Page 4 - NOVAGOLD 2015 Annual Report

Dear shareholders,
Greg Lang
president and CEO
2
2015 marked a year of accomplishment for the Company. Our 50 percent-owned Donlin Gold project reached a key permitting milestone with the U.S. Army Corps of Engineers’ publication of the draft Environmental Impact Statement (EIS), which represents one of the most comprehensive project evaluations ever undertaken for a proposed mining project in the United States. This is a significant achievement for both NOVAGOLD and its partner Barrick Gold. Permitting a major project like Donlin Gold within the framework of the National Environmental Policy Act (NEPA) requires a great deal of collaboration and team spirit on the part of everyone involved. Three years into permitting, we have significant and early input by cooperating agencies and
the public regarding the potential environmental, social, and economic impacts of the proposed project. Concurrent with the NEPA analysis, Donlin Gold has been submitting major permit applications to relevant agencies to obtain the more than 100 individual permits required for the project on a timely basis.
Our approach has been characterized by tremendous collaboration and perfect alignment with our Native partners and our other stakeholders, including various levels of government. This notion, in fact, applies to both Donlin Gold and Galore Creek, a major copper-gold-silver project owned equally by NOVAGOLD and Teck Resources. While base metal prices are currently depressed, having half of a project that when developed is expected to be the largest copper mine in Canada and one of its lowest-cost producers, will be a big plus for our shareholders when markets turn.
The alignment we enjoy with our partners didn’t happen by chance. NOVAGOLD’s collaboration with its Native Corporation partners, the Calista Corporation and The Kuskokwim Corporation (TKC) in Alaska and the Tahltan Nation in British Columbia is sufficiently time-tested, enabling all parties to share common objectives and the same vision. Stakeholders view Donlin Gold and Galore Creek as future profitable businesses capable of providing much-needed socio-economic benefits to all those who share in their success.
The Calista Corporation and TKC continue to be active, involved participants in the development of their land and mineral resources at Donlin Gold. Its economic development will help fulfill the Alaska Native Claims Settlement Act’s (ANCSA) broader goal of Alaska Native self-determination by allowing shareholders of both corporations to participate in the world economy. Over the 20 years since the Calista Corporation first signed the mining lease for Donlin Gold, the project has been the single largest economic stimulus in the Kuskokwim Region.
In 2015, most of our resources (human and financial) were
focused on Donlin Gold. With a projected average annual production of over one million ounces of gold, it’s expected to be the world’s largest single pure gold mine during its planned 27-year life. We can’t think of any other producing gold mine that had the good fortune of commencing operations with 39 million ounces in resources (inclusive of 34 million ounces of reserves). And considering that this large gold endowment comes from only a 3-kilometer portion of an 8-kilometer-long mineralized belt, the project’s owners are well-positioned to potentially find even more.
There’s no doubt that the development of a major mine represents significant permitting, technical, logistical, and financial challenges. A company facing these challenges must have experienced people. NOVAGOLD’s team is made up of individuals with an unparalleled track record of developing and operating mines like Pueblo Viejo in the Dominican Republic and Cortez Hills in Nevada. While both are technologically, logistically, and culturally unique – like Donlin Gold – all three share important common characteristics: the need for undivided attention to detail, strong focus on social and community engagement, and uncompromising environmental stewardship. All of these elements must come together for a mining company to be successful in the 21st century. I’m proud to say that, with
its steady performance to date, NOVAGOLD is a new breed
of mining company, prepared to successfully meet all the challenges of our time. We’ve done it so far, and we’ll continue to do it in the future.
In 2016, our activities will be focused on progressing Donlin Gold through permitting. We’ll also be supporting the Corps and cooperating agencies through the Donlin Gold draft EIS public comment meetings, which are scheduled throughout the Yukon-Kuskokwim region in the first half of the year. The Corps will review and respond to the comments in a final
EIS anticipated to be published in 2017. At Galore Creek, the
first phase of the tunneling practice study is underway, and we’ll continue technical work on the project at minimal costs, including optimization concepts to integrate mining, waste rock and water management.