RBC Capital upgrades NovaGold stock rating to outperform

On Wednesday, RBC Capital analysts upgraded NovaGold Resources stock from Sector Perform to Outperform. The analysts also raised the price target for the stock to $7.00 from the previous $5.00. The stock, currently trading at $3.77 with a market capitalization of $1.51 billion, has seen analyst targets ranging from $5.03 to $10.09.

The upgrade comes as the new partnership revives interest in the Donlin project, which had previously stalled under the joint venture with Barrick. RBC Capital analysts see potential valuation upside in a favorable gold price environment over the coming years. According to InvestingPro data, the company maintains strong liquidity with a current ratio of 47.82 and operates with moderate debt levels.

Work on an updated feasibility study for the Donlin project in Alaska is set to resume. The project is characterized as a high-quality, long-life, large-scale deposit. Despite its potential, challenges remain before any construction decision, which is projected to occur after 2028.

RBC Capital analysts believe that the new ownership structure of the Donlin project could unlock further valuation upside for NovaGold Resources.

In other recent news, NovaGold Resources Inc. has seen significant developments regarding its Donlin Gold project. The Alaska Superior Court upheld a crucial water quality certification for the project, affirming the Alaska Department of Environmental Conservation’s decision that the project complies with state water quality standards. This legal victory marks a critical step forward for NovaGold as it navigates the regulatory landscape. Additionally, NovaGold has entered into a definitive agreement with Paulson Advisers LLC to acquire a combined 50% interest in the Donlin Gold project from Barrick Gold (NYSE:B) Corporation for $1 billion in cash. This transaction will increase NovaGold’s stake to 60%, with Paulson acquiring a 40% interest. The deal is expected to close between late Q2 and early Q3 of 2025, pending regulatory approvals. NovaGold has secured $170 million in funding commitments from Paulson, The Electrum Group, and Kopernik Global Investors, with the remaining funds coming from its treasury. Once the transaction closes, the new partners plan to update the project’s Feasibility Study and focus on expanding its reserves and resources.

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