NOVAGOLD RESOURCES INC. (“NOVAGOLD” or “the
Company”) (NYSE American, TSX: NG) today released its 2020 second
quarter financial results and an update on its flagship Donlin Gold
project, a premier gold project which NOVAGOLD owns equally with
Barrick.
Details of the financial results for the quarter ended May 31,
2020 are presented in the consolidated financial statements and
quarterly report filed June 24, 2020 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.
Second Quarter Highlights and Updates:
- COVID-19 health protocols enhanced as Donlin Gold camp is
re-opened° The health and safety of NOVAGOLD employees, partners
and contractors is top priority for the Company. In that regard, to
reduce risk, our office employees have been asked to work from
home, avoid all non-essential travel, adhere to good hygiene
practices, and, if they must visit the office, engage in social
distancing.° NOVAGOLD and its partner Barrick, through their joint
venture company Donlin Gold LLC, have implemented a wide-ranging
health and safety policy consistent with State of Alaska
requirements, recommendations and precautions:
- Enhanced health protocol includes requiring all Donlin Gold
personnel to take a COVID-19 test before coming into the camp, and
again when they leave; out-of-state contractors/employees require
two negative COVID-19 tests prior to going to camp; personnel are
regularly screened for symptoms, use charter flights to travel to
and from the project site, and maintain a minimum of six feet of
distance in eating areas and living quarters. Should any individual
exhibit symptoms of illness, the on-site health professionals will
determine if they need to be quarantined at site or evacuated. All
Donlin Gold camp personnel are asked to monitor their health in and
out of camp and consult health professionals if feeling any
symptoms of illness. These precautions will remain in place for the
foreseeable future.
- NOVAGOLD and Barrick are advancing technical work on Donlin
Gold:° With the gradual re-opening of Alaska and the easing of some
travel restrictions, Donlin Gold re-mobilized four drill rigs at
the project. Assuming no further interruptions, it is anticipated
that a majority of the 2020 drill program, which consists of
approximately 80 holes totaling about 22,000 meters centered on the
ACMA and Lewis resource areas, will be completed. The objective is
to validate recently developed geologic and resource modeling
concepts and test potential extensions of high-grade zones. The
focus is on early-life mining that has the potential to further
enhance the project economics.° The multi-year site investigation
program that commenced in mid-2019 as part of the project’s dam
safety certification application has been temporarily paused due to
the prioritization of the ongoing drill program.
- Donlin Gold, together with Calista Corporation (“Calista”)
and The Kuskokwim Corporation (TKC), continued their
long-standing community engagement efforts, focused during the
quarter on countering the impact of COVID-19 on Yukon-Kuskokwim
(Y-K) communities. Specifically, we:° Delivered food to every home
in eight middle Kuskokwim villages. Donlin Gold partnered with TKC
and local Tribal councils to coordinate and deliver food and
supplies to communities now without regular air carrier service.°
Partnered with Aniak village, a regional center for food
distribution. Food and supplies were delivered by the village to
residents homebound due to health issues and quarantine
requirements.° Assembled and shipped 1,400 face mask making kits to
56 Y-K villages. Coordinated with Tribal administrators to identify
community members to make the masks for Elders and
COVID-susceptible people.
- During the quarter, NOVAGOLD provided a comprehensive response
to the error-laden report published at the end of the quarter by J
Capital Research (“JCAP”) as part of a “short-and-distort” campaign
of stock manipulation. A media release, Chairman’s letter to
shareholders and sentence-by-sentence Fact Matrix were published
countering the numerous false and misleading statements in the
report. NOVAGOLD is now analyzing various legal options against
JCAP and their associates.
President’s Message
Re-Mobilization of Four Drill Rigs to
Advance Donlin Gold with Comprehensive COVID-19
Health Protocols in Place
In the Shadow of a Pandemic
The second quarter 2020 was dominated by the COVID-19 pandemic,
testing the character of all globally and causing a shift in
activities at Donlin Gold, with NOVAGOLD’s support, to remotely
assist local communities in Alaska after the 2020 drill program was
temporarily paused for two months.
NOVAGOLD’s most important objective is to secure the health and
safety of its employees, partners, and contractors. The Company has
implemented policies at its offices in Salt Lake City and Vancouver
designed to ensure the safety and well-being of all employees and
the people associated with them. In that regard, to reduce risk,
our employees have been asked to work from home, avoid all
non-essential travel, adhere to good hygiene practices, and engage
in social distancing. Additionally, NOVAGOLD and its partner
Barrick Gold, through Donlin Gold, have implemented a health and
safety policy consistent with State of Alaska Department of Health
and Social Services recommendations, travel restrictions and other
COVID-19 measures in the region aimed at achieving the same
objectives at Donlin Gold’s Anchorage office and the project site.
