NovaGold Resources Inc has published a report saying that it has reached a binding agreement to sell 100% of its NovaGreenPower subsidiary for up to $40 million to AltaGas Ltd., a Calgary based energy infrastructure company. NovaGreenPower owns several development-stage run-of-river hydroelectric projects located in northwest British Columbia.
The transaction is expected to close later today, with payment to NovaGold of $35 million on closing and an additional $5 million subject to completion of certain conditions by February 15, 2009. NovaGold acquired the NovaGreenPower hydroelectric assets in 2006. The carrying value to NovaGold of the assets being sold, along with transaction costs, is approximately $6 million. Canaccord Adams acted as financial advisor to NovaGold for this transaction.
“NovaGold’s strategy is to focus our financial and management resources on the advancement of our core mining projects: Donlin Creek, Galore Creek and Rock Creek,” said Rick Van Nieuwenhuyse, President & CEO of NovaGold. “The sale of NovaGreenPower is consistent with the strategy to realize the value of our non-core assets for NovaGold shareholders. We believe AltaGas has the resources and expertise to develop Forrest Kerr and the other hydroelectric projects owned by NovaGreenPower. AltaGas’ focus on rapidly advancing these projects will facilitate the timely development of power transmission infrastructure that will support future power requirements of the Galore Creek copper-gold-silver mine as well as the communities of northwest British Columbia.”
Like NovaGold, AltaGas is committed to community engagement and developing projects in a responsible manner that brings real benefits to local communities and First Nations group. AltaGas is committed to upholding the First Nations Agreements in place for the Forrest Kerr project, and will continue to work with local First Nations groups as the projects progress.
Recognizing the strength of NovaGold’s renewable energy team, AltaGas has retained the NovaGreenPower team, including Doug Brown, Acting President of NovaGreenPower and VP Business Development of NovaGold, and Dan Woznow, VP Operations of NovaGreenPower. NovaGold would like to thank Doug Brown, Dan Woznow and the other members of the NovaGreenPower team for their contributions to the Company and wish them well in their transition to AltaGas.
NovaGold is a precious metals company engaged in the exploration and development of mineral properties in Alaska and Western Canada. Production is scheduled for 2008 at the 100%-owned Nome Operations in Alaska, which includes the Rock Creek, Big Hurrah and Nome Gold deposits. NovaGold owns 50% of the Donlin Creek gold project in Alaska, one of the world’s largest gold deposits, with Barrick Gold (50%). The Company also owns 50% of the Galore Creek copper-gold-silver project in British Columbia with Teck Cominco (50%). Also in Alaska, NovaGold is earning a 51% interest as manager of the high-grade Ambler copper-zinc-silver-gold project in partnership with Rio Tinto. NovaGold has one of the largest resource bases of any exploration or development-stage precious metals company. NovaGold trades on the TSX and AMEX under the symbol NG.
Source: NovaGold Resources Inc.