NOVAGOLD RESOURCES INC. (NYSE American, TSX: NG)
today released its 2019 third quarter financial results and updates
for its flagship Donlin Gold project in Alaska, which NOVAGOLD owns
equally with Barrick Gold Corp. (“Barrick”).
Details of the financial results for the third quarter ended
August 31, 2019 are presented in the consolidated financial
statements and quarterly report filed on Form 10-Q with the SEC
that is available on the Company's website at www.novagold.com, on
SEDAR at www.sedar.com, and on EDGAR at www.sec.gov. All amounts
are in U.S. dollars unless otherwise stated and all resource and
reserve estimates are shown on a 100% project basis.
In the third quarter 2019, NOVAGOLD achieved the
following milestones:
- With key Federal permits in hand and the receipt of multiple
State permits, Donlin Gold LLC (“Donlin Gold”) continued to advance
other State permits during the quarter:- The Alaska
Department of Natural Resources (ADNR) Division of Mining, Land,
and Water (DMLW) issued preliminary land use decisions on January
28, 2019 for the project’s transportation corridor, including the
access road and related material sites, airstrip, and upriver
Jungjuk Port. The public comment period for these decisions
closed on March 29, 2019. Final ADNR approvals are
anticipated by the end of the year.- ADNR’s Division of
Oil and Gas (DOG), State Pipeline Coordinator’s Section issued a
preliminary decision to authorize the sections of the pipeline on
State lands on January 28, 2019. The public comment
period for this decision closed on March 22, 2019. Final DOG
approval is anticipated by the end of the year.- Donlin
Gold commenced a geotechnical field program to support the detailed
design package to be submitted to ADNR for final approval and
issuance of Alaska Dam Safety Certificates.
- NOVAGOLD, as well as Donlin Gold, together with Calista
Corporation (“Calista”) and The Kuskokwim Corporation (TKC), its
Native Corporation Partners, continued local community outreach in
Alaska:- Brought together more than 20 regional
organizations to successfully collect, process and remove household
hazardous material from remote villages in the Yukon-Kuskokwim
(Y-K) region. The latest event took place in Bethel on July 24 when
about 80,000 pounds of material was collected.-
Continued outreach activities, including attending Calista’s
Annual Shareholders meeting in July.- Provided project
updates and gathered feedback from shareholders in Kotlik and
Kongiganak and met with groups interested in establishing
Friendship Agreements.- Supported the City of Aniak’s
initiative for community-wide fire safety training and
equipment.
President’s Message
Progress across the boardDonlin Gold
constitutes a unique asset with which we are truly blessed. With
our partner Barrick, your management team and board of directors
have advanced this project up the value chain with a resolute
strategic consistency. Speaking for NOVAGOLD, all our kept promises
and strategic decisions have revolved around our belief that Donlin
Gold represents the finest development stage story in the global
gold industry. Were we to simply extract our stated resources, this
pronouncement would still hold true. As we are convinced that the
potential exploration upside is so much greater than what we are
dealing with at present, we feel that owning NOVAGOLD is akin to
owning a pure play on an emerging major gold district. Our major
shareholders are united in their belief that our equity provides an
excellent vehicle available to take full advantage of the next leg
upwards in both the secular bull market in our favorite metal and a
resurgence of gold-related equities. NOVAGOLD’s track record of
achievement has also been aided by the good fortune
of conducting much of the permitting and technical work
necessary to de-risk the Donlin Gold project during a
cyclical market correction, thus avoiding entirely the industry’s
scourge of being forced to squander at low prices what is, at least
what we believe to be in our case, an unparalleled natural
endowment.
An impressive bountyWith approximately
39,000,000 ounces of gold in measured and indicated
mineral resources grading 2.24 grams per tonne1, Donlin
Gold is not just exceptional in today’s world, but when one
takes into account that a project that may well result in the
largest gold-producing mine in the world is located in a
jurisdiction characterized by a strict adherence to the rule of
law, Donlin Gold could well be in a league of its own as
a premier gold deposit. Its unique stature is further
enhanced by the presently quantified aspect of its gold
endowment being contained within three
kilometers of an eight-kilometer mineralized belt, all of
which represents, in and of itself, a small portion of the overall
land package.
