NovaGold Resources, Inc. NG Securities Stock Fraud

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Company: NovaGold Resources, Inc.
Ticker Symbol: NG
Class Period: Oct-25-06 to Nov-23-07
Date Filed: Aug-11-08
Lead Plaintiff Deadline: Oct-10-08
Court: Southern District of New York
A class action lawsuit was filed in the United States District Court for the Southern District of New York on behalf of all purchasers of securities of NovaGold Resources, Inc from October 25, 2006 through November 23, 2007, inclusive.

The Complaint charges NovaGold and certain of its officers and directors with violations of the Securities Act of 1933 and Securities Exchange Act of 1934. NovaGold is engaged in the business of exploration and development of mineral properties. Throughout the Class Period, Defendants falsely portrayed NovaGold as a rapidly growing company on the verge of moving from a mid-tier exploration and development company to a mid-tier gold and copper production company by issuing a series of materially false and misleading statements regarding the costs, progress and viability of its multi-billion dollar Galore Creek project.

The Class Period begins on October 25, 2006, when NovaGold issued a press release touting the results of a feasibility study performed by Hatch Ltd. ("Hatch") that purportedly "confirmed" the economic viability of the Galore Creek project. According to a statement made by the Company's President and CEO, Rick Van Nieuwenhuyse ("Nieuwenhuyse"), in the October 25, 2006 press release, "the Feasibility Study confirms that Galore Creek is one of the world's largest undeveloped copper-gold-silver projects with one of the lowest cash costs in the industry ...." The Feasibility Study estimated the capital costs for the Galore Creek project to be Cdn $2.2 billion. The Hatch Feasibility Study enabled the Company to successfully fend off a hostile takeover bid by mining giant Barrick Gold by maintaining the average closing price of the Company's shares above Barrick Gold's $16 per share tender offer. In fact, when fending off Barrick Gold's takeover bid Nieuwenhuyse assured shareholders "that at US$16, NovaGold shares are better than money in the bank." The Hatch Feasibility Study also allowed the Company to raise hundreds of millions of dollars in an April 2007 secondary stock offering, thus providing a strong motive for the Defendants to misrepresent the Hatch Feasibility Study as a bankable study. Throughout the Class Period, the Company regularly and systematically assured the investing public that the construction of the Galore Creek project was on schedule and on budget.

On November 26, 2007, the Company shocked investors when it announced that it would suspend activities at Galore Creek based on the results of an updated feasibility study, which estimated the capital costs for the Galore Creek project to be Cdn $5 billion -- approximately 127 percent greater than Hatch had estimated in October 2006. Upon the release of this news, the Company's shares declined $10.76 per share, or more than 53 percent, to close on November 26, 2007 at $9.48 per share, on unusually heavy trading volume.

If you are a member of the class described above, you may, not later than October 6, 2008, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.

NovaGold Resources, Inc. NG Securities Fraud Legal Help

If you have suffered from financial losses, you may qualify for damages or remedies that may be awarded in a possible NovaGold Resources, Inc. securities class action lawsuit. Please fill in our form on the right to submit your complaint for a free evaluation.

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