Editor’s picks: top stories of week 16

Barrick had acquired 13.6 million NovaGold shares at US$16 in December, or only 14.8% of the junior, in a rancourous, mostly futile takevover attempt.

Barrick sold about 12 million shares Friday morning at US$16.25 in a block trade on the American Stock Exchange through RBC Capital Markets. The company had sold 1.5 million NovaGold shares earlier in the week at prices above US$16.25, Barrick spokesman Vince Borg told the Associated Press.

It was only Thursday that NovaGold priced a public offering of 12.5 million shares at the very same US$16.25 (C$18.33) price point. If an over-allotment option is exercised in full, gross proceeds of the offering will be US$234 million.

Reaction to the news was rather muted, with Barrick shares rising US18 cents to close at US$28.86 in New York and up 10 cents to C$32.55 in Toronto. NovaGold rose 9 cents to $18.15 in Toronto and US13 cents to US$16.18 on the Amex.

NovaGold owns 70% of the very large but remote and low-grade Donlin Creek deposit in Alaska, with Barrick owing the remaining 30 per cent. NovaGold also has 100% of the Galore Creek copper-gold-silver project in northwestern British Columbia.

NovaGold now has the opportunity to show whether Barrick was truly holding the Donlin Creek and Galore Creek projects back, or whether the major was correct in its assessment that NovaGold was too rosy in its view with regards to both project’s mining potential.

Next we’ll see what Barrick will do with its 30% stake in Donlin Creek. There is a very strong incentive to hang on to it until after the full feasibility study is completed this fall at Donlin, and Barrick’s stake rises to 70%.

NovaGold has repeatedly said Barrick doesn’t have enough time to do the study, and so will remain at a 30% interest.

Under the deal, Dynatec shareholders will receive 0.19 of a Sherritt share and about 0.0635 of an FNX Mining (FNX-T) share. Dynatec has a 24.5% interest in FNX to explore five mineral properties near Sudbury, Ont. the McCreedy, West, Levack, Podolsky, Victori and Kirkwood properties. Dynatec also has a coalbed-methane project covering 42,053 acres in West Virginia.

In a separate but related agreement, FNX will have the right to buy Dynatecs Mining Services division from Sherritt for an as-yet undetermined cash price.

Sherritts closing share price of $17.15 and FNXs share price of $25.46 on April 19 values Dynatec at $4.88 per share a 29% premium over Dynatecs closing share price on Thursday.

The deal left many analysts on the ensuing conference call perplexed that some of the big numbers haven’t yet been pinned down. Sherritt management insist they’re looking at the big picture.

Global has just raised a gross $7.5 million by issuing 7.5 million shares at a buck apiece.