NovaGold Resources Inc. March 20 said it has priced a public offering of $95 million in convertible bonds due May 1, 2015 and net proceeds before deducting estimated offering expenses are expected to total $92.15 million.

NovaGold said a day earlier that cash raised in the offering will be used to repay short-term debt, fund exploration and development projects and pay bills. J.P. Morgan Securities Inc., the underwriter, also received the option to issue another $14 million in notes to cover over-allotments, if any. If the over-allotment option is exercised, net proceeds from the offering would total $105.73 million.

The bonds have a semi-annual cash interest coupon of 5.5 percent and are convertible into NovaGold common stock based on a conversion rate of 94.2418 shares per $1,000 principal amount of notes, equivalent to a conversion price of about $10.61 per share (equivalent to C$10.77 per share), subject to adjustment. The conversion price represents a 35 percent premium to the closing price of NovaGold common stock on March 19. The Vancouver, B.C.-based junior said it will pay back about C$16 million that it borrowed under a C$30 million short-term credit facility and finance ongoing work in Alaska and British Columbia.

NovaGold is scheduled to begin production this year at the Rock Creek, Big Hurrah and Nome Gold deposit in western Alaska. It also aims to continue efforts to develop the Donlin Creek gold project in western Alaska, which it owns 50/50 with Barrick Gold, and the Galore Creek copper-gold-silver project in northwestern British Columbia, which it owns 50/50 with Teck Cominco Ltd.

The junior is also earning a 51 percent interest in the high-grade Ambler copper-zinc-silver-gold project in Northwest Alaska as project manager in partnership with Rio Tinto plc.