2. conference call attendees
▶
Introduction
Mélanie Hennessy (Vice President Corporate Communications)
▶
Corporate Update
Greg Lang (President & Chief Executive Officer)
▶
Third Quarter Financials & 2013 Budget
David Ottewell (Vice President & Chief Financial Officer)
▶
Closing Remarks
Greg Lang (President & Chief Executive Officer)
▶
Question & Answer Session
Greg Lang & David Ottewell
2
3. cautionary statements
REGARDING FORWARD-LOOKING STATEMENTS
This presentation includes certain “forward-looking statements” within the meaning of applicable securities laws, including the United States Private Securities Litigation Reform Act of 1995. All
statements, other than statements of historical fact, included herein including, without limitation, statements relating to Donlin Gold’s future operating or financial performance, are forwardlooking statements. Forward-looking statements are frequently, but not always, identified by words such as “plans”, “expects”, “anticipates”, “believes”, “intends”, “estimates”, “potential”,
“possible” and similar expressions, or statements that events, conditions or results “will”, “may”, “could”, or “should” occur or be achieved. These forward-looking statements are set forth in the
slides pertaining to the implementation of the Donlin Gold second updated Feasibility Study and pertaining to the implementation of the Galore Creek Pre-Feasibility Study and may include
statements regarding perceived merit of properties; exploration results and budgets; mineral reserves and resource estimates; work programs; capital expenditures; timelines; strategic plans;
completion of transactions; market price of precious base metals; or other statements that are not statements of fact. Forward-looking statements involve various risks and uncertainties. There
can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that
could cause actual results to differ materially from our expectations include the uncertainties involving the need for additional financing to explore and develop properties and availability of
financing in the debt and capital markets; uncertainties involved in the interpretation of drilling results and geological tests and the estimation of reserves and resources; the need for continued
cooperation between NOVAGOLD and Barrick Gold in the exploration and development of the Donlin Gold property; the need for continued cooperation between NOVAGOLD and Teck
Resources Ltd. in the exploration and development of the Galore Creek property; the need for cooperation of government agencies and native groups in the development and operation of
properties; the need to obtain permits and governmental approvals; risks of construction and mining projects such as accidents, equipment breakdowns, bad weather, non-compliance with
environmental and permit requirements, unanticipated variation in geological structures, ore grades or recovery rates; unexpected cost increases; fluctuations in metal prices and currency
exchange rates; and other risk and uncertainties disclosed in reports and documents filed by NOVAGOLD with applicable securities regulatory authorities from time to time. The forwardlooking statements made herein reflect our beliefs, opinions and projections on the date the statements are made. Except as required by law, we assume no obligation to update the forwardlooking statements of beliefs, opinions, projections, or other factors, should they change.
REGARDING SCIENTIFIC AND TECHNICAL INFORMATION
Unless otherwise indicated, all reserve and resource estimates included in this presentation have been prepared in accordance with Canadian National Instrument 43-101 Standards of
Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves (“CIM Definition
Standards”). Canadian standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission (“SEC”), and reserve and resource
information in this presentation may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, the term “resource”
does not equate to the term “‘reserves”. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be
economically and legally produced or extracted at the time the reserve determination is made. At this time, both of Donlin Gold and Galore Creek projects are without known reserves, as
defined under SEC Industry Guide 7. The SEC’s disclosure standards normally do not permit the inclusion of information concerning “measured mineral resources”, “indicated mineral
resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the
SEC. U.S. investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “inferred mineral resources”
may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is
economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report
mineralization that does not constitute “reserves” by SEC standards as in-place tonnage and grade without reference to unit measures. The requirements of NI 43-101 for identification of
“reserves” are also not the same as those of the SEC, and reserves reported in compliance with NI 43-101 may not qualify as “reserves” under SEC standards. Accordingly, information
concerning mineral deposits set forth herein may not be comparable to information made public by companies that report in accordance with United States standards.
