donlin gold site tour 2014
DESCRIPTION
For more information on NOVAGOLD and Donlin Gold, please visit www.novagold.com or www.donlingold.comTRANSCRIPT
August 2014
Donlin Gold
Project Overview
disclaimer This presentation is confidential and was prepared exclusively for the benefit and internal use of the recipient.
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 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 f inancing 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 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 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.
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. 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.
donlin gold management
Stanley Foo
President/General
Manager
30+ years mining industry experience in exploration, mine geology, operations management, project management and
permitting; 12 years mine operations experience in NV including superintendent roles at Cortez and Bald Mtn;
15 years in Alaska in project management and permitting; Previous Project Manager roles with Donlin 1997-99, 2005-
2007, served on Donlin Gold LLC board 2008-2010.
James Fueg
Study Manager
Led Donlin Gold’s recent feasibility studies and coordinates all engineering and technical work for project;
20+ years experience in mining, exploration and environmental science; 16 years in Alaska; at Donlin since 2004.
Robert Nick Enos
Environmental and
Permitting Manager
Leads permitting and environmental management for project; primary contact for reg. agencies; 20 years experience in
Alaska in geology, environmental science and permitting management; Previous experience includes Greens Creek,
Calista Corp., as environmental/permitting consultant; Joined Donlin in 2005.
Kurt Parkan
External Affairs
Manager
Leads Donlin Gold’s community affairs, communications, government relations and corporate social responsibility
functions; Nearly 30 years public affairs experience in Alaska; Previous roles: External Affairs Director of Nature
Conservancy of Alaska, Deputy Commissioner for Alaska Department of Transportation and Public Facilities, Special
Assistant to the Governor, Legislative Aide and as staff for Alaska House of Representatives Finance Committee.
Meg Day
Human Resources
Manager
22 years human resources experience in the mining industry including 17 years in Alaska; Served in various senior
management positions in Alaska, Utah and Washington and has been involved in the start up of several mines. Serves
on Alaska Miners Association HR Committee, Society of HR Management and Advisory Board member of University
of Alaska.
Jan Halstead
Administrative and
Finance Manager
25+ years accounting and financial analysis experience in construction, investment, telecommunications;
Responsible for growth and development of Accounting, Administration, Purchasing and Contract functions for Donlin
Gold LLC.
table of contents
Part 1 An Introduction to Alaska
Part 2 History of the Project
Part 3 Community Engagement
Part 4 Environmental
Part 5 Permitting
Part 6 Mining
Part 7 Process
Part 8 Engineering/Infrastructure
Part 9 Resource Upside
Part 10 Capital & Operating Cost
Donlin Gold
Project Overview
Part 1:
An Introduction to Alaska
2
Alaska: the last frontier
The project site is located in the hills approximately 20
kilometers north of the village of Crooked Creek on the
Kuskokwim river, Anchorage lies 450 kilometers to the
east
190 million acres of Federal,
State, and Native lands open
for mineral-related activities
2
motto: north to the future Purchased from Russia in1867 for $7.2 million
Klondike Gold Rush brought thousands to Alaska
Became 49th state in 1959
Discovery of oil in Prudhoe Bay in 1968 created the modern
Alaska we know today
65% of land in federal ownership
3
demographics Population of 732,000 - ranked 47th in USA
61% Anchorage, 13% Fairbanks, 11% Panhandle, 15% Rural/Bush
Diversity
72% White, 13% Native, 6% Hispanic, 5% Asian and 4% Black
YK region ~90% Alaska Native
1/3rd of Alaskans have no access to public roads
Yukon-Kuskokwim Region one of the nation’s poorest regions
Red state politically with Republicans and Democrats generally
supportive of resource development
4
key events in Alaska
5
1968 – Discovery of North Slope oil
1971 – Alaska Native Claims Settlement Act (ANCSA) enacted
1977 – Trans Alaska Pipeline System (TAPS) completed
1981 – Alaska National Interest Lands Conservation Act (ANILCA)
enacted
ANCSA corporations Alaska Natives relinquished title claims in exchange for right to select
lands
13 Regional Corporations – granted rights to select lands valuable for
their natural resources
70% of natural resource revenues shared among all Regional
Corporations
Surface lands that were traditionally used for subsistence purposes were
selected by and granted rights to village corporations
TKC was formed with the merger of 10 village corporations
Individuals residing in defined regions and villages when ANCSA enacted
became shareholders in corporations based on residence
Shares can be transferred to descendants or gifted
Some corporations have adopted structures to provide shares to
“descendants”
6
government
Executive Branch
Governor
Lt. Governor
Attorney General
Agencies
Fish & Game
Environmental
Conservation
Natural Resources
7
Juneau / Anchorage
Juneau home to the
