Novagold Resources Inc. · AMEX:NG
Novagold Resources — Shareholder Meeting (May 2018)
37 slides from Novagold Resources's shareholder meeting presentation, May 4, 2018
Slide 1: 2018 Annual General Meeting of Shareholders
TSX, NYSE American: NG | novagold.com | May 4, 2018 2018 Annual General Meeting of Shareholders
Slide 2: Speakers
SPEAKERS Thomas Kaplan, Chairman Gregory Lang, President & CEO David Deisley, EVP & General Counsel 2
Slide 3: Cautionary Statements Regarding Forward-Looking Statements
CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS This presentation includes certain “forward-looking information” and “forward-looking statements” (collectively “forward-looking statements”) within the meaning of applicable securities legislation, including the United States Private Securi
Slide 4: Gold: Declining Production, Discovery Rates and Grades. Rising Jurisdictional Risk and Costs
GOLD: DECLINING PRODUCTION, DISCOVERY RATES AND GRADES. RISING JURISDICTIONAL RISK AND COSTS Increased Production Has Depleted Resources: Mine supply is set to decline after years of increases Global Gold Mine Production 120.00 o Annual production rose ~26% between 1997 and 2017 o Existing mines are
Slide 5: Gold: Declining Production, Discovery Rates and Grades (Cont'd)
GOLD: DECLINING PRODUCTION, DISCOVERY RATES AND GRADES. RISING JURISDICTIONAL RISK AND COSTS (CONT’D) o Global gold exploration budget rose for first time in 5 years in 2017 (from a 10-year low in 2016), but Central Bank Changes in Gold Holdings: reduced sales, increased purchases remains ~60% below
Slide 6: Why Invest in Gold Now?
WHY INVEST IN GOLD NOW? NINE FUNDAMENTAL FACTORS FOR INVESTING IN GOLD NOW1 1 The Extreme Valuations of That gold should be viewed “as cheap insurance on a possible significant retreat from current valuation Financial Market Assets extremes.” 2 The Worsening US Fiscal With the implementation of the
Slide 7: Gold Remains in a Secular Bull Market
GOLD REMAINS IN A SECULAR BULL MARKET SINCE 2000 THE PRICE OF GOLD HAS INCREASED APPROXIMATELY FIVEFOLD o Bridgewater Associates LP’s Ray Dalio suggested in August that investors should hold 5-10 percent of their portfolios in gold to hedge against rising political risks. IS GOLD REALLY AN EFFECTIVE
Slide 8: Gold: World's Largest Producers Quickly Depleting Their Reserves
GOLD: WORLD’S LARGEST PRODUCERS QUICKLY DEPLETING THEIR RESERVES LARGE HIGH QUALITY PROJECTS SUCH AS DONLIN GOLD ARE NEEDED TO REPLENISH DEPLETING RESERVES Total Reserves for 20 of the World’s Largest Gold Producers (2012-2016) 800 697 700 638 600 585 554 536 500 (Moz) 400 300 200 100 0 2012 2013 20
Slide 9: NOVAGOLD Represents Unparalleled Value Proposition
NOVAGOLD REPRESENTS UNPARALLELED VALUE PROPOSITION MAJOR MILESTONES ACHIEVED, TAKING DONLIN GOLD AND GALORE CREEK SUBSTANTIALLY UP THE VALUE CHAIN Today NOVAGOLD has achieved the following $2,000 $18.00 significant milestones toward value creation: $1,800 $16.00 ✓ DG final EIS published $1,600 ✓ Ful
Slide 10: 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 be one of the largest gold producers in the world Approx. 280 miles west of Anchorage GALORE CREEK 50/50 with Teck Potential to
Slide 11: Donlin Gold: The Right Project
DONLIN GOLD: THE RIGHT PROJECT ARGUABLY THE MOST IMPORTANT DEVELOPMENT-STAGE GOLD PROJECT IN THE WORLD LONGEVITY 27-year mine life; strong leverage to gold price JURISDICTION Located in Alaska, one of the truly safe mining jurisdictions PARTNERSHIPS Strong partnerships with local stakeholders GROWTH
Slide 12: Development Projects the Size of Donlin Gold Are Scarce
DEVELOPMENT PROJECTS THE SIZE OF DONLIN GOLD ARE SCARCE A RESOURCE FOUR TIMES THE SIZE OF THE PEER GROUP AVERAGE 60 50 49.2 9 0.52 39.0 39 40 g/t M&I Gold Resource (millions of ounces) Moz1 Moz 2.24 30 g/t Donlin Gold1 Peer Group Average2 20 18.8 0.52 g/t 11.5 9.5 10 8.0 8.0 0.68 7.4 6.7 6.5 g/t 0.7
Slide 13: High Quality Deposit with Double the Industry Average Grade
