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Published on Gold Anti-Trust Action Committee (http://www.gata.org)

Having gotten only 7,000 shares, Barrick extends bid for NovaGold

By cpowell
Created 2006-09-15 00:49

Barrick Gold Extends Bid for NovaGold,
Seeking to Kill NovaGold Poison Pill

By Craig Wong
Canadian Press via CanadianBusinss.com
Thursday, September 14, 2006

http://www.canadianbusiness.com/markets/headline_news/article.jsp?conten... [1]

VANCOUVER -- Barrick Gold Corp. has extended its US$1.5-billion offer to buy NovaGold Resources Inc. to Sept. 29 and says it will seek a hearing at the British Columbia Securities Commission to cancel the junior gold miner's shareholder rights plan.

"At the expiry of the bid, NovaGold will have had over two months to table an alternative proposal," said Greg Wilkins, Barrick's president and chief executive in a release.

"It's time for the poison pill to be removed so that Barrick can proceed with its bid and shareholders can exercise their fundamental right to make their own decisions regarding the tender of their shares without constraints imposed on them by NovaGold's management."

Barrick's original offer was set to expire Friday, however the company said only 6,797 shares had been tendered so far to the offer of US$14.50 per share.

Market trading above the offer is "speculation of value," Wilkins said in an interview with The Canadian Press. "It's people who think there's a game going on and at the moment nothing has surfaced in any of the activities to suggest that the $14.50 price isn't a great price."

Barrick said the offer is a 24 per cent premium to where NovaGold shares were trading before the offer was made. However, the junior company's shares were down 31 cents at C$17.99 on the Toronto Stock Exchange and down 37 cents at US$16.10 on the American Stock Exchange on Thursday.

NovaGold's board recommended shareholders reject Barrick's bid earlier this year saying it undervalued its projects and growth potential.

But NovaGold chief executive Rick Van Nieuwenhuyse said Thursday he's still willing to sit down and talk to Toronto-based Barrick about that he feels would be "fair value."

"So far all we've heard from them in the marketplace is what they think is fair value," Nieuwenhuyse said in an interview.

"We're not entrenched management digging in our heels here. We just know the quality of the assets that we have."

Wilkins said the bid extension isn't a move to allow for more time to sweeten the offer.

"The purpose of the extension is to provide for the securities commission to have a hearing on the shareholder's rights program. We've extended the bid at the same price, so nothing's changed. It's just to buy the time for that," he said.

Earlier in the day a U.S. court denied NovaGold's request for an injunction to block Barrick's bid. Key to the dispute is NovaGold's 70 percent ownership of the Donlin Creek gold project in Alaska that Barrick holds the other 30 percent through Placer Dome, which it acquired earlier this year.

Barrick has the right to increase its share of the project to 70 percent if it is able to meet the conditions, including providing a bankable feasibility study by November 2007.

However, NovaGold has said it doubts Barrick will be able accomplish the goal, a claim Barrick disputes.

NovaGold has filed two lawsuits against Barrick seeking to block its bid and accusing the big gold miner of misleading investors about its stake in a gold project in Alaska.

In denying the injunction Thursday, the U.S. District Court for the District of Alaska found there is "a genuine dispute as to the meaning of the terms of the Donlin Creek Mining venture agreement and the possibility of Barrick meeting the conditions under the agreement by November 2007."

However, the court also said that "NovaGold's shareholders have been fully informed of the nature of the dispute and have sufficient information to determine whether they should tender their shares."

Wilkins said in an earlier statement that he was pleased by the court's decision.

"NovaGold's board and management should stop employing diversionary legal maneuvers and putting up roadblocks. It is now time to put the ball in their shareholders' court."

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Source URL:
http://www.gata.org/node/4380