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The NovaGold share that beats the gold price suppression scheme could be yours
9:41p ET Monday, August 14, 2006
Dear Friend of GATA and Gold:
The Reuters story appended here about NovaGold's resistance to Barrick Gold's low-ball acquisition offer seems to be the most comprehensive one so far about today's developments.
Note that it reports that NovaGold's management controls about 10 percent of the company's shares. GATA Chairman Bill Murphy's commentary of August 10 --
-- listed the institutional holders of about another 30 percent of NovaGold's shares, and urged GATA supporters to contact those institutions (their e-mail addresses were provided) to urge them not to tender their shares to Barrick, on account of Barrick's massive shorting of gold and its suppression of the price.
The primary responsibility of those institutions is to their investors, and they well may be ready to take any offer that produces an immediate profit. But we need to try to make them understand that their shareholders -- both those directly invested in NovaGold and those invested in the precious metals sector generally -- may be better served by resisting any offer from Barrick, no matter how attractive the price seems, until Barrick ends its participation in the gold price suppression scheme and allows gold to find a price that better reflects a free market. Such a price will lift the shares of NovaGold and all precious metals mining companies.
You don't have rely on those instutitional investors to do the right thing. You can strike your own blow on this new and decisive battlefield of the gold war by buying and holding your own shares in NovaGold, as GATA and some of its officers have done. We think that we'll do both good and well this way. Even the purchase of a small number of shares may help the opposition reach the crucial mark of 50 percent of the shares, plus one. That one share, the decisive share, could be yours.
CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.
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NovaGold Urges Investors
to Spurn Barrick Bid
Monday, August 14, 2006
NEW YORK -- NovaGold Resources Inc. urged investors on Monday to reject a hostile $1.28-billion takeover offer from Barrick Gold Corp., saying the bid "significantly undervalues" the Canadian company's projects and its growth potential.
NovaGold said Barrick's $14.50 a share cash offer was not in the best interest of the company's shareholders and failed to reflect the value of NovaGold's 70-percent ownership of the Donlin Creek project in Alaska, which it described as one of the world's biggest gold deposits.
Shares of NovaGold closed up 2 percent at C$19.04 on the Toronto Stock Exchange on Monday and up 25 cents at $16.86 on Amex. Shares of Barrick, the world's biggest gold producer, closed 77 Canadian cents lower at C$34.35 in Toronto.
"Alternative transactions are being pursued by NovaGold with some of the world's largest mining companies to generate greater value for ... shareholders," NovaGold said in a statement.
NovaGold's directors and management, who hold about 10 percent of the company's stock, have said they do not intend to tender their shares to Barrick's bid, the company said.
A source familiar with the situation said NovaGold has entered into discussions with mining companies regarding the acquisition of all of NovaGold. It is also in discussions with mining companies on joint ventures at some of its key assets.
In addition, the source said that NovaGold is pursuing the option of remaining an independent company and that shareholder support for the Barrick transaction appears to be low. The completion of Barrick's offer requires it to have the support of slightly more than 50 percent of NovaGold's investors.
"I think shareholders recognize that Barrick is forestalling a tremendous amount of upside in the stock," the source said.
Separately, NovaGold said it is suing Barrick for allegedly misusing confidential information in its competing bid for Pioneer Metals Corp.
NovaGold, which has also bid for Pioneer, alleges Barrick misused confidential information that belongs to NovaGold in making its offer for Pioneer.
NovaGold is seeking a court order that any shares of Pioneer bought by Barrick under its bid be held under a "constructive trust" for the benefit of NovaGold.
A spokesman for Barrick said the company is reviewing the circular and the complaint and "will offer a response in due course."