Novagold Resources Inc. · AMEX:NG
Novagold Resources — Investor Presentation (November 2015)
42 slides from Novagold Resources's investor presentation, November 2015
Slide 1: The Gold Development Company for the 21st Century
THE GOLD DEVELOPMENT COMPANY for the 21st Century NYSE-MKT, TSX: NG | November 2015 novagold.com
Slide 2: 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 3: Why Gold? A Rising Tide
WHY GOLD? A RISING TIDE GOLD HAS BEEN IN A SECULAR BULL MARKET SINCE 2000 > Driven by financial and macro-economic developments, a shift in central bank activity, and significant supply/demand pressures. $2,000 1882 Gold Price ($USD/oz) $1,800 $1,600 “Experienced observers will note $1,400 1207 1168
Slide 4: 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 > HISTORIC HAVEN: 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 cr
Slide 5: Gold Is the World's Best Performing Currency
NOT SURPRISINGLY…GOLD IS THE WORLD’S BEST PERFORMING CURRENCY ANNUAL PERFORMANCE OF SPOT GOLD IN NINE GLOBAL CURRENCIES USD EUR AUD CAD CHF CNY GBP INR JPY 2000 -3.0% 7.5% 14.8% 1.9% 3.0% - 6.6% 4.7% - 2001 2.0% 8.8% 12.3% 8.7% 6.5% - 5.0% 5.4% - 2002 24.7% 6.4% 13.3% 22.8% 5.7% - 13.1% 23.9% - 2003
Slide 6: Gold Thrives in Inflation and Deflation
GOLD THRIVES IN INFLATION AND DEFLATION GOLD IS A SAFE HAVEN THAT HAS RETAINED ITS VALUE > Gold has historically retained value on a relative and absolute basis. > Inflation, or expectations of inflation, can have a substantial impact on the price of gold, which is a trusted inflation hedge. > Defla
Slide 7: Gold Is a Valuable Portfolio Diversifier
GOLD IS A VALUABLE PORTFOLIO DIVERSIFIER PRECIOUS METALS HAVE OUTPERFORMED OIL AND MAJOR INDICES > 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. > Studies have shown that,
Slide 8: Why Gold? It's Scarce
WHY GOLD? IT’S SCARCE LIMITED DISCOVERIES, DECLINING GRADES & RISING COSTS HAS CONSTRAINED GOLD SUPPLY New Discoveries Rare Declining Grades Rising Costs • Despite increase in exploration spending over past • Current generation of operating mines is past its • Total gold production costs have risen
Slide 9: Summary: Gold Is Positioned for the Next Phase of the Bull Market
SUMMARY: GOLD IS POSITIONED FOR THE NEXT PHASE OF THE BULL MARKET SUPPLY AND DEMAND PRESSURES SUPPORT GOLD’S UPWARD TRAJECTORY SUPPLY PRESSURES DEMAND DRIVERS > Decreasing reserve grades > Asset diversification > Escalating production costs > Historic safe haven appeal > Declining production growth
Slide 10: Why Gold Equities: Extraordinary Value Proposition
WHY GOLD EQUITIES: EXTRAORDINARY VALUE PROPOSITION GOLD EQUITIES TRADING AT A 25-40% DISCOUNT TO NAV 2.00x Gold Producers Gold Developers 1.80x > Gold exploration and development 1.60x companies are down 70% - 90% from 1.40x their 2010/2011 highs1 1.20x • Trading at less than the value of 1.00x the
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: The Right Project
DONLIN GOLD: THE RIGHT PROJECT ARGUABLY THE MOST IMPORTANT GOLD PROJECT IN THE WORLD TODAY Size Partnerships Among the largest present and/or Strong partnerships with local future gold mines in the world stakeholders Jurisdiction Grade High-grade open-pit mine Donlin Gold Located in Alaska, one of t
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: 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 45.0 40.0 35.0 > Donlin Gold’s size and production profile clearly distinguish it from 30.0 its peers (millions of ounces) M&I Gold Resource 25.0 20.0 39.0 15.0 10.0 21.