3
4. the NOVAGOLD opportunity
EXCEPTIONAL IN SCALE, QUALITY, AND JURISDICTIONAL SAFETY
▶
Donlin Gold
• In terms of combined size, grade, exploration
potential, production profile and jurisdictional
safety, Donlin Gold is arguably the most
important undeveloped gold project in the world
• Permitting commenced in Q3/12
▶
Galore Creek
• If placed into production, as per the latest prefeasibility study, would be the largest and
lowest cash cost copper mine in Canada
• Pursuing divestiture to fund development of
Donlin Gold
4
5. recent achievements
PROJECTS CONTINUE TO ADVANCE ON TIME AND ON BUDGET
maintained a healthy balance sheet with receipt of $54M cash from warrants and
reduced convertible debt by $79M1
continued to advance permitting of Donlin Gold with completion of public scoping
and drafting of preliminary draft environmental impact statement
Galore Creek 2013 exploration drill results identify extensions to mineralization
at Legacy zone
simplified company, significantly reduced expenditures
built a management team with expertise in permitting, developing and operating
large-scale projects
5
1)
Outstanding Convertible Notes mature on May 1, 2015. The holders of the Notes had the right to require the Company to repurchase all or part of their Notes on May 1, 2013 (“put option”)
6. 2013 project activity
▶
Donlin Gold
o Advanced permitting activities
o Project funding (NG 50% share)
• FY-2013: US$12.2 million
• FY-2014: US$12 million
▶
Galore Creek
o Completed 2013 drilling program ahead of schedule and under budget
o Project funding (NG 50% share)
• FY-2013: $6.6 million
• FY-2014: $2.5 million
6
7. 2013 operating performance analysis
Highlights
(US$ million)
Year ended
November 30, 2013
Year ended
November 30, 2012
$ 14.7
$ 19.2
Share-based payments
12.3
19.9
Share of losses – Donlin Gold
14.6
16.9
Share of losses – Galore Creek
13.4
23.4
0.8
0.5
55.8
79.9
3.1
(64.6)
3.9
$ 62.8
(7.7)
$ 7.6
Expenses(1)
Other operating expenses
Operating loss
Other expense (income)
Income tax expense (recovery)
Net loss from continuing operations
(1) General and administrative, salaries and severance, professional fees, corporate and development expenses
7
8. 2013 cash flow highlights
Highlights
(US$ million)
Year ended
November 30, 2013
Year ended
November 30, 2012
Cash used in operating activities
$ (19.5)
$ (28.6)
Cash used in investing activities
(128.8)
(34.8)
Cash used in financing activities
(24.8)
323.6
--
(65.0)
(0.3)
0.1
(173.4)
195.3
Beginning
254.7
59.4
Ending
$ 81.3
$ 254.7
Discontinued operations
Foreign exchange effect on cash
Increase (decrease) in cash
Cash and cash equivalents
Term deposits
Cash and term deposits
110.0
$ 191.3
8
9. 2014 budget
▶
Donlin Gold - $ 12M (NG 50% share)
o Advance permitting through completion of PDEIS
o Maintain engagement with communities in region
▶
Galore Creek - $ 2.5M (NG 50% share)
o Undertake technical studies to build on 2012 & 2013 drill results
o Evaluate opportunities to monetize the value of the asset
▶
General and Administrative Expenses - $ 13M
▶
Interest expense, working capital and other - $ 2M
9
10. financial obligations have decreased substantially
CLEAR FOCUS BEGINS WITH STRONG FUNDING TO EXECUTE ON ALL FRONTS
$140
in millions of U.S. dollars
market cap2
reduced by ~$100M
$120
$1,030
$100
- 70%
cash and term
deposits3
$80
$190
- 23%
$60
convertible notes4
$40
$16
$20
1)
2)
$0
2012 Act(1)
2013 Act
2014 Bud 1
3)
4)
DiscOps
G&A
Donlin
Galore
2014 anticipated budget expenditure disclosed on
February 11, 2014
Market Capitalization as of February 11, 2014
based on 316.7 million shares issued and
outstanding.
Includes US$ 110 million in term deposits as of
November 30, 2013.
The Notes mature on May 1, 2015.
Interest & other
10
11. 2014 activities & milestones
PROJECTS CONTINUE TO ADVANCE ON TIME AND ON BUDGET
advance permitting of the Donlin Gold project
maintain a healthy balance sheet
undertake Galore Creek technical studies
evaluate opportunities to monetize the value of Galore Creek
maintain an effective corporate social responsibility program
11
12. reserve & resource growth
RESOURCES MORE THAN DOUBLED IN LESS THAN TWO YEARS
Focused on feasibility-level planning
and more recently permitting
40.0
37.9
39.0
39Moz
35.3
M&I resources
29.4
30.0
inclusive of
Updated Feasibility Study
25.0
20.0
Feasibility Study
16.6
15.0
10.0
PEA
M&I Au Resources (Moz)
35.0
5.0
0.0
2006
2007
2008
2009
2011
Notes:
•
Donlin Gold data as per NOVAGOLD Annual Integrated Reports published 2006-2013. Measured and Indicated resources are
inclusive of Proven and Probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve &
Resource Base” with footnotes in the appendix.
