Novagold Resources Inc. · AMEX:NG
Novagold Resources — Investor Presentation (January 2010)
57 slides from Novagold Resources's investor presentation, January 2010
Slide 1: A growth-focused precious metals company
Click to edit Master title style A growth‐focused precious metals company Corporate Presentation NYSE‐AMEX, TSX: NG January 2010
Slide 2: Forward-Looking Statements
Forward‐Looking Click Forward to edit Looking Master Statements title style This presentation includes “forward‐looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included herein incl
Slide 3: Investment Highlights
Investment Click to edit Highlights Master title style 15.2M ozs Gold Reserves 9.0M ozs Gold M&I 94M ozs Silver M&I 6.0B bs Coppe lbs Copper M&I & 5.3M ozs Gold Inferred 63M ozs Silver Inferred 3.1B lbs Copper Inferred • One of the largest resource bases of any junior or mid‐tier producing company,
Slide 4: Why NovaGold? Unparalleled Value, Unparalleled Leverage
Click NovaGold? Why to edit Master title style Unparalleled Value Unparalleled ll l d Leverage • Large, high‐quality projects. 50% interests in two of the world’s largest gold and copper‐gold projects. • Safe geopolitical locations. Current properties are in Alaska and British Columbia, offering inv
Slide 5: Unparalleled Value, Unparalleled Leverage
Unparalleled Click to edit Master Value, title Unparalleled style Leverage • NovaGold offers significant value to investors: – 15.2M ozs gold reserves, 9.0M ozs M&I gold resources and 5.3M ozs inferred gold resources Æ each 10 shares of NovaGold = 1.7 ozs of gold or 3.1 ozs of gold equivalent (gold
Slide 6: Resource Growth
Resource Click to edit Growth Master title style One of the industry’s best track records for resource growth Average of 3M ozs of gold added each year Billionss of lbs of co d‐equivalentt ozs opper resourrces Milllions of gold Note: Reflects 50% ownership of Donlin Creek, 50% of Galore Creek, 100%
Slide 7: Comparative Gold Resources in the Americas
Comparative Clickpto editGold Resources Master in the Americas title style 50 Mid‐Tier old resource e 40 Producers Developers Recently Junior 30 Acquired Producers ons of ozs go Developers 20 10 Millio 0 Proven & Probable Measured & Indicated Inferred Source: Metals Economics Groups. See “Cautionary
Slide 8: Enterprise Value per Ounce in the Americas
Enterprise Value Click pto edit per Ounce p Master in the Americas title style d oz 350 Mid‐tier Producers esource gold Avg $260 EV/oz 300 Recently Acquired Developers Developers 250 Junior Producers Avg $105 EV/oz Avg $130 EV/oz NG Avg $130 EV/oz Enterprise value per re 200 $36 EV/oz 150 100 50 0 S
Slide 9: Operational Overview Map
Click to edit Master Operational Overview title Map style Advanced stage Exploration stage Port of Stewart N
Slide 10: Donlin Creek: 50/50 Partnership with Barrick Gold
Click toCreek Donlin edit Master title style 50/50 Partnership with Barrick Gold 29 3M 29.3M ozs Gold Proven & Probable 1 6.0M ozs Gold Measured & Indicated 1 4 0M 4.0M ozs Gold Inferred 1 (1) At 100% basis. NovaGold owns 50%.
