Precious Metals Summit, Zurich
novagold.com
NYSE-MKT, TSX: NG | November 2014
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 historical fact, included herein including, without limitation, statements relating to Donlin Gold’s future operating or financial performance, are forwardlooking statements. Forward-looking statements are frequently, but not always, identified by words such as “plans”, “expects”, “anticipates”, “believes”, “intends”, “estimates”, “potential”,
“possible” and similar expressions, or statements that events, conditions or results “will”, “may”, “could”, or “should” occur or be achieved. These forward-looking statements are set forth in the
slides pertaining to the implementation of the Donlin Gold second updated Feasibility Study and pertaining to the implementation of the Galore Creek Pre-Feasibility Study, the factors that may
influence future gold price performance, and the potential future value of gold, and may include statements regarding perceived merit of properties; exploration results and budgets; mineral
reserves and resource estimates; work programs; capital expenditures; timelines; strategic plans; completion of transactions; market price of precious or base metals; or other statements that
are not statements of fact. Forward-looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and
future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from our expectations include the
uncertainties involving the need for additional financing to explore and develop properties and availability of financing in the debt and capital markets; uncertainties involved in the interpretation
of drilling results and geological tests and the estimation of reserves and resources; the need for continued cooperation between NOVAGOLD and Barrick Gold in the exploration and
development of the Donlin Gold property; the need for continued cooperation between NOVAGOLD and Teck Resources Ltd. in the exploration and development of the Galore Creek property;
the need for cooperation of government agencies and native groups in the development and operation of properties; the need to obtain permits and governmental approvals; risks of
construction and mining projects such as accidents, equipment breakdowns, bad weather, non-compliance with environmental and permit requirements, unanticipated variation in geological
structures, ore grades or recovery rates; unexpected cost increases; fluctuations in metal prices and currency exchange rates; and other risks and uncertainties disclosed in reports and
documents filed by NOVAGOLD with applicable securities regulatory authorities from time to time. The forward-looking statements made herein reflect our beliefs, opinions and projections on
the date the statements are made. Except as required by law, we assume no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they
change.
REGARDING SCIENTIFIC AND TECHNICAL INFORMATION
Unless otherwise indicated, all reserve and resource estimates included in this presentation have been prepared in accordance with Canadian National Instrument 43-101 Standards of
Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves (“CIM Definition
Standards”). Canadian standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission (“SEC”), and reserve and resource
information in this presentation may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, the term “resource”
does not equate to the term “‘reserves”. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be
economically and legally produced or extracted at the time the reserve determination is made. At this time, both of Donlin Gold and Galore Creek projects are without known reserves, as
defined under SEC Industry Guide 7. The SEC’s disclosure standards normally do not permit the inclusion of information concerning “measured mineral resources”, “indicated mineral
resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the
SEC. U.S. investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “inferred mineral resources”
may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is
economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report
mineralization that does not constitute “reserves” by SEC standards as in-place tonnage and grade without reference to unit measures. The requirements of NI 43-101 for identification of
“reserves” are also not the same as those of the SEC, and reserves reported in compliance with NI 43-101 may not qualify as “reserves” under SEC standards. Accordingly, information
concerning mineral deposits set forth herein may not be comparable to information made public by companies that report in accordance with United States standards.
All dollar amounts quoted in this report are in U.S. currency unless otherwise noted.
2
who is NOVAGOLD?
DEVELOPMENT-STAGE COMPANY WITH PROJECTS OF EXCEPTIONAL SCALE,
QUALITY, AND JURISDICTIONAL SAFETY
DONLIN GOLD
50% with Barrick
poised to become one of the
largest producers in the gold
industry
GALORE CREEK
50% with Teck
expected to be the largest and
lowest cost copper mine in
Canada
3
NOVAGOLD’s strategy
CONTINUE TO EXECUTE AND DELIVER ON OUR BUSINESS PLAN
▶
Committed to gold through various market cycles
▶
Advance Donlin Gold through permitting and up to a construction decision
▶
Safeguard our cash position
▶
Monetize our 50% share of Galore Creek
▶
Maintain strong relationships with all stakeholders
4
focused on donlin gold
ONE OF THE MOST SIGNIFICANT GOLD ASSETS IN DEVELOPMENT TODAY
Donlin Gold offers:
▶ TOP TIER, high-grade deposit with excellent exploration upside
▶ SECURE, supportive, loyal, and engaged stakeholders
▶ PROLIFIC gold production projected for decades to come
▶ LEVERAGE to a massive endowment with a low operating cost structure
5
donlin gold a large high-grade gold project
ATTRIBUTES POSITION IT AMONG THE WORLD’S MOST SIGNIFICANT GOLD
DEPOSITS
RESERVES1
34 million oz Proven & Probable
Grade: 2.1 g/t
RESOURCES1,2
39 million oz Measured & Indicated
Grade: 2.2 g/t
(inclusive of P&P reserves)
6 million oz Inferred
Grade: 2.0 g/t
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 Concerning Reserve & Resource Estimates” and “Reserve & Resource
Base” with footnotes in the appendix.
