TORONTO (Reuters) - NovaGold Resources Inc NG.TO managed to turn a profit in the first quarter, but the impact on its shares was muted on Tuesday as the development-stage miner still faces high construction costs.
The stock was flat at $7.86 in morning trade on the Toronto Stock Exchange, a day after NovaGold released its quarterly results. Mining peers on the key Canadian index, meanwhile, were up 1.1 percent as a group.
NovaGold, which has copper and gold assets in Canada and Alaska, earned $28.0 million, or 26 cents a share in the three months ended February 29. That’s up from a loss of $4.9 million, or 5 cents a share in the corresponding period a year earlier.
The company got a boost from a $15.3-million gain from the sale of U.S. Gold Corp shares, and from a $15.2-million cost recovery from the suspension of operations at Galore Creek.
Late last year, NovaGold and partner Teck Cominco TCKb.TO suspended development of Galore Creek, a massive copper-gold-and-silver deposit in northwestern British Columbia, after projected costs more than doubled.
Since the suspension, NovaGold shares have shed about 60 percent of their value.
This year, the companies will focus on “demobilizing” the Galore Creek project and readying it for a restart some time in the future, NovaGold said on Monday.
“This continues to be a challenging time to build mines, with strong inflationary pressures and intense industry competition for staff, contractors and equipment,” the company said in a statement.
Revenue in the most recent quarter jumped more than 50 percent to $1.7 million.
Reporting by Jonathan Spicer; Editing by Bernadette Baum