Novagold Resources Inc. · AMEX:NG
Novagold Resources — Non-Deal Roadshow (April 2015)
60 slides from Novagold Resources's roadshow presentation, Apr 27, 2015
Slide 1: The Institutional-Quality Gold Development Company
The Institutional-Quality Gold Development Company novagold.com NYSE-MKT, TSX: NG | April 2015
Slide 2: Cautionary Statements
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 historic
Slide 3: Roadshow Participants
Roadshow Participants Dr. Thomas Kaplan ▸ Chairman and Chief Investment Officer of The Electrum Group LLC, a privately held natural resources investor that controls a diversified Chairman portfolio of precious and base metals assets Gregory Lang ▸ Former President of Barrick Gold North America ▸ 35
Slide 4: Why Gold? Gold Has Been in a Secular Bull Market Since 2000
Why Gold? Gold Has Been in a Secular Bull Market Since 2000 We believe that gold is in a secular bull market, driven by financial and macro- RISING TIDE economic developments, a shift in central bank activity, and significant supply/demand pressures. “Experienced observers will note that sentiment i
Slide 5: Why Gold? A Valuable Portfolio Diversifier
Why Gold? A Valuable Portfolio Diversifier “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” Gold provides excellent portfolio diversification due to its low correlation with most othe
Slide 6: Gold Price History In Major World Currencies
Gold Price History In Major World Currencies GOLD HAS BEEN THE BEST PERFORMING CURRENCY OVER THE LAST DECADE Gold Price Percentage Increase 350% 300% 250% 200% 150% 100% 50% 0% -50% Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Gold in Euros Gold in Pound Sterling Gold in Ind
Slide 7: Why Gold? Gold Is More Than a Commodity
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 HISTORIC HAVEN other crise
Slide 8: Why Gold? Safe Haven that has Retained Its Value
Why Gold? Safe Haven that has Retained Its Value “GOLD CAN FLOURISH IN INFLATION AND IT CAN FLOURISH IN DEFLATION.” Gold has historically retained value on a relative and absolute basis. When imploding asset classes created a HISTORICAL deflationary spiral in 2008 and 2009, oil, equities, currencies
Slide 9: Why Gold? It's Scarce
Why Gold? It’s Scarce “GOLD IS A CURRENCY THAT SIMPLY CANNOT BE DEBASED...” 1 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. Gold Vs. Yen June 2013 – January 2
Slide 10: Why Gold? Gold and the USD Concurrently Outperformed
Why Gold? Historically Gold and the USD are Known to Have Concurrently Outperformed “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 BULLISH ON • While a weaker dollar encourages investors to stor
Slide 11: Why Gold? It is Honest Money
Why Gold? It is Honest Money 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 F
Slide 12: What Makes NOVAGOLD Unique?
What Makes NOVAGOLD Unique? A DEVELOPMENT-STAGE COMPANY WITH TWO PROJECTS OF EXCEPTIONAL SCALE, QUALITY, AND JURISDICTIONAL SAFETY DONLIN GOLD 50/50 with Barrick Poised to become one of the largest gold producers in the world GALORE CREEK 50/50 with Teck Expected to be the largest and lowest cost co
Slide 13: A Large High-Grade Gold Project
Donlin Gold: A Large High-Grade Gold Project AMONG THE WORLD’S MOST SIGNIFICANT AND HIGHEST-GRADE GOLD DEPOSITS RESERVES1 34 Moz Proven & Probable Grade: 2.09 g/t RESOURCES1,2 39 Moz Measured & Indicated (inclusive of P&P reserves) Grade: 2.24 g/t 6 Moz Inferred Grade: 2.02 g/t Notes: 1) Shown on 10
Slide 14: Donlin Gold: The Right Project
Donlin Gold: The Right Project ARGUABLY THE MOST IMPORTANT GOLD PROJECT IN THE WORLD TODAY size partnerships grade DONLIN GOLD jurisdiction growth longevity leverage to gold 14
Slide 15: The Emerging Top-Tier Producer in the Safest Jurisdiction
Donlin Gold: The Emerging Top-Tier Producer in the Safest Jurisdiction A REMARKABLE RESOURCE AMONG EMERGING OPEN-PIT GOLD DEPOSITS 40.0 ▶ Donlin Gold’s size and production profile clearly 35.0 distinguish it from its peers (millions of ounces) M&I Gold Resource 30.0 39.0 25.0 20.0 21.8 15.0 19.0 15.
