novagold marketing presentation 2015
TRANSCRIPT
novagold.com
NYSE-MKT, TSX: NG | February 2015
The Institutional-Quality Gold Development Company
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.
Roadshow Participants
3
Dr. Thomas Kaplan Chairman
▸ Chairman and Chief Investment Officer of The Electrum Group LLC, a privately held natural resources investor that controls a diversified portfolio of precious and base metals assets
Gregory Lang President & CEO
▸ Former President of Barrick Gold North America ▸ 35 years experience building & operating major mines ▸ Intimate knowledge of Donlin Gold
Igor Levental Board Member
▸ President of The Electrum Group LLC, former VP of Homestake Mining and International Corona Corp.
▸ Over 30 years experience in the mining industry
Mélanie Hennessey VP, 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
Why Gold? Gold Has Been in a Secular Bull Market Since 2000
4
RISING TIDE
We believe that gold is in a secular bull market, driven by financial and macro-
economic developments, a shift in central bank activity, and significant
supply/demand pressures.
“Experienced observers will note that sentiment is like the seasons, those
espousing 'hunker down' in the gold industry will be clamoring for growth
when the next leg in the bull market unfolds”
Why Gold? A Valuable Portfolio Diversifier
5
Comparative Returns
Note: T-note, and T-bond are average rates of return.
Gold provides excellent portfolio diversification due to its low correlation with most other asset classes,
including equities, bonds, other commodities, and the U.S. dollar.
Unlike other commodities, gold tends to retain value during recessions and deflationary periods.
Gold’s performance over the last decade vindicates its status as a valuable diversifier. Over the last decade,
gold has surged relative to other investment classes; it has outperformed equities, risen in price as oil fell,
and outperformed the Commodity Research Bureau (CRB) Futures Index by 25% between December 2009
and December 2014.
We believe it will continue to do so because gold is more than a mere commodity.
PORTFOLIO
DIVERSIFICATION
AND CAPITAL
PRESERVATION
Gold Has Retained Value in Uncertain Times
100.0%
40.0% 44.0%
89.0%
27.0%
(5.0%)
(50.0%)
(65.0%)
(31.0%)
(80.0%)
(60.0%)
(40.0%)
(20.0%)
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
120.0%
1814 to 1830 1864 to 1897 1929 to 1933
Gold Silver Other Commodities
SOURCE: INCREMENTUM AG.
“AFTER A 40-YEAR SECULAR TREND OF ATTEMPTED DE-MONETIZATION,
GOLD IS RE-ASSERTING ITSELF AS THE ONLY FINANCIAL ASSET THAT DOESN’T
REPRESENT SOMEONE ELSE’S LIABILITY”
SOURCE: CPM GROUP.
Percent Change
31-Dec-14 1 year 5 year 10 year
Gold $1,184.10 -1.5% 8.0% 170.1%
Silver $15.60 -19.5% -7.4% 128.2%
Oil $53.27 -45.9% -33.3% 22.6%
S&P 500 2,058.90 11.4% 84.6% 69.9%
FTSE 6566.09 -2.7% 21.3% 36.4%
Nikkei 17450.77 7.1% 65.5% 51.9%
MSCI World Index 1709.67 5.0% 48.8% 46.2%
$/Euro $1.21 -12.0% -15.5% -10.7%
10 Year T-Note 10.4% 29.2% 41.4%
30 Year T-Bond 27.3% 67.6% 95.8%
6
Why Gold? Gold Is More Than a Commodity
“OIL IS A COMMODITY. GOLD IS A CURRENCY.” 1
Gold has served mankind for five millennia, protecting wealth from high inflation, negative
real interest rates, volatile currencies, rising and falling empires, declining stock values, and
other crises. We believe that this is because gold is more than a commodity; it is a
currency.
