Nadagold (NG): Look closer

RICK!

It's the little things that matter sometimes, those devils in those details. Combine a smarter than average financial journalist who knows how to get things past his editors at FP with eagle eyed IKN reader 'MP' and here's what you get (red type added here):

NovaGold settlement set at $28m

Sutts, Strosberg deal awaits OK from judges

Jim Middlemiss, Financial Post Published: Wednesday, February 17, 2010

Sutts, Strosberg's investment in U.S. class-action securities lawyer Andrew Morganti appears to be paying off with the announcement that the firm has reached a $28-million cross-border settlement on behalf of investors in NovaGold Resources Inc. The settlement must still be approved by judges in Canada and the United States. NovaGold was represented by Gowlings lawyer Kelley McKinnon, a former deputy director of enforcement at the Ontario Securities Commission.

The Sutts, Strosberg firm sued NovaGold in October, explained Jay Strosberg, who worked on the case along with Mr. Morganti. Mr. Morganti joined Sutts Strosberg last April after working at the U.S. class-action giant Milberg LLP and knows all about class actions, having been involved in lawsuits that won millions of dollars for plaintiffs.

The Sutts, Strosberg firm became involved in the suit after U.S. law firm Labaton Sucharow sued NovaGold in the United States, but a court there ruled it didn't have the "jurisdiction to deal with Canadian investors," Mr. Strosberg said. So his firm launched a parallel action in Canada on behalf of Canadian investors.

The claim, directed at the company and its officers and directors, alleges the defendants misrepresented that the Galore Creek mining project was "economically feasible when they knew or should have known that the construction of the Tailings Dam would cost substantially more than publicly disclosed figures."

CONTINUES HERE

Nadagold

RICK!

Mineweb link here and article starts like this. You reap what you sow in this game.

A New York-based law firm is investigating possible misconduct related to the securities of NovaGold Resources.

The pending litigation would become one of several class action lawsuits which have been filed against the Vancouver-based junior gold miner stemming from statements it made regarding the costs, progress and viability of the Galore Creek copper and gold project.

The law firm of Wolf Haldenstein is investigating whether American investors who bought NovaGold securities between January 24, 2006 through November 25, 2007, may have been mislead by statements made by NovaGold officers and directors concerning the costs, progress and viability of its Galore Creek project.

Fans of Rick! pay for his summer vacation

RICK!

Since when does anyone need to extract metals from rocks to be a successful miner, anyway?

May 31/09	May 28/09	Van Nieuwenhuyse, Rick	Direct Ownership	Common Shares	10 - Disposition in the public market	-1,300	$5.250
May 31/09	May 28/09	Van Nieuwenhuyse, Rick	Direct Ownership	Common Shares	10 - Disposition in the public market	-10,000	$5.000
May 31/09	May 27/09	Van Nieuwenhuyse, Rick	Direct Ownership	Common Shares	10 - Disposition in the public market	-10,000	$4.950

Nadagold (NG) reports

RICK!

I love these Nadagold (NG) guys and you should, too. The perfect example of the slick, positively spun but ultimately meaningless press release. We can all learn from them how to be all that we want to be in this fine 21st century world that rewards BS more than honesty. Here's the link so go read yourself, but once you wade through the guff and style at the top you start getting to the substance at the bottom. This is the bit I like:

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The Company's three material projects are the Donlin Creek, Rock Creek and Galore Creek projects. The Company's remaining share of the 2009 budget at the Donlin Creek project is approximately US$10 million, part of which will be incurred completing the feasibility study and the remainder is planned to be used for permitting activities at the project. The Rock Creek project is in care and maintenance, pending a review of whether to recommence start-up at the project. The current remaining care and maintenance budget at Rock Creek for 2009 is approximately US$7 million. The budget for care and maintenance and optimization studies activities at the Galore Creek Project for 2009 is $16 million, however, NovaGold is not required under its revised agreement with Teck to fund any of those costs.

The Company does not plan to commence development or construction at its Donlin Creek and Galore Creek projects in 2009, nor does it currently plan to recommence the start-up process at the Rock Creek project. However, the Company will need external financing to develop and construct its major properties and to fund the exploration and development of its other mineral properties in future years. Sources of external financing may include bank borrowings and future debt and equity offerings. There can be no assurance that financing will be available on acceptable terms, or at all. The failure to obtain financing could have a material adverse effect on the Company's growth strategy and or results of operations and financial condition. Development of the mineral properties would require significant capital expenditures. There can be no assurance that the Company will be able to secure the financing necessary to retain its rights to, or to begin or sustain production at, any of its mineral properties.