6
donlin gold largest resource of its peer group
A REMARKABLE RESOURCE AMONG EMERGING OPEN-PIT GOLD DEPOSITS
40.0
35.0
M&I Gold Resource
(millions of ounces)
30.0
25.0
39.0
20.0
15.0
19.0
15.7
10.0
5.0
6.5
6.2
4.21
4.0
0.0
Location
Owner(s)
Donlin Gold
Metates
USA
Mexico
NOVAGOLD (50%)
Barrick (50%)
Chesapeake
(100%)
Livengood
USA
ITH Mines (100%)
Aurora
Rainy River
Merian
Haile
Guyana
Canada
Suriname
USA
Guyana Goldfields
(100%)
New Gold (100%)
Newmont
(100%)
Romarco
(100%)
Notes:
Donlin Gold data as per the second updated feasibility study effective November 18, 2011, as amended January 20, 2012 . Peer group resource data from RBC Capital Markets Research,
focusing on large, open pit, gold focused development projects. Measured and indicated resources are inclusive of proven and probable reserves. See “Cautionary Note Concerning Reserve
& Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix.
1) Newmont reports "Mineralized Material" as defined by SEC Industry Guide 7 for its Merian gold project as opposed to an "M&I Gold Resource" as defined by NI 43-101.
7
donlin gold emerging top-tier producer in safe
jurisdiction
THE LARGEST PROJECTED GOLD PRODUCER AMONG DEVELOPMENT PROJECTS
1.60
27 year mine life
1.40
Projected Annual Gold Production
(millions of ounces)
1.501
1 million + ounces per year
1.20
1.00
0.80
0.60
1.102
0.76
0.40
0.58
0.40
0.20
0.33
0.19
0.13
0.00
Donlin Gold
Location
Owner(s)
USA
NOVAGOLD (50%)
Barrick (50%)
Metates
Mexico
Chesapeake
(100%)
Livengood
Merian
Rainy River
Aurora
Haile
USA
Suriname
Canada
Guyana
USA
ITH Mines (100%)
Newmont (100%)
New Gold (100%)
Guyana Goldfields
(100%)
Romarco (100%)
Notes:
Donlin Gold data as per Donlin Creek Gold Project Alaska, USA, NI 43-101 Technical Report on “Updated Feasibility Study”, effective November 18, 2011, as amended January 20, 2012 (the “second updated
feasibility study”). Represents 100% of measured and indicated resources of which NOVAGOLD’s share represents 50%. Measured and indicated resources inclusive of proven and probable reserves. See
“Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. Peer group data as per latest company documents, public filings and websites.
Comparison group based on large, open-pit, gold-focused development projects . 1) Projected annual gold production during first five full years of mine life; 2) Projected annual gold production during full life of mine.
8
mines the size of donlin gold are scarce
ONLY THREE PROJECTS IN THE WORLD ARE SLATED TO PRODUCE >1MOZ/YEAR
1
123 MINES
>100 Koz
13 MINES
>500 Koz
3 MINES
>800 Koz
GRASBERG
Indonesia
PUEBLO VIEJO
Dominican Republic
3 MINES/
Projects
>1 Moz
DONLIN GOLD
Only undeveloped
asset in this category in
North America
USA
▸ 1.5 Moz/year in first five full years1
▸ 1.1 Moz/year LOM1
Notes:
Donlin Gold projected annual production represents 100% of which NOVAGOLD’s share is 50%. All other production estimates, with the exception of Grasberg, are based on published 2014 average
gold annual production guidance sourced from SNL Metals & Mining. Grasberg represents the published 2014 gold sales guidance. Excludes Newmont’s Nevada operations that consist of multiple
mines. Analysis includes life of mine data for Donlin Gold.
1) If put into production as contemplated by the second updated feasibility study effective November 18, 2011, as amended January 20, 2012.
9
donlin gold more than double the grade of the
average gold deposit in the world
AMONG VERY FEW LARGE HIGH-GRADE OPEN-PIT GOLD PROJECTS ON THE
HORIZON
Donlin Gold
World
Avg. Grade2:
Avg. Grade1:
2.2 g/t
1.01 g/t
Reserve grades continue to decline while
sources for emerging production to replace
mined-out capacity become increasingly
scarce
Notes:
See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix.
1)
Average grade of all deposits globally over 1 million ounces in size, sourced from “2013 Global Gold Mine and Deposit Rankings” – Natural Resource Holdings and
Visual Capitalist.
2)
Donlin Gold data as per the second updated feasibility study effective November 18, 2011, as amended January 20, 2012. Represents 100% of measured and
indicated resources of which NOVAGOLD’s share is 50%. Measured and indicated resources are inclusive of proven and probable reserves.
10
donlin gold substantial exploration potential
MULTIPLE DRILL PROSPECTS AND TARGETS EXIST ALONG 8KM TREND
▶ Potential to expand current open-pit
resources along strike and at depth
▶ Good potential to discover meaningful
deposits outside current mine footprint
•
Reserves and resources are contained
within just 3 km of an 8 km long district
▶ Inferred mineral resource: 6 million
ounces of gold mainly within the resource
pit shell
• Upside potential to project economics
11
donlin gold reserve & resource growth
OVER FIVE YEARS RESOURCES INCREASED 135%
Expanding
Potential
2006
2011
~17Moz
39Moz
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 resources are
inclusive of proven and probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix.
12
why donlin gold? project progressing as planned
DEVELOPMENT TIMELINE OF NEW GOLD PROJECTS HAS MORE THAN DOUBLED
35
~18 years
discovery to production
111 mines
25
~11 years
discovery to production
~8 years
20
discovery to production
57 mines
27 mines
15
10
5
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
0
1985
Average Number of Years from Discovery to Production
30
Startup Year
Notes:
Data sourced from SNL Metals & Mining.
