NovaGold (NG-T11.132.1624.08%) radical management shakeup and restructuring could set the stage for Barrick Gold (ABX-T53.21-0.21-0.39%) to launch a takeover bid.

Gregory Lang, former president of Barrick Gold North America, will take the helm of NovaGold effective immediately. The company will spin off its copper project, Ambler, to create NovaCopper, a subsidiary, led by founder and former CEO Rick Van Nieuwenhuyse, and the company is open to selling half or all of its interest in Galore Creek, which it co-owns with Teck Resoures (TCK-N37.49-0.51-1.34%).

At the heart of the dramatic shift was money. Costs at Donlin Creek, one of the biggest gold mines in the world, grew from $4.5-billion (U.S.) to $7-billion, to be split evenly between NovaGold and Barrick. Now NovaGold, a $2.11-billion company, will have to fork over $3.5-billion over the next five years before the mine even enters production.

Donlin has the potential to produce 1.3 million ounces of gold annually at 2 grams per ton at around $400 an ounce. A full updated feasibility study is scheduled to be released by the end of the year.

“The move is being made because the board and management team believe the assets individually are worth more than under one umbrella,” says Paolo Lostritto, equity research analyst at National Bank Financial, who has a sector perform rating on the stock. “The move is more to pay for Donlin, but there could be an element to clean it up as well.”

Tom Kaplan, the new chairman of NovaGold, said the move was about sharpening focus. “Galore is a beautiful asset, but we can better use the cash for Donlin and remove a major chunk of our estimated capex.”

The biggest opponent of a takeover of NovaGold was now former CEO and founder Rick Van Nieuwenhuyse. He recently said that a handful of shareholders own 50 per cent of the stock, including legendary investor John Paulson. Those shareholders would be unwilling to budge if the price is wrong. “When you have a strong group of shareholders who believe in higher gold prices and they own one of the largest and best gold deposits in the world in a safe jurisdiction, you outta pay a fair price for that.”

But with a new CEO at the helm and that CEO coming from Barrick Gold, ties between the two companies could be strengthened, and NovaGold cleaning up its other assets could be the icing on the cake.

The relationship between NovaGold and Barrick has been fraught with drama. In 2006, Barrick made an offer for NovaGold at $14.50 a share when the stock was trading between $15-$17. NovaGold rejected the offer on the basis that shares weren’t adequately valued. Not only could Barrick currently get the company for almost half of its offer price, but it would get some payback for having been burned before.

“They are trying to get the project ready to be acquired by Barrick at this point,” says Jeb Handwerger, editor of GoldStockTrades.com. “Donlin creek should have been bought out a long time ago ... it’s too advanced for a company like NovaGold.”

Lang’s track record says as much. Before joining Barrick, Lang worked at Homestake Mining Company and International Corona Corporation, which are now owned by Barrick. Lang “knows how to get these companies ready,” says Handwerger. “Barrick has to be the one to lead this into production.”

Lostritto wouldn’t commit to an eventual Barrick takeover of NovaGold but said it was possible to imply.

Shareholders could win either way. NovaGold’s stock has been pummeled this year, down 34 per cent. Shares tanked 20 per cent in a week after Barrick released rising costs for Donlin at a shareholders meeting in September without releasing new production estimates and cash costs. Two industry insiders speculated this was purposely done to drag down the shares to make the company cheaper to buy.

“For 2011 it’s been in this downtrend,” says Handwerger. “This is a step towards getting the project into production (with the potential) to become Barrick shareholders.”

In response to whether NovaGold was prepping for a Barrick takeover, Kaplan said "Barrick is our partner, and we appreciate them greatly. But we can no more assess their long-term intentions towards Donlin than we can those of the other major mining companies that would like to own the asset."

Barrick declined to comment.