denver gold forum, colorado
TRANSCRIPT
novagold.com
NYSE-MKT, TSX: NG | September 2014
Denver Gold Forum
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 forward-
looking 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, the factors that may
influence future gold price performance, and the potential future value of gold, 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 or 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 risks and uncertainties disclosed in reports and
documents filed by NOVAGOLD with applicable securities regulatory authorities from time to time. The forward-looking 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 forward-looking 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.
2 All dollar amounts quoted in this report are in U.S. currency unless otherwise noted.
EXCEPTIONAL IN SCALE, QUALITY, AND JURISDICTIONAL SAFETY
why NOVAGOLD?
Donlin Gold
Galore Creek
3
▶ poised to become one of the
largest producers in the
gold industry
▶ expected to be the largest
and lowest cost copper
mine in Canada
ATTRIBUTES POSITION IT AMONG THE WORLD’S MOST SIGNIFICANT GOLD
DEPOSITS
donlin gold a large high-grade gold project
EXCEPTIONAL reserve size
OUTSTANDING production profile
HIGH-QUALITY grade
SIGNIFICANT exploration upside
FAVORABLE jurisdiction
LOW COST operation
4
39Moz M&I resources2
2.2g/t M&I grade
Contained Gold1
Notes:
1) Shown on 100% project basis, of which NOVAGOLD holds a 50% interest
2) Measured and indicated resources inclusive of proven and probable reserves.
See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix.
27year mine life
34Moz P&P reserves
2.1g/t P&P grade
6Moz Inferred resources
2.0g/t Inferred grade
the right project – donlin gold
ARGUABLY THE WORLD’S MOST SIGNIFICANT GOLD PROJECT
partnerships grade
growth jurisdiction
longevity
size
5
donlin gold
donlin gold emerging top-tier producer in safe jurisdiction
1.102
0.76
0.58
0.40 0.33
0.19 0.13
1.501
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
Donlin Gold Metates Livengood Merian Rainy River Aurora Haile
Location USA Mexico USA Suriname Canada Guyana USA
Owner(s) NOVAGOLD (50%)
Barrick (50%)
Chesapeake (100%) ITH Mines (100%) Newmont (100%) New Gold (100%) Guyana Goldfields
(100%)
Romarco (100%)
Pro
jecte
d A
nn
ual
Go
ld P
rod
ucti
on
(millio
ns o
f o
un
ces)
THE LARGEST PROJECTED GOLD PRODUCER AMONG DEVELOPMENT PROJECTS
6 Notes: Donlin Gold data as per Donlin Creek Gold Project Alaska, USA, NI 43-101 Technical Report on “Updated Feasibility Study”, effective November 18, 2011, as amended January 20, 2012 (the “second updated feasibility study”). Represents 100% of measured and indicated resources of which NOVAGOLD’s share represents 50%. Measured and indicated resources 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 . 1) Projected annual gold production during first five full years of mine life; 2) Projected annual gold production during full life of mine.
the right project – donlin gold
HIGH GRADE OPEN PIT MINE
partnerships grade
growth jurisdiction
longevity
size
7
donlin gold
DONLIN GOLD’S GRADE IS AMONG THE HIGHEST COMPARED TO WORLD’S
BIGGEST PRODUCERS
donlin gold expected to emerge as one of the highest-grade gold producers
8 Notes: Donlin Gold data as per the second updated feasibility study effective November 18, 2011, as amended January 20, 2012. Represents 100% of measured and indicated resources of which NOVAGOLD’s share represents 50%. 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 - 2013 annual average grade per tonne (combined proven & probable reserves and measured & indicated resources) for open-pit and underground material as per public filings.