HISTORIC HAVEN
Gold has risen in price as oil fell sharply in Q4 2008 and again in Q2 2011 and Q4 2014,
signifying a historic decoupling. The plunge in oil prices since November 2014 has pushed
the gold/oil ratio to the highest level since 1999. GOLD AND OIL
1. Thomas Kaplan, quote made on May 2014.
Gold & Oil: 2007 - 2015 Gold & Oil: November 2014 – January 2015
USD/oz. USD/oz. $/Barrel $/Barrel
SOURCE: BLOOMBERG
$20
$40
$60
$80
$100
$120
$140
$160
$300
$500
$700
$900
$1,100
$1,300
$1,500
$1,700
$1,900
$2,100
Gold Oil
$40
$45
$50
$55
$60
$65
$70
$75
$80
$85
$1,000
$1,050
$1,100
$1,150
$1,200
$1,250
$1,300
$1,350
Gold Oil
Why Gold? Safe Haven that has Retained Its Value
7
HISTORICAL
DEFLATIONARY
PRECEDENT
Gold has historically retained value on a relative and absolute basis. When imploding asset classes created a
deflationary spiral in 2008 and 2009, oil, equities, currencies, agricultural and commodities declined. As a
safe haven, gold retained its value, as investors sought to protect their savings and hedge against financial
market default. In prior periods of significant economic downturn such as the Great Depression, average gold
prices rose.
Gold Prices vs. Change in CPI, September 2008 to March 2009
Monthly Data
SOURCE: CPM GROUP.
Past performance is not indicative of future results.
(2.0%)
(1.5%)
(1.0%)
(0.5%)
0.0%
0.5%
1.0%
$0
$200
$400
$600
$800
$1,000
Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09
MoM CPI Gold Price
“GOLD CAN FLOURISH IN INFLATION AND IT CAN FLOURISH IN DEFLATION.”
Change in CPI Gold price $/oz.
Why Gold? It’s Scarce
8
• Gold production growth rates have slowed
• New discoveries are increasingly difficult and
costly to find, highly risky, and require long
lead times to reach production
• Central banks, formerly a source of supply,
have been net purchasers since 2009.
SUPPLY
CHALLENGES
CURRENCY
DEBASEMENT
Major reserve currencies are being debased. After a 40-year secular trend of attempted de-monetization, gold
has re-asserted itself as the only currency that cannot be debased or printed.
Past performance is not indicative of future results
1. Thomas Kaplan, quotes made on May 2012.
“GOLD IS A CURRENCY THAT SIMPLY CANNOT BE DEBASED...” 1
“GOLD CANNOT BE PRINTED... AS WE KNOW, ITS DIFFICULT ENOUGH TO FIND AND MINE IT”1
8
Gold Vs. Yen June 2013 – January 2015 Gold Vs. Yen September 2014 – January 2015
SOURCE: BLOOMBERG
SOURCE: SNL METALS & MINING
115000
120000
125000
130000
135000
140000
145000
150000
155000
6/3/2013 9/3/2013 12/3/2013 3/3/2014 6/3/2014 9/3/2014 12/3/2014
125000
130000
135000
140000
145000
150000
155000
9/1/14 10/1/14 11/1/14 12/1/14 1/1/15
Why Gold? Historically Gold and the USD are Known to Have Concurrently Outperformed
9
Chart source: CPM Group.
Note: US dollar index data from 2014 to Jan 26, 2015.
1. Thomas Kaplan, quotes made on March 2013 and May 2012 respectively.
2. December 31, 2014 to January 27.2015.
“ALL PAPER CURRENCIES ARE TOILET TISSUE; THE DOLLAR ON OCCASION IS
DOUBLE-PLY”1
“TO BE BULLISH ON GOLD, ONE DOES NOT NEED TO BE BEARISH ON THE DOLLAR.”1
• While a weaker dollar encourages investors to store value in gold, a strengthening
dollar can also be beneficial for the precious metal
• Year-to-date, the gold price is up 9.1%, while the US dollar index is up 4.2%2
BULLISH ON
GOLD AND THE
DOLLAR
9
Why Gold? It is Honest Money
10 THE ECB’S BALANCE SHEET HAS CORRELATED REMARKABLY WELL WITH USD GOLD PRICES SINCE THE EURO’S INCEPTION;
IF THAT RELATIONSHIP HOLDS, €1.1T ECB QE COULD EQUATE TO $2,000 GOLD BY SEP-16E.