Slide 15: 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 >1 MOZ/YEAR DONLIN GOLD USA ▸ 1.5 Moz/year in first five MURUNTAU Uzbekistan full years1 ▸ 1.1 Moz/year LOM1 GRASBERG Only undeveloped asset in Indonesia this category in North America PUEBLO VIEJO2
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: 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 18: 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 19: 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 (US$ in millions) 30,000 > Project has a positive return 27year 27.0B that increases substantially with higher gold prices 25,000 mine life > Good payback at a 20,000 19.2B broad rang
Slide 20: Committed Partners Advancing the Project
DONLIN GOLD: COMMITTED PARTNERS ADVANCING THE PROJECT COLLABORATING WITH OUR PARTNER TO COMPLETE THE EIS PROCESS 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 > Foc
Slide 21: 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 > Alaska’s jurisdictional appeal is comprised of five cornerstones: • Mineral potential • Established mining industry • Political and social stability • Excellent local partnerships • A full embrace of the r
Slide 22: Strong Partnerships with Local Stakeholders
DONLIN GOLD: STRONG PARTNERSHIPS WITH LOCAL STAKEHOLDERS ALASKA NATIVE CORPORATIONS: LEADERS OF REGIONAL ECONOMIC DEVELOPMENT > ANCSA established 40 years ago; resolved Alaska Native land claims > Lands valuable for resource potential selected by Regional Corporations under ANCSA > Native corporatio
Slide 23: Life of Mine Agreements with Alaska Native Corporations
DONLIN GOLD: LIFE OF MINE AGREEMENTS WITH ALASKA NATIVE CORPORATIONS STRONG AND TIME-HONORED RELATIONSHIPS WITH STAKEHOLDERS Donlin Gold has the support of the land owners through a 20+ year relationship “Calista and TKC are not only stakeholders, “Since 1995, Donlin Gold has worked but are the legi
Slide 24: Project Permitting Is on Track
DONLIN GOLD: PROJECT PERMITTING IS ON TRACK DEVELOPMENT & ENVIRONMENTAL IMPACT STATEMENT/PERMITTING TIMELINE 16 years ̴5 ̴4 27+ years ENVIRONMENTAL STUDIES 1.5 Moz/year first five full years1 EXPLORATION & ENGINEERING & CONSTRUCTION PERMITTING OPERATION 1.1 Moz/year life of mine1 August 2012 2017 Fi
Slide 25: Disciplined & Transparent Environmental Impact Statement
DONLIN GOLD: DISCIPLINED & TRANSPARENT ENVIRONMENTAL IMPACT STATEMENT AGENCY COORDINATION AND PUBLIC INVOLVEMENT > US Army Corps of Engineers, lead agency for Environmental Impact Statement (EIS) > Coordinating with 11 cooperating agencies, working together at each stage of the NEPA process • 5 Fede
Slide 26: 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 27: 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 $1,326M Tailings 120 Utilities
Slide 28: 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 29: Galore Creek: Peer Comparison
GALORE CREEK: PEER COMPARISON AMONG HIGHEST COPPER GRADE COMPARED TO NORTH AMERICAN ASSETS 0.60 > Advancing Galore Creek mine planning and project design 0.50 0.50 > Looking at opportunities to monetize the value of the asset 0.40 P&P + M&I grade (Cu%) 0.40 0.33 0.33 0.30 0.30 0.26 0.24 0.21 0.20 0.
Slide 30: 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 $130M in cash and term deposits1 2015 Revised Forecast2 $3.5M Less Donlin Gold $11.0M Galore Creek $1.0M G&A, interest & Donlin Gold joint studies $13.5M Repayment of outstandin
Slide 31: 2015 Focus
2015 FOCUS CONTINUE TO EXECUTE AND DELIVER ON OUR BUSINESS PLAN > Advance Donlin Gold permitting to a construction decision > Maintain strong relationships with all stakeholders > Advance Galore Creek mine planning and project design > Monetize the value of Galore Creek > Safeguard our cash position
Slide 32: Why Invest in NOVAGOLD?
WHY INVEST IN NOVAGOLD? IT IS A BLUE CHIP INSTITUTIONAL QUALITY INVESTMENT “...a perpetual call on the gold price 26.6% with what could be a world-class Electrum Strategic Resources LP gold mining asset, but it won't get built until the gold price is right.” John Hathaway, 44% Tocqueville Asset Mana
Slide 33: Why NOVAGOLD Why Now
WHY NOVAGOLD WHY NOW Safe Geo-Political Environment: Strong Balance Sheet: Alaska and British Columbia, $130m cash + term deposits top-rated mining jurisdictions as of August 31, 2015 NOVAGOLD focused on execution and delivery of our business plan Top Tier Assets: Accomplished Team: 185 years cumula
Slide 34: Appendix
APPENDIX novagold.com
Slide 35: 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 36: 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 37: Permitting in the U.S.
DONLIN GOLD: PERMITTING IN THE U.S. LARGE PROJECTS HAVE BEEN SUCCESSFULLY PERMITTED • 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 ~3 years • Permitting completed in 2007 • Ne
Slide 38: 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 open-pit and underground mines President & CEO (Goldstrike, Cortez, Turquoise Ridge, Bald Mou
Slide 39: NOVAGOLD: The Board of Directors
NOVAGOLD: THE BOARD OF DIRECTORS > Chairman and CIO of The Electrum Group LLC, a privately held natural resources Dr. Thomas Kaplan investment management company that controls a diversified portfolio of precious and Chairman base metals assets > Former Chief Legal Officer and Corporate Secretary wit
Slide 40: 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 41: 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 42: 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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