NovaGold Resources (NG) Reports Q1 Earnings, Comments on Cash Position

April 14, 2008 4:39 PM EDT

NovaGold Resources Inc. (AMEX: NG) reports Q1 EPS of $0.26 compared to a loss of $0.05 for the same period last year. Revenues for the quarter ended February 29, 2008 were $1.7 million compared to $1.1 million in the corresponding period in 2007.

At February 29, 2008, the Company had cash and cash equivalents of $13.8 million. Of this amount $10.2 million was designated for Galore Creek suspension related activities, including payment of other payables. Subsequent to the quarter end, the Company drew down an additional $6.0 million from the Bank of Nova Scotia credit facility for a total amount drawn down of $16.0 million. On March 26, 2008, the Company completed the issuance of US$95.0 million of 5.5% convertible senior unsecured notes due May 1, 2015 for net proceeds of US$90.65 million and has subsequently repaid the $16.0 million drawn down on the credit facility and closed the line.

During the quarter, the Company has revised the demobilization cost to $62.7 million from the estimate of $93.1 million recorded for the year ended November 30, 2007 as a result of the settlement of six of the major contracts. The Company has reflected the $30.4 million reduction as a recovery in the current period's statement of operations, net of non-controlling interest of $15.2 million and future income tax expense of $4.0 million.

As of April 11, 2008, NovaGold anticipates funding its planned activities for 2008 from available cash.

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