1) Based on announced mining startup dates. Expansions and mine redevelopments are not included as they are not comparable with new mine developments.
13
why gold? no new and substantial discoveries
DESPITE RECORD HIGH EXPLORATION SPENDING LEVELS THE GOLD INDUSTRY
HAS EXPERIENCED A RECENT DROP IN DISCOVERIES
16
10,000
Gold Discovered
Exploration Budget (US$M)
9,000
14
Number of Gold Discoveries
8,000
12
7,000
10
6,000
8
5,000
4,000
6
3,000
2012
highest year on
record for
exploration
spending and first
year in over two
decades with no
discoveries
4
2,000
2
1,000
0
0
1997
1999
2001
2003
2005
2007
2009
2011
2013
Notes:
Data as per SNL MEG’s MineSearch database, Company reports, SNL MEG estimates. Thomson Reuters. A gold discovery of 5 million ounces or
more is considered significant. Number of discoveries data not yet available for 2013 and 2014.
14
donlin gold has exceptional leverage to gold
NPV INCREASES ~20X WITH ~2X INCREASE IN GOLD PRICE
▶ Project has a positive
return that increases
substantially with higher
gold prices
27year
mine life
▶ Good payback at a
broad range of gold
prices
▶ Significant exploration
upside on the
mineralized trend
NPV at 5%
NPV at 0%
Notes:
Donlin Gold estimates as per the second updated feasibility study effective November 18, 2011, as amended January 20, 2012 . All dollar figures are in USD and reflect after-tax net present value (at a 0% and 5% discount
rates) of the Donlin Gold project as of 1/1/2014. At a 5% discount rate, the net present value is: $547 m @ $1,200 gold; $1,922m @ $1,350 gold; $3,147m @ $1,500 gold; $4,581 m @ $1,700 gold; $6,722 m @ $2,000 gold;
and $10,243 m @ $2,500 gold. Project development costs prior to 1/1/2014 are treated as sunk costs.
15
donlin gold located in a favorable jurisdiction
ALASKA A RESOURCE-RICH STATE WITH AN ESTABLISHED RULE OF LAW
Donlin Gold located in Alaska, one of
the safest jurisdictions in the world with
history of successful mine development
▶ Alaska is the second largest U.S.
gold-producing State
▶ Well-defined permitting process
▶ Natural resource projects integral
to the State’s economy
▶ Strong and time-tested community
support
16
donlin gold mining an integral part of communities
ALASKA NATIVE CORPORATIONS: LEADERS OF REGIONAL ECONOMIC
DEVELOPMENT
▶ ANCSA established 40 years ago; resolved
legal issues related to Native title claims
▶ Lands valuable for resource potential
selected by Regional Corporations under
ANCSA
▶ Native corporations have an owner’s interest
in the development of the selected lands to
support the economic prosperity of their
shareholders
▶ Mining is compatible and consistent with
subsistence lifestyles
▶ Donlin Gold is located on private land
selected for its resource development
potential
17
donlin gold durable, long-term agreements with
native corporations
STRONG AND TIME-HONORED RELATIONSHIPS WITH STAKEHOLDERS
“Calista and TKC are not only stakeholders, but are
the legislatively mandated landowners charged
with the responsibility of seeing the project to
fruition in an environmentally responsible manner.”
– June MacAtee, Vice President of Calista Corporation
(mineral owner)
"Since 1995, Donlin Gold has worked constructively in
our region and I know our partnership will benefit our
shareholders for many generations. Today's agreement
sets the basis for a long and productive relationship
that with construction of the mine will provide jobs and
financial value to the shareholders in our 10 villages.”
– Maver Carey, President & CEO of
The Kuskokwim Corporation (surface owner)
Donlin Gold has the support of the land owners through a 20+ year relationship
18
NFWF partnership
PROTECT, RESTORE AND CONSERVE ALASKA FISH AND WILDLIFE
“We, the Board members of NOVAGOLD, are truly
proud of the fact that our company and NFWF
have come together to create an extraordinary
partnership that can serve as a model for the
sustainable development of natural resources.”
“The lands and waters of Alaska provide a home for
an incredible number of fish and wildlife species.
We applaud this commitment from NOVAGOLD and
Donlin Gold as a significant contribution toward
conserving the wetlands, streams and wild places of
Alaska for future generations.”
Thomas Kaplan, Chairman
Jeff Trandahl, Executive Director & CEO
The partnership supports regional
solutions driven by locals to:
▶ Promote healthy watersheds
▶ Enhance and protect wildlife habitat
▶ Advance sustainable fisheries
19
donlin gold project permitting is on track
DEVELOPMENT TIMELINE - ADVANCING TOWARD A CONSTRUCTION DECISION
̴4
̴4
27+ years
firstfive
fivefull
fullyears
years1 1
first
OPERATION
ENGINEERING &
CONSTRUCTION
1.5Moz/year
Moz/year
1.5
PERMITTING
EXPLORATION &
ENVIRONMENTAL
STUDIES
16 years
1.1Moz/year
Moz/year
1.1
lifeofofmine
mine1 1
life
WE ARE HERE
HALF WAY THROUGH PERMITTING
Federal and State agencies are working cooperatively,
with day-to-day support from Donlin Gold,
to efficiently move the project through the EIS and permitting processes.