DONLIN GOLD: HIGH QUALITY DEPOSIT WITH DOUBLE THE INDUSTRY AVERAGE GRADE AMONG THE WORLD’S HIGHEST-GRADE OPEN PIT GOLD DEPOSITS Donlin Gold Average Grade1 World Average Grade2 2.24 g/t 1.13 g/t While industry average grades are declining, Donlin Gold’s grade provides resilience through commodity pri
Slide 14: Expected to Be One of the Industry's Top Producing Assets
DONLIN GOLD: EXPECTED TO BE ONE OF THE INDUSTRY’S TOP PRODUCING ASSETS POISED TO BECOME A MILLION OUNCE GOLD PRODUCER 1.60 1.40 1.501 1.20 Donlin Gold’s size, grade, and projected 1.1 Moz2 0.3 Moz Projected Annual Gold Production (millions of ounces) production profile Donlin Gold’s North and South
Slide 15: Top Ten Gold Producing Mine Comparison
DONLIN GOLD: ONLY UNDEVELOPED ASSET IN THIS CATEGORY IN NORTH AMERICA 2017 TOP TEN GOLD PRODUCING MINE COMPARISON ONLY SEVEN MINES IN THE WORLD SLATED TO PRODUCE >1M OUNCES A YEAR 39.0Moz Donlin Gold 31.6Moz Olimpiada 48.2Moz 10.0Moz 12.0Moz Muruntau Goldstrike Cortez 46.4Moz Lihir Island 25.5Moz Pu
Slide 16: Excellent Exploration Potential
DONLIN GOLD: EXCELLENT EXPLORATION POTENTIAL MULTIPLE DRILL PROSPECTS EXIST ALONG THE 8 KM GOLD MINERALIZED TREND The next big gold discovery may be at Donlin Gold: o Donlin Gold’s resource was defined with nearly 1,400 drill holes, totaling over 339,000 meters o From 2006 to 2011, M&I resources inc
Slide 17: 2017 Drill Program Highlights
DONLIN GOLD: 2017 DRILL PROGRAM HIGHLIGHTS EXCELLENT RESULTS - MINERALIZED INTERCEPTS ENCOUNTERED HIGHER GRADES THAN PREDICTED BY PREVIOUS MODELING Top Five Significant Intervals1 DC17-1821 130.5 meters grading 5.93 g/t gold, starting at 205.0 meters depth DC17-1821 39.0 meters grading 9.34 g/t gold
Slide 18: Private Land Designated for Mining
DONLIN GOLD: PRIVATE LAND DESIGNATED FOR MINING TOPOGRAPHY AMENABLE TO SITE DEVELOPMENT Lewis Deposit ACMA Deposit 18
Slide 19: Project Optimization Efforts
DONLIN GOLD: PROJECT OPTIMIZATION EFFORTS LAYING THE GROUNDWORK FOR 2018 AND BEYOND Latest drill results provide valuable inputs to advance optimization work o A total of 16 core holes were completed (7,040 m) and core samples assayed o Intercepted distinct significant high-grade zones in multiple a
Slide 20: Final EIS Milestone Quote from Barrick CEO
“The publication of the final EIS is an important milestone for Donlin Gold and reflects a high degree of professionalism and teamwork by the entire project team. The project partners share common values that include technical innovation, financial discipline, a deep commitment to safety and environ
Slide 21: Significant Value Upside with Higher Gold Prices
DONLIN GOLD: SIGNIFICANT VALUE UPSIDE WITH HIGHER GOLD PRICES NPV5 INCREASES ~20X WITH ~2X INCREASE IN GOLD PRICE Net Present Value (NPV) (US$ in Billions) NPV at 0% NPV at 5% $27.0B $2,500 $19.2B $2,000 • Project has a positive return that increases substantially with higher gold prices $1,700 $14.
Slide 22: Life of Mine Agreements with Alaska Native Corporations
DONLIN GOLD: LIFE OF MINE AGREEMENTS WITH ALASKA NATIVE CORPORATIONS TIME-HONORED RELATIONSHIPS WITH STAKEHOLDERS o Donlin Gold is located on private land specifically selected for its resource development potential • ANCSA1 established 40 years ago; resolved Alaska Native land claims • Lands valuab
Slide 23: Native Corporation Support Quotes
Maver Carey President & CEO, The Kuskokwim Corporation “As a mine that focuses on environmental responsibility, meaningful dialogue with communities, job opportunities, and economic stimulus for one of the poorest regions in the entire state, Donlin Gold has TKC’s full support.” “Ultimately, economi
Slide 24: Leverage in a Place Where You Can Keep the Rewards
DONLIN GOLD: LEVERAGE IN A PLACE WHERE YOU CAN KEEP THE REWARDS AT A TIME OF EXTREME GEOPOLITICAL UNCERTAINTY, ALASKA IS WELCOMING NEW RESPONSIBLE DEVELOPMENT DONLIN GOLD is a very rare 39 million ounce deposit located in Alaska – a safe jurisdiction and the second largest gold producing U.S. State.
