Novagold Resources Inc. · AMEX:NG
Novagold Resources — FY2020 Earnings Presentation
32 slides from Novagold Resources's earnings presentation, Jan 28, 2021
Slide 1: 2020 Year-End Financial Results & Project Update
2020 Year-End Financial Results & Project Update TSX, NYSE American: NG | novagold.com | January 28, 2021
Slide 2: Year-End 2020 Webcast and Conference Call Attendees
Year-End 2020 Webcast and Conference Call Attendees Introduction Mélanie Hennessey (Vice President, Corporate Communications) Year-End Update Greg Lang (President & Chief Executive Officer) Year-End Financials and 2021 Budget David Ottewell (Vice President & Chief Financial Officer) Corporate Update
Slide 3: Cautionary 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: NOVAGOLD: Donlin Gold is a Tier-One Asset in a Tier-One Jurisdiction
NOVAGOLD: Donlin Gold is a Tier-One Asset1 in a Tier-One Jurisdiction2 Unique asset with strong, investor-friendly attributes SIZE: 39,000,000 gold ounces contained in measured and indicated mineral resources3 GRADE: 2.24 g/t4, more than double the world average grade5 EXPLORATION POTENTIAL: Endowme
Slide 5: DONLIN GOLD: 2020 Activity Highlights
DONLIN GOLD: 2020 Activity Highlights Completing drill program amid COVID-19 in a safe, efficient, responsible, and cost-effective manner Health & Safety • With extensive communication and the application of health and safety protocols, there were zero COVID-19 cases on site and no Lost- Time Incide
Slide 6: DONLIN GOLD: 2020 Drill Program
DONLIN GOLD: 2020 Drill Program Encouraging initial results 1 – further advancing the unique value proposition • Mineralized intercepts continue to encounter grades higher than predicted by previous modeling • Drilling was completed as of September with 85 core holes encompassing 23,400 meters, with
Slide 7: DONLIN GOLD: 2020 Permitting Update
DONLIN GOLD: 2020 Permitting Update Key federal permits for the project received and state permitting is well advanced Federal Permitting Final Environmental Impact Statement (EIS) Joint Record of Decision (ROD) by the Corps and Bureau of Land Management Section 10/404 (wetlands) permit and BLM Offe
Slide 8: DONLIN GOLD: 2020 COVID-19 Response Activity
DONLIN GOLD: 2020 COVID-19 Response Activity Continued active external affairs and community engagement during pandemic Providing a helping hand during COVID-19 and deepening partnerships: • Delivered food to every home in eight middle Kuskokwim villages • Donated thousands of pounds of food to shel
Slide 9: DONLIN GOLD: 2020 Community Engagement
DONLIN GOLD: 2020 Community Engagement Further strengthening relationships with Alaska Native partners and key representatives in the region Donlin Gold worked with its Alaska Native partners and other key representatives of the communities in the region, responding to needs arising from the COVID-1
Slide 10: DONLIN GOLD: Long-Term Native Corporation Partners
DONLIN GOLD: Long-Term Native Corporation Partners The Donlin Gold project location was specifically selected for its resource development potential • The Alaska Native Claims Settlement Act1 (ANSCA) of 1971 resolved Alaska Native land claims, allotting 44 million acres for land use to Native Corpor
Slide 11: Partner quotes from Kuskokwim Corporation and Calista
“The Kuskokwim Corporation, TKC, has been involved every step of the way, in not only inviting Donlin Gold onto our land, but also in writing the permits, in environmental oversight, and really ensuring that this is the best possible project on our land to provide those opportunities for our shareho