legislature and governor
residence
Federal and state agencies in
Anchorage and Juneau
Legislature
Republican controlled, split
by geography and ideology;
Urban-Republican; Rural-
Democrat but organize with
Republicans
federal and state representatives
8
SUPPORTIVE OF DEVELOPING RESOURCES FOR ALASKA'S ECONOMIC PROSPERITY
Governor Sean Parnell Former Lt. Governor, State Senator
Former lawyer with Patton Boggs
Former Conoco executive
Champion of Alaska natural resources industry (oil and gas
tax changes, and Roads to Resources)
Senator Lisa Murkowski Re-elected in write-In campaign
Ranking Republican on Energy & Natural Resources
Committee
Supportive of natural resources sector
Senator Mark Begich Followed Senator Ted Stevens in 2008
Former mayor of Anchorage
Mostly supportive of natural resources
Running for re-election this year
Congressman Don Young Elected in 1973
Former chair of the House Natural Resources Committee
Supportive of resource development in Alaska
ALL VERY KNOWLEDGEABLE OF THE MINING INDUSTRY STRONGLY ADVOCATING ITS GROWTH IN ALASKA
Alaska economy
If the flow of federal and petroleum money disappeared overnight, 2/3rds of the jobs for Alaskans would no longer exist
Unemployment stayed below 8% during Great Recession
Unemployment in YK region is chronically high (22%+)
9
10
Alaska budget and trust fund
Oil drives the budget
Tax credits to support exploration, development and
vocational education
Competitive corporate taxes and no individual state income
or sales tax; ranked 4th in U.S. for lowest tax burden
Alaska permanent fund (primarily contributions from the
resource sector)
$42B savings account
Used to pay dividends to each Alaska resident - ranged
from $845 to $3,200 in the last decade
Constitutional budget reserve - $10.6B to help fund state
budget 10
an educated workforce
Four decades of oil & gas production has developed a skilled workforce in Alaska
Alaska offers a quality of life attractive to many looking for jobs
Large engineering, construction, transportation, and logistics companies able to
service resource companies
Workforce development initiatives in regional and remote communities
Education and training programs
University of Alaska – earth sciences, geology, engineering, minerals and
mining
Center for Mine Training – occupational fields workforce training
University of Alaska Fairbanks – Community and Technical College
State of Alaska – 22 job centers to connect employers to job seekers
Bethel – Yuut Elitnaurviat (YE) The People’s Learning Center, part of the
State of Alaska’s Regional Training Centers, provides training and education
in the Yukon-Kuskokwim Delta Region
TKC and Donlin Gold support creating/funding a training center in Aniak
11
ACTIVE MINERAL INDUSTRY CORE EDUCATION & TRAINING
top employers
4,000+
Providence Health Services
3,000+
Wal-Mart
2,000+
ASRC Energy Services, Trident Seafoods
1,000+
BP Exploration, NANA, CH2M Hill, Alaska Airlines, GCI, FedEx,
ConocoPhillips
500+
Fort Knox Gold mine, Red Dog mine, UPS, Wells Fargo,
Alyeska Pipeline, Costco
Less than 500
Kensington mine, Pogo Gold mine, Greens Creek mine
12
economic challenges and
state issues
High costs, climate, distance to
markets, lack of infrastructure, local
workforce skills
Geographic cost differences
Anchorage 1.00 - Bethel 1.53
Food for a week: $123 vs $251
Gasoline ($/gal): 3.96 vs 7.06
Impacts of federal budget cuts - highest
per capita federal dollars in the nation
13
Oil Taxes
Decline in output
Underutilization of pipeline
capacity
Alaska National Wildlife Reserve
Infrastructure
Roads, oil & gas pipelines, power
transmission lines
Shift of Bush population to Anchorage
The Pebble Project
Aging population – Health Care
the Alaska advantage
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
Resource-sector associations
Resource Development Council of Alaska
Alaska Miners Association
Council of Alaska Producers
Alaska Support Industry Alliance
14
a thriving and growing mining
sector
15
2ND LARGEST GOLD PRODUCING STATE AFTER NEVADA
A high level of
predictability,
commitment and
stability
Major mines create
employment in Alaska
Fort Knox 630
Red Dog 639
Greens Creek 400
Kensington 306
Pogo 320
Usibelli 140
Source: Alaska Miners Association – The Economic Benefits of Alaska’s Mining Industry, January 2014
mining is a growing force in
Alaska’s economy
16
2013 PROVIDED SIGNIFICANT BENEFITS FOR THE STATE
Mining jobs in Alaska - includes 4,600 direct and 4,500 indirect jobs
Total direct and indirect payroll - average annual wage $100,000 – twice that of any
other sector in Alaska’s economy
State Government-related revenue through rents, royalties, fees and taxes
Payments to Alaska Native Corporations
Local government revenue through property taxes
9,100
$630M
$150M
$144M
$17M
Source: Alaska Miners Association – The Economic Benefits of Alaska’s Mining Industry, January 2014
Alaska minerals commission
Funding infrastructure development
Comprehensive permitting reform to create timely and efficient permitting process
DNR oversees all state agency permitting and coordinates with federal agencies
Experienced key staff focused on large mining projects as a high priority
Over the past decade two new operations (Pogo and Kensington) and three
expansions (Red Dog, Fort Knox, and Greens Creek) have been successfully
permitted