Will the next Donlin be found at Donlin?We
believe that great districts are the best place to go hunting for
new discoveries. Yet for various reasons, the greater Donlin Gold
region has been underexplored. As with the best mining
districts in Nevada and throughout the world, key geologists that
have been involved in the project for many years believe that when
Donlin Gold’s holdings are explored systematically, the next Donlin
may well be found at Donlin. If, like ourselves, you are
excited by the possibility of uncovering significant additional
resources and perhaps even making new discoveries– especially
during an era characterized by a striking paucity of both – then
pause and think about that prospect for a moment. Moreover, this
bounty is located in Alaska, a State that supports and
welcomes responsible development and, as the second-largest gold
producing State in the United States, is arguably the safest legal
jurisdiction in the world. Combining the right assets, the
right management team, and the right jurisdiction we expect
NOVAGOLD to be one of the few equities that will represent a
“go-to” stock when the market resumes its uptrend.
So far, so greatOur team expects that, once
developed, Donlin Gold will provide benefits for all its
stakeholders for decades to come. NOVAGOLD is guided by a
highly experienced management group with a strong track record of
execution and we have taken the time to get things right the
first time and not cut any corners. The third quarter was
no exception, as NOVAGOLD and Barrick continued to
make significant progress in conscientiously
advancing the jointly held Donlin Gold project up the value
chain. We are continuing to carry out
necessary fieldwork, including site investigation to
collect additional geotechnical information required for the
procurement of the Alaska Dam Safety Certificates. This
program consists of geotechnical drilling (core and
direct push) and field testing with installation of monitoring
instruments; pumping test program in the tailings storage facility
area; excavation of test pits; geophysical surveys (seismic
refraction and downhole); and laboratory testing. The site
investigation information will support a Preliminary Design
Package, Detailed Design Package and ultimately the Final
Construction Package, each of which will be submitted to the
ADNR for final approval and issuance of the Certificates.
The geotechnical field program commenced in May 2019, following
the re-opening of the Donlin Gold camp. Good
progress had been made prior to a five-week
suspension of activities in late July when field
personnel were moved to safety as a precaution and to
accommodate wildland firefighting operations in the area.
Donlin Gold structures and equipment sustained no damage. All
personnel returned to the site in early September to resume work on
the field program which will continue through the winter and is
expected to be completed in 2020.
NOVAGOLD and Donlin Gold also provided support to
the ADNR’s Division of Mining, Land, and Water to help
advance work on the land use
decisions regarding the project’s transportation
corridor, including the access road and related material sites,
airstrip and upriver port, as well as the DOG’s authorization for
construction of the sections of the pipeline on State lands. Final
approvals for both authorizations are expected by the end of 2019.
With key Federal permits in hand and the timeline fully in the
owners’ control, NOVAGOLD and Barrick continue to focus
their attention on project optimization toward defining an
updated development plan, followed by an advanced
feasibility study. We all agree that Donlin Gold
must be advanced in a financially disciplined manner while
emphasizing recently
updated geological data, modern engineering, and with
particular attention to strong environmental and
social stewardship as well as safety practices.
External affairs and stakeholder engagement are
keyNOVAGOLD never takes its social license
for granted and continues to work closely with the Donlin
Gold team in partnership with Calista and TKC, owners of the
mineral and surface rights, respectively, on a variety
of local outreach, environmental and educational
initiatives. Our third quarter activities
included bringing together a group of 20 organizations
to sponsor and participate, along with the Delta
Backhaul company, in successfully collecting,
processing and removing household hazardous material
and e-wastes from the remote City of Bethel. About
250 residents took part in the program, collecting some 80,000
pounds of material that will be safely transferred to designated
disposal facilities. Spearheaded by NOVAGOLD, Donlin Gold and
the Delta Backhaul company, nearly 150,000 pounds of hazardous
material have been removed from
14 remote villages on the Kuskokwim River and the City of
Bethel over the past year. These various initiatives aptly
reflect NOVAGOLD’s steadfast commitment to nurturing strong and
collaborative working relationships in the communities in which we
operate. We also pursued our ongoing outreach activities with
Calista, meeting with tribal councils and key stakeholders in the
Yukon-Kuskokwim Delta region, including Donlin Gold
attending the Calista Corporation Annual Shareholders meeting
in July, providing project updates and
gathering feedback from shareholders in Kotlik and Kongiganak,
two coastal villages, as well as
meeting with various Native groups interested in
establishing Friendship Agreements.
