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NovaGold Resources Inc. (USA) (NG) Earnings Won’t End the Stock’s Tailspin

NovaGold Resources Inc. (USA) (NG)NovaGold Resources Inc. (USA) (NYSEMKT:NG) will give investors its quarterly report on Wednesday. But the mining company has already seen its stock plunge in the wake of crashing gold prices, and NovaGold Resources Inc. (USA) (NYSEMKT:NG) earnings results aren’t likely to give investors much good news barring a big surprise.

NovaGold is in the uncomfortable position of having no revenue, as the company’s mines are still stuck at the developmental stage. The key for the company’s success is moving forward with its most lucrative projects, but falling gold prices aren’t leaving its partners in much of a mood to cooperate. 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 ($0.10)
Revenue Estimate $0
Year-Ago Revenue $0
Earnings Beats in Past 4 Quarters 0

Source: Yahoo! Finance.

Will NovaGold’s earnings ever improve?
Analysts have had mixed views on NovaGold Resources Inc. (USA) (NYSEMKT:NG)’s long-term earnings prospects recently. They’ve widened their loss estimates for the current fiscal year by $0.02 per share, but narrowed their fiscal 2014 estimates by the same amount. Yet the stock has plunged almost 40% since early April, reflecting the fact that no one sees the company becoming profitable anytime soon.

The biggest challenge for NovaGold Resources Inc. (USA) (NYSEMKT:NG) has been convincing its development partners to take action on its primary mining properties. The Donlin Gold project in Alaska is one of the largest known undeveloped gold deposits in the world, according to the company, but joint-venture partner Barrick Gold Corporation (USA) (NYSE:ABX) said last year that the economics of the mine didn’t justify further action on its part, and as the deep pocket in the venture, Barrick Gold Corporation (USA) (NYSE:ABX) is in a far better position to invest capital on Donlin than NovaGold. Similarly, high production costs at NovaGold’s Galore Creek joint venture with Teck Resources Ltd (USA) (NYSE:TCK) has led NovaGold Resources Inc. (USA) (NYSEMKT:NG) to consider a sale of its 50% interest in the venture in order to raise capital and focus on Donlin.

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