2.66
2.24 2.14
1.88 1.81
1.44
1.32
1.04 0.98
0.81 0.78
0.00
0.50
1.00
1.50
2.00
2.50
3.00
AgnicoEagle
Donlin Gold Polyus Gold Fields AngloGoldAshanti
Barrick Harmony Eldorado Goldcorp Yamana NewmontDonlin
Gold
M&I Au Grade (g/t)
the right project – donlin gold
SUBSTANTIAL EXPLORATION POTENTIAL
partnerships grade
growth jurisdiction
longevity
size
9
donlin gold
MULTIPLE DRILL PROSPECTS AND TARGETS EXIST ALONG 8KM TREND
donlin gold substantial exploration potential
10
▶ Potential to expand current open-pit
resources along strike and at depth
▶ Good potential to discover meaningful
deposits outside current mine footprint
• Reserves and resources are contained
within just 3 km of an 8 km long district
▶ Between 2002 and 2010, drilling programs
more than doubled the mineral endowment
▶ Inferred mineral resource: 6 million ounces
of gold mainly within the resource pit shell
• Upside potential to project economics
0
2
4
6
8
10
12
14
16
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1997 1999 2001 2003 2005 2007 2009 2011 2013
why gold? no new and substantial discoveries
11 Notes:
Data as per SNL MEG’s MineSearch database, Company reports, SNL MEG estimates. Thomson Reuters. A gold discovery of 5 million ounces or
more is considered significant. Number of discoveries data not yet available for 2013 and 2014.
Nu
mb
er
of
Go
ld D
isco
veri
es
Gold Discovered
Exploration Budget (US$M)
2012 highest year on
record for
exploration
spending and first
year in over two
decades with no
discoveries
DESPITE RECORD HIGH EXPLORATION SPENDING LEVELS THE GOLD INDUSTRY
HAS EXPERIENCED A RECENT DROP IN DISCOVERIES
the right project – donlin gold
27 YEAR MINE LIFE
partnerships grade
growth jurisdiction
longevity
size
12
donlin gold
z
donlin gold strong cash flow at today’s gold prices
13 Notes:
Donlin Gold estimates as per the second updated feasibility study effective November 18, 2011, as amended January 20, 2012
1) Based on Donlin Gold’s projected first five full years of production.
2) Pre-tax cash flow estimate.
$768/oz1
$1.0B+
annual cash flow1,2
MARGIN ALL-IN
SUSTAINING COST
GOLD PRICE
$1,300/oz
1.5M/oz annual production1
$532/oz1
$6.2B
$9.2B
$11.6B
$14.6B
$19.2B
$27.0B
0
5,000
10,000
15,000
20,000
25,000
30,000
$1,200 $1,350 $1,500 $1,700 $2,000 $2,500
NP
V (
US
$ i
n m
illi
on
s)
Gold Price (US$)
NPV at 0% NPV at 5%
NPV INCREASES ~20X WITH ~2X INCREASE IN GOLD PRICE
donlin gold has exceptional leverage to gold
▶ Project has a positive return
that increases substantially
with higher gold prices
▶ Good payback at a
broad range of gold prices
▶ Significant exploration upside
on the mineralized trend
14 Notes:
Donlin Gold estimates as per the second updated feasibility studyeffective November 18, 2011, as amended January 20, 2012 . All dollar figures are in USD and reflect after-tax net present value (at a 0% and 5% discount
rates) of the Donlin Gold project as of 1/1/2014. At a 5% discount rate, the net present value is: $547 m @ $1,200 gold; $1,922m @ $1,350 gold; $3,147m @ $1,500 gold; $4,581 m @ $1,700 gold; $6,722 m @ $2,000 gold;
and $10,243 m @ $2,500 gold. Project development costs prior to 1/1/2014 are treated as sunk costs.
27year mine life
the right project – donlin gold
LOCATED IN ALASKA, ONE OF THE FEW SAFE MINING JURISDICTIONS
partnerships grade
growth jurisdiction
longevity
size
15
donlin gold
donlin gold located in a favorable jurisdiction
M&I Gold Resource
>30 million oz.
>10 million oz.
>4 million oz.
Donlin Gold: 39.0 M oz.
Livengood: 15.7 M oz.
Metates: 19.0 M oz.
Haile: 4.0 M oz.
Aurora: 6.5 M oz.
Rainy River: 6.2 M oz.
Notes:
Donlin Gold data as per the second updated feasibility study effective November 18, 2011, as amended January 20, 2012 . Peer group resource data from RBC Capital Markets Research, focusing on large, open pit, gold focused
development projects. 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.
1) Source: Canaccord Genuity Research, “Don’t Fear the Reaper,” January 8, 2013. This report ranks each of the top twenty gold-producing countries in terms of jurisdictional safety.
2) Newmont reports "Mineralized Material" as defined by SEC Industry Guide 7 for its Merian gold project as oppose to an "M&I Gold Resource" as defined by NI 43-101.