Publishing geological data on Alaska’s mineral potential
Leadership role in state assumption of water discharge permitting from EPA
Accelerating state land entitlement conveyances in accordance with the Alaska
Statehood Act
Reestablishing the Citizens’ Advisory Commission on Federal Areas
Asserting and defending public access to roads, trails, and navigable waterways
Funding University of Alaska mineral engineering and geology programs
17
OVER THE PAST 27 YEARS KEY RECOMMENDATIONS WERE ACTED UPON
THESE INITIATIVES HAVE SENT A CLEAR MESSAGE TO THE MINERAL INDUSTRY THAT
ALASKA WANTS A SUSTAINABLE GLOBALLY COMPETITIVE MINING INDUSTRY
state supporting development
of resource industry
New oil tax structure adopted in 2013 to encourage further investment
Alaska Exploration Incentive Credit Program – up to $20 million deduction over a 15-
year period for new mines
Roads to Resources Program (R2R) – transportation initiatives to support the
development of natural resources
Demonstrates the will of the State to work with companies in facilitating cost-effective
access to various projects and operations in Alaska
Red Dog mine port & access road initially financed by Delong Mountain
Transportation System and now owned by State Economic Development Agency
Ambler project - earlier-stage initiative in evaluating a 225 mile road to access the
Ambler mining district
Legislative approval of financing for Bokan-Dotson Ridge ($145 million) and
Niblack ($125 million) projects
18
2014 ENHANCED INVESTMENT IN THE STATE BY THE OIL AND GAS INDUSTRY
investing in mining sector
19
INCREASED DEVELOPMENT FUNDING IN 2013
Mine construction and other capital investments
Gross production value from Red Dog, Greens Creek, Fort Knox, Pogo, Nixon Fork, Kensington, Usibelli Coal mines, placer mines, and rock/sand/gravel operations
Export value, or 36% of Alaska’s total export in 2012
$250M
$3.4B
$1.6B
Exploration investment or $2.6B since 1981 $180M
Source: Alaska Miners Association – The Economic Benefits of Alaska’s Mining Industry, January 2014
community
support
state
support
business
capacity workforce
development
skilled labor
resource rich &
exceptional geological potential
ALASKA
a safe
jurisdiction
20
Alaska: the right location
FUTURE ECONOMIC OPPORTUNITY AND PROSPERITY
Donlin Gold
Project Overview
Part 2:
History of the Project
surrounding region
Donlin Gold
22
75 COMMUNITIES WITH POPULATIONS OF 50-600
project area of influence
23
LARGER THAN UTAH OR IDAHO - 88,0002 MILES
project history
Placer gold discovered at Snow Gulch in 1909
Small-scale placer gold production has continued to the present
Sub-surface rights held by Calista Corporation, surface rights held by
TKC
First substantial drilling started in 1988, by WestGold
Placer Dome explored the property from 1995 through 2000
Donlin Creek Joint Venture (DCJV), between Placer Dome and
NOVAGOLD, was formed in 2001
In 2007, after Barrick’s acquisition of Placer Dome, JV partners formed
Donlin Creek LLC (now Donlin Gold LLC), a 50:50 joint operating
company that has aggressively drilled and studied the project
Feasibility Study Update 2 (FSU2), completed at the end of 2011
Current Reserves & Resources based on this study
Donlin Gold Board approved FSU2 in July 2012, gave authorization to
commence permitting 24
project structure
Donlin Gold LLC is the operating company
Operates under agreements with Alaska Native Claims Settlement
Act (ANCSA) landowners
Calista Corporation (“Calista”)
Land selected by Calista for its resource development potential
Subsurface minerals and surface lease
The Kuskokwim Corporation (“TKC”)
Surface Use Agreement (“SUA”)
Project office in Anchorage
37 full-time employees in Anchorage and 9 contractors
Field offices in Bethel and Aniak
Camp at site maintained year-round 25
donlin gold llc agreement
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
Chairman has limited casting vote authority
Certain matters require special (60%) or unanimous approval
Owners committed to fund permitting
Upon publication of Draft EIS either party can propose
construction program and budget
Budget deadlock resolution provisions provided for permitting
(expert referral) and construction (offer or buy/sell option)
26
"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)
durable, long-term agreements
with native corporations
27
STRONG AND TIME-HONORED RELATIONSHIPS WITH STAKEHOLDERS
“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)
Calista Mining Lease
Term until April 30, 2031, continues thereafter year-to-year so long as
mining or processing operations carried out continuously
NSR royalty from commercial production
Net Proceeds Royalty (NPR)
Shareholder hiring perference
Scholarships
Bidder’s preference
28
agreements with native
corporations
TKC Surface Use Agreement
Extended to coincide with Calista Mining Lease
Direct compensation through payments for milestones, annual surface use
and mine operation
Consultative approach regarding annual project planning, and preparation of
subsistence harvest plan
Preference for contracts, hiring and training
Scholarships
Exclusive contract for the construction and operations of an upriver port
site
project highlights
Reserves: 33.9 Moz Au (~500M 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 1) See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve and Resource Base” table with footnotes.
