Novagold Resources Inc. · AMEX:NG
Novagold Resources — FY2017 Earnings Presentation
26 slides from Novagold Resources's earnings presentation, Jan 25, 2018
Slide 1: 2017 Year-End Financials & Project Update
TSX, NYSE AMERICAN: NG | novagold.com | January 25, 2018 2017 Year-End Financials & Project Update
Slide 2: Conference Call Attendees
CONFERENCE CALL ATTENDEES o Introduction Mélanie Hennessy (Vice President Corporate Communications) o Corporate Update Greg Lang (President & Chief Executive Officer) o Fourth Quarter Financials & 2018 Budget David Ottewell (Vice President & Chief Financial Officer) o Closing Remarks Greg Lang (Pres
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 be one of the largest gold producers in the world Location: Southwest Alaska GALORE CREEK 50/50 with Teck Potential to be one of
Slide 5: 2017 Achievements: Donlin Gold Permitting
2017 ACHIEVEMENTS: DONLIN GOLD PERMITTING LAYING THE GROUNDWORK FOR 2018 AND BEYOND Donlin Gold Nearing the Completion of Permitting o Federal - Environmental Impact Statement (EIS) process: • Donlin Gold and the cooperating agencies have supplied the Corps with all outstanding requested information
Slide 6: 2017 Achievements: Donlin Gold Drill Program
2017 ACHIEVEMENTS: DONLIN GOLD DRILL PROGRAM LAYING THE GROUNDWORK FOR 2018 AND BEYOND o Use of more selective mining practices to increase grade is being evaluated in conjunction with ongoing optimization work o A drill program took place to support ongoing optimization work, further strengthen und
Slide 7: 2017 Achievements: Donlin Gold Project Optimization
2017 ACHIEVEMENTS: DONLIN GOLD PROJECT OPTIMIZATION LAYING THE GROUNDWORK FOR 2018 AND BEYOND o Barrick and NOVAGOLD are focused on further improving project economics, reducing the owners’ initial capital expenditures and enhancing the project’s execution plan. The next steps include: • Integrating
Slide 8: 2017 Achievements: Stakeholder Engagement
2017 ACHIEVEMENTS: STAKEHOLDER ENGAGEMENT LAYING THE GROUNDWORK FOR 2018 AND BEYOND Community outreach efforts continued with local stakeholders: o Donlin Gold hosted project site tours with key stakeholder representatives o Donlin Gold, Calista & TKC visited a number of villages across the Y-K regi
Slide 9: 2017 Operating Performance Analysis
2017 OPERATING PERFORMANCE ANALYSIS Year ended Year ended (US$ millions) November 30, 2017 November 30, 2016 General and administrative expenses1 $20.8 $20.2 Donlin Gold 11.2 8.8 Galore Creek 1.7 1.1 Operating loss 33.7 30.1 Other expense2 4.6 3.4 Income tax 0.7 0.3 Net loss $39.0 $33.8 (1) Includes
Slide 10: 2017 Cash Flow Highlights
2017 CASH FLOW HIGHLIGHTS Year ended Year ended (US$ millions) November 30, 2017 November 30, 2016 General and administrative(1) $ (10.5) $ (9.9) Working capital, interest and other 2.2 2.5 Cash used in operating activities $ (8.3) $ (7.4) Donlin Gold - Permitting (8.1) (8.7) Donlin Gold - Drilling
Slide 11: 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 TOTAL 2018 BUDGET ($ MILLIONS) $28 Donlin Gold $84M – permitting 9 cash and term – optimization works 5 deposits1 Galore Creek 3 G&A, working capital and other 11 1) Includes $5
Slide 12: Development Projects the Size of Donlin Gold Are Scarce
DEVELOPMENT PROJECTS THE SIZE OF DONLIN GOLD ARE SCARCE A RESOURCE FOUR TIMES THE SIZE OF THE PEER GROUP AVERAGE 60 49.8 50 40 0.53 g/t 39.0 39.0 10.0 M&I Gold Resource (millions of ounces) million oz million oz 2.24 30 g/t 20 18.8 Donlin Gold Peer Group Avg. 0.52 g/t 11.5 9.5 10 8.0 8.0 0.68 6.7 6.