100
600
1100
1600
2100
2600
3100
Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 Jul-13 Jan-14 Jul-14
Gold ECB Balance Sheet
800
850
900
950
1000
1050
1100
1150
1200
Jun-13 Sep-13 Dec-13 Mar-14 Jun-14 Sep-14 Dec-14
Gold vs. Euro
“NO EX-ANTE QUANTITATIVE LIMITS ARE SET ON THE SIZE OF OUTRIGHT MONETARY TRANSACTIONS…”
“THE CENTRAL BANK WILL DO “WHATEVER IT TAKES” TO SAVE THE EURO” PRESIDENT OF THE EUROPEAN CENTRAL BANK, MARIO DRAGHI
REPEAT AFTER ME: “WE WILL DEFEND THE 1.20 FLOOR WITH THE UTMOST DETERMINATION… WE WILL DEFEND THE 1.20 FLOOR
WITH THE UTMOST DETERMINATION…” SNB PRESIDENT THOMAS JORDAN 2012
"LET ME IMMEDIATELY STATE HERE: THE SNB REMAINS COMMITTED TO PURCHASING UNLIMITED QUANTITIES OF FOREIGN CURRENCY TO ENFORCE THE MINIMUM EXCHANGE RATE WITH THE UTMOST DETERMINATION.” SNB PRESIDENT THOMAS JORDAN 12/18/14
$0.95
$1.00
$1.05
$1.10
$1.15
$1.20
$1.25
$1.30
$1.35
1/1/2015 1/4/2015 1/7/2015 1/10/2015 1/13/2015 1/16/2015 1/19/2015 1/22/2015 1/25/2015
CHF USD Close
A DEVELOPMENT-STAGE COMPANY WITH TWO PROJECTS OF EXCEPTIONAL SCALE, QUALITY, AND JURISDICTIONAL SAFETY
What Makes NOVAGOLD Unique?
DONLIN GOLD
GALORE CREEK
11
Poised to become one of the
largest gold producers in the
world
Expected to be the largest and
lowest cost copper mine in
Canada
50/50 with Barrick
50/50 with Teck
AMONG THE WORLD’S MOST SIGNIFICANT AND HIGHEST-GRADE GOLD DEPOSITS
Donlin Gold: A Large High-Grade Gold Project
12
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.
RESERVES1
34 million oz Proven & Probable
Grade: 2.1 g/t
RESOURCES1,2
39 million oz Measured & Indicated
Grade: 2.2 g/t
6 million oz Inferred
Grade: 2.0 g/t
(inclusive of P&P reserves)
Donlin Gold: The Right Project
13
ARGUABLY THE MOST IMPORTANT GOLD PROJECT IN THE WORLD TODAY
partnerships grade
growth jurisdiction
size
DONLIN GOLD
longevity
leverage to gold
Donlin Gold: The Emerging Top-Tier Producer in the Safest Jurisdiction
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 Haile
1.102
0.76 0.58
0.40 0.33 0.13
1.501
Location USA Mexico USA Suriname Canada USA
Owner(s) NOVAGOLD (50%)
Barrick (50%)
Chesapeake
(100%)
ITH Mines
(100%)
Newmont (75%)
Republic of
Suriname (25%)
New Gold
(100%)
Romarco (100%)
Pro
jecte
d A
nn
ua
l G
old
Pro
du
cti
on
(mil
lio
ns
of
ou
nc
es)
A REMARKABLE RESOURCE AMONG EMERGING OPEN-PIT GOLD DEPOSITS
14
Notes:
• Peer group data as per latest company documents, public filings and websites. Comparison group based on large, gold-focused development projects where the majority of the M&I resource is open-pit. 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.
• 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 inclusive of proven and probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix.
(1) Projected annual gold production during first five full years of mine life; (2) Projected annual gold production during full life of mine.