29
partnerships grade
growth jurisdiction
longevity
size
DONLIN
GOLD
30
donlin gold - the right project
ARGUABLY THE WORLD’S MOST SIGNIFICANT GOLD PROJECT
Donlin Gold
Project Overview
Part 3:
Community Engagement
communications
2 32
ENGAGING COMMUNITIES THROUGH DIFFERENT MEDIUMS
community engagement
Active outreach effort to more than 60
remote communities in the region and along the pipeline route
Average population is less than 200
Frequent village meetings to update stakeholders
Donlin Gold community offices in Bethel and Aniak
Fluent Yup’ik speakers on staff to present information and participate in local discussions
Project summary video narrated in both English & Yup’ik
Mine and permitting planning take into account input from communities
33
health & safety
Over 1.8 million man-hours (6+ years) without a lost-time incident (LTI)
Training for safety awareness and emergency preparedness by all employees at site and in Anchorage annually
Strong safety culture for employees and for the region
Safety Culture: “Every person going home safe and healthy everyday”
34
workforce development
Promote and enrich youth education School visits Scholarships
Encourage local hire throughout the mine life Training facilities and internships Talent bank
On-site workforce has primarily been Calista shareholders or descendants
Shift schedule promotes a healthy lifestyle by maintaining a good job and practicing a subsistence way of life
35
academic & trades decathlon
Donlin Gold partnered with the Kuspuk School District, Alaska Construction Academies, and EXCEL Alaska to sponsor a youth Academic and Trades Decathlon in Aniak
145 students from 6 Yukon Kuskokwim school districts Learned various trades from
experts Held individual competitions in
math, science, geography and keyboarding
Team competitions combined sports, design and academics, with events such as a banner design contest and volleyball and basketball games
36
community investment
Crooked Creek capacity
building/sustainability
Bering Sea Elders Advisory Group
Kuskokwim River Watershed Council
Tundra Women’s Coalition
Drew’s Foundation (Suicide Prevention)
Best in the West Small Business Incentive
Grants
Iditarod & Iron Dog sled races
CULTURAL PRESERVATION, ENVIRONMENTAL PROTECTION, COMMUNITY WELLNESS,
EDUCATION
K-300 sled dog race
Aniak Interior Rivers State Fair
Donlin Gold Classic Basketball
Tournament
Bethel Search and Rescue
Summer boat safety
Winter snow machine safety
Clean Up Green Up
37
current community activities
38
WORKING TOGETHER AND FORMING LASTING RELATIONSHIPS
Donlin Gold
Project Overview
Part 4:
Environmental
environmental management
Water Management
Waste Rock
Management Design for Closure
40
water management
Objectives
All discharge meet Alaska water quality standards at point of
discharge
Ensure an adequate supply of water to the process plant
Minimize build-up of water in the Tailings Storage Facility (TSF)
Meet pit slope depressurization requirements
41
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
January February March April May June July August September October November December
Pre
cip
itati
on
(in
ch
es)
climate and hydrology
Average annual precipitation: 19.6” (499 mm)
42
baseline water quality
Water Quality Monitoring:
Establish baseline data to provide defensible documentation in
support of permitting
Support project design, including water management, process
design, treatment design, and closure planning
Develop the baseline for evaluation of potential environmental
impacts
43
Lewis Pit Waste Rock
Facility
Upper Contact Water Pond Lower Contact Water Pond
Overburden Stockpile
ACMA Pit with Backfill
Tailings Storage Facility
Fresh Water Pond
Ore Stockpile Mill
Tailings Dam
44
water management - layout LIFE OF MINE TAILINGS STORAGE CAPACITY 27 YEARS+
water balance
45
Developed comprehensive water balance taking into account full range of climatic conditions during life of mine and closure
Maximizes water reuse to the extent practicable while providing for discharge flexibility for excess water
Water management plan balances environmental concerns with operational needs
All data and analysis developed with input from Federal and State agencies; ensures will meet permitting requirements
waste rock management
Objectives
Geochemical characterization of waste rock
Segregation and isolation of Potentially Acid Generating (PAG) rock
Non-Acid Generating (NAG) rock managed to address predicted metal leaching
Maximize concurrent reclamation and backfill opportunities
46
waste rock management
WRMC Mt % Disposal
NAG 2,519 93 Waste Rock Facility (WRF)
PAG 5 79 3 Blended in WRF
PAG 6 123 4
Isolated cells in WRF / ACMA
backfill
PAG 7 2 0.1
Low-grade ore stockpile / ACMA
backfill
Total 2,723 47
CATEGORIZED AND PLACED BY ACID-GENERATING POTENTIAL
closure - design
Objectives
Minimize footprint
Maximize concurrent reclamation
Manage Waste Rock Facility for long-term stability
Minimize accumulation of water in facilities
Pit lake is key to closure water management
48
closure - pit lake
49
FORMATION WILL TAKE ~60 YEARS
closure -tailing storage facility
TSF after dry closure and reclamation
50
Small pond
with
unaffected
runoff from
soil cover
ELIMINATING LONG-TERM CLOSURE OBLIGATIONS
closure
Tailing Storage Facility reclamation: 5 years
Formation of pit lake: ~60 years
Seasonal water treatment from pit lake after filling
Trust-fund model for long-term financial assurance
51
Donlin Gold
Project Overview
Part 5:
Permitting
permitting timeline
Current Status
53
16 years 4 27+ years
EX
PL
OR
AT
ION
&
EN
VIR
ON
ME
NT
AL
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
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.
Notes: 1) Donlin Gold data as per the updated feasibility study. Projected annual production represents 100% of which NOVAGOLD’s share represents 50%.
