We are investigating NovaGold Resources Inc. (NG) (“NovaGold” or the “Company”) for potential violations of the federal securities laws.
On May 28, 2020, J. Capital Research (“J. Capital”) published a report alleging that “NovaGold’s management team has systematically misled investors” about the Company’s Donlin gold-mining project, “a deposit so remote and technologically challenging that the mine will never be built.” J. Capital criticized NovaGold for using “custom metrics designed to deceive,” which included, among other representations, that “the deposit will require $6.7 bln in capital, [when] the feasibility study clearly shows this number is $8 bln.” J. Capital also contended that “[t]he proposed natural gas pipeline central to powering the project is dead on arrival,” quoting an engineer who worked on costing the pipeline as stating that he “doesn’t know of any engineering company that has the experience to build such a complex pipeline.” On this news, NovaGold’s stock price fell $0.94 per share, or 8.83%, to close at $9.71 per share on May 28, 2020.