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
Donlin Gold Metates Livengood Rainy River Merian Haile
39.0
19.0 15.7
6.2 4.2 4.0
M&
I G
old
Reso
urc
e
(mil
lio
ns
of
ou
nc
es)
▸ Donlin Gold’s size and North American location distinguish it
from its peers
15
ONLY THREE PROJECTS IN THE WORLD ARE SLATED TO PRODUCE >1MOZ/YEAR
Mines the Size of Donlin Gold are Scarce
Notes:
Donlin Gold projected annual production represents 100% of which NOVAGOLD’s share is 50%. All other production estimates, with the exception of Grasberg, are based on published 2014 average
gold annual production guidance sourced from SNL Metals & Mining. Grasberg represents the published 2014 gold sales guidance. Excludes Newmont’s Nevada operations that consist of multiple
mines. Analysis includes life of mine data for Donlin Gold.
1) If put into production as contemplated by the second updated feasibility study effective November 18, 2011, as amended January 20, 2012.
123 MINES
>100 Koz
13 MINES
>500 Koz
3 MINES
>800 Koz
3 MINES/
Projects
>1 Moz
GRASBERG
Indonesia
PUEBLO VIEJO
Dominican Republic
DONLIN GOLD USA
▸ 1.5 Moz/year in first five full years1
▸ 1.1 Moz/year LOM1
1
Only undeveloped
asset in this category in
North America
Donlin Gold: The Right Project
HIGH-GRADE OPEN-PIT MINE
16
partnerships grade
growth jurisdiction
size
DONLIN GOLD
longevity
leverage to gold
VERY FEW LARGE HIGH-GRADE OPEN-PIT GOLD PROJECTS ON THE HORIZON
Donlin Gold: Is More than Double the Grade of the Average Gold Deposit in the World
17
Notes: See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. 1) Average grade of all deposits globally over 1 million ounces in size, sourced from “2013 Global Gold Mine and Deposit Rankings” – Natural Resource Holdings and
Visual Capitalist. 2) 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 is 50%. Measured and indicated resources are inclusive of proven and probable reserves.
World Avg. Grade1:
1.01 g/t
Donlin Gold Avg. Grade2:
2.2 g/t
Reserve grades continue to decline while
sources for emerging production to replace
mined-out capacity have become
increasingly scarce
0.00
0.50
1.00
1.50
2.00
2.50
Donlin Gold Haile Merian Rainy River Livengood Metates
2.24
1.77
1.22 1.09
0.61 0.50
GRADE COMPARES WELL AMONG PEER GROUP OF EMERGING OPEN-PIT GOLD DEPOSITS
Donlin Gold: The Highest-Quality Open-Pit Development-Stage Gold Deposit
18
▸ With a high grade endowment, Donlin Gold is a unique
project better able to weather gold price cycles
M&
I G
old
Gra
de
(g
/t)
Notes:
• Development-stage peer group data as per latest company documents, public filings and websites. Comparison group based on large, gold-focused development projects where the majority of the M&I resource is open-pit. Top gold producers group data based on 2013 annual average grade per tonne (combined proven & probable reserves and measured & indicated resources) for open-pit and underground material as per public filings.
• 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 inclusive of proven and probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix.
• 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.
0.00
0.50
1.00
1.50
2.00
2.50
3.00
AgnicoEagle
DonlinGold
Polyus GoldFields
AngloGoldAshanti
Barrick Harmony Eldorado Goldcorp Yamana Newmont
2.66 2.24 2.14 1.88 1.81
1.44 1.32
1.04 0.98 0.81 0.78
M&
I G
old
Gra
de
(g
/t)
SUBSTANTIAL EXPLORATION POTENTIAL
Donlin Gold: The Right Project
19
partnerships grade
growth jurisdiction
longevity
leverage to gold
size
DONLIN GOLD
MULTIPLE DRILL PROSPECTS AND TARGETS EXIST ALONG 8KM TREND
Donlin Gold: Excellent Exploration Potential
20
The next big gold discovery?
▶ Potential to expand current open-pit
resources along strike and at depth
▶ Good prospects to discover meaningful
deposits outside current mine footprint
• Reserves and resources are contained
within just 3 km of an 8 km long trend
▶ Inferred mineral resource: 6 million ounces
of gold mainly inside the reserve pit
• Upside potential to project economics
OVER FIVE YEARS RESOURCES INCREASED 135%
Donlin Gold: Reserve & Resource Growth
21 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.