34Moz
P&P reserves @ $975/oz
grade of
2.24g/t
And there is opportunity for
continued growth once in
production…
12
13. highest-quality development-stage gold deposit
M&I Au Grade (g/t)
WORLD’S BIGGEST UNDEVELOPED AND EARLY PRODUCTION GOLD PROJECTS
2.50
2.24
▸
Donlin Gold is among the highest-grade deposits in
the world, the top for an open-pit deposit
2.00
▸
With capital constraints, only the best projects
will find funding
1.50
1.05
1.04
1.02
1.00
0.61
0.55
0.50
0.50
0.31
-Donlin Gold
Canadian Malarctic Rosia Montana
Detour Lake
Livengood
KSM
Notes:
•
Donlin Gold data as per Donlin Creek Gold Project Alaska, USA, NI 43-101 Technical Report on Second “Updated Feasibility Study”, effective
November 18, 2011, as amended January 20, 2012 (the “updated feasibility study”). Measured and Indicated resources are inclusive of Proven and
Probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix.
•
Peer group data as per latest company documents, public filings and websites. Comparison group based on large, open-pit, gold-focused development
projects.
Metates
Hycroft
13
14. novagold is expected to emerge as a producer with
the highest average grade
DONLIN GOLD’S GRADE COMPARES WELL WITH WORLD’S BIGGEST PRODUCERS
3.00
M&I Au Grade (g/t)
2.50
2.00
1.50
1.00
0.50
0.00
Agnico
Eagle
Donlin
Donlin
Gold
Gold
Gold
Fields
Polyus
AngloGold
Ashanti
Barrick
Harmony Eldorado Newmont
Yamana
Notes:
•
Donlin Gold data as per Donlin Creek Gold Project Alaska, USA, NI 43-101 Technical Report on Second “Updated Feasibility Study”, effective
November 18, 2011, as amended January 20, 2012 (the “updated feasibility study”). Measured and Indicated resources are inclusive of Proven and
Probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix.
•
Peer group data - 2012 annual average grade per tonne (combined proven & probable reserves and measured & indicated resources) for open-pit and
underground material as per public filings.
Goldcorp
Kinross
Newcrest
14
15. the right stakeholders
JURISDICTIONAL SAFETY IS MORE THAN GEOGRAPHIC LOCATION
Committed Stakeholders
▶
Calista Corporation
▶
The Kuskokwim Corporation
“Calista would like to take this opportunity
to assert and inform the U.S. Army Corps of
Engineers and the public of its legislated
mandate under ANCSA. Calista and TKC
are not only stakeholders, but are the
legislatively mandated landowners charged
with the responsibility of seeing the project
to fruition in an environmentally responsible
manner.”
– June MacAtee, Calista Corporation VP
15
16. significant drop in discoveries since 2006
25
$1,800
Gold Discovered
$1,600
Gold Price
$1,400
$1,200
15
$1,000
$800
10
$600
First year in over
two decades with
no discoveries
$400
5
$200
Source: SNL MEG’s MineSearch database, Company reports, SNL MEG estimates. Thomson Reuters.
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
$1991
0
1990
Number of Gold Discoveries
20
16
17. donlin gold development timeline
PROCEED ON SCHEDULE…
̴4
̴4
27+ years
1.5Moz/year
1.5five full years
first Moz/year
first five full years1
OPERATION
ENGINEERING &
CONSTRUCTION
1
PERMITTING
EXPLORATION &
ENVIRONMENTAL
STUDIES
16 years
1.1Moz/year
1.1Moz/year
life of mine
1
life of mine1
WE ARE HERE
17
Notes:
1.
Donlin Gold data as per Donlin Creek Gold Project Alaska, USA, NI 43-101 Technical Report on Second “Updated Feasibility Study”, effective November 18, 2011, as amended January 20, 2012 (the “updated feasibility study”). Measured and Indicated
resources are inclusive of Proven and Probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix.
