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NovaGold releases second quarter results: posts loss of US$9.6mln

Published: 19:06 27 Jun 2018 EDT

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The Donlin Gold project is located in the historic Kuskokwim Gold Belt of Southwest Alaska

NovaGold Resources Inc. (TSE:NG, NYSE:NG) released its 2018 second quarter financial results today, posting a loss of US$9.6mln. 

The company, which is headquartered in Vancouver, said it had a loss from US$8.5mln ($0.03 per share) in the second quarter of 2017 to US$9.6mln ($0.03 per share) in 2018, primarily due to higher operating losses, higher interest expense on the Barrick promissory note, lower interest income and an unfavorable net change in foreign exchange gains and losses.

Updates were also released in regards to the company's flagship Donlin gold project in Alaska, which Novagold owns equally with Barrick Gold Corp. (TSE:ABX) and its Galore Creek copper-gold-silver project in British Columbia, which Novagold owns equally with Teck Resources (TSE:TECK.B). 

The company said cash used in operating activities increased by $0.3mln in the second quarter 2018, primarily due to increased general and administrative expense and changes in working capital. Cash used to fund Donlin Gold and Galore Creek was $1.5mln higher year-over-year due to ongoing optimization efforts at Donlin Gold.

"We remain financially strong with approximately $70 million in cash and term deposits as of May 31, 2018, representing a healthy cash position that enables the company to execute on its stated strategy of enhancing the value of the Donlin Gold and Galore Creek projects," said president and chief executive officer Gregory A. Lang. 

"The company has sufficient funds to complete permitting and planned project optimization work at Donlin Gold, as well as meet our other financial obligations."

Donlin Gold project update

The Donlin Gold project is located in the historic Kuskokwim Gold Belt of Southwest Alaska, 10 miles north of the village of Crooked Creek. 

The company said its focus in the second quarter was twofold: to support the U.S. Army Corps of Engineers in filing the notice of availability for the final Environmental Impact Statement (EIS) for the Donlin Gold project, along with federal and state permitting authorities in advancing other required permits.

Additionally, the company said it is continuing to concentrate on improving its capital efficiencies and the overall project execution plan. 

Shares of NovaGold were down 2.22% on Wednesday at $5.73. 

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