NG - NovaGold Resources: An Inferior Way To Play The Gold Price

• NovaGold has rallied sharply over the past few weeks, and now is approaching a short-term resistance zone in the $8.15 to $8.20 region.
• On the surface, the company looks quite cheap, trading at less than $150.00/oz on reserves, with the possibility that Donlin's reserves could grow to 40+ million ounces (20 million attributable).
• However, on a P/NPV (5%) basis, the stock looks less attractive, especially if we factor in minor degradation in the project NPV (5%) to adjust for inflationary pressures.
• A rising tide (gold price) will lift all boats, but I think there are far better ways to play the sector, and owning NovaGold could end up being an opportunity cost with many producers returning significant capital to shareholders.

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