Slide 16: Mines the Size of Donlin Gold are Scarce
Mines the Size of Donlin Gold are Scarce ONLY FIVE MINES/PROJECTS IN THE WORLD ARE SLATED TO PRODUCE >1MOZ/YEAR MURUNTAU 1 Uzbekistan 151 MINES >100 Koz GRASBERG Indonesia 19 MINES >500 Koz PUEBLO VIEJO1 Dominican Republic 2 MINES >800 Koz GOLDSTRIKE1 USA 5 MINES/ Projects Only undeveloped >1 Moz as
Slide 17: Donlin Gold: The Right Project
Donlin Gold: The Right Project HIGH-GRADE OPEN-PIT MINE size partnerships grade DONLIN GOLD jurisdiction growth longevity leverage to gold 17
Slide 18: More than Double the Grade of the Average Gold Deposit
Donlin Gold: Is More than Double the Grade of the Average Gold Deposit in the World VERY FEW LARGE HIGH-GRADE OPEN-PIT GOLD PROJECTS ON THE HORIZON Donlin Gold World Avg. Grade2: Avg. Grade1: 2.24 g/t 1.01 g/t Reserve grades continue to decline while sources for emerging production to replace mined-
Slide 19: Among the Highest-Quality Open-Pit Development-Stage Gold Deposits
Donlin Gold: Among the Highest-Quality Open-Pit Development-Stage Gold Deposit DONLIN GOLD’S HIGH GRADE ENDOWMENT PROVIDES RESILIENCE TO GOLD PRICE CYCLES 3.00 ▸ Grade compares well among peer group of emerging open-pit 2.50 gold deposits M&I Gold Grade (g/t) 2.00 2.79 2.31 2.24 1.50 1.77 1.63 1.41
Slide 20: Donlin Gold: The Right Project
Donlin Gold: The Right Project SUBSTANTIAL EXPLORATION POTENTIAL size partnerships grade DONLIN GOLD jurisdiction growth longevity leverage to gold 20
Slide 21: Excellent Exploration Potential
Donlin Gold: Excellent Exploration Potential MULTIPLE DRILL PROSPECTS AND TARGETS EXIST ALONG 8KM TREND 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 a
Slide 22: Reserve & Resource Growth
Donlin Gold: Reserve & Resource Growth OVER FIVE YEARS RESOURCES INCREASED 135% Expansion Potential 2006 2011 ~17 Moz 39 Moz 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
Slide 23: Donlin Gold: The Right Project
Donlin Gold: The Right Project 27-YEAR MINE LIFE; STRONG LEVERAGE TO GOLD PRICE size partnerships grade DONLIN GOLD jurisdiction growth longevity leverage to gold 23
Slide 24: Significant Value Upside with Higher Gold Prices
Donlin Gold: Significant Value Upside with Higher Gold Prices NPV INCREASES ~20X WITH ~2X INCREASE IN GOLD PRICE ▶ Project has a positive 30,000 27.0B return that increases substantially with higher 25,000 27year gold prices mine life NPV (US$ in millions) 19.2B ▶ Good payback at a 20,000 broad rang
Slide 25: Consistently Advancing the Project
Donlin Gold: Consistently Advancing the Project CO-OWNERS COMMITTED TO MOVING DONLIN GOLD THROUGH PERMITTING TO A CONSTRUCTION DECISION AT A MEASURED PACE Donlin Gold Updated FS, FS completed resources Optimization studies increased 60 completed, 135% from reserves up 2006 Project Funding on 100% ba
Slide 26: Keeping to our Timetable: Project Progressing as Forecasted
Keeping to our Timetable: Project Progressing as Forecasted DEVELOPMENT TIMELINE OF NEW GOLD PROJECTS HAS MORE THAN DOUBLED 35 ▸ Donlin Gold is more than halfway through permitting & will be ready for a construction decision when sentiment returns 30 ~18 years Average Number of Years from Discovery
Slide 27: Why Donlin Gold? No New Substantial Discoveries
Why Donlin Gold? No New Substantial Discoveries DESPITE RECORD HIGH EXPLORATION SPENDING LEVELS THE GOLD INDUSTRY HAS EXPERIENCED A RECENT DROP IN DISCOVERIES 16 Gold Discovered 10,000 Exploration Budget (US$M) 9,000 14 8,000 12 Number of Gold Discoveries 7,000 2012 10 6,000 highest year on record f
Slide 28: Donlin Gold: The Right Project