The policy includes requesting all personnel to monitor their
health and consult health professionals if feeling any symptoms of
illness; requiring all personnel to take a COVID-19 test before
coming into the camp, and again when they leave; implementing more
frequent sanitization practices; and regularly conducting safety
meetings designed to address sound hygiene and sanitization
practices. Out-of-state contractors/employees require two negative
COVID-19 tests prior to going to camp. Donlin Gold uses charter
flights to transport personnel to and from the site. Employees are
screened for symptoms and maintain a minimum of six feet of
distance in eating areas and living quarters. Should any individual
exhibit symptoms of illness, they will be evaluated and, if needed,
quarantined, and/or evacuated from the camp.
Donlin Gold was one of the first mining companies in Alaska to
respond to the pandemic and its impacts on the communities closest
to the project site. The Donlin Gold drill program preparations and
work began in February and continued through March but, due to
COVID-19 restrictions and for the safety of our personnel, was
temporarily paused in April as a precautionary measure.
Re-mobilization began in late May in accordance with Donlin Gold’s
COVID-19 policies and procedures taking into account all applicable
State requirements.
As more than half of Donlin Gold employees are Native Alaskan,
prior to re-mobilization of drill rigs and re-opening camp, Donlin
Gold held weeks of conversations with community and tribal leaders
in the Y-K region to ensure safety precautions for Donlin Gold
personnel met the needs of each community. The Company seeks to
bring tangible, long-lasting benefits to all of its community
partners in the form of training and employment opportunities,
service business contracts, and participation agreements as the
project advances.
Drilling for Value Enhancement
NOVAGOLD and Barrick continue to study ways to improve the
project’s value and to reduce initial capital outlays including
enhanced project design and execution, engagement of third-party
operators for certain activities, and potential for future
financing of some capital-intensive infrastructure. To date, these
additional studies have identified key areas that have the
potential to add value and maximize the future opportunity and
longevity of the project.
The 2020 Donlin Gold drill program is part of this effort. The
objective of this drill campaign, the largest in 12 years, is to
validate recent geologic and resource modeling concepts developed
by the Barrick and NOVAGOLD teams, and to test potential extensions
of high-grade zones, most of which would be expected to be mined
early in the life of a future mine. The results of the 2020 drill
program will provide the necessary data needed for NOVAGOLD and
Barrick to decide on the next steps to advance Donlin Gold. The
Company will incorporate this data as part of the ongoing
optimization work and staged development approach that the owners
have been studying to reduce initial capital. This information will
provide valuable input into the owners’ decision process to proceed
with updating the feasibility study.
As originally stated in January, the owners continue to target
completing a majority of the drill program by year-end. The project
owners remain committed to advancing the Donlin Gold project in a
safe, efficient, and financially disciplined manner with a strong
focus on environmental stewardship and social responsibility.
Donlin Gold continues to support the State of Alaska to advance
other permits and certificates needed for the project. The field
work for the Alaska Dam Safety certificates has been temporarily
paused to prioritize the ongoing drill program.
Additionally, Alaska Department of Natural Resources’ (ADNR)
Division of Oil and Gas (DOG), issued the final State Right-of-Way
(ROW) lease for the buried natural gas pipeline on January 17,
2020. On February 6, 2020, Cook Inletkeeper, on behalf of the
Orutsararmiut Native Council (ONC), Susitna River Coalition,
Kasigluk Traditional Council, and Tununak IRA Council, requested
that the Commissioner of ADNR reconsider the decision to issue the
ROW lease for the pipeline. The ADNR Commissioner denied the
request for reconsideration on February 18, 2020. On March 19,
2020, Earthjustice, representing ONC, Chevak Native Village,
Chuloonawick Native Village, Native Village of Eek, and Cook
Inletkeeper, filed an appeal of the denial of the ROW lease
issuance reconsideration request in the Superior Court of the State
of Alaska at Anchorage (“Alaska Superior Court”). On April 30,
2020, ADNR reversed and agreed to reconsider the decision to issue
the ROW lease in accordance with the February 6, 2020 request made
by Cook Inletkeeper. As a result, the appeal filed in the Alaska
Superior Court was dismissed without prejudice on May 20, 2020.
