NovaGold Announces Intention to Make Takeover Offer for Copper Canyon
Resources
December 20, 2010 - Vancouver, British Columbia - NovaGold Resources
Inc. ("NovaGold��)
(NYSE-AMEX: NG, TSX: NG) today announced that it intends to make an offer
to acquire all of the outstanding shares of Copper Canyon Resources Ltd.
("Copper Canyon��)
(TSX-V: CPY), a junior exploration company, on the basis of 0.0425 of a
NovaGold common share for each one Copper Canyon common share. The offer
represents a 41.8% premium based on the closing price of Copper Canyon common
shares and NovaGold common shares on the TSX-V and TSX, respectively, on
December 17, 2010. Based on public disclosure, there are approximately 57.4
million Copper Canyon common shares outstanding on a fully diluted basis,
valuing the acquisition at approximately C$34.1 million.
Copper Canyon's principal
asset is its 40% joint venture interest in the Copper Canyon copper-gold-silver
property that is adjacent to the Galore Creek project, owned equally by NovaGold
and Teck Resources Limited. A wholly-owned subsidiary of NovaGold owns the
remaining 60% joint venture interest in the Copper Canyon property.
NovaGold believes its
proposed offer provides Copper Canyon shareholders several benefits in addition
to an attractive premium. Copper Canyon shareholders will have continued upside
exposure to the Galore Creek project and will gain exposure to a world-class
portfolio of North American gold and copper-gold projects. In addition, Copper
Canyon shareholders will receive shares in a larger company with much greater
financial capability and significantly greater trading liquidity.
The offer will be made by way
of a formal offer and takeover bid circular to be mailed to shareholders of
Copper Canyon and will be subject to various conditions, including receipt of
all required regulatory approvals, termination or waiver of Copper Canyon's
shareholder rights plan and not less than 66?% of the Copper Canyon shares
being deposited under the offer and not withdrawn. Further details concerning
the offer will be included in the formal offer and takeover bid circular.
This press release does not
constitute an offer to buy or an invitation to sell, or the solicitation of an
offer to buy or invitation to sell, any securities of NovaGold or Copper
Canyon. Such an offer may only be made pursuant to an offer and takeover bid
circular filed with the securities regulatory authorities in Canada and
pursuant to registration or qualification under the securities laws of any
other such jurisdiction.
NovaGold intends to file with the U.S. Securities and Exchange
Commission (the "SEC��) a
Registration Statement on FormF-8 which will include the offer and takeover bid
circular. Investors
and security holders are urged to read the offer and takeover bid circular
regarding the proposed transaction referred to in these documents when they
become available, because they will contain important information. Investors may obtain a free copy of
the offer and takeover bid circular, when they become available and other
documents filed by NovaGold with the Canadian provincial securities regulators
on SEDAR at www.sedar.com, and with the SEC at the SEC's website at
www.sec.gov. The offer and takeover bid circular and these other documents may
also be obtained for free, once they have been mailed, on NovaGold's website.
Free copies of any such documents could also be obtained by directing a request
to NovaGold at Suite 2300 – 200 Granville Street, PO Box 24, Vancouver, BC,
Canada V6C 1S4.
TD Securities Inc. is acting
as financial advisor to NovaGold in connection with the proposed takeover offer
and Blake, Cassels & Graydon LLP and Dorsey & Whitney LLP are acting as
NovaGold's legal counsel.
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About NovaGold
NovaGold is a precious metals company engaged in the exploration and
development of mineral properties in Alaska, U.S.A. and British Columbia,
Canada. The Company is focused on advancing its two core properties, Donlin
Creek and Galore Creek, with the objective of becoming a low-cost
million-ounce-a-year gold producer, and offers superior leverage to gold with
one of the largest reserve/resource bases of any junior or mid-tier gold
company. NovaGold has a strong track record of expanding deposits through
exploration success and forging collaborative partnerships, both with local
communities and with major mining companies. The Donlin Creek project in
Alaska, one of the world's largest undeveloped gold deposits, is held by a
limited liability company owned equally by NovaGold and Barrick Gold U.S. Inc.
The Galore Creek project in British Columbia, a large copper-gold-silver
deposit, is held by a partnership owned equally by NovaGold and Teck Resources
Limited. NovaGold also owns a 100% interest in the high-grade Ambler
copper-zinc-gold-silver deposit in northern Alaska and has other earlier-stage
exploration properties. NovaGold trades on the TSX and NYSE-AMEX under the symbol
NG. More information is available at www.novagold.net or by emailing
info@novagold.net.
NovaGold Contact
Rhylin Bailie
Director, Communications & Investor Relations
604-669-6227 or
1-866-669-6227
Cautionary Note
Regarding Forward-Looking Statements
This
press release includes certain "forward-looking statements” within the
meaning of the United States Private Securities Litigation Reform Act of 1995.
All statements, other than statements of historical fact, included herein
including, without limitation, plans for and intentions with respect to the
acquisition of Copper Canyon, are forward-looking statements. Forward-looking
statements involve various risks and uncertainties. There can be no assurance
that such statements will prove to be accurate, and actual results and future
events could differ materially from those anticipated in such statements.
Important factors that could cause actual results to differ materially from
NovaGold's expectations include uncertainty as to the completion of the purchase
of Copper Canyon in accordance with the terms and conditions of the proposed
offer; the accuracy of management's assessment of the effects of the successful
completion of the offer; the timing and prospects for shareholder acceptance of
an offer and the implementation thereof; the satisfaction of any conditions to
an offer;
uncertainties involving the need for additional financing to explore and
develop properties and availability of financing in the debt and capital
markets; uncertainties involved in the interpretation of drilling results and
geological tests and the estimation of reserves and resources; the need for
continued cooperation with Teck Resources in the exploration and development of
the Galore Creek property; the need for cooperation of government agencies and
native groups in the development and operation of properties; the need to
obtain permits and governmental approvals; risks of construction and mining
projects such as accidents, equipment breakdowns, bad weather, non-compliance
with environmental and permit requirements, unanticipated variation in
geological structures, ore grades or recovery rates; unexpected cost increases;
fluctuations in metal prices and currency exchange rates; the outcome of
litigation pending against the company; and other risk and uncertainties
disclosed in NovaGold's Annual Information Form for the year ended November 30,
2009, filed with the Canadian securities regulatory authorities, and NovaGold's
annual report on Form 40-F filed with the United States Securities and Exchange
Commission and in other NovaGold reports and documents filed with applicable
securities regulatory authorities from time to time. NovaGold's forward-looking
statements reflect the beliefs, opinions and projections on the date the statements
are made. NovaGold assumes no obligation to update the forward-looking
statements of beliefs, opinions, projections, or other factors, should they
change.