NovaGold Resources Inc. (NYSEAMERICAN:NG; TSE:NG) saw its shares jump 10.3% in New York trading on Wednesday, closing at $6.21, following the announcement of a definitive agreement to acquire Paulson Advisers' 40% interest in the Donlin Gold project. The stock traded more than 25.7 million shares, nearly 7.5 times the average volume over the prior five sessions, as investors reacted positively to the deal that will give NovaGold full ownership of the Alaskan gold asset.
The transaction, which requires approval from two-thirds of shareholders, is expected to close in the fourth quarter of 2026. Under the terms, Paulson will exchange its 40% stake in Donlin for newly issued shares in the combined entity, giving it approximately 35% of the pro forma company. Legacy NovaGold shareholders, including Paulson's existing stake, will retain roughly 65% ownership of the fully consolidated Donlin parent company.
As a result, the effective Donlin exposure per legacy share increases by about 8.3%, according to preliminary estimates provided by the company. The deal creates a U.S.-based gold developer with a projected equity value of $4.2 billion, combining NovaGold's existing 60% interest with the acquired 40% to achieve full control of the 40-million-ounce gold resource, which grades 2.22 grams per tonne.
Chief Executive Greg Lang emphasized that the company's absolute focus remains on completing the Bankable Feasibility Study, targeted for 2027. Donlin Gold is expected to produce an average of 1.3 million ounces annually in its first ten years and 1.1 million ounces per year over a 27-year mine life. With full ownership, NovaGold's attributable production would exceed 520,000 ounces annually in the initial decade.
The market's reaction exceeded the mechanical uplift implied by the ownership change, with the stock gaining roughly two percentage points more than the estimated 8.3% per-share exposure increase. This suggests investors are pricing in additional strategic value from the consolidation, though the premium may also reflect adjustments for cash, liabilities, and anticipated financing needs. The stock's 10.3% gain outpaced peer Seabridge Gold Inc. (NYSE:SA), which rose 3.7% on the day.
Paulson's newly issued shares carry a 10% discount based on Donlin's implied value, determined using NovaGold's 10-day volume-weighted average price through July 21. Shareholders will receive one new parent share for each existing share held. Paulson's total economic stake will rise to approximately 40%, but its voting power will be capped at 19.99%. The board will expand to 11 members, with Paulson having the right to nominate two initial directors.
As of May 31, NovaGold held $370.2 million in cash and term deposits, and management maintained its 2026 spending forecast of $98.5 million. The company plans to secure additional funding for detailed engineering and other pre-development activities. The deal has already secured support from directors and investors representing roughly 28% of outstanding shares, who have entered into voting agreements.
Risks remain, including potential shareholder or legal challenges, an ongoing permit dispute before the Alaska Supreme Court, and substantial funding requirements for the project's development. Current permits remain valid during the legal process. Investors are now awaiting the expected regulatory filing containing the full transaction agreements, though no date has been set for the shareholder meeting.