20
Notes:
1) Donlin Gold data as per the second updated feasibility study. Projected average annual production represents 100% of which NOVAGOLD’s share represents 50%.
donlin gold permitting milestones
PAST HALFWAY MARK IN THE EIS PROCESS
2012-2013
Notice of Intent
to Prepare EIS
2013-2015
2015-2016
Draft EIS
Final EIS
Record of Decision
Initial permit applications
Scoping summary document
Submitted: 08/12
Completed: 08/13
Notice of intent
Development of alternatives
Issued: 12/14/12
Completed: Q2/14
Publish final EIS
Public scoping period
Complete preliminary draft EIS
Record of decision
Ended: 03/29/13
Prepare draft final EIS
Agency review
Agency review
Prepare draft EIS
Public comment period
21
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 billion lbs
Grade: 0.5%
gold
8 million oz
Value of Contained
Metal2
$27 billion
$9.9 billion
Grade: 0.3 g/t
silver
136 million oz $2.3 billion
Grade: 5.2 g/t
Notes:
1) Represents 100% of measured and indicated resources of which NOVAGOLD’s share is 50%.
Measured and indicated resources inclusive of proven and probable reserves.
2) Value of contained metal in $USD, based on metal prices as of Oct. 17, 2014 ($3.00/lbs Cu;
$1,238.20/oz Au; $17.27/oz Ag).
See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base”
with footnotes in the appendix.
22
galore creek grade peer comparison
AMONG HIGHEST COPPER GRADE COMPARED TO NORTH AMERICAN ASSETS
P&P + M&I grade (Cu%)
23
Notes:
Data as per SNL MEG’s MineSearch database, Company reports, SNL MEG estimates.
strong balance sheet
CLEAR FOCUS BEGINS WITH STRONG FUNDING TO EXECUTE ON ALL FRONTS
$171M
cash and term deposits1
sufficient cash to meet the company's financial obligations and advance
the Donlin Gold project through the remaining permitting process
~$30M
2014 budget2
$12M
donlin gold
- permitting, community engagement & development
$2.5M
galore creek
- technical studies, community-related activities
$15M
g&a expenses, interest & working capital
Notes:
(1) Includes US$100 million in term deposits as of August 31, 2014. (2) 2014 anticipated budget expenditure disclosed on February 11, 2014 .
24
why NOVAGOLD? excellent and committed
shareholder base
BLUE CHIP INSTITUTIONAL QUALITY INVESTMENT
26.7%
Electrum Strategic
Resources LP
%
80
Institutional
Ownership
51%
Other
11.3%
Paulson & Co.
Inc
%
49
held by top
5 shareholders(1)
6.9%
The Baupost
Group, L.L.C.
1.6%
Kopernik Global
Investors, LLC
2.7%
Tocqueville Asset
Management
Notes:
(1) Shareholder positions are based on the latest 13-F filings.
committed
to Shareholder Value
25
NOVAGOLD highlights
Safest Leverage to Gold:
Alaska and British Columbia,
top-rated mining jurisdictions
Strong Balance Sheet:
$171m cash + term deposits
NOVAGOLD
focused on execution and
delivery of our business plan
Accomplished Team:
185 years experience
Prolific Production Profile:
Donlin Gold expected to be one of
industry’s top producing assets
Top Tier Assets:
Industry’s leading mineral
endowments
Supportive Stakeholders:
Long standing shareholders and
engaged local partners
26
appendix
novagold.com
donlin gold project overview
ADVANCING DONLIN GOLD UP THE VALUE CHAIN
▶ Donlin Gold LLC is the operating company
▶ 50/50 ownership by NOVAGOLD and Barrick Gold
▶ Board of Directors has two representatives from each company
• Chairman rotates every year
• Each company has the right to appoint the Donlin Gold General Manager every
two years
▶ Operates under agreements with Alaska Native Claims Settlement Act (ANCSA)
landowners
• Calista Corporation (Subsurface minerals and surface lease)
• The Kuskokwim Corporation (Surface use agreement)
▶ Project office in Anchorage
• 36 full-time employees and 2 contractors
▶ Strong track record for local hiring
28
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, conventional truck & shovel
Milling:
53.5k tonnes/day, sulfide flotation, pressure
oxidation (POX), carbon-in-leach recovery (CIL)
Strip ratio:
5.5 = 2.8B tonnes waste rock
Tailings:
Fully lined storage facility
Power:
153MW average site-generated load, fueled by natural gas
transported via a 315-mile pipeline
Logistics:
All consumables supplied by Kuskokwim River transportation
system with port near Jungjuk Creek
See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve and Resource Base” table with footnotes.
29
donlin gold expected to provide three decades of
low cost production
LOW OPERATING CASH COSTS AND ALL-IN SUSTAINING COSTS
First Five Years
Cash Costs1 Per Ounce
Open-pit mining2
Processing
G&A, royalties, land & other3
Total
All-in Sustaining Costs Per Ounce
Cash costs1
Sustaining capex
Corporate administration
Reclamation
Total
Life of Mine
133
208
70
$411
411
83
21
17
$532
Cash Costs1 Per Ounce
Open-pit mining2
Processing
G&A, royalties, land & other3
Total
270
257
108
$635
All-in Sustaining Costs Per Ounce
Cash costs1
Sustaining capex
Corporate administration
Reclamation
Total
635
50
28
22
$735
Notes:
Donlin Gold estimates as per the second updated feasibility study effective November 18, 2011, as amended January 20, 2012.