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Because it's now clear that NG isn't going to re-start Rock Creek anytime soon despite all the hopeful noises made earlier this year. Instead it's going to spend another $7m on care and maintenance there. Whether that expense includes paying back the $15m or so the company still owes to its suppliers in Nome is not made totally clear.

We also get a budget for the rest of the year. Add em up and divide by three (the first quarter is done) and we see that NG needs to spend $5.66m per quarter to keep its project expenses on track in 2009. I suggest you make a mental note of that number and compare it to the loss NG reports in the second quarter as it'll give you some idea of just how much cash is wasted in non-core stuff such as office space, Martini lunches, photocopiers, executive jets etc. Why follow this number? Because according to filings, expenditures on the three 'material projects' were $4m in 1q09 and the net result at the company was a $28.5m loss. Hopefully $15m went to pay off those previously mentioned and very patient suppliers in Nome, but as for the other $9.5m minimum it's anyone's guess. Seriously, that's at least $100,000 a day in non-core expenses for a company whose only income is a few hundred thousand a quarter selling gravel.

Or in other words, shareholders in NG are perfectly matched to the management team: More money than sense. DYODD.

Nadagold (NG): Just follow the instructions on the shampoo bottle.....

.......and everything comes out clean, bright and sparkling.

And those instructions are LATHER, RINSE AND REPEAT.

Hey Look! Our lucky pal Rick Van Nieuwenhuyse has just awarded himself 838,000 new stock options to replace the ones he claims "he had to sell due to a third party margin call".

Totally unrelated thought for the day: Not all thieves wear black and white striped sweaters and carry bags labelled 'Swag'.

Special Novagold chart of the day is.......

.......Greg Johnson's insider sales for 2008.

Click to enlarge

Things of interest to note here:

1) Check out the November 24st press release that mentions when things were seen to be going wrong at Rock Creek. Here's the relevant detail from the PR, and note how "mid October" exactly matches the time when Johnson started selling his shares.

The Rock Creek gold mine received regulatory authorizations and began commissioning start-up in September 2008. NovaGold was required to complete a number of additional environmental and operational tasks in the following weeks and months to ensure compliance with environmental requirements for the mine. Complications have arisen in meeting these regulatory requirements and the federal and state regulators have provided notice that certain conditions in the previously granted permits have not been fully met. Though the Company continues to work with state and federal regulators to resolve these matters, if such issues are not addressed to the satisfaction to the regulators, NovaGold's subsidiary could face financial penalties or have additional mitigation or monitoring requirements imposed. The Rock Creek mine has experienced unanticipated mechanical problems including an electrical failure with the milling circuit and the Company has ongoing concerns with the efficiency of the process and recovery circuit. These issues have been compounded by the effects of extreme arctic weather conditions experienced in Nome, Alaska. In mid October, NovaGold foresaw cash flow in 2009 from the Rock Creek mine of over C$25 million at the then prevailing gold price and exchange rates. The Company now does not expect the Rock Creek mine to generate significant net cash flow over the next six months using a gold price of US$750 per ounce and current exchange rates. As a result of expected further capital requirements and increased operating costs together with the uncertainty regarding the operation of the project and the resulting cash flow, the Company has decided to suspend operations at the Rock Creek mine. The cash flow from Rock Creek which the Company had intended to use to fund its ongoing obligations will therefore not be available. The regulatory consequences of a suspension are uncertain, however existing environmental requirements will continue to be met during this suspension. As part of its requirements under Canadian GAAP, the Company will be reviewing impairment testing for the project.

2) Note that the payback for $20m bridge loan that NG obtained from Auramet on September 26th was wholly dependent on the revenues generated from Rock Creek. Or in other words, once Rock Creek hit serious problems Johnson knew NG couldn't make that payment and started selling his shares.

3) Note how the October 20th sale was Johnson's first in 2008. Why did it suddenly occur to him to start selling on this date, and sell a small lot of shares on every single trading day until the news of NG financial disaster was finally made public?

If this isn't illegal insider selling I really don't know what is. Those people who added to Novagold's coffers on the October 1st warrants expiration now know where at least some of their money went.

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Nadagold (NG): more inside selling

Hey Greg, wipe that stupid smirk off your face. Stupid beard, too

Greg Johnson of Nadagold (NG) got rid of nearly half a million shares of the company he helped to sink recently (see filings below and linked here). Now note the difference between the 280k or so that were bailed in the 50c region and the other, slow drip sales he put in on the days leading up to last Monday's final admission of total corporate incompetance and failure.

Are you really telling me that he was forced into selling 10,000 shares, then 2k, then 5.6k, then 15k etc etc etc on a margin call when he had half a million pieces of this toilet paper on hand? Gimme a break, guys...this is criminal behaviour! Not only are you a blatant thief, Greg, but you're insulting your shareholders at the same time!

