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Nova gold1q13presentation Presentation Transcript

  • 1. 2013 FIRST QUARTER &PROJECT UPDATE APRIL 11, 2013 1 NYSE-MKT, TSX: NG www.novagold.com
  • 2. CONFERENCE CALL ATTENDEES ▸ Introduction Mélanie Hennessy (Vice President Corporate Communications) ▸ Corporate Update Greg Lang (President & Chief Executive Officer) ▸ First Quarter Financials & 2013 Budget David Ottewell (Vice President & Chief Financial Officer) ▸ Closing Remarks Greg Lang (President & Chief Executive Officer) ▸ Question & Answer Session Greg Lang & David Ottewell 2 NYSE-MKT, TSX: NG www.novagold.com
  • 3. CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS This presentation includes certain “forward-looking statements” within the meaning of applicable securities laws, including the United States Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact, included herein including, without limitation, statements relating to Donlin Gold’s and Galore Creek’s future operating or financial performance, are forward-looking statements. Forward-looking statements are frequently, but not always, identified by words such as “plans”, “expects”, “anticipates”, “believes”, “intends”, “estimates”, “potential”, “possible” and similar expressions, or statements that events, conditions or results “will”, “may”, “could”, or “should” occur or be achieved. These forward-looking statements are set forth in the slides pertaining to the implementation of the Donlin Gold second updated Feasibility Study and the Galore Creek Pre-Feasibility Study. Froward-looking statements may include statements regarding perceived merit of properties; exploration results and budgets; mineral reserves and resource estimates; work programs; capital expenditures; timelines; strategic plans; completion of transactions; market price of precious base metals; or other statements that are not statements of fact. Forward- looking statements involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from our expectations include the uncertainties involving the need for additional financing to explore and develop properties and availability of financing in the debt and capital markets; uncertainties involved in the interpretation of drilling results and geological tests and the estimation of reserves and resources; the need for continued cooperation between NOVAGOLD and Barrick Gold in the exploration and development of the Donlin Gold property; between NOVAGOLD and Teck Resources Ltd. in the exploration and development of the Galore Creek property; the need for cooperation of government agencies and native groups in the development and operation of properties; the need to obtain permits and governmental approvals; risks of construction and mining projects such as accidents, equipment breakdowns, bad weather, non-compliance with environmental and permit requirements, unanticipated variation in geological structures, ore grades or recovery rates; unexpected cost increases; fluctuations in metal prices and currency exchange rates; and other risk and uncertainties disclosed in reports and documents filed by NOVAGOLD with applicable securities regulatory authorities from time to time. The forward-looking statements made herein reflect management’s beliefs, opinions and projections on the date the statements are made. Except as required by law, the Company assumes no obligation to update the forward-looking statements of beliefs, opinions, projections, or other factors, should they change. REGARDING SCIENTIFIC AND TECHNICAL INFORMATION Unless otherwise indicated, all reserve and resource estimates included in this presentation have been prepared in accordance with Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum Definition Standards for Mineral Resources and Mineral Reserves (“CIM Definition Standards”). Canadian standards, including NI 43-101, differ significantly from the requirements of the United States Securities and Exchange Commission (“SEC”), and reserve and resource information in this presentation may not be comparable to similar information disclosed by U.S. companies. In particular, and without limiting the generality of the foregoing, the term “resource” does not equate to the term “‘reserves”. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. The SEC’s disclosure standards normally do not permit the inclusion of information concerning “measured mineral resources”, “indicated mineral resources” or “inferred mineral resources” or other descriptions of the amount of mineralization in mineral deposits that do not constitute “reserves” by U.S. standards in documents filed with the SEC. U.S. investors should also understand that “inferred mineral resources” have a great amount of uncertainty as to their existence and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimated “inferred mineral resources” may not form the basis of feasibility or pre-feasibility studies except in rare cases. Investors are cautioned not to assume that all or any part of an “inferred mineral resource” exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in-place tonnage and grade without reference to unit measures. The requirements of NI 43-101 for identification of “reserves” are also not the same as those of the SEC, and reserves reported in compliance with NI 43-101 may not qualify as “reserves” under SEC standards. Accordingly, information concerning mineral deposits set forth herein may not be comparable to information made public by companies that report in accordance with United States standards. 3 NYSE-MKT, TSX: NG www.novagold.com
  • 4. 2013 GOALS AND MILESTONESFocused on Advancing Our Projects On Time and On Budget Q4 - 13 Q4 - 13 Q3 - 13 Update on Donlin Gold Q2 - 13 Donlin Gold Preliminary cost Draft EIS Q1 - 13 Galore reduction progress Creek opportunities Q1 - 13 Complete endowment update public update Q1 - 13 Appointed scoping for Richard Donlin Gold Galore Williams VP EIS Creek Engineering & exploration DevelopmentReceived drill results strengthening$54.0 Mproceeds technicalfrom in the expertisemoneywarrants 4 NYSE-MKT, TSX: NG www.novagold.com
  • 5. THE RIGHT PROJECT – DONLIN GOLDArguably the World’s Most Significant Gold Project Largest gold project in development Among the highest grade large-scale open-pit deposits Excellent expansion potential along strike & at depth Poised to be world’s largest gold producer, one of only six >1Moz/year Safe: In Alaska, 2nd largest gold producing state in U.S. 5 NYSE-MKT, TSX: NG www.novagold.com
  • 6. www.novagold.com 2013 FIRST-QUARTER FINANCIALS DAVID OTTEWELL, VICE PRESIDENT & CFO
  • 7. Q1 2013 – PROJECT ACTIVITY▸ Donlin Gold > Held public scoping meetings around project area > Compiled and presented all environmental and social baseline data to the Corps to facilitate preparation of the EIS > Project funding (NG 50% share) > FY-2013: US$15.0 million to continue permitting > Q1-2013: US$2.4 million▸ Galore Creek > Exploration and geotechnical drilling in 2013 > Project funding (NG 50% share) > FY-2013: $8.0 million for follow-up drilling and new targets (exploration season May-Oct.) > Q1-2013: $0.7 million 7 NYSE-MKT, TSX: NG www.novagold.com
  • 8. Q1 2013 – OPERATING PERFORMANCE ANALYSIS in thousands of Canadian dollars Three months Three months ended ended Highlights February 28, 2013 February 29, 2012 $ $ Expenses(1) 3,474 5,866 Share-based payments 5,526 10,088 Project care and maintenance - 2,574 Mineral properties - 907 Decommissioning expense - 1,651 Foreign exchange (gain) loss (7,883) (1,411) Share of losses – Donlin Gold 2,986 3,623 Share of losses – Galore Creek 2,482 4,065 Other (gains) losses (9) 25 Operating loss (6,576) (27,388) (1) General and administrative, salaries and severance, professional fees, corporate and development expenses 8 NYSE-MKT, TSX: NG www.novagold.com
  • 9. Q1 2013 – CASH FLOW HIGHLIGHTS in thousands of Canadian dollars Three months ended Three months ended Highlights February 28, 2013 February 29, 2012 $ $ Cash used in operating activities (9,307) (24,649) Cash from financing activities 54,014 320,100 Cash used in investing activities - (13,625) Foreign exchange effect on cash 11,601 178 Increase (decrease) in cash 56,308 282,004 Cash and cash equivalents Beginning 253,037 60,572 Ending 309,345 342,576 Ending US$ 299,941 346,207 9 NYSE-MKT, TSX: NG www.novagold.com