2006 ~17Moz
2011 39Moz
Expanding
Potential
Donlin Gold: The Right Project
22
27-YEAR MINE LIFE; STRONG LEVERAGE TO GOLD PRICE
partnerships grade
growth jurisdiction
longevity
leverage to gold
size
DONLIN GOLD
0
5,000
10,000
15,000
20,000
25,000
30,000
$1,200 $1,300 $1,500 $1,700 $2,000 $2,500
6.2B
8.2B
11.6B
14.6B
19.2B
27.0B
NP
V (
US
$ i
n m
illi
on
s)
Gold Price (US$)
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
▶ Long mine life offers high
likelihood of enjoying one
or more cyclical bull
markets over the period
of the mine’s operation
23 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; $1,465m @ $1,300 gold; $3,147m @ $1,500 gold; $4,581 m @ $1,700 gold; $6,722 m @ $2,000 gold;
and $10,243 m @ $2,500 gold. Project development costs prior to 1/1/2014 are treated as sunk costs.
27year mine life
NPV at 0% NPV at 5%
DEVELOPMENT TIMELINE OF NEW GOLD PROJECTS HAS MORE THAN DOUBLED
Keeping to our Timetable: Project Progressing as Forecasted
24 Notes:
Data sourced from SNL Metals & Mining.
1) Based on announced mining startup dates. Expansions and mine redevelopments are not included as they are not comparable with new mine developments.
27 mines
~8 years discovery to production 57 mines
111 mines ~11 years
discovery to production
~18 years discovery to production
0
5
10
15
20
25
30
35
19
85
19
86
19
87
19
88
19
89
19
90
19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
Av
era
ge N
um
ber
of
Years
fro
m D
isco
very
to
Pro
du
cti
on
Startup Year
▸ Exciting that Donlin Gold is more than halfway through permitting &
will be shovel-ready when sentiment returns
0
2
4
6
8
10
12
14
16
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
1997 1999 2001 2003 2005 2007 2009 2011 2013
Why Donlin Gold? No New and Substantial Discoveries
25 Notes:
Data as per SNL MEG’s MineSearch database, Company reports, SNL MEG estimates. Thomson Reuters. A gold discovery of 5 million ounces or
more is considered significant. Number of discoveries data not yet available for 2014.
Nu
mb
er
of
Go
ld D
isco
veri
es
Gold Discovered
Exploration Budget (US$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
LOCATED IN ALASKA, ONE OF THE TRULY SAFE MINING JURISDICTIONS
Donlin Gold: The Right Project
26
partnerships grade
growth jurisdiction
size
DONLIN GOLD
longevity
leverage to gold
Donlin Gold located in Alaska, one of
the safest jurisdictions in the world with a
history of successful mine development
ALASKA – A RESOURCE-RICH STATE WITH AN ESTABLISHED RULE OF LAW
Donlin Gold: Located in a Favorable Jurisdiction
▶ Alaska is the second largest U.S.
gold-producing State
▶ Well-defined permitting process
▶ Natural resource projects integral
to the State’s economy
▶ Strong and time-tested community
support
27
STRONG PARTNERSHIPS
Donlin Gold: The Right Project
28
partnerships grade
growth jurisdiction
size
DONLIN GOLD
longevity
leverage to gold
Donlin Gold: Partnerships & Activities
29
COLLABORATING WITH OUR PARTNER TO MAXIMIZE PROJECT RETURN
Barrick and NOVAGOLD are jointly committed to working together to create
shareholder value from Donlin Gold’s unique optionality
▶ Project activities continue to progress as planned
▶ After further de-risking, we are encouraged by Donlin Gold’s prospects
▶ Focused on advancing Donlin Gold through permitting to a record of decision
▶ Working together on evaluating development alternatives
▶ Neither partner has a build at any gold price mentality
“Both companies are happy to take a sober and constructive view. We don't want
to subsidize the world's consumption of gold by squandering the treasures that
Mother Nature has given us and we're happy to wait for the higher gold prices that
will make the project's economics sing.” – Thomas S. Kaplan,
Chairman of NOVAGOLD
RETAINING THE GREATEST VALUE WHILE ENSURING CAPITAL EFFICIENCY
ALASKA NATIVE CORPORATIONS: LEADERS OF REGIONAL ECONOMIC DEVELOPMENT
Donlin Gold: Mining with the Local Communities
▶ ANCSA established 40 years ago; resolved
legal issues related to Native land 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
specifically selected for its resource
development potential
30
STRONG AND TIME-HONORED RELATIONSHIPS WITH STAKEHOLDERS
31
Donlin Gold: Durable, Long-Term Agreements with the Native Corporations
Donlin Gold has the support of the land owners through a 20+ year relationship
“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)
"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)
PROTECT, RESTORE AND CONSERVE ALASKA FISH AND WILDLIFE
Donlin Gold: A Unique Partnership with the National Fish and Wildlife Foundation (NFWF)
“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 watersheds
▶ Enhance and protect wildlife habitat
▶ Advance sustainable fisheries
32
Donlin Gold: The Project Permitting is On Track
33
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.