Balance
sheetNOVAGOLD’s robust balance sheet – with
approximately $152.9 million in cash and term deposits as
of August 31, 2019 – gives us great flexibility
to further enhance the value of Donlin Gold. This
amount does not include an additional $100 million expected to come
from Newmont within the next four years,
or another $75 million contingent payment that we
could receive if the Galore Creek project owners approve
a construction plan. Therefore, the Company believes
it has sufficient funds to advance Donlin Gold
without the need to raise capital until a
construction decision is made.
Current gold environment and recent meetings with
investorsDuring the last quarter, gold has made important
strides to resume its upward trajectory within what we are
convinced constitutes a long-term secular bull market. Though gold
is not over-owned by any measure – far from it – we are not alone
in this bullish conviction. Leading investors such as Bridgewater
Associates’ Ray Dalio, DoubleLine Capital’s Jeffrey Gundlach, and
RIT Capital Partners’ Jacob Rothschild, to name a few, repeatedly
point out that gold is clearly
poised for substantial appreciation in value
because of its unique currency characteristics, declining supplies,
and due to the highly unpredictable geo-political and
economic environment we live in. At the recent Precious
Metals Summit in Beaver Creek, Colorado and Gold Forum Americas in
Denver, Colorado, where NOVAGOLD participated, we heard clearly
from numerous investors that NOVAGOLD is viewed as the very
best and most well-conceived option on a large, federally permitted
gold project in one of the world’s safest locations for resource
development. This notion, along with NOVAGOLD’s
strong balance sheet, ultimately supports our view of
NOVAGOLD as a unique financial vehicle poised
for a substantial value uplift as gold returns to its
bull market.
In conclusion, I wish to express my profound appreciation
to the experienced group of professionals at
NOVAGOLD, Donlin Gold and Barrick. Their hard work
and fierce dedication, coupled with the
unwavering support and leadership of Calista and TKC, are
key ingredients
of our success. My gratitude also goes to
the various State agencies for their diligent work
and adherence to well-established regulatory
procedures. And last but not least, I sincerely
thank my dedicated colleagues on the NOVAGOLD
Board for their incredible support, constant
engagement, and commitment to best governance practices.
Gregory A. Lang President & CEO
Financial Results
in thousands of U.S. dollars, except for per share amounts |
|
|
Three monthsendedAug 31,
2019$ |
|
Three monthsendedAug 31,
2018$ |
|
Nine monthsendedAug 31,
2019$ |
|
Nine monthsendedAug 31,
2018$ |
|
General and administrative expense (1) |
4,075 |
|
4,408 |
|
12,630 |
|
13,989 |
|
Share of losses – Donlin Gold |
3,141 |
|
2,514 |
|
6,662 |
|
7,260 |
|
Total operating expenses |
7,216 |
|
6,922 |
|
19,292 |
|
21,249 |
|
|
|
|
|
|
Loss from operations |
(7,216) |
|
(6,922) |
|
(19.292) |
|
(21,249) |
|
Other expense |
(581) |
|
(1,112) |
|
370 |
|
(3,839) |
|
Income tax expense |
(259) |
|
(9) |
|
(972) |
|
(154) |
|
Loss from continuing operations |
(8,056) |
|
(8,043) |
|
(19,894) |
|
(25,242) |
|
Loss from discontinued operations (2) |
— |
|
(80,582) |
|
— |
|
(81,229) |
|
Net loss |
(8,056) |
|
(88,625) |
|
(19,894) |
|
(106,471) |
|
|
|
|
|
|
Loss per share, basic and diluted |
|
|
|
|
Continuing operations |
(0.02) |
|
(0.02) |
|
(0.06) |
|
(0.08) |
|
Discontinued operations |
— |
|
(0.25) |
|
— |
|
(0.25) |
|
|
(0.02) |
|
(0.27) |
|
(0.06) |
|
(0.33) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At |
|
At |
|
|
|
|
|
|
Aug 31, 2019$ |
|
Nov 30, 2018$ |
|
Cash and term deposits |
|
|
152,881 |
|
167,004 |
|
Total assets |
|
|
249,879 |
|
260,929 |
|
Total liabilities |
|
|
105,635 |
|
100,241 |
|
(1) Includes share-based compensation expense of $1,552 and
$1,920 in the third quarter of 2019 and 2018, respectively, and
$4,625 and $5,811 in the first nine months of 2019 and 2018,
respectively.(2) On July 27, 2018, the Company completed the sale
of its 50% interest in Galore Creek to Newmont Goldcorp
Corporation. A loss on the sale of Galore Creek was declared as of
the quarter ended August 31, 2018.
