Novagold Resources Inc. · AMEX:NG
Novagold Resources — Q2 2016 Earnings Presentation
25 slides from Novagold Resources's earnings presentation, Jun 28, 2016
Slide 1: 2016 Second Quarter & Project Update
2016 Second Quarter & Project Update NYSE-MKT, TSX: NG | June 28, 2016 novagold.com
Slide 2: Conference Call Attendees
CONFERENCE CALL ATTENDEES > Introduction Mélanie Hennessey (Vice President Corporate Communications) > Corporate Update Greg Lang (President & Chief Executive Officer) > Second Quarter Financials & 2016 Budget David Ottewell (Vice President & Chief Financial Officer) > Closing Remarks Greg Lang (Pre
Slide 3: Cautionary Statements Regarding Forward-Looking 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 4: 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 Location: Southwest Alaska GALORE CREEK 50/50 with Teck Expected to be the
Slide 5: Project Permitting Is On Track
DONLIN GOLD: PROJECT PERMITTING IS ON TRACK DRAFT ENVIRONMENTAL IMPACT STATEMENT PUBLIC COMMENT PERIOD COMPLETE EIS TIMELINE: August 2012 2017 Permit Notice of Public Preliminary Draft EIS Draft EIS Public Final EIS Applications Intent Scoping Comment Record of Decision Period Submitted Submitted En
Slide 6: Second Quarter Activity Highlights: Donlin Gold
SECOND QUARTER ACTIVITY HIGHLIGHTS FOCUSED EXECUTION AND DELIVERY ON OUR BUSINESS PLAN DONLIN GOLD > Permitting update • Draft EIS public comment period closed at the end of Q2-2016 • The Corps successfully completed 17 public meetings in the Yukon-Kuskokwim (Y-K) region and Anchorage • Approximatel
Slide 7: Comments Received From Local Stakeholders
DONLIN GOLD: COMMENTS RECEIVED FROM LOCAL STAKEHOLDERS WELCOMED FEEDBACK DURING THE PUBLIC COMMENT PERIOD “As you know, exploration and development of Alaska’s “Donlin will provide far reaching benefits for Alaska natural resources plays an important part of our past, Native people throughout the st
Slide 8: Committed Partners Advancing the Project
DONLIN GOLD: COMMITTED PARTNERS ADVANCING THE PROJECT JOINT AND DEDICATED EFFORT TO COMPLETE THE EIS PROCESS BY BARRICK AND NOVAGOLD “The Donlin Gold project has the potential to become a world class asset for Barrick and for our partner NOVAGOLD. We would like nothing more than to see this potentia
Slide 9: Second Quarter Activity Highlights: Galore Creek
SECOND QUARTER ACTIVITY HIGHLIGHTS FOCUSED EXECUTION AND DELIVERY ON OUR BUSINESS PLAN GALORE CREEK > Technical studies • Studies focused on project mine planning and design, as well as waste rock and water management • A draft report for the first phase of the generalized tunneling practice study w
Slide 10: Q2-2016 Project Activity
Q2-2016 PROJECT ACTIVITY > Donlin Gold o Project funding (NG 50% share) • Q2: $2.9 million • YTD: $4.7 million • Full year: $9.0 million > Galore Creek o Project funding (NG 50% share) • Q2-2016: $0.3 million • YTD: $0.5 million • Full year: $1.0 million 10
Slide 11: Q2-2016 Operating Performance Analysis
Q2-2016 OPERATING PERFORMANCE ANALYSIS Three months ended Six months ended May 31, May 31, (US$ millions) 2016 2015 2016 2015 General and administrative(1) $4.6 $3.2 $11.9 $11.7 Donlin Gold 2.5 3.7 4.5 6.1 Galore Creek 0.3 0.3 0.5 0.4 Studies and evaluation -- 0.1 -- 0.3 Operating loss 7.4 7.3 16.9
Slide 12: Q2-2016 Cash Flow Highlights
Q2-2016 CASH FLOW HIGHLIGHTS Three months ended Six months ended May 31, May 31, (US$ millions) 2016 2015 2016 2015 General and administrative(1) $(2.7) $(2.4) $(5.3) $(5.6) Donlin Gold (2.8) (3.7) (4.7) (6.0) Galore Creek (0.3) (0.3) (0.5) (0.4) Studies and evaluation -- (0.1) -- (0.3) Working capi
Slide 13: 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 $112 million in cash and term deposits1 2016 Budget ($ millions) Donlin Gold $9 Galore Creek 1 G&A, Donlin studies, working capital and other 15 TOTAL $25 1) Includes $80 millio
Slide 14: A Large High-Grade Gold Project
DONLIN GOLD: A LARGE HIGH-GRADE GOLD PROJECT AMONG THE WORLD’S MOST SIGNIFICANT AND HIGHEST-GRADE GOLD DEPOSITS 1 1,2 Notes: 1) Shown on 100% project basis, of which NOVAGOLD holds a 50% interest 2) Measured and indicated resources inclusive of proven and probable reserves. See “Cautionary Note Conc
Slide 15: The Emerging Top-Tier Producer in the Safest Jurisdiction
DONLIN GOLD: THE EMERGING TOP-TIER PRODUCER IN THE SAFEST JURISDICTION A REMARKABLE RESOURCE AMONG EMERGING GOLD DEPOSITS IN THE AMERICAS 45.0 40.0 35.0 Donlin Gold’s size and projected production profile clearly 30.0 distinguish it from its peers (millions of ounces) M&I Gold Resource 25.0 20.0 39.