Major permit applications are well underway • Air quality
• Water discharge and usage*
• Pipeline plan of development*
• Wetlands*
• Dam safety*
* applications submitted and in agency review
Notice of Intent to Prepare EIS
Draft EIS
Final EIS Record of Decision
34
Initial permit applications Submitted: 08/12
Notice of intent Issued: 12/14/12
Public scoping period Ended: 03/29/13
Scoping summary document Completed: 08/13
Development of alternatives
Completed: Q2/14
Initial drafts of EIS chapters Completed: Q4/14
Agency & Donlin Gold review Completed: Q4/14
Prepare draft EIS
Public comment period
Prepare draft final EIS
Agency review
Publish final EIS
Record of decision
PAST THE HALFWAY MARK IN THE EIS PROCESS
Donlin Gold: Permitting Milestones
2012-2013 2013-2015 2015-2016
COLLABORATING WITH OUR PARTNER TO MAXIMIZE PROJECT RETURN
Donlin Gold: Optimization Studies
▶ Optimization studies underway to evaluate opportunities to reduce initial owner
capital
• Third-party financing or owner/operator prospects (≈$1.0B potential reductions
i.e. gas pipeline, port facilities, oxygen plant, mining fleet)
• Conducting technical studies ($3.0M) with experts from both companies and
independent consultants to identify potential design and execution
enhancements from FSU2
Potential benefits:
▶ Lower initial owner capital required to build
▶ Opportunity to implement lessons learned from past/current experience in building
and operating assets such as Pueblo Viejo
▶ Opportunity to expand with future cash-flow generation
▶ When sentiment returns in the gold sector, the market will seek out projects with
leverage and growth
• Donlin Gold will be one of the few projects shovel-ready
35
THE KIND OF ASSET YOU CAN BUILD A COMPANY AROUND
Galore Creek: A Significant Copper-Gold-Silver Asset in Canada
36
Notes:
1) Represents 100% of measured and indicated resources of which NOVAGOLD’s share is
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.
9 billion lbs Grade: 0.5%
8 million oz Grade: 0.3 g/t
136 million oz Grade: 5.2 g/t
copper
gold
silver
M&I Resources1
AMONG HIGHEST COPPER GRADE COMPARED TO NORTH AMERICAN ASSETS
Galore Creek: Peer Comparison
37
P&P + M&I grade (Cu%)
Notes:
Data as per SNL MEG’s MineSearch database, Company reports, SNL MEG estimates.
2014 millions
Total spending $26
Cash and term deposits1 $165
2015
Budget2
Donlin Gold $13
Galore Creek $2
G&A, interest & Donlin Gold joint studies $14
Repayment of outstanding convertible
notes3 $16
Anticipated year-end cash position $120
Clear Focus and Strong Funding to Execute on all Fronts
38 1) Includes US$ 95.0 million in term deposits as of November 30, 2014.
2) 2015 anticipated budget expenditure disclosed on January 28, 2015
3) The Notes mature on May 1, 2015.
