Novagold Resources Inc. · AMEX:NG
Novagold Resources — Non-Deal Roadshow (February 2015)
57 slides from Novagold Resources's roadshow presentation, February 2015
Slide 1: The Institutional-Quality Gold Development Company
The Institutional-Quality Gold Development Company novagold.com NYSE-MKT, TSX: NG | February 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: 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 7: 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 8: 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 9: Why Gold? Gold and the USD Have 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 10: 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 11: 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 12: Donlin Gold: 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 million oz Proven & Probable Grade: 2.1 g/t RESOURCES1,2 39 million oz Measured & Indicated (inclusive of P&P reserves) Grade: 2.2 g/t 6 million oz Inferred Grade: 2.0 g/t Not
Slide 13: 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 13
Slide 14: 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 North American location distinguish it 35.0 from its peers (millions of ounces) M&I Gold Resource 30.0 25.0 39.0 20.0 15.0 19.0 10.0 15.7 5
Slide 15: Mines the Size of Donlin Gold are Scarce
Mines the Size of Donlin Gold are Scarce ONLY THREE PROJECTS IN THE WORLD ARE SLATED TO PRODUCE >1MOZ/YEAR 1 123 MINES >100 Koz 13 MINES >500 Koz GRASBERG Indonesia 3 MINES >800 Koz PUEBLO VIEJO Dominican Republic 3 MINES/ Projects Only undeveloped >1 Moz asset in this category in North America DONL
Slide 16: 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 16
Slide 17: Donlin Gold: 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: 2.2 g/t 1.01 g/t Reserve grades continue to decline while sources for emerging production to replace mined-o
Slide 18: The Highest-Quality Open-Pit Development-Stage Gold Deposit
Donlin Gold: The Highest-Quality Open-Pit Development-Stage Gold Deposit GRADE COMPARES WELL AMONG PEER GROUP OF EMERGING OPEN-PIT GOLD DEPOSITS 2.50 ▸ With a high grade endowment, Donlin Gold is a unique project better able to weather gold price cycles M&I Gold Grade (g/t) 2.00 1.50 2.24 1.77 1.00
Slide 19: Donlin Gold: The Right Project
Donlin Gold: The Right Project SUBSTANTIAL EXPLORATION POTENTIAL size partnerships grade DONLIN GOLD jurisdiction growth longevity leverage to gold 19
Slide 20: 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 21: Reserve & Resource Growth
Donlin Gold: Reserve & Resource Growth OVER FIVE YEARS RESOURCES INCREASED 135% Expanding Potential 2006 2011 ~17Moz 39Moz Notes: 21 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 22: 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 22
Slide 23: Exceptional Leverage to Gold
Donlin Gold: Has Exceptional Leverage to Gold NPV INCREASES ~20X WITH ~2X INCREASE IN GOLD PRICE ▶ Project has a positive 30,000 27.0B return that increases substantially with higher gold prices 25,000 27year mine life ▶ Good payback at a NPV (US$ in millions) 19.2B 20,000 broad range of gold prices
Slide 24: 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 ▸ Exciting that Donlin Gold is more than halfway through permitting & will be shovel-ready when sentiment returns 30 ~18 years Average Number of Years from Discovery to Prod
Slide 25: Why Donlin Gold? No New and Substantial Discoveries
Why Donlin Gold? No New and 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 reco
Slide 26: 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 26
Slide 27: 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 28: Donlin Gold: The Right Project
Donlin Gold: The Right Project STRONG PARTNERSHIPS size partnerships grade DONLIN GOLD jurisdiction growth longevity leverage to gold 28
Slide 29: 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 30: 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 31: 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 32: 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 33: The Project Permitting is On Track
Donlin Gold: The Project Permitting is On Track DEVELOPMENT TIMELINE - ADVANCING TOWARD A CONSTRUCTION DECISION 16 years ̴4 ̴4 27+ years 1.5Moz/year ENVIRONMENTAL EXPLORATION & first five full years1 CONSTRUCTION ENGINEERING & PERMITTING OPERATION 1.1Moz/year STUDIES life of mine1 WE ARE HERE HALF W
Slide 34: Permitting Milestones
Donlin Gold: Permitting Milestones PAST THE HALFWAY MARK IN THE EIS PROCESS 2012-2013 2013-2015 2015-2016 Notice of Intent Final EIS to Prepare EIS Draft EIS Record of Decision Initial permit applications Scoping summary document Prepare draft final EIS Submitted: 08/12 Completed: 08/13 Agency revie
Slide 35: 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 36: 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 billion lbs Grade: 0.5% gold 8 million oz Grade: 0.3 g/t silver 136 million oz Grade: 5.2 g/t Notes: 1) Represents 100% of measured and indicated resources of which
Slide 37: Galore Creek: Peer Comparison
Galore Creek: Peer Comparison AMONG HIGHEST COPPER GRADE COMPARED TO NORTH AMERICAN ASSETS P&P + M&I grade (Cu%) 37 Notes: Data as per SNL MEG’s MineSearch database, Company reports, SNL MEG estimates.
Slide 38: Clear Focus and Strong Funding to Execute on all Fronts
Clear Focus and Strong Funding to Execute on all Fronts 2014 TOTAL SPEND 14% LESS THAN BUDGET 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 Antic
Slide 39: 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 40: Why Invest in NOVAGOLD?