Slide 25: Project Permitting Is on Track
DONLIN GOLD: PROJECT PERMITTING IS ON TRACK THE CORPS RELEASED THE FINAL ENVIRONMENTAL IMPACT STATEMENT DEVELOPMENT TIMELINE: 16 years ̴6 4-6 27+ years 1.5 ENVIRONMENTAL STUDIES Moz/year first five full years1 EXPLORATION & ENGINEERING & CONSTRUCTION PERMITTING OPERATION 1.1 Moz/year life of mine1 C
Slide 26: A Thorough, Transparent, and Established Environmental Review Process
DONLIN GOLD: A THOROUGH, TRANSPARENT, AND ESTABLISHED ENVIRONMENTAL REVIEW PROCESS SUPPORTING THE CORPS IN COMPLETING THE EIS PROCESS AND ISSUING A RECORD OF DECISION WHILE WORKING WITH ALASKA TO SECURE STATE PERMITS National Environmental Policy Act (NEPA) review completed – supports agency decisio
Slide 27: Alaska Governor Quote on Final EIS
“This is great news for Alaska, a major step toward development of a gold mine that would bring jobs to the Yukon-Kuskokwim region and help utilize Alaska’s vast natural resources. The Donlin Gold project still has a long way to go in the permitting process before construction and operations can beg
Slide 28: Upcoming Catalysts
DONLIN GOLD: UPCOMING CATALYSTS NEXT STEPS IN DONLIN GOLD’S DEVELOPMENT Integrate drill program results into resource model Determine best path forward based on updated study & prevailing market conditions Solidify execution plan Constructi on technical construction decision financing permitting & o
Slide 29: Galore Creek: A Significant Copper-Gold-Silver Asset
GALORE CREEK: A SIGNIFICANT COPPER-GOLD-SILVER ASSET MEASURED & INDICATED RESOURCES1 9Blbs 1 COPPER Grade: 0.50% Potential to be one of the largest, highest-quality, GOLD 8 Moz1 Grade: 0.31g/t lowest-cost copper producers in Canada. SILVER 136 Moz1 Grade: 5.21g/t 1) Galore Creek project estimates as
Slide 30: Galore Creek: Significant Upside Potential with Higher Copper Prices
GALORE CREEK: SIGNIFICANT UPSIDE POTENTIAL WITH HIGHER COPPER PRICES PROJECT HAS POSITIVE RETURNS THAT INCREASE SIGNIFICANTLY WITH RISING COPPER PRICES Net Present Value (NPV) (US$ in Billions) NPV at 5% NPV at 7% $3.5B $4.00 $3.1B $3.75 $2.6B $3.50 A significant copper-gold-silver asset in Canada:
Slide 31: Clear Focus and Strong Funding to Execute on All Fronts
NOVAGOLD: CLEAR FOCUS AND STRONG FUNDING TO EXECUTE ON ALL FRONTS SUFFICIENT CASH ON HAND TO COMPLETE DONLIN GOLD PERMITTING ($ MILLIONS) 2018 Budget $ 14M Donlin Gold ($9M permitting, $5M optimization work) 28.0M $ 3M Galore Creek $ 11M G&A, working capital and other 24.7M Yearly Average Annual Spe
Slide 32: Top Institutional Shareholders
TOP INSTITUTIONAL SHAREHOLDERS 52% OF SHARES ISSUED & OUTSTANDING HELD BY SIX LARGEST SHAREHOLDERS2 Electrum Strategic 26.2% Resources LP & affiliates Fidelity Management & 7.4% Research Company 6.8% Paulson & Co. Inc. $ 1.5 Market Cap1 B 5.7% Van Eck Associates Corporation 3.3% The Baupost Group, L
Slide 33: The NOVAGOLD Opportunity
THE NOVAGOLD OPPORTUNITY SAFE GEO-POLITICAL STRONG BALANCE SHEET ENVIRONMENT $77M cash + term deposits Alaska and British Columbia, as of February 28, 2018 top-rated mining jurisdictions TOP TIER ASSETS ACCOMPLISHED Donlin Gold – large, high-grade deposit well LEADERSHIP TEAM advanced in permitting;
Slide 34: Appendix
APPENDIX
Slide 35: 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 36: NOVAGOLD: Reserve/Resource Table (Cont'd)
NOVAGOLD: RESERVE/RESOURCE TABLE (CONT’D) 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 37: 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 Allison Pettit VP, Corporate Communications Manager, Investor Relations melanie.hennessey@novagold.c