Jan. 16--Following a run of tough luck starting up its new hard rock gold mine near Nome and related negative financial news in the later part of 2008, NovaGold Resources rang in the New Year in a celebratory way, landing a substantial new investor to support the junior explorer.

NovaGold announced Jan. 2 that the Vancouver-based exploration company entered into a definitive agreement with Electrum Strategic Resources LLC, a New York-based private metals investment company, to sell Electrum 46.1 million units of NovaGold at $1.30 for each share.

Upon closing, NovaGold will receive gross proceeds of roughly $60 million, and Electrum will become NovaGold's largest shareholder, owning approximately 30 percent of the issued and outstanding common shares of the company.

The purchase price for each unit also allows Electrum to acquire additional common shares of NovaGold for $1.50 for each unit within four years. If fully exercised, Electrum would own approximately 46 percent of NovaGold.

"This is a strategic investment by a group that has a long term view," Rick Van Nieuwenhuyse, NovaGold Resources president and CEO, said in a telephone interview Jan. 6.

Also on Jan. 6, NovaGold said several other institutional investors agreed to purchase units with the same terms and price as Electrum, adding another $15 million to the financing secured by NovaGold.

"This investment allows us to demonstrate to the market that we can maintain our interest in Donlin Creek and Galore Creek, and we have the option of putting Rock Creek back into operation, providing the economics are there and we can receive workable permits from the government," Van Nieuwenhuyse said.

The equity financing comes at a time when stock prices for junior exploration companies have plummeted, in some cases, much more dramatically than other publicly traded companies suffering from the recent global economic meltdown.

Mining and exploration stocks began falling earlier in 2008, as metal prices began to decline and investor dollars dried up. Among that sector's freefall was NovaGold, which reached a peak price of slightly more than $20 per share in November 2007, shortly before the beginning of a string of negative news from the junior explorer, which is heavily invested in Alaska and northwestern British Columbia.

At its low several weeks ago, NovaGold was trading at about 50 cents per share. Following the news about the Electrum investment, the stock price bounced back to over $2 per share.

"It's a tough market out there and a challenging place to raise money," he said.