Barrick Gold has agreed to divest its 50% stake in the Donlin Gold Project to affiliates of Paulson Advisers and Novagold Resources for a total consideration of $1bn in cash.
The deal, involving the Alaskan-based project, also includes an option for Novagold to acquire related outstanding debt.
The Donlin Gold Project, situated in the Kuskokwim region of Southwest Alaska, contains an estimated 39 million ounces of gold within its Measured and Indicated Mineral Resources, including mineral reserves.
Under the terms of the agreement, Paulson will purchase 80% of Barrick Gold U.S.’s interest in Donlin Gold for $800m.
Novagold will acquire the remaining 20% for $200m, thereby increasing its total ownership interest in the project from 50% to 60%.
Paulson will hold the remaining 40%, positioning both parties as joint partners in managing the development of the Donlin Gold Project.
Novagold has been granted an option to buy the debt owed to Barrick in relation to the project for $90m if exercised prior to closing, or $100m if exercised within 18 months following the transaction’s completion.
Should Novagold opt not to exercise this right, the debt will remain in place under its current terms.
Barrick stated that the transaction aligns with its ongoing strategy to streamline its asset base and focus on projects it operates directly, specifically those with long-life potential in gold and copper. The proceeds from the divestiture are expected to support balance sheet strengthening and shareholder-focused initiatives.
Barrick president and chief executive Mark Bristow said: “The Donlin agreement allows Barrick to exit the Donlin Gold Project at an attractive valuation, while allowing Novagold and Paulson to pursue the development of the project.
“This is a good example of an instance where an asset we own might be better suited in the hands of others, while we pursue our priority portfolio of Barrick-managed growth projects.”
The closing of the transaction remains subject to regulatory approvals and customary conditions, with finalisation anticipated either by the end of Q2 or early in Q3 2025.
Following the completion, Novagold and Paulson will jointly manage Donlin Gold. The partnership intends to prioritise an updated feasibility study and reorient the 2025 exploration programme towards converting existing resources into reserves and identifying new resource expansion opportunities.
Novagold president and CEO Greg Lang said: “As with many of our shareholders, we have engaged extensively with Paulson over the years and are grateful for their steadfast solidarity.
“Our management team welcomes this enormous vote of confidence and looks forward to initiating an updated Feasibility Study, as well as to allowing our new drill program to move towards reserve and resource expansion.”
Advising Barrick on the transaction are CIBC World Markets as financial adviser and legal counsel firms Davies Ward Phillips & Vineberg and Holland & Hart.
