Barrick Gold Corp. today announced that it has reached an agreement to sell its 50% interest in the Donlin gold project in Alaska to affiliates of Paulson Advisers LLC and NOVAGOLD Resources for $1 billion in cash. In addition, Barrick has granted NOVAGOLD an option to purchase the outstanding debt owed to Barrick in connection with the Donlin gold project for $90 million if purchased prior to closing, or for $100 million if purchased within 18 months from closing, when the option expires. If that option is not exercised, the debt will remain outstanding, substantially in accordance with its existing terms.
Paulson and NOVAGOLD have agreed to acquire 80% and 20%, respectively, of Barrick’s interest in Donlin Gold LLC, the entity that holds the Donlin Gold Project, with each purchaser contributing pro rata to the purchase price and several existing shareholders, including Paulson, backstopping NOVAGOLD’s purchase commitment.
Proceeds from the sale will be used to further strengthen the balance sheet, invest in the project’s future and support a commitment to deliver returns to shareholders, NOVAGOLD explained…