18. permitting milestones
DONLIN GOLD ADVANCES ON PERMITTING PATH
submit permit applications to federal and state regulatory agencies
file Notice of Intent
public scoping period (Dec. 14/12 - March 29/13)
preliminary draft EIS (PDEIS) 2014
draft EIS
~1-2
years
public comment period
final EIS/record of decision
permit issuance
30-day Appeal Period
18
19. current work
PROCEEDING ON SCHEDULE AS PER EIS TIMELINE
▶
Maintaining strong working relationships with the agencies and providing input throughout the
permitting and EIS processes
▶
EIS Alternatives Development – being finalized during Q1 2014
• Reasonable range of alternatives identified to address key issues
• Alternatives address mine, pipeline, and transportation components
▶
PDEIS preparation – planned for issuance in late 2014
• Initial draft chapters in review by agencies and Donlin Gold
• Final data needs being addressed
▶
Major permit application submittals and agency reviews – well underway
• Air quality
• Water discharge and usage
• Pipeline plan of development
• Wetlands
• Dam safety
19
20. we are here
DONLIN GOLD’S SCALE, QUALITY AND JURISDICTIONAL SAFETY WILL MAKE IT
ONE OF THE MOST COVETED PRECIOUS METALS ASSETS IN THE WORLD
…A compelling investment opportunity when
one considers the impending production cliff.
20
21. galore creek
ENHANCING VALUE WHILE EVALUATING OPPORTUNITIES TO MONETIZE ASSET
Completed the 2013 drilling program under budget,
exceeding objectives with 11,600 meters drilled
▶
• Confirmed significant mineralization at the
recently discovered Legacy zone
• Identified areas for potential resource growth
2012 and 2013 results will be incorporated into a
capital efficient work plan for 2014 that will advance
the project toward next-level mine planning and
design
▶
• Includes technical studies in the areas of
environmental & water management, and site
layout
M&I Resources1, 2
9Blbs
0.5%
copper
copper
8Moz
0.3g/t
gold
gold
136Moz
silver
1)
2)
See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix.
M&I: Measured and Indicated resources inclusive of Proven and Probable reserves
5.2g/t
silver
21
22. galore creek grade peer comparisons
AMONG HIGHEST COPPER GRADE COMPARED TO NORTH AMERICAN ASSETS
P&P + M&I grade (Cu%)
0.80
0.72
0.70
0.60
0.50
0.50
0.45
0.40
0.32
0.30
0.27
0.24
0.21
0.18
0.20
0.10
0.00
Copper Creek Galore Creek
Pebble
Red Chris
Schaft Creek New Prosperity
KSM
Mount Milligan
22
Source: SNL MEG’s MineSearch database, Company reports, SNL MEG estimates.
23. the NOVAGOLD opportunity
INSTITUTIONAL QUALITY INVESTMENT
Tocqueville Asset
Management
2.2%
Sun Valley
Gold, LLC
1.7%
The Baupost
Group, L.L.C.
%
80
Institutional
Ownership
6.9%
Electrum Strategic
Resources, L.L.C.
26.7%
Paulson
& Co. Inc
%
49
held by top
5 shareholders(1)
11.3%
committed
to Shareholder Value
1)
Shareholder positions are based on the latest 13-F filings
23
24. why NOVAGOLD? why now?
NOVAGOLD WELL POSITIONED TO DELIVER ON ALL CORPORATE OBJECTIVES
top
best
supportive
right
strong
tier, high-quality assets
and safest leverage to gold
, loyal, and engaged shareholders
people to bring project up value chain
balance sheet
24
27. reserve/resource table (con’t)
Copper Canyon (NOVAGOLD 70%)
Resources (100%)5,6
COPPER
Inferred
GOLD
Inferred
SILVER
Inferred
t = metric tonne
M = million
g/t = grams/tonne
* Reserve grade is diluted; resource
grade is in situ.
** NOVAGOLD share net after earn-ins
Tonnage
Grade*
Metal content
NOVAGOLD share**
Mt
%Cu
Mlbs
Mlbs
53.7
0.50
592.0
414.4
Moz
Mt
g/t
Moz
53.7
0.73
1.26
0.88
Mt
g/t
Moz
Moz
53.7
10.60
18.36
12.85
Approximate cut-off grades (see Resource Footnotes below):
Donlin Gold
Reserves1: 0.57 g/t gold
Resources3: 0.46 g/t gold
Galore Creek
Reserves2: C$10.08 NSR
Resources4: C$10.08 NSR
Copper Canyon
Resources5,6: 0.6% copper equivalent
28. reserve/resource table (con’t)
Notes:
a. These resource estimates have been prepared in accordance with NI43-101 and the CIM Definition Standard, unless otherwise noted.
