Gold's Next Big Play: Paulson and NovaGold Bet Big on Alaska's Donlin Gold Project

The recent $1.1 billion deal to transfer Barrick Gold’s 50% stake in the Donlin Gold project in Alaska to NOVAGOLD Resources (NG) and Paulson Advisers has sent ripples through the mining sector. The transaction, finalized on April 22, 2025, marks a bold strategic move for both buyers and sellers—and offers investors a window into one of the world’s most promising gold projects.

The Deal: Cash, Equity, and a High-Stakes Gamble

Barrick is exiting Donlin Gold for $1 billion upfront, with a potential $100 million kicker if NOVAGOLD chooses to settle outstanding project debt. The structure splits ownership: NOVAGOLD increases its stake to 60% by paying $200 million, while Paulson Advisers, managed by legendary investor John Paulson, takes a 40% stake for $800 million. The move aligns with Barrick’s strategy to divest non-core assets, but the real intrigue lies in what Paulson and NOVAGOLD see in this Alaskan gold mine.

The financial terms are equally telling. Paulson and two other investors (Electrum Group and Kopernik Global) are backing NOVAGOLD’s portion through a $170 million equity stake at $3.00 per share, plus warrants for 25.5 million shares. This signals confidence in NOVAGOLD’s ability to execute on Donlin’s potential—but also underscores the high stakes if things go wrong.

Why Donlin Gold Matters

Donlin Gold is no ordinary mine. With 39 million ounces of gold in Measured and Indicated Resources, it’s one of the world’s largest undeveloped gold deposits. The ore’s average grade of 2.24 grams per tonne dwarfs the global industry average of 1.03 grams for similar deposits, a critical factor in lowering production costs. At 60% ownership, NOVAGOLD’s stake alone would represent 23.4 million ounces—a staggering number that positions it as a gold powerhouse.

The project’s scale is staggering: a proposed 27-year mine life with annual production of 1.1 million ounces, which would make Donlin one of the largest gold mines in the U.S. And with only 3 kilometers of an 8-kilometer mineralized belt explored to date, there’s room to grow.

The Paulson Factor: Why a Hedge Fund Mogul Cares

John Paulson, who famously bet against subprime mortgages in 2008 and has long been a gold bull, isn’t here for a casual investment. Paulson’s track record—such as his prior stake in Detour Gold—suggests he’s in it for the long haul. The Alaska project fits his thesis: a high-grade, low-cost asset in a politically stable jurisdiction.

Paulson’s $800 million bet also comes with governance power. Post-deal, he and NOVAGOLD will share equal control, with immediate plans to restart advanced development. This includes updating the Feasibility Study to meet modern standards (NI 43-101 and S-K 1300) and refocusing exploration on converting resources to reserves.

Risks and Challenges

Donlin isn’t without hurdles. Regulatory approvals are pending, and Alaska’s permitting process is notoriously slow. The project also faces the ever-present risks of cost overruns and commodity price volatility. Barrick’s press release even warns of uncertainties around permits, construction, and capital markets—a reminder that even the best-laid plans can go awry.

Environmental and social factors loom large. The project sits on land owned by Indigenous corporations Calista and TKC, whose support is critical. Both buyers have pledged to maintain community engagement and adhere to Alaskan environmental laws—a necessity in an era where social license is as important as mineral rights.

The Bigger Picture: Gold’s Role in a Volatile World

Donlin Gold’s valuation of up to $1.1 billion reflects investor optimism about gold’s long-term prospects. With central banks globally holding over 36,000 metric tons of gold, and geopolitical tensions fueling demand, the metal remains a safe haven. Donlin’s high-grade, low-cost profile could make it a standout asset in a sector where margins are thin.

Meanwhile, the deal underscores a broader trend: the concentration of gold ownership in fewer, larger projects. Barrick’s exit makes sense—why hold a 50% stake in a project when you can monetize it and focus on higher-margin operations? For Paulson and NOVAGOLD, the bet is clear: Alaska’s gold could be the next big winner in a world hungry for tangible assets.

Conclusion: A Gold Mine of Potential, but Risks Remain

Donlin Gold’s numbers are undeniable: 39 million ounces, a grade double the industry average, and a project life spanning decades. With Paulson’s financial clout and NOVAGOLD’s local expertise, the partnership could unlock a gold mine worth far more than the $1.1 billion paid.

Yet, the path to profit is littered with obstacles. Regulatory delays, permitting costs, and gold price swings could all eat into returns. The fact that the deal’s value hinges on NOVAGOLD exercising a debt option (at $90 million or $100 million) adds another layer of uncertainty.

For investors, the question is whether Donlin’s potential outweighs the risks. With Alaska’s political stability, low operating costs, and untapped exploration upside, the project has all the hallmarks of a gold giant. If Paulson and NOVAGOLD can navigate the hurdles, this deal could be remembered as the start of a modern gold boom—or, at the very least, a shrewd bet on one of the world’s last great unexploited deposits.