For the third quarter ended August 31, 2019, loss
from operations increased from $6.9 million in 2018 to $7.2 million
in 2019 due to higher costs at Donlin Gold LLC, partially offset by
lower general and administrative expense. At Donlin Gold, expenses
increased by $0.6 million resulting from the commencement of
fieldwork to support the design packages needed to advance the
application for Alaska Dam Safety certification applications.
General and administrative expense decreased by $0.3 million due to
lower share-based compensation costs.
Net loss from continuing operations was unchanged
at $8.1 million ($0.02 per share) as the increase in operating
losses, higher interest expense on the promissory note payable to
Barrick and foreign exchange movements was offset by higher
interest income and accretion of notes receivable.
Net loss from discontinued operations, net of tax,
of $80.6 million ($0.25 per share) in 2018 resulted primarily from
the loss on the sale of our 50% interest in the Galore Creek
Partnership in July 2018.
For the first nine months ended August 31, 2019,
the loss from operations decreased from $21.2 million in 2018 to
$19.3 million in 2019 due to lower general and administrative
expense and lower costs at Donlin Gold LLC. General and
administrative expense decreased by $1.4 million primarily due to
lower share-based compensation costs. At Donlin Gold expenses
decreased by $0.6 million resulting from a reduction in permitting
activities, partially offset by the commencement of fieldwork to
support the design packages needed to advance the application for
Alaska Dam Safety certification applications.
Net loss from continuing operations decreased from
$25.2 million ($0.08 per share) in 2018 to $19.9 million ($0.06 per
share) in 2019, primarily due to lower operating losses, higher
interest income and accretion of notes receivable, partially offset
by higher interest expense on the promissory note payable to
Barrick.
Net loss from discontinued operations, net of tax,
of $81.2 million ($0.25 per share) in 2018 resulted primarily from
the loss on the sale of Galore Creek.
Liquidity and Capital Resources
In the third quarter 2019 compared to 2018, cash
used in operating activities of continuing operations decreased by
$1.1 million, due to higher interest income, partially offset by
changes in working capital. Net cash used in investing activities
of continuing operations included a $1.5 million increase in Donlin
Gold funding due to the commencement of geotechnical fieldwork. In
the third quarter of 2019, term deposits were reduced by $40.0
million, with the proceeds deposited in interest-bearing savings
accounts.
In the first nine months of 2019, total cash, cash
equivalents and term deposits decreased by $14.1 million of which
$5.3 million was used in operating activities for administrative
costs and working capital changes, $7.6 million was used to fund
Donlin Gold and $1.2 million related to withholding taxes paid on
vested performance share units.
NOVAGOLD’s cash and term deposits are believed to
be sufficient to advance Donlin Gold and meet our other financial
obligations. Additional capital will be necessary if a decision to
commence engineering and construction is reached for the Donlin
Gold project. The term deposits are denominated in U.S. dollars and
are held at Canadian chartered banks.
2019 Outlook
We continue to anticipate spending approximately $24 million in
2019, $13 million to fund our share of expenditures at the Donlin
Gold project and $11 million for general and administrative
costs.
NOVAGOLD remains focused on four primary goals
in 2019: Continue to advance the Donlin Gold project toward a
construction/production decision; maintain an effective corporate
social responsibility program; promote a strong safety culture by
maintaining a zero lost time accident record; and safeguard the
company’s treasury.
Conference Call & Webcast Details
NOVAGOLD’s conference call and webcast to
discuss these results will take place October 2, 2019 at 8:00 am PT
(11:00 am ET). The webcast and conference call-in details are
provided below.