Jurisdictional Considerations1
Safest Somewhat Safe Unranked Less Safe Riskiest
16
Hycroft Mine Expansion:
24.3 M oz.
Rosia Montana: 17.1 M oz.
A REMARKABLE RESOURCE AMONG EMERGING OPEN-PIT DEPOSITS
Merian: 4.2 M oz.2
Donlin Gold located in Alaska, one of
the safest jurisdictions in the world with
history of successful mining
development
ALASKA HAS A GROWING NATURAL RESOURCES SECTOR
alaska a resource-rich state with an established rule of law
▶ Alaska is the second largest U.S. gold-
producing State
▶ Well-defined permitting process
▶ Four large precious metals mines, one
coal mine & one base metal mine
▶ Numerous small-scale mines
▶ Natural resource projects integral to the
State’s economy
▶ Strong and time-tested community support
17
the right project – donlin gold
STRONG PARTNERSHIPS WITH NATIVE CORPORATIONS
partnerships grade
growth jurisdiction
longevity
size
18
donlin gold
“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, Vice President of
Calista Corporation (mineral owner)
STRONG AND TIME-HONORED RELATIONSHIPS WITH STAKEHOLDERS
"Since 1995, Donlin Gold has worked constructively
in our region and I know our partnership will benefit
our shareholders for many generations. Today's
agreement sets the basis for a long and productive
relationship that with construction of the mine will
provide jobs and financial value to the shareholders
in our 10 villages.”
– Maver Carey, President & CEO of
The Kuskokwim Corporation (surface owner) 19
donlin gold durable, long-term agreements with native corporations
PROTECT, RESTORE AND CONSERVE ALASKA FISH AND WILDLIFE
NFWF partnership
“We, the Board members of NOVAGOLD, are truly
proud of the fact that our company and NFWF
have come together to create an extraordinary
partnership that can serve as a model for the
sustainable development of natural resources.”
Thomas Kaplan, Chairman
“The lands and waters of Alaska provide a home for
an incredible number of fish and wildlife species.
We applaud this commitment from NOVAGOLD and
Donlin Gold as a significant contribution toward
conserving the wetlands, streams and wild places of
Alaska for future generations.”
Jeff Trandahl, Executive Director & CEO
The partnership supports regional
solutions driven by locals to:
▶ Promote healthy water systems
▶ Improve working landscapes for wildlife
▶ Advance sustainable fisheries
20
NATIVE CORPORATIONS WANT TO LEAD THE ECONOMIC DEVELOPMENT OF THEIR REGIONS
donlin gold mining an integral part of communities
▶ ANCSA established 40 years ago; resolved
legal issues related to Native title claims
▶ Lands valuable for resource potential
selected by Regional Corporations under
ANCSA
▶ Native corporations have an owner’s interest
in the development of the selected lands to
support the economic prosperity of their
shareholders
▶ Mining is compatible and consistent with
subsistence lifestyles
▶ Donlin Gold is located on private land
selected for its resource development
potential
Donlin Gold has the support of the land
owners through a 20+ year relationship
21
donlin gold project permitting is on track
22
1.5Moz/year first five full years1
1.1Moz/year life of mine1
16 years 4 27+ years
EX
PL
OR
AT
ION
&
EN
VIR
ON
ME
NTA
L
ST
UD
IES
PE
RM
ITT
ING
EN
GIN
EE
RIN
G &
CO
NS
TR
UC
TIO
N
OP
ER
AT
ION
WE ARE HERE
HALF WAY THROUGH PERMITTING
1.5Moz/year first five full years1
1.1Moz/year life of mine1
4
Notes: 1) Donlin Gold data as per the second updated feasibility study. Projected average annual production represents 100% of which NOVAGOLD’s share represents 50%.
DEVELOPMENT TIMELINE - ADVANCING TOWARD A CONSTRUCTION DECISION
Federal and State agencies are working cooperatively,
with day-to-day support from Donlin Gold,
to efficiently move the project through the EIS and permitting processes.
