Tuesday, gold and copper properties developer NovaGold Resources Inc. (NG,NG.TO), reported a slip to a loss in the third quarter, hurt by factors including project care and maintenance charges related to activities at two of its projects, and a foreign exchange loss due to foreign currency fluctuation.
For the third quarter, the Vancouver, Canada-based company reported a net loss of C$18.1 million or C$0.10 per share, compared to net earnings of C$1.6 million or C$0.02 per share last year.
The results for the quarter were negatively impacted by a charge of C$8.6 million for project care and maintenance related to activities at the Rock Creek and Galore Creek projects, with no comparable charge in the year-ago period. In addition, exploration costs were reduced to C$3.8 million from C$16.2 million in the prior-year quarter, reflecting reduced activity at Rock Creek and Galore Creek.
Quarterly revenues decreased to C$0.3 million from C$1.4 million in the year-ago quarter, primarily due to lower interest income from lower interest rates.
Expenses for the quarter were C$20.9 million, compared to C$31.3 million in the prior-year quarter.
The company recorded a C$0.1 million foreign exchange loss in the latest quarter, compared to a foreign exchange loss of C$7 million in the same period last year. The reduction in loss is from the strengthening Canadian dollar against the US dollar during the third quarter of 2009 on US dollar denominated convertible notes and the Donlin Creek promissory note.
For the nine-month period, net loss was C$51.3 million or C$0.30 per share, compared to C$2.6 million or C$0.02 per share in the same period last year. Net revenues for nine months decreased to C$1.0 million from C$3.4 million last year.
NovaGold said it has no intention to begin development or construction at its Donlin Creek and Galore Creek projects in 2009, and is currently examining the potential to recommence the start-up process at the Rock Creek project. The company, however, indicated needing external financing to develop and construct its properties and to fund the exploration and development of its other mineral properties in future years.
The company noted that failure to obtain financing could have a material adverse effect on its growth strategy and/or results of operations and financial condition.
NG.TO closed Tuesday's trading at C$6.30, up C$0.58 or 10.14%, on a volume of 6.93 million shares on the TSX. NG closed Tuesday's trading at US$6.02, up US$0.41 or 7.31%, on a volume of 5.34 million shares on the AMEX. In after hours, the stock further gained US$0.03 or 0.50%, trading at US$6.05.
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