NovaGold’s $4.2 Billion Donlin Deal Solves Control, Not the Funding Problem

NovaGold Resources is paying with stock to remove the last partner from Donlin Gold, turning one of the world’s largest undeveloped gold deposits into a single-company financing test.

The July 22 agreement will lift NovaGold’s ownership of the Alaska project from 60% to 100% by acquiring Paulson Advisers’ 40% interest. The all-share transaction is structured around an estimated $4.2 billion equity value for the new U.S.-domiciled company. Existing NovaGold shareholders will own roughly 65%, while Paulson will receive about 35% for its project stake. Including shares Paulson already owns, it will hold about 40% of the economic interest, although its voting power will be capped at 19.99%.

That structure matters because Donlin’s problem has never been a shortage of gold. NovaGold reports about 40 million ounces in measured and indicated resources, including proven and probable reserves, at an average grade of 2.22 grams per tonne. The proposed open-pit mine is expected to produce more than one million ounces annually over a roughly 27-year life. Reuters said the consolidation adds more than 16 million attributable measured and indicated ounces to NovaGold, including 13 million reserve ounces, and more than 520,000 ounces of projected annual attributable production for a decade.

The deal instead addresses split control at the moment when ownership complexity could have become a financing liability. NovaGold acquired an additional 10% of Donlin from Barrick in 2025 for $200 million, while Paulson paid $800 million for the other 40%. The two owners then had equal governance rights despite their unequal economic stakes. Bringing the project under one listed issuer should simplify decisions on design, capital structure, government support and any future infrastructure partnership.

It also concentrates the risk. Donlin is remote, technically large and infrastructure-heavy. Alaska’s project description includes an open pit, processing plant, tailings storage, power generation, port and road infrastructure, plus a proposed 315-mile natural-gas pipeline. The state estimates three to four years of construction. Earlier external estimates put development costs above $9 billion, before the current bankable feasibility study resets the design, schedule and budget.

Fluor is leading that study, with WSP, Worley and Hatch working on specialist packages. Completion is targeted for 2027. Reuters cited RBC Capital Markets as expecting the study around mid-2027 and a possible construction decision in 2028 or later. That makes the acquisition less a finish line than a transfer of the next capital call from a partnership to NovaGold shareholders and lenders.

NovaGold entered the transaction with financial capacity for the study, not for mine construction. The company reported about $370.2 million in cash and term deposits at the end of its fiscal second quarter and said it was funded to complete the feasibility work. Its SEC filing nevertheless states that future development will require additional capital through some mix of corporate equity and debt, project finance, infrastructure funding, government support and potentially a royalty or stream.

The all-share purchase preserves cash, but it introduces dilution and a powerful strategic shareholder. Paulson’s roughly 40% economic exposure gives the gold investor a strong incentive to support financing and development, while the voting cap limits formal control. The new company is expected to be incorporated in Delaware and seek a New York Stock Exchange listing, with Thomas Kaplan and John Paulson as co-chairs. The transaction still requires shareholder, court and regulatory approvals and is expected to close in the fourth quarter of 2026.

Permitting is more advanced than at many projects of comparable scale, but it is not risk-free. Donlin has federal and state approvals covering the mine, pipeline, water, waste and access infrastructure. Alaska’s Supreme Court upheld important state permits in November 2025. Federal agencies have also placed supplemental environmental review work on the FAST-41 permitting dashboard. A mature permit inventory reduces one category of uncertainty; it does not eliminate redesign, extension or litigation risk as the feasibility study changes the project.

The social licence is equally complex. Donlin sits on Alaska Native corporation lands, with Calista holding subsurface rights and The Kuskokwim Corporation holding much of the surface estate. Those landowners support development and its economic benefits. Other regional Native groups and residents have raised concerns about the Kuskokwim watershed, subsistence fishing and the long-term consequences of a large tailings facility. Full corporate control cannot resolve that divide by itself.

Gold’s current level gives the transaction a favourable backdrop. Samarium’s internal price series rose from $4,115.41 to $4,123.31 over the latest 24-hour window, a gain of 0.19%, after trading between $4,109.85 and $4,159.15. High bullion prices improve the apparent economics of long-life deposits and expand financing options, but a project designed for decades cannot rely on a single price cycle.

For NovaGold, the next valuation test is no longer whether it can consolidate Donlin. It is whether the 2027 study can produce a financeable capital number without sacrificing the project’s scale. The acquisition removes divided ownership, but it also makes the answer entirely NovaGold’s responsibility.