  • 10. NOVAGOLD’S FUTURE FINANCIAL OBLIGATIONS HAVE DECREASEDSUBSTANTIALLYClear Focus Begins with Strong Funding to Execute on All Fronts Highlights: 40 $3 ▸ US$300M in cash and cash equivalents1 $8 ▸ US$95M cash available for convertible 30 notes2 US$ (Millions) 2013: $15 20 ▸ 62% spending reduction ▸ Donlin Gold Q1-2013 spending US$2.4M (NOVAGOLD 50%-share) 10 $0.7 ▸ Galore Creek Q1-2013 spending $15 $2.4 US$0.7M (NOVAGOLD 50%-share) $6.1 ▸ Administrative expenses US$3.5M and 0 2013 Budget3 Q1-2013 Spending working capital US$2.6M 1) Cash and cash equivalents as of February 28, 2013 2) The Notes mature on May 1, 2015. The holders of the Notes have the right to require the Donlin Gold G&A and Miscellaneous Company to repurchase all or part of their Notes on May 1, 2013 (“put option”) Galore Creek Interest4 3) 2013 anticipated budget expenditure disclosed on February 12, 2013 4) Assuming full repayment of US$95M in convertible notes 10 NYSE-MKT, TSX: NG www.novagold.com
  • 11. DONLIN GOLD PUBLIC COMMENT PERIODCommunication on all Levels is a Core Value ▸ U.S. Army Corps of Engineers (“the Corps”) launched website for the EIS project: www.donlingoldeis.com ▸ Public scoping is 2nd phase of the EIS process ▸ Important opportunity to ask questions, identify concerns, and offer ideas related to the proposed project and its environmental effects ▸ Helps shape the direction of the EIS analysis ▸ Donlin Gold public comment period (Dec. 14/12 - March 29/13) ▸ 13 public meetings in villages/communities in Western Alaska and Anchorage ▸ Very well attended with knowledgeable audience and overall positive feedback on the Project ▸ The Corps received constructive comments that will be beneficial in developing a robust EIS ▸ Public scoping summary document will be available on the EIS website ▸ Core focus is the development of an environmentally responsible Project design, and spending significant time working with communities in the region 11 NYSE-MKT, TSX: NG www.novagold.com 12-07-26
  • 12. DONLIN GOLD PERMITTING PROCESSRegulatory Process Currently Focused on Environmental Impact Statement (“EIS”) What is an EIS? A disclosure document that is part of the regulatory process and led by the U.S. Army Corps of What is the Permitting Process? Engineers that provides the Concurrent with and supported by the EIS process, the Federal and agencies and the public with State regulatory agencies will consider all of the required permits and information needed to make authorizations for the project. permitting decisions on the project Record of Preliminary Decision Notice of Public Public Final Draft EIS Draft EIS subject to Intent Scoping Comment EIS/Permit 30-Day Period Issuance Appeal Submitted Period Ended 12/14/12 03/29/13 2012 2016 Permitting Process ~3-4 Impacts Discussed in the EIS years • Hydrology • Fish & Aquatic Habitat • Air & Water Quality • Wildlife • Cultural Resources • Noise • Socioeconomics • Visual Resources • Wetlands • Threatened & Endangered Species • Recreation, Safety & Feasibility • Cumulative Impacts • Land Use and Subsistence 12 NYSE-MKT, TSX: NG www.novagold.com
  • 13. GALORE CREEK2012 Drilling Program Extended Mineralization Substantially Beyond Pit Limit ▸ Completed 27,873-meter drilling program ▸ Significant intercepts, including 86 meters grading 1.31%Cu and 0.46g/t Au, lead to the discovery of the new Legacy zone, a 700 -meter long mineralized zone, currently open in all directions and adjacent to the Central Pit ▸ Results expected to increased endowment and enhance the mine plan 13 NYSE-MKT, TSX: NG www.novagold.com
  • 14. GALORE CREEKWell Positioned to Update Resource Model and Improve Overall Economics▸ NOVAGOLD continues to consider the potential sale of its share of Galore Creek meanwhile enhancing its value through exploration and technical studies on a reduced budget▸ 2013 work and exploration program ▸ Update resource model with 2012 drill results in Q3-2013 ▸ Drilling to define the extent of the Legacy mineralization, and assess its impact on future mine design▸ Once in production, as envisioned by the Pre-Feasibility Study, Galore Creek is expected to be the largest and lowest cash cost copper mine in Canada 14 NYSE-MKT, TSX: NG www.novagold.com