Slide 13: Donlin Gold: Quality Grade Double the Average Gold Deposit
DONLIN GOLD: QUALITY GRADE DOUBLE THE AVERAGE GOLD DEPOSIT IN THE WORLD AMONG THE WORLD’S HIGHEST-GRADE OPEN PIT GOLD DEPOSITS World Donlin Gold Average Grade1 Resource Grade2 1.13g/t 2.24g/t While industry average grades are declining, Donlin Gold’s grade provides resilience through commodity price
Slide 14: Donlin Gold: Expected to Be One of the Industry's Top Producing Assets
DONLIN GOLD: EXPECTED TO BE ONE OF THE INDUSTRY’S TOP PRODUCING ASSETS A REMARKABLE RESOURCE AMONG UNDEVELOPED GOLD DEPOSITS IN THE AMERICAS Donlin Gold’s size, grade and projected 1.60 production profile clearly distinguish it from its peers 1.40 1.1 2 Projected Annual Gold Production (millions of
Slide 15: Donlin Gold: Excellent Exploration Potential
DONLIN GOLD: EXCELLENT EXPLORATION POTENTIAL MULTIPLE DRILL PROSPECTS AND TARGETS EXIST ALONG THE 8 KM GOLD MINERALIZED TREND THE NEXT BIG GOLD DISCOVERY MAY BE AT DONLIN GOLD o Donlin Gold’s resource was defined with nearly 1,400 drill holes, totaling over 339,000 meters o From 2006 to 2011, M&I re
Slide 16: Donlin Gold: Significant Value Upside with Higher Gold Prices
DONLIN GOLD: SIGNIFICANT VALUE UPSIDE WITH HIGHER GOLD PRICES EXTRAORDINARY LEVERAGE TO THE GOLD PRICE NPV (US$ BILLIONS) NPV5 INCREASES ~20X $30.0 WITH ~2X INCREASE IN GOLD PRICE $27.0B o Project has a positive return that increases substantially with higher gold prices $25.0 27 YEAR MINE LIFE NPV
Slide 17: Donlin Gold: 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 18: Donlin Gold: Project Permitting Is on Track
DONLIN GOLD: PROJECT PERMITTING IS ON TRACK THE CORPS EXPECTS TO PUBLISH THE FINAL ENVIRONMENTAL IMPACT STATEMENT IN EARLY 2018 DEVELOPMENT TIMELINE: 16 years ̴6 ̴4 27+ years ENVIRONMENTAL STUDIES 1.5 Moz/year first five full years1 EXPLORATION & CONSTRUCTION PERMITTING OPERATION 1.1 Moz/year life o
Slide 19: Galore Creek: A Significant Copper-Gold-Silver Asset
GALORE CREEK: A SIGNIFICANT COPPER-GOLD-SILVER ASSET POTENTIAL TO BE ONE OF THE LARGEST, HIGHEST-QUALITY, LOWEST-COST COPPER PRODUCERS IN CANADA Copper Gold Silver 7Blbs Grade: 0.59% 5Moz Grade: 0.32g/t 102Moz Grade: 6.02g/t P&P RESERVES1 1) Galore Creek project estimates as per the pre-feasibility
Slide 20: Upcoming Catalysts
UPCOMING CATALYSTS KEY COMPANY MILESTONES ON THE HORIZON o Donlin Gold final EIS expected to be published by the U.S. Army Corps of Engineers o Expect receipt of Donlin Gold Record of Decision o NOVAGOLD reports next steps for Donlin Gold development 20
Slide 21: Top Institutional Shareholders
TOP INSTITUTIONAL SHAREHOLDERS 51% OF SHARES ISSUED & OUTSTANDING HELD BY SIX LARGEST SHAREHOLDERS2 26.3% Electrum Strategic Resources LP 7.6% Fidelity Management & Research Company $1.3B 6.8% Paulson & Co. Inc. MARKET CAP1 4.5% Van Eck Associates Corporation 3.0% The Baupost Group, L.L.C. 2.7% Tocq
Slide 22: The NOVAGOLD Opportunity
THE NOVAGOLD OPPORTUNITY SAFE GEO-POLITICAL STRONG BALANCE SHEET ENVIRONMENT $84M cash + term deposits Alaska and British Columbia, as of November 30, 2017 top-rated mining jurisdictions TOP TIER ASSETS ACCOMPLISHED Donlin Gold – Large, LEADERSHIP TEAM high-grade deposit well Extensive experience ad
Slide 23: Appendix
APPENDIX
Slide 24: 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 25: 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 26: 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@