The “Big Short” Billionaire investor John Paulson struck a deal with NOVAGOLD RESOURCES INC. (AMEX:NG) to consolidate ownership of the Donlin Gold project in Alaska. The transaction combines NOVAGOLD’s existing 60% interest in Donlin Gold with Paulson’s remaining 40% stake in an enterprise worth about $4.2 billion.
“Consolidating our interest in Donlin into NOVAGOLD enhances Donlin’s organizational structure and will facilitate, streamline and expedite the development of the Donlin mine,” Paulson said in the news release. “As the major shareholder of New NG, I share the conviction that Donlin Gold is a world-class gold investment.”
Under the agreement, NOVAGOLD will acquire Paulson’s interest in Donlin Gold through an all-stock transaction. Through a new company, NovaGold Corporation domiciled in Delaware, existing NOVAGOLD shareholders will own around 65% of the combined company, while Paulson will receive roughly 35% of shares. The firm is expected to list on the New York Stock Exchange.
When accounting for NOVAGOLD shares Paulson already owns, he will hold about 40% of the new company, although his voting rights will be capped at 19.99%. He will be a co-chair, alongside NOVAGOLD Chairman Thomas Kaplan.