  • 15. THE NOVAGOLD TEAMSenior Industry Leaders to Bring Donlin Gold through Permitting and Beyond MANAGEMENT ▸ Former President of Barrick Gold North America Gregory A. Lang ▸ 35 years experience building & operating major mines President & CEO ▸ Intimate knowledge of Donlin Gold ▸ Former EVP and General Counsel of Goldcorp David Deisley ▸ Regional General Counsel for Barrick Gold North America Executive Vice President and ▸ Extensive track record in project permitting, corporate social responsibility, General Counsel mergers and acquisitions and corporate development ▸ 25 years of mining industry experience David Ottewell ▸ Former VP and Corporate Controller of Newmont Mining Corporation ▸ 25 years of mining industry experience Vice President and Chief ▸ Diverse experience in all facets of financial management, from mine operations Financial Officer to executive corporate financial management of premier gold producers Mélanie Hennessey ▸ Held variety of senior IR & corporate communication positions with Goldcorp Vice President, Corporate Inc., New Gold Inc., and Hecla Mining Company Communications ▸ Leading NOVAGOLD’s internal and external communications functions Ron Rimelman ▸ 25 years of environmental experience , managing environmental impact assessments and permitting activities world-wide Vice President, Environment, ▸ Leadership role on mine permitting and NEPA evaluations for mine projects in Health, Safety & Sustainability Alaska since 1993 Richard Williams ▸ Former Project Director for the Pueblo Viejo project in the Dominican Republic Vice President, Engineering ▸ 30 years of experience developing and operating major mines world-wide and Development ▸ Particular expertise in autoclave technology 15 NYSE-MKT, TSX: NG www.novagold.com
  • 16. 2013 - AN EXCITING YEAR AHEADNOVAGOLD Well Positioned to Deliver on All Corporate Objectives A simplified corporate structure resulting in reduced ongoing expenditures Experienced team and Focused on advancing committed stakeholders Donlin Gold up the represent the right foundation value chain to execute on all fronts Strong cash balance to take Donlin Gold through expected 3-4 years of permitting 16 NYSE-MKT, TSX: NG www.novagold.com
  • 17. APPENDIX 17 NYSE-MKT, TSX: NG www.novagold.com
  • 18. MAJOR DISCOVERIES ARE INCREASINGLY RAREVery Few and No Easy Quality Development Assets LeftSignificantdecline in golddiscoveriessince 2006Gold reservesare being minedout at a high rate Source: Metals Economics Group – Strategies for Gold Reserves Replacement 2012 Note: Major gold discoveries based on a cut off of 2 M/oz of gold in total reserves, resources and past production (or at least 1 M/oz in defined reserves) 18 NYSE-MKT, TSX: NG www.novagold.com
  • 19. THE CLIMATE OF DECLINING GRADE AND ESCALATING COSTSDonlin Gold Has Among the Highest Grade for an Open-Pit Deposit Grade, g/t Cost US$/oz 2.5 1,200Donlin Gold Mining 12.24 g/t average Mined gradeM&I grade 2.0 36% 1,000 above reserve grade“Reserve grade are 800down 50% over 10 Reserve grade 1.5years negativelyimpacting 600production costand capex which 1.0have tripled in the 400same time period” 0.5Pierre Lassonde, 200DGF 2012 0.0 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Total cash cost Depreciation Exploration & sustaining capex Other and administrative 2 Source: GFMS Mine Economics, LBMA, World Gold Council 1) 2002-2004 data set includes primary gold mines only, 2005 onwards, includes porphyry copper gold mines 2) Includes exceptional items 19 NYSE-MKT, TSX: NG www.novagold.com
  • 20. DONLIN GOLD: THE LARGEST DEVELOPMENT-STAGE GOLD DEPOSITFeasibility Study in Place and Permitting Underway 45 40 39.0 35 30 M&I Au Resources (Moz) 25.8 25 20 19.0 16.5 14.6 14.0 15 10 5 -- Donlin Gold Detour Lake Metates Livengood Rosia Montana Kibali LOCATION: USA CANADA MEXICO USA ROMANIA D.R. CONGO Source: Donlin Gold data as per Donlin Creek Gold Project Alaska, USA, NI 43-101 Technical Report on Second “Updated Feasibility Study”, effective November 18, 2011, as amended January 20, 2012 (the “Updated Feasibility Study”). Measured and Indicated resources are inclusive of Proven and Probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. RBC peer group data based on large, open pit, gold focused development projects. 20 NYSE-MKT, TSX: NG www.novagold.com
  • 21. DONLIN GOLD: AMONG HIGHEST-GRADE DEPOSITS IN THE WORLD Large-Scale Open-Pit Gold Development 4.00 3.50 3.38 3.00 2.50 M&I Au Grade (g/t) 2.24 2.00 1.50 1.30 1.04 1.00 0.55 0.50 0.50 -- Kibali Donlin Gold Rosia Montana Detour Lake Livengood MetatesLOCATION: D.R. CONGO USA ROMANIA CANADA USA MEXICO Source: Donlin Gold data as per the Updated Feasibility Study. Measured and Indicated resources are inclusive of Proven and Probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. RBC peer group data based on large, open pit, gold focused development projects. 21 NYSE-MKT, TSX: NG www.novagold.com