Notice of Intent to Prepare EIS
Draft EIS
Final EIS Record of Decision
23
Initial permit applications Submitted: 08/12
Notice of intent Published: 12/14/12
Public scoping period Ended: 03/29/13
Scoping summary document Completed: 08/13
Development of alternatives
Completed: Q2/14
Prepare preliminary draft EIS
Agency review
Prepare draft EIS
Public comment period
Prepare draft final EIS
Agency review
Publish final EIS
Record of decision
HALFWAY THROUGH PERMITTING TIMELINE
donlin gold permitting milestones
2012-2013 2013-2015 2015-2016
THE KIND OF ASSET YOU CAN BUILD A COMPANY AROUND
galore creek a significant copper-gold-silver asset in canada
STRONG copper grade
SIGNIFICANT gold & silver content
GROWING resources
CONSIDERABLE exploration upside
SAFE jurisdiction
24
9Blbs copper
8Moz gold
136Moz silver
0.5% copper
0.3g/t gold
5.2g/t silver
M&I Resources1
Notes:
1) Represents 100% of measured and indicated resources of which
NOVAGOLD’s share represents 50%. Measured and indicated resources
inclusive of proven and probable reserves. See “Cautionary Note
Concerning Reserve & Resource Estimates” and “Reserve & Resource
Base” with footnotes in the appendix.
18year mine life
AMONG HIGHEST COPPER GRADE COMPARED TO NORTH AMERICAN ASSETS
galore creek grade peer comparison
25
P&P + M&I grade (Cu%)
Notes:
Data as per SNL MEG’s MineSearch database, Company reports, SNL MEG estimates.
0.50
0.45
0.42 0.40
0.32 0.30
0.27
0.24
0.21
0.18 0.18
0.00
0.10
0.20
0.30
0.40
0.50
0.60
GaloreCreek
Pebble Rosemont Catface Red Chris Berg SchaftCreek
NewProsperity
KSM MountMilligan
Casino
ENHANCING VALUE WHILE EVALUATING OPPORTUNITIES TO MONETIZE ASSET
galore creek
CURRENT ACTIVITIES
▶ Execute capital efficient work plan incorporating 2012 and 2013
drill results to advance the project toward next-level mine
planning and design
▶ Evaluate mining, waste rock and water management options to
enhance the economics of the project
▶ Ongoing environmental monitoring
26
IN THE COMMUNITY
▶ Bursary award program for Tahltan members pursuing
post-secondary education
▶ Sponsor of the 37th Annual Kilrich/Northern Yukon Native
Hockey Tournament
▶ Sponsor of the Dease Lake Community sporting event
CLEAR FOCUS BEGINS WITH STRONG FUNDING TO EXECUTE ON ALL FRONTS
financial obligations have decreased substantially
27 Notes:
(1) 2014 anticipated budget expenditure disclosed on February 11, 2014. (2) Includes US$105 million in term deposits as of May 31, 2014.
2013 2012 2014
$176M cash and term deposits2
To
tal A
nn
ua
l E
xp
en
dit
ure
($
US
D)
~77% reduction in
expenditures
$129M actual
$38M actual $30M
budget1
26.7%
11.3%
6.9%
2.7% 1.4%
51%
BLUE CHIP INSTITUTIONAL QUALITY INVESTMENT
why NOVAGOLD? excellent and committed shareholder base
28
Institutional
Ownership
80%
held by top
5 shareholders(1)
49%
Notes:
(1) Shareholder positions are based on the latest 13-F filings.
committed to Shareholder Value
Electrum Strategic
Resources LP
Paulson & Co.
Inc
The Baupost
Group, L.L.C.
Tocqueville Asset
Management Sun Valley
Gold, LLC
Other
why NOVAGOLD? why now?
