%-owned Donlin Gold project in Alaska and the 50%-owned Galore Creek project in British Columbia, including the news that the Environmental Impact Statement (EIS) process at the Donlin project is nearing completion. The company stated that the lead permitting agency, the U.S. Army Corps of Engineers, is working on the final EIS, and that "the Corps' schedule envisages the final EIS to be published in early 2018." The company also noted that "other permitting applications and submissions have been concurrently advanced with state and federal agencies."
Analyst Raj Ray of National Bank Financial Markets wrote in a Jan. 25 research flash that "Donlin Gold permitting enters last stretch with Final EIS expected by early 2018. . .the Donlin Gold permitting process is driven by the U.S. National Environmental Policy Act (NEPA) which requires the preparation of an EIS which is a detailed evaluation of the environmental effects of the proposed action and alternatives. . .the NEPA process drives the federal permitting timeline and state permits are anticipated to be issued once the federal process is completed."
Ray also noted that the "Alaska Native Corporations also play an important role in the NEPA process and their early involvement in the Donlin Gold project bodes well for the permitting process."
On the financial side, Ray stated that NOVAGOLD "continues to maintain a strong financial position with cash and term deposits of ~US$105 mln at the end of fiscal Q4/16 which we believe is more than sufficient to complete permitting of Donlin Gold. . .the strong cash balance provides optionality protection over the next few years."
Ray noted that he views NOVAGOLD as a "long-dated option on the gold price that offers investors long-term exposure to a large-scale and relatively high grade open-pit deposit in a stable jurisdiction which could assume significance if our forecast for industry-wide production decline play out over the next few years."
Eric Muschinski, editor of Gold Investment Letter, wrote on Jan. 26 that "I believe the upside on this stock is enormous. . .this is a stock that you can comfortably own in size because of its mature stage of development, liquidity, and pedigree."
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Disclosures from National Bank Financial Markets, Novagold Resources Inc., Research Flash, Jan. 25, 2017
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Disclosures from Gold Investment Letter, Jan. 26, 2017
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