Slide 16: Double the Grade of the Average Gold Deposit in the World
DONLIN GOLD: IS DOUBLE THE GRADE OF THE AVERAGE GOLD DEPOSIT IN THE WORLD DONLIN GOLD’S HIGH GRADE ENDOWMENT PROVIDES RESILIENCE TO GOLD PRICE CYCLES Donlin Gold Average Grade2: World Average Grade1: 2.24 g/t 1.12 g/t Industry average grades are declining and sources for emerging production are incr
Slide 17: Excellent Exploration Potential
DONLIN GOLD: EXCELLENT EXPLORATION POTENTIAL MULTIPLE DRILL PROSPECTS AND TARGETS EXIST ALONG 8KM TREND The next big gold discovery? > Potential to expand current open-pit resources along strike and at depth > Good prospects to discover meaningful deposits outside current mine footprint • Reserves a
Slide 18: Significant Value Upside with Higher Gold Prices
DONLIN GOLD: SIGNIFICANT VALUE UPSIDE WITH HIGHER GOLD PRICES NPV INCREASES ~20X WITH ~2X INCREASE IN GOLD PRICE NPV after-tax (US$ in millions) 30,000 > Project has a positive return that increases substantially with higher gold prices 25,000 27year 27.0B mine life > Good payback at a broad range o
Slide 19: 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 “It is that rare “unicorn” that is located in a safe part of the world where an investor can tread without fear. As such, Donlin Gold represents for us the optimal way to invest in the space: that is, to see
Slide 20: Why Invest in NOVAGOLD?
WHY INVEST IN NOVAGOLD? EXCELLENT SHAREHOLDER BASE APPRECIATES SUPERIOR LEVERAGE “With so many macro- and micro-economic factors pointing 26.5% to a more robust price Electrum Strategic environment than we see today, Resources LP investors in NOVAGOLD should be well-positioned to derive a lot of val
Slide 21: The NOVAGOLD Opportunity
THE NOVAGOLD OPPORTUNITY Safe Geo-Political Environment: Strong Balance Sheet: Alaska and British Columbia, $112m cash + term deposits top-rated mining jurisdictions as of May 31, 2016 Accomplished Leadership Team: focused on execution Top Tier Assets: 185 years cumulative experience and delivery of
Slide 22: Appendix
APPENDIX novagold.com
Slide 23: NOVAGOLD: Reserve/Resource Table
NOVAGOLD: RESERVE/RESOURCE TABLE Donlin Gold* Tonnage (100%) Grade (100%) Metal (100%) NOVAGOLD Share (50% ) GOLD Mt g/t Au koz Au koz Au Reserves1 Proven 7.7 2.32 573 286 Probable 497.1 2.08 33,276 16,638 P&P 504.8 2.09 33,849 16,924 Resources3, inclusive of Reserves Measured 7.7 2.52 626 313 Indic
Slide 24: NOVAGOLD: Reserve/Resource Table (Con't)
NOVAGOLD: RESERVE/RESOURCE TABLE (CON’T) Notes: a. These reserve and resource estimates have been prepared in accordance with NI 43-101 and the CIM Definition Standard, unless otherwise noted. b. See numbered footnotes below on resource information. c. Rounding and significant figures may result in
Slide 25: 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 Senior Stakeholder Relations Specialist melanie.hennessey@