Donlin Gold supported the State’s decision to accept the
reconsideration request and the subsequent withdrawal of the appeal
filed in Alaska Superior Court. The Company supports the
efforts of the State to address the narrow issues related to
cumulative effects that have been raised by Cook
Inletkeeper. The Company will work with the State wherever
needed to ensure they have the information they
require. NOVAGOLD expects a final decision in approximately
six months. The Company believes the ROW lease offer will be upheld
by ADNR.
A Tier One Asset in a Tier One
Jurisdiction
Donlin has both extraordinary size and quality. The size of the
resource at Donlin Gold – at approximately 39,000,000 ounces of
gold in measured and indicated mineral resources1 – defines
its rarity. Very few gold assets began production with a mine life
measured in decades and, despite billions spent globally on gold
exploration over the past decade, there have been very few
discoveries of any consequence and NOVAGOLD believes none are
anywhere comparable to Donlin Gold. As the global average gold
grade for measured and indicated resources decreased over the past
decade, grade – always important to the project’s economic
viability – is a key attribute to ensure the successful development
and survivability of an operation through multiple gold cycles.
With an average measured and indicated resource grade of 2.24 grams
per tonne2, the Donlin Gold project has more than twice the
industry average grade3. With stated resources contained in just
three kilometers of an eight-kilometer mineralized belt,
and with only a small portion of the land package having been
explored, NOVAGOLD believes Donlin Gold could well command
district-sized exploration potential.
More than ever, location is one of the pivotal factors for
valuing any mining deposit. With Alaska as a top mining
jurisdiction where the rule of law is well-established, location
has become the existential investment criterion as globally,
nationalization – both stealth and brazen – and designation of gold
as a national strategic resource to be exchanged for local currency
are beginning to impact mining companies large and small in
higher-risk jurisdictions. Political and economic instability will
only exacerbate growing discrepancies regarding jurisdictional risk
in the mining industry.
These attributes render Donlin Gold unique compared to all other
development-stage open-pit gold projects. Consequently, any
value-enhancing work that the owners undertake on the property
should only boost its attributes of a project that is already a
category-killer. Donlin Gold last carried out a drill program in
2017 that encountered distinct significant high-grade intercepts
within the reserve pit and high grades identified outside the
planned pit boundaries4. The results from the 2017 drill program
will be combined with this year’s drill program results to provide
additional information helpful to advancing the project up the
value chain.
Deepening Partnerships with Stakeholders during the
Pandemic
Calista and TKC have been our Native Corporation partners in the
project for many years and, like Barrick, share our vision of
building value for the future generations of their shareholders
with this project. The COVID-19 pandemic created significant
concern in the Y-K region due to Elders’ memories of the toll taken
by the Spanish Flu early in the 20th Century when Native Alaskans
suffered the highest casualty rate in North America. When concerns
emerged about the spread of COVID-19 to Alaska, our Native
Corporation partners immediately engaged with the community to
determine their most immediate needs of small villages in the
region, and Donlin Gold contacted Calista and TKC to offer help
with transportation, food and supplies.
A priority early on was partnering with the
village of Aniak, a regional hub for the eight middle Kuskokwim
villages closest to the project, to distribute food and supplies to
residents homebound due to health issues, quarantine requirements,
or other reasons. Additionally, Donlin Gold donated thousands of
pounds of food to food banks and homeless shelters when the Donlin
Gold camp was temporarily closed in April. In partnership with TKC
and Tribal councils, Donlin Gold continues to coordinate the
delivery of food and supplies to communities now without regular
air carrier service after the regional airline went into
bankruptcy.
Practical sanitation issues were also addressed,
including delivery of five-gallon buckets sent to middle Kuskokwim
villages with water supply issues and disinfecting soap sent to all
the homes in the Y-K region (distribution took place from Anchorage
and all packages were sent to the Tribes for each village). Donlin
Gold coordinated with Tribal administrators to identify community
members to make face masks for the protection of Elders and
COVID-susceptible people, then assembled and shipped the 1,400 mask
making kits to 56 Y-K villages.
NOVAGOLD is proud of the immediate response from Donlin Gold to
urgent community needs during the COVID-19 pandemic and partnering
with Calista and TKC in ongoing community engagement in
environmental management, safety, training, educational, health,
and cultural initiatives, as well as providing economic assistance
through community funds such as the Bethel COVID-19 Resiliency
Fund. As part of an ongoing environmental commitment, Clean Up
Green Up initiatives, funded in part by Donlin Gold, took place in
32 villages.
At the end of the quarter, we were delighted to report that Dan
Graham was promoted to the position of General Manager for the
Donlin Gold project, replacing Andy Cole who has retired. Mr.