b. See numbered footnotes below on resource information.
c. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal content
d. Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounces, contained copper pounds as imperial pounds
Resource Footnotes:
Mineral Reserves are contained within Measured and Indicated pit designs, and supported by a mine plan, featuring variable throughput rates, stockpiling and cut-off optimization. The pit designs and mine plan were optimized on diluted grades using the following economic and technical parameters: Metal price for
gold of US$975/oz; reference mining cost of US$1.67/t incremented US$0.0031/t/m with depth from the 220 m elevation (equates to an average mining cost of US$2.14/t), variable processing cost based on the formula 2.1874 x (S%) + 10.65 for each US$/t processed; general and administrative cost of US$2.27/t
processed; stockpile rehandle costs of US$0.19/t processed assuming that 45% of mill feed is rehandled; variable recoveries by rock type, ranging from 86.66% in shale to 94.17% in intrusive rocks in the Akivik domain; refining and freight charges of US$1.78/oz gold; royalty considerations of 4.5%; and variable pit
slope angles, ranging from 23º to 43º. Mineral Reserves are reported using an optimized net sales return value based on the following equation: Net Sales Return = Au grade * Recovery * (US$975/oz – (1.78 + (US$975/oz – 1.78) * 0.045)) - (10.65 + 2.1874 * (S%) + 2.27 + 0.19) and reported in US$/tonne. Assuming
an average recovery of 89.54% and an average S% grade of 1.07%, the marginal gold cutoff grade would be approximately 0.57 g/t, or the gold grade that would equate to a 0.001 NSR cutoff at these same values. The life of mine strip ratio is 5.48. The assumed life-of-mine throughput rate is 53.5 kt/d.
Mineral Reserves are contained within Measured and Indicated pit designs using metal prices for copper, gold and silver of US$2.50/lb, US$1,050/oz, and US$16.85/oz, respectively. Appropriate mining costs, processing costs, metal recoveries and inter ramp pit slope angles varing from 42º to 55º were used to
generate the pit phase designs. Mineral Reserves have been calculated using a 'cashflow grade' ($NSR/SAG mill hr) cut-off which was varied from year to year to optimize NPV. The net smelter return (NSR) was calculated as follows: NSR = Recoverable Revenue – TCRC (on a per tonne basis), where: NSR = Net
Smelter Return; TCRC = Transportation and Refining Costs; Recoverable Revenue = Revenue in Canadian dollars for recoverable copper, recoverable gold, and recoverable silver using metal prices of US$2.50/lb, US$1,050/oz, and US$16.85/oz for copper, gold, and silver, respectively, at an exchange rate of
CDN$1.1 to US$1.0; Cu Recovery = Recovery for copper based on mineral zone and total copper grade; for Mineral Reserves this NSR calculation includes mining dilution. SAG throughputs were modeled by correlation with alteration types. Cash flow grades were calculated as the product of NSR value in $/t and
throughput in t/hr. The life of mine strip ratio is 2.16.
Mineral Resources are contained within a conceptual Measured, Indicated and Inferred optimized pit shell using the following assumptions: gold price of US$1,200/oz; variable process cost based on 2.1874 * (sulphur grade) + 10.6485; administration cost of US$2.29/t; refining, freight & marketing (selling costs) of
US$1.85/oz recovered; stockpile rehandle costs of US$0.20/t processed assuming that 45% of mill feed is rehandled; variable royalty rate, based on royalty of 4.5% * (Au price – selling cost). Mineral Resources have been estimated using a constant Net Sales Return cut-off of US$0.001/t milled. The Net Sales Return
was calculated using the formula: Net Sales Return = Au grade * Recovery * (US$1200/oz – (1.85 + ((US$1200/oz – 1.85) * 0.045)) - (10.65 + 2.1874 * (S%) + 2.29 + 0.20)) and reported in US$/tonne. Mineral Resources are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. Inferred Resources have a great amount of uncertainty as to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred Resources will ever
be upgraded to a higher category. See "Cautionary Note Concerning Reserve & Resource Estimates".