NOVAGOLD offers:
▶ TOP TIER, high-grade assets with excellent exploration upside
▶ SAFEST leverage to a massive gold endowment
▶ PROLIFIC gold production for decades to come
▶ SUPPORTIVE, loyal, and engaged stakeholders
▶ ACCOMPLISHED team in permitting, building & operating large-scale mining assets
▶ STRONG balance sheet
29
In an environment where:
▶ Gold is in a secular bull market
▶ Macroeconomic environment supportive of continued trend toward higher price
▶ Grades are declining
▶ New discoveries are few
▶ Global exploration & development shrinking
▶ Geopolitical risks increasing
novagold.com
appendix
▶ Donlin Gold LLC is the operating company
▶ 50/50 ownership by NOVAGOLD and Barrick Gold
▶ Board of Directors has two representatives from each company
• Chairman rotates every year
• Each company has the right to appoint the Donlin Gold General Manager every
two years
▶ Operates under agreements with Alaska Native Claims Settlement Act (ANCSA)
landowners
• Calista Corporation (Subsurface minerals and surface lease)
• The Kuskokwim Corporation (Surface use agreement)
▶ Project office in Anchorage
• 36 full-time employees and 2 contractors
▶ Strong track record for local hiring
ADVANCING DONLIN GOLD UP THE VALUE CHAIN
donlin gold project overview
31
DONLIN GOLD SLATED TO BE A STATE-OF-THE-ART SIGNIFICANT MINE
donlin gold project highlights
32
Reserves: 33.9 Moz Au (505M tonnes ore)1
Resources: 5.1 Moz M&I (excluding P&P) and 6.0 Moz Inferred1
Mine Life: ~27 years
Production: Year 1-5,1.5 Moz/year; LOM,1.1 Moz/year
Operation: Open-pit, conventional truck & shovel
Milling: 53.5k tonnes/day, sulfide flotation, pressure
oxidation (POX), carbon-in-leach recovery (CIL)
Strip ratio: 5.5 = 2.8B tonnes waste rock
Tailings: Fully lined storage facility
Power: 153MW average site-generated load, fueled by natural gas
transported via a 315-mile pipeline
Logistics: All consumables supplied by Kuskokwim River transportation
system with port near Jungjuk Creek See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve and Resource Base” table with footnotes.
RESOURCES MORE THAN DOUBLED FROM 2006 TO 2008
donlin gold reserve & resource growth
33
16.6
29.4
35.3
37.9 39.0
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
2006 2007 2008 2009 2011
Notes: Donlin Gold data as per NOVAGOLD public documents. Represents 100% of measured and indicated resources of which NOVAGOLD’s share represents 50%. 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.
M&
I A
u R
eso
urc
es (
Mo
z)
39Moz M&I RESOURCES
34Moz P&P RESERVES @ $975/oz
inclusive of
grade of
2.24g/t
And there is opportunity for
continued growth once in
production…
PE
A
Fe
as
ibil
ity S
tud
y
Up
da
ted
Fe
as
ibil
ity S
tud
y
Focused on feasibility-level planning
and more recently permitting
donlin gold expected to provide more than three decades of low cost production LOW OPERATING CASH COSTS AND ALL-IN SUSTAINING COSTS
34
Open-pit mining2 270
Processing 257
G&A, royalties, land & other3 108
Total $635
Open-pit mining2 133
Processing 208
G&A, royalties, land & other3 70
Total $411
Cash Costs1 Per Ounce
First Five Years
Notes:
Donlin Gold estimates as per the second updated feasibility study effective November 18, 2011, as amended
January 20, 2012 .
1) US GAAP cost of sales, excluding depreciation and reclamation
2) Net of deferred costs
3) Based on US$1,200/oz gold price
All-in Sustaining Costs Per Ounce
Cash costs1 635
Sustaining capex 50
Corporate administration 28
Reclamation 22
Total $735
Cash costs1 411
Sustaining capex 83
Corporate administration 21
Reclamation 17
Total $532
Life of Mine
Cash Costs1 Per Ounce
All-in Sustaining Costs Per Ounce
donlin gold
WELL POSITIONED TO SHARE UPFRONT COSTS WITH THIRD PARTIES
Areas US$M1 Opportunities1
Mining 345 Leasing equipment ~$170M
Site preparation/roads 236
Process facilities 1,326 Oxygen plant could be built by third party ~$130M
Tailings 120
Utilities 1,302
Ancillary buildings 304
Off-site facilities 243
Total Direct Costs 3,876
Owners’ cost 414
Indirect Costs 1,405
Contingency 984 Healthy Contingency
Total Owner’s & Indirect Costs, and Contingency
2,803
Total Project Cost 6,679 >$1B potential capital reductions
Gas pipeline could be built by third party $834M
1) Represents 100% of project’s capital expenditures 35
ROBUST ECONOMICS HIGHLY LEVERAGED TO GOLD PRICES
donlin gold key performance indicators
36
Gold Price
Unit $1,000/oz $1,200/oz
Base Case
$1,700/oz $2,000/oz $2,500/oz
Average annual
after-tax cash flow
(first full five years)
$M 670 950 1,500 1,785 2,185
Average annual
after-tax cash flow (LOM)
$M 350 500 815 990 1,275
NPV (5%) after-tax1 $M (1,340) 550 4,580 6,720 10,240
NPV (0%) after-tax1 $M 2,100 6,200 14,620 19,250 26,975
IRR after-tax1 % 2.3 6.0 12.3 15.1 19.1
Payback period Years 19.1 9.2 5.3 4.4 3.5
Notes:
Donlin Gold estimates as per the second updated feasibility study effective November 18, 2011, as amended January 20, 2012. All dollar figures are in USD and reflect after-tax net present value (at a 0% and 5% discount
rates) of the Donlin Gold Project as of 1/1/2014. At a 5% discount rate, the net present value is: $547 m @ $1,200 gold; $4,581 m @ $1,700 gold; $6,722 m @ $2,000 gold; and $10,243 m @ $2,500 gold. Project development
costs prior to that date are treated as sunk costs.
