Hook & thesis
NovaGold Resources (NG) is moving beyond exploration into the heavy-lift phase for Donlin Gold. Management has appointed an experienced project director to steer the project toward a Bankable Feasibility Study (BFS) and reported high-grade drill results and a positive Alaska Supreme Court decision in recent weeks. With gold prices trading firm and macro expectations of easier U.S. monetary policy, the risk/reward for NG looks attractive from current levels.
We are initiating a directional long trade on NG at a precise entry. The set-up couples improving project execution and legal momentum with constructive technicals: the stock sits at $10.75, above its 10-, 20- and 50-day moving averages and showing bullish MACD momentum. This is a catalyst-driven development trade with a clear stop and a mid-to-long timeframe to let the BFS process and gold tailwinds play out.
What NovaGold does and why the market should care
NovaGold is a well-financed precious metals company focused on developing the Donlin Gold project in Alaska. NovaGold owns 60% of Donlin Gold; Paulson Advisers owns the remaining 40%. Donlin is one of the largest undeveloped gold deposits globally, with roughly 39 million ounces of gold attributed to the project - a scale that gives the asset meaningful strategic optionality if development economics are favorable.
The market cares because Donlin is large enough that a robust BFS with supporting permitting could transform NovaGold from a development-stage company into a near-term project developer with multi-billion-dollar NPV potential under favorable gold pricing. Recent items that matter to valuation and execution include:
- Appointment of Frank Arcese as Project Director (01/14/2026), a senior hire charged with pushing Donlin toward a Bankable Feasibility Study.
- Strong 2025 drill program results (announced 01/07/2026) with high-grade intercepts up to 26.22 g/t, which improve resource confidence and optionality for higher-margin zones.
- A positive Alaska Supreme Court decision referenced in recent company updates, removing legal overhang and smoothing the path for permitting dialogues.
Key numbers to frame valuation and balance sheet
At $10.75 per share, NovaGold’s market capitalization is approximately $4.71 billion. Enterprise value is roughly $4.76 billion. The company reports negative trailing EPS of -$0.22 and carries a debt-to-equity ratio around 1.02, indicating leverage on the balance sheet while the company transitions from exploration to development. Return on assets is negative -0.2818 and return on equity is -0.5779, reflecting the pre-production status of the business.
Trading ranges are instructive: 52-week high is $12.09 and low is $2.26. Average daily volume over recent periods runs in the multi-million share range (two-week average ~5.055M; a separate average shows 4.35M). Short interest has been material but recently compressed - the 01/30/2026 settlement shows roughly 12.73 million shares short with a days-to-cover of ~2.19, meaning short-position liquidity is manageable but could expedite rallies on positive catalysts.
Technical backdrop
NG currently trades above the 10-day SMA ($9.74), the 20-day SMA ($10.07) and the 50-day SMA ($9.93). The 9-day EMA sits at $10.24 and the 21-day EMA at $10.06. Momentum indicators are constructive: RSI is ~54.4 and MACD shows bullish momentum (MACD line above signal line, positive histogram). These technicals favor a measured long position while catalysts are realized.
Valuation framing - why the price can re-rate
Valuation today is driven largely by project optionality rather than current earnings; the company posts negative EPS and has a high price-to-book metric (reported price-to-book around 28.75), reflecting investor willingness to pay a premium for Donlin’s scale. At face value, a $4.7B market cap implies the market is pricing in a substantial portion of future project value. That said, there remains room to re-rate higher if the BFS returns attractive economics at realistic gold prices, permitting risk continues to shrink and financing needs are demonstrably manageable.
Comparisons to peers aren’t provided in this report, but qualitatively: developers with large, well-advanced deposits and clear financing paths tend to carry higher multiples than early-stage explorers. The upcoming BFS milestones are the principal pathway to justify a higher valuation or, conversely, to reprice downside if project economics disappoint.
Catalysts to watch (2-5)
- BFS advancement and timing - any formal launch or results cadence is a primary re-rating mechanism.