But the thing is, the ten filings listed below fromthe Canadian Insider website are only the tip of the iceberg. Greg Johnson started selling his shares on October 20th 2008 at $3.30 and managed to sell a total of $1.33m in shares between Oct 20th and Nov 20th. Johnson got rid of 524,381 shares in bite-sized chunks, never more than 65,000 at a time and typically between 5,000 and 20,000 in any one day. According to the Nadagold website, Johnson is old pals with fellow inside salesman, CEO Rick Van Nieuwenhuyse:

Greg S. Johnson, B.Sc.
Vice President, Strategic Development
Greg joined Rick Van Nieuwenhuyse to establish NovaGold in 1998. With over 20 years of industry experience, Greg is responsible for NovaGold's marketing and communication activities, and is involved in developing strategic growth opportunities. Prior to his role at NovaGold, Greg was part of the management team responsible for overseeing the exploration and acquisition activities for Placer Dome's International Exploration Group in Africa and Eurasia. Greg also worked with Rick Van Nieuwenhuyse and Joe Piekenbrock as part of the Alaska Exploration Group for Placer Dome in the late 1980s and early 1990s, where he played a key role in the multi-million-ounce Donlin Creek discovery in 1995. Greg has been involved in all aspects of exploration and development, from grassroots discoveries to Feasibility Studies in the United States, Canada, Australia, Russia and Africa. Greg holds an Honors B.Sc. in Geology from W. Washington University.

The OSC should be crawling all over this board of directors. Well, they would be in any serious country, but as the country in question is Canada and white-collar fraud is applauded rather than punished, expect the whusses at the OSC to do nothing and this crook and all the others who turned NG into mining's finest laughing stock since BRE-X to be waltzing around PDAC next spring, pressing flesh and doing new deals.

You people make me want to vomit.

Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
Nov 26/08	Nov 26/08	Johnson, Gregory Shawn	Direct Ownership	Common Shares	10 - Disposition in the public market	-22,000	$0.540 USD
Nov 26/08	Nov 25/08	Johnson, Gregory Shawn	Direct Ownership	Common Shares	10 - Disposition in the public market	-82,800	$0.560 USD
Nov 26/08	Nov 24/08	Johnson, Gregory Shawn	Direct Ownership	Common Shares	10 - Disposition in the public market	-180,400	$0.520 USD
Nov 26/08	Nov 21/08	Johnson, Gregory Shawn	Direct Ownership	Common Shares	10 - Disposition in the public market	-56,000	$1.540 USD
Nov 26/08	Nov 20/08	Johnson, Gregory Shawn	Direct Ownership	Common Shares	10 - Disposition in the public market	-89,000	$1.700 USD
Nov 26/08	Nov 19/08	Johnson, Gregory Shawn	Direct Ownership	Common Shares	10 - Disposition in the public market	-10,000	$2.250 USD
Nov 26/08	Nov 18/08	Johnson, Gregory Shawn	Direct Ownership	Common Shares	10 - Disposition in the public market	-15,066	$2.140 USD
Nov 26/08	Nov 17/08	Johnson, Gregory Shawn	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,618	$2.300 USD
Nov 26/08	Nov 14/08	Johnson, Gregory Shawn	Direct Ownership	Common Shares	10 - Disposition in the public market	-2,100	$2.400 USD
Nov 26/08	Nov 13/08	Johnson, Gregory Shawn	Direct Ownership	Common Shares	10 - Disposition in the public market	-10,000	$2.360 USD

Nadagold (NG): Don't say I didn't warn you

Otto on September 23rd 2008 wrote a post explaining why Novagold (NG) was untouchable, was a set up for a short etc etc...the post finished like this:

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1) They are desperate.
2) They don't give a damn about shareholders, they just want your money.
Bottom line: AVOID NG LIKE THE PLAGUE

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So cut to today and this press release from NG. Among the pearls contained are;

NovaGold's unconsolidated cash position has decreased to approximately C$10 million.

If NovaGold is not able to raise additional cash in December, it will not have sufficient cash to meet its obligations.

NovaGold has received a cash call for the Galore Creek Partnership, the entity which owns the Galore Creek project, for approximately C$1.9 million which is due on November 24, 2008. NovaGold does not intend to make this payment......

........the Company has decided to suspend operations at the Rock Creek mine. The cash flow from Rock Creek which the Company had intended to use to fund its ongoing obligations will therefore not be available.

And a whole bunch of other toxicity. The result? Otto said "sell NG" when the stock stood at $7. Right here right now NG is trading at $0.45 and dropping like a stone. Feel free to mail me and tell me just how annoying I can be sometimes.