Billionaire John Paulson’s 2023 Portfolio: Top 5 Stock Picks

3. NovaGold Resources Inc. (NYSE:NG)

Number of Hedge Fund Holders: 11

John Paulson’s Paulson & Co.’s Holdings: $138,247,586

Percentage of John Paulson’s Paulson & Co.’s Portfolio: 11.49%

NovaGold Resources Inc. (NYSE:NG) is a Salt Lake City, Utah-based mining company that focuses on the exploration and development of mineral properties, with a primary emphasis on gold and copper. The company has a portfolio of projects located in Alaska and British Columbia, Canada. The Donlin Gold project is the flagship project of the company, which is expected to contain 39 million ounces of gold, translating into a value of $80 billion at the current market price.

Here’s what Old West Management said about NovaGold Resources Inc. (NYSE:NG) in its Q4 2022 investor letter:

“The previous two mining companies are industry leaders with solid production. The next two companies have no production or revenue but are sitting on huge deposits. We were initially attracted to NovaGold Resources Inc. (NYSE:NG) because of the track record of success of company chairman and largest shareholder Thomas Kaplan. Kaplan has become a billionaire investing in silver and platinum mines in Bolivia and South Africa. Besides his investing in mining, he owns the world’s largest collection of Rembrandt’s works.

Novagold is co-owner of the Donlin mine in Alaska, along with Barrick Gold. The Donlin mine is on track to be one of the world’s largest gold mines with 39 million ounces of measured and indicated reserves with an average grade of 2.24 grams of gold per ton. A major hurdle is Donlin is located in a remote area of Alaska, and the estimated cost to bring the mine to production is $7.4 billion. That is a huge expense but at today’s gold price the mine has gross revenue potential of $72 billion. Obviously the higher the gold price goes the easier the decision to begin construction. The U.S. government is supportive of the project as are the local Alaska Native stakeholders. Novagold has $120 million of long term debt offset by $142 million of cash. The market cap is $2.2 billion, and the company is burning $11 million of cash per year. It is widely expected that Barrick, who is always looking to buy high quality assets, will purchase Novagold’s 50% interest in the world class Donlin mine.”