Citi Initiates Coverage on NovaGold Resources Stock With Buy Rating, Sets PT at $7

NovaGold Resources Inc. (NYSE:NG) is one of the Best Gold Mining Companies to Buy Now. On July 16, Citi initiated coverage on NovaGold Resources Inc. (NYSE:NG) stock with a Buy rating, setting the price target at $7.

Alexander Hacking from Citi initiated coverage on NG and pointed out that NovaGold remains well below its 2020 levels of almost $10 per share, when gold was trading $2,000 per ounce. Hacking sees potential in the NovaGold’s Donlin Gold project in Alaska, which the company owns 60% and Paulson Advisers holds the remaining 40%. The analyst mentioned that the project could become the second-largest gold mine in the U.S., with production capacity of almost 1.5 million ounces.

A man, dressed in protective gear, holding a golden nugget freshly extracted from an underground mining shaft.

The analyst further mentioned that the development faces major challenges, including an estimated $10 billion capital expenditure requirement. Hacking said that Barrick’s recent exit opens a path for NovaGold to advance the project after more than 20 years of inactivity. The analyst believes that the project economics become attractive with gold prices above $2,500 per ounce, but are not feasible below $2,000 per ounce.

NovaGold Resources Inc. (NYSE:NG) explores and develops gold mineral properties in the U.S. The company owns a 60% interest in the Donlin Gold project, consisting of over 493 mining claims.

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Disclosure: None. This article is originally published at Insider Monkey.