Donlin Gold: The Right Project LOCATED IN ALASKA, ONE OF THE TRULY SAFE MINING JURISDICTIONS size partnerships grade DONLIN GOLD jurisdiction growth longevity leverage to gold 28
Slide 29: Leverage in a Place Where You Can Keep the Rewards
Donlin Gold: Leverage in a Place Where You Can Keep the Rewards – Location, Location, Location JURISDICTIONAL APPEAL IS COMPRISED OF FIVE CORNERSTONES: 1) MINERAL POTENTIAL 2) ESTABLISHED MINING PRACTICE 3) POLITICAL AND SOCIAL STABILITY 4) EXCELLENT LOCAL PARTNERSHIPS AND, OF “EXISTENTIAL IMPORTANC
Slide 30: Located in a Favorable Jurisdiction
Donlin Gold: Located in a Favorable Jurisdiction ALASKA – A RESOURCE-RICH STATE WITH AN ESTABLISHED RULE OF LAW Donlin Gold located in Alaska, one of the safest jurisdictions in the world with a history of successful mine development ▶ Alaska is the second largest U.S. gold-producing State ▶ Well-de
Slide 31: Donlin Gold: The Right Project
Donlin Gold: The Right Project STRONG PARTNERSHIPS size partnerships grade DONLIN GOLD jurisdiction growth longevity leverage to gold 31
Slide 32: Perfect Alignment between Partners
Donlin Gold: Perfect Alignment between Partners Barrick Gold Fourth Quarter 2014 Results – Full Donlin Gold Disclosure “The 50% owned Donlin Gold project located in Alaska is one of the largest undeveloped gold deposits in the world. In terms of size, grade, and jurisdictional safety, Donlin Gold is
Slide 33: Partnerships & Activities
Donlin Gold: Partnerships & Activities 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-ri
Slide 34: Mining with the Local Communities
Donlin Gold: Mining with the Local Communities ALASKA NATIVE CORPORATIONS: LEADERS OF REGIONAL ECONOMIC DEVELOPMENT ▶ 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 cor
Slide 35: Durable, Long-Term Agreements with the Native Corporations
Donlin Gold: Durable, Long-Term Agreements with the Native Corporations STRONG AND TIME-HONORED RELATIONSHIPS WITH STAKEHOLDERS "Since 1995, Donlin Gold has worked constructively in “Calista and TKC are not only stakeholders, but are our region and I know our partnership will benefit our the legisla
Slide 36: A Unique Partnership with the National Fish and Wildlife Foundation
Donlin Gold: A Unique Partnership with the National Fish and Wildlife Foundation (NFWF) PROTECT, RESTORE AND CONSERVE ALASKA FISH AND WILDLIFE “We, the Board members of NOVAGOLD, are truly “The lands and waters of Alaska provide a home for proud of the fact that our company and NFWF an incredible nu
Slide 37: The Project Permitting is On Track
Donlin Gold: The Project Permitting is On Track DEVELOPMENT TIMELINE - ADVANCING TOWARD A CONSTRUCTION DECISION 16 years ̴5 ̴4 27+ years 1.5 Moz/year ENVIRONMENTAL EXPLORATION & first five full years1 CONSTRUCTION ENGINEERING & PERMITTING OPERATION 1.1 Moz/year STUDIES life of mine1 WE ARE HERE HALF
Slide 38: Permitting Milestones
Donlin Gold: Permitting Milestones PAST THE HALFWAY MARK IN THE EIS PROCESS 2012-2013 2013-2015 2015-2017 Notice of Intent Final EIS to Prepare EIS Draft EIS Record of Decision Initial permit applications Scoping summary document Public comment period Submitted: 08/12 Completed: 08/13 Prepare draft
Slide 39: Optimization Studies
Donlin Gold: Optimization Studies COLLABORATING WITH OUR PARTNER TO MAXIMIZE PROJECT RETURN ▶ 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, o
Slide 40: Galore Creek: A Significant Copper-Gold-Silver Asset in Canada
Galore Creek: A Significant Copper-Gold-Silver Asset in Canada THE KIND OF ASSET YOU CAN BUILD A COMPANY AROUND M&I Resources1 copper 9 Blbs Grade: 0.50% gold 8 Moz Grade: 0.31 g/t silver 136 Moz Grade: 5.21 g/t Notes: 1) Represents 100% of measured and indicated resources of which NOVAGOLD’s share