Why Invest in NOVAGOLD? A BLUE CHIP INSTITUTIONAL QUALITY INVESTMENT 26.7% Cash and Term Electrum Strategic Resources LP Deposits2 $165.3M 47% Other Convertible Notes3 11.3% Paulson & Co. Inc $15.8M 53% Market Cap4 6.9% The Baupost Held by top $1.17B Group, L.L.C. 5 shareholders1 1) Shareholder posi
Slide 41: NOVAGOLD Highlights
NOVAGOLD Highlights Safe Geo-Political Environment: Strong Balance Sheet: Alaska and British Columbia, $165m cash + term deposits top-rated mining jurisdictions as of November 30, 2014 NOVAGOLD focused on execution and delivery of our business plan Top Tier Assets: Accomplished Team: Large, high-gra
Slide 42: Appendix
appendix novagold.com
Slide 43: Donlin Gold: A Project Overview
Donlin Gold: A Project Overview ADVANCING DONLIN GOLD UP THE VALUE CHAIN ▶ Donlin Gold LLC is the operating company ▶ 50/50 ownership by NOVAGOLD and Barrick Gold ▶ Board of Directors has two representatives from each company • Chairman rotates every year • Each company has the right to appoint the
Slide 44: Donlin Gold: Project Highlights
Donlin Gold: Project Highlights DONLIN GOLD SLATED TO BE A STATE-OF-THE-ART SIGNIFICANT MINE Reserves: 33.9 Moz Au (505M tonnes ore)1 Resources: 5.1 Moz M&I (excluding P&P) and 6.0 Moz Inferred1 Mine Life: ~27 years Production: Year 1-5,1.5 Moz/year; LOM,1.1 Moz/year Operation: Open-pit, conventiona
Slide 45: Expected to Provide Three Decades of Low Cost Production
Donlin Gold: Expected to Provide Three Decades of Low Cost Production LOW OPERATING CASH COSTS AND ALL-IN SUSTAINING COSTS First Five Years Life of Mine Cash Costs1 Per Ounce Cash Costs1 Per Ounce Open-pit mining2 133 Open-pit mining2 270 Processing 208 Processing 257 G&A, royalties, land & other3 7
Slide 46: Donlin Gold: Capital Expenditures
Donlin Gold: Capital Expenditures WELL POSITIONED TO SHARE UPFRONT COSTS WITH THIRD PARTIES Areas US$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 Gas pipeline c
Slide 47: 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 $1,000/oz $1,200/oz $1,700/oz $2,000/oz $2,500/oz Base Case Average annual $M 670 950 1,500 1,785 2,185 after-tax cash flow (first full five years) Average annual $M 350
Slide 48: Permitting in the U.S.
Donlin Gold: Permitting in the U.S. LARGE PROJECTS HAVE BEEN SUCCESSFULLY PERMITTED Project Name Location Metal Time Description • Expansion Red Dog Alaska Lead/zinc ~2 years • EIS completed in 2009 • Development started on schedule in 2010 • Expansion – new heap leach facility Fort Knox Alaska Gold
Slide 49: Galore Creek: Project Overview
Galore Creek: Project Overview GALORE CREEK, AN EXCEPTIONAL ASSET ▶ Galore Creek Mining Corporation (GCMC) is the operating company ▸ 50/50 ownership by NOVAGOLD and Teck Resources Inc. ▸ Management Committee has two representatives from each company • Chairman rotates every year ▸ Project is locate
Slide 50: Galore Creek: Project Highlights
Galore Creek: Project Highlights GALORE CREEK TO BE ONE OF CANADA’S LARGEST COPPER MINES Reserves: 6.8 Blb Cu; 5.5 Moz Au; 102 Moz Ag 1 Resources: 8.9 Blb Cu; 8.0 Moz Au; 136 Moz Ag (inclusive of reserves) 1 Mine Life: ~18 years Production: Year 1-5, 400 Mlb/year Cu; LOM, 340 Mlb/year Cu Operation:
Slide 51: Galore Creek: Key Performance Indicators
Galore Creek: Key Performance Indicators ROBUST ECONOMICS HIGHLY LEVERAGED TO METAL PRICES All amounts in CAD dollars Unit Metal Prices Copper US$/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 52: NOVAGOLD: The Team
NOVAGOLD: The Team INDUSTRY LEADERS TO BRING DONLIN GOLD THROUGH PERMITTING & BEYOND MANAGEMENT ▸ 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 53: 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 Chairman investor that controls a diversified portfolio of precious and base metals assets Former Chief Legal Officer and Corporate Secretary with Franco-Nevada, transfor
Slide 54: NOVAGOLD: Reserve/Resource Table
NOVAGOLD: Reserve/Resource Table At April 30, 2012 Donlin Gold (NOVAGOLD 50%) Tonnage Grade* Metal content NOVAGOLD share** GOLD Mt g/t Moz 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
Slide 55: NOVAGOLD: Reserve/Resource Table (con't)
NOVAGOLD: Reserve/Resource Table (con’t) Copper Canyon (NOVAGOLD 70%) Tonnage Grade* Metal content NOVAGOLD share** Resources (100%)5,6 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 t = me
Slide 56: 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 57: 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
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