Gold Fever Spreads: John Paulson Invests $800 Mn in Alaskan Gold Mine

Gold rally has made its own fans and now everybody want to be a part of the fandom. In a recent move, John Paulson and NovaGold Resources have agreed to invest over $1 billion in the Donlin Gold project located in Alaska.

The Donlin Gold project, a major refractory gold deposit in Alaska with an estimated 39 million ounces of the precious metal, was jointly owned by Barrick Gold and NovaGold earlier (each holding a 50% stake). On Tuesday, Barrick announced it would be exiting the project by selling its share to Paulson and NovaGold, as per multiple media reports.

The billionaire called Donlin Gold "one of the most attractive development gold projects in the world."

"With 39 million ounces of gold at double the industry average grade, and an optimal location in the prime jurisdiction of Alaska — already the second largest gold-producing state in the United States — we believe that the project could create value for decades to come," he said.

Paulson & Co. will buy 40% of the Donlin Gold project for $800 million, becoming a full partner. At the same time, Novagold will be investing $200 million to increase its stake from 50% to 60% in the project. This news comes at a time when the yellow metal has witnessed a sharp rally in its value so far this year.

Gold Rally Continues

In India, the rate of yellow metal has already surpassed the Rs 1 lakh price mark. Major brokerage have revised and upgraded gold target price as trade tensions continue to keep the overall outlook turbulent.

So far this year, gold's value has surged over 26% with analysts expecting more upside potential largely owing to Trump's tariff play which is giving rise to heightened uncertainty. Last week, Citi raised its three-month gold price target to $3,500 per ounce as investors are now increasingly turning to the safe-haven asset class.

While several financial institutions, including Goldman Sachs and UBS, raised their gold price targets earlier this year, the pace at which the value of the yellow metal has increased has exceeded expectations.