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What are the key milestones and goals for 2022?
  • Continue to advance the Donlin Gold project toward a construction decision
  • Maintain or increase support for Donlin Gold among the project's stakeholders
  • Promote a strong safety, sustainability, and environmental culture
  • Maintain a peer-leading reputation of NOVAGOLD, its governance practices and its project among shareholders
  • Manage the Company treasury effectively and efficiently
What is the Company doing to respond to the COVID-19 pandemic?

In August, Donlin Gold enhanced its Community and Workforce Protection Plan to ensure the safety and well-being of its workforce, employee families and local communities for the remainder of the 2021 field season. Employees and contractors are subject to mandatory COVID-19 testing prior to traveling to camp as well as upon arrival and must follow strict masking requirements when close contact cannot be avoided in common areas.

Health and safety is top priority. With that in mind, NOVAGOLD has implemented a broad range of policies designed to ensure the safety and well-being of all employees, contractors, and members of the community where the Company is operating. Throughout the pandemic, Donlin Gold has worked with all of its community partners in Alaska and in the Y-K region to make sure that the program is effective.

During the 2021 drill program, employees and contractors had to undergo mandatory testing prior to traveling to the Donlin Gold project camp and upon arrival followed physical distancing and other protective requirements. In addition, all workforce members have been required to continue following these protocols upon return to their respective communities and are encouraged to bring Donlin Gold’s safety practices into their home villages.

All Donlin Gold employees who may have been exposed are being tested, are quarantining, and are working remotely in accordance with the Donlin Gold COVID-19 Mitigation Plan protocols.

COVID-19 protocol at Donlin Gold:

In August, Donlin Gold enhanced its Community and Workforce Protection Plan to ensure the safety and well-being of its workforce, their families, and local communities for the 2021 field season. The Plan includes the following:

  • All personnel must self-monitor and consult health professionals if feeling any symptoms of illness and take an accepted COVID-19 test with a negative result before coming into the camp
  • Adhering to CDC guidelines and specific procedures for out-of-state, in-state, and In-region individuals
  • Rapid testing in days prior to arriving at camp and within 48 hours prior to departure for those returning to villages
  • Weekly safety meetings designed to reinforce sound hygiene and sanitization practices
  • Two negative COVID-19 tests prior to going to camp and a third negative test at camp on day 3 for all unvaccinated contractors and employees; one negative test prior to going to camp for fully vaccinated contractors and employees, with an additional rapid test at camp on day 3 (out-of-state requires two negative tests prior to going to camp)
  • Masking requirements for staff and visitors when close contact cannot be avoided in common areas
  • Evaluating individuals for symptoms of illness and, if appropriate, isolate and/or evacuate the affected individual from camp

These protocols will remain in place for the foreseeable future.

Why should I be interested in NOVAGOLD today?

NOVAGOLD owns 50 percent of Donlin Gold, one of the largest and among the highest-grade open-pit gold development projects in the world. With approximately 39 million ounces of gold in the measured and indicated mineral resources, inclusive of proven and probable mineral reserves (100 percent, approximately 19.5 million ounces attributable to NOVAGOLD) grading 2.24 grams per tonne1 – and exceptional exploration potential along an eight-kilometer gold mineralized belt in Alaska, Donlin Gold has all the key attributes that one would seek in a major gold deposit and it's located in an excellent jurisdiction with a track record of strong support for responsible resource development. The recently completed federal permitting process, which resulted in the issuance of a joint Record of Decision (ROD) by the U.S. Army Corps of Engineers (the "Corps") and the Bureau of Land Management (BLM), has substantially de-risked the project. With federal permitting activities largely complete and other key State permits advancing, activities have been focused on furthering our geological understanding and integrating scoping-level optimization work into a study that should serve as the basis for an updated project development plan.

While these attributes themselves make NOVAGOLD a compelling target for investors looking for size, grade, scale, resource growth, and jurisdictional safety, there's more to consider. Mine development and operation is a complex business, and we're fortunate to have a great partner in Barrick. Among the largest companies in the gold mining industry, Barrick has a depth of expertise in project development and operation. And we're blessed to have the Calista and TKC, owners of mineral and surface rights, as Native Corporation partners.