Slide 41: Galore Creek: Peer Comparison
Galore Creek: Peer Comparison AMONG HIGHEST COPPER GRADE COMPARED TO NORTH AMERICAN ASSETS 0.50 0.50 0.45 0.40 0.40 P&P + M&I grade (Cu%) 0.35 0.33 0.33 0.30 0.30 0.25 0.26 0.24 0.20 0.21 0.19 0.19 0.15 0.10 0.05 0.00 Galore Pebble Copper Red Chris Berg Schaft New KSM Mount Casino Creek Mountain Cre
Slide 42: Clear Focus and Strong Funding to Execute on all Fronts
Clear Focus and Strong Funding to Execute on all Fronts SUFFICIENT CASH ON HAND TO PROGRESS DONLIN GOLD THROUGH PERMITTING AND MEET FINANCIAL OBLIGATIONS Q1-2015 millions Cash and term deposits1 $157.0 2015 Budget2 Donlin Gold $12.6 Galore Creek $1.6 G&A, interest & working capital $13.3 Donlin Gold
Slide 43: 2015 Outlook
2015 Outlook CONTINUE TO EXECUTE AND DELIVER ON OUR BUSINESS PLAN PRIORITY PRIORITY PRIORITY PRIORITY PRIORITY 1 2 3 4 5 Advance Maintain Advance Evaluate Safeguard Donlin Gold strong Galore Creek opportunities our cash permitting relationships mine to monetize position to a with all planning the va
Slide 44: Why Invest in NOVAGOLD?
Why Invest in NOVAGOLD? A BLUE CHIP INSTITUTIONAL QUALITY INVESTMENT 26.7% Cash and Term Electrum Strategic Resources LP Deposits2 $157.0M 47% Other Convertible Notes3 11.3% Paulson & Co. Inc $15.8M 53% Market Cap4 6.9% The Baupost Held by top $1.2B Group, L.L.C. 5 shareholders1 1) Shareholder posit
Slide 45: NOVAGOLD Highlights
NOVAGOLD Highlights Safe Geo-Political Environment: Strong Balance Sheet: Alaska and British Columbia, $157m cash + term deposits top-rated mining jurisdictions as of February 28, 2015 NOVAGOLD focused on execution and delivery of our business plan Top Tier Assets: Accomplished Team: Donlin Gold: La
Slide 46: Appendix
Appendix novagold.com
Slide 47: Donlin Gold: A Project Overview
Donlin Gold: A Project Overview ADVANCING DONLIN GOLD UP THE VALUE CHAIN ▶ Donlin Gold LLC is the operating company ▶ 50/50 ownership by NOVAGOLD and Barrick Gold ▶ Board of Directors has two representatives from each company • Chairman rotates every year • Each company has the right to appoint the
Slide 48: Donlin Gold: Project Highlights
Donlin Gold: Project Highlights DONLIN GOLD SLATED TO BE A STATE-OF-THE-ART SIGNIFICANT MINE Reserves: 33.9 Moz Au (505M tonnes ore)1 Resources: 5.1 Moz M&I (excluding P&P) and 6.0 Moz Inferred1 Mine Life: ~27 years Production: Year 1-5,1.5 Moz/year; LOM,1.1 Moz/year Operation: Open-pit, conventiona
Slide 49: Expected to Provide Three Decades of Low Cost Production
Donlin Gold: Expected to Provide Three Decades of Low Cost Production LOW OPERATING CASH COSTS AND ALL-IN SUSTAINING COSTS First Five Years Life of Mine Cash Costs1 Per Ounce Cash Costs1 Per Ounce Open-pit mining2 133 Open-pit mining2 270 Processing 208 Processing 257 G&A, royalties, land & other3 7
Slide 50: Capital Expenditures
Donlin Gold: Capital Expenditures WELL POSITIONED TO SHARE UPFRONT COSTS WITH THIRD PARTIES Areas US$M1 Opportunities1 Mining 345 Leasing equipment ~$170M of $345M Site preparation/roads 236 Process facilities 1,326 Oxygen plant could be built by third party ~$130M of $1.3B Tailings 120 Utilities 1,
Slide 51: Donlin Gold: Key Performance Indicators
Donlin Gold: Key Performance Indicators ROBUST ECONOMICS HIGHLY LEVERAGED TO GOLD PRICES All amounts in US dollars Gold Price Unit $1,200/oz $1,500/oz $1,700/oz $2,000/oz $2,500/oz Base Case Average annual $M 950 1,306 1,500 1,785 2,185 after-tax cash flow (first full five years) Average annual $M 5
Slide 52: Permitting in the U.S.
