NovaGold, one of the companies developing the proposed Donlin Gold mine, has filed a lawsuit against a short-selling research firm. That firm released a report in May opining that the proposed Donlin Gold mine would not be built, and that NovaGold was overvalued.
The short-selling research firm J Capital Research and its clients make money from stock prices dropping. The firm released a report making the case that the proposed Donlin Gold mine is not going to be built because it’s too expensive to do so.
The day J Capital Research released its report, NovaGold stock prices fell from around $10 per share to $8 per share. By the end of June, the stock had recovered much of those losses. In an interview in June, NovaGold CEO Greg Lang called the report misleading.
“More than anything else, I think we’ve all experienced it, but it’s indicative of the power of misinformation when it spreads on the internet,” Lang said at the time.
NovaGold released a line-by-line rebuttal. Its partner, Barrick Gold, which is one of the biggest gold mining companies in the world, has not responded to a request for comment. Now NovaGold is suing J Capital Research for damages. Alaska’s Energy Desk reached out to NovaGold and J Capital Research for comment, but did not receive one from either entity by publication.
NovaGold’s stock rose slightly after it announced the lawsuit, and it’s now trading at nearly the same price as before J Capital Research firm came out with its report.