NovaGold Resources

We retain our Buy recommendation for shares of NovaGold Resources Inc. (AMEX, TSX: NG) and 12-month price target of US$27 per share. We maintain our opinion that the tender offer by Barrick Gold Corporation (NYSE: ABX) at US$16 per share is unsupportable. We also believe the manner in which the tender offer for NG has been conducted demonstrates hostility toward NG shareholders and NG management’s efforts to create value. We see the number of shares to be acquired as a nuisance, much in the same manner as we view ABX’s acquisition of Pioneer Metals Corporation’s (TSX: PSM), a matter that should be settled at some point in the future. See full report .

We offered our opinion that Barrick Gold Corporation’s (NYSE: ABX) tender offer of US$14.50 per share for NovaGold Resources Inc. (AMEX, TSX: NG) was unsupportable in our Special Report dated August 10, 2006. Now that NG has received a bankable-Feasibility Study on its Galore Creek project and initiated construction of its Rock Creek project in Nome, we find the revised tender offer of US$16.00 per share to be even more unsupportable. See full report.

Barrick Gold Corporation (NYSE: ABX) announced the fourth extension of its tender offer for NovaGold Resources Inc.(AMEX, TSX: NG). This time the tender offer was increased to US$16.00 per share from US$14.50 per share. Given the trading range of NG’s stock since the tender offer on July 24, 2006, we see the increase as simply offering to buy shares at market. The increased tender offer price remains below the average closing price of NG’s stock since the tender offer of about $16.35 per share. The new expiry is November 7, 2006. See full report.

Barrick Gold Corporation (NYSE: ABX) announced the third extension of its tender offer for NovaGold Resources Inc. (AMEX, TSX: NG) at a price of US$14.50. The new expiry date is October 24, 2006. The extension comes as no surprise as we see the acquisition by ABX as essential to maintain their production pipeline. See full report.

The British Columbia Inspector of Mines has reviewed NovaGold Resources Inc.’s (AMEX, TSX: NG) report to condemn the subsurface mineral rights, known as the Grace claims, owned by Pioneer Metals Corporation (TSX: PSM). The recommendation should clear the way for granting a surface lease. See full report.

We attended the 2006 Denver Gold Forum. The theme was symbolized by a road sign warning “Mergers Ahead.” This reflected our opinion alerting shareholder’s of the unsupportable tender offer of NovaGold Resources Inc. (AMEX, TSX: NG) by Barrick Gold Corporation (NYSE: ABX). Both company’s presentations are well worth attending and revisiting. We were interested in ABX management’s presentation and specifically the calculation of their acquisition of Placer Dome. We were particularly interested in their inclusion of copper which has not received sufficient attention. See full report.

NovaGold Resources Inc. (AMEX, TSX: NG) released an updated Preliminary Economic Assessment estimating average annual production at Donlin Creek at 1.9 million ounces of gold in the first seven years of operation. NG commissioned the independent study with SRK, an internationally recognized engineering firm, to provide updated economics on the Donlin Creek project for the benefit of shareholders. The study was tabled when Barrick Gold Corporation (NYSE: ABX) commenced its hostile takeover of Placer Dome. With the hostile takeover attempt on NG, the company jump started the study based on information previously made available by Placer Dome. The report does not include the benefit of ABX’s 2006 80,000 meter in-fill drill program. See full report.

NovaGold Resources Inc.’s (AMEX, TSX: NG) stock price has moved lower following a broad decline in commodity prices. In the past, a short term pull back in commodities, while NG improved fundamentals, provided an excellent entry point for investors. In the present situation, the tender offer provides an opportune entry point for Barrick Gold Corporation (NYSE:ABX) and a resistance level for investors. We have maintained a High risk assessment for NG due to the potential for increased volatility related to the tender offer. At the current level, with declining commodity prices, the tender offer appears to mitigate downside risk below US$14.50 per share. See full report.

The events of the prior week have produced an environment for a potentially volatile upcoming week for both NovaGold Resources Inc. (AMEX, TSX: NG) and Barrick Gold Corporation (NYSE: ABX). Attribution of the prior week was obscured by a 6% decline in the price of gold from about $646 to $610, due to a slump in oil prices, and speculation on central bank selling and a stronger dollar. Specific to NG and ABX, significant events in the past week include the following: See full report.

Goldcorp Inc.’s (NYSE: GG) acquisition of Glamis Gold Ltd. (NYSE: GLG) is signaling the end of summer bargains in gold equities. Coincident with the announcement we note a flurry of opinion reworking concepts bullish for metals (China, interest rates, trade, the dollar, terrorism) attempting to get a jump on a seasonal updraft in precious metals. While speculation is likely to increase in the months ahead, it relatively more important that metals prices remain above costs of production. See full report.

The United States District Court for the District of Alaska has ordered a hearing September 6, 2006 to hear testimony on NovaGold Resources Inc. (AMEX, TSX: NG) lawsuit against Barrick Gold Corporation (NYSE: ABX). The Judge will be considering whether to grant a preliminary injunction prior to the expiry date of ABX’s tender offer of September 15, 2006. We believe that in ordering a hearing that the court desires further facts of the case that should benefit investors.View Report

The United States District Court for the District of Alaska has ordered a hearing September 6, 2006 to hear testimony NovaGold Resources Inc. (AMEX, TSX: NG) lawsuit against Barrick Gold Corporation (NYSE: ABX). The Judge considering whether to grant a preliminary injunction prior to the expiry date of ABX’s tender offer of September
believe that in ordering a hearing that the court desires further facts of the case that should benefit investors. See full report.

NovaGold Resources Inc. (AMEX, TSX: NG) completed a resource upgrade for its Donlin Creek and Galore Creek projects. The re-tabulation, based on revised metal price assumptions with lower cut-off grades and results from the 2005 drill program at Galore Creek, reflects the current profile of the deposits and information available to Barrick Gold Corporation (NYSE:ABX) and visitors of NG’s data room. See full report.

We continue to investigate the permitting status of the Donlin Creek project. In our opinion, the project is not likely begin construction until well after the November 13, 2007 construction decision deadline referred to in the Mining Venture Agreement between NovaGold Resources Inc. (AMEX, TSX: NG) and Placer Dome, now Barrick Gold Corporation (NYSE: ABX). See full report.

We consider Barrick Gold Corporation’s (NYSE: ABX) opportunistic and hostile bid for NovaGold Resources, Inc.(AMEX, TSX: NG) to be unsupportable at US$14.50 per share. We believe the ABX offer significantly undervalues NG’s assets and does not adequately compensate NG shareholders for the increasing value of NG’s properties as they complete permitting, start construction and begin production beginning in mid-2007. This report will seek to explain our opinion as to why the transaction is unlikely to take place at this price. See full report