Slide 11: Donlin Creek: Comparison of Gold Projects in the Americas
Click toCreek Donlin edit Master title style 40 Comparison of Gold Projects in the Americas 35 Inferred resources 30 Measured & Indicated resources* 25 20 15 10 5 0 Donlin Las Cristinas Metates Detour Fruta del Angostura Canadian Aurora Mine Creek 1 Norte Malartic Grade (g/t) 2.4 0.98 0.66 1.3 7.23
Slide 12: Donlin Creek: Access & Facilities
Click toCreek Donlin edit Master Accesstitle & Facilities style Proposed Infrastructure for the Donlin Creek Mine 12
Slide 13: Proposed Mine Site Layout
Click to edit Proposed Mine Master Site title Layoutstyle 13
Slide 14: Donlin Creek: Value Drivers
Click toCreek Donlin edit Master Value Drivers title style • Completed feasibility study in Q1‐2009 Æ 29.3M ozs reserves – Average yearly production 1 1.5M 5M ozs first 12 years years, 20+ year mine life – 50–55k tonnes per day, open pit with pressure oxidation and CIL – One of only a few mines worl
Slide 15: Donlin Creek: One of the World's Largest Undeveloped Gold Deposits
Donlin Creek: One of the World’s Largest Undeveloped Click to editGold Depositstitle style Master Comparison of Donlin Creek with Barrick Gold’s largest gold mine Key Operating Statistics Donlin Creek (100%) 1 Goldstrike Mine 2 Years 1–5 1 5 (Open Pit) Production (ozs/year) 1.6 Million ozs/year 1.5
Slide 16: Donlin Creek: Exploration
Click toCreek Donlin edit Master Exploration title style Resources are M&I category. 16
Slide 17: Donlin Creek: Exploration Potential
Click toCreek Donlin edit Master Exploration title style Potential 17
Slide 18: Galore Creek: 50/50 Partnership with Teck
Click toCreek Galore edit Master title style 50/50 Partnership with Teck 8 9B 8.9B lbs Copper 4 0B 4.0B lbs Copper Measured & Indicated 1 Inferred 1 7.3M ozs Gold 4.9M ozs Gold Measured & Indicated 1 Inferred 1 123M ozs Silver 80M ozs Silver Port of Stewart Measured & Indicated 1 Inferred 1 (1) At 1
Slide 19: Galore Creek: One of the World's Largest Undeveloped Copper-Gold-Silver Resources
Click toCreek Galore edit Master title style One of the world’s largest undeveloped copper‐gold‐silver resources opper Resources 35.0 35.0 Millions of ozss of Gold Ressources 30.0 30.0 25.0 25.0 First 5 years Billionss of lbs of Co 20 0 20.0 20 0 20.0 >1% Cu Eq 15.0 15.0 10.0 10.0 5.0 5.0 0.0 0.0 Ke
Slide 20: Galore Creek: Value Drivers
Click toCreek Galore edit Master Value Drivers title style • Project redesigned and re‐engineered – Lower costs, reduced time of construction, shorter access road – Major infrastructure moved out of Galore Creek Valley • Conventional tailings dam • Capacity for project expansion • Updated mine plan
Slide 21: Galore Creek Exploration Targets
Galore Click Creek to edit Exploration Master Targets title style
Slide 22: Galore Creek: Updated Access Route
Click toCreek Galore edit Master Updated title Access style Route Proposed Infrastructure for the Galore Creek Mine Km 48 22
Slide 23: Galore Creek: One of the World's Largest Undeveloped Copper-Gold Deposits
Galore Creek One of the World’s Largest Undeveloped Click pp to edit Copper‐Gold pMaster title style Deposits Comparison of Galore Creek with Barrick Gold’s largest copper mine Key Operating Statistics Galore Creek Years 1–5 1,2 Zaldívar Mine 3 Production: Copper 350 to 500 Million lbs/yr 295 Millio
Slide 24: Nome Operations: NovaGold owns 100%
Click toOperations Nome edit Master title style NovaGold owns 100% 0 5M 0.5M ozs Gold Probable Reserves 1 1.9M ozs Gold G ld Measured & Indicated 1 0 3M 0.3M ozs Gold Inferred 1 (1) M&I resources exclusive of reserves.
Slide 25: Nome Operations
Click toOperations Nome edit Master title style • Project 90% constructed • Estimated $20-30 million start‐up capital remaining • Gold p production estimated at 100,000 ozs/year • Anticipated life‐of‐mine cash costs $500-600/oz (industry average) • Potential for significant cash flow • Examining go‐
Slide 26: Ambler: NovaGold owns 100%
Click to edit Master title style Ambler NovaGold owns 100% 2.2B lbs Zinc 1.3B lbs Zinc Measured & Indicated Inferred 1 1.5B lbs Copper 93 937M lbs Copper Measured & Indicated Inferred 0.5M ozs Gold 0.3M ozss Gold o Measured & Indicated Inferred Port of Stewart 32M ozs Silver 19M ozs Silver Measured
Slide 27: Ambler
Click to edit Master title style Ambler • Multiple p ppromisingg targets g on property • Arctic deposit most advanced – Very V hi high‐grade h d VMS deposit: d it 4% copper, 6% zinc, 0.8 g/t gold, 60 g/t silver (1) • 2010 objectives bj ti – Continued community engagement – Exploration – Environmenta
Slide 28: Ambler District Geology
Click Amblerto edit Master District title style Geology NovaGold - Rio Tinto Joint Venture 28
Slide 29: Nome Road Planning Map – Preliminary Corridor Alternatives
Nome Road Planning Map – Preliminary Click to edit Corridor Master title style Alternatives Source: Alaska Department of Transportation & Public Facilities.
