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Gold/Mining/Energy : Mining News of Note -- Ignore unavailable to you. Want to Upgrade?

To: LoneClone who wrote (29422)	11/24/2008 9:14:38 PM
From: LoneClone	Read Replies (1) \| Respond to of 193231

NovaGold drops 70 percent as it faces cash crunch 24/11/08 globeinvestor.com TORONTO (Reuters) - Shares of NovaGold plunged nearly 70 percent on Monday, after the Canadian miner said it had suspended operations at its only producing mine, and warned it would need additional funding to meet financial obligations due in December. The company, whose main assets are 50 percent stakes in the Donlin Creek gold deposit in Alaska and the Galore Creek copper and gold project in British Columbia, said its cash position has dwindled to C$10 million ($8.1 million), meaning it will have to find alternative ways to pay a $20 million bridge loan due in December. "Novagold is continuing to review strategic alternatives with its advisers including raising additional equity and debt financing, the sale of assets and other restructuring alternatives," the company said in a statement. It stock was down C$1.51 at 69 Canadian cents about one hour into trading on the Toronto Stock Exchange, touching its lowest level since 2001. NovaGold will suspend its Rock Creek mine in Alaska due to mechanical problems, difficulty meeting state environmental requirements, and predicted lower cash flow due to weaker gold prices and a stronger U.S. dollar. The lost cash flows from the operation will exacerbate a squeeze the company had already been feeling due to tight credit markets and rising costs at the Galore Creek and Donlin Creek joint ventures. Donlin is 50 percent owned by Barrick Gold , while Galore, which was put on hold last fall due to soaring construction costs, is 50 percent owned by Teck Cominco . ($1=$1.24 Canadian) (Reporting by Cameron French; editing by Rob Wilson)