By Robb M. Stewart

Barrick Gold is selling its stake in an Alaskan gold project for as much as $1.1 billion to affiliates of billionaire John Paulson's Paulson Advisers and Novagold Resources, bolstering its balance sheet at a time when the precious metal is trading at a record high.

The Canadian miner said it has reached an agreement to sell its 50% interest in the Donlin project for $1 billion in cash. Novagold will have an option to buy the outstanding debt owed to Barrick connected to the Donlin project for $90 million if purchased before the sale closes or for $100 million if bought within 18 months from closing.

The deal will allow Barrick to exit Donlin at an attractive valuation, while Novagold and Paulson push ahead with development of the project, Barrick Chief Executive Mark Bristow said. Proceeds from the sale will be used to strengthen the company's balance sheet, invest and support returns to shareholders.

Dealmaking in the gold industry typically increases when the metal's price is high. Gold futures set a record high this week, rising above $3,500 for the first time.

Under the deal with Barrick, Novagold will buy a 10% interest in Donlin for $200 million to lift its stake to 60%. Paulson will buy a 40% interest for $800 million and will share responsibility as an equal partner in project management of the operation.

Novagold said that to finance its portion of the deal it has funding commitments from Paulson and other investors that have agreed to buy $170 million worth of shares in the company.

Novagold, which is focused on developing Donlin, will have the option to buy the debt owed to Barrick for 18 months after the deal closes, and if not exercised the debt will remain outstanding.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

April 22, 2025 07:48 ET (11:48 GMT)

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