- Permitting progress and stakeholder engagement outcomes from Alaska teams and Native Corporations.
- Gold price direction - the metal above $3,300 (and expectations for Fed easing) materially boosts project NPV assumptions.
- Further capital transactions or strategic moves, such as the earlier $179.4M financing that was used to buy additional interest in the project; any new equity or JV news will move the shares.
- Quarterly or corporate updates that quantify costs, capex estimates or a clear BFS timetable.
Trade plan (actionable)
We are initiating a directional long trade with explicit risk controls. This setup is designed to capture re-rating and BFS-driven upside while containing downside.
| Entry | Target | Stop | Horizon | Risk level |
|---|---|---|---|---|
| $10.75 | $13.50 | $9.50 | long term (180 trading days) | high |
Rationale: Entering at $10.75 captures current momentum above key averages and participation ahead of BFS progress. The target of $13.50 reflects a roughly 25% upside from entry, a realistic re-rate if BFS progress and gold tailwinds materialize. The stop at $9.50 sits below the 50-day SMA and provides a defined capital-preservation line while allowing for normal volatility.
Timeframe: This is a long-term development trade - plan for long term (180 trading days) to allow BFS work, permitting progress, and commodity-price movements to play out. Shorter-term traders can use a tactical variant: a short-term (10 trading days) scalp if NG gaps on a headline, or a mid-term (45 trading days) hold to capture an immediate catalyst reaction, but the full thesis benefits from the longer window.
Position sizing & execution notes
Given the company’s development-stage profile, treat this as a high-risk allocation: no more than a small percentage of total risk capital (for most portfolios, single-digit percent sizing). Use limit orders to avoid chasing spikes; consider scaling in on dips toward $10.00-$10.25 if liquidity allows.
Risks and counterarguments
- Execution and capex risk: The BFS could reveal high capital or operating costs that materially lower project NPV. Large capex requirements would push financing needs and dilute current shareholders.
- Permitting and stakeholder risk: Donlin sits in Alaska and requires sustained cooperation with Native Corporations, local stakeholders and regulators. Any permitting delays or opposition could push timelines and increase carrying costs.
- Financing/dilution risk: The company has raised capital recently and may need more to fund development. Future equity issuance or expensive debt would dilute or pressure the share price.
- Commodity price risk: A sustained decline in gold prices would directly reduce project NPV and could erase the premium investors pay for optionality.
- Balance sheet/leverage: Debt-to-equity of ~1.02 indicates leverage; should project financing conditions deteriorate, the company may face higher financing costs or refinancing strain.
- Market sentiment and volatility: Mining development names can gap substantially on headlines. Large institutional trades or renewed short interest could accelerate downside moves before fundamentals change.
Counterargument: One strong counterargument is valuation - NG already trades at a premium price-to-book and a market cap that reflects substantial future project value. If market participants have already priced in a constructive BFS outcome and gold rally, positive news might be partially discounted and upside limited. In that scenario, the best path may be to wait for BFS results or a pullback to support closer to the 50-day SMA before initiating a larger position.
Conclusion - stance and what would change my mind
Stance: Bullish - initiate a long position at $10.75 with a stop at $9.50 and a target of $13.50, planned for long term (180 trading days). The trade balances project-development upside with strict downside control and is intended for investors comfortable with development-stage mining risk.
What would change my mind: I would downgrade this trade if any of the following occur - (1) BFS timing slips substantially or management signals materially higher capex estimates, (2) a sustained drop in gold below structural support (for example a quick move below $2,900), (3) a renewed wave of dilutive financing without clear allocation to advancing Donlin, or (4) a negative legal or permitting decision reversing recent positive outcomes.
In short: NovaGold’s path to a Bankable Feasibility Study and recent project momentum give the stock a plausible path to re-rating. With technical momentum, a defined entry, and a disciplined stop, the risk/reward favors a constructive, sized long position for investors who can stomach the inherent development-stage volatility.