John Paulson Adds to Activist NovaGold Position ~ market folly

Friday, March 9, 2012

John Paulson Adds to Activist NovaGold Position

John Paulson's hedge fund firm Paulson & Co has been active in numerous stocks lately, including NovaGold Resources (NG)

Activist on NovaGold Resources (NG)

John Paulson filed an amended 13D with the SEC regarding his activist position in the gold miner. They've disclosed almost a 30 million position in the name and have increased their position size by 30% since the beginning of the year. They now have a 10.8% ownership stake in the company.

While the hedge fund originally bought the miner as part of Paulson's gold fund in a wager against the US dollar, shares now have an added catalyst as well.

NovaGold's Spin Off

NovaGold plans to spin off its Northern Alaska Ambler copper deposits which will now be known as NovaCopper.

Shareholders of NG will receive 1 share of NovaCopper for every 6 shares of NG owned. The shareholder meeting takes place on March 28th and the spin off is largely expected to be complete by April 30th.

The new company will be headed by former NG CEO Rick Van Nieuwenhuyse. While he's obviously biased, he thinks it's a great opportunity and highlighted the company's prospects:

"NovaCopper holds highly valuable assets ... Our ultimate objective is that the twin attributes of high grades from multiple deposits, when combined with jurisdictional safety, will result in NovaCopper being rated as the premier vehicle in its class."

In an attempt to focus solely on gold, NovaGold is also looking to sell its Galore Creek copper project as well.

For more recent activity from this hedge fund, you can read Paulson's presentation on Hartford Financial Services Group (HIG) as well as how Paulson sold some Delphi (DLPH).

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