Graham was previously the Manager, Permitting and Environmental
Department at Donlin Gold and has worked in Alaska’s mining
industry for over 35 years. Dan is a long-term Alaska resident and
a member of the board for the Council of Alaska Producers, Alaska
Sealife Center, and the Tyonek Tribal Conservation District and
past board member of the Alaska State Hockey Association, Alaska
Miners Association, and the Resource Development Council. The
Company would like to thank Andy for his years of service to the
Donlin Gold project and wish him well in his retirement.
A Strong Balance Sheet to Advance the Project without
Share Dilution
A conservative approach to managing NOVAGOLD's balance sheet and
projected expenses is a tangible benefit to all shareholders and a
rarity for development-stage companies that regularly rely on share
issuances to fund operations. NOVAGOLD has not needed to raise
equity through the markets since 2012 and should not need to do so
for the foreseeable future. In 2020, the Company continues to
project annual expenses totaling $31 million. As of May 31, 2020,
NOVAGOLD had cash and term deposits of $134.3 million with another
$100 million of receivables from Newmont. As such, we can focus on
moving Donlin Gold up the value chain through permitting and
optimization without needing to access additional capital until a
construction decision is made.
Now more than ever, these challenging times bring out the best
in our experienced team of professionals at
NOVAGOLD, Donlin Gold, and Barrick. I would like to thank
them for their unwavering dedication to the task at hand, whether
in responding to the COVID-19 pandemic and the impact on the
Company, our communities or personal lives, or for the actions
taken to advance the Donlin Gold project. These relationships
breathe life into the Company and enhance the value of the project,
creating an opportunity for a better future for all stakeholders.
We are also thankful for our partners, Calista and TKC, for their
long-term commitment to the project that has been a cornerstone to
the accomplishments to date. The Company extends it gratitude to
Alaska State officials for their thoroughness in advancing
permitting efforts for the project. I wish to thank NOVAGOLD’s
Board of Directors for their continued counsel and adherence to
best governance practices and leadership which have truly set the
Company apart in the gold industry.
To our shareholders, many of whom we regularly engage with and
who can attest to the high standard of transparency in all that we
do, I thank you all for your encouragement, engagement, and
dedication to the long-term vision management has for the Company.
Our shareholders understand and support NOVAGOLD’s investment
thesis and have shown remarkable steadfastness as we continue to
deliver on our strategy. We are truly grateful to you.
We pledge to remain true to our promise to build on Donlin
Gold’s unique value, to remain true to our principles to do the
right thing with a continued high degree of professionalism, and to
continue to make our shareholders proud. We wish all of our
stakeholders continued good health and safety.
Sincerely,
Gregory A. Lang President & CEO
Financial Results
in thousands of U.S. dollars, except for per share
amounts
|
Three months endedMay 31,
2020$ |
Three months endedMay 31,
2019$ |
Six months endedMay 31,
2020$ |
Six months endedMay 31,
2019$ |
General
and administrative expense (1) |
4,387 |
4,215 |
9,101 |
8,555 |
Share of
losses – Donlin Gold |
3,700 |
2,198 |
5,268 |
3,521 |
Total operating expenses |
8,087 |
6,413 |
14,369 |
12,076 |
|
|
|
|
|
Loss from
operations |
(8,087) |
(6,413) |
(14,369) |
(12,076) |
Interest
expense on promissory note |
(1,400) |
(1,861) |
(3,160) |
(3,659) |
Accretion
of notes receivable |
824 |
796 |
1,648 |
1,591 |
Other
income |
1,694 |
2,319 |
2,581 |
3,019 |
Income tax expense |
(264) |
(356) |
(528) |
(713) |
Net loss |
(7,233) |
(5,515) |
(13,828) |
(11,838) |
|
|
|
|
|
Loss per
share, basic and diluted |
(0.02) |
(0.02) |
(0.04) |
(0.04) |
|
|
|
|
|
|
|
|
AtMay 31,
2020$ |
AtNov 30,
2019$ |
|
|
|
Cash and
term deposits |
|
|
134,329 |
148,549 |
Total
assets |
|
|
235,031 |
245,835 |
Total liabilities |
|
|
110,695 |
107,881 |
(1) Includes share-based compensation expense of $1,715 and
$1,542 in the second quarter of 2020 and 2019, respectively, and
$3,476 and $3,073 in the first six months of 2020 and 2019,
respectively.