Investors should also be encouraged that the drill program completed in 2020 at Donlin Gold delivered better-than-expected results, providing valuable input to project optimization. See drill program releases from August 6, 2020, October 26, 2020 and January 19, 2021 here

We're also strong financially. With a treasury of $142 million as of May 31, 2022, which includes receivables of $75 million from Newmont Corp., paid in July 2021, and an additional $25 million expected to be paid in July 2023, respectively (from the sale of our 50 percent share of the Galore Creek project in July 2018), we're in a strong financial position to execute on our stated objectives to advance the Donlin Gold project.

Finally, NOVAGOLD has an experienced management team with an unparalleled track record in building and operating major mines, as well as a highly regarded board with strong ownership representation, a commitment to sound governance principals, and a firm belief in doing things right from the standpoint of technical excellence, safety, and environmental stewardship. NOVAGOLD is a compelling opportunity for a discerning investor interested in becoming a shareholder in a company committed to value creation in the gold space.

We have a long-term view and believe that NOVAGOLD offers investors all the leverage they could wish in rising gold price environment and at a point when the equity may be even more precious than the metal itself. If anything, the understanding and appreciation for gold is only going to improve since it is the only currency that cannot be printed at a time when major reserve currencies are being debased. After a 40-year secular trend of attempted demonetization, gold is re-asserting itself as the only financial asset that doesn't represent someone else's liability.


1 Donlin Gold data as per NI 43-101 Technical Report on the Donlin Gold Project, Alaska, USA, effective June 1, 2021 and the S-K 1300 Technical Report Summary on the Donlin Gold Project, Alaska, USA, November 30, 2021. 39Moz refers to mineral resources inclusive of reserves on a 100% basis.  Donlin Gold proven and probable reserves of approximately 16.925 Moz grading 2.09 g/t attributable to NOVAGOLD (33.849 Moz on 100% basis) and measured and indicated resources, exclusive of reserves, of approximately 2.749 Moz grading 2.43 g/t attributable to NOVAGOLD (5.497 Moz on 100% basis). 

What makes the Donlin Gold project so unique among other large undeveloped projects?

It all comes down to geology, potential, economics, location, partnerships, and management.

Geology –With approximately 39 million ounces of gold in the measured and indicated resource categories (541 million tonnes of gold at an average grade of 2.2 grams per tonne)1 , and an additional approximately six million ounces (92 million tonnes at an average grade of 2.0 grams per tonne) in inferred resources, Donlin Gold is one of the world's largest known undeveloped gold deposits. These are excellent numbers, placing Donlin Gold well within the top one percent of known global gold deposits in terms of size. It's also blessed with high grades when compared with other open pit mines and projects. As we've seen in the recent downdraft in the mining industry, this kind of quality counts. Its grade is where the average grade of the industry was ten years ago and is more than double the average grade of gold mines and projects globally2.

Potential – The NI 43-101 Technical Report on the Donlin Gold Project, Alaska, USA filed in 2021 and the S-K 1300 Technical Report Summary on the Donlin Gold Project, Alaska, USA, November 30, 20213 demonstrated that, as envisioned, Donlin Gold could become one of the largest single gold-producing mines in the world, averaging approximately 1,500,000 ounces of gold production in the first five years of operation and approximately 1,100,000 ounces per year over its 27-year life. And that's assuming no more higher-grade ore is found – or any additional ore at all, for that matter. In addition to its already large mineral endowment, Donlin Gold has excellent exploration potential, with the opportunity to expand the current open-pit resource both along strike and at depth. Considering that the current pit occupies only part of a three-kilometer area that is itself only a portion of an eight-kilometer mineralized belt, in NOVAGOLD's view it is likely that Donlin Gold's mine life, already measured in decades, or ultimate production profile – or both – is likely to be greater than anticipated.

Economics – During the first five years of operations, Donlin Gold's operating costs are estimated to be $3.5 billion or $477 per ounce of gold sold. Over the life of mine, the operating costs are estimated to be $19.3 billion or $635 per ounce of gold sold. This is very favorable in today's world and a function of the project’s high grade. The after-tax Net Present Value (NPV), using a gold price of $1,500 per ounce at a 5 percent discount rate, was estimated at $3.0 billion, per the NI 43-101 Technical Report on the Donlin Gold Project, Alaska, USA. The NPV at 5% increases to $4.9 billion at a gold price of $1,700 per ounce and $7.2 billion at a gold price of $2,000 per ounce.