All amounts in US dollars
1) NPVs and IRRs as at January 1, 2014. Project development costs prior to that date are treated as sunk costs.
PROCEEDING ON SCHEDULE AS PER EIS TIMELINE
donlin gold current work
▶ Maintaining strong working relationships with the agencies and providing input
throughout the permitting and EIS processes
▶ EIS process and current activities
• Alternatives development addressing mine, pipeline and transportation
components was completed in Q1 2014
• PDEIS well underway including defining the baseline conditions and
analyzing consequences expected to be completed around year-end 2014
• Draft EIS anticipated mid-year 2015
▶ Major permit application submittals and agency reviews – well underway
• Air quality
• Water discharge and usage
• Pipeline plan of development
• Wetlands
• Dam safety
37
LARGE PROJECTS HAVE BEEN SUCCESSFULLY PERMITTED
permitting in the U.S.
38
Project Name Location Metal Time Description
Red Dog Alaska Lead/zinc ~2 years
• Expansion
• EIS completed in 2009
• Development started on schedule in 2010
Fort Knox Alaska Gold ~3 years • Expansion – new heap leach facility
• Permitting completed in 2007
Pogo Alaska Gold ~3 years
• New mine
• Permitting completed in 2004
• Operations began in 2006
Arturo Nevada Gold ~4 years
• Major pit expansion
• New waste rock and heap leach facilities
• EIS/ROD completed in May 2014
Rochester Nevada Silver ~1 year • Expansion – new heap leach & mine reopening
• EA/permitting completed in 2011
Cortez Nevada Gold ~3 years • Major pit expansion
• EIS/permitting completed in 2008/2009
Goldstrike Nevada Gold ~2 years
• Major pit expansion
• Waste rock and tailings facilities
• ROD approving the project was in 2009
Hycroft Nevada Gold ~2 years • Reactivation
• EIS/permitting completed in 2012
Long Canyon Nevada Gold ~3 years
(anticipated)
• New pit, heap leach, mill and tailings facility
• Draft EIS issued in March 2014
Pan Nevada Gold ~2 years • New open pit and heap leach
• EIS/permitting completed in 2013
Haile South Carolina Gold ~4 years
(anticipated)
• New mine on historic property
• Open pits, processing and tailings facilities
• Final EIS issued July 2014, ROD anticipated November 2014
GALORE CREEK, AN EXCEPTIONAL ASSET
galore creek project overview
39
▶ Galore Creek Mining Corporation (GCMC) is the operating company
▸ 50/50 ownership by NOVAGOLD and Teck Resources Inc.