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Webcast: |
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|
|
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www.novagold.com/investors/events/ |
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North American callers: |
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1-800-319-4610 |
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International callers: |
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1-604-638-5340 |
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About NOVAGOLD
NOVAGOLD is a well-financed precious metals company focused on
the development of its 50%-owned Donlin Gold project in Alaska, one
of the safest mining jurisdictions in the world. With approximately
39 million ounces of gold in the measured and indicated mineral
resource categories, inclusive of proven and probable mineral
reserves (541 million tonnes at an average grade of approximately
2.24 grams per tonne in the measured and indicated resource
categories on a 100% basis),2 Donlin Gold is regarded to be one of
the largest, highest-grade, and most prospective known open pit
gold deposits in the world. According to the Second Updated
Feasibility Study (as defined below), once in production, Donlin
Gold is expected to produce an average of more than one million
ounces per year over a 27-year mine life on a 100% basis. The
Donlin Gold project has substantial exploration potential beyond
the designed footprint which currently covers three kilometers of
an approximately eight-kilometer long gold-bearing trend. Current
activities at Donlin Gold are focused on state permitting,
optimization work, community outreach and workforce development in
preparation for the construction and operation of this project.
With a strong balance sheet, NOVAGOLD is well-positioned to fund
its share of permitting and optimization advancement efforts at the
Donlin Gold project.
Scientific and Technical Information
Some scientific and technical information contained herein with
respect to the Donlin Gold project is derived from the “Donlin
Creek Gold Project Alaska, USA NI 43-101 Technical Report on Second
Updated Feasibility Study” prepared by AMEC with an effective date
of November 18, 2011, as amended January 20, 2012 (the “Second
Updated Feasibility Study”). Kirk Hanson, P.E., Technical
Director, Open Pit Mining, North America, (AMEC, Reno), and Gordon
Seibel, R.M. SME, Principal Geologist, (AMEC, Reno) are the
Qualified Persons responsible for the preparation of the
independent technical report, each of whom are independent
“qualified persons” as defined by NI 43-101.
Clifford Krall, P.E., who is the Mine Engineering Manager for
NOVAGOLD and a “qualified person” under NI 43-101, has approved and
verified the scientific and technical information related to the
Donlin Gold project contained in this press release.
NOVAGOLD Contacts:Mélanie Hennessey Vice
President, Corporate Communications
Jason Mercier Manager, Investor Relations
604-669-6227 or 1-866-669-6227
Cautionary Note Regarding
Forward-Looking Statements
This press release 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
Securities Litigation Reform Act of 1995. Forward-looking
statements are frequently, but not always, identified by words such
as “expects”, “anticipates”, “believes”, “intends”, “estimates”,
“potential”, “possible”, and similar expressions, or statements
that events, conditions, or results “will”, “may”, “could”, “would”
or “should” occur or be achieved. Forward-looking statements are
necessarily based on several opinions, estimates and assumptions
that management of NOVAGOLD considered appropriate and reasonable
as of the date such statements are made, are subject to known and
unknown risks, uncertainties, assumptions and other factors that
may cause the actual results, activity, performance or achievements
to be materially different from those expressed or implied by such
forward-looking statements. All statements, other than statements
of historical fact, included herein are forward-looking
statements. These forward-looking statements include
statements regarding the 2019 Outlook; the potential development
and construction of Donlin Gold; perceived merit of properties; the
advancement of optimization studies at Donlin Gold; potential
opportunities to enhance or maximize the value of Donlin Gold;
sufficiency of funds for the Company to advance Donlin Gold without
additional financing; the timing and likelihood of permits;
opportunities to reduce capital outlays and improve project
economics; mine life and production estimates at Donlin Gold; the
exploration potential of Donlin Gold; mineral reserve and resource
estimates; work programs; capital expenditures; timelines;
strategic plans; benefits of the Donlin Gold project and market
prices for precious metals; whether the final $75 million
promissory note from the sale of Galore Creek will mature and be
payable. In addition, any statements that refer to expectations,
intentions, projections or other characterizations of future events
or circumstances are forward-looking statements. Forward-looking
statements are not historical facts but instead represent
NOVAGOLD’s management expectations, estimates and projections
regarding future events or circumstances on the date the statements
are made.
