VANCOUVER (CP) -- NovaGold Resources Inc. [TSX:NG; NYSE:NG] urged shareholders to spurn the latest sweetened takeover offer by Barrick Gold Corp. [TSX:ABX; NYSE:ABX], saying the US$1.7-billion hostile offer by the senior gold producer is ''simply not good enough.''
NovaGold chief executive Rick Van Nieuwenhuyse said Tuesday the message to Barrick was simple, clear and consistent.
''Either offer NovaGold shareholders full and fair value for their investment, or withdraw the offer so NovaGold can get on with its business of advancing projects toward production and creating value for shareholders,'' Van Nieuwenhuyse said in a statement.
Barrick raised its offer last week to US$16 in cash per share, up from US$14.50, and extended the bid for a fourth time to 9 p.m. ET on Nov. 7.
However, NovaGold continued to resist Barrick's advances, accusing one of the world's biggest gold producers of trying to snap up its interest in their Donlin Creek joint venture in southwestern Alaska for less than its true value.
Barrick said Tuesday it was disappointed by NovaGold's decision, but not surprised.
''We believe that NovaGold shareholders should consider our premium all-cash offer of US$16 as money in the bank,'' Barrick CEO Greg Wilkins said in a statement.
''The choice is cash in the bank versus significant project risk and financial dilution.''
Wilkins suggested the Barrick offer has been supporting the NovaGold share price and asked NovaGold shareholders to consider where the share price will be without it.
NovaGold shares traded for C$13.29 on the Toronto Stock Exchange before Barrick made its offer in July.
NovaGold said its latest response was based on the advice of a special committee of independent directors.
''The special committee and full board unanimously determined that Barrick's amended bid still falls well short of reflecting the value inherent in NovaGold,'' said Gerald McConnell, chairman of the special committee.
In its third-quarter report this month, NovaGold attributed a loss of C$2.6 million to C$4.7 million in costs arising from the hostile Barrick offer.
NovaGold owns a 70% interest in Donlin Creek, described as one of the largest undeveloped gold resources in the world, while Barrick holds the remaining 30%.
Barrick is also the operator on the project and has a right to increase its stake in the project to 70% if it meets certain conditions including providing a bankable feasibility study by November 2007.
NovaGold also recently completed its feasibility study for its Galore Creek gold and copper project in B.C. that is expected to cost US$1.8 billion to build.
On Tuesday, NovaGold shares fell five cents to close at C$17.70 on the Toronto Stock Exchange, while Barrick shares rose 2.2%, or 75 cents, to C$34.75.
(c) The Canadian Press 2006