Slide 12: NOVAGOLD: 2020 Operating Performance
NOVAGOLD: 2020 Operating Performance Three months ended Year ended November 30, November 30, (US$ millions) 2020 2019 2020 2019 General and administrative (1) $4.8 $3.7 $18.7 $16.3 Donlin Gold 3.1 3.8 14.5 10.5 Operating loss 7.9 7.5 33.2 26.8 Other (income) expense (2) 0.6 0.1 1.2 (0.3) Income tax
Slide 13: NOVAGOLD: 2020 Cash Flow
NOVAGOLD: 2020 Cash Flow Three months ended Year ended November 30, November 30, (US$ millions) 2020 2019 2020 2019 General and administrative (1) $(2.9) $(2.1) $(11.5) $(10.1) Donlin Gold (1.7) (3.5) (15.3) (11.1) Working capital, interest and other 0.2 1.2 1.9 3.9 Withholding tax on share-based co
Slide 14: NOVAGOLD: Maintaining a Strong Treasury
NOVAGOLD: Maintaining a Strong Treasury A healthy treasury to advance Donlin Gold to the next stage of development T R E A S U R Y P L A N N E D S P E N D I N G $122Mcash and term deposit $31-35 anticipated 2021 expenditures M balance on November 30, 2020 disclosed on January 27, 20211 G A L O R E C
Slide 15: Project Catalysts
DONLIN GOLD: Project Catalysts Multi-generational sustainable economic opportunity • Complete drill program • Report drill assay results • Incorporate drill data into the latest model • The partners will determine the next steps to update the Donlin Gold feasibility study and initiate the engineerin
Slide 16: When I Speak About Donlin Gold, I Often Ask This Question
WHEN I SPEAK ABOUT DONLIN GOLD, I OFTEN ASK THIS QUESTION What other gold development-stage asset in the industry compares in its combination of… • Enormous size; • High grade for an open pit gold mine (and hence low all- in sustaining cash costs); • Truly superb exploration upside; • A production p
Slide 17: GOLD: Decline in Discoveries and Grade as Global Production Peaks
GOLD: Decline in Discoveries and Grade as Global Production Peaks Mine supply is set to decline after years of increases • Existing mines are being depleted and grades are declining, while few new discoveries have been identified to replace them • Existing mine production at 26 of the world’s larges
Slide 18: GOLD: Sharp Underinvestment Impedes Output Growth
GOLD: Sharp Underinvestment Impedes Output Growth In 2012, mining companies began implementing aggressive cost-cutting measures and curtailing expansion plans in an effort to protect margins, as shareholders abandoned growth stories in favor of maximizing returns from existing operations • Explorati
Slide 19: Largest Gold Development Project in its Category
DONLIN GOLD: Largest Gold Development Project in its Category1 A resource more than four times the size of the peer group average 50.0 2 39.0 8.4 40.0 Donlin Gold2 Moz M&I Gold Resource (millions of ounces) 30.0 39.0 Moz peer group average1 20.0 18.8 11.7 11.5 11.3 10.9 10.0 10.0 8.2 8.1 8.0 6.3 5.0
Slide 20: DONLIN GOLD: Double the Industry Average Grade
DONLIN GOLD: Double the Industry Average Grade1 Among the world’s highest-grade known open-pit gold deposits 2.24 g/t 1.05 g/t Donlin Gold average grade2 World average grade1 While industry average grades are declining, Donlin Gold’s grade provides resilience through commodity price cycles 1) 2019 a
Slide 21: Positioned to be One of the World's Largest Gold Mines
DONLIN GOLD: Positioned to be One of the World’s Largest Gold Mines Positioned to become a million-ounce gold producer1 1.1 1.80 1.60 Moz/yr1 1.40 0.3 Moz/yr3 Projected Annual Gold Production (millions of ounces) 1.502 1.20 1.00 Donlin Gold’s 27-year mine life North and South American gold- 0.80 foc