  • 22. DONLIN GOLD: SUBSTANTIAL EXPLORATION POTENTIALMultiple Drill Prospects and Targets Exist Along 8km Trend ▸ Future mine situated in 3km segment of 8km mineralized trend ▸ Over the last six years, the mineral endowment has more than doubled ▸ Located largely on private land, designated for mining ▸ Gold-bearing drill holes along the 8km trend ▸ Exploration upside: • In-pit resource conversion • In-pit/deep-pit exploration • Near-pit targets (East ACMA, 3km = 39 Moz M&I (including 34 Moz P&P), 6 Moz Inferred1 Akivik Zone and Snow) • Area resource potential1) See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. 22 NYSE-MKT, TSX: NG www.novagold.com
  • 23. DONLIN GOLD: ANTICIPATED TO BE TOP-TIER PRODUCER By Far the Largest Evolving Gold Producer from Existing Projects 1.60 1 1.50 1.40 1.20LOM Average Annual Au Production (Moz) 2 1.10 1.00 0.80 0.76 0.66 0.60 0.60 0.56 0.51 0.40 0.20 0.00 Donlin Gold Metates Detour Lake Kibali Livengood Rosia Montana LOCATION: USA MEXICO CANADA D.R. CONGO USA ROMANIA Source: Donlin Gold data: Updated Feasibility Study. Measured and Indicated resources are inclusive of Proven and Probable reserves. See “Cautionary Note Concerning Reserve & Resource Estimates” and “Reserve & Resource Base” with footnotes in the appendix. RBC peer group data based on large, open pit, gold focused development projects. 1) Projected annual gold production during first five full years of mine life 2) Projected annual gold production during full life of mine 23 NYSE-MKT, TSX: NG www.novagold.com
  • 24. JURISDICTIONAL SAFETY BECOMING THE “EXISTENTIAL” INVESTMENTCRITERION“Large-Scale Quality Assets” Raising the Question “Where in the World Are You?” • Recently highlighted regions/countries with heightened geopolitical risk ▸ Accelerated industry focus on jurisdictional safety and resource nationalism in many of the largest gold and copper-producing countries ▸ Countries such as Mongolia, Kyrgyzstan, Peru, Indonesia and Ghana have all stated their intentions to seek higher mining taxes and royalties ▸ Civil and labor unrest in South Africa and Greece with countries looking to get an increased stake in mining companies ▸ Very limited number of quality assets in low geo-political risk jurisdictions 24 NYSE-MKT, TSX: NG www.novagold.com
  • 25. GALORE CREEKHigh-Grade Mineral Inventory in a Safe, Mining-Friendly Jurisdiction Copper (M&I) Copper (Inf) Gold (M&I) Gold (Inf) 71.4 89.7 64.0 20 20 17.1 14.1 Millions of Au Oz. Billions of Cu Lbs. 15 13.3 15 12.8 12.0 10 9.1 10 7.1 5.3 5 2.9 5 0 0 Pebble KSM El Morro Prosperity Mt. Milligan Galore Creek Project Name Pebble KSM Galore El Morro Prosperity Mt. Milligan Creek1 Grade Cu (%) 0.41% 0.20% 0.48% 0.53% 0.24% 0.18% Grade Au (g/t) 0.35 0.51 0.31 0.56 0.41 0.32 Grade Ag (g/t) N/A 2.94 5.18 N/A N/A N/A • N. Dynasty • Goldcorp (50%) • NOVAGOLD • Seabridge (70%) • Taseko • Thompson Owner(s) • Anglo- (50%) (100%) • New Gold (100%) Creek (100%) American • Teck (50%) (30%) (50%) Location USA Canada Canada Chile Canada Canada1) Represents 100% of Galore Creek, of which NOVAGOLD owns 50%, and 100% of Copper Canyon, of which NOVAGOLD owns 70%. See slides 12 and 13 for additional information.Source: Metals Economics Group, company websites, and NOVAGOLD. Peer projects were selected on the basis of their primary copper endowment and are ranked by the size of theirMI&I copper resources. Measured and Indicated resources include Proven and Probable Reserves. See “Cautionary Note Concerning Reserve and Resource Estimates” and “Reserve andResource Table” with footnotes. 25 NYSE-MKT, TSX: NG www.novagold.com
  • 26. GALORE CREEKFlagship of the Next Generation of North American Copper-Gold Mines ▸ Potentially the largest copper producer in Canada: ▸ Forecast to produce 6.2B lbs Cu, 4.0M oz Au and 65.8M oz Ag over an 18-year mine life; fourth largest copper producer in North America ▸ Potential to be lowest cost copper producer in Canada: ▸ Cash costs average $0.80/lb Cu at PFS Base Case metal price assumptions and $0.42/lb Cu at PFS Upside Case metal prices1 ▸ Project concept simplified – mining in the Galore Valley and processing in the West More Valley ▸ Open pit ▸ 2.2:1 strip ratio ▸ Truck and shovel operation ▸ 14km tunnel for conveying crushed ore ▸ Designed to accommodate future expansions ▸ Standard flotation circuit – 95,000 tpd nominal design ▸ Single copper concentrate with significant gold value1) Cash costs net of by-product credits. Base Case utilizes metal prices of US$2.65/lb copper, US$1,100/oz gold and US$18.50/oz silver and a foreign exchange rate of 1.11 CAD/USD. Upside Case metal prices are closing prices on July 27, 2011 of US$4.44/lb Cu, US$1,613/oz Au and US$40.34/oz Ag respectively and foreign exchange rate of 0.949 CAD/USD. 26 NYSE-MKT, TSX: NG www.novagold.com
