Novagold Resources on Monday 聽against a report from J Capital Research released late May that accused managers of the Vancouver-based explorer of 鈥渟ystematically鈥澛爉isleading investors about its proposed Alaska gold mine over the last 15 years.
J Cap, a company聽聽a decade ago which usually targets overvalued media and tech companies for short-selling, said the Donlin Gold project, which is 50-50 owned by Novagold and Barrick, 鈥渨ill never be built鈥� and 鈥渋n short, this is a stock promote, not a mining plan.鈥�
Shares in Novagold (NYSE: AMERICAN, TSX: NG) fell by more than 12% on Monday and are now down 25% since the publication of the report, pushing the company鈥檚 market value to $2.6 billion.
Greg Lang, Novagold president and CEO said the response, which includes a of the original J Cap report, explains why the company is 鈥渟o determinedly assessing all of the legal options available to it in various jurisdictions.鈥�
Among other points, Novagold says its response demonstrates:
- Donlin Gold (the 鈥減roject鈥�), 50%-owned by NOVAGOLD, is clearly feasible as well as one of the world鈥檚 largest and highest-grade known open-pit gold deposits, as supported by extensive environmental, technical, and social studies conducted by numerous reputable firms;
- NOVAGOLD and its partner Barrick Gold are advancing Donlin Gold toward development in a fiscally and socially responsible manner with a strong focus on technical excellence, safety, and environmental stewardship;
- The company鈥檚 highly experienced and well-regarded management team is steadfast in its strategy toward successful execution of the project when the gold price, market conditions, and project optimization render it ready for development;
- JCAP exhibited a fundamental lack of knowledge of geology, engineering, topography, technology, accounting and financial assessment methodology as it attempted to denigrate NOVAGOLD and its assets; and
- JCAP鈥檚 misrepresentations, convenient omissions, and intentional muddling of chronology, events and data, as well as inappropriate comparisons and consistent reliance on unidentified, questionably credentialed 鈥渆xperts鈥� exposed its deep lack of legitimacy.
Click for theand here for a letter to shareholders from Novagold鈥檚 board chair Dr. Thomas S. Kaplan also released today.