NovaGold Discloses Citi's $11.5 Million Fee On Paulson Donlin Deal Ahead Of November 3 Vote
The gold developer added proxy disclosures to head off shareholder demand letters before its vote on buying Paulson's 40% Donlin Gold stake.
NovaGold, the gold developer focused on Alaska's Donlin Gold project, said Friday it is adding to its proxy materials, including that Citi will collect an $11,500,000 fee for advising on its all-share purchase of Paulson's 40% Donlin Gold stake. Shareholders vote on the deal at a special meeting on November 3.
Citi's fee and its past work
Of Citi's $11,500,000 fee, $1,250,000 was payable when it delivered its fairness opinion, and $10,250,000 is contingent on the deal closing, the 8-K says. NovaGold also agreed to reimburse certain Citi expenses and to indemnify it against certain liabilities.
In the two years before the opinion, Citi and its affiliates received aggregate fees of less than $15 million from NovaGold, for advising it on an acquisition and acting as joint bookrunner on an equity offering.
Citi also ran a peer analysis of seven mining companies, including Perpetua Resources, Dakota Gold and Seabridge Gold. Price-to-net-asset-value ratios across them ran from 0.2x to 0.5x, and firm value per ounce of resources from $16 to $268. Applying selected ranges to NovaGold implied equity values of $4.61 to $9.22 per share on net asset value and $4.54 to $7.57 per share on value per ounce.
Demand letters and a rewritten deal history
The company said it received demand letters from counsel for purported shareholders alleging omissions or misstatements in its proxy disclosures and asking for corrective filings. NovaGold denies all the allegations and says no supplement was required. It chose to add the material solely to avoid litigation expense and potential delay or disruption to the deal.
The supplement also rewrites passages of the deal's backstory. It says NovaGold countered Paulson's September 4 proposal on October 10, 2025, proposing a 30% discount to Paulson's implied Donlin Gold valuation. It also describes a three-party deal with a company it calls Party A, which the filing says ended on or about January 10, 2026. The board then restarted two-way talks with Paulson under the name Project Phoenix.
On February 12, 2026, Citi told the board that, under Paulson's February 9 proposal, Paulson would own about 42% of a combined company, Electrum 14% and public shareholders about 44%.
What shareholders are voting on
The deal would lift NovaGold's Donlin Gold stake from 60% to 100%. Current shareholders, Paulson's equity included, would own about 65% of the new parent, New NovaGold. Paulson would hold about 39.7% of the economic interest, with its voting interest capped at 19.99%.
NovaGold does not produce gold and has no operating earnings. Its Donlin Gold project is the center of its business.
NovaGold shareholders vote on the transactions at a special meeting on November 3.
Sources
- 8-K Filing — NOVAGOLD RESOURCES INC (NG) — SEC EDGAR