  • 27. NOVAGOLD RESERVE/RESOURCE TABLE At April 30, 2012 Donlin Gold (NOVAGOLD 50%) Tonnage Grade* Metal content NOVAGOLD share** GOLD Mt g/t Moz Moz Reserves (100%)1 Proven 7.7 2.32 0.57 0.29 Probable 497.1 2.08 33.28 16.64 P&P 504.8 2.09 33.85 16.93 Resources (100%)3 inclusive of reserves Measured 7.7 2.52 0.63 0.31 Indicated 533.6 2.24 38.38 19.19 M&I 541.3 2.24 39.01 19.50 Inferred 92.2 2.02 5.99 3.00 Galore Creek (NOVAGOLD 50%) Tonnage Grade* Metal content NOVAGOLD share** COPPER Mt %Cu Mlbs Mlbs Reserves (100%)2 Proven 69.0 0.61 900.0 450.0 Probable 459.1 0.58 5,900.0 2,950.0 P&P 528.0 0.59 6,800.0 3,400.0 Resources (100%)4 inclusive of reserves Measured 108.4 0.48 1,147.0 573.5 Indicated 706.3 0.50 7,786.0 3,893.0 M&I 814.7 0.50 8,933.0 4,466.5 Inferred 346.6 0.42 3,230.0 1,615.0 Mt g/t Moz Moz GOLD Reserves (100%)2 Proven 69.0 0.52 1.15 0.58 Probable 459.1 0.29 4.30 2.15 P&P 528.0 0.32 5.45 2.73 Resources (100%)4 inclusive of reserves Measured 108.4 0.48 1.70 0.85 Indicated 706.3 0.28 6.40 3.20 M&I 814.7 0.31 8.00 4.00 Inferred 346.6 0.24 2.70 1.35 Mt g/t Moz Moz SILVER Reserves (100%)2 Proven 69.0 4.94 11.0 5.5 Probable 459.1 6.18 91.2 45.6 P&P 528.0 6.02 102.2 51.1 Resources (100%)4 inclusive of reserves Measured 108.4 4.10 14.30 7.15 Indicated 706.3 5.38 122.10 61.05 M&I 814.7 5.21 136.40 68.20 Inferred 346.6 4.28 47.73 23.87 27 NYSE-MKT, TSX: NG www.novagold.com
  • 28. RESERVE/RESOURCE TABLE (CON’T) Copper Canyon (NOVAGOLD 70%) Tonnage Grade* Metal content NOVAGOLD share** Resources (100%)5,6 COPPER Mt %Cu Mlbs Mlbs Inferred 53.7 0.50 592.0 414.4 GOLD Mt g/t Moz Moz Inferred 53.7 0.73 1.26 0.88 SILVER Mt g/t Moz Moz Inferred 53.7 10.60 18.36 12.85 t = metric tonne Approximate cut-off grades (see Resource Footnotes below): M = million Donlin Gold Reserves1: 0.57 g/t gold g/t = grams/tonne Resources3: 0.46 g/t gold * Reserve grade is diluted; resource Galore Creek Reserves2: C$10.08 NSR grade is in situ. Resources4: C$10.08 NSR ** NOVAGOLD share net after earn-ins Copper Canyon Resources5,6: 0.6% copper equivalent 28 NYSE-MKT, TSX: NG www.novagold.com
  • 29. RESERVE/RESOURCE TABLE (CON’T)Notes:a. These resource estimates have been prepared in accordance with NI43-101 and the CIM Definition Standard, unless otherwise noted.b. See numbered footnotes below on resource information.c. Rounding as required by reporting guidelines may result in apparent summation differences between tonnes, grade and contained metal contentd. Tonnage and grade measurements are in metric units. Contained gold and silver ounces are reported as troy ounces, contained copper pounds as imperial poundsResource Footnotes:Mineral Reserves are contained within Measured and Indicated pit designs, and supported by a mine plan, featuring variable throughput rates, stockpiling and cut-off optimization. The pit designs and mine plan were optimized on diluted grades using the following economic and technical parameters: Metal price forgold of US$975/oz; reference mining cost of US$1.67/t incremented US$0.0031/t/m with depth from the 220 m elevation (equates to an average mining cost of US$2.14/t), variable processing cost based on the formula 2.1874 x (S%) + 10.65 for each US$/t processed; general and administrative cost of US$2.27/tprocessed; stockpile rehandle costs of US$0.19/t processed assuming that 45% of mill feed is rehandled; variable recoveries by rock type, ranging from 86.66% in shale to 94.17% in intrusive rocks in the Akivik domain; refining and freight charges of US$1.78/oz gold; royalty considerations of 4.5%; and variable pitslope angles, ranging from 23º to 43º. Mineral Reserves are reported using an optimized net sales return value based on the following equation: Net Sales Return = Au grade * Recovery * (US$975/oz – (1.78 + (US$975/oz – 1.78) * 0.045)) - (10.65 + 2.1874 * (S%) + 2.27 + 0.19) and reported in US$/tonne. Assumingan average recovery of 89.54% and an average S% grade of 1.07%, the marginal gold cutoff grade would be approximately 0.57 g/t, or the gold grade that would equate to a 0.001 NSR cutoff at these same values. The life of mine strip ratio is 5.48. The assumed life-of-mine throughput rate is 53.5 kt/d.Mineral Reserves are contained within Measured and Indicated pit designs using metal prices for copper, gold and silver of US$2.50/lb, US$1,050/oz, and US$16.85/oz, respectively. Appropriate mining costs, processing costs, metal recoveries and inter ramp pit slope angles varing from 42º to 55º were used togenerate the pit phase designs. Mineral Reserves have been calculated using a cashflow grade ($NSR/SAG mill hr) cut-off which was varied from year to year to optimize NPV. The net smelter return (NSR) was calculated as follows: NSR = Recoverable Revenue – TCRC (on a per tonne basis), where: NSR = NetSmelter Return; TCRC = Transportation and Refining Costs; Recoverable Revenue = Revenue in Canadian dollars for recoverable copper, recoverable gold, and recoverable silver using metal prices of US$2.50/lb, US$1,050/oz, and US$16.85/oz for copper, gold, and silver, respectively, at an exchange rate ofCDN$1.1 to US$1.0; Cu Recovery = Recovery for copper based on mineral zone and total copper grade; for Mineral Reserves this NSR calculation includes mining dilution. SAG throughputs were modeled by correlation with alteration types. Cash flow grades were calculated as the product of NSR value in $/t andthroughput in t/hr. The life of mine strip ratio is 2.16.Mineral Resources are contained within a conceptual Measured, Indicated and Inferred optimized pit shell using the following assumptions: gold price of US$1,200/oz; variable process cost based on 2.1874 * (sulphur grade) + 10.6485; administration cost of US$2.29/t; refining, freight & marketing (selling costs) ofUS$1.85/oz recovered; stockpile rehandle costs of US$0.20/t processed assuming that 45% of mill feed is rehandled; variable royalty rate, based on royalty of 4.5% * (Au price – selling cost). Mineral Resources have been estimated using a constant Net Sales Return cut-off of US$0.001/t milled. The Net Sales Returnwas calculated using the formula: Net Sales Return = Au grade * Recovery * (US$1200/oz – (1.85 + ((US$1200/oz – 1.85) * 0.045)) - (10.65 + 2.1874 * (S%) + 2.29 + 0.20)) and reported in US$/tonne. Mineral Resources are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not havedemonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. Inferred Resources have a great amount of uncertainty as to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred Resources will everbe upgraded to a higher category. See "Cautionary Note Concerning Reserve & Resource Estimates".Mineral resources are contained within a conceptual Measured, Indicated and Inferred optimized pit shell using the same economic and technical parameters as used for Mineral Reserves. Tonnages are assigned based on proportion of the block below topography. The overburden/bedrock boundary has beenassigned on a whole block basis. Mineral resources have been estimated using a constant NSR cut-off of C$10.08/t milled. The Net Smelter Return (NSR) was calculated as follows: NSR = Recoverable Revenue – TCRC (on a per tonne basis), where: NSR = Diluted Net Smelter Return; TCRC = Transportation andRefining Costs; Recoverable Revenue = Revenue in Canadian dollars for recoverable copper, recoverable gold, and recoverable silver using silver using the economic and technical parameters mentioned above. The mineral resource includes material within the conceptual M,I&I pit that is not scheduled for processingin the mine plan but is above cutoff. Mineral Resources are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. Inferred Resources have a great amount of uncertaintyas to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred Resources will ever be upgraded to a higher category. See "Cautionary Note Concerning Reserve & Resource Estimates".The copper-equivalent grade was calculated as follows: CuEq = Recoverable Revenue ÷ 2204.62 * 100 ÷ 1.55. Where: CuEq = Copper equivalent grade; Recoverable Revenue = Revenue in US dollars for recoverable copper, recoverable gold and recoverable silver using metal prices of US$1.55/lb, US$650/oz, andUS$11/oz for copper, gold, and silver, respectively; for the purposes of the equivalency formula, Cu Recovery is assumed to be 100%. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Inferred Resources are in addition to Measured and Indicated Resources. InferredResources have a great amount of uncertainty as to their existence and whether they can be mined legally or economically. It cannot be assumed that all or any part of the Inferred Resources will ever be upgraded to a higher category. See "Cautionary Note Concerning Reserve & Resource Estimates".NOVAGOLD Canada Inc. has agreed to transfer its 60% joint venture interest in the Copper Canyon property to the Galore Creek Partnership, which is equally owned by NOVAGOLD Canada Inc. and a subsidiary of Teck Resources Limited. The remaining 40% joint venture interest in the Copper Canyon property isowned by another wholly owned subsidiary of NOVAGOLD.Cautionary Note Concerning Reserve & Resource EstimatesThis summary table uses the term “resources”, “measured resources”, “indicated resources” and “inferred resources”. United States investors are advised that, while such terms are recognized and required by Canadian securities laws, the United States Securities and Exchange Commission (the “SEC”) does notrecognize them. Under United States standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. Mineral resources that are not mineral reservesdo not have demonstrated economic viability. United States investors are cautioned not to assume that all or any part of measured or indicated resources will ever be converted into reserves. Further, inferred resources have a great amount of uncertainty as to their existence and as to whether they can be minedlegally or economically. It cannot be assumed that all or any part of the inferred resources will ever be upgraded to a higher category. Therefore, United States investors are also cautioned not to assume that all or any part of the inferred resources exist, or that they can be mined legally or economically. Disclosure of“contained ounces” is permitted disclosure under Canadian regulations, however, the SEC normally only permits issuers to report “resources” as in place tonnage and grade without reference to unit measures. Accordingly, information concerning descriptions of mineralization and resources contained in this releasemay not be comparable to information made public by United States companies subject to the reporting and disclosure requirements of the SEC.NI 43-101 is a rule developed by the Canadian Securities Administrators, which established standards for all public disclosure an issuer makes of scientific and technical information concerning mineral projects. Unless otherwise indicated, all resource estimates contained in this circular have been prepared inaccordance with NI 43-101 and the CIM Definition Standards.Technical Reports and Qualified PersonsThe documents referenced below provide supporting technical information for each of NOVAGOLDs projects.Project Qualified Person(s) Most Recent Disclosure & Filing DateDonlin Gold Tony Lipiec, P. Eng., AMEC Donlin Creek Gold Project Gordon Seibel R.M. SME, AMEC Alaska, USA Kirk Hanson P.E., AMEC NI 43-101 Technical Report on Second Updated Feasibility Study amended filing on January 23, 2012Galore Creek Robert Gill, P.Eng., AMEC Galore Creek Copper–Gold Project, Jay Melnyk, P.Eng., AMEC British Columbia, NI 43-101 Technical Report on Pre-Feasibility Study, Greg Kulla, P.Geo., AMEC filed on September 12, 2011 Greg Wortman, P.Eng., AMEC Dana Rogers, P.Eng., Lemley InternationalHeather White, B.Sc., P.Eng., who is a consultant to NOVAGOLD and a “qualified person” under NI 43-101, has approved the scientific and technical information included in this section related to: (i) Donlin Gold since the issuance of the technical report filed on January 23, 2012, and (ii) Galore Creek since theissuance of the technical report filed on September 12, 2011. 29 NYSE-MKT, TSX: NG www.novagold.com
  • 30. CONTACT USNOVAGOLD RESOURCES INC.200 Granville St., Suite 2300Vancouver, BCCanada V6C 1S4T 604 669 6227 TF 1 866 669 6227 F 604 669 6272www.novagold.cominfo@novagold.comMélanie Hennessey Erin O’TooleVP, Corporate Communications Analyst, Investor Relationsmelanie.hennessey@novagold.com erin.otoole@novagold.com 30 NYSE-MKT, TSX: NG www.novagold.com