Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Barrick Gold Corporation (USA) (ABX): NovaGold Resources Inc. (USA) (NG) Earnings: An Early Look

Spring is finally here, and a new earnings season is right around the corner. On Wednesday, NovaGold Resources Inc. (USA) (NYSEMKT:NG) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they’ll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you’ll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

NovaGold Resources Inc. (USA) (NYSEMKT:NG)

Gold mining stocks have gotten crushed over the past year, as a combination of weak bullion prices and cost-related struggles have led to intense pressure throughout the industry. Yet NovaGold has gotten the attention of hedge-fund investors John Paulson and Seth Klarman, who have taken sizable stakes in the company. Let’s take an early look at what’s been happening with NovaGold Resources Inc. (USA) (NYSEMKT:NG) over the past quarter and what we’re likely to see in its quarterly report.

Stats on NovaGold Resources

Analyst EPS Estimate ($0.03)
Year-Ago EPS $0.07
Revenue Estimate $0
Year-Ago Revenue $0
Earnings Beats in Past 4 Quarters 2

Source: S&P Capital IQ.

Will NovaGold Resources shine brighter this quarter?
It’s hard for analysts to get too excited about NovaGold because it hasn’t reported even minimal revenue since 2010. The single price target on the stock of $17.10 is wildly out of line with its current price, and shareholders have taken a substantial hit lately, with the stock having lost a quarter of its value since the beginning of the year.

NovaGold Resources Inc. (USA) (NYSEMKT:NG) has several promising development-stage mining properties in its portfolio, although none of them has gotten to the production stage at this point. The company claims its Donlin Gold joint venture with Barrick Gold Corporation (USA) (NYSE:ABX) in Alaska is the world’s largest known undeveloped gold deposit, with project permitting having begun last August. Moreover, its Galore Creek venture with Teck Resources Ltd (USA) (NYSE:TCK) in British Columbia has promising prospects for copper, silver, and gold.

But the big problem that NovaGold has faced is that high production costs have made those projects less economically viable. Last summer, Barrick said that Donlin no longer met its goals for suitable investments because of substantial needs for capital, and although the permitting process has continued, it’s far from certain whether Barrick Gold Corporation (USA) (NYSE:ABX) would be willing to go forward even if the project is approved. Meanwhile, NovaGold has said it would try to sell its 50% interest in Galore Creek, but the company has only been willing to enhance the project’s value on a reduced budget.

DOWNLOAD FREE REPORT: Warren Buffett's Best Stock Picks

Let Warren Buffett, George Soros, Steve Cohen, and Daniel Loeb WORK FOR YOU.

If you want to beat the low cost index funds by 19 percentage points per year, look no further than our monthly newsletter.In this free report you can find an in-depth analysis of the performance of Warren Buffett's entire historical stock picks. We uncovered Warren Buffett's Best Stock Picks and a way to for Buffett to improve his returns by more than 4 percentage points per year.

Bonus Biotech Stock Pick: You can also find a detailed bonus biotech stock pick that we expect to return more than 50% within 12 months.
Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.