Important factors that could cause actual results to differ
materially from expectations include the need to obtain additional
permits and governmental approvals; the timing and likelihood of
permits; 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 Corp. for the continued exploration, and
development and eventual construction of the Donlin Gold property;
the need for cooperation of government agencies and native groups
in the development and operation of properties; 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, which could include significant increases in estimated
capital and operating costs; fluctuations in metal prices and
currency exchange rates; whether a positive construction decision
will be made regarding Donlin Gold or Galore Creek; 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 contained herein
reflect the beliefs, opinions and projections of NOVAGOLD on the
date the statements are made. NOVAGOLD assumes no obligation to
update the forward-looking statements of beliefs, opinions,
projections, or other factors, should they change, except as
required by law.
Cautionary Note to United States Investors
This press release has been prepared in accordance with the
requirements of the securities laws in effect in Canada, which
differ from the requirements of U.S. securities laws. Unless
otherwise indicated, all resource and reserve estimates included in
this press release 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 (CIM)—CIM Definition Standards on Mineral
Resources and Mineral Reserves, adopted by the CIM Council, as
amended (“CIM Definition Standards”). NI 43-101 is a rule developed
by the Canadian Securities Administrators which establishes
standards for all public disclosure an issuer makes of scientific
and technical information concerning mineral projects. Canadian
standards, including NI 43-101, differ significantly from the
requirements of the United States Securities and Exchange
Commission (SEC) Industry Guide 7 (“SEC Industry Guide 7”), and
resource and reserve information contained herein may not be
comparable to similar information disclosed by U.S. companies.
NOVAGOLD’s disclosure concerning Reserve & Resources Estimates
remains consistent with NI 43-101. Under SEC Industry Guide 7,
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. SEC Industry Guide 7 normally does
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” under SEC Industry Guide 7 in documents filed with the
SEC. 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.
Under Canadian rules, estimated "inferred mineral resources” may
not form the basis of feasibility or pre-feasibility studies except
in rare cases. 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” under SEC Industry Guide 7 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 SEC Industry Guide 7, and reserves
reported by NOVAGOLD in compliance with NI 43-101 may not qualify
as "reserves” under SEC Industry Guide 7. Donlin Gold does not have
known reserves, as defined under SEC Industry Guide 7.
Accordingly, information concerning mineral deposits set forth
herein may not be comparable with information made public by
companies that report in accordance with SEC Industry Guide 7.
On October 31, 2018, the SEC adopted a final rule (“New Final
Rule”) that will replace SEC Industry Guide 7 with new disclosure
requirements that are more closely aligned with current industry
and global regulatory practices and standards, including NI 43-101.
Companies must comply with the New Final Rule for the company’s
first fiscal year beginning on or after January 1, 2021, which for
NOVAGOLD would be the fiscal year beginning December 1, 2021. The
New Final Rule provides that SEC Industry Guide 7 will remain
effective until all registrants are required to comply with the New
Final Rule, at which time SEC Industry Guide 7 will be rescinded.
While early voluntary compliance with the New Final Rule is
permitted, NOVAGOLD has not elected to comply with the New Final
Rule at this time.
___________________________
1 Donlin Gold project estimates as per the
Second Updated Feasibility Study (as defined herein). Represents
100% of measured and indicated mineral resources, of which
NOVAGOLD’s share represents 50%. Measured and indicated resources
are inclusive of proven and probable mineral reserves. Measured
resources total 8M tonnes grading 2.52 g/t Au and indicated
resources total 534M tonnes grading 2.24 g/t Au. Proven reserves
total 8M tonnes grading 2.32 g/t Au, and probable reserves total
497M tonnes grading 2.08 g/t Au. See “Cautionary Note Concerning
Reserve & Resource Estimates” and “Reserve/Resource Table” at
www.novagold.com
2 Donlin Gold data as per the Second Updated
Feasibility Study (as defined herein). Donlin Gold measured
resources of approximately 8 Mt grading 2.52 g/t and indicated
resources of approximately 534 Mt grading 2.24 g/t, each on a 100%
basis. Mineral resources have been estimated in accordance with
National Instrument 43-101 – Standards of Disclosure for Mineral
Projects (“NI 43-101”).
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