Jurisdiction – Unstable and changing geopolitics, including but not limited to economic and political instability, have altered how the market views investment opportunities on the frontier. In our view, it's not an overstatement to say that jurisdictional risk represents the single greatest threat to the mining industry. Many companies and assets in the developing world have been victims of sovereign risk with unanticipated tax increases, royalties, civil unrest, permitting delays, corruption and resource nationalism. Market analysts, commentators, and investors are taking note of the actions by a number of governments to impose higher taxes and royalties on gold and other metal mines in their assessment of project value. We believe that the fact that Donlin Gold is in Alaska, America's second largest gold producing state, on private land already designated for mining and owned by Alaska Native corporations, distinguishes the project from other undeveloped open pit gold deposits. In summary, as a corollary to this heightened awareness, we believe that when sentiment returns to the space, Donlin Gold's location in the United States will give NOVAGOLD a tremendous competitive advantage during a time when heightened resource nationalism and jurisdictional uncertainty is second only to investor sentiment as the most significant factor negatively affecting shareholder value among natural resource companies.

Partnerships – Donlin Gold enjoys broad support, including from our Alaska Native corporation stakeholders, Calista and TKC, who own the mineral and surface rights to Donlin Gold. Our well-established track record of social engagement and environmental stewardship in the community is a huge plus. The government of Alaska cites Donlin Gold as a model project for responsible development, a reputation that was reinforced in 2014 by a unique strategic alliance with the National Fish and Wildlife Foundation. That's not something you see every day, and we're proud of it.

Management – NOVAGOLD's operating management team is among the most solid in their credentials and pedigree as any you'll find in the industry. Greg Lang, president and CEO, has been fortunate to work with some of the most experienced individuals in the gold sector and on some of its greatest assets. He ran Barrick's top assets – their North American operations – as president for eight years before joining NOVAGOLD. During the majority of his 30-year career, Greg rose through the ranks with Barrick and the companies it had acquired, Homestake Mining and International Corona. Greg leads a team of experienced industry veterans. Dave Ottewell joined NOVAGOLD from Newmont; Mélanie Hennessey joined from Hecla; Ron Rimelman joined from Tetra Tech; and Richard Williams joined NOVAGOLD from Barrick right after bringing into production the mammoth Pueblo Viejo project. Each of these individuals left senior positions at these senior companies because they too see in Donlin Gold a truly unique and attractive gold asset in an era defined by quality asset scarcity.

In summary, Donlin Gold has size and extraordinary grade, industry-leading projected output, a low-cost structure, a company-making mine life, excellent exploration upside, strong local partnerships, and jurisdictional safety. Donlin Gold is a truly unique and attractive gold asset in an era defined by asset scarcity with leverage to rising gold prices in a strong gold environment. Finally, Donlin Gold is well-advanced in the permitting process; positioned to be ready to construct when market sentiment will support construction of a major new gold mine.


1 Donlin Gold data as per the NI 43-101 Technical Report on the Donlin Gold Project, Alaska, USA, effective June 1, 2021 and the S-K 1300 Technical Report Summary on the Donlin Gold Project, Alaska, USA, November 30, 2021. 39Moz refers to mineral resources inclusive of reserves on a 100% basis.  Donlin Gold proven and probable reserves of approximately 16.925 Moz grading 2.09 g/t attributable to NOVAGOLD (33.849 Moz on 100% basis) and measured and indicated resources, exclusive of reserves, of approximately 2.749 Moz grading 2.43 g/t attributable to NOVAGOLD (5.497 Moz on 100% basis). 
2 2020 average grade of open pit and underground deposits with gold as primary commodity and over 1Moz in measured and indicated resources, sourced from S&P Global Market Intelligence.
3 See full technical reports here: https://www.novagold.com/properties/donlin_gold/technical_report/

What is the latest status of the Donlin Gold project?
 

2021 Drill Program

The Donlin Gold project camp has been re-opened safely with four drills currently operating.