2014 TOTAL SPEND 14% LESS THAN BUDGET
CONTINUE TO EXECUTE AND DELIVER ON OUR BUSINESS PLAN
2015 Outlook
1 2 3 4 5 PRIORITY PRIORITY PRIORITY PRIORITY PRIORITY
Advance
Donlin Gold
permitting
to a
construction
decision
Advance
Galore Creek
mine
planning
and project
design
Evaluate
opportunities
to monetize
the value of
Galore Creek
Safeguard
our cash
position
Maintain
strong
relationships
with all
stakeholders
COMMITTED TO GOLD THROUGH VARIOUS
MARKET CYCLES 39
26.7%
11.3%
6.9%
5.2% 3.0%
47%
A BLUE CHIP INSTITUTIONAL QUALITY INVESTMENT
Why Invest in NOVAGOLD?
40
Held by top
5 shareholders1
53%
Electrum Strategic
Resources LP
Paulson & Co. Inc
The Baupost
Group, L.L.C.
Van Eck Associates
Corporation
Tocqueville Asset
Management
Other
Market Cap4
$1.17B
Cash and Term
Deposits2
$165.3M
Convertible Notes3
$15.8M
1) Shareholder positions are based on the latest 13-F
filings
2) Includes US$ 95.0 million in term deposits as of
November 30, 2014.
3) The Notes mature on May 1, 2015.
4) Market Capitalization as of January 26, 2015 based
on 317.8 million shares issued and outstanding
and NG share price of $3.69.
NYSE-MKT, TSX: NG
NOVAGOLD
focused on execution and
delivery of our business plan
NOVAGOLD Highlights
41
Safe Geo-Political Environment:
Alaska and British Columbia,
top-rated mining jurisdictions
Accomplished Team:
185 years cumulative
experience
Prolific Production Profile:
Donlin Gold expected to be one of industry’s
top producing assets; strong leverage to gold
Supportive Stakeholders:
Long standing shareholders and
engaged partners
Strong Balance Sheet:
$165m cash + term deposits
as of November 30, 2014
Top Tier Assets:
Large, high-grade deposit
past 50% mark in
permitting; great additional
exploration potential
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: A Project Overview
43
DONLIN GOLD SLATED TO BE A STATE-OF-THE-ART SIGNIFICANT MINE
Donlin Gold: Project Highlights
44
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.
Donlin Gold: Expected to Provide Three Decades of Low Cost Production LOW OPERATING CASH COSTS AND ALL-IN SUSTAINING COSTS
45
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.
US GAAP cost of sales, excluding depreciation and reclamation
1) Net of deferred costs
2) 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 $532
Life of Mine
Cash Costs1 Per Ounce
All-in Sustaining Costs Per Ounce
Donlin Gold: Capital Expenditures
WELL POSITIONED TO SHARE UPFRONT COSTS WITH THIRD PARTIES
Areas US$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 initial capital reductions
Gas pipeline could be built by third party $834M
1) Represents 100% of project’s capital expenditures 46
ROBUST ECONOMICS HIGHLY LEVERAGED TO GOLD PRICES
Donlin Gold: Key Performance Indicators
47
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. 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.
LARGE PROJECTS HAVE BEEN SUCCESSFULLY PERMITTED
Donlin Gold: Permitting in the U.S.
48
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
• Final EIS approved by BLM, under 30-day review
Pan Nevada Gold ~2 years • New open pit and heap leach • EIS/permitting completed in 2013
NorthMet Minnesota Copper/nickel/cobalt ~12 years
(anticipated)
• New open pit
• Final EIS and Record of Decision anticipated in the first half 2015
Haile South Carolina Gold ~4 years
(anticipated)
• New mine on historic property
• Open pits, processing and tailings facilities
• Final EIS issued July 2014, ROD issued October 2014
GALORE CREEK, AN EXCEPTIONAL ASSET
Galore Creek: Project Overview
49
▶ 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
50
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’s Northwest Transmission Line is now in service
connecting 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
51
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
NOVAGOLD: The Team
52
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: The Board of Directors
53
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 A well-known commentator and author on global investing, publisher of The Gloom, Boom
& Doom Report
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 Chief Executive Officer of China Moly Corp. 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
54
NOVAGOLD: 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
55
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.
NOVAGOLD: Reserve/Resource Table (con’t)
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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
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