Barrick Waives Minimum Tender Condition in NovaGold Bid

Vancouver — With about 20.6 million shares of NovaGold Resources (NG-T, NG-X) deposited under Barrick Gold’s (ABX-T, ABX-N) US$16.00-per-share hostile bid, the gold major has waived the 50.1% minimum tender condition in a realization it may fall short. It again extended its offer, now set to expire on Nov. 21.

With the condition removed, Barrick hopes to elicit the deposit of additional NovaGold shares from shareholders previously concerned about the likelihood of satisfying the minimum tender conditition.

NovaGold reports its management and directors along with certain key shareholders control over 40% of its shares on a fully diluted basis, greatly reducing Barrick’s chances for gaining control of the company under the unsolicited offer. However, the major will very likely emerge as the company’s largest single shareholder.

“Barrick is pleased with the significant increase in the number of shares tendered to our bid to date,” said Greg Wilkins, Barrick president and CEO. “We are anticipating that tenders to the bid will continue to increase during this extension as more NovaGold shareholders choose the cash in the bank our offer provides, rather than the significant project risk and financial dilution associated with remaining as a NovaGold shareholder.”

Following the senior’s fifth bid extension, NovaGold countered that its shareholders have overwhelmingly rejected Barrick’s hostile offer.

“After almost four months, four extensions and one token increase in the offer price, Barrick has persuaded the holders of only nineteen per cent of NovaGold shares on a fully diluted basis to tender to its undervalued and inadequate bid,” said Rick Van Nieuwenhuyse, NovaGold’s president and CEO.

“It appears clear that in waiving the 50.1 per cent minimum condition, Barrick is acknowledging that they will not gain a controlling interest in NovaGold through this undervalued bid,” he continued. “Barrick seems to now agree with our other shareholders that at US$16.00, NovaGold shares are better than money in the bank.”

Shares of NovaGold perked up following the news of Barrick’s waiver, gaining about 50 on TSX trading to around $18.30 and US36 on the AMEX to around US$16.20 apiece.