  • A total of 28 holes (representing approximately 8,650 meters of length drilled) as of June 26, 2021, out of the 64 planned for the 2021 program have been drilled to date (representing a total of approximately 20,100 meters of length to be drilled).
  • The program is expected to:
    • Build upon a successful 2020 drill program that produced results supporting updates to recent geologic modeling concepts, validate mineralization continuity, and test for extensions of high-grade zones in both intrusive (igneous) and sedimentary rocks.
    • Encompass the drilling desired prior to proceeding with a upcoming feasibility study, subject to a formal decision by the Donlin Gold LLC Board, and initiate the engineering work necessary to advance the project design before reaching a construction decision.
  • Local community involvement in the project lies at the core of both Barrick’s and NOVAGOLD’s philosophy. Prior to re-opening the camp and mobilizing the drill rigs in May, Donlin Gold held numerous conversations with community and tribal leaders in the Y-K region to ensure strict adherence to safety protocols at Donlin Gold. Approximately 70% of Donlin Gold direct hires for this year’s drill program are Alaska Natives and we are pleased to report that for the 2021 season, Donlin Gold hired employees from 20 Y-K communities. In an area marked by high unemployment and fewer job choices than in urban environments, the work experience and skills training that Donlin Gold provides is highly significant and appreciated. We share the objective of protecting the health of all Alaskans.

2020 Drill Program

Donlin Gold successfully completed an 85-hole, approximately 23,400-meter, drill program in both the ACMA and Lewis deposit areas, exceeding modeled grade-thickness, with higher grades observed over narrower intervals, particularly in sedimentary rocks. See March 25th, 2021 release titled “Donlin Gold Announces Assay Results From Remaining 30 Percent of the 2020 Drill Program, Consistent With Previously Reported Results of Higher Than Predicted Grade-Thickness” here.

What state permits remain outstanding for the Donlin Gold project?

NOVAGOLD has reached a number of milestones with the issuance of key transportation and energy infrastructure approvals for the Donlin Gold project including the final state land authorizations for the port, access road, and airstrip, and the final state Right-of-Way (ROW) offer to lease for the buried natural gas pipeline to provide fuel to power the remote project site. The port, access road, and airstrip authorizations were not appealed and have 30-year terms.

During the 2020 fourth fiscal quarter, Donlin Gold and its Native Corporation partners continued to support the State of Alaska to advance permits and certificates needed for the project. While the field work related to the issuance of the Alaska Dam Safety certificates was temporarily paused to concentrate on the 2020 drill program, the overall critical path for securing much of the state permitting for Donlin Gold has generally not been affected by the pandemic. Key federal permitting milestones completed include the Final Environmental Impact Statement (EIS) and the first-ever Joint Record of Decision (ROD) by the U.S. Army Corps of Engineers and Bureau of Land Management. Notable state permits and approvals received to-date include the Air Quality permit, the Alaska State Pollution Discharge Elimination System permit, Reclamation Plan and Waste Management permit. State land leases, easements, land use permits, and material site authorizations for the proposed transportation facilities including the access road, airstrip, and upriver Jungjuk port as well as the easement for the fiber optic cable on state lands were issued in early 2020.

On January 28, 2019, ADNR’s State Pipeline Coordinator Services (SPCS) issued a preliminary decision to grant the State Right-of-Way authorization for the buried natural gas pipeline. The public comment period began on January 28, 2019 and ended on March 22, 2019. The final offer to lease was issued on January 17, 2020 and was accepted by Donlin Gold in February 2020. On February 6, 2020, Cook Inletkeeper, on behalf of the Susitna River Coalition and three Native village organizations requested that the ADNR Commissioner reconsider issuance of the ROW lease. The ADNR Commissioner denied the request for reconsideration on February 18, 2020. After Earthjustice filed a court appeal of the lease issuance and reconsideration denial, ADNR changed its position and accepted the reconsideration request on April 30, 2020 specifically to address cumulative effects. On September 10, 2020, ADNR issued a revised Consideration of Comments document, which specifically addresses the potential cumulative effects of the pipeline. The comment period on the revised document ended on November 9, 2020 and ROW lease offer is expected to be reissued in 2021.