For the second quarter ended May 31, 2020, loss from operations
increased from $6.4 million in 2019 to $8.1 million in 2020 due to
higher general and administrative expense and higher costs at
Donlin Gold. General and administrative expense increased from $4.2
million in 2019 to $4.4 million in 2020 primarily due to higher
salaries and benefits and share-based compensation costs. The
equity loss in NOVAGOLD’s share of Donlin Gold increased from $2.2
million in 2019 to $3.7 million in 2020 due to the 2020 drilling
program.
Net loss increased from $5.5 million ($0.02 per share) in 2019
to $7.2 million ($0.02 per share) in 2020, primarily due to higher
operating losses and lower interest income, partially offset by
lower interest expense on the promissory note payable to Barrick
and foreign exchange movements.
For the first six months ended May 31, 2020, loss from
operations increased from $12.1 million in 2019 to $14.4 million in
2020 due to higher general and administrative expense and higher
costs at Donlin Gold. General and administrative expense increased
by $0.5 million primarily due to higher share-based compensation
and regulatory costs. At Donlin Gold expenses increased by $1.7
million due to the 2020 drilling program.
Net loss increased from $11.8 million ($0.04 per share) in 2019
to $13.8 million ($0.04 per share) in 2020, primarily due to higher
operating losses and lower interest income, partially offset by
lower interest expense on the promissory note payable to Barrick
and foreign exchange movements.
Liquidity and Capital
Resources
In the first six months of 2020, total cash, cash equivalents
and term deposits decreased by $14.2 million of which $5.3 million
was used in operating activities for administrative costs and
working capital changes, $6.9 million was used to fund Donlin Gold
and $1.7 million was related to withholding taxes paid on vested
performance share units. Effects of exchange rate changes also
decreased cash by $0.3 million. The term deposits are denominated
in U.S. dollars and are held at Canadian chartered banks.
Net cash used in operating activities increased by $0.1 million,
due to lower interest income, partially offset by changes in
working capital. Net cash provided from (used in) investing
activities included a $1.4 million increase in Donlin Gold funding
due to the 2020 drilling program.
Net cash used in operating activities increased by $0.4 million,
primarily due to lower interest income, partially offset by changes
in working capital. Net cash provided from (used in) investing
activities included a $3.1 million increase in Donlin Gold funding
due to the 2020 drilling program. For the six-month period in 2019,
term deposits decreased by $7.0 million, with the proceeds
deposited in interest-bearing savings accounts. Net cash used in
financing activities related to withholding taxes paid on vested
performance share units.
NOVAGOLD had $134.3 million in cash and term
deposits as of May 31, 2020. The Company’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.
2020 Outlook
We anticipate spending approximately $31 million in 2020, which
includes $20 million to fund our share of expenditures at the
Donlin Gold project, the majority earmarked for the drill program
with the balance for permitting and community engagement, and $11
million for general and administrative costs.
NOVAGOLD’s primary goals in 2020 are to continue to
advance the Donlin Gold project toward a construction/production
decision; maintain a healthy balance sheet; and continue an
effective corporate social responsibility program.
Conference Call & Webcast Details
NOVAGOLD’s conference call and webcast to discuss these results
will take place June 25, 2020 at 8:00 am PT (11:00 am ET). The
webcast and conference call-in details are provided below.
Webcast:
http://services.choruscall.ca/links/novagold20200625.htmlNorth
American callers: 1-800-319-4610International callers:
1-604-638-5340
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),5 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” or “FSU2”). 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
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; the timing and likelihood of permits; mineral
reserve and resource estimates; work programs; capital
expenditures; timelines; strategic plans; and benefits of the
Donlin Gold project and market prices for precious metals, and
potential actions against or redress from JCAP; and the timing and
outcome of ADNR’s decision to reconsider the ROW lease for the
natural gas pipeline. 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; the outbreak of the coronavirus global pandemic
(COVID-19); 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,
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, natural disasters, climate change,
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;
continuing legal review of statements by JCAP; 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 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 and inclusive of mineral reserves. Mineral resources have
been estimated in accordance with National Instrument 43-101 –
Standards of Disclosure for Mineral Projects (“NI 43-101”).2 Ibid.3
Donlin Gold grade represents average grade of measured and
indicated mineral resources, inclusive of mineral reserves, see
note re: “Scientific and Technical Information” below, compared to
2019 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.4 Refer
to the media release dated February 20, 2018 titled “NOVAGOLD’s
Donlin Gold Project Reports Excellent Results from 2017 Drill
Program,” for significant intervals and additional information.5
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 and inclusive of mineral
reserves. Mineral resources have been estimated in accordance with
NI 43-101.
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