Slide 30: Strong Projected Gold and Copper Production Growth
Strong Projected Gold and Copper Production Growth Click with Lowto edit Master Production Costs Nettitle style of Copper Credits Nome Ops, Donlin Creek & Galore Creek (Au) NovaGold’s net share of estimated production 1,200 Donlin Creek & 1000 Galore Creek 50% (Gold) Nome Ops (Au) 500 Gold Productio
Slide 31: New Mines Expected to Achieve Production by 2015
New Mines Expected to Achieve Production by 2015 Click to edit Master Gold & Gold‐Equivalent title > 5 Moz M&Istyle Resources ABX/Kinross Goldcorp NovaGold Projects: 2 of the top 10 largest M&I Gold Resources d/Teck 70 G NovaGold Barricck/Goldcorp ont/Anglogold All Mines 100% Basis Newmont 60 NovvaG
Slide 32: Forecast Peak Gold Production
Peak Gold Pro P oduction Raate (OOO oz)) 0 200 400 600 800 1000 1200 1400 1600 1800 Buckreef IAMGOLD Click C1 Santa Luz Yamana Jeronimo Yamana Bombore IAMGOLD Bonikro Forecastto Lapa Lihir Didipio Agnico‐Eagle Oceana Peak Kittila Agnico‐Eaagle Goldex Agnico‐Eagle Cerro Blanco Goldcorp edit Kettle Ri
Slide 33: Gold Resource Ounces per Share
Gold Resource Click Ouncestitle to edit Master per Share p style 0.35 0.3 er Share 0.25 Gold Ounces pe 0.2 0.15 0.1 0.05 0 Source: Metals Economics Group as at November 6, 2009, using $1100/oz gold. 33
Slide 34: Value of Gold Resource per Dollar Invested
Value of Gold Click to Resourcetitle edit Master per Dollar p style Invested $35 n US Dollarrs $30 $25 e of Gold in $20 $15 Value $10 $5 $‐ Source: Metals Economics Group as at November 6, 2009, using $1100/oz gold. 34
Slide 35: Appendix
Click to edit Master title style A Appendix di
Slide 36: Capitalization
Click toCapitalization Share edit Master title style Issued and Options Warrants Fully diluted 1 outstanding outstanding 187.2M 13.0M 53.8M 254.0M • C$46M in cash plus cash equivalents 2 • ~US$1.2B market cap (in the money, fully diluted) • Share Sh liquidity li idit with ith an average off 3.7M 3 7
Slide 37: Value Drivers: Next 12 Months
Click toDrivers Value edit Master Next 12 title Months style Donlin Creek 9 Continued community engagement and consultation for project permitting • Continue optimization work, including potential for a natural gas pipeline • Total 3‐year budget minimum $100M (100% basis) to complete permitting and
Slide 38: Investment Leverage
Click to edit Leverage Investment Master title style Investment Leverage to Gold Investment Leverage to Increased Gold Price Gold ounces per 10 shares Ounces per $1,000 Investment Adjusted for Mining Costs 2.8:1 Increase in 3 50 0 50.0 Net Value at $1,100 w/ Cu 2.5 Margin Expansion w/ 40.0 d oz/$100
Slide 39: Project Development Pipeline and Market Valuations by Development Stage
NovaGold’s Project Development Pipeline Click to edit and Market Master Valuations bytitle style Stage Development AMBLER GALORE DONLIN ROCK PROJECT CREEK CREEK CREEK RESOURCE PRE‐ PERMIT & DISCOVERY DEFINITION FEASIBILITY PRODUCTION FEASIBILITY CONSTRUCT PEA INCREASING RESOURCE INCREASING CERTAINTY
Slide 40: Gold Sector Valuation Ranges
Gold Sector Valuation Ranges Click to edit Master title style Total Gold Resource vs. Enterprise Value Si Size off Ci l = Enterprise Circle i Value l per O Ounce off Totall G ld Resource Gold Developers Advanced Developers Junior Producers Mid‐Tier Producers 100.0 N.Dynasty Average Explorer es + Res
Slide 41: Reserve & Resource Base
Click to edit Reserve & Resource Master title Basestyle Net Share of Contained Metal 1 Project j Ownership p g y2 Resource Category Gold Copper pp Silver M ozs M lbs M ozs Donlin Creek 50% Proven & Probable 14.64 Measured & Indicated 3.00 Inferred 2.01 Nome Operations 100% Probable Reserves 0.51 Mea
Slide 42: Top 10 NovaGold Shareholders
Click10 Top toNovaGold edit Master title style 1 Shareholders • Electrum Strategic Resources • Aletheia Research & Management • Tradewinds NWQ Global Investors • Sun Valley Gold • Oppenheimer Funds • Soros Fund Management • Andreeff Equity Advisors • Blue Ridge Capital Holdings • Norges Bank Investm
Slide 43: Sustainability Commitments
Click to edit Master Sustainability Commitments title style • NovaGold supports the UN Global Compact • NovaGold supports the International Council on Mining & Metals 10 Sustainability Principles 1. Ethical business practices and sound corporate governance 2 Sustainable development part of corporate
Slide 44: The Investment Case for Gold Equities
Click to edit Master title style Th Investment The I t t Case C for f Gold G ld Equities E iti
Slide 45: Why Invest in Growth Stage Gold?
