Raj Ray, an analyst from BMO Capital, has initiated a new Buy rating on Novagold Resources New (NG).
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Raj Ray has given his Buy rating due to a combination of factors that highlight Novagold Resources’ potential. The company is advancing the Donlin Gold project in Alaska, which is recognized as one of the largest undeveloped gold assets globally. This project benefits from being located in a stable, tier-1 jurisdiction, which is appealing to investors. Additionally, the current political and macroeconomic environment is favorable for the development of the Donlin Gold project, making it an opportune time for Novagold to proceed.
Despite recent increases in share price, the valuation of Novagold remains discounted compared to its peers. The Donlin project offers significant leverage to gold prices due to its scale and grade, and with gold prices at high levels, assets in secure jurisdictions like Alaska are likely to re-rate first. Furthermore, the straightforward operation of the Donlin project, combined with potential project optimizations and a clear path to financing, positions Novagold for a meaningful re-rating as the market recognizes its readiness for execution.
In another report released on October 29, National Bank also upgraded the stock to a Buy with a C$15.00 price target.