US GAAP cost of sales, excluding depreciation and reclamation
1) Net of deferred costs
2) Based on US$1,200/oz gold price
30
donlin gold
WELL POSITIONED TO SHARE UPFRONT COSTS WITH THIRD PARTIES
Areas
US$M1
Mining
345
Site preparation/roads
236
Process facilities
1,326
Tailings
120
Utilities
1,302
Ancillary buildings
304
Off-site facilities
243
Total Direct Costs
414
Indirect Costs
1,405
984
Total Owner’s & Indirect
Costs, and Contingency
2,803
Total Project Cost
6,679
1) Represents 100% of project’s capital expenditures
Leasing equipment ~$170M
Oxygen plant could be built by third party ~$130M
Gas pipeline could be built by third party $834M
3,876
Owners’ cost
Contingency
Opportunities1
Healthy Contingency
>$1B potential capital reductions
31
donlin gold key performance indicators
ROBUST ECONOMICS HIGHLY LEVERAGED TO GOLD PRICES
All amounts in US dollars
Gold Price
Unit
$1,000/oz
$1,200/oz
Base Case
$1,700/oz
$2,000/oz
$2,500/oz
Average annual
after-tax cash flow
(first full five years)
$M
670
950
1,500
1,785
2,185
Average annual
after-tax cash flow (LOM)
$M
350
500
815
990
1,275
NPV (5%) after-tax1
$M
(1,340)
550
4,580
6,720
10,240
NPV (0%) after-tax1
$M
2,100
6,200
14,620
19,250
26,975
IRR after-tax1
%
2.3
6.0
12.3
15.1
19.1
Years
19.1
9.2
5.3
4.4
3.5
Payback period
Notes:
Donlin Gold estimates as per the second updated feasibility study effective November 18, 2011, as amended January 20, 2012. All dollar figures are in USD and reflect after-tax net present value (at a 0% and 5% discount
rates) of the Donlin Gold Project as of 1/1/2014. Project development costs prior to that date are treated as sunk costs.
1)
NPVs and IRRs as at January 1, 2014. Project development costs prior to that date are treated as sunk costs.
32
donlin gold current work
PROCEEDING ON SCHEDULE AS PER EIS TIMELINE
▶ Maintaining strong working relationships with the agencies and providing input
throughout the permitting and EIS processes
▶ EIS process and current activities
• Alternatives development addressing mine, pipeline and transportation
components was completed in Q1 2014
• PDEIS well underway, initial drafts of baseline conditions and analysis of
impacts expected to be completed by year-end 2014
• Draft EIS anticipated mid-year 2015
▶ Major permit application submittals and agency reviews – well underway
• Air quality
• Water discharge and usage
• Pipeline plan of development
• Wetlands
• Dam safety
33
permitting in the U.S.
LARGE PROJECTS HAVE BEEN SUCCESSFULLY PERMITTED
Project Name
Location
Metal
Time
Description
Red Dog
Alaska
Lead/zinc
~2 years
•
•
•
Expansion
EIS completed in 2009
Development started on schedule in 2010
Fort Knox
Alaska
Gold
~3 years
•
•
Expansion – new heap leach facility
Permitting completed in 2007
Pogo
Alaska
Gold
~3 years
•
•
•
New mine
Permitting completed in 2004
Operations began in 2006
Arturo
Nevada
Gold
~4 years
•
•
•
Major pit expansion
New waste rock and heap leach facilities
EIS/ROD completed in May 2014
Rochester
Nevada
Silver
~1 year
•
•
Expansion – new heap leach & mine reopening
EA/permitting completed in 2011
Cortez
Nevada
Gold
~3 years
•
•
Major pit expansion
EIS/permitting completed in 2008/2009
Goldstrike
Nevada
Gold
~2 years
•
•
•
Major pit expansion
Waste rock and tailings facilities
ROD approving the project was in 2009
Hycroft
Nevada
Gold
~2 years
•
•
Reactivation
EIS/permitting completed in 2012
Long Canyon
Nevada
Gold
~3 years
(anticipated)
•
•
New pit, heap leach, mill and tailings facility
Draft EIS issued in March 2014
Pan
Nevada
Gold
~2 years
•
•
New open pit and heap leach
EIS/permitting completed in 2013
Minnesota
Copper/nickel/cobalt
~12 years
(anticipated)
•
•
New open pit
Final EIS and Record of Decision anticipated in the first half 2015
South Carolina
Gold
~4 years
(anticipated)
•
•
•
New mine on historic property
Open pits, processing and tailings facilities
34
Final EIS issued July 2014, ROD anticipated November 2014
NorthMet
Haile
galore creek project overview
GALORE CREEK, AN EXCEPTIONAL ASSET
▶
Galore Creek Mining Corporation (GCMC) is the operating company
▸
50/50 ownership by NOVAGOLD and Teck Resources Inc.
▸
Management Committee has two representatives from each company
•
Chairman rotates every year
▸
Project is located within the Tahltan Nation Territory and operates under a
Participation Agreement
▸
All mineral claims are on Crown land
▸
Project office in Vancouver
•
▸
Abundance of technical strength to draw from within Teck
Strong track record for Tahltan hiring at project site as well as contracting and
procurement with Tahltan businesses and joint ventures
35
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 Ag 1
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
Operation:
Open-pit, conventional truck & shovel
Milling:
+80k tonnes/day, conventional crush, grind, and Cu/Au/Ag flotation
concentration, plant located in West More Valley
Strip ratio:
2.2 = 1.1B tonnes waste rock
Tailings:
storage facility located in West More Valley next to plant
Power:
BC Hydro’s Northwest Transmission Line is now in service
connecting from near Terrace, BC to Bob Quinn to promote remote
industrial development, Galore Creek to tie into the NTL
Logistics:
Port facilities to be built near Stewart, BC
Notes:
See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve and Resource Base” table with footnotes.