Slide 22: The Largest Gold Project in a Safe Jurisdiction
DONLIN GOLD: The Largest Gold Project in a Safe Jurisdiction A global comparison of the top 5 annual gold producing operations with the top 5 largest development-stage gold projects1 39.0Moz2 Donlin Gold 11.5Moz 46.0Moz Livengood 1.4Moz Sukhoi Log Olimpiada 1.3Moz 2.8Moz 11.7Moz Carlin Muruntau Blac
Slide 23: Not All Ounces are The Same
DONLIN GOLD: Not All Ounces are The Same Global Gold Reserves1 Ranked by Favorability of Mining Jurisdiction2 Grades above scale3 50.0 Increasing Jurisdictional Risk2 5.0 45.0 4.5 P&P Grade (g/t Au) 40.0 4.0 Million Ounces of Gold Reserves (P&P) 35.0 3.5 P&P Reserve Grade (g/t Au) 30.0 3.0 25.0 2.5
Slide 24: The New Carlin? The Next Big Gold Discovery Could be at Donlin Gold
DONLIN GOLD: The New Carlin? The Next Big Gold Discovery Could be at Donlin Gold Substantial exploration potential along the 8 km-long mineralized trend, located on less than 5% of Donlin Gold’s land position • From 2006 to 2011, M&I resources increased 135% (16.6Moz1 to 39.0Moz2) through a well-exe
Slide 25: Gold is evolving into a must-have asset (El-Erian quote)
Gold is evolving into a “must-have” asset...investors went from treating gold as a short-term momentum trade, to seeing it more as a legitimate standalone option in long- term portfolios. Mohamed A. El-Erian August 2020 25
Slide 26: GOLD COMMENTARY: Bullish Conviction is no Longer a Rarity
GOLD COMMENTARY: Bullish Conviction is no Longer a Rarity “Gold is evolving into a “must-have” asset...investors went from treating gold as a short-term momentum trade, to seeing it more as a legitimate standalone option in long-term portfolios." Mohamed A. El-Erian, Chief Economic Advisor, Allianz,
Slide 27: GOLD: Supply Decreases as Demand Pressure Increases
GOLD: Supply Decreases as Demand Pressure Increases DEMAND DRIVERS S U P P LY P R E S S U R E S asset diversification dwindling discovery rates historic safe-haven inadequate exploration appeal budgets currency debasement decreasing ore grades protection central bank purchasing rising production cos
Slide 28: NOVAGOLD: Strong Institutional Shareholder and Management Support
NOVAGOLD: Strong Institutional Shareholder and Management Support o The 10 largest shareholders represent 62.4% of shares issued and outstanding1 o Named Executive Officers’ share ownership has increased to 2,689,1002 since joining the Company 25.7% Electrum Strategic Resources LP & affiliates 7.5%
Slide 29: NOVAGOLD: Donlin Gold is a Tier-One Asset in a Tier-One Jurisdiction
NOVAGOLD: Donlin Gold is a Tier-One Asset1 in a Tier-One Jurisdiction2 Unique asset with strong, investor-friendly attributes SIZE: 39,000,000 gold ounces contained in measured and indicated mineral resources3 GRADE: 2.24 g/t4, more than double the world average grade5 EXPLORATION POTENTIAL: Endowme
Slide 30: Appendix
Appendix
Slide 31: NOVAGOLD: Mineral Reserves & Mineral Resources
NOVAGOLD: Mineral Reserves & Mineral Resources Donlin Gold (100% basis)* Tonnage Grade Metal content * Mineral reserves and GOLD kt g/t Au koz Au resources are reported on a 100% basis. NOVAGOLD and Barrick each own 50% of the Reserves(1) Donlin Gold project. Proven 7,683 2.32 573 Donlin Gold approx
Slide 32: NOVAGOLD RESOURCES INC. contact details
NOVAGOLD RESOURCES INC. Suite 1860 – 400 Burrard Street Mélanie Hennessey Vancouver, BC, Canada V6C 3A6 VP, Corporate Communications T: 604 669 6227 melanie.hennessey@novagold.com TF: 1 866 669 6227 F: 604 669 6272 Jason Mercier www.novagold.com Manager, Investor Relations info@novagold.com jason.me