Click Invest Why to editin Growth Master Stage title styleGold? • Leverage to gold price • Increased value from resource growth & project advancement Potential for superior • Producer acquisition target shareholder returns Market Value (US$ Millions) per Million ozs of Gold Resource 150 ‐250 250 Inc
Slide 46: Anticipated Low-Cost Gold Production
Click to editLow‐Cost Anticipated Master Low Costtitle Goldstyle Production Global Industry Cash Cost Curve 1200 old ($/oz) Industry Average 1000 Cash Cost Production of >1 M ozs/yr Total Caash Cost Per Ounce of Go ~$500/oz from Donlin, Galore and Donlin Creek Rock Creek net of Copper 800 +1.5 M ozs
Slide 47: The Gold Market
Click to edit Master title style Th Gold The G ld Market M k t
Slide 48: Fundamentals for gold remain in place for continued higher prices
Fundamentals for gold remain in place Click for to edit Master continued title style higher prices • Global monetary policy has accelerated inflationary pressures • Prices for gold in real terms remain well below historical highs • Demand for gold continues to increase – Investment demand remains a
Slide 49: Increased Demand, Decreased Supply
Click to edit Increased Demand, Master Decreased title style Supply Production Global Mine Production in M ozs decreasing by 85 1M ozs annually since 2001 75 65 55 n Ounces 45 Million 35 25 15 5 ‐5 1977 1981 1985 1989 1993 1997 2001 2005 2009 South African Mine Production Other Mine Production Sourc
Slide 50: Increased Global Demand for Gold
Increased Click to edit Global Master Demand title style for Gold Global Gold Demand in US$ Billions $120 • Overall demand increasing Investment by US$9 billion annually $100 Industrial • Investment demand grown from 5% to >35% $80 Jewellery $60 $40 $20 $0 2000 2002 2004 2006 2008 Source: World Gold
Slide 51: Increased Investment Demand
Click to edit Increased Investment Master title Demand style Investment Demand's Effect on Gold Price 60 120 50 100 40 80 Milllion Ounces Percent Ch 30 60 hange 20 40 10 20 0 0 ‐10 ‐20 1977 1981 1985 1989 1993 1997 2001 2005 2009 Private Investment Percent Change in Price Source: CPM Gold Yearbook 2
Slide 52: The Copper Market
Click to edit Master title style Th Copper The C Market M k t
Slide 53: Copper: Increased Demand vs Constrained Supply
Copper: Click toIncreased Demand edit Master vs Constrained title style Supply • Global demand for copper continues to increase with population growth and industrialization – Developing countries continue to build out infrastructure and urban populations are increasing – Consumers in developing coun
Slide 54: Growth in Copper Demand with Industrialization
Click to Growth edit pp Master in Copper Demandtitle with style Industrialization Copper Intensity per Capita USA ((1878‐2005)) 30 Taiwan Japan (1950‐2005) 25 S Korea (1970‐2005) Germany (1950‐2005) ( ) per/Capita 20 S Korea Taiwan (1970‐2005) Still early days for 15 metal demand China (1950‐2005) K
Slide 55: China Driving Copper Demand
Click toDriving China edit Master Coppertitle Demand style Global Copper Demand Projected Demand 18000 for India & China rest of 15000 the World Demand in kt USA 12000 China hi Projected India USA Demand 9000 for China 6000 3000 0 1996 2006 2015 Other* Europe Japan India USA China * Other Asian coun
Slide 56: Actual Production Lower Than Projected
Actual Click toProduction Lower edit Master Than title Projected style j • Market constraints Æ delays to construction and start‐up for new projects • Strikes and other impediments Æ existing projects can’t can t meet projected production levels Copper Production Losses vs Market Expectations 500 0
Slide 57: Cautionary Note Concerning Reserve & Resource Estimates
Cautionary Note Concerning Reserve & Click to Estimates Resource edit Master title style This presentation uses the terms “probable reserves”, “measured”, “indicated”, “inferred” and “historical” resources. United States investors are advised that, while these terms are recognized and required by Ca
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