▸ Management Committee has two representatives from each company
• Chairman rotates every year
▸ Project is located within the Tahltan Nation Territory and operates under a
Participation Agreement
▸ All mineral claims are on Crown land
▸ Project office in Vancouver
• Abundance of technical strength to draw from within Teck
▸ Strong track record for Tahltan hiring at project site as well as contracting and
procurement with Tahltan businesses and joint ventures
GALORE CREEK TO BE ONE OF CANADA’S LARGEST COPPER MINES
galore creek project highlights
40
Reserves: 6.8 Blb Cu; 5.5 Moz Au; 102 Moz Ag 1
Resources: 8.9 Blb Cu; 8.0 Moz Au; 136 Moz Ag (inclusive of reserves) 1
Mine Life: ~18 years
Production: Year 1-5, 400 Mlb/year Cu; LOM, 340 Mlb/year Cu
Operation: Open-pit, conventional truck & shovel
Milling: +80k tonnes/day, conventional crush, grind, and Cu/Au/Ag flotation
concentration, plant located in West More Valley
Strip ratio: 2.2 = 1.1B tonnes waste rock
Tailings: storage facility located in West More Valley next to plant
Power: BC Hydro currently constructing the Northwest Transmission
Line from near Terrace, BC to Bob Quinn to promote remote
industrial development, Galore Creek to tie into the NTL
Logistics: Port facilities to be built near Stewart, BC Notes:
See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve and Resource Base” table with footnotes.
ROBUST ECONOMICS HIGHLY LEVERAGED TO METAL PRICES
galore creek key performance indicators
41
Unit
Metal Prices
Copper
Gold
Silver
US$/lb
US$/oz
US$/oz
2.00
900
15.00
2.65
1,100
18.50
3.00
1,100
20.00
3.50
1,200
25.00
4.00
1,300
30.00
LOM after-tax cash flow $M 1,514 5,118 6,641 9,223 11,812
NPV (5%) after-tax1 $M (969) 988 1,794 3,134 4,458
NPV (7%) after-tax1 $M (1,431) 137 778 1,837 2,877
IRR after-tax1 % 2.4 7.4 9.2 11.9 14.3
Payback period Years 13.2 7.8 6.1 4.1 3.3
Notes:
Galore Creek estimates as per the 2011 Pre-Feasibility Study. All dollar figures are in CAD. See “Cautionary Note Concerning Reserve & Resource Estimates” and
“Reserve & Resource Base” with footnotes in the appendix.
1) NPVs and IRRs as of two years prior to significant project spend. Project development costs prior to that point are treated as sunk costs.
All amounts in CAD dollars
INDUSTRY LEADERS TO BRING DONLIN GOLD THROUGH PERMITTING & BEYOND
the NOVAGOLD team
42
Gregory Lang
President & CEO
▸ Former President of Barrick Gold North America ▸ 35 years experience building & operating major mines ▸ Intimate knowledge of Donlin Gold
David Deisley
Executive Vice President and
General Counsel
▸ Former EVP and General Counsel of Goldcorp ▸ Regional General Counsel for Barrick Gold North America ▸ Extensive track record in project permitting, corporate social responsibility,
mergers and acquisitions and corporate development ▸ 25 years of mining industry experience
David Ottewell
Vice President and Chief
Financial Officer
▸ Former VP and Corporate Controller of Newmont Mining Corporation ▸ 25 years of mining industry experience ▸ Diverse experience in all facets of financial management, from mine operations
to executive corporate financial management of premier gold producers
Mélanie Hennessey
Vice President, Corporate
Communications
▸ Held variety of executive and senior IR & corporate communications positions with Goldcorp, New Gold, and Hecla Mining Company
▸ Leading NOVAGOLD’s internal and external communications functions
Ron Rimelman
Vice President, Environment,
Health, Safety & Sustainability
▸ 25+ years of environmental experience, managing environmental impact assessments and permitting activities world-wide
▸ Leadership role on mine permitting and NEPA evaluations for mine projects in Alaska since 1993
Richard Williams
Vice President, Engineering
and Development
▸ Former Project Director for the Pueblo Viejo project in the Dominican Republic ▸ 30 years of experience developing and operating major mines world-wide ▸ Particular expertise in autoclave technology
MANAGEMENT
NOVAGOLD board of directors
43
Dr. Thomas Kaplan
Chairman
Chairman and CIO of The Electrum Group LLC, a privately held natural resources
investor that controls a diversified portfolio of precious and base metals assets
Sharon Dowdall Former Chief Legal Officer and Corporate Secretary with Franco-Nevada, transforming an
industry pioneer into one of the most successful precious metals enterprises in the world
Dr. Marc Faber Publishes a monthly investment newsletter entitled The Gloom, Boom & Doom
Report and is the author of several books
Greg Lang
President & CEO
Former President of Barrick Gold North America, 35 years experience building & operating major mines with intimate knowledge of Donlin Gold
Gil Leathley COO and Director of Sunward Resources, former Senior Vice President and Chief
Operating Officer of the Company
Igor Levental President of The Electrum Group LLC, former VP of Homestake Mining and International
Corona Corp.