On November 30, 2020, ADNR issued a public notice for comment on Donlin Gold’s 12 water rights applications for the mine site and transportation corridor. The public comment period was ended on December 15, 2020. Final authorizations of the water rights are expected in 2021.

On May 27, 2021, the Alaska Department of Environmental Conservation (“ADEC”) Commissioner Jason W. Brune upheld the State of Alaska’s Section 401 Certification under the Clean Water Act that had been granted to Donlin Gold in 2018 after a thorough, diligent, and transparent review by State and Federal agencies, over a nine-year period, of the proposed project development plan and its relationship with the surrounding environment. The Commissioner’s decision, as expected, is being appealed in Alaska Superior Court by a San Francisco-based activist law firm, Earthjustice.

NOVAGOLD supports the Commissioner’s conclusion to uphold the Donlin Gold 401 Certification and believes it was the right outcome. Donlin Gold strongly believes that the Commissioner’s decision to uphold the 401 Certification validates the project stakeholders’ commitment to advance the Donlin Gold project in a safe and environmentally responsible manner for the benefit of all Alaskans.

What is your anticipated spending for Donlin Gold in 2022?

By carefully managing our treasury, we have remained financially strong with $142 million in cash and term deposits as of May 31, 2022, that includes additional receivables of $75 million from Newmont Corp., paid in July 2021, and an additional $25 million expected to be paid in July 2023, respectively (from the sale of our 50 percent share of the Galore Creek project in July 2018), we're in a strong financial position to execute on our stated objectives to advance the Donlin Gold project.

In 2022, the proposed overall budget for the Donlin Gold LLC (100%) is set at $60 million (of which NOVAGOLD’s portion is 50 percent). It is the largest project budget in more than a decade and is designed to: 1) update geologic modelling and interpretation work for an updated resource model and engineering activities for use in an updated project feasibility study; 2) undertake approximately 34,000 meters of planned technical and in-pit and below-pit exploration drilling; 3) support fieldwork and permitting for the Alaska Dam Safety Certifications; 4) support environmental activities; and 5) support community and external affairs efforts. 

How much risk do you see of environmental litigation delaying the project?

NOVAGOLD believes that the risk of environmental litigation successfully delaying the project is relatively low, however, should there be any litigation or delays, we are prepared to work through them with Barrick and Donlin Gold to keep the process moving forward as best we can. With an asset that has a life of mine of almost 30 years, we maintain a view that is long-term while taking a methodical approach to ensure that each step is completed properly – even if that means taking a bit more time.  We believe that the extensive studies including worked completed to date, combined with the level of engagement, transparency, and strong relationships established over 20 years by Donlin Gold with Calista, owner of the mineral estate, TKC, owner of the surface estate, local communities in the Y-K Region, and the State of Alaska mitigates the litigation risk with a large mining project like Donlin Gold.

In Alaska, the Alaska Native Claims Settlement Act (ANCSA), came into effect in 1971 and was intended to resolve long-standing issues surrounding aboriginal land claims in Alaska, as well as to stimulate economic development throughout the State. The settlement established Alaska Native claims to the land by transferring titles to twelve Alaska Native regional corporations and over 200 local village corporations. A thirteenth regional corporation was later created for Alaska Natives who no longer reside in Alaska. The Native Corporations must share 70% of their profits with the other Native Corporations.

Part of the reason Donlin Gold’s relationship with local communities is so strong is that these local communities already enjoy tangible benefits from project activities. For instance, since exploration began in 1996, residents have been employed in a variety of roles, forming up to 90 percent of the workforce at the Donlin Gold camp. The proposed project could employ hundreds of workers during development and operations. Through Donlin Gold’s support of scholarships for Calista and TKC youth, sponsorship of academic and trades fairs, and leadership in development of the Alaska Miners Association’s Mining Workforce Development Plan, we are building a foundation that will provide Calista and TKC shareholders and their descendants with the opportunity to thrive as Donlin Gold prospers.