Mineral resources are contained within a conceptual Measured, Indicated and Inferred optimized pit shell using the same economic and technical parameters as used for Mineral Reserves. Tonnages are assigned based on proportion of the block below topography. The overburden/bedrock boundary has been
assigned on a whole block basis. Mineral resources have been estimated using a constant NSR cut-off of C$10.08/t milled. The Net Smelter Return (NSR) was calculated as follows: NSR = Recoverable Revenue – TCRC (on a per tonne basis), where: NSR = Diluted Net Smelter Return; TCRC = Transportation and
Refining Costs; Recoverable Revenue = Revenue in Canadian dollars for recoverable copper, recoverable gold, and recoverable silver using silver using the economic and technical parameters mentioned above. The mineral resource includes material within the conceptual M,I&I pit that is not scheduled for processing
in the mine plan but is above cutoff. Mineral Resources are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. Inferred Resources have a great amount of uncertainty
as to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred Resources will ever be upgraded to a higher category. See "Cautionary Note Concerning Reserve & Resource Estimates".
The copper-equivalent grade was calculated as follows: CuEq = Recoverable Revenue ÷ 2204.62 * 100 ÷ 1.55. Where: CuEq = Copper equivalent grade; Recoverable Revenue = Revenue in US dollars for recoverable copper, recoverable gold and recoverable silver using metal prices of US$1.55/lb, US$650/oz, and
US$11/oz for copper, gold, and silver, respectively; for the purposes of the equivalency formula, Cu Recovery is assumed to be 100%. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. Inferred
Resources have a great amount of uncertainty as to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred Resources will ever be upgraded to a higher category. See "Cautionary Note Concerning Reserve & Resource Estimates".
NOVAGOLD Canada Inc. has agreed to transfer its 60% joint venture interest in the Copper Canyon property to the Galore Creek Partnership, which is equally owned by NOVAGOLD Canada Inc. and a subsidiary of Teck Resources Limited. The remaining 40% joint venture interest in the Copper Canyon property is
owned by another wholly owned subsidiary of NOVAGOLD.
Cautionary Note Concerning Reserve & Resource Estimates
This summary table uses the term “resources”, “measured resources”, “indicated resources” and “inferred resources”. United States investors are advised that, while such terms are recognized and required by Canadian securities laws, the United States Securities and Exchange Commission (the “SEC”) does not
recognize them. Under United States standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Mineral resources that are not mineral reserves
do not have demonstrated economic viability. United States investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. Further, inferred resources have a great amount of uncertainty as to their existence and as to whether they can be mined
legally or economically. It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher category. Therefore, United States investors are also cautioned not to assume that all or any part of the inferred resources exist, or that they can be mined legally or economically. Disclosure of
“contained ounces” is permitted disclosure under Canadian regulations, however, the SEC normally only permits issuers to report “resources” as in place tonnage and grade without reference to unit measures. Accordingly, information concerning descriptions of mineralization and resources contained in this release
may not be comparable to information made public by United States companies subject to the reporting and disclosure requirements of the SEC.
NI 43-101 is a rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all resource estimates contained in this circular have been prepared in
accordance with NI 43-101 and the CIM Definition Standards.
Technical Reports and Qualified Persons
The documents referenced below provide supporting technical information for each of NOVAGOLD's projects.
Project
Donlin Gold
Qualified Person(s)
Most Recent Disclosure & Filing Date
Tony Lipiec, P. Eng., AMEC
Donlin Creek Gold Project
Gordon Seibel R.M. SME, AMEC
Alaska, USA
Kirk Hanson P.E., AMEC
Galore Creek
NI 43-101 Technical Report on Second Updated Feasibility Study amended filing on January 23, 2012
Robert Gill, P.Eng., AMEC
Galore Creek Copper–Gold Project,
Jay Melnyk, P.Eng., AMEC
British Columbia, NI 43-101 Technical Report on Pre-Feasibility Study,
Greg Kulla, P.Geo., AMEC
filed on September 12, 2011
Greg Wortman, P.Eng., AMEC
Dana Rogers, P.Eng., Lemley International
Heather White, B.Sc., P.Eng., who is a consultant to NOVAGOLD and a “qualified person” under NI 43-101, has approved the scientific and technical information included in this section related to: (i) Donlin Gold since the issuance of the technical report filed on January 23, 2012, and (ii) Galore Creek since the
issuance of the technical report filed on September 12, 2011.
29. contact us
NOVAGOLD RESOURCES INC.
Suite 720 – 789 West Pender Street
Vancouver, BC
Canada V6C 1H2
T 604 669 6227 TF 1 866 669 6227 F 604 669 6272
www.novagold.com
info@novagold.com
Mélanie Hennessey
VP, Corporate Communications
melanie.hennessey@novagold.com
Erin O’Toole
Analyst, Investor Relations
erin.otoole@novagold.com