Kalidas Madhavpeddi Former Executive with Phelps Dodge
Gerald McConnell Former Chairman and CEO of NOVAGOLD, CEO of Namibia Rare Earths Inc.
Clynton Nauman CEO of Alexco Resources, formerly with Viceroy Gold and Kennecott Minerals
Rick Van Nieuwenhuyse CEO of NovaCopper, founder and former CEO of NOVAGOLD
Anthony Walsh Former President and Chief Executive Officer of Miramar Mining Corporation, which in
2007 was sold to Newmont Mining Corporation.
COPPER
Tonnage
Mt
Grade*
%Cu
Metal content
Mlbs
NOVAGOLD share**
Mlbs
Reserves (100%)2
Proven 69.0 0.61 900.0 450.0
Probable 459.1 0.58 5,900.0 2,950.0
P&P 528.0 0.59 6,800.0 3,400.0
Resources (100%)4 inclusive of reserves
Measured 108.4 0.48 1,147.0 573.5
Indicated 706.3 0.50 7,786.0 3,893.0
M&I 814.7 0.50 8,933.0 4,466.5
Inferred 346.6 0.42 3,230.0 1,615.0
GOLD Mt
g/t
Moz
Moz
Reserves (100%)2
Proven 69.0 0.52 1.15 0.58
Probable 459.1 0.29 4.30 2.15
P&P 528.0 0.32 5.45 2.73
Resources (100%)4 inclusive of reserves
Measured 108.4 0.48 1.70 0.85
Indicated 706.3 0.28 6.40 3.20
M&I 814.7 0.31 8.00 4.00
Inferred 346.6 0.24 2.70 1.35
SILVER
Mt
g/t
Moz
Moz
Reserves (100%)2
Proven 69.0 4.94 11.0 5.5
Probable 459.1 6.18 91.2 45.6
P&P 528.0 6.02 102.2 51.1
Resources (100%)4 inclusive of reserves
Measured 108.4 4.10 14.30 7.15
Indicated 706.3 5.38 122.10 61.05
M&I 814.7 5.21 136.40 68.20
Inferred 346.6 4.28 47.73 23.87
At April 30, 2012
Donlin Gold (NOVAGOLD 50%)
Galore Creek (NOVAGOLD 50%)
GOLD
Tonnage
Mt
Grade*
g/t
Metal content
Moz
NOVAGOLD share**
Moz
Reserves (100%)1
Proven 7.7 2.32 0.57 0.29
Probable 497.1 2.08 33.28 16.64
P&P 504.8 2.09 33.85 16.93
Resources (100%)3 inclusive of reserves
Measured 7.7 2.52 0.63 0.31
Indicated 533.6 2.24 38.38 19.19
M&I 541.3 2.24 39.01 19.50
Inferred 92.2 2.02 5.99 3.00
NOVAGOLD reserve/resource table
44
reserve/resource table (con’t)
Resources (100%)5,6
Tonnage
Grade*
Metal content
NOVAGOLD share**
COPPER Mt %Cu Mlbs Mlbs
Inferred 53.7 0.50 592.0 414.4
GOLD Mt g/t Moz Moz
Inferred 53.7 0.73 1.26 0.88
SILVER Mt g/t Moz Moz
Inferred 53.7 10.60 18.36 12.85
Copper Canyon (NOVAGOLD 70%)
t = metric tonne
M = million
g/t = grams/tonne
* Reserve grade is diluted; resource
grade is in situ.
** NOVAGOLD share net after earn-ins
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
45
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 Qualified Person(s) Most Recent Disclosure & Filing Date
Donlin Gold Tony Lipiec, P. Eng., AMEC Donlin Creek Gold Project
Gordon Seibel R.M. SME, AMEC Alaska, USA
Kirk Hanson P.E., AMEC NI 43-101 Technical Report on Second Updated Feasibility Study amended filing on January 23, 2012
Galore Creek 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.
reserve/resource table (con’t)
46
47
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
Mélanie Hennessey
VP, Corporate Communications
Erin O’Toole
Analyst, Investor Relations
contact us