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Message: Closes Balance of US$75 Million Financing and Bridge Loan Converted
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Closes Balance of US$75 Million Financing and Bridge Loan Converted

posted on Jan 26, 2009 04:23AM
January 26, 2009
NovaGold Closes Balance of US$75 Million Financing and Bridge Loan Converted
VANCOUVER, BRITISH COLUMBIA--(Marketwire - Jan. 26, 2009) - NovaGold Resources Inc. (the "Company" or "NovaGold") (TSX:NG)(NYSE Alternext US:NG) further to its news release of January 22, 2009, announced today that it has closed the final US$5,925,000 of its total US$75 million private placement. An additional 4,557,692 Units were sold at a price of US$1.30 per Unit bringing the total Units sold to 57,692,308 for gross proceeds of US$75 million. Each Unit consists of one common share of NovaGold and one common share purchase warrant of NovaGold ("Warrant"). Each Warrant entitles the holder to acquire one common share of NovaGold for an exercise price of US$1.50 prior to 5:00 p.m. (EST) on January 21, 2013.

The Company also announced that it received a Notice of Conversion from Auramet Trading, LLC ("Auramet") to convert all of the remaining balance of the US$20 million bridge loan. The approximately US$7.3 million principal amount outstanding has now been converted to 5,762,565 common shares of NovaGold. Following this final conversion the bridge loan has been fully converted into shares with none of the proceeds of the US$75 million private placement used to repay any portion of the loan principal.

Auramet has also informed NovaGold that all the shares received on conversion of the US$20 million bridge loan have been sold by Auramet to a number of institutional investors. These investors include Electrum Strategic Resources LLC, NovaGold's largest shareholder, which has purchased an additional 5.8 million shares of NovaGold at US$1.68 per share increasing its total position to 51.9 million shares or 28.7% of the current 180,973,089 issued and outstanding shares of the Company.

"We are pleased to have successfully completed this financing and to have substantially strengthened NovaGold's balance sheet by providing strategic funding to advance our key assets including our major stakes in two of the largest undeveloped gold and copper-gold deposits in the world," said Rick Van Nieuwenhuyse, President and CEO of NovaGold. "This funding will also allow the Company to evaluate potential growth opportunities that can provide further growth and create additional shareholder value."

The net proceeds of financing (approximately US$74 million) will be used to fund general corporate purposes and more importantly, the completion of a feasibility study on Donlin Creek in Alaska (32 million measured and indicated ounce gold deposit) and initiate the formal permitting process, while Teck Cominco continues to fund studies as part of earning a 50% interest in the Company's Galore Creek copper-gold project in British Columbia. In addition, the company will complete Care and Maintenance activities on its 100% owned Rock Creek Mine near Nome, Alaska and, if warranted, re-activate the mining operation.
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