Donlin Gold LLC, with support from NOVAGOLD and Barrick, remains actively engaged in environmental sustainability projects and extensive, though primarily remote due to COVID-19 safety precautions, outreach efforts with local stakeholders, through multiple traditional village council meetings, regional tribal gatherings, events, and village visits across the Y-K region. Donlin Gold LLC collaborated with Calista and TKC (owners of the mineral and surface rights, respectively) on grants, scholarships, and community outreach efforts.

Donlin Gold

Do you have all the surface rights and exploration licenses in place to mine at the Donlin Gold project for as long as there is potential?

Yes. Donlin Gold has a mining lease with Calista and a surface use agreement with TKC with co-terminus terms that grant Donlin Gold the rights to mine so long as the company believes there is valuable mineral potential at the property.

How would you describe the Donlin Gold ore body?

Gold-bearing rock within the Donlin Gold deposit is present in two adjacent areas known as the ACMA and Lewis pits. By the end of the mine life, currently 27 years based on the defined reserve, the two pits would merge at the surface into one oval-shaped open-pit mine with dimensions roughly 2.2 miles long by 1 mile wide. The ACMA pit would have an ultimate depth of approximately 1,850 feet and Lewis would be 1,653 feet deep. Mining of the ACMA pit is proposed in nine phases and the Lewis pit in six phases. The initial mining of the two pits would be independent, but they would partially merge later in the life of the mine. Overburden from the final stages of the Lewis pit would be placed into the ACMA pit, partially backfilling it.

Within the orebodies, southeast-dipping north-northeast-oriented fracture zones are the primary control on gold bearing vein distribution within the north-northeast mineralized corridors. Composite vein zones or mineralized corridors range up to 30 meters in width and extend for hundreds of meters along strike. Intrusive rocks and to a lesser extent competent massive greywacke are the most favored host rocks, and act as a secondary control on the mineralization. Gold distribution in the deposit closely mimics the intrusive rocks, which contain about 74% of the mineral resource identified in the NI 43-101 Technical Report on the Donlin Gold Project, Alaska, USA. Structural zones in competent sedimentary units account for the remaining 26%.

Is there potential for a smaller scale project requiring lower initial capital and providing better economics in this gold price environment? Or does the large infrastructure requirement make a smaller scale project difficult economically?

Prior to making a construction decision, the owners expect to prepare a new feasibility study for the Donlin Gold project. NOVAGOLD and Barrick already have initiated their review of the Donlin Gold FS, apart from the work being advanced by Donlin Gold, to identify the project components that offer the greatest opportunities for enhancing project efficiencies, execution, operation and hence economics. At this point, Donlin Gold's scale is affected by the need to develop access, fuel, and power infrastructure for the project. While the owners will consider all potentially viable options for design, construction, and operation of a successful project, the best project design available today is the one that Donlin Gold has advanced through permitting.

Can you briefly describe the social stakeholders in the Donlin Gold project and how are you managing your community relations and obligations?

Local communities are our neighbors – and at Donlin Gold, they're the owners of the minerals and land on which the project will be built and operated. Over nearly 20 years of activities at Donlin Gold, we have consistently sought to build strong community partnerships, reach equitable participation agreements with Calista and TKC owners of the mineral rights and surface rights, respectively, and establish good communication with local communities as well as state and federal regulators. At the same time, we collected extensive environmental baseline data to facilitate permitting of the project and developed training and employment programs to engage the local population and businesses in the advancement of Donlin Gold. We're very proud of the relationships that we have with our community partners. We have taken the time to listen to their concerns and carefully designed our project to mitigate those concerns as best we can.

Funding and Valuation

How does NOVAGOLD expect to finance its share of the capital cost of putting Donlin Gold into production?

NOVAGOLD has the funds to pay for its share of costs relating to the permitting of Donlin Gold and optimization efforts. Projects with solid economic fundamentals, which we expect to be the case for Donlin Gold, have diverse and multiple financing options: including equity, debt, and third-party project financing.

Does NOVAGOLD participate in the Direct Registration of Shares (DRS)?

Yes, NOVAGOLD participates in the Direct Registration of Shares with the Company's transfer agent, Computershare. For more information on DRS, share transfers, lost certificates, or a change of address, please contact Computershare www.computershare.com.

Still Have a Question?

Please email info@novagold.com. While we may not be able to post all questions on the website, we will respond promptly to everyone.

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