Teck mulls next step with Novagold stake

Vancouver-based Novagold Resources is working with two banks to sell its 50-per-cent stake in the Galore Creek copper project in northwestern B.C.

“Novagold and our bankers at Royal Bank of Canada and J.P. Morgan have begun the process of engaging with potential suitors for our portion of the project,” CEO Greg Lang said Wednesday.

Vancouver-based Teck Resources, Canada’s biggest diversified mining company, owns the other half of Galore Creek. Teck said on Nov. 16 it had a 90-day right of first refusal in its partnership agreement on the property, which Novagold says would be the largest copper mine in Canada.

“We have not waived our right of first refusal,” Teck spokeswoman Marcia Smith said Wednesday.

Novagold said in November it would “explore opportunities” to sell all or part of its holding in the project. The company intends to concentrate on funding and developing its “flagship” Donlin gold project in Alaska. Novagold owns 50 per cent of Donlin and Barrick Gold Corp., the world’s largest producer of the metal, owns the other half. The mine may require about $6.7 billion in startup capital, according to a Dec. 5 study.

Investors will vote on March 28 on a plan to spin off the company’s Ambler project in Alaska, Novagold said. Shareholders will get one share of the new company, Novacopper Inc., for every six Novagold shares they hold.