36
galore creek key performance indicators
ROBUST ECONOMICS HIGHLY LEVERAGED TO METAL PRICES
All amounts in CAD dollars
Unit
Copper
Gold
Silver
LOM after-tax cash flow
US$/lb
US$/oz
US$/oz
$M
Metal Prices
2.00
900
15.00
1,514
2.65
1,100
18.50
5,118
3.00
1,100
20.00
6,641
3.50
1,200
25.00
9,223
4.00
1,300
30.00
11,812
NPV (5%) after-tax1
$M
(969)
988
1,794
3,134
4,458
NPV (7%) after-tax1
$M
(1,431)
137
778
1,837
2,877
IRR after-tax1
%
2.4
7.4
9.2
11.9
14.3
Years
13.2
7.8
6.1
4.1
3.3
Payback period
Notes:
Galore Creek estimates as per the 2011 Pre-Feasibility Study. All dollar figures are in CAD. See “Cautionary Note Concerning Reserve & Resource Estimates” and
“Reserve & Resource Base” with footnotes in the appendix.
1)
NPVs and IRRs as of two years prior to significant project spend. Project development costs prior to that point are treated as sunk costs.
37
the NOVAGOLD team
INDUSTRY LEADERS TO BRING DONLIN GOLD THROUGH PERMITTING & BEYOND
MANAGEMENT
Gregory Lang
President & CEO
David Deisley
Executive Vice President and
General Counsel
David Ottewell
Vice President and Chief
Financial Officer
Mélanie Hennessey
Vice President, Corporate
Communications
Ron Rimelman
Vice President, Environment,
Health, Safety & Sustainability
Richard Williams
Vice President, Engineering
and Development
▸
▸
▸
Former President of Barrick Gold North America
35 years experience building & operating major mines
Intimate knowledge of Donlin Gold
▸
▸
▸
Former EVP and General Counsel of Goldcorp
Regional General Counsel for Barrick Gold North America
Extensive track record in project permitting, corporate social responsibility,
mergers and acquisitions and corporate development
25 years of mining industry experience
▸
▸
▸
▸
Former VP and Corporate Controller of Newmont Mining Corporation
25 years of mining industry experience
Diverse experience in all facets of financial management, from mine operations
to executive corporate financial management of premier gold producers
▸
Held variety of executive and senior IR & corporate communications positions
with Goldcorp, New Gold, and Hecla Mining Company
Leading NOVAGOLD’s internal and external communications functions
▸
▸
▸
25+ years of environmental experience, managing environmental impact
assessments and permitting activities world-wide
Leadership role on mine permitting and NEPA evaluations for mine projects in
Alaska since 1993
▸
▸
▸
Former Project Director for the Pueblo Viejo project in the Dominican Republic
30 years of experience developing and operating major mines world-wide
Particular expertise in autoclave technology
38
NOVAGOLD board of directors
Dr. Thomas Kaplan
Chairman
Chairman and CIO of The Electrum Group LLC, a privately held natural resources
investor that controls a diversified portfolio of precious and base metals assets
Sharon Dowdall
Former Chief Legal Officer and Corporate Secretary with Franco-Nevada, transforming an
industry pioneer into one of the most successful precious metals enterprises in the world
Dr. Marc Faber
Publishes a monthly investment newsletter entitled The Gloom, Boom & Doom
Report and is the author of several books
Greg Lang
President & CEO
Former President of Barrick Gold North America, 35 years experience building &
operating major mines with intimate knowledge of Donlin Gold
Gil Leathley
COO and Director of Sunward Resources, former Senior Vice President and Chief
Operating Officer of the Company
Igor Levental
President of The Electrum Group LLC, former VP of Homestake Mining and International
Corona Corp.
Kalidas Madhavpeddi
Former Executive with Phelps Dodge
Gerald McConnell
Former Chairman and CEO of NOVAGOLD, CEO of Namibia Rare Earths Inc.
Clynton Nauman
CEO of Alexco Resources, formerly with Viceroy Gold and Kennecott Minerals
Rick Van Nieuwenhuyse
CEO of NovaCopper, founder and former CEO of NOVAGOLD
Anthony Walsh
Former President and Chief Executive Officer of Miramar Mining Corporation, which in
2007 was sold to Newmont Mining Corporation.
