It's a minefield out there.

Who Ya Gonna Call ... Ghostbusters?
No -- Goldbusters!

By Bill Murphy, Chairman
Gold Anti-Trust Action Committee Inc.
Wednesday, August 9, 2006

I could not resist that title, one based on the Bill Murray (not to be confused with Bill Murphy) movie "Ghostbusters," for an obvious reason now to be explained -- along with my sudden trip to Vancouver.

Last evening I had the pleasure of having dinner with Rick Van Nieuwenhuyse, president and CEO of NovaGold Resources. As most of must know, Nova is suddenly fighting a hostile takeover bid from Barrick Gold.

In days of yore Rick, born in Belgium, was head of exploration for Placer Dome before deciding to build his own company. He was very aware that the former chairman of Placer, John Willson, was one of GATA's first corporate supporters. (When Willson retired, Placer went anti-GATA and began to hedge its gold production at around $300 per ounce.)

At the moment the most significant happening in the gold world is Barrick's bid for Nova. For many reasons this cannot be allowed to succeed at a price less than $30 per share. (Nova this week has been trading a little below $17.) For their own interest and the interest of a free gold price, all gold shareholders, whether they own Nova shares or not, must OPPOSE Barrick's bid.

Here's why:

* Placer Dome got fouled up and only fiddled around with some of the NovaGold properties in which they were joint partners.

* Having taken over Placer Dome, Barrick was like a breath of fresh air to NovaGold because it promised to spend a lot of money to drill the properties at an aggressive pace.

* NovaGold laid out the entire deal to Barrick, and all was hunky-dory for Nova's shareholders until, OUT OF NOWHERE, Barrick launched a hostile takeover bid -- and while Van Nieuwenhuyse was on vacation in Italy.

* Barrick's hedge book is mega-toxic and so the company is desperate for the unhedged gold in the ground at NovaGold, with which Barrick would extricate itself from a nightmare. Taking over NovaGold will help Barrick immensely. This cannot be allowed to happen UNLESS Barrick has to pay so much that it impairs their credit situation:

* * *

TORONTO (Standard & Poor's) July 25, 2006 -- Standard & Poor's Rating Services today said it placed its 'A-' long-term corporate credit and senior unsecured debt ratings on Barrick Gold Corp. on CreditWatch with negative implications after the company announced an unsolicited US$1.53 billion takeover of NovaGold Resources Inc. (unrated). The 'A-2' CP rating on Barrick is affirmed.

The CreditWatch stems from the increased risk in Barrick's conservative financial profile, which is currently supported by large cash balances that contribute to low net debt leverage.

"The company has stated that it would fund the acquisition of NovaGold with cash and debt, which will weaken its funds flow to debt metrics," said Standard & Poor's credit analyst Donald Marleau.

The assets to be acquired are development properties that generate no appreciable cash flow, nor will they without substantial development capital expenditures. On the other hand, the assets will enhance Barrick's operating profile over the longer term by increasing reserves and resources in Alaska and British Columbia, which are areas of low political risk. In addition, the acquisition of NovaGold adds the 30% of the Donlin Creek development project that Barrick did not already own, while the parallel acquisition of Pioneer Metals Corp. (unrated) for C$65 million will consolidate Barrick's land position around NovaGold's Galore Creek project in northern British Columbia.

Grey   credit to GATA