VANCOUVER - NOVAGOLD RESOURCES is taking BARRICK GOLD to the Supreme Court of British Columbia alleging Barrick misused confidential information in its bid to take over PIONEER METALS. NovaGold is asking that any Pioneer shares purchased by Barrick are held under a constructive trust for the benefit of NovaGold.
The three companies are on a merger-go-round of their own. In the middle of June 2006, NovaGold made an all-cash offer to purchase 100% of Pioneer shares for Cdn$0.57 per share. Pioneer advised its shareholders to reject NovaGold's offer and support instead a friendly takeover bid by Barrick. The gold giant offered Cdn$1.00 in cash per Pioneer share. At the same time, Barrick made an unsolicited bid for all NovaGold shares, offering US$14.50 per NovaGold share. NovaGold advised its shareholders not to accept Barrick's offer.
Barrick and NovaGold are partners in the Donlin Creek gold mine development in Alaska. Barrick has said it would like to gain control of the property, which is expected to produce at least 600,000 oz of gold annually.
NovaGold would like to swallow Pioneer because the latter company owns the Grace property adjacent to NovaGold's Galore Creek copper-gold project. Building a mine at that site in northwestern British Columbia carries capital costs of US$1.1 billion.