39
NOVAGOLD reserve/resource table
At April 30, 2012
Donlin Gold (NOVAGOLD 50%)
GOLD
Reserves (100%)1
Proven
Probable
P&P
Resources (100%)3 inclusive of reserves
Measured
Indicated
M&I
Inferred
Tonnage
Mt
Grade*
g/t
Metal content
Moz
NOVAGOLD share**
Moz
7.7
2.32
0.57
0.29
497.1
504.8
2.08
2.09
33.28
33.85
16.64
16.93
7.7
533.6
541.3
92.2
2.52
2.24
2.24
2.02
0.63
38.38
39.01
5.99
0.31
19.19
19.50
3.00
Tonnage
Mt
Grade*
%Cu
Metal content
Mlbs
NOVAGOLD share**
Mlbs
Galore Creek (NOVAGOLD 50%)
COPPER
Reserves (100%)2
Proven
Probable
P&P
Resources (100%)4 inclusive of reserves
Measured
Indicated
M&I
Inferred
GOLD
Reserves (100%)2
Proven
Probable
P&P
Resources (100%)4 inclusive of reserves
Measured
Indicated
M&I
Inferred
SILVER
Reserves (100%)2
Proven
Probable
P&P
Resources (100%)4 inclusive of reserves
Measured
Indicated
M&I
Inferred
69.0
0.61
900.0
450.0
459.1
528.0
0.58
0.59
5,900.0
6,800.0
2,950.0
3,400.0
108.4
706.3
814.7
346.6
0.48
0.50
0.50
0.42
1,147.0
7,786.0
8,933.0
3,230.0
573.5
3,893.0
4,466.5
1,615.0
Mt
g/t
Moz
Moz
69.0
0.52
1.15
0.58
459.1
528.0
0.29
0.32
4.30
5.45
2.15
2.73
108.4
706.3
814.7
346.6
0.48
0.28
0.31
0.24
1.70
6.40
8.00
2.70
0.85
3.20
4.00
1.35
Mt
g/t
Moz
Moz
69.0
4.94
11.0
5.5
459.1
528.0
6.18
6.02
91.2
102.2
45.6
51.1
108.4
706.3
814.7
346.6
4.10
5.38
5.21
4.28
14.30
122.10
136.40
47.73
7.15
61.05
68.20
23.87
40
reserve/resource table (con’t)
Copper Canyon (NOVAGOLD 70%)
Resources (100%)5,6
COPPER
Inferred
GOLD
Inferred
SILVER
Inferred
t = metric tonne
M = million
g/t = grams/tonne
* Reserve grade is diluted; resource
grade is in situ.
** NOVAGOLD share net after earn-ins
Tonnage
Grade*
Metal content
NOVAGOLD share**
Mt
%Cu
Mlbs
Mlbs
53.7
0.50
592.0
414.4
Moz
Mt
g/t
Moz
53.7
0.73
1.26
0.88
Mt
g/t
Moz
Moz
53.7
10.60
18.36
12.85
Approximate cut-off grades (see Resource Footnotes below):
Donlin Gold
Reserves1: 0.57 g/t gold
Resources3: 0.46 g/t gold
Galore Creek
Reserves2: C$10.08 NSR
Resources4: C$10.08 NSR
Copper Canyon
Resources5,6: 0.6% copper equivalent
41
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 apparent summation differences between tonnes, grade and contained metal content
d. Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounces, contained copper pounds as imperial pounds
Resource Footnotes:
Mineral Reserves are contained within Measured and Indicated pit designs, and supported by a mine plan, featuring variable throughput rates, stockpiling and cut-off optimization. The pit designs and mine plan were optimized on diluted grades using the following economic and technical parameters: Metal price for
gold of US$975/oz; reference mining cost of US$1.67/t incremented US$0.0031/t/m with depth from the 220 m elevation (equates to an average mining cost of US$2.14/t), variable processing cost based on the formula 2.1874 x (S%) + 10.65 for each US$/t processed; general and administrative cost of US$2.27/t
processed; stockpile rehandle costs of US$0.19/t processed assuming that 45% of mill feed is rehandled; variable recoveries by rock type, ranging from 86.66% in shale to 94.17% in intrusive rocks in the Akivik domain; refining and freight charges of US$1.78/oz gold; royalty considerations of 4.5%; and variable pit
slope angles, ranging from 23º to 43º. Mineral Reserves are reported using an optimized net sales return value based on the following equation: Net Sales Return = Au grade * Recovery * (US$975/oz – (1.78 + (US$975/oz – 1.78) * 0.045)) - (10.65 + 2.1874 * (S%) + 2.27 + 0.19) and reported in US$/tonne. Assuming
an average recovery of 89.54% and an average S% grade of 1.07%, the marginal gold cutoff grade would be approximately 0.57 g/t, or the gold grade that would equate to a 0.001 NSR cutoff at these same values. The life of mine strip ratio is 5.48. The assumed life-of-mine throughput rate is 53.5 kt/d.
Mineral Reserves are contained within Measured and Indicated pit designs using metal prices for copper, gold and silver of US$2.50/lb, US$1,050/oz, and US$16.85/oz, respectively. Appropriate mining costs, processing costs, metal recoveries and inter ramp pit slope angles varing from 42º to 55º were used to
generate the pit phase designs. Mineral Reserves have been calculated using a 'cashflow grade' ($NSR/SAG mill hr) cut-off which was varied from year to year to optimize NPV. The net smelter return (NSR) was calculated as follows: NSR = Recoverable Revenue – TCRC (on a per tonne basis), where: NSR = Net
Smelter Return; TCRC = Transportation and Refining Costs; Recoverable Revenue = Revenue in Canadian dollars for recoverable copper, recoverable gold, and recoverable silver using metal prices of US$2.50/lb, US$1,050/oz, and US$16.85/oz for copper, gold, and silver, respectively, at an exchange rate of
CDN$1.1 to US$1.0; Cu Recovery = Recovery for copper based on mineral zone and total copper grade; for Mineral Reserves this NSR calculation includes mining dilution. SAG throughputs were modeled by correlation with alteration types. Cash flow grades were calculated as the product of NSR value in $/t and
throughput in t/hr. The life of mine strip ratio is 2.16.
