BRITISH COLUMBIA

NovaGold cuts Q3 loss to $21.5M; cites reversal in decommissioning expense

10/11/2012 07:46 EDT | Updated 12/11/2012 05:12 EST
VANCOUVER - NovaGold Resources Inc. (TSX:NG) has extended the timeline for selling its 50 per cent stake in the Galore Creek project by three months to the first quarter of 2013.

The company said Thursday that it was in talks with several groups and decided to extend the time because of additional interest in the B.C. project that it shares with Teck Resources Ltd. (TSX:TCK.B).

However, if it does not receive a rich enough offer, NovaGold plans to withdraw the property from sale and reduce activity on the project until market conditions improve.

NovaGold made the comments as it reported a third-quarter loss of $21.5 million or eight cents per share. The net loss for the three months ended Aug. 31 was less than half the loss of $52.1 million or 22 cents per share it reported a year ago.

The company credited the improvement primarily to the recovery of a decommissioning expense of $3.1 million in the 2012 quarter compared with an expense of $20.6 million for the corresponding period in 2011.

The company, whose flagship asset is its 50 per cent stake in the Donlin gold project in Alaska, did not report any revenues for the quarter.

Shares in NovaGold came under pressure earlier this year after its partner on the Donlin project, Barrick Gold Corp. (TSX:ABX), suggested it did not currently meet its investment criteria.

NovaGold has been streamlining its operations in recent months to focus on the Donlin project.

The company spun off its Ambler project into a company called NovaCopper earlier this year and signed a deal to sell its troubled Rock Creek property in Nome, Alaska, to Bering Straits Native Corp.

NovaGold started production a Rock Creek in 2008, but stopped operations at the conventional open-pit mine shortly after they began.