Donlin Gold: Permitting in the U.S. LARGE PROJECTS HAVE BEEN SUCCESSFULLY PERMITTED Project Name Location Metal Time Description • Expansion Red Dog Alaska Lead/zinc ~2 years • EIS completed in 2009 • Development started on schedule in 2010 • Expansion – new heap leach facility Fort Knox Alaska Gold
Slide 53: Galore Creek: Project Overview
Galore Creek: Project Overview GALORE CREEK, AN EXCEPTIONAL ASSET ▶ Galore Creek Mining Corporation (GCMC) is the operating company ▶ 50/50 ownership by NOVAGOLD and Teck Resources Inc. ▶ Management Committee has two representatives from each company • Chairman rotates every year ▶ Project is locate
Slide 54: Galore Creek: Project Highlights
Galore Creek: Project Highlights GALORE CREEK TO BE ONE OF CANADA’S LARGEST COPPER MINES Reserves: 6.8 Blb Cu; 5.5 Moz Au; 102 Moz Ag1 Resources: 8.9 Blb Cu; 8.0 Moz Au; 136 Moz Ag (inclusive of reserves)1 Mine Life: ~18 years Production: Year 1-5, 400 Mlb/year Cu; LOM, 340 Mlb/year Cu Cash costs: L
Slide 55: Galore Creek: Key Performance Indicators
Galore Creek: Key Performance Indicators ROBUST ECONOMICS HIGHLY LEVERAGED TO METAL PRICES All amounts in CAD dollars Unit Metal Prices Copper US$/lb 2.00 2.65 3.00 3.50 4.00 Gold US$/oz 900 1,100 1,100 1,200 1,300 Silver US$/oz 15.00 18.50 20.00 25.00 30.00 LOM after-tax cash flow $M 1,514 5,118 6,
Slide 56: NOVAGOLD: The Management Team
NOVAGOLD: The Management Team INDUSTRY LEADERS TO BRING DONLIN GOLD THROUGH PERMITTING & BEYOND ▸ Former President of Barrick Gold North America Gregory Lang ▸ 35 years experience building & operating major mines President & CEO ▸ Intimate knowledge of Donlin Gold ▸ Former EVP and General Counsel of
Slide 57: NOVAGOLD: The Board of Directors
NOVAGOLD: The Board of Directors Dr. Thomas Kaplan Chairman and CIO of The Electrum Group LLC, a privately held natural resources investor Chairman that controls a diversified portfolio of precious and base metals assets Former Chief Legal Officer and Corporate Secretary with Franco-Nevada, transfor
Slide 58: NOVAGOLD: Reserve/Resource Table
NOVAGOLD: Reserve/Resource Table Donlin Gold (100% basis)* Tonnage Grade Metal content GOLD Kt g/t Au Koz Au Reserves1 Proven 7,683 2.32 573 Probable 497,128 2.08 33,276 P&P 504,811 2.09 33,849 Resources3, inclusive of Reserves Measured 7,731 2.52 626 Indicated 533,607 2.24 38,380 M&I 541,337 2.24 3
Slide 59: NOVAGOLD: Reserve/Resource Table (con't)
NOVAGOLD: Reserve/Resource Table (con’t) Notes: a. These resource estimates have been prepared in accordance with NI43-101 and the CIM Definition Standard, unless otherwise noted. b. See numbered footnotes below on resource information. c. Rounding as required by reporting guidelines may result in a
Slide 60: Contact Us
Contact Us NOVAGOLD RESOURCES INC. Suite 720 – 789 West Pender Street Vancouver, BC Canada V6C 1H2 T 604 669 6227 TF 1 866 669 6227 F 604 669 6272 www.novagold.com info@novagold.com Mélanie Hennessey Erin O’Toole VP, Corporate Communications Analyst, Investor Relations melanie.hennessey@novagold.com