Mineral Resources are contained within a conceptual Measured, Indicated and Inferred optimized pit shell using the following assumptions: gold price of US$1,200/oz; variable process cost based on 2.1874 * (sulphur grade) + 10.6485; administration cost of US$2.29/t; refining, freight & marketing (selling costs) of
US$1.85/oz recovered; stockpile rehandle costs of US$0.20/t processed assuming that 45% of mill feed is rehandled; variable royalty rate, based on royalty of 4.5% * (Au price – selling cost). Mineral Resources have been estimated using a constant Net Sales Return cut-off of US$0.001/t milled. The Net Sales Return
was calculated using the formula: Net Sales Return = Au grade * Recovery * (US$1200/oz – (1.85 + ((US$1200/oz – 1.85) * 0.045)) - (10.65 + 2.1874 * (S%) + 2.29 + 0.20)) and reported in US$/tonne. Mineral Resources are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have
demonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. Inferred Resources have a great amount of uncertainty as to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred Resources will ever
be upgraded to a higher category. See "Cautionary Note Concerning Reserve & Resource Estimates".
Mineral resources are contained within a conceptual Measured, Indicated and Inferred optimized pit shell using the same economic and technical parameters as used for Mineral Reserves. Tonnages are assigned based on proportion of the block below topography. The overburden/bedrock boundary has been
assigned on a whole block basis. Mineral resources have been estimated using a constant NSR cut-off of C$10.08/t milled. The Net Smelter Return (NSR) was calculated as follows: NSR = Recoverable Revenue – TCRC (on a per tonne basis), where: NSR = Diluted Net Smelter Return; TCRC = Transportation and
Refining Costs; Recoverable Revenue = Revenue in Canadian dollars for recoverable copper, recoverable gold, and recoverable silver using silver using the economic and technical parameters mentioned above. The mineral resource includes material within the conceptual M,I&I pit that is not scheduled for processing
in the mine plan but is above cutoff. Mineral Resources are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. Inferred Resources have a great amount of uncertainty
as to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred Resources will ever be upgraded to a higher category. See "Cautionary Note Concerning Reserve & Resource Estimates".
The copper-equivalent grade was calculated as follows: CuEq = Recoverable Revenue ÷ 2204.62 * 100 ÷ 1.55. Where: CuEq = Copper equivalent grade; Recoverable Revenue = Revenue in US dollars for recoverable copper, recoverable gold and recoverable silver using metal prices of US$1.55/lb, US$650/oz, and
US$11/oz for copper, gold, and silver, respectively; for the purposes of the equivalency formula, Cu Recovery is assumed to be 100%. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. Inferred
Resources have a great amount of uncertainty as to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred Resources will ever be upgraded to a higher category. See "Cautionary Note Concerning Reserve & Resource Estimates".
NOVAGOLD Canada Inc. has agreed to transfer its 60% joint venture interest in the Copper Canyon property to the Galore Creek Partnership, which is equally owned by NOVAGOLD Canada Inc. and a subsidiary of Teck Resources Limited. The remaining 40% joint venture interest in the Copper Canyon property is
owned by another wholly owned subsidiary of NOVAGOLD.
Cautionary Note Concerning Reserve & Resource Estimates
This summary table uses the term “resources”, “measured resources”, “indicated resources” and “inferred resources”. United States investors are advised that, while such terms are recognized and required by Canadian securities laws, the United States Securities and Exchange Commission (the “SEC”) does not
recognize them. Under United States standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Mineral resources that are not mineral reserves
do not have demonstrated economic viability. United States investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. Further, inferred resources have a great amount of uncertainty as to their existence and as to whether they can be mined
legally or economically. It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher category. Therefore, United States investors are also cautioned not to assume that all or any part of the inferred resources exist, or that they can be mined legally or economically. Disclosure of
“contained ounces” is permitted disclosure under Canadian regulations, however, the SEC normally only permits issuers to report “resources” as in place tonnage and grade without reference to unit measures. Accordingly, information concerning descriptions of mineralization and resources contained in this release
may not be comparable to information made public by United States companies subject to the reporting and disclosure requirements of the SEC.
NI 43-101 is a rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all resource estimates contained in this circular have been prepared in
accordance with NI 43-101 and the CIM Definition Standards.
Technical Reports and Qualified Persons
The documents referenced below provide supporting technical information for each of NOVAGOLD's projects.
Project
Donlin Gold
Galore Creek
Qualified Person(s)
Most Recent Disclosure & Filing Date
Tony Lipiec, P. Eng., AMEC
Donlin Creek Gold Project
Gordon Seibel R.M. SME, AMEC
Alaska, USA
Kirk Hanson P.E., AMEC
NI 43-101 Technical Report on Second Updated Feasibility Study amended filing on January 23, 2012
Robert Gill, P.Eng., AMEC
Galore Creek Copper–Gold Project,
Jay Melnyk, P.Eng., AMEC
British Columbia, NI 43-101 Technical Report on Pre-Feasibility Study,
Greg Kulla, P.Geo., AMEC
filed on September 12, 2011
Greg Wortman, P.Eng., AMEC
Dana Rogers, P.Eng., Lemley International
Heather White, B.Sc., P.Eng., who is a consultant to NOVAGOLD and a “qualified person” under NI 43-101, has approved the scientific and technical information included in this section related to: (i) Donlin Gold since the issuance of the technical report filed on January 23, 2012, and (ii) Galore Creek since the
issuance of the technical report filed on September 12, 2011.
42
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
[email protected]
Mélanie Hennessey
VP, Corporate Communications
[email protected]
Erin O’Toole
Analyst, Investor Relations
[email protected]
43