~4 YEAR PROCESS
4
major federal permits
Clean Water Act - Section 404 (USCOE)
NEPA “Trigger”
Right of Way (BLM)
Pipeline corridor
Pipeline Special Permit (PHMSA)
Consultations
Essential Fish Habitat Consultation (NMFS)
Endangered Species Act/Section 7 Consultation (NMFS/USFWS)
Section 106 NHPA Consultation (SHPO)
54
major state permits
Reclamation Plan Approval (ADNR)
Integrated Waste Permit (ADEC)
Wastewater Discharge/APDES (ADEC)
Air Quality Permit (ADEC)
Fish Habitat Permits (ADF&G)
Water Rights (ADNR)
Rights of Way (ADNR/ADOT)
Dam Safety Certification (ADNR)
55
financial assurance
Financial Assurance/Bonding
“…require proof of financial responsibility
to cover the cost of closing…and, if
monitoring is required, the cost of post-
closure monitoring…”
Cost estimate based on detailed
engineering analysis and reviewed every
5 years
Trust funds for long term treatment
obligations
Draft estimate is ~$285 million
(funded at ~$10 million annually LOM) 56
NEPA/EIS
National Environmental Policy Act (NEPA)
Procedural
Supports agency decision-making
Informs public and provides opportunities for comment
Environmental Impact Statement (EIS) preparation well
underway
PDEIS (agency review) – Around year-end 2014
DEIS (public review) – Mid-2015
Public Comment Period – Late 2015
Final EIS/Record of Decision – Around year-end 2016
All key Federal and State agencies cooperating in NEPA
process to ensure EIS supports their permitting needs 57
permitting process
EIS
Process
Federal
Process
State
Process
CSR
Record
of Decision
Federal Permits,
Certifications,
Approvals
State Permits,
Certifications,
Approvals
Social License
To Operate
Notice of
Intent Scoping Draft EIS Final EIS
ACOE
CWA
404
Tribal
Consultation
(ACOE/EPA)
USFWS/NMFS
Endangered
Species Act
Consultation
NMFS EFH
Consultation
BLM
ROW
ADFG Fish
Habitat
ADNR Reclamation
Plan/Bonding
Pipeline
Water Use
SHPO National
Historical
Preservation Act
Determination
ADEC
Waste Management
Air Quality
Water Discharge
Stakeholder
Engagement
Community
Engagement
Workforce
Development
58
OCCURS CONCURRENTLY
Notice of Intent to Prepare EIS
Draft EIS
Final EIS Record of Decision
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
APPROACHING HALFWAY MARK IN PERMITTING
donlin gold permitting milestones
2012-2013 2013-2015 2015-2016
59
work completed to date
Initial permit applications submitted - August 2012
Notice of Intent initiating EIS published - December 2012
EIS Public Scoping completed - March 2013
14 public scoping meetings
Donlin Gold/Calista submitted comments in key areas
Only one consolidated comment letter from NGOs
Approximately 150 public comment submittals
Public comments well informed and constructive, provided
positive input to process
60
INITIAL DOCUMENTS SUBMITTED AND EIS SCOPING TOOK PLACE IN 2012/13
2012 scoping meetings
61
WELL ATTENDED – POSITIVE & CONSTRUCTIVE REVIEW
Environmental Evaluation Document (EED) issued - May 2013 Comprehensive environmental report for project prepared by Donlin
Gold to support EIS
EIS data and analysis requirements finalized – Early 2014 All requisite info to be submitted by Donlin Gold – 3rd quarter 2014
Alternatives development completed – Mid-2014 Reasonable range of mine/transportation/pipeline alternatives adopted
for detailed analysis in EIS
Initial drafts of EIS chapters released/reviews completed Purpose and Need for EIS
Alternatives
Affected Environment (baseline conditions)
Donlin Gold afforded comment opportunities on drafts early in
process
62
work completed to date
current activities
PDEIS Preparation – expected to be complete around
year-end
Analysis of potential environmental impacts
Identification of mitigation measures
Major permit applications under development
CWA 404 (wetlands), pipeline ROW, water use, and dam safety
applications submitted
Air quality, water discharge, and fish habitat applications being
prepared
Coordinating with agencies to integrate permit issuance with EIS
process
63
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
permitted large projects
64
donlingoldeis.com
65
Donlin Gold
Project Overview
Part 6:
Mining
project location
5 km
67
LOW ELEVATION AND CONDUCIVE TO SITE INFRASTRUCTURE
geology
Gold mineralization exists in intrusive dikes &
sills (colored in figure), hosted by sandstones,
siltstones, and shales of the Kuskokwim Group
Acma-Lewis mineralization generally associated
with pyrite, arsenopyrite, and stibnite
68
Some graphitic carbon exists and is
potentially preg-robbing
Existences of mercury, chlorine, &
fluorine must be taken into account
in process planning
resource modeling
1,396 holes (89% are core), 340 km of drilling used in the latest resource model
Acma & Lewis deposits divided into 9 geologic domains, each bound by structures,
domains associated with distinct metallurgical recoveries and rock hardness
Raw assay gold grades capped prior to compositing based on cumulative frequency plots
by rock type
Rock densities assigned by rock type
Drill hole database composited on 6-meter intervals
6m x 6m x 6m block model created, gold & sulfur grades estimated using inverse
distance method, some estimates constrained by indicator shells (identify probability of
mineralization), also constrained by rock type (intrusives, shales, & greywackes)
Other materials estimated are As, Hg, Sb, CO2, Ca, Mg, & neutralization potential
Due to small block sizes & high mining rates, post-processing required to simulate
dilution & ore loss, also to decide which portions of deposit to mine selectively and
which to mine in bulk
69
block model
Plan section of pit phases and block model at 5m elevation
Gold grades (g/t) identified using legend at bottom right
70
SMUman results
Plan section at 5m,
Acma Pit
Legend below states
planned material types
6m_ore = ore to be
mined on 6m benches
6m_omaw = ore mined
as waste, 6m benches
(planned ore loss)
6m_wmao = waste
mined as ore, 6m
benches (planned
dilution)
Same types also depicted
for planned 12m bench
mining
Planned ore loss is 1.3%
Planned dilution is 7.1%
71
reserves & resources Last R&R statement generated upon completion of FSU2 in late 2011
Reserves & FSU2 mine plan based on a designed pit guided by a $975/oz Au, RF1.0 Whittle shell and
M&I categorized material only
Resources guided by a $1,200/oz Au, RF1.0 Whittle shell, and M,I,&I categorized material
SMUman post-processing accounted for in R&R calculations
Reserve pit includes 2,765Mt of waste, strip ratio = 5.48
72
P&P Reserves
Category Ore
(kt)
Au
(g/t)
S
(%)
Contained Au
(koz)
Proven 7,683 2.32 1.12 573
Probable 497,128 2.08 1.06 33,276
Total P&P 504,811 2.09 1.06 33,849
M,I,&I Resources, inclusive of Reserves
Category Ore
(kt)
Au
(g/t)
Contained Au
(koz)
Measured 7,731 2.52 626
Indicated 533,607 2.24 38,380
Total M&I 541,337 2.24 39,007
Inferred 92,216 2.02 5,993
mine design
15-phase pit design (9 in
Acma, 6 in Lewis) based
on nested Whittle shells
Most benches double-
stacked (24m total), some
quadruple stacked where
slope angles are very
shallow (43º) due to
adverse bedding
Pit ramps are 40m wide
(including berm) and no
steeper than 10%
Inter-ramp slope angles
range from 28º to 50º,
depending on slope sector
Most phases have dual
access
73
pit & dump dimensions
564m vertical
highwall
3.4km across
2.5km across
330m vertical
dump face
4.2km across
74
mine schedule
Schedule logic based on maximizing NPV while meeting plant constraints on sulfur
content and feed hardness
Large low-grade stockpile kept until end of mine life (reaches ~105Mt maximum)
Binned by sulfur content (high, medium, & low) for blending purposes
Ore stockpiled longer than one year assumed to have degraded plant recoveries and
sulfur contents
Mining rate capped at 155Mtpa (425ktpd)
Vertical advance rate capped at 8 12m benches per year
Milling rate variable at 50-55ktpd, depending on feed hardness
Acma pit sequenced so that it is partially backfilled with Lewis waste at end of mine life
Most waste is NAG (91%), and PAG waste must be sequenced such that it is
encapsulated inside the waste dump
Overburden to be removed from surface using smaller equipment and stockpiled for
reclamation purposes
75
phase mining rates
76 Source: Date 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 ( “FSU2”)
77 Source: FSU2
78 Source: FSU2
mine progress, year 26
79
mining equipment
Truck fleet consists of ultra-class (360-t) trucks for primary
mining and smaller trucks (135-t) for overburden
movement and project work
Loading fleet primarily 42m3 (55yd3) electric-hydraulic
shovels, one diesel-hydraulic shovel for flexibility
Loading fleet also includes two large FELs (55yd3) for stock
rehandle & backup loading, plus one smaller FEL for
support & project work
Drill fleet consists of a mix of 3 different models for bulk
material movement, split-bench movement, RC grade
control, secondary D&B, and wall control D&B Sourc
e: F
SU
2
80
opportunities & risks
LNG-powered mine equipment, particularly trucks
Lowers operating costs
Reduces fuel-barging requirements on the river
Alternative waste haulage options (autonomous, trolley-assist, crush/convey)
Added grade from Inferred Resources
Currently assumed to have 0 grade, thus diluting M&I ore
Expanded pit due to higher gold prices
Exploration potential along NE-SW mineralization trend
Opportunities
Risks Selective mining plan must be executed successfully to planned feed grades
Consumable price fluctuation (diesel, explosives, tires, etc.)
Equipment availability & capital fluctuation
81
Donlin Gold
Project Overview
Part 7:
Process
process key parameters
Parameter Value Units, Metric
LOM 27 Years
Mill Throughput 53,500 tpd avg
Hourly Mill Throughput 2,397 te/h
Plant Availability 93 %
Au grade 2.09 g/te
Mass pull to concentrate 15.2 wt%
S grade in concentrate 7 wt%
Au recovery, flotation 93.0 %
Au recovery, POX/CIL 96.6 %
Au recovery, overall 89.8 %
Au production 1.1 Moz/yr avg LOM
Power Consumption, (ave/peak) 153 / 185 MW
83
donlin gold flowsheet
84
CONVENTIONAL PROCESSING FACILITY
mineralogy
Au in Donlin Gold ore is exclusively sub-microscopic
disseminated in crystal structure of arsenopyrite and
pyrite, hence it is refractory
Native organic carbon, primarily concentrated in
sediments, is preg-robbing
Arsenopyrite is primary host accounting for ~80% of Au in
feed. Pyrite, although 3-10 times more abundant than
aresenopyrite, carries ~20% of the gold
85
crushing/grinding
Flowsheet selection
Circuit selection:
Lowest capital cost
Ability to cope with clay fraction in the ore
Ability to cope with climatic conditions
General ease of operation and maintenance
Flexibility in throughput rates
Widely applied technology in the milling industry
Gyratory crusher – 60”x 89”
Sag mill – 38’x 24.8’ (20 MW)
Ball mills – 26’x 42.5’ (18 MW)
86
flotation - testwork
Extensive bench and pilot testing on Donlin Gold samples
Bulk concentrate flowsheet proved optimum to maximize Au recovery
and produce a concentrate with autogenous sulphur grade for POX
An MCF2 style flowsheet provides additional 1.8% Au recovery to a
7% sulphur flotation concentrate and was economically favoured for
Donlin Gold
Rapid kinetics for pyrite and coarser arsenopyrite, but much of Au is
associated with fine arsenopyrite.
To achieve high float recovery, it is essential to recover free pyrite
and binary particles of quartz carrying fine grained arsenopyrite.
To achieve maximum recovery from the arsenopyrite (some of
which is tied up with larger gangue particles) a long float retention
time (114 min) and high reagent consumption is necessary
87
POX flowsheet
Residence time and sulfur operating windows
Sulfur Range: 480 – 648 tepd
Design A/C throughput per train 4,356 tepd
40-50 minutes residence time, nominal 45 min.
3250 kPag
225°C
1,750 tepd oxygen plant
(2) autoclaves, each 5.2m diameter x 33.2m long, 630
tonnes
88
CIL flowsheet
Six CIL tanks to provide 24 hours leach retention time
15 g/L activated carbon concentration for each CIL tank
Carbon retention screens with 24 mesh openings
36 tonne of carbon would be advanced daily through the circuit
35% solids slurry in CIL circuit
89
refinery
90
Pressure Zadra
12t carbon batch
3 strips per day
Acid washing of carbon
Carbon regeneration
Electrowinning (4 cells)
Retort
Induction Furnace
Donlin Gold
Project Overview
Part 8:
Engineering / Infrastructure
engineering
Feasibility Study
AMEC (lead, process and infrastructure)
Hatch (Pressure Oxidation, Oxygen Plant)
NCL/Barrick (Mining)
BGC (Tailings, Water, and Geotechnical)
CH2M Hill (Gas Pipeline)
SRK (Closure and Geochemistry)
Reviews
Barrick (All areas) 1
Turner & Townsend (Estimate)
Barrick Energy (Gas Pipeline)2
1 Divested by Barrick Gold Corporation in 2011. 2 Barrick Gold Corporation performed a third party audit.
92
access & infrastructure
27 mile road
5000-foot runway
Two port facilities
600-bed permanent
camp
2500-bed construction
camp
40 million gallon diesel
storage
93
site overview
94
VERY COMPACT TO MINIMIZE FOOTPRINT
Lewis Pit Waste Rock
Facility
Upper Contact Water Pond Lower Contact Water Pond
Overburden Stockpile
ACMA Pit with Backfill
Tailings Storage Facility
Fresh Water Pond
Ore Stockpile Mill
Tailings Dam
95
LANDSCAPE AMENABLE TO PROJECT DESIGN
site layout in 3-D
site plan design
96
INCLUDES LATEST FEASIBILITY UPDATES
processing plant layout
97
CONVENTIONAL TECHNOLOGY
logistics & supply chain
98
WEST COAST BARGE CARGO INTO BETHEL UP TO JUNGJUK
energy demand
Average running load 153 MW
Peak load 182 MW
Total installed load 227 MW
Mobile Fleet Fuel 40 Mgal
28 Mgal for haul trucks
99
energy costs
Costs based on WTI crude price of $85/bbl
Diesel price
West Coast Seattle ULSD indexed price
Built up cost for barging, terminal fees, Bethel City
charges, and trucking
Gas price assumes imported LNG
Based on 12% index to crude
Built up costs for shipping, regasification, pipeline
transportation
Diesel delivered $3.03/gal ($22.50/mmbtu)
Gas delivered $13.18/mmbtu
Delivered power cost 11.9c/kwh
100
natural gas pipeline route
101
COOK INLET TO DONLIN GOLD - 315 MILES
natural gas pipeline project
Pipeline
315 mile, buried, 14” steel pipeline
Class 1 for entire alignment
70 mmscfd capacity (estimated 30 - 40 demand)
1,480 psig max allowable operating pressure
Construction 2 construction spreads, each with 3-4 sections
Construction period over 2 winters and 2-3 summers
Season for each section based on terrain and geotechnical conditions
102
power plant
Requirements
Proven technology
Load following ability
High efficiency
Redundancy (N+2)
16.6 MW Wartsila combined cycle units
Single steam turbine (16.4 MW)
Initial installation 10 units (182.4 MW)
Two additional units later (215.6 MW)
Similar to Pueblo Viejo power plant
103
oxygen plant
1,750 tpd GOX
(2) Main Air Compressors (MAC) at 10,813 kw each
(1) Booster Air Compressor (BAC) at 10,142 kw
LOX pump and vaporizer
Double column distillation process
LOX storage (24hrs)
50% turndown capability
Similar to Pueblo Viejo oxygen plant, but smaller
104
Donlin Gold
Project Overview
Part 9:
Resource Upside
mineralization trend
Mineralization exists along a gold-in-soil
geochemical anomaly trend, which
coincides with a magnetic-low
Additional Resource opportunities exist:
In-pit Inferred and Blue Sky
Resources
Higher gold price expansion
potential
East/southeast expansions of
Acma and Lewis Pits
North/northeast expansion of
Lewis Pit
Deeper phase bottoms
Along the mineralization trend
Positive drilling at Snow
Positive drilling at Dome
No drilling yet at Ophir, but
favorable outcrops exist
106
Ophir
Dome
Snow
Duqum
Quartz
Queen
Aurora Akivik
Rochelieu
400
Acma S. Lewis
Lewis Vortex
Far East
Far Side
- Pit shown is $975/oz
design
+1 g/t Au Blocks
Ophir
Dome
Snow
Lewis
Acma
mineralization trend - isometric
Quartz Duqum Far Side
Queen
S. Lewis Far East
400
Aurora
Akivik Vortex
Rochelieu
- Pit shown is $975/oz design
107
current drilling
4
~1,400 holes (89% are core)
utilized for latest Resource
model update (340 km)
108
pit expansion potential
P&P Reserve Design
($975/oz Au)
M,I,&I Resource
Shell ($1,200/oz Au)
109
Reserves based on M&I categorized material inside a $975/oz Au design
Resources based on M,I,&I categorized material inside a $1,200/oz Au Whittle shell
At higher Au prices, pit tends to expand towards the south/southeast, as well as
north/northeast
exploration potential – along trend
5 km
D
D’
Snow
Dome
Snow Dome Quartz Ophir
Acma Lewis
45.0Moz
Resource
Additional
Resource Potential
110
upside potential summary Current
P&P Reserves = 33.8Moz (2.1 g/t)
M&I Resources = 5.2Moz (4.4 g/t)
Inferred Resources = 6.0Moz (2.0 g/t)
Total = 45.0Moz (2.2 g/t)
Potential – including only areas of significant drilling
In-Pit Blue Sky - In-fill drilling needed or encounters of un-estimated grade during
production
Below Resource Pit - Higher gold price needed to drive pit deeper
East Acma Extension - In-fill drilling of intercepts outside of pit and/or higher gold price
(+$1,200) to expand pit
Snow, Queen, Quartz, Duqum, Dome and Far Side targets - Additional exploration & in-
fill drilling opportunities, potential for low grade bulk oxide at Dome
Additional Potential – areas with insufficient drilling
Ophir Exploration - Exploration drilling & in-fill follow-up
Deep UG Potential – Limited evaluation thus far, UG exploration drilling from near pit
bottom required
111
Donlin Gold
Project Overview
Part 10:
Capital & Operating Cost
execution plan
Schedule1
~2 year engineering (partly and concurrently with
construction)
~ 4 year mine site construction
~ 3 year pipeline construction (concurrently with mine site
construction)
Labor
Peak construction labor force of 2500 (mine site)
Two crews working simultaneously on different segments
of the pipeline construction
113 1 Mine site and pipeline construction timelines will coincide.
capital cost estimate
114
Mining 345
Site prep and roads 236
Process facilities 1,326
Tailings 120
Utilities 1,302
Ancillary facilities 304
Off Site facilities 243
Owner's costs 414
Indirects 1,405
Contingency 984
Total 6,679
1 Level of accuracy for capital cost estimate is -15%/+30% as per AACE class 3 definition. Costs are
unescalated and based on the 2011 Donlin Gold Second Updated Feasibility Study.
Initial capital costs ($M)1
Tailings 631
Mine equipment 578
Other mobile equipment 71
Mine dewatering 66
Freight, EPCM & other 159
Total 1,505
Sustaining capital costs ($M)1
operating cost estimate
115
$M
$/t
mined
$/t
milled $/oz
Mine operations 8,200 2.52 16.24 270
Processing operations 7,808 2.40 15.47 257
Administration 1,630 0.50 3.23 54
Royalties 1,580 0.48 3.13 52
Refining 31 0.01 0.06 1
Cost of sales1 19,249 5.91 38.13 634
Operating costs (life-of-mine)
1 U.S. GAAP cost of sales, excluding depreciation and reclamation costs. Costs are unescalated and
based on the 2011 Donlin Gold Second Updated Feasibility Study.
mining operating cost
116
$M $/t mined $/t milled
Labor 1,919 0.59 3.80
Diesel 2,066 0.63 4.09
Maintenance supplies 1,766 0.54 3.50
Consumables 1,286 0.40 2.55
Tires 685 0.21 1.36
Electricity 183 0.06 0.36
Services/overhead 295 0.09 0.58
Total 8,200 2.52 16.24
Mining costs (life-of-mine)1
1Costs are unescalated and based on the 2011 Donlin Gold Second Updated Feasibility Study.
process operating cost
117
$M $/t milled
Labor 616 1.22
Reagents and consumables 2,587 5.12
Power 3,497 6.93
Maintenance supplies 860 1.70
G&A allocation 248 0.49
Total 7,808 15.47
Processing costs (life-of-mine)1
1Costs are unescalated and based on the 2011 Donlin Gold Second Updated Feasibility Study.
Next steps
Donlin Gold feasibility study to be updated to reflect recent
economic metrics
Evaluate third party owner operators
Port facilities
Gas pipeline
Oxygen plant
Power plant
Leasing equipment
118
UPDATING FEASIBILITY STUDY