NovaGold reports Q3 loss of $18.1M; revenues drop

By The Canadian Press

VANCOUVER, B.C. - NovaGold Resources Inc. (TSX: NG.TO) swung to a loss in the third quarter and said lower interest rates pushed down revenues.

The Vancouver-based mining company reported a net loss of $18.1 million or 10 cents per share for the third quarter ended Aug. 31.

That compared to earnings of $1.6 million or two cents per share for the same period in 2008, when it had a $33.5 million gain on investments, including the sale of its subsidiary NovaGreenPower and its investment in U.S. Gold Corp (TSX: UXG.TO).

Net revenues for the quarter were $300,000 compared with $1.4 million for the same time last year, which it blamed on lower interest rates.

NovaGold said it generates "modest revenues" from land and gravel sales and gold royalties.

The company said it continues to streamline its operations "and carefully manage cash to ensure financial stability."

NovaGold explores and develops mineral properties in Alaska and British Columbia. It is primarily focused on gold properties, some of which also have significant copper and silver resources.

The company's Donlin Creek flagship property in Alaska, which is shares 50-50 with Barrick Gold Corp. (TSX: ABX.TO), is in the pre-permitting phase that will lead to a mine producing more than one million ounces of gold annually for more than 20 years.

Its 100-per-cent owned Rock Creek property in Alaska remains on care and maintenance for the foreseeable future. NovaGold said it is evaluating whether to restart the project or possibly "sell the property or an interest in the property to another company."

It's Galore Creek project in B.C., a 50-50 joint venture with Teck Resources Ltd (TSX: TCK-B.TO) also remains suspended.

Construction was halted two years ago after costs skyrocketed. NovaGold said road building activities have continued and a new 287 kV Northwest Transmission Line being backed by the government will help improve access to the site.

NovaGold said new